Increasingly, so are its related up- and down-stream activities in input supply, food logistics, food processing, retail, and food services, which, together with agriculture, make up the broader agri-food system . The AFS remains a major employer, particularly in poorer countries and for the poorer segments of society . Much hope is vested in the AFS to create badly needed jobs for youth in Africa, as well as for vulnerable populations and people in lagging regions elsewhere in the world . In contrast, employment in the AFS has dropped to only 10 percent of the labor force in high income countries, where the majority of AFS jobs are now off-farm in food processing and services. There, the domestic workforce has shifted out of the AFS. New digital technologies are enabling the automation of some historically labor-intensive agricultural tasks and providing an alternative to domestic labor substitution through international migration. COVID-19 will likely reinforce these trends. Given these developments, what role will the AFS play in the future of inclusive job creation across different countries worldwide? At the early stages of development, employment in the AFS largely coincides with employment in farming.Food supply chains are short and, for the most part, local. As countries develop, however, populations urbanize and food supply chains become longer. The income elasticity of demand for food declines, agriculture’s role as employer diminishes ,hydroponic nft system and the farm workforce becomes older, more wage-oriented, and more immigrant.
Urban consumers, and those with rising incomes, demand foods that are more protein- and nutrient-rich, processed, and convenient to consume. This change in demand provides some scope for agriculture related job creation beyond the farm, particularly in food processing and services. While these changes occur, jobs on the farm typically become more remunerative and competitive with jobs off the farm even though they dramatically shrink in terms of share and number.These dynamics, driven importantly by food demand behavior, have been observed across countries throughout history. They are broadly known as the structural transformation and the agricultural/dietary transformation . Often, these transformations are accompanied by deeply wrought societal change in response to growing rural-urban income divides and ineffective policy responses, including agricultural protectionism, especially when investment in rural public goods and inclusive food value chain development lags behind . Technological revolutions further shape these dynamics . Examples include steam power, railways and tractors in the 19th century, and electricity and cold storage in the 20th century. The current century is witnessing a rapidly unfolding digital revolution , with another revolution in energy just around the corner . These technological advancements of the 21st century and the associated business and product innovations are affecting structural and agricultural transformations across the globe. They have the potential to profoundly alter the global organization of the food system, as well as labor and skill demands. They dramatically reduce transaction costs in input and output markets, change economies of scale, and modify the optimal capital/labor mix in agricultural production, processing, and marketing. Because some agricultural tasks are arguably more automatable than those in industry and services , automation could accelerate the exit of labor out of agriculture in developing countries and transform farms and food processing firms in the developed world.
A future with robots in the fields and packing plants, together with technology-savvy farm workers to complement new technological solutions in specific commodities and tasks, already is taking shape. Solar driven water pumps , cold storage, and agro-processing equipment are also beginning to spread in rural India and East Africa, accelerating the transition away from subsistence production . Historically, during this process of structural and agricultural transformation, societies typically evolved from having a surplus to a shortage of domestic farm labor. Food prices dropped to offset technology-induced productivity gains because of income-inelastic food demand. Inefficient land markets and sluggish food value chain development slowed farm consolidation and diversification, and social protection for the self employed remained limited. As a result, farm incomes have struggled to keep up with more secure and faster-growing incomes off the farm. Domestic workers shifted from the primary sector to the secondary and tertiary. More often than not, in developed countries farm labor shortages have been filled largely by foreign agricultural wage workers, especially for difficult-to-automate tasks like harvesting fresh fruits and vegetables. Migrant-sending households in low-income countries benefited through remittances. However, with anti-immigration sentiments flying high in migrant-destination countries, the structural transformation unfolding in migrant-source countries, and technology increasingly offering alternatives to hired labor everywhere, opportunities to close income gaps across countries through legal farm labor migration may be narrowing .
The shift in policy dialogue away from immigration solutions to farm labor problems coexists with a bifurcating global demographic. Many developing countries, especially in Sub-Saharan Africa, struggle to provide employment for their young, rapidly-expanding populations, presenting a missed opportunity for development from the so-called “demographic dividend” , including through international migration. Agricultural trade is similarly challenged in its role to help address global imbalances in farm labor, partly because of its purported contribution to global warming. The domestic and global forces of structural transformation and food demand behavior, the new technological revolution and associated business innovation, and the deceleration of agricultural trade and labor migration provide much of the socioeconomic backdrop against which the future of work in the AFS unfolds across countries. These transformations are further affected by the recent COVID-19 pandemic. It already has set back income growth . In the long run, the pandemic will reinforce existing trends in AFS automation and digitization and decrease reliance upon agricultural labor migration and trade, especially in the developed world. The pandemic has also exposed vulnerabilities in supply chains, as some countries experienced difficulty securing supplies of strategic goods and risks ushering in a new wave of protectionism .How countries address these, and related, challenges will shape the extent to which the AFS can continue its historically crucial role in reducing poverty and fostering shared prosperity by raising smallholder incomes and creating employment opportunities for young, expanding work forces. We argue that a policy and business environment supportive of inclusive agricultural value chain development will be a critical component of the solution. Adequate competition policies to address the challenge of rising power concentration within the AFS need to be part of the solution, as does the provision of broad access to digital infrastructure. Solutions will also require the provision of quality education to rural populations, including on the use of digital technologies,so that the agricultural and rural workforce can maximally benefit from new technologies and off-farm employment opportunities. To mitigate problems that arise during the farm labor transition and help prevent a reversal to agricultural policy distortions,nft channel adequate social protection systems that mitigate calls for agricultural protectionism must be developed. The decoupling of social protection from employment holds promise in that regard , with the massive expansion of social protection provisions across the globe in response to COVID-19, especially through cash transfers, providing useful experiences and platforms to build upon. The remainder of this paper discusses the impact and evolution of these different forces and reflects on a policy agenda that can leverage the future global food system to generate decent employment, accelerate poverty reduction, and attain shared prosperity.
Work in agriculture tends to be seasonal and dispersed across space, with labor productivity often low and unpredictable. High fertility among rural and agricultural populations, partly in response to low and variable agricultural earnings, often contributes to low labor productivity. As countries become more affluent, their demand for nonfood goods and services increases, and their work forces shift out of agriculture into more stable, high-paying, jobs in industry and services.The development of food manufacturing and services is particularly important in the process of narrowing cross-sectoral income differences. These nodes of the AFS tend to be more labor-intensive and less high tech than other industries and services, more likely to employ women and unskilled workers , and less spatially concentrated .This pattern of structural transformation is evident historically in high-income countries and is currently unfolding in low-income countries . Against this broad and sweeping background of structural transformation, what role will the AFS play as a source of employment and shared prosperity in the future? First, on-farm work will continue to be a major source of employment in poor countries. In low-income countries, as in much of Sub-Saharan Africa, a decrease in the share of the workforce employed in agriculture is still accompanied by an increase in agricultural employment in absolute terms. Given high population growth, the agricultural workforce is projected to continue swelling in the foreseeable future before it starts to decline . The population continues to grow fast while the amount of cultivated land expands. Therefore, in low-income countries, where most of the global agricultural workforce is still concentrated, the transition out of agriculture in the short run does not necessarily imply a smaller agricultural workforce overall. In these settings, the primary challenge is to improve the quality of farmers’ jobs, while also facilitating the transition out of agriculture. In many middle income countries, on the other hand, as well as historically in high income ones, the absolute number of agricultural workers has decreased over time,farm populations have “grayed,”and farm labor shortages in specific commodities at specific points in time have become a feature of the agricultural landscape. Second, agricultural labor productivity will continue to rise. The existence of a persistent and large productivity gap between non-agricultural and agricultural activities is received wisdom in development economics. It is often seen as proof that agriculture is intrinsically less productive and as suggestive that the policy solution for agricultural labor in the developing world lies in removing barriers that prevent people from exiting agriculture . Recent research, however, suggests that agricultural labor productivity is understated . Using micro household data instead of national macro accounts, controlling for skill differences, and expressing productivity in terms of value per hour of labor , labor productivity in agriculture is not lower than in other sectors . This finding suggests that agriculture is not intrinsically less productive but, rather, underemployment in the sector is high, at least in the earlier stages of development. Underemployment is likely linked to the seasonal nature of agricultural production and high fertility rates . If the productivity gap is much smaller than generally assumed, a disproportionate focus on policies to remove barriers to sectoral or spatial migration, however well-intentioned, may be misplaced. In fact, if agricultural labor is only in surplus during the agricultural slack season , such policies may prove ineffective, or they may even exacerbate agricultural labor shortages during planting and harvesting . Improving agricultural productivity would enable a productive move out of agriculture, leaving a more productive agricultural labor force behind. This could be accomplished through the development of complementary activities during the slack season, such as double cropping through irrigation and mixed farming systems .These types of developments would maximize poverty reduction , in contrast to a scenario in which people leave agriculture due to distress following under investment. The road out of agriculture runs importantly through a path that increases labor productivity in agriculture. This agricultural job paradox remains underappreciated. It will eventually leave far fewer people in farming, but they will have better employment conditions, and there will be greater quantities of relatively cheap food available for those in the rest of the economy. This process is still not underway in earnest in many African low-income countries . Third, the successful exit of labor out of agriculture is intimately tied to a successful agricultural transformation . Food expenditure shares decline as incomes increase. Food consumption patterns also change from primary staples to more protein- and micronutrient-rich diets .Eventually, societies tend to demand more processed and prepared foods; they may even develop food consumption patterns that involve eating as an “experience.” Societies become more dependent upon the downstream AFS as a result. This, in turn, opens up new employment opportunities off the farm in food processing, marketing, logistics, food retail, and food services.