Sixthly, fluctuations in agricultural production may affect private corporate
investment decisions through the impact of the terms of trade on profitability
(Ahluwalia, 1986 and Rangarajan, 1982).6 Whereas some of these channels
emphasize the „agriculture-industry‟ linkage on the supply side or production
side, others stress the linkages through the demand side. The production
linkages basically arise from the interdependence of the sectors for meeting the
needs of their productive inputs, whereas the demand linkage arises from the
interdependence of the sectors for meeting final consumption. Further, the
linkages between the two sectors can also be categorized into two groups based
on the direction of interdependence. One is the backward linkage, which
identifies how a sector depends on others for their input supplies and the other
is the forward linkage, which identifies how the sector distributes its outputs to
the remaining economy.7 More importantly, these two linkages can indicate a
sector‟s economic pull and push, because the direction and level of such
linkages present the potential capacity of each sector to stimulate other sectors
and then reflect the role of this sector accordingly.