Agricultural Wage Rates Research Articles

Factor Market Activity and the Inverse Farm Size-Productivity Relationship in Tanzania

Although the inverse farm size-productivity relationship (IR) is sometimes used to motivate arguments in favour of smallholder-led agricultural development, it remains unclear what drives this relationship. It may be attributed to market imperfections that compel small farms to use land more intensively than large farms. Using a three-wave longitudinal household survey from Tanzania, we examine whether the intensity of the IR is related to local factor market activity for land, labour, credit, and animal and machine traction. The IR holds in Tanzania when family labour is either not counted or valued at its shadow cost, though it disappears when family labour is valued at the prevailing local agricultural wage rate. Moreover, the IR is significantly weakened in regions with relatively active agricultural factor markets, such as for land and mechanization services. This suggests that the IR is at least partly driven by imperfections in rural factor markets. As household participation in agricultural factor markets continues to rise, the IR may be expected to weaken or even reverse.

Push and (or) Pull? Drivers of Labour Force Participation in Indian Agriculture

Labour force participation rate in the Indian agricultural sector is gradually declining. This paper wants to investigate the possible causes behind it. Here both possible push and pool factors behind this decline are considered simultaneously. Initially, on the basis of 70th round NSSO data on agricultural households, it is tested whether or not marginal farmers are enjoying comparative advantage during the time of getting employment in the agricultural sector as agricultural labourer. But as ‘decline’ is a flow concept, to investigate possible reasons behind this decline, we have considered six rounds state-level NSSO data on Employment Unemployment Survey of India and its 20 major states. Applying fixed effect panel data regression technique after considering state-specific possible factors, it is found that gradual decline of per capita land holdings is the major push factor responsible for gradual decline of labour force participation rate in Indian agriculture. Apart from that, other push factors like hike of real agricultural wage rate, improvement in education level of the agricultural households and pull factor like hike of non-farm real wage, employment opportunities in construction and other non-farm activities are found significant for gradual decline of labour force participation rate in Indian agriculture.

SEVERAL FACTORS THAT INFLUENCE HOUSEHOLD ECONOMIC DECISIONS OF RICE FARMERS IN INDONESIA

The objective of this study is to point out the factors that influence household economic decisions in the use of labor, production, and consumption. This study was undertaken in Kupang regency, East Nusa Tenggara with 114 samples of agricultural household. A specification of household economic model used a simultaneous equations system. Parameter estimation uses two-stage least squares (2SLS) method. The results showed that the act of using labor in a household for rice farming was significant influenced by agricultural wage rate, rice product price, household income, farming area, and the number of household member. While the use of wage-labor was significant influenced by wage rate, farming area, and the use of household (domestic) labor. The use of urea and SP-36 was affected by ratio of rice price to fertilizer, and farming area. Rice production was influenced by farming area, total number of labor used, and amount of fertilizer used. Rice consumption from farming was positively significant influenced by an amount of rice production produced and the number of household member. Rice consumption from purchase was negatively influenced by the number of rice production but positively influenced by the number of household member.

Influence of NREGS on Agricultural Wage Determination in West Bengal: A Dynamic Panel Approach

It is investigated whether the expansion of the National Rural Employment Guarantee Scheme (NREGS) can influence the real agricultural wage in West Bengal. The time period studied is between 2005-06 and 2012-13 where 18 districts of the state are used as a unit. Three types of NREGS work like, (i) provision of irrigation facilities, (ii) micro irrigation work and (iii) rural connectivity are considered separately because these works are undertaken in a majority during this tenure. These works have been measured as the total number of tasks completed in different districts in the different years. They are considered separately because each type of asset creation work could influence agricultural wage but not uniformly. Both the ‘push’ and ‘pull’ factors functioning in the labour market are deemed as being able to impact agricultural wage rates. Agricultural wages of a particular district in a particular period is also very affected by the agricultural wage rates prevalent in the same district in the previous period. The dynamic panel approach used in this paper shows that all three types of NREGS work are responsible for the hike of real agricultural wage rates in West Bengal but the impact has not been very strong. It may then, be concluded that, the expansion of the NREGS has little impact when determining the real agricultural wage rate in West Bengal.

Wage Growth, Landholding, and Mechanization in Chinese Agriculture

This paper aims to examine the dynamics of land transactions, machine investments, and the demand for machine services using farm panel data from China. Recently, China's agriculture has experienced a large expansion of machine rentals and machine services provided by specialized agents, which has contributed to mechanization of agricultural production. On the other hand, the empirical results show that an increase in non-agricultural wage rates leads to expansion of self-cultivated land size. A rise in the proportion of non-agricultural income or the migration rate also increases the size of self-cultivated land. Interestingly, however, relatively educated farm households decrease the size of self-cultivated land, which suggests that relatively less educated farmers tend to specialize in farming. The demand for machine services has also increased if agricultural wage and migration rate increased over time, especially among relatively large farms. The results on crop income also support complementarities between rented-in land and machine services (demanded), which implies that scale economies are arising in Chinese agriculture with mechanization and active land rental markets.

Agricultural Employment, Wages and Poverty in Developing Countries

Drawing upon panel data estimations, we have analysed the relationships among agricultural productivity, employment, technology, openness of the economy, inequality in land distribution and poverty. First, we have identified a number of important factors affecting agricultural productivity, such as agricultural R&D expenditure, irrigation, fertilizer use, agricultural tractor/machinery use, reduction in inequality of land distributions, or reduction in gender inequality. Second, while agricultural wage rate is negatively associated with agricultural productivity and food price in levels, the growth in agricultural wage rate is positively correlated with the growth in agricultural land or labour productivity as well as with the growth in food price, particularly after 2000. Contrary to the ILO’s (2012) claim that the gap has widened recently, this suggests the narrowing gap between wage and labour productivity once we focus on the conditional relationship between the two. Third, agricultural employment per hectare tends to increase agricultural productivity after taking account of the endogeneity of the former, while the growth in agricultural employment per hectare tends to increase the growth in non-agricultural employment over time with adjustment for endogeneity of the former. In this context, we have reviewed the recent literature and emphasised the importance of enhancing agricultural productivity and employment. Fourth, both agricultural growth and non-agricultural growth tend to lead to reduction in overall inequality. Finally, increase in agricultural productivity which is treated as endogenous will reduce poverty significantly through the overall economic growth. Overall, policies to increase agricultural productivity and agricultural employment are likely to increase non-agricultural growth, overall growth and reduce poverty, where guaranteeing gender inequality is likely to be one of the key factors.

Farm size and profitability of rice farming under rising input costs

As small farmers produce 90% of the total rice in the world, it is important to maintain adequate incentives for small rice farmers to ensure an adequate global rice supply. Rising input prices and agricultural wage rates, however, have been reducing overall profitability, consequently generating disincentives to rice farmers. Using household income and expenditure survey data for 2000 and 2010, this paper econometrically demonstrates that the loss in profitability is generally larger for small farms than for large farms, as small farms use more labor and other inputs than large farm households to earn higher rice income and profit. This paper econometrically demonstrates that, while per acre overall rice farming profitability (profit/total revenue) in Bangladesh declined more in 2010 than in 2000, the rate of reduction for small rice farm households is higher than for large farm households. It is found that, for both small and large farm households, the costs of wages, chemical fertilizer, irrigation, and tilling increased more significantly in 2010 than in 2000; however, the rate of increase for small farm households was higher than for large farm households. Consequently, the total cost of rice farming per acre for small farm households increased more sharply in 2010 than for large farm households. As a result, the profitability of rice farming per acre for small farm households declined more than for large farm households in 2010. Policies are drawn up based on the findings.

How does population density influence agricultural intensification and productivity? Evidence from Malawi

This article uses nationally representative household-level panel data from Malawi to estimate how rural population density impacts agricultural intensification and household well-being. We find that areas of higher population density are associated with smaller farm sizes, lower real agricultural wage rates, and higher real maize prices. Any input intensification that occurs seems to be going to increasing maize yields, as we find no evidence that increases in population density enable farmers to increase gross value of crop output per hectare. We also find evidence that households in more densely populated areas increasingly rely on off-farm income to earn a living, but there appears to be a rural population density threshold beyond which households can no longer increase off-farm income per capita.

Wage and employment effects of Malawi's fertilizer subsidy program

This article uses three waves of nationally representative household-level panel data from Malawi to estimate how a large-scale fertilizer subsidy program impacts the agricultural labor market, known as ganyu in that country. I find that when looking across the entire population of smallholders, receiving an additional 100 kg of subsidized fertilizer causes the average household to supply about three fewer days of ganyu. The fertilizer subsidy program also has a small positive effect on the probability that a household demands agricultural labor, with the results approaching statistical significance. In addition, a 10 kg increase in the average amount of subsidized fertilizer acquired per household in a community boosts the median agricultural wage rate by 1.4% in that community. The increase in wage rates translates to a US $1.40 per year increase in average household income in the years after Malawi's subsidy program was scaled up, and a US $1.86 per year increase in average household income for those who sold their labor before the subsidy program was scaled up. This finding suggests that households who sell their labor off farm may experience some small spillover benefit from the program in the form of higher agricultural wage rates.

Changes in Labour Market and Domestic Agriculture

Sri Lanka&rsquo;s economy has undergone significant structural changes during the past two decades. The manufacturing and services sectors show a considerable growth during this period and these changes in the economy seem to have had a greater influence on domestic agriculture. Sri Lanka&rsquo;s rural areas have witnessed the co-existence of rising wage rates of domestic agricultural sector workers with relatively high unemployment levels. The real price of agricultural output shows a declining trend while the real wage rate in domestic agriculture shows an increasing trend. This study examines the influence of the expansion effect of non-agricultural sector on the real wages of the domestic agriculture during the post reform period. Engle and Granger methodology is used to determine the relationship between real agricultural wage rates, capital formation in non-agriculture and wage rate of export agriculture. The results indicate the presence of a long-term relationship between wage rate and capital formation in the non-agriculture sector. Increase in labour productivity, suitable farm mechanization and institutional changes related to land and labour would help to mitigate the negative influence of rising wage rates on domestic agriculture. DOI: http://dx.doi.org/10.4038/sjae.v6i1.3472 <em>SJAE </em>2004; 6(1): 82-97

“Capture” of anti-poverty programs: An analysis of the National Rural Employment Guarantee Program in India

Using pooled household level data for the Indian states of Rajasthan and Andhra Pradesh we find that the size of landholdings is a negative predictor of participation in the National Rural Employment Guarantee Program (NREGP). In state level analysis this pattern survives in Rajasthan but reverses in Andhra Pradesh where we notice a positive relationship. This paper examines whether this sign reversal in Andhra Pradesh is indicative of program capture in Andhra Pradesh and better targeting in Rajasthan. We compare land inequality, ratio of NREG and slack season agricultural wage rates, political interference, and geographical remoteness across the two states and conclude that program capture may be an issue in Andhra Pradesh, largely because of these reasons. We also find evidence of complementarity between NREGP and the Public Distribution System (PDS), implying that the real income transfer through food subsidy needs supplementation.

Poverty decline, agricultural wages, and nonfarm employment in rural India: 1983–2004

AbstractWe analyze five rounds of National Sample Survey data covering 1983, 1987/1988, 1993/1994, 1999/2000, and 2004/2005 to explore the relationship between rural diversification and poverty. Poverty in rural India has declined at a modest rate during this time period. We provide region‐level estimates that illustrate considerable geographic heterogeneity in this progress. Poverty estimates correlate well with region‐level NSS data on changes in agricultural wage rates. Agricultural labor remains the preserve of the uneducated and also to a large extent of the scheduled castes and scheduled tribes. We show that while agricultural labor grew as a share of total economic activity over the first four rounds, it had fallen back to the levels observed at the beginning of our survey period by 2004. This all‐India trajectory also masks widely varying trends across states. During this period, the rural nonfarm sector has grown modestly, mainly between the last two survey rounds. Regular nonfarm employment remains largely associated with education levels and social status that are rare among the poor. However, casual labor and self‐employment in the nonfarm sector reveals greater involvement by disadvantaged groups in 2004 than in the preceding rounds. The implication of this for poverty is not immediately clear—the poor may be pushed into low‐return casual nonfarm activities due to lack of opportunities in the agricultural sector rather than being pulled by high returns offered by the nonfarm sector. Econometric estimates reveal that expansion of the nonfarm sector is associated with falling poverty via two routes: a direct impact on poverty that is likely due to a pro‐poor marginal incidence of nonfarm employment expansion; and an indirect impact attributable to the positive effect of nonfarm employment growth on agricultural wages. The analysis also confirms the important contribution to rural poverty reduction from agricultural productivity, availability of land, and consumption levels in proximate urban areas.

インド・グジャラート州中部における農業労賃の低位性--農村インフォーマル金融制度との関連に焦点を当てて

インド・グジャラート州中部における農業労賃の低位性--農村インフォーマル金融制度との関連に焦点を当てて

Agricultural Wage Rates Under Forced and Free Labour: Pre‐1944 and Post‐1954 Guatemala

From 1871 to 1944 liberal trade and foreign investment policies were combined with illiberal labour coercion to create a classic export economy based on coffee plantations. The substantial reallocation of labour from the subsistence‐oriented peasant economy to the coffee sector is associated with a sustained reduction in the agricultural wage rate. Throughout the forced labour period the wage was below a subsistence level, made possible by rural workers’ access to land for their own subsistence production. The post‐1954 free labour period is associated with a once‐and‐for‐all doubling of the real wage to a subsistence level, consistent with the emergence in this period of a sizeable landless rural labour force. In the free labour era, the commercial agricultural sector has grown in ‘classical’ fashion, drawing on labour at a virtually constant, subsistence wage.

Economic Issues Regarding Irrigation Developments in Southern Egypt and on the Sinai Peninsula

The Government of Egypt is implementing projects that will expand irrigated areas on the Sinai Peninsula and in the southern desert. The projects will increase the annual demand for irrigation water in Egypt, while reducing the supply of Nile River water available to farmers in the Nile Delta. One goal of the projects is to reduce population pressure in the Delta by developing new communities in desert areas. The Government is encouraging private-sector investments in the projects, but substantial public funding also is being used to construct pumping stations, canals, and other facilities. The projects may impose opportunity costs and unintended consequences on agricultural production, rural development, and food security in the Nile Delta. The opportunity costs may include financial, hydraulic, political, and intellectual components, while unintended consequences may include reductions in agricultural wage rates in the Nile Delta and larger economic losses during sustained dry periods. Full consideration of opportunity costs and unintended consequences may be helpful in identifying complementary investments and policies that will increase the productivity of land and water resources, improve rural incomes, and enhance food security.

An Empirical Investigation of Short- and Long-run Agricultural Wage Formation in Ghana

This paper investigates the factors that influence real agricultural wage rates in Ghana, a critical issue in that country for promoting successful macroeconomic adjustment to structural changes in incentives. It is based on 1957-91 data. The Johansen cointegration framework is used to quantify and to examine the stability following major shocks of new long-run relationships among agricultural and urban wage rates, the domestic terms of trade between agriculture and non-agriculture, urban unemployment, capital stock in agriculture and the size of the rural population. An error correction model is then used to investigate short-run dynamic relationships among the variables. Results show that: (1) there is only one stable equilibrium relationship among agricultural wage rates and their determinants in the long run; (2) a 1% change in the domestic terms of trade between agriculture and non-agriculture leads to a 0.48% change in the real agricultural wage rate in the short run and a 0.83% change in the long run; and (3) the analysis suggests a one-time and one-way upwards structural shift of 3.6% in real agricultural wages during the 1980s.

Jawahar Rozgar Yojana, Panchayats, and the Rural Poor in India

Rural public works are a major component of India's poverty alleviation strategy. The Jawahar Rozgar Yojana (JRY), the largest such program, was launched in 1989 following the merger of the National Rural Employment Program (NREP) and Rural Landless Employment Guarantee Program (RLEGP). Between 1992-95, total allocation for the JRY grew 18%, from Rs 11.3 billion to Rs 13.4 billion (at 1980-81 prices-all government expenditure data are deflated at this level). Person-days of employment generated rose from 782 million to 895 million, implying a growth of more than 14%.1 The JRY aims to alleviate poverty through creating supplementary employment opportunities for the rural poor during agricultural slack periods. Other objectives are creating social assets, such as, roads, public forests, school buildings, and so forth, and increasing agricultural wage rates. JRY employment preference is given (though no specific targets are set) to members of Scheduled Castes (SCs) and Scheduled Tribes (STs) and 30% of the employment opportunities are reserved for women. The central government's assistance to India's states and union territories is allocated on the basis of the proportion of rural poor in a state or union territory to the total rural poor in the country. Within a state, district-wise allocations are based on an index of backwardness that weights equally the proportion of rural

The Determination of Agricultural Wage Rates in Bangladesh

The impact of the 'green revolution' on wages has been a contentious issue. This paper uses the cointegration and error correction approach to identify long and short-run relationships between prices, agricultural production and wages of agricultural labourers in Bangladesh, test for homogeneity, test for weak exogeneity with the Johansen-Juselius methodology, test for a structural break, and estimate the long and short-run elasticities of nominal wages with respect to rice prices. We find that agricultural wages have strong positive long run relationships with rice prices, manufacturing wages and agricultural productivity. The short run response of wages, estimated consistently with these longer run relationships, to rice prices is small, highlighting the vulnerability of the rural poor to sudden rises in rice prices, even though in the longer run nominal wages respond sufficiently to rice prices. Policy can promote growth of agriculture and manufacturing but should also mitigate the short run food insecurity of agricultural labourers.

The Influence of London on Labor Markets in Southern England, 1830-1914

Historians have long acknowledged that London, because of its enormous size and rapidly growing demand for labor, acted as a powerful magnet for migrants from throughout southern England. However, while there is a large literature documenting the flow of migrants to London, there have been surprisingly few attempts to determine the consequences of this migration for southern labor markets. This article attempts to redress the imbalance in the literature by examining the influence of London on agricultural labor markets during the nineteenth century. In particular, the article examines the effect of distance from London on wage rates in southern England at various points in time, and the effect of labor market conditions in London on short-run changes in agricultural wage rates.

Migration and Labour Market Integration in Late Nineteenth‐Century England and Wales

This study examines aspects of internal labor migration in late nineteenth-century Britain. section I a simple framework is set out which stresses the links between migration and labour market integration. In section II the evidence on the character of migration flows their magnitude and direction is examined. Section III focuses on the determinants of migration flows at the county level particularly from rural southern counties. This is followed in section IV with an examination of the effect of rural-urban migration on agricultural wage rates. Section V considers the evidence on regional labour market integration and is followed by a brief conclusion summarising the results. (EXCERPT)