What is Primary Industry?

• A primary industry deals with the extraction of natural resources.
• Forestry, agriculture, fishing, quarrying, mining, and mineral exploitation are all part of a country’s economy.
• It is thus named because it serves as the foundation for all other items. It is also known as the ‘agriculture and allied sector’ since agriculture, dairy, forestry, and fishing provide the majority of the natural items we consume.
• Due to the nature of their profession, people who engage in primary activities are referred to as red-collar employees.
• Primary industries have played a vital role in national history, consistently contributing roughly 20% to 30% of the total GDP. Activities in the primary sector of the economy are carried out by utilising natural resources directly. Agriculture, mining, fishing, forestry, dairy, and other industries fall into this category. 

It is categorised into two types:

• Genetic Industry

A genetic industry is concerned with the upbringing and breeding of living organisms such as birds, plants, and animals. The genetic industry includes activities such as milking cows, raising livestock, poultry farms, plant nurseries, and pond fish farming, among others.   

It encompasses any raw material production that can be improved by human interference in the development phase.

• Extractive Industry

These businesses obtain materials from natural sources by extracting or drawing them out. The basic supply of resource extraction is raw materials, which are largely soil products. These products are transformed into a variety of other valuable things by manufacturing industries. Farming, mining, logging, hunting, and fishing operations are examples of extractive industries. 

 It entails the development of finite raw materials that cannot be replenished by cultivation.

The development of the agricultural industry in India is critical to the country’s economic growth. The agriculture industry is the primary source of income for 60% of India’s population.

Advantages of Producing Primary Products

• In many industries, the emerging economies have a huge and flexible supply of labour that is eager and able to work.
• It is not necessary to make a large investment or borrow money to finance it. Local personnel can handle the industries. Developing economies that have attempted to transition to manufacturing have had mixed results due to a lack of infrastructure, skills, and human resources.
• They are a key source of foreign exchange and export revenue.
• If export earnings are spent in developing various parts of the economic infrastructure, core business industries can become a launching pad toward economic development.

Disadvantages of Relying on Primary Products:

• Due to inelastic demand, prices are frequently fluctuating. For example, if there is a ‘good harvest’, production will increase and the value of primary products will decline. Considering demand is inelastic, this would result in a decrease in revenue.
• Weather and disease can also have an impact on supply. Crop failure is always a possibility for crops, which could result in financial hardship in a given year.
• Resources are limited. Precious metals, for example, may become scarce if rising economies run out of limited primary commodities. Without diversity, the economy would be left with a gap.
• Demand for primary items has a low-income elasticity. When global income rises, the market for primary commodities rises by a proportionately smaller percentage.

Impact of Primary Industries on the Economy

• Primary industry is the foundation of the economy. As a result, unexpected shortages can be harmful to the overall economy. If there is an unexpected scarcity of oil, for example, there will be less petrol available for sale, and the price rises.
• Expensive energy has a significant influence on enterprises, which are therefore faced with high manufacturing expenses. This has the potential to affect producers in the same way that it has the potential to affect courier or transportation services.
• Since fewer individuals spend their cash, fewer firms receive money. This problem in the major industry can sometimes produce a recession. And a shortage does not always have to be severe to be problematic.

The Impact of the Agricultural Sector on Indian Economy:

• The agricultural sector provides a large percentage of raw materials to companies. It has not only become a source of livelihood for individuals, but it is also becoming a key supplier of raw materials for industry.
• Previously, the agricultural sector accounted for a large share of the GDP, but it now accounts for only about 18% of GDP.
• As we all know, agriculture is becoming a key supplier of raw materials for the industrial sector. The agricultural sector is the primary source of raw materials for the majority of companies.

Conclusion

The number of dependents in the agriculture industry is higher, while the agricultural sector’s GDP is lower. The government should take steps to develop the agricultural industry in all areas, such as awarding loans and assisting farmers by providing agricultural motors, trucks, fertilisers, and other necessities.