What is Agricultural Investment in the real sense?

By definition, Investment consists of all expenditures aimed at increasing the productive capacity of a business. It seeks to acquire assets, which yield productivity gains spread over time.

In Agriculture, Investment takes different forms. It consists of acquiring agricultural lands, planting and cultivation of crops, animal husbandry, sales and purchase of agricultural equipment (machinery, equipment, buildings, etc.).

From a microeconomic point of view, reasoning as an economic agent. Purchase of land by the farmer is considered an investment because it leads to increase in the farmer’s landholdings.

However, from a macroeconomic perspective, this operation does not at all mean an increase in the country’s production capacity. It is merely a change of owner and not the acquisition of a new asset.

In situations where the farmer cultivates, acquire storage facilities or processing, it can be considered an investment expenditure for the country. This is because these activities contribute to increasing the production capacity of society.

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