Farming Community Has Surpassed Its Peak

Will Africa spoil the party?

The global number of farmers reached its peak at the beginning of this millennium. Following a steady decrease over the first two decades of this century, the sudden increase in the number of farmers in the 2020s raises questions about Africa's economic performance in light of its projected population explosion this century. This article analyzes these trends and concludes that Sub-Saharan Africa will slow down the continuing global structural transformation. In that part of the world, population growth and structural transformation are projected to result in an agricultural workforce of 460 million by 2075. This transformation can occur with fewer imbalances in food provision and employment and may proceed more rapidly if Sub-Saharan governments support rural entrepreneurs through infrastructure investments, solid macro-economic policies, addressing land inheritance issues, and fostering cooperative development in rural areas.

Structural transformation

The number of farmers worldwide has been increasing for centuries. As the global population grew, so did the number of individuals engaged in agriculture, animal husbandry, and fisheries. This includes farm managers, laborers, and family members involved in farming, collectively referred to here as farmers. However, since the beginning of the millennium, the number of farmers peaked at 1.4 billion and then began to decline. Over the last 25 years, the global number of farmers has already shrunken to 1.2 billion.

This trend is a well-known expected pattern and reflects the development of the world economy. Similar trends occur in most countries and is indicative of their structural transformation from agrarian societies to modern economies reliant on manufacturing and services. Continuous progress and well-being of the global population depend on creating more value efficiently, requiring increased productivity. Only countries rich in natural resources, like oil producers, can enormously spur this socio-demographic dynamic. Generally, successful economic transformation allows fewer farmers to feed a growing population, reducing simultaneously the need for land in agriculture.

In agrarian societies like present-day Burundi, about 80 out of 100 workers are farmers. In highly developed countries like the Netherlands, still known for its agricultural prowess, only 1 out of 100 individuals works in the primary sector. As more people find employment outside agriculture, more goods and services are produced, enhancing overall well-being. Initially, the relative reduction in the number of farmers in the total workforce may not be evident due to population growth. Eventually, also the absolute number of farmers declines. This shift began in the early 20th century for the first industrializing countries and around the millennium change for the world as a whole.

At the turn of the century, the global number of farmers reached its peak of 1.4 billion. Since then, the number has decreased, mainly due to developments in countries like China, Cambodia, the Philippines, Laos, and Vietnam, all part of the "East Asia and the Pacific - not including high-income countries" region as per World Bank statistics. This region saw 350 million fewer farmers in 2022 than in 1992, despite ongoing population growth.

Sub-Saharan Africa

Surprisingly, this global trend of declining farmer numbers reversed recently, with an increase driven by population growth in Sub-Saharan Africa. Despite a decreasing proportion of farmers in the labor force also in this part of the world, the absolute number of African farmers is still growing due to rapid population growth. The continent’s population is expected to more than triple by 2100, reaching 4.1 billion up from 1.2 billion today. This trend in Sub-Saharan Africa in 2020 reversed the global decline in the number of farmers.

Graph 1 illustrates the three trends: the worldwide decline starting in 2000, the role of Asia in this downward trend, and its reversal in 2020 due to Sub-Saharan Africa's developments. Despite the downward trend in East Asia and the Pacific, the steady growth of farmers in Sub-Saharan Africa offsets the worldwide reduction.

Is this problematic? Yes. Most of these 1.2 billion farmers in the world are very poor, with little to no land. There is a persistent myth about smallholders’ role in feeding the world[1] and preserving the environment[2], which I have tried to debunk in other occasions. The issue is that the structural transformation of the global economy might be slowing down, meaning insufficient off-farm employment opportunities are being created for future generations. Without enough non-agricultural jobs, farmers (and their children) cannot exit agriculture and thus, not escape poverty.

Few scholars welcome a slowdown or halt in structural transformation. Some challenge the universal trend observed over many decades, as theorized by Kilby and Johnston (1971)[3]. Historic trends might not hold for the future, and it could become difficult for countries like Burundi to develop sufficient manufacturing or service sectors due to labor-saving technologies. In late-developing countries, labor might move directly from agriculture to services[4]. Politically, some argue against highly industrialized agriculture, advocating agroecology, which requires more labor and therefore in their view would need less structural transformation.

Two decades ago, debates on this technology was polarized. Today, blended strategies emphasize the need for productivity increases in agriculture while respecting the environment, reducing climate impact, and avoiding land expansion, as well as the farmer’s freedom to chose the tecnology suited for her or his situation.

Employment

The number of farmers in any given country depends on three factors: population growth, progress in structural transformation, and the overall employment rate. In the World, Sub-Saharan Africa, and East Asia, populations are still growing, and employment rates are 61%, 65%, and 74%, respectively, with a tendency to decline, especially in Asia. The main determinants for the number of farmers in Africa are population growth and the pace of structural transformation.

As seen in Graph 2, the structural transformation in Sub-Saharan Africa, characterized by a rapidly declining relative share of farmers in the overall workforce, was interrupted in 2020 and 2021. The economic slowdown due to COVID-19 affected overall employment and reversed temporarily the downward trend in the percentage of farmers in total employment. This highlights a basic function of agriculture in developing countries as an unemployment safety net. During crises, when people lose their jobs in manufacturing or services, they return to their villages and work the land.

Even among the current farmers, hundreds of millions remain in agriculture due to a lack of options in other sectors. This also explains the often referred to low productivity of agriculture compared to other sectors of the economy. “Inter-sectoral differences in annual earnings per worker arise from differences in employment volume (hours per worker of labor supplied) rather than wages or productivity per hour of labor supplied.[5]”

However, after the pandemic in 2022, Sub-Saharan Africa resumed the downward trend in the share of agricultural labor in total employment, which, if maintained the total number of Sub-Saharan farmers will only peak in 2075 at 460 million farmers, before this absolute number starts to drop, reducing the percentage of farmers in the total work force to 15% or 390 million farmers out of a population of 4.1 billion in 2100..

This perspective, due to Africa’s extensive population growth, prompted the European and African Commissions to establish a high-level expert Task Force on Rural Africa to report on the necessary actions to balance population growth and employment amidst economic transformations[6]. The Task Force's recommendations were accepted by the EU and AU governments during their ministerial meeting in Rome in 2019.

Policies matter

To maintain a steady structural transformation or even to speed it up, policies matter. This is illustrated in a third diagram showing the percentage of farmers in the total employed workforce in three Sub-Saharan countries that were less developed 30 years ago, with about 9 out of 10 employed persons in agriculture. Over three decades, these countries displayed different patterns, with Rwanda's performance standing out. In 1992, Rwanda had the second highest relative number of farmers in its workforce compared to Burkina Faso and Burundi. By 2022, already 44% of Rwandans were employed outside agriculture, while in Burkina Faso, this number was a quarter, and in Burundi, only 15%. Then again, in the figures of Rwanda one sees the impact of the pandemic of people returning to their homesteads in rural areas and engaging in agriculture after losing their jobs, reversing its structural transformation with 9 percentage points. In basically agrarian societies, like Burundi or Burkina Faso, the COVID-19 effect remains concealed.

Rwanda’s commitment to agricultural development has been crucial in achieving economic growth and improving livelihoods in rural communities. The country’s long-term goal is to shift from subsistence farming to a more knowledge-intensive, market-oriented sector. Other Sub-Saharan countries witnessing rapid structural transformation include Namibia, Benin and Gabon. In contrast, Mali, Uganda and Niger showed hardly progress, and Angola even regressed significantly.

Recently, Ruben[7] made a wrap up of effective policies for smallholder development. Two comments seem appropriate: First, although policies matter, and bad policy can jeopardize considerable the process, this foremost true for the general macro-economic policy framework and the resulting market conditions. Governments have to create stable macro-economic environments avoiding market distortions, and above all avoid what the World Bank at the time called the Plundering of Agriculture, turning the terms of trade against agriculture by use of the exchange rate and price controls[8]. Even though the stabilization and adjustment programs of the 1980s have reduced widespread exchange rate distortions, governments still tend to intervene in markets and prices. The general recommendation should be: let markets work.

Ruben underscores that the objective of policies is behavioral change. For rapid development, crucial actors must move beyond the tipping point of no longer expecting development from outsiders like governments, banks, and foreign donors.[9] Farmers then demand participation in the economy through representative organizations that, in continuous dialogue with governments, establish an environment of economic freedom that spurs development. Entrepreneurs start and expand businesses and trade their produce. Through collective action, they can pool the capital needed to realize their development ideas. The underlying concepts of ‘participatory planning’ and the ‘peasant mode of appropriation’ were theorized during Nicaragua’s development debates in the 1980s[10] and stripped of their socialist connotation, are appliable generally to any development process.

Ruben then states that a “more comprehensive set of measures is needed?“ and that “right’ composition of this package and the size and sequence of the related measures are of fundamental importance for being able to influence smallholder behaviour.” He mentioned six intervention areas: land property rights, diversification of income sources, women empowerment, value chain trust and transparency, collective action, infrastructural investments.

That leads to a second comment: governmental interventions for smallholder development, fail because many interventions at the time are apparently required to address rural economic development. Even Ruben’s comprehensive set is still voluminous, especially in view of the high volume of persons in the target group. The ‘Leave No One Behind’ adage of United Nations has inhibited the inclusion of effective selection mechanisms in policy making[11].

At this point of history, 1.2 billion farmers are best helped by speeding up overall economic development and the structural transformation of economies. Successful transformations require government actions to build rural infrastructure, including roads, electricity, and internet, as well as schools and hospitals. Governmental action should address and give room to those actors and factors that spur up development. For specific policies, selection and segmentation of the target group becomes much more important[12]. The most important policies out of the comprehensive set, are land rights, and then particularly to combat land fragmentation. And, on the other hand cooperative development, which is collective action for inclusion of farmers in value chains. Finally, I will address the issue of capital for development as recent insights change the need for interventions.

Farm consolidation

With a still growing number of farmers, an urgent issue to address in Sub-Saharan Africa is the ownership and inheritance of land. The issue cannot be generalized across all Sub-Saharan countries, but it remains a critical concern. Inheritance laws and customs often do not favor land consolidation, leading to further fragmentation of land, even among children who have left agriculture and moved to cities. This has given rise to phenomena like ‘phone farmers,’ where absentee landowners manage farms remotely. While this can sometimes introduce new insights into farming, it often results in abandoned or poorly managed land. Moreover, gender disparities in land rights exacerbate the problem. An additional problem is, that land only passes to new generations upon death of the owner. Children with an ambition to farm have to wait generally too long before they can assume the management of the farm.

This is more urgent in countries with a current high share of farmers in total employment and a slow decrease of? that relative share in the last 30 years, notably: Burundi, Central African Republic, Mozambique, Madagaskar, Chad, Tanzania, and Eritrea. It will prove less a problem in countries that have experienced fast structural transformation over the last 30 years and currently have a low share of farmers in the total employment, think of: Cabo Verde, Namibia, Togo, Kenya, Liberia, Sudan, Rwanda. However, also in these last countries, there might be limited room to expand agricultural lands, even though productivity has significantly increased.

Efforts to change statutory and customary laws to benefit those who remain in farming are essential steps towards resolving the challenges of the structural transformation in Sub-Saharan Africa.

Cooperative development

Then again, the biggest challenge in the structural transformation is how to maintain the balance between population and employment growth and between population growth and food supply? Structural transformation and the exodus of farmers from agriculture can jeopardize these balances. Cooperative development and famer organization in general has proven in the European economic history to be crucial for maintaining the food and employment balances during development while speeding up transformation.

The Korean government achieved successful economic development in the 1970s with the adequate usage of selective industrial policies and export-oriented trade policies. The country has successfully moved up from a position it shared with Ghana in the 1960s, to the top 15 most developed countries. It still witness fast economic growth, and exoerienced an ongoing rapid structural transformation in the last 30 years.

Particularly important was a priority attention to the rural population, by means of the Saemaul Undong,? a community-driven integrated rural development and modernization movement. South-Korea has today an impressive cooperative movement, integrated in the National Agricultural Cooperative Federation?(NongHyup) or?NACF[13].

The state-of-the-art on this subject supposes that the positive impact of cooperatives on development operates through the impact of social organization on democratic behavior and the positive impact of democracy on development.[14] On the other hand, from my own research emerge indications that collective farmer actions influence the type of industrialization, less concentrated and less capital intensive, with more regional diversity higher labor intensity (see note 10). The overall benefit of a large cooperative sector would then also imply a faster development than in less cooperative countries.

Urgent need of statistics

For exploring this thesis about the relationship between cooperative development and speeding up economic development, the most extensive collection of data on cooperative development was compiled by Dave Grace &Associates for the United Nations International Year of Cooperatives (2014).[15] His report indeed highlights a positive correlation between the contribution of cooperatives to the economy and social progress for the top 10 of countries in each list. This correlation does not imply causation. In fact, the causal relationship could be inverse: the more progress, the more cooperatives. Probably Dave Grace did not come up with a more convincing analysis on the supposed positive impact of cooperatives on development, because his dataset has many flaws.

Therefore, it wasn't surprising that it also proved impossible to plot a statistically significant relationship between the incidence of cooperative membership in a population in over 100 countries in the database, and the speed of structural transformation in the last 30 years in these countries. The problem to explore this relation is that there are neither other databases available with more reliable data. The International Cooperative Alliance, which commissioned the 2014 research, acknowledges these flaws, stating on its website: “Statistical analysis and collection in the co-operative movement is challenging for a number of reasons: The relationships between various co-operative enterprises lead to potential double counting. There is a lack of statistical data available and reported to the ICA. The statistical data available is at different levels of co-operative structures. Statistics come in at different levels but often only provide part of the story from each level: country-wide, federations, apexes, unions, and primary co-operatives. Organizations sometimes provide data of their own, or for their members only, or a combination of both. The data provided is not always accountable.” [16]

National statistics on cooperative entrepreneurship and membership emerge as an urgent area to address. The International Labour Organization (ILO) has projects in place but cannot provide reliable data, confining itself to the elaboration of manuals for data gathering and definitions. A comprehensive action among cooperative stakeholders, statistical bureaus, and business analysts is paramount.

Capital for development

Being capital mobilization crucial for farmer projects, a new form of development cooperation emerged in the 1990s: the agri-agency.[17] Their focus was on grant provision for farmer advocacy and policy generation (participatory planning). Their support for this issue remained but changed to an advisory role also because much more attention was given to economic and cooperative development. For a few decades, another aspect of capital transfers, loan provision, focused on the supply, creating beneficial conditions and special funds to deliver loans to special groups.

The need for international capital transfers from development cooperation agencies to farmer organizations in recent years declined with increasing private bank loans, migrant capital, and direct and portfolio investments in Africa, Latin America, and Asia in this century. In rural contexts, internal capital mobilization among farmers with cooperative projects gained importance (peasant mode of appropriation).

Recognition grew that the biggest bottleneck for rural finance by external national and foreign institutions was the need for farmers and their organizations to formulate bankable projects. Without bankable projects, the special loan funds showed deficient loan portfolios and high managerial costs. National bank were left no option than to invest in government bonds. Therefore, attention has currently shifted to the demand side of rural finance, leading to new concepts like AgriGrade.[18]

AgriGrade presents an opportunity for governments opting for rapid rural development by enhancing their cooperative sector on a national scale. Through segmentation and due selection of cooperatives and support entities one can target each selected cooperative with the required advise geared at its level of development. The concepts allows to align development cooperation institutions with national priorities, and continuously measure the success of both cooperatives and support agencies. When integrated into national policies, the AgriGrade approach will also cater to the dearly needed statistics on cooperatives in countries, link cooperatives with other companies in the value chains and with investment and loan providers by creating a solid pipeline of farmer-led initiatives.

Conclusion

Global structural transformation will continue but at a very low pace. Sub-Saharan Africa will have the coming decades a growing farmer community. The more African governments can elaborate inheritance laws to consolidate farms for the benefit of farmers, the fewer imbalances this will entail. Incorporating the latest insights to drive cooperative and rural development on a large scale will accelerate the process of lifting poor farmers out of poverty. Investments in rural infrastructure and solid macro-economic policies will complete the effort. Policies matter, but in the end, it will be the rural entrepreneurs who, beyond the tipping point, trust their own initiative and pledge their own capital investments, and will develop Africa. In that way, Africa is not going to spoil the party.

[1] ???? https://www.dhirubhai.net/pulse/rethinking-role-smallholders-global-food-production-blokland-phd/?trackingId=fPMh4LO6SLiXYQuJHSfT2Q%3D%3D

[2] ??? https://impakter.com/deforestation-why-poverty-root-cause/

[3] ???? Kilby and Johnston (1971) ?"Agriculture & Structural Transformation, Economic Strategies in Late-Developing Countries"

[4] ??? https://www.adb.org/sites/default/files/publication/525971/adr-vol36no2-1-structural-transformation-world.pdf

[5] ???? https://www.worldbank.org/en/programs/africa-myths-and-facts/publication/labor-productivity-and-employment-gaps-in-sub-saharan-africa

[6] ??? https://agriculture.ec.europa.eu/international/international-cooperation/africa/eu-africa-partnership_en

[7] ???? Ruben, R. What Smallholders Want: Effective Strategies for Rural Poverty Reduction. Sustainability 2024, 16, 5525. https://www.mdpi.com/2071-1050/16/13/5525

[8] Maurice Schiff and Alberto Valdes (1992), The Plundering of Agriculture in Developing Countries, , Maurice Schiff?and?Alberto Valdes, https://documents1.worldbank.org/curated/es/401231468322430089/pdf/multi0page.pdf

[9] ???? https://impakter.com/farmers-the-tipping-point/

[10] ???Blokland, C. Towards Economic Democratization, updated (2023) summary of: Blokland, C. Participación Campesina en el Desarrollo Económico, La Unión Nacional de Agricultores y Ganaderos de Nicaragua durante la Revolución Sandinista. PFS / Doetinchem · 1992) https://bit.ly/4chUQZd

[11] ? https://elpais.com/planeta-futuro/red-de-expertos/2021-10-27/atreverse-a-elegir.html

[12] ?? https://impakter.com/why-leave-no-one-behind-is-impossible-dare-to-select/?

[13] ???? Development State, Korea’s Experience of Community Development Strategy: Focus on the Saemaul Undong Development in 1970’s Yangsoo Yi, in: International Journal of Kybernology Volume 3, Number 1, July 2016

[14] ??? Growth, income equality and democracy: Cooperatives - the development impact beyond member benefitsGrowth, income equality and democracy: Cooperatives - the development impact beyond member benefits, in: Cooperatives, Economic Democratization and Rural Development. Edward Elgar Publishers, London / New York · Jan 29, 2016

[15] ???? Measuring the Size and Scope of the Cooperative Economy: Results of the 2014 Global Census on Co-operatives April 2014 For the United Nation’s Secretariat Department of Economic and Social Affairs Division for Social Policy and Development. Dave Grace & Associates / Madison · 2014

[16] ??? https://ica.coop

[17] ???? https://nl.wikipedia.org/wiki/Agri-agency

[18] ??? https://www.Agrigade.org?? ?