The incorporation of a circular economy within the framework of the agriculture sector provides a way of managing wastes through the utilization of residues from crops, animal products, and other organic materials through renewal energy sources and organic manure. This paper aims to examine the possibility of applying circular economy to agricultural systems in terms of the economic and environmental impacts and limitations of circular economy application. The findings also suggest that circular strategies can create substantial value from waste, decrease input costs, enhance farmers’ revenues and profits, and support ecological improvements. However, factors including high initial costs, low awareness levels, and inadequate infrastructure resist its use in many areas. This paper gives solutions to the above challenges and how the circular economy can be integrated into agriculture.