Role of Land in the process of production

The term Land has been given a special meaning in Economics. It does not mean soil as in ordinary speech but is used in much wider sense. It also includes all natural resources which are free gift of nature.

In Marshall’s words, “land means the materials and the forces which nature gives freely for man’s aid in land and water in air and light and heat.”

Importance of Land

Land in economics is a term which is often used in a wider sense. It does not mean soil as in ordinary speech. Land stands for all natural resources which yield income or which have exchange value. It represents those natural resources which are useful and scarce actually or potentially. Land is absolutely indispensable for human being and nothing can be produced without land. Land is an important factor of production and survival of human being is directly linked with land.

Fertility and productivity of land is essential for economic development. The developed countries have reached the climate of economic development and increased their production due to rich and abundant natural resources, on the other hand under developed countries will have explored their natural resources in order to achieve economic welfare. Marshall says in favour of importance of land by saying that land provides space for the human activities and struggles. Land is the first and the foremost factor of production without which it is difficult to start a business. For example if we want to establish cotton industry, we need raw material which will come from land. In this way in all economic activities the role of land is maximum and the question of land is foremost goal of all economic activities to start. Moreover the following points further elaborate its importance.

(i)         Land provides all food to human beings.

(ii)        It provides space for all human activities like banking, trade, industry etc.

(iii)       Fertile and productive lands pave way for economic development of a country.

(iv)       Agriculture development of a country is possible only when all lands are fertile and suitable for all crops.

(v)        Agriculture raw material plays a vital role in industrial development which comes from nature i.e. land.

(vi)       Land provides way to transfer commodity from one place to another which leads to economic development for a country.