scispace - formally typeset
Search or ask a question

What is the effect of inflation in the agricultural sector? 


Best insight from top research papers

The effect of inflation in the agricultural sector varies depending on the context. In some cases, inflation of agricultural products can lead to an increase in corruption levels . In Southeast Sulawesi, inflation has a significant negative effect on the farmer's term of trade, resulting in a decrease in their trade . In the Republic of Serbia, inflation and changes in global prices of agri-food products have important consequences, including higher food prices and pressure on wage growth . National inflation has no exogenous impact on prices received by farmers, but it does increase prices paid by farmers for items used in production . The impact of inflation on agricultural prices is positive in low inflation regimes in developed countries and negative in high inflation regimes in developing countries .

Answers from top 5 papers

More filters
Papers (5)Insight
The paper states that inflation has a significant effect on the farmer's term of trade, with a 1% increase in inflation leading to a 1.61% decrease in the farmer's term of trade.
The effect of inflation on the agricultural sector is positive in developed countries with low inflation rates and negative in developing countries with high inflation rates.
The paper states that national inflation has no exogenous impact on prices received by farmers. However, each 1 percent increase in national inflation raises prices paid by farmers in the short and long run. Additionally, a 10 percent increase in prices paid by farmers due to inflation reduces farm net revenue in both the short and long run. The supply response by farmers offsets a portion of the impact of input-price inflation on net farm income.
Open accessJournal ArticleDOI
Nikola Njegovan, Mirela Tomaš Simin 
01 Jun 2020-Economic Themes
4 Citations
The paper states that inflation in the agricultural sector is influenced by factors such as changes in the prices of inputs, energy supply, and global trends in food prices. It also mentions that demand inflation, driven by population growth, leads to higher food prices.
The paper states that the inflation of agricultural products artificially raises the profit rates of capital, leading to an increase in prices and a reduction in the purchasing power of certain segments of income generated in the agricultural sector.

Related Questions

How does inflation rate impact exchange rate?5 answersInflation rate has a significant impact on exchange rates. Studies show that inflation and exchange rates are interdependent. Changes in inflation rates directly affect consumer goods prices, including exchange rates. The relationship between inflation and exchange rates is dynamic, with inflation leading to changes in exchange rates and vice versa. Empirical evidence suggests a positive correlation between inflation and exchange rates, indicating that a change in one variable leads to a change in the other. Additionally, inflation has been found to have a negative influence on return on assets, affecting savings and investment levels, which in turn can influence exchange rates. Therefore, managing inflation is crucial for maintaining stability in exchange rates and ensuring economic growth.
What are the effect of inflation?4 answersInflation has various effects on the economy. Firstly, it can lead to a decrease in people's purchasing power, especially for those with lower middle income levels. Secondly, inflation can create an unpredictable environment that is not favorable for economic development. Thirdly, it affects businesses by causing changes in the prices of inputs and outputs, which can disrupt the structure of the business sector. Additionally, high inflation can slow down economic growth, while low and stable inflation can encourage economic growth. Lastly, inflation rates can have negative impacts on the economy, such as weakening the national currency, increasing the cost of imports, decreasing the purchasing power of individuals, and increasing credit costs and interest rates.
How the inflation affected the economy?5 answersInflation has a significant impact on the economy. High inflation rates can lead to a decrease in economic growth, weakening of the national currency, increased import costs, decreased purchasing power, and high credit costs and interest rates. Inflation also affects taxes, as high levels of inflation can affect real tax liabilities due to the depreciation of the national currency. Furthermore, inflation negatively affects public finances, monetary systems, and the entire economic system. It reduces the purchasing power of money, distorts the real picture of financial results, and exacerbates social conflicts and social differentiation. In terms of economic growth, inflation can have both positive and negative effects. Inflation below a certain threshold (3 to 7 percent) can be beneficial for economic growth, as it stimulates production and helps solve unemployment issues. However, high inflation can have a negative impact on economic growth. Overall, inflation plays a crucial role in shaping the economy and its effects should be carefully managed.
How inflation affect businesses?5 answersInflation affects businesses in multiple ways. Firstly, it leads to changes in the prices of inputs and outputs, which can be uneven and disrupt the structure of the business sector. Secondly, inflation has a positive impact on the profitability of businesses, as well as a positive relationship with the inflation level, profit tax, net wages level, and GDP level. Thirdly, inflation interacts with corporate taxation, affecting firms' investment decisions. It increases taxable profits and distorts investment decisions, but also stimulates investment through the effective real interest rate. Lastly, high inflation artificially inflates company earnings, leading to higher taxes and smaller real returns on investments. In summary, inflation affects businesses by influencing prices, profitability, investment decisions, and returns on investments.
How does inflation affects businesses?3 answersInflation affects businesses in several ways. Firstly, inflation can have a positive impact on the profitability of businesses. Secondly, inflation interacts with corporate taxation, which can distort investment decisions of financially constrained firms. Thirdly, inflation creates uncertainty about future inflation, which can cloud the decision-making of consumers and businesses and reduce economic well-being. Fourthly, inflation increases effective tax rates, adversely affecting incentives to save, invest, and work. Lastly, when inflation rate rises, the precision and accuracy of management forecasts of listed companies' earnings decline. These findings highlight the importance of understanding the relationship between inflation and businesses, including its impact on profitability, investment decisions, uncertainty, tax rates, and earnings forecasts.
What are the impacts of inflation on the economy?2 answersInflation has significant impacts on the economy. It can lead to a decrease in purchasing power, affecting the size of domestic demand for consumer goods and services. Rising inflation rates can have larger effects on certain groups compared to others. Inflation also poses challenges for economies like India, eating away at economic growth and development. Excess currency liquidity resulting from monetary policy can contribute to inflation, necessitating measures such as raising interest rates to control it. In Ukraine, inflationary processes are analyzed, and anti-inflationary policies are proposed, including the development of competitive industries, improvement of monetary policy, and stabilization of the foreign exchange market. Overall, inflation impacts various aspects of the economy, including consumer purchasing power, economic growth, and the effectiveness of monetary policies.

See what other people are reading

What is the current trend in game theory?
4 answers
The current trend in game theory encompasses its diverse applications across various fields. Game theory is increasingly utilized in cybersecurity to enhance defense mechanisms against advanced persistent threats (APTs). Furthermore, game theory is being employed in formal pragmatics to study language use, language evolution, and pragmatic reasoning. In the realm of supply chain management, game theory is a relevant tool for evaluating coordination and competition dynamics within supply chains. Additionally, game theory provides a mathematical framework to analyze stakeholder interactions in industries like construction. Moreover, game theory is gaining traction in systems and control engineering, particularly in designing protocols to incentivize cooperation in engineered systems involving humans and in dynamic resource allocation scenarios.
What could prevent the civil war?
5 answers
Preventing civil wars can be achieved through various mechanisms. Anticipated shifts in power favoring one side can lead to preventive war today, as governments may increase repression to deter rebellion. External intervention can also prevent civil wars by overwhelming one side's probability of victory, dissuading dissidents from initiating violence. Proper measures like dialogue and patience can prevent civil wars, as seen in historical examples like the Cisjordanian tribes in Joshua 22. Additionally, membership in highly structured intergovernmental organizations can prevent the escalation of conflicts to civil wars by altering the bargaining game and increasing the costs of escalation for states involved. These strategies collectively highlight the importance of power dynamics, external influences, conflict resolution mechanisms, and international cooperation in preventing civil wars.
Inflation Rate and Poverty Does inflation make the poor poorer?
4 answers
In developing countries like Nigeria and Indonesia, inflation has been found to exacerbate poverty. Studies reveal that rising inflation rates lead to a decrease in real income, particularly affecting the purchasing power of low-income individuals. The relationship between inflation and poverty is bidirectional, with inflation causing poverty indirectly through its impact on real income. Additionally, the lending rate has been identified as a moderating factor, helping to mitigate the adverse effects of inflation on poverty rates. Furthermore, research indicates that inflation significantly influences poverty levels, with unemployment also playing a role in exacerbating poverty in countries like Indonesia. Overall, inflation does indeed make the poor poorer by reducing their purchasing power and contributing to higher poverty rates.
What is important to successful health service innovation?
5 answers
Successful health service innovation hinges on various critical factors. Personal determination, the ability to navigate organizational culture, and evidence-based influence are key traits of successful innovators. Additionally, factors such as adaptive organizational structures, effective communication systems, committed leadership, shared understanding of missions, and supportive social networks play pivotal roles in fostering innovation within health service organizations. Innovation centers within health systems focus on creating new services, exploring business models, and improving patient outcomes through diverse strategies and projects. Moreover, the success of health service innovations is contingent on factors like value creation for beneficiaries, expansion beyond the pilot phase, leadership, collaborative expertise, organizational support, and motivation. Ultimately, a combination of personal attributes, organizational support, and strategic focus is crucial for driving successful health service innovation.
Can remote sensed be used to analyze the economic condition?
5 answers
Remote sensing, particularly through satellite imagery, can indeed be utilized to analyze economic conditions. It offers valuable insights into economic indicators such as inequality, investments, disaster impact assessment, and damage evaluation. By combining remote sensing data with machine learning techniques, it becomes possible to estimate economic activities like construction investments and agricultural machinery expenditures with high precision. Additionally, remote sensing tools aid in assessing the impact of natural and human-made disasters on communities and assets, providing crucial information for relief and recovery efforts. Furthermore, remote sensing data can be instrumental in evaluating environmental and economic damage from events like oil pollution, offering methods to determine pollution types and scales for different natural-territorial complexes.
What are the specific ways in which inflation rates affect the profitability of small businesses in the Philippines?
5 answers
In the Philippines, inflation rates impact small businesses' profitability in various ways. Firstly, inflation leads to changes in input and output prices, affecting businesses unevenly. Secondly, the relationship between inflation and economic indicators like the Policy rate influences short-term business operations. Additionally, the adoption of inflation targeting and increased trade openness in the Philippines has contributed to the flattening of the Phillips curve, affecting inflation dynamics and business profitability. Moreover, the monetary policy response to inflation, output growth, and exchange rate movements plays a crucial role in shaping business conditions, with policy rules reflecting different approaches to managing economic shocks. Overall, inflation's impact on small businesses in the Philippines is heterogeneous, with varying effects on different sectors and structures.
What are the common problems of schools in other country?
5 answers
Schools in various countries face a multitude of common problems. These include challenges such as financial constraints, educational corruption, and issues related to education quality. Moreover, seismic regions in developing countries like Nepal encounter risks due to earthquakes, with a significant number of school buildings being vulnerable to seismic activity, highlighting poor construction practices and lack of resources as key issues. Additionally, foreign students in schools face language barriers, adaptation difficulties, and struggles in achieving educational outcomes, emphasizing the importance of language support, family education, and integration programs for these students. Addressing these challenges requires a comprehensive approach involving financial support, structural improvements, language assistance, and community involvement to ensure a safe and conducive learning environment for all students globally.
Why is world round?
5 answers
The concept of the world being round has been explored in various contexts. Gertrude Stein's book "The World is Round" delves into the idea that in a round world, individual identity can become blurred, symbolizing the eternal return and the loss of uniqueness. Additionally, Lavinia Greenlaw's poetry reflects on the conflict between the mystifying force of art and the demystifying force of science, highlighting the need to reconcile empirical thinking with artistic miracles. Furthermore, the imbalance in world agricultural markets due to protectionist policies affects global trade dynamics, emphasizing the interconnectedness of economies on a round world stage. These perspectives collectively suggest that the roundness of the world symbolizes interconnectedness, the blurring of boundaries, and the need to reconcile different perspectives for a holistic understanding.
What is institution in development?
4 answers
In the realm of development, institutions are crucial components that shape economic progress and societal advancement. Institutions encompass the rules and values defining a society's basic structure, influencing human behavior and long-term development prospects. They serve as instruments for allocating resources and transitioning economies, forming the institutional foundation of economic development (IFED) alongside state capacity and policy frameworks. The significance of institutions in Asian development has been debated, with emphasis on the distribution of power among organizations and the 'political settlement' as key factors determining outcomes. Development institutions aim to create favorable investment conditions while increasingly focusing on sustainable development goals, shifting from solely promoting rapid growth to incorporating environmental considerations. Overall, institutions play a pivotal role in fostering cooperation, wealth creation, and sustainable progress in developmental processes.
What will Denmark look like in the next 10 years?
5 answers
Denmark's economic outlook suggests a slowdown in GDP growth to 0.1% in 2023, followed by a rebound to 1.1% in 2024, driven by receding inflation and improved purchasing power. The country faces risks from supply disruptions and labor shortages, impacting prices and economic activity negatively. In terms of public sector reforms, Denmark underwent significant changes in 2007, restructuring its healthcare system to prioritize quality over proximity to hospitals, with increased use of private hospitals to reduce waiting times. Additionally, recent political developments, such as the 2022 referendum on defense opt-outs, indicate a potential return to closer defense cooperation with the EU and NATO, following the decision to abolish defense opt-outs. Overall, Denmark's future seems to involve economic resilience, healthcare improvements, and potential shifts in defense policies.
Does rate hikes lead to higher inflation?
5 answers
Raising interest rates can have complex effects on inflation. The Federal Reserve's decision to increase rates in response to high inflation concerns has been observed in the US and Canada. The US raised rates multiple times in 2022 to combat inflation. However, historical data suggests that low interest rates, even during periods of low unemployment, did not necessarily lead to high inflation. The impact of rate hikes on inflation depends on various factors, including the overall economic conditions, labor market dynamics, and the pace of rate increases. While rate hikes are often used as a tool to curb inflation, their effectiveness in directly controlling inflation can vary based on the specific context and timing of the policy decisions.