A natural experiment from a migration lottery in New Zealand finds evidence that migrant earnings stimulate remittance flows and generate better mental health outcomes . If out migration causes the local labor supply to decrease, this can put upward pressure on wages, which can be beneficial to local workers but potentially harmful to farmers who rely on hired labor. Filipski et al. find econometric evidence that migration from Mon state in Myanmar to Thailand caused Mon state wages to rise. However, migrant remittances offset the negative effects of higher wages on Mon production, as the infusion of remittances into the local economy stimulated productive investments and created spillovers by raising the demand for local goods and services. The role of agriculture as a driver of remittances becomes more marginal as migrant networks develop and information about non-farm employment opportunities spreads. In the U.S., for example, immigrants have become increasingly prevalent in all of the other low-skilled sectors of the economy , revealing agriculture’s diminishing role over time. The World Bank predicts a significant reduction in remittances due to lockdown measures from the COVID-19 crisis that prevent migration .
The decrease in remittances poses a huge threat to development,drainage collection pot which could potentially push a significant number of people back into poverty. Restrictions on mobility and work have particularly affected workers who are ineligible to receive benefits from social safety nets due to their informal working arrangements or legal status. In Southeast Asia, aggregate agricultural production is predicted to decline by three percent as a result of reduced labor mobility and access to input and output markets, which could increase the number of people in poverty by as much as three percent . Ultimately the revival of remittances will depend on the mobility of labor after the crisis calms down. Migration by men can affect the empowerment of women and the types of work in which they engage. Kar et al. find that, in Nepal, male out migration induces women to become the primary decision makers on the farm rather than simply providing labor to agricultural production. The receipt of remittances facilitates group membership and financial integration, as evidenced by the possession of bank accounts. However, in the absence of remittances, spouses of international migrants tend to be worse off with regard to several domains of empowerment, including decision making about certain productive activities, agricultural income, and access to information.
In Senegal, when household members migrate but do not send remittances home, households become more food insecure. These findings underscore the importance of programs to reduce remittance costs and improve extension services that enable women to become more productive farmers and entrepreneurs in migrant-source economies. To reduce reliance on immigrant farm labor, farmers and countries could switch out of labor-intensive crops and import them from lower wage countries. Some U.S. farm operations already expanded into Mexico in order to meet the year-round demand of their customers. In fact, about half of the fresh fruit consumed in the United States and a third of fresh vegetables are imported. There is some evidence that farmers are planting more land in less labor-intensive crops like tree nuts, most of which are harvested by machines that shake the nuts off the tree and sweep them off the ground . However, consumer demand for fresh fruits and vegetables, both in the United States and abroad, continues to rise, and food imports are expanding. Consumers’ demand and willingness to pay for locally-grown produce increases as incomes rise, creating limits to countries’ reliance on food imports as a solution to the farm labor problem. At the other end of this trade often are countries with much lower land per laborer, such as China. Since the turn of the century, China has dramatically raised its exports of labor-intensive fruits and vegetables, while increasing its imports of less strategic, and more land intensive ones such as soybeans and corn for animal feed, much of it from the United States and Brazil .
The structural transformation is a quintessential part of economic development everywhere; people move off the farm and pressure on agriculture grows to feed a growing population. What policies are required to address these issues logically depends on what stage of the development process a country is in and what institutions and social norms are in place. But at the core must lie a policy package that raises labor productivity in agriculture while leveraging the poverty-reducing powers of the AFS, mitigating the social-adjustment costs inherent to this transition, and avoiding the introduction of inefficient policies, such as the closure of borders for agricultural goods and labor. Accomplishing these tasks has been challenging in the past and will continue to be a challenge moving forward, with technological shifts, altering attitudes towards globalization, and climatic change further setting the boundaries of what’s possible and desirable. We conclude by pointing out a trio of policy entry points for developing countries, at the early to middle stages of the agricultural transformation, and for high-income countries at the late stages. The starting point for thinking about policy responses in developing countries is to recognize that agricultural labor productivity in many African countries continues to be dismally low, that current and future generations of young people are less willing than their parents to perform low-paying and onerous farm work, and that agricultural exports and emigration may offer fewer employment opportunities than in the past. However, domestic food demands continue to increase and diversify, creating important employment opportunities in the off-farm AFS.
These changes mean that both traditional and new digital technologies can be leveraged to induce a productive exit out of agriculture in Sub-Saharan Africa while maintaining a competitive agricultural workforce on and off the farm in the chains elsewhere. Three key policy implications emerge. First, productivity-enhancing investment in agriculture must accelerate in the lower-income countries and proceed at least in tandem with the movement of workers off the farm elsewhere. Populations will continue to grow despite slowing birthrates, and food production will have to expand to keep pace. The movement of workers off the farm to meet the demand for other goods requires producing more food with fewer workers, once underemployed labor has been activated. Historically in today’s high-income countries, agricultural extension and public investments in infrastructure, from irrigation to information, marketing institutions, and roads, played a critical supporting role in facilitating the labor exit out of agriculture. They enabled the remaining farmers to earn a living commensurate with non-farm sectors,round plastic pot as competition for workers with the non-farm sectors and downstream food processors intensified. This agenda holds as much today as then. In Sub-Saharan Africa, the agricultural share of public spending continues to be well below that in East Asia . Myriad input, factor, and output market constraints hold agricultural labor productivity back, and integrated solutions that simultaneously overcome a number of these constraints are needed. Inclusive value chain development , which links farmers with buyers in contracting arrangements, offering knowledge, access to credit and inputs , and higher prices in exchange for a consistent volume of high-quality products , provides a market-based solution to do so, though smallholders’ lack of legal protections can be an obstacle . Given the challenge to develop self-enforcing incentive compliant contracts, iVCD typically does not work well for raising staple crop productivity. Yet, in low income countries, this is where the need and scope for raising labor productivity and poverty reduction is highest. For raising labor productivity in staple crops, more and better public investment in public goods is needed . Second, the scope for iVCD to raise smallholder incomes and benefit the poor and women is greater for non-staples. iVCD also creates jobs off the farm, in the chains and beyond . Success factors of iVCD include careful diagnosis of the competitiveness and sustainability of the product value chain chosen, starting small, involving financial institutions, monitoring producer-buyer relationships, and sustaining capacity building. This is in addition to creating an economic environment that is conducive to investment generally. Developing systems to monitor and enforce food quality standards in the AFS is equally critical. There is clearly a role for agricultural ministries, as well as for the private sector, to ensure that the development and use of labor-saving technologies keeps pace with the movement of workers off-farm. Many questions remain, however, especially on the best entry points for support: through farmer organizations/cooperatives, large anchor firms and/or SMEs, or externally initiated stakeholder platforms. More experiments are needed. In the meantime, appropriate measures will be needed to help SMEs in the transformative food chains see through the decline in liquidity caused by COVID-19 and avoid undue concentration of activity in the long run.
Labor-market regulations and other social protections can also be useful in protecting vulnerable populations from exploitation as they transition into non-farm work . Third, investment in people is critical to raise agricultural labor productivity and to make sure that those leaving can access the new jobs in the AFS, as well as other non-farm sectors, and meet the rising economic aspirations of rural youth. Continued investment in quality rural education, which continues to largely underperform in developing countries, is needed . Increasing educational attainment in rural areas facilitates technology adoption, as well as occupational mobility, and reduces income inequality. This is also important for young women facing social norms that make it difficult to escape from traditional gender roles. Nontraditional skill-building programs and effective agricultural extension systems will be equally needed to build up human capital in regions where traditional education has proven ineffective. The extension system is particularly weak in Sub-Saharan Africa and has been largely neglected for the past couple of decades by governments and donors alike. The 2010s have witnessed a surge in studies on social network or farmer-to-farmer technology extension, which proves more promising especially in combination with public extension than traditional public-sector extension approaches. But several issues remain such as the choice and compensation of appropriate lead farmers . Policy implications are different, but just as immediate, in high income countries. Rich-country farmers will be required to produce more and higher-quality fresh and processed foods for a growing, and increasingly affluent, domestic and global population, and they will be required to do so under increasingly stringent environmental and animal welfare standards. However, they will have to do this with fewer workers. The transition of domestic workers out of farm work largely has run its course in rich countries. The option of importing foreign workers is gradually closing, due to a declining farm labor supply in farm labor exporting countries and a less supportive political environment for immigration, particularly of low-skilled workers, in high-income countries. Three key policy implications emerge for high-income countries in this era of growing farm labor scarcity: First, farmers in high income countries will increasingly need to look beyond immigration policy as an answer to farm labor scarcity —especially in the medium and long run. Guest worker programs can expand as a short-run response to farm labor scarcity. However, as the structural transformation progresses in farm labor-exporting countries and political resistance to importing low-skilled farm workers intensifies, the immigration solution to the farm labor problem becomes less of an option. This does not mean that immigration will not continue to play a central role in farm labor markets throughout the developed world for some time. But farmers will need to take steps to retain an aging, mostly immigrant, workforce while pursuing available options to contract new workers from abroad. International farm labor migration could continue to be a much-needed channel for sharing prosperity across nations and reducing poverty in the world’s poorest countries. For this, however, a counter narrative needs to take hold rapidly. If not, its days may be numbered prematurely, especially now that the COVID-19 pandemic so clearly exposed the agri-food sector’s dependence on immigrant labor and the logistical challenges this may entail, eroding support for reliance on immigrant agricultural labor even further. Second, increasingly sophisticated technological change is going to be a fundamental feature of the food supply chain, from farming to food processing. Productivity-enhancing investments likely will include the use of highly-advanced robotic systems that will dramatically reduce the need for workers .