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Agricultural Productivity: Fields of Dreams?

by Bennett Voyles

November 26, 2013

Rural China
A farmer in rural China. Photo courtesy: iStockphoto

As agricultural productivity grows, rural life continues to evolve.

Factories, skyscrapers, airports–picture modernity and chances are you’ll think first of an urban landscape, or an industrial wasteland. As for the rural world, everyone knows that’s what modernity ruins: as Henry David Thoreau noted in his journal in 1852, “This winter they are cutting down our woods more seriously than ever… Thank God they cannot cut down the clouds!”

In fact, a truer picture of modernity may be a forest teeming with wildlife. In Thoreau’s time, for instance, the northeastern US was 70% fields. Now, it’s 80% forests, according to Harvard University research–even as its population has grown from 2.7 million to 14.5 million. Nationwide, the number of deer has grown from 300,000 in the 1930s to more than 30 million today, according to a 2005 Associated Press report.

The underlying factor that drove this transformation was soaring agricultural productivity. In 1870, it took 80 Americans to feed every 100. By 2002, that number had fallen to around two, according to World Bank figures–and those two remaining farm workers were producing so much food that obesity had become the country’s number one health problem and agricultural products one of its largest exports: some lobbyists estimate that every US farmer feeds roughly 155 people.

In many rapidly developing countries, a similar revolution is now underway as rising yields and mechanization steadily reduce the need for labor and cultivation grows ever more intense. In China, for example, economists now estimate that the need for labor declined by around 5% a year between 1991 and 2009, even as total agricultural productivity rose by 6.5% (Cao and Birchenall, 2013),

A 6.5% tick isn’t exactly Moore’s Law, but over the last three decades, steady, long-term gains in such a massive economic sector have already led to some vast social changes, as the percentage of Chinese living in cities has risen from 21% in 1982 to 50%-plus in 2012–when for the first time in history the country became more urban than rural–and rising yields have made famines a thing of the past.

This revolution is changing other dynamics as well. In China, those same researchers estimate that more than 50% of agricultural laborers are now over 50, up from 22% in 1991. In some villages, only the young and the old have stayed home, and most working-age adults are off seeking their fortune in the city. “I’ve actually been in villages where you don’t see anybody of normal working age,” says Alan de Brauw, Senior Research Fellow in the Markets, Trade, and Institutions Division of the International Food Policy Research Institute (IFPRI) in Washington, DC.

The gender balance has also changed in agriculture. As men leave for other work, more farm workers in China are now women. “Their labor input is decreasing but more slowly than men’s input,” de Brauw explains.

This has some important consequences, according to de Brauw. For one thing: more women in control mean more women now decide which crops to plant, and have more say over what to do with the money those crops bring in.

It changes the children as well: de Brauw found that migrants’ children weigh more, a difference he ascribed in part to the fact that they tend to have better access to tap water, according to a 2012 IFPRI study.

And this is likely only the beginning: even after 30 years of steady development, greater efficiencies are still to be gained: 37 of every 100 Chinese workers are still out in the fields, according to World Bank figures. Meanwhile, a number of other countries have plenty of room to raise their agricultural productivity as well. For every 100 people, the number of agricultural workers is 39 in Thailand, 48 in Vietnam, 51 in India, and 66 in Uganda. Even the rapidly modernizing Brazil still has 17 out in the fields, although Chile, its richer neighbor, is down to 11.

Yet despite rising yields and remittances home from urban migrant workers, the face of poverty is still more likely to belong to a weather-beaten peasant than anyone else. In 2005, of the world’s 1.4 billion people living in extreme poverty (less than $1.25 a day), approximately 1 billion lived in rural areas, according to an estimate of the International Fund for Agricultural Development (IFAD).

Nor are the absolute numbers of rural people going down yet, at least in some regions. Rural populations aren’t expected to peak until 2025 in South Asia and 2050 in Africa, according to Douglas Gollin, a professor of development economics at Oxford University.

Gollin is also skeptical that the kind of consolidation and mechanization seen elsewhere will happen to the typical African farm anytime soon. “At some level, the economic reasons why it would stay small are the same reasons why it’s already small: markets are segmented, transport costly, economies of scale not self-evident,” he says. Complicated property laws also make it difficult for people to create large farms, and in any case, large farms are very capital-intensive.

Finally, farms tend to be family run. “Farming almost everywhere is a family-managed activity,” Gollin says. “We think we understand why that is: it’s about the difficulty of monitoring and incentivizing hired labor in agriculture, other than in tasks like picking.” Farming also requires a lot of judgment. As a result, between the need to make many ongoing decisions and the need to monitor labor, a lot of agriculture remains primarily a family business, according to Gollin.

Nor is Gollin optimistic about the impact of communication technologies. “There’s a supposition that the big challenge for farmers is information problems or knowledge problems. I’m not sure I buy that myself. I think farmers have always had ways of getting information from each other,” he says, particularly as farming is an intensely local business–even on an individual farm, what works well in one section may not work well in another.

De Brauw is also skeptical of technology as a cure-all. For example, in a recent experiment, he said, he convinced a telephone manufacturer to sell him a number of cellphones at cost, which he was able to sell quickly to 150 farmers in Madagascar for $11 a unit–a lot of money in that community. However, although they wanted the phones, de Brauw says he wasn’t able to persuade many of the farmers to use the phones as a way to transfer money, which had been an important goal of the experiment.

Raising the Last Billion

So what might help raise these last billion people out of such horrendous poverty?

Although economists continue to debate what particular recipe for agricultural development works best–or even if there can be one recipe, given so many radically different conditions between markets–most see some common elements:

Roads. Economists are now fairly unanimous about roads: in terms of productivity, being able to get goods to market and ideas back from the market seems to trump everything else. “I do think transportation is a really important issue,” says Gollin. “I think we’re increasingly aware of how remoteness limits the attractiveness of new technologies.”

Capital. One of the oldest problems in agriculture is cash flow: the money tends to come in long before it needs to be invested for the following year’s crops. “Development economists have been trying to solve that in various ways for 50 years,” points out de Brauw. Some experiments with savings accounts that accept the money at harvest and don’t let it out until planting seem to have worked well, de Brauw says. “In specific contexts, I think that could be quite successful.” Insurance is also an important focus for researchers, Gollin says.

But perhaps best of all is cash. “Cash transfers seem to work quite well in a variety of contexts, whether they are conditional or unconditional,” says de Brauw. Whether the support comes in the form of a remittance or cash in exchange for doing something, such as having children vaccinated, money turns out to be an excellent cure for poverty. Brazil’s massive redistribution program, for instance, accelerated rural economic growth substantially, he notes.

Title. In many places, who owns what is not that clear, making it difficult for farmers to buy and sell parcels or to use land as collateral.

Education. IFAD suggests that the biggest barrier facing the rural poor is their lack of skills: virtually all rural people everywhere who emerge from poverty do so by acquiring more specialized skills. Farming may be part of how they make a living, but in an economically successful family, it is typically only a part.

Southern friends. Gollin says similarities of conditions between Africa, South America, and Asia, and the fact that three of the world’s best agricultural science research systems in the world are operated by three of the biggest agricultural powers–China, Brazil, and India–may serve to help African farmers. These institutes do “absolutely first-rate science,” Gollin says. At the same time, he adds, southern private sector companies are developing machinery to serve farmers working “in places that don’t look like Iowa.”

De Brauw also notes that he has seen the down-sized farm equipment that has helped revolutionize Chinese farming because it’s suited to smaller Chinese plots for sale now in Africa.

Back to the Wild

Of course, the success of agricultural productivity and the ensuing focus on conservation can lead to problems of its own. The resurgence of wildlife can lead to a number of problems, particularly in the absence of predators. In the US, millions of hungry deer cause billions of dollars in damage to crops every year. Many also carry a tick that can cause Lyme Disease, a chronic disease that exhibits such a wide range of symptoms it is often misdiagnosed as a number of other ailments, including multiple sclerosis, rheumatoid arthritis, or lupus.

More deliberate conservation can also have unintended consequences. In Uganda, for instance, even as farmers living near Kibale National Park profit from economic opportunities created by visiting tourists, they are also hurt by some of the park’s permanent residents: declining grasslands inside the park are leading elephants to visit farmers’ plots to forage on maize, avocados or bananas, according to Aerin Jacob, a PhD student in ecological restoration at McGill University in Montreal, Canada, who studies the western Ugandan park.

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