Abstract
Relative to other developing regions, developing Asia has experienced a slower decline in employment share in agriculture, compared to its output share; a rapid growth in labor and land productivity; and a shift from agricultural output from traditional to high-value products. The most successful Asian economies have pursued an agricultural development-led industrialization pathway. Nevertheless, agriculture remains the largest employer in many large Asian countries, hence future structural transformation must take into account agricultural transformation. Extrapolating from past trends, and taking to account emerging conditions, many countries of developing Asia will be expected to move on to the next phase of agricultural development; however even in the long term, agriculture’s employment share will continue to be sizable relative with the output share. To expedite transformation, many Asian countries will still need to promote long term productivity growth in agriculture and facilitate upgrading of their farms and agroenterprises within the global value chain.
Highlights
Agricultural transformation in Asia will likely proceed according to past trends, though the pace and direction of change will be punctuated by emerging challenges and opportunities related to environmental stress, market instability, future technological breakthroughs, and the rise of global value chains
By 2040, if current trends continue, agriculture’s employment share will remain sizable, compared to the output share
The link between agricultural development and poverty alleviation indicated the positive interaction between the political economy of rapid growth and a development strategy that emphasized the role of the rural economy
Summary
A strategy that pays greater attention to the role of agriculture in development can help the poor trace pathways out of poverty, through improved livelihoods in agriculture, market access for smallholders, increase in skilled employment in rural areas, and establishment of efficient value chains. These pathways entail investments in effective research and development and technology transfer, human resource development, transport infrastructure and contract enforcement, other public goods and rural infrastructure, and a functional and equitable system of land rights. The rationale for industrial policy, often applied to manufacturing can be extended towards farm and agribusiness support
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