Q9 – Incomes from agriculture, forestry and fishing

This question was asked to the public in Sweden, Norway, Finland, Denmark and the UK in the Sustainable Development Misconception Study 2020

In December 2020 Gapminder launches a brand new service for upgrading your worldview, where you will be able to take this (and many other) tests and become certified gapm.io/upgrader

Question

How much of the world’s economy comes from agriculture, forestry and fishing?

a) Around 4%

b) Around 24%

c) Around 44%

Correct answer

Around 4% of the world’s economy comes from agriculture, forestry and fishing.

People’s views are more than 100 years out of date!

During the last 200 years, the share of the world’s economy that comes from agriculture, forestry and fishing has been dropping steadily. There’s no country that has become rich without reducing agriculture’s share of incomes, by replacing it with other production. Refining raw materials into products, manufacturing and services, or by extracting a valuable natural resource like oil.

To our great surprise, many people in rich countries believe that nearly half of the world’s money still comes from production of wood and the raw ingredients in food. When they buy food, they don’t realize what a tiny fraction of the price goes to the farmer or the fisherman. Almost all the money goes to the food manufacturers and the services who process, package, transport and sell the food to consumers.

Today, most countries are middle-income or high-income, and their economies rely on some combination of manufacturing and services. Seeing wages from agriculture as a big part of the global economy is an incredibly outdated view. Incomes from agriculture haven’t been 50% of the world economy for 200 years and they haven’t been around 30% for probably 100 years! 

Data sources

The share of the world’s economy which is made up of agriculture, fishing and forestry[1] is only 4%, because almost all money made today comes from services and manufacturing. This is based on national accounts[2] data which is of poorer quality in poorer countries where the informal sector is larger. But this data problem doesn’t influence the global number much, as most of the value is generated in middle- and high-income countries, where data is of higher quality, and in high-income countries, only 1.3% of GDP comes from the combined value of agriculture, fishing and forestry. 

Over the last 200 years, most countries increased their incomes and as they did they have followed very similar declines of agriculture as a share of their economies[3]. It’s hard to know exactly what the global percentage was at the start of the industrial revolution, but probably around 50%. That’s where a few extremely poor countries still are today.

Source 1 – International Standard Industrial Classification of All Economic Activities (ISIC)

Source 2 – Agriculture, forestry, and fishing, value added (% of GDP) – World Bank national accounts data and OECD National Accounts data files.

Source 3 – Share of agriculture in GDP vs GDP per capita, 1801 to 2010, Our World in Data

Source 4 – “Agriculture in the World Economy: an Historical Geography of Decline” by David Grigg in the journal Geography in July 1992.


Date Posted: 2020-11-23