Importance of Each Factor of Production


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In today’s class, we will be talking about the importance of each factor of production. Enjoy the class!

Importance of each factor of production

Importance of each factor of production

Agriculture is a business venture. It involves the production of food and other resources. Some factors must be combined to make this successful. These are called factors of production.

Factors of production

Factors of production in agriculture are the basic requirements necessary for producing crops and animals for human use. These factors are managed by the farmer to produce crops and animals for his own use and for sale to make money. The basic factors of production in agriculture are land, labour, water, money, and management.

  • Land

Land is the surface of the earth on which plants grow and animals live. It is the surface on which farmers build their farmhouses. It is also the place which farmers cultivate and grow their crops, such as yams, rice, maize, etc. Farmers also raise their livestock or farm animals, such as cattle, sheep, and goats, on land.

Importance or uses of land
  1. It holds plants firmly in the soil.
  2. It provides food for animals, such as grasses and leaves.
  3. It provides living spaces and food for insects and pests, such as grasshoppers and rats.
  4. It helps in the decay of plant and animal matter


  1. What are the things farmers can do with land?
  2. How important is land to plants and animals?
  • Labour

Labour is the energy of man put into work to obtain products useful to man. In agriculture, there are two types of labour: labour from the farmer and hired labour. Labour from the farmer is the one supplied by the farmer and his family for work on his farm. Hired labour is the one for which the farmer pays someone else to work on his farm.

Importance of labour
  1. Labour makes agricultural production possible.
  2. Labour makes it easy to use other factors of production, e.g. tools, equipment, money, and land.
  3. Labour provides employment in agriculture


  1. Mention and explain two types of labour
  2. What are the uses of labour?
  • Water

Water is a liquid required by plants and animals for growth and development. It can be obtained from rain, wells, streams, rivers, and dams

Importance of water
  1. Water helps plants and animals to grow and develop properly.
  2. It helps to dissolve plant food in the soil.
  3. It provides home for fishes and other water animals.
  4. It helps in the transportation of agricultural produce from one place to another.
  5. It supplies the farmer energy for work.
  • Money

Money is the medium of buying and selling. It can be in the form of coins or paper notes with their values printed on them.

Importance of money
  1. Money is used by the farmer to purchase land for agricultural production.
  2. It helps the farmer to hire labour for farm work.
  3. It helps the farmer to finance social activities.
  4. It helps the farmer to pay his children’s school fees.
  5. It helps the farmer to finance the advertisement of his products.
  6. It helps the farmer to expand his farm business.
  • Management

Management is the art of directing the farm business for agricultural production. The farmer can manage his farm himself or hire someone to manage it for him. The person who manages a farm business is known as the farm manager.

Importance of management
  1. Management is important in the planning of farm activities.
  2. It is important in the financial control of farm input.
  3. It helps in the control and management of farm labour.
  4. It helps in the coordination of farm activities.
  5. It is important in decision making on developments in the farm.
  1. List the factors of production in agriculture.
  2. Describe any two factors of production in agriculture under these headings: a) Meaning b) Importance


We hope you enjoyed the class.

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