Agriculture is the primary sector of many economies, as well as the one often making the best direct use of certain countries' natural resources. Typically, this sector is of higher importance in the developing world than it is in industrial and developed countries, though it is still important there nonetheless. It is only a smaller component of “first-world” economies because such have much higher total revenues to begin with, so the agricultural sectors may in fact have higher nominal revenues, despite lower relative revenues, as compared to elsewhere in the "third world". In many developed countries, as agriculture has become more technologically advanced, it has subsequently required a smaller labor force as well, in spite of increasing total production levels.
Defining the Agricultural Sector and Its Contribution to Total GDP
Agricultural production doesn’t simply include what is grown and produced on the ground by farmers, ranchers, and their laborers. Also considered in such figures are firms that process raw farm materials, provide packaging services, or directly service farming systems, such as irrigation technologies, just to name a few. Among the developed countries, one notable top producer is Canada, where the agricultural sector remains one of the most important ones to the national economy.
Within the larger economy of a country, agricultural production is generally expressed as a percentage relative to the nation’s total Gross Domestic Product (GDP). Besides the cultivation of crops and livestock production, this sector also includes revenues derived from forestry, fishing, and hunting activities as well. To refer to the agriculture sector as a percent of GDP, we use only those ‘values added’. This refers to the final net inputs of a determined sector after all final outputs have been added up and all the intermediate inputs subtracted. Value added is calculated without making any deductions for depreciation of assets, degradation of natural resources or depletion. Therefore, such figures only include final products ready for consumption.
The United Kingdom's Mechanized Agriculture
According to World Bank data, the United Kingdom has the smallest percentage of GDP coming from agriculture of any nation, standing at 0.61%. Being the third-largest economy in Europe, after Germany and France, the United Kingdom is a leading financial center and trading power. The agricultural infrastructure of the United Kingdom is highly mechanized and efficient, producing about 60% of the internal food needed by the British people despite employing less than 2% of the total labor force. The key sectors contributing most to the U.K.'s GDP are service industries, particularly business services such as banking and insurance. Meanwhile, manufacturing is on the decline as an important contributor to total economic output.
Food Imports to Belgium
Belgium’s agriculture value added accounts for only 0.74% of its total GDP. The country has a modern economy, based mainly on private service enterprises. Due to the few natural resources of the country, Belgium imports high quantities of raw materials, making the economy especially vulnerable to shifts in global trade dynamics. Belgium is trying to pursue a reform program to improve the country’s competitiveness, which includes changes to its tax policy, new rules for the labor market, and more far-reaching benefits for the social welfare of its population.
Germany's Manufacturing Industries
Having the largest economy within the European Union, and the fifth-largest economy in the world, Germany benefits from a skilled workforce, and is a leading exporter of vehicles, machinery, household equipment, and chemicals alike. As part of such a huge economy, German agriculture represents a mere 0.75% of the country’s total GDP. Germany is making considerable efforts to replace its petroleum-sourced and nuclear energy with more sustainable sources of energy, while many reforms in the labor market, including a raise of the minimum wage, are contributing to raising the general welfare standards of the German population. On a social level, Germany is facing significant demographic challenges, including a low fertility rate. For these reasons, agriculture has taken a backseat when it comes to policy-making there.
Food Security in Denmark
Denmark has a value added for agriculture equivalent to 1.27% of its total national GDP. Nevertheless, the country boasts a high-tech and efficient agricultural sector, right alongside a number of the world-leading brands in the pharmaceuticals industry, renewable energy, and maritime shipping. Even though Denmark is one of Europe’s leading exporters of food and energy, the country is highly dependent upon imports of several raw materials. Nonetheless, the fiscal position of Denmark is one of the strongest in the European Union, despite the fact that the Danish government opted not to join the European Economic and Monetary Union (Eurozone). Despite the small contribution made by the agricultural sector to GDP there, Denmark is one of the most food-secure states on the European continent and, in fact, the entire world.
Agriculture’s Contributions to Developed Economies: A Complex Issue
As we have demonstrated, the countries topping our list aren’t necessarily food-insecure and, in reality, each of these five discussed have excellent food supply and agricultural infrastructures in place. The contribution made by agriculture to GDP within them has merely just been diluted by the massive total revenues their respective economies produce as a whole. In such countries, a low value added by agriculture relative to GDP doesn’t indicate a poor economic standing or even a weak farm sector. Rather, it symbolizes a diversification of the most powerful sectors, including agriculture, creating a stronger economy still across the board.
Agricultural Spending vs GDP
- View information as a:
|Rank||Country||Percentage of GDP Spent on Agriculture|
|1||United Kingdom||0.61 %|
|7||St. Kitts and Nevis||1.56 %|
|11||Saudi Arabia||1.92 %|
|15||Antigua and Barbuda||2.24 %|
|17||South Korea||2.34 %|
|20||South Africa||2.49 %|
|24||Czech Republic||2.62 %|
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