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Agricultural Economics Basics

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Environmental Impact of Agriculture

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The effect farming practices have on the environment, which can include soil degradation, water scarcity, and biodiversity loss, and how these can be mitigated to promote sustainable agriculture.

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Biofuels

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Fuels produced directly or indirectly from organic material – biomass – including plant materials and animal waste. It's part of renewable energy sources and has implications for both energy and agricultural markets.

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Agricultural Policy

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A set of laws and regulations which are specifically directed to the agricultural industry. Policies can determine the shape and performance of the agricultural sector in aspects such as land use, labor, and trade.

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Agricultural Credit

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Loans or other forms of credit provided to farmers and agribusinesses to finance agricultural production. These loans can cover initial operating costs, equipment purchases, land acquisition, and other needs.

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Agribusiness

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The business activities involved in the production, processing, and distribution of agricultural products. Agribusiness includes a wide range of activities and players, from farm machinery makers to food processing companies.

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Agricultural Productivity

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The measure of the output of the agricultural sector relative to the inputs used. Increased productivity can result from improved technology, farming practices, or resource management.

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Farm Subsidy Programs

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Governmental financial support programs aimed at assisting farmers by making direct payments, providing price supports, or offering subsidized loans or insurance to ensure agricultural stability and productivity.

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Agricultural Extension Services

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Public and private services that provide information and expertise to farmers and agricultural businesses to improve productivity, profitability, and sustainability of their operations.

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Agricultural Innovation

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The development and application of new ideas, technologies, and practices to increase efficiency, productivity, and sustainability in agriculture.

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Agricultural Tariffs

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Taxes imposed on imported agricultural products to protect domestic farmers from foreign competition, raise revenue, or to negotiate trade terms with other countries.

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Farm Management

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The practice of making and implementing decisions that will contribute to the success and sustainability of the agricultural business. This includes budgeting, resource allocation, and strategic planning among other tasks.

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Risk Management

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The identification, evaluation, and prioritization of risks in agriculture followed by coordinated application of resources to minimize, control, or eliminate potential adverse impacts.

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Value-Added Agriculture

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A strategy that aims at increasing the economic value of a commodity through particular production processes, differentiation, and marketing, thus allowing farmers to receive a bigger share of the food dollar.

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Supply and Demand

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The relationship between the availability of agricultural products (supply) and the desire for them by consumers (demand). This relationship affects the market price for agricultural commodities.

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Organic Agriculture

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A farming system that seeks to produce food and fiber in a way that is sustainable and harmonious with the environment, often through the avoidance of synthetic fertilizers and pesticides, and use of techniques that maintain soil fertility and ecological balance.

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Genetically Modified Organisms (GMOs)

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Organisms whose genetic material has been altered using genetic engineering techniques. In agriculture, GMO crops can have benefits such as increased yields, pest resistance, and reduced need for chemical inputs.

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Global Food Systems

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Interconnected processes and infrastructures involved in feeding a population that include producing, processing, transporting, and consuming foods. It heavily relates to global health, environmental sustainability, and economic stability.

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Agricultural Trade

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The exchange of agricultural goods and services between countries. This trade is crucial for the economy of agricultural nations and can be an essential source of income.

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Agricultural Cooperatives

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Organizations owned and operated by a group of farmers who pool their resources for mutual economic or social benefit. Cooperatives can help members secure better prices for inputs and outputs, and offer a variety of services.

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Commodity Prices

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Prices for raw products such as grains, fruits, and vegetables that were produced for sale in the market. Fluctuations in commodity prices can significantly impact the economic well-being of farmers and entire agricultural sectors.

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Subsidies

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Forms of financial support extended to the agriculture sector by the government intended to stabilize food prices, ensure ample food production, and guarantee farmers' basic income.

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Crop Insurance

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A risk management tool to protect farmers against losses caused by crops being damaged by things like hail, drought, freezes, disease, or loss of revenue due to declines in the prices of agricultural commodities.

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Market Access

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The ability of a farmer or agricultural company to sell their products in a given market. Tariffs, trade agreements, and domestic policies can affect market access.

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Food Security

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A condition that exists when all people at all times have physical, social, and economic access to sufficient, safe, and nutritious food that meets their dietary needs and food preferences for an active and healthy life.

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Agricultural Labor Markets

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The economic market for the demand and supply of labor in agriculture, which can be affected by factors such as seasonality, migration policies, and labor laws.

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Input Costs

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The costs involved in the production of agricultural goods, such as seeds, fertilizers, pesticides, labor, machinery, and irrigation systems. Managing input costs is vital to farm profitability.

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Food Supply Chain

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A system that includes all the processes that are involved from the production of food through to consumption. Efficiency and safety regulations are key aspects of food supply chain management.

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Economies of Scale

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Cost advantages that producers obtain due to the size, output, or scale of their operation, with cost per unit of output generally decreasing with increasing scale as fixed costs are spread out over more units of output.

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Sustainable Farming Practices

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Methods of farming designed to meet current food and textile needs without compromising the ability of future generations to meet their needs. These practices typically involve techniques that protect the environment, public health, human communities, and animal welfare.

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Precision Agriculture

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Farming management based on observing, measuring, and responding to inter- and intra-field variability in crops to optimize returns on inputs while preserving resources. It relies on new technology such as GPS and remote sensing.

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