Agricultural Employment Trends in Asia and Africa: Too Fast or Too Slow?

Abstract

Contrary to conventional economic theories, the relationship between income growth and agricultural employment is extremely diverse, even among regions starting from similar levels of development, such as Asia and Africa. Due to its labor-intensive Green Revolution and strong farm-nonfarm linkages, Asia's development path is mostly characterized by fast growth with relatively slow agricultural exits. In contrast to Asia, urban biased policies, low rural population density, and high rates of population growth have led a number of African countries down a path of slow economic growth with surprisingly rapid agricultural exits. Despite this divergence both continents now face daunting employment problems. Asia appears to be increasingly vulnerable to rising inequality, slower job creation, and shrinking farm sizes, suggesting that Asian governments need to refocus on integrating smallholders and lagging regions into increasingly commercialized rural and urban economies. Africa, in contrast, has yet to achieve its own Green Revolution, which would still be a highly effective tool for job creation and poverty reduction. However, the diversity of its endowments and its tighter budget constraints mean that agricultural development strategies in Africa need to be highly context specific, financially sustainable, and more evidence-based. JEL codes: O13, O15, O18 Long-run economic growth has been accompanied by a significant exodus of workers out of the agricultural sector. This observation was regarded as a robust stylized fact by early development economists and was incorporated into a wide array of development theory (Lewis 1954; Hirschman 1958; Kuznets 1973; Chenery 1979). Subsequent research has added important nuances to this observation-for example many agricultural workers move into the local nonfarm economy rather than to urban areas (Anderson and Leiserson 1980)-but the basic conclusion that development entails "agricultural exits" has rarely been The World Bank Research Observer

Labour Market Effects of Large-Scale Agricultural Investment: Conceptual Considerations and Estimated Employment Effects

“…In many poor countries, the agricultural sector continues to be the backbone of the economy and employs a large share of the population. Development processes often focus on urban areas and leave rural populations behind (Headey, Bezemer, & Hazell, 2010). Against this logic, largescale farms in rural areas could hence shoulder the burden of creating agricultural wage employment, for instance, by (i) satisfying labor demand by directly employing former land users and (ii) stimulating the local economy and creating employment opportunities outside the agricultural sector through sectoral linkages.…”

Small Farms: Changing Structures and Roles in Economic Development

“…There may be two different mechanisms leading to growth of rural nonfarm activities, namely, the push and pull scenarios (ibid). In the case of pull scenario, dynamic agricultural development stimulates the growth of nonfarm sectorthe way it happened in many Asian economies (Headey et al 2010), whereas in the push scenario, stagnant agriculture and falling productivity forces rural households to seek whatever incomes and livelihoods outside agriculture -a process which was suggested to be more prevalent in many African countries (ibid.). Thus, push scenario may not necessarily lead to an escape from poverty for many rural households (von Braun 2005).…”

“…Thus, push scenario may not necessarily lead to an escape from poverty for many rural households (von Braun 2005). In both cases, there is a need for creating conditions for orderly outmigration of labor from farm sector to nonfarm and even from rural areas to urban areas (Headey et al 2010), especially in Asia, given the magnitudes of these population movements.…”

A framework for investigating the potential to explore new markets in smallholder farmers in Kenya’s Kiambu West District

“…The challenges limiting late-developing countries from transforming their economy and society has generated a growing debate in the development community and academia about the best options for transition under these circumstances (Heady et al, 2010). In this debate, views are usually divided between the industrialists (urbanists) and agriculturalists (ruralists).…”

“…Agricultural development also creates opportunities for diversification through processing of products and an increase in rural demand arising from increased rural incomes (Heady et al, 2010). Therefore, rural issues must be addressed to reduce poverty and manage economic and demographic transitions (The World Bank, 2009).…”