Alwin Dsouza, Arizona State University
This presentation is dedicated to the memory of Dr. Hans P. Binswanger-Mkhize who sadly passed away in August 2017
Presented at the ReSAKSS-Asia conference “Agriculture and Rural Transformation in Asia: Past Experiences and Future Opportunities”. An international conference jointly organized by ReSAKSS-Asia, IFPRI, TDRI, and TVSEP project of Leibniz Universit Hannover with support from USAID and Deutsche Forschungsgemeinschaft (DFG) at the Dusit Thani Hotel, Bangkok, Thailand December 12–14, 2017.
India 1960-2010: Structural Change, The Rural Nonfarm Sector, and the Prospects for Agriculture
1. INDIA 1960-2010:
STRUCTURAL CHANGE,
THE RURAL NONFARM
SECTOR, AND THE
PROSPECTS FOR
AGRICULTURE
Alwin Dsouza, Arizona State University
This presentation is dedicated to the memory of Dr. Hans P.
Binswanger-Mkhize who sadly passed away in August 2017
ReSAKSS-Asia conference December 12, 2017
2. Outline
1. Rapid growth, but slow structural
transformation
2. Poverty, labor markets.
3. The rural non-farm sector and its drivers
4. The vision for agriculture, policies and
programs
3. The stylized Structural
Transformation
At the outset of Structural Transformation (ST), labor and
economic output are both concentrated in Agriculture
Because labor productivity in agriculture is lower than in
industry
the share of labor in agriculture exceeds the share in
nonagriculture
During ST, the gaps in labor productivity and between the
agricultural shares of labor and output widen
A turning point is reached when the productivities and the
shares start converging
recently estimated by Peter Timmer at between 1600 and 9000
dollars per capita incomes ($ of 2000)
Convergence is driven by rapid absorption of labor in the
6. Productivity Growth in
Agriculture
* till 2007
Indicator
Growth rates for decade
or three year avg. centered on last year shown
Average
growth rate
of 2006---
2009
1961---
1970
1971---1980 1981---
1990
1991---2000 2001---
2009
Agricultural
GDP growth
3.8 1.5 3.3 2.7 2.8 3.1
Growth of Agric.
Output per
worker
0.6 0.4 2.3 1.2 1.1 1.5
TFP growth
India*
0.0 0.0 2.0 1.5 1.9*
TFP growth
China*
0.0 0.0 2.8 4.2 2.7*
Total
population
growth
2.1 2.3 2.2 2.0 1.6
* Till 2007
7. Structural Transformation has been
very slow, a turning point may be far
away
The rural and agricultural labor forces are still
growing
Rural-urban migration is very slow
After a sharp slowdown, agricultural
productivity growth has accelerated only very
recently
Increasingly divergence in labor productivity
between agriculture and non-agriculture
8. The rural non-farm sector: the major
source of rural income and employment
growth
9. India’s structural transformation is
stunted
Much of the growing labor force is stuck in rural
areas
The largest growth in nonagricultural employment is
in the rural non-farm sector rather than in urban
areas
In all sectors there are few high quality jobs with
security of employment and benefits
While the urban-agricultural productivity differential
has been rising, rural urban income differences
grew little on account of non-farm growth
10. Major reforms in policies and
programs are required
More responsive, accountable and better financed
research system
Efficient use of inputs through better technology
and genetically advanced crops.
Better financed, diversified and accountable
agricultural extension system.
Greater role for private sector in both research and
extension
Expansion of electricity for effective use of irrigated
water.
11. The marketing and value
chain
This sector is modernizing very rapidly
Remaining constraints in marketing systems need
to be eliminated
Competition in the sector needs to be fostered to
contain margins between producer and consumer
prices
Efficient farmer organizations and contract
farming need to develop much faster