Can agriculture contribute to inclusive rural economies?

Abstract

If agricultural development is to contribute to economic growth, it has to do more than increase the productivity or efficiency of farming. It also needs to contribute to employment in the rural non-farm sector. This is because increases in the intensity, efficiency or competitiveness of agriculture often push large numbers of people off the land – and opportunities for finding alternative employment in the cities are scarce. Inclusive growth thus also depends on the development of an inclusive and diverse rural non-farm economy (RNFE). This is something often ignored both by agricultural and labour market policy. Policymakers, therefore, need to ask how different pathways of agricultural development affect non-farm employment. Research conducted by PLAAS indicates that agricultural development can indeed stimulate local non-farm job creation – but the links are neither simple nor direct. While access by farmers to lucrative global markets or national markets can stimulate the local economy, much depends on the precise nature of the forward and backward linkages that connect farming to the rest of the economy. The ability of farming to stimulate the RNFE depends greatly on the scale of agriculture, the social and spatial organisation of agricultural value chains and the political economy of local institutions.