How can we create inclusive employment in agriculture?

Extreme poverty in the world has decreased considerably over the past three decades. In 1981, more than half of citizens in the developing world lived on less than $1.25 a day. This rate has dropped dramatically to 21% in 2010. Moreover, despite a 59% increase in the developing world’s population, there were significantly fewer people living on less than $1.25 a day in 2010 (1.2 billion) than there were three decades ago (1.9 billion). However, 1.2 billion people still live in extreme poverty—an extremely high figure, so the task ahead of us remains herculean.
Among the poor, 78% live in rural areas, and 500 million of these are small farmers. Of these, 170 million are women farmers. Globally, 2.5 billion are dependent on small farms as a source of livelihood and employment. Agriculture contributes one third of GDP in Africa and more than 65% of the workforce depends on this sector. There has been significant progress in increasing agricultural production and expansion of livelihood and economic opportunities in rural areas. There are about 40 million enterprises, from very small to medium-sized, involved in agribusiness.
Nevertheless, they are too small in size and quality to make the kind of dent in jobs and employment that is needed. Agriculture accounts for 32% of total employment globally, according to the ILO’s Global Employment Trends Report 2014. In 2013, 74.5 million youth – aged 15-24 - were unemployed, an increase of more than 700,000 over the previous year. That same year, the global youth unemployment rate reached 13.1%, which was almost three times as high as the adult unemployment rate. One contributing factor in these rates is the lack of interest in agriculture among youth cohorts. Simply put, agriculture is not a preferred job and livelihood option for young people.

Can Agriculture and Food become the next growth engine and job creator/promoter?

As we look at the potential of agriculture to become a job and livelihood creator for the bottom 40%, including rural youth and women, many opportunities emerge.

Firstly, food production is no longer restricted to cereals. With the demand for fruits, vegetables and dairy products increasing in urban settings and rural areas, there is significant potential to expand employment opportunities. Global vegetable production is about to reach 1.1 billion metric tons. Global milk production has already exceeded 750 million tons, and approximately 150 million households around the globe are engaged in milk production. In most developing countries, milk is produced by smallholders, and milk production contributes to household livelihoods, food security and nutrition. Milk provides relatively quick returns for small-scale producers and is an important source of cash income. In addition, aquaculture and fish production has reached 158 million tons.

There is significant difference in employment and enterprise opportunities created in vegetables, fruit, milk and aquaculture as compared to cereals. In Kenya, 6 jobs are created per hectare of vegetable crops that are exported, including 3 positions in the field, 2 in packed houses and one with the exporter. In Nigeria, for every 10 metric tons of catfish 8 jobs are created; one on the fish farm and the rest in supply chain including “Market Queens”, “Market Mamas”, and ladies running the Buka restaurants. The implication of all this is that a large proportion of future jobs will be created not only on farms but also in positions connected to food servicing and delivery.

Pathways to Inclusive employment in agriculture

There are four pathways emerging for the bottom 40% to access more, better, and inclusive jobs in agriculture and related sectors in rural areas. Firstly, small farmers need mechanisms through which they can aggregate their produce to deal with the market. They need to be organized as producer organizations and companies and engage with the market differently. Secondly the value chains should be developed in such a manner that they become more inclusive and developed with jobs and enterprises perspective. Thirdly, there needs to be more investment in expanding the ecosystem of small and medium-sized enterprises (SMEs). Existing SMEs should be encouraged to grow faster and new SMEs to emerge. Fourthly, youth need to be provided opportunities for skill development and enhancement so they are able to access entrepreneurship opportunities and acquire jobs in agribusiness, non-farm, and rural labor markets.

A new Global Solution Group for the Agriculture Global Practice

The Agriculture Global Practice at the World Bank works with Governments and clients to support them design and manage policies and investments that promote new opportunities in agriculture, food and related sectors in rural areas. A new Global Solution Group has been recently set up in the last six months to match problems and challenges with solutions in this area. It has a multi-sectoral composition, with professionals from various practices across the Bank participating. Bank staff who are designing or managing programs within the Agricultural sector share challenges or problems, and the Global Solution Group identifies solutions that have previously been tried in the Bank and outside. The GSG and Bank staff then work together to consider the possible solutions and how they might impact the design or evaluation of programs. These lessons are also shared with clients and presented to senior decision makers to help them take decisions and carry out informed dialogues.

Informed presentations and discussions with the Minister for Agriculture and Rural Development of Kosovo about how to create a more favorable ecosystem for Agribusiness investment and Rural Enterprise ecosystem in the country were conducted. Tunisia and Morocco Teams are looking for approaches which integrate poverty reduction, value chain development, and market based approaches to climate smart agriculture and will launch an interesting set of studies and dialogues with clients in the country. A team in Tanzania is looking at designing a new Horticulture Development Project informed by analytics, including a tool which will enable the team to apply a Jobs lens to value chains.

All these experiences are being documented and curated by the GSG and will be offered on the GSG website platform to enable all staff of the World Bank to access this knowledge, including papers, presentations, videos and other material. The GSG team is also trying to make this interactive so that individuals could post both challenges and solutions and create a vibrant community of practitioners.