In this article we will discuss about the inter dependence of agriculture and industry.

The interdependence of agriculture and industry helps the development of both the sectors.

The most important aspect of this inter dependence is that the products of one serve as important inputs for the other. Growth of one sector, thus means ample supply of inputs for the other. The situation is such that a greater flow of products from one sector to other simultaneously ensures a greater return flow of inputs itself, though with some time lag. Help others to help you in brief, sums up, development.

Limits of Interdependence:

The account of the contribution of each sector to the other should not lead one to conclude that this interdependence is competing. This is not the case. Each sector uses some inputs which are not supplied by the other sector. For instance industrial sector does not depend upon the agricultural sector for supply of minerals and salts as raw materials. Much of its capital is now supplied from its own sources.


It itself supplies machinery to it. Similarly agricultural sector will continue to depend upon nature for certain inputs like water supply even after industrial sector has provided it with canals and modern irrigation facilities. As use of machinery is limited in agriculture, human and animal power will continue to be important inputs for the sector. For these inputs, the agricultural sector will again depend upon itself.

Further, there are some problems which are specific to a particular sector and the development of the other sector will leave these problems untouched. What all this implies for the policy-makers is that development of one sector say, the industrial sector, will surely remove some hindrances in the way of further development of the agricultural sector.

But at the same time, it should not be overlooked that there are other hindrances too which emanate from within the agricultural sector itself. These too have to be attended to. Same is the case with the industrial sector. Development of agricultural sector will not remove all the hindrances inhibiting the development of the industrial sector.

Contributions of Agriculture to Industries:

(i) Supply of raw materials to industries:


Many industries look to the agricultural sector for supply of raw material.

(ii) Supply of wage goods:

The market arrivals of food grains can be taken to represent what agriculture can spare for the non-agricultural sector as wage goods provided the market arrivals do not contain any distress sale on the part of the agriculturists. With this provision in view, we give below the market arrivals in the state of Punjab for the last 30 years or so.

Punjab agriculture has developed at a much rapid pace as compared with that in the other states of the country and its rate of growth of population is one of the lowest in the country. So, there is a reason to believe that whatever is sold in the market is a genuine surplus spared by the agricultural sector.


(iii) Agriculture and foreign trade:

Though India has been importing food grains for quite sometimes after independence, it has also been exporting the products of Argo-based industries , thereby , helping the country , not only to pay for the food imports but also for other imports which includes capital goods also. It is important to note here that the major traditional exports of India are the cotton textiles, Jute textiles and tea.

(iv) Provision of market for the industrial sector:

The increasing income of the farm sector leads to an expanded demand for the consumer’s goods produced in the industrial sector. Though no enquiry directly pertaining to this issue has been conducted in India, the data collected by the National Sample Survey organization does indicate that the goods produced in the industrial sector are finding their way into the consumption schedule of the rural people.

(v) Provision of capital and labour to the non-agricultural sector:

No data are available about the supply of these to inputs by the agricultural sector to the industrial sector. Since it is the agriculture which is the custodian of capital and labour in the initial stages of economic development, it can be positively asserted that, these factors have moved to the industrial sector, mainly from the agricultural sector, in initial stages of economic development in most of the countries.

The contribution of the agriculturists in setting up of various industries in England, of textile industry in India and of some important industries in Japan is quite known. The statement about Indian labour that it was migratory in character and that this was because of its nexus with agriculture shows that it was agricultural sector which provided labour to the industrial sector in the initial stages of the development of the latter.

Contributions of the Industrial Sector to the Agricultural Sector:


(i) Provision of modern inputs to the agricultural sector:

One of the major contributions of the industrial sector is to provide modern input to agriculture. The inputs are in the form of fertilizers, pesticides, machinery etc.

(ii) Reduction of population pressure on land:

Data regarding transfer of population from agricultural to non agricultural sector in India does not yield an encouraging picture. Dependence of population on agriculture during the last 50 years or so has not declined to any significant extent.


Growing population and a slow progress of the industrial sector are responsible for this static situation. However, the population data concerning some developed countries of Europe & that of the U.S.A., are quite illuminating in this regard.

(iii) Provision of infrastructure:

No doubt, many of the items included infrastructure serve the agricultural sector as well as the industrial sector but these are provided mainly by the industrial sector. Transport, electricity, financial institutions, health services, educational and research institutions, all owe their existence mainly to the facilities provided by the industrial sector.