Primary sector of the economy

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Product’s lifecycle

The primary sector of the economy is the sector of an economy making direct use of natural resources. This includes agriculture, forestry, fishing, mining, and extraction of oil and gas. This is contrasted with the secondary sector, producing manufactured goods, and the tertiary sector, producing services. The primary sector is usually most important in less developed countries, and typically less important in industrial countries.

The manufacturing industries that aggregate, pack, package, purify or process the raw materials close to the primary producers are normally considered part of this sector, especially if the raw material is unsuitable for sale or difficult to transport long distances.[1]

Primary industry is a larger sector in developing countries; for instance, animal husbandry is more common in Africa than in Japan.[2] Mining in 19th century South Wales is a case study of how an economy can come to rely on one form of business.[3]

Canada is unusual among developed countries in the importance of the primary sector, with the logging and oil industries being two of Canada's most important. However, in recent years, the number of terminal exchanges have heavily reduced Canada's primary industry, making them rely more on quaternary industry.

Agriculture[edit]

In developed countries primary industry becomes more technologically advanced, for instance the mechanization of farming as opposed to hand picking and planting. In more developed economies additional capital is invested in primary means of production. As an example, in the United States corn belt, combine harvesters pick the corn, and spray systems distribute large amounts of insecticides, herbicides and fungicides, producing a higher yield than is possible using less capital-intensive techniques. These technological advances and investment allow the primary sector to require less workforce and, this way, developed countries tend to have a smaller percentage of their workforce involved in primary activities, instead having a higher percentage involved in the secondary and tertiary sectors.[4]

Developed countries are allowed to maintain and develop their primary industries even further due to the excess wealth. For instance, European Union agricultural subsidies provide buffers for the fluctuating inflation rates and prices of agricultural produce. This allows developed countries to be able to export their agricultural products at extraordinarily low prices. This makes them extremely competitive against those of poor or underdeveloped countries that maintain free market policies and low or non-existent tariffs to counter them.[5][6][7] Such differences also come about due to more efficient production in developed economies, given farm machinery, better information available to farmers, and often larger scale.

List of countries by agricultural output[edit]

Largest countries by agricultural output at Purchasing Power Parity according to IMF, 2014
Economy
Countries by agricultural output at Purchasing Power Parity in 2014 (billions in USD)
(01)  China
1,419
(02)  India
917
(---)  European Union
302
(03)  Indonesia
198
(04)  United States
193
(05)  Nigeria
161
(06)  Pakistan
152
(07)  Brazil
138
(08)  Russia
110
(09)  Turkey
109
(10)  Iran
103
(11)  Thailand
85
(12)  Egypt
83
(13)  Vietnam
74
(14)  Argentina
74
(15)  Mexico
69
(16)  Malaysia
63
(17)  Ethiopia
62
(18)  Bangladesh
60
(19)  Philippines
55
(20)  Japan
53
Rest of the World
1,196

The twenty largest countries by agricultural output at Purchasing Power Parity in 2014, according to the IMF and CIA World Factbook.

See also[edit]

References[edit]

Further reading[edit]

  • Dwight H. Perkins: Proceedings of the Academy of Political Science, Vol. 31, No. 1, China's Developmental Experience (Mar., 1973)
  • Cameron: General Economic and Social History
  • Historia Económica y Social General, by Maria Inés Barbero, Rubén L. Berenblum, Fernando R. García Molina, Jorge Saborido
  • The Nature of Wealth, by Fred Lundgren and Jerome Friemel