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The Effects of Inflation on Agriculture


This paper aims to investigate the effects of inflation on agriculture. Inflation can significantly impact global food supplies, poverty rates, and the overall economy. The research problem investigated in this paper is how inflation affects agriculture in various ways. For example, high inflation can make it more difficult for farmers to repay loans and increase the cost of inputs such as fertilizer and pesticides. This paper will comprehensively analyze how inflation affects agriculture worldwide, using empirical data and theoretical models. The basic design of this study is to use both empirical data and theoretical models to investigate the effects of inflation on agriculture. In addition to providing a comprehensive analysis of the impact of inflation on agriculture, the paper will also make some general recommendations for improving our understanding of how inflation affects the sector. The empirical data used in this study comes from various sources, including economic surveys, agricultural production data, and price indexes. The paper also concludes with general recommendations for understanding how inflation affects agriculture.

The findings of this research will help policymakers and agricultural experts better understand the effects of inflation on the sector and make more informed decisions about how to address them.

Key terms: Agriculture, economics, inflation, global food supplies, jobs, value-added taxes, production, economic policy

Agriculture Economics

Inflation is the silent tax that can erode the value of your savings and the purchasing power of your wages. Bonab (2017) argues that high inflation can significantly impact your standard of living. It can also have a significant impact on the agricultural industry. Inflation can harm farmers because it can increase the cost of inputs such as seeds, fertilizers, and crop insurance. It can also improve farmers’ goods’ costs to consumers (Bonab, 2017). A chief measure of price inflation is the inflation rate, the annualized percentage change in a general price index, usually the consumer price index (CPI) (Van, 2019). This paper will provide a comprehensive discussion on the relationship between inflation and agriculture, highlighting the problems that are on the horizon with poverty.

The agricultural sector is one of the largest and most important economic sectors in the United States. The agricultural industry directly employs about 17% of all US workers and indirectly employs another 39 %( Van, 2019). The gross value of farm products sold in the US was $1,141 billion in 2016. Over 60% of this value was generated by crops, livestock, forestry products, honey, and nursery products. This corresponds to a production value index that averaged 145 points from 1997 through 2016 (Food and Agriculture Organization of the United Nations, 2017), above the national average of 100 points. Therefore, the agricultural sector has a significant impact on the US economy. Ultimately, the agricultural sector is subject to numerous external factors, such as weather conditions, market demand for particular products, and government policies.

There are some potential problems on the horizon for our food supply. For example, climate change is causing global temperatures to rise, leading to increased evaporation and water shortages that would impact crop production (Praveen & Sharma, 2019). Additionally, there is an increasing demand for food due to population growth and an expanding economy. Still, there is also a rising amount of waste produced in the food system (Spicka et al., 2019). Praveen and Sharma (2019) argue that climate change also can cause more severe droughts that could further impact crop production. There are also concerns that several diseases, such as pandemics, could cause significant disruptions to the global food supply. Finally, there is the potential for terrorists or other actors to disrupt food supplies by sabotage or contamination (Del Buono, 2021). These findings have led to a renewed focus on agricultural economics, which is the study of how food is produced and consumed and the economic factors that affect those activities. Hence, agricultural economists are responsible for developing policies and strategies to improve the food system’s efficiency and productivity.

Given all of these risks and challenges, it is essential to keep track of the latest food news so that we can stay informed about potential disruptions to global food supplies. Inflation is a crucial factor impacting food prices, and agriculture is a significant driver of inflation (Van, 2019). According to the USDA’s Economic Research Service, food production accounts for about one-third of the US GDP (Astill, Perez, & Thornsbury, 2020). The production of agricultural goods and services supports more than 15 million jobs in the United States. Agriculture is also an essential source of revenue for many farmers, ranchers, and related businesses (Fausti, 2021). Based on these facts, keeping track of food prices and agricultural production is vital to making informed economic decisions.

In conclusion, inflation impacts agriculture in a variety of ways. For example, high inflation can make it more difficult for farmers to repay loans and increase the cost of inputs such as fertilizer and pesticides. In addition, high inflation can cause value-added taxes to increase, which will impact farmers’ prices for their products. The effects of inflation on agriculture are complex and far-reaching. They can significantly impact global food supplies, poverty rates, and the overall economy. Therefore, keeping track of the latest food news is essential to stay informed about potential disruptions to global food supplies.


Astill, G., Perez, A., & Thornsbury, S. (2020). Developing Automation and Mechanization for Specialty Crops: A Review of US Department of Agriculture Programs. Administrative Publication No. (AP-082).

Bonab, A. F. (2017). A review of inflation and economic growth. Journal of Management and Accounting Studies5(02), 1-4.

Del Buono, D. (2021). Can biostimulants be used to mitigate the effect of anthropogenic climate change on agriculture? It is time to respond—the science of the Total Environment751, 141763.

Fausti, S. W. (2021). Precision Agriculture: Trends, Issues, and Application to Production in the US. Western Economics Forum (Vol. 19, No. 2, pp. 3-3).

Food and Agriculture Organization of the United Nations. (2017). The future of food and agriculture.

Praveen, B., & Sharma, P. (2019). A review of literature on climate change and its impacts on agriculture productivity. Journal of Public Affairs19(4), e1960.

Spicka, J., Hlavsa, T., Soukupova, K., & Stolbova, M. (2019). A literature review is an approach to estimating farm-level economic viability and sustainability in agriculture. Agricultural Economics65(6), 289-297.

Van, D. D. (2019). Money supply and inflation impact economic growth—Journal of Financial Economic Policy.


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