A new paradigm of development as a modern challenge in agriculture

Abstract

The authors of the paper propose a thesis of a necessary change of an industrial development paradigm of agriculture to a socially sustainable one. They present the mechanism of functioning of the first one proving that by stimulating the growth of production of agricultural raw materials it leads to a decreasing marginal productivity and, as a result, to lower incomes of farmers in the conditions of incomplete internalisation of costs. The pressure on natural environment leads to the deterioration of the natural environment welfare. Therefore, the change of that paradigm to the socially sustainable one is necessary. The effects of that model, which exceed the productive and economic sphere, were presented. They take into account the fact that agriculture is also a supplier of public goods. In that case a new concept of a land rent was included, assuming that the agricultural land independently creates a part of a land utility which is subject to market or institutional valorisation if it is limited to some extent of intensity of agricultural economics. However, there must be a declaration of a social demand for that utility of a public character. That process has already started and it determines the evolutionary change of the paradigm of the agricultural development.