Illuminating Agriculture's true value : the case for effect-based approaches

Recent employment data reveals an underlying imbalance in agriculture's outsized workforce role yet minimal GDP contribution. While comprising 26% of global employment, agriculture only makes up 4% of economic output on average as measured by traditional metrics . (ILO, 2022) This discrepancy indicates that our current accounting fails to capture the multidimensional value of agricultural systems. As developing countries gain influence , transitioning to holistic frameworks that accurately reflect agriculture's diverse effects becomes imperative.

Smallholder dependence on undervalued Agriculture

In low-income countries, smallholder farmers heavily depend on agricultural livelihoods yet remain mired in poverty. For instance, agriculture provides 86% of employment in Burundi but only represents 36% of GDP. (World Bank, 2019)

Across sub-Saharan Africa, small farms supply 90% of food production yet poverty rates exceed 30% in farming communities. Minimal market access and investment in rural infrastructure limits income generation and reinforces dependence on undervalued subsistence farming. (FAO, 2020)

Women face additional marginalization, earning 20% less income from agriculture on average compared to men. Studies have also shown pervasive gaps in land rights, credit access, extension services, and access to productive farm inputs that hamper productivity and empowerment. (UN Women, 2020)

Unaccounted Externalities and Environmental Damage

Industrial agriculture has generated massive unaccounted effects. Agricultural drivers were responsible for around 70% of tropical deforestation between 2001-2018.?(Harris et al., 2021)

Agriculture accounts for 70% of global freshwater withdrawals, contributing to water scarcity and contamination. (UN Water, 2022) Soil erosion now affects up to 38% of agricultural land worldwide. (Food and Agriculture Organization, 2022)

Yet the critical provisioning services underpinning agriculture remain unvalued. This includes pollination, on which 75% of global food crop types depend. Animal pollinators, including threatened wild species, provide essential pollination services. (Perrot et al., 2022)

Agriculture also contributes around 13.5% of total greenhouse gas emissions globally as of 2019, largely from livestock, soil degradation, and fertilizer use. (UN Framework Convention on Climate Change, 2022)

Food Security Challenges and Yield Gaps

Projections estimate that closing yield gaps sustainably will be crucial for meeting rising food demand, especially in developing regions. Recent analysis finds that yield gaps globally remain around 50-60% of potential optimally attainable yields. (J?germeyr et al., 2020)

For example, average grain yields in sub-Saharan Africa currently reach only 50% of ecosystem potentials. Closing yield gaps will require substantial improvements in water and agricultural resource management. (FAO et al., 2022)

But transformation requires reorienting whole systems, not just input intensification.

The Transition Imperative

The economic rise of BRICS epitomizes the shifting global landscape. By 2028, BRICS nations are projected to contribute 34% of world GDP compared to 28% for G7 countries. (IMF, 2022) As influential developing countries like India and China take on greater leadership in South-South cooperation, accurately valuing multidimensional effects becomes critical for sustainability.?

For instance, India’s GDP quadruples from $3.7 trillion to $13 trillion when adjusted for purchasing power parity that accounts for local costs. (IMF, 2022) Effect-based frameworks can help incorporate such holistic perspectives by quantifying positive externalities and enabling new forms of value flow excluded from traditional GDP.

Transitioning to inclusive, ecological economics requires reimagining value - and enabling diverse exchange beyond extraction and commodification. Insights from the Global South like Buen Vivir, Ubuntu, and rights of nature approaches expand conceptions of shared wealth by recognizing the interconnectedness of communities and the intrinsic value of ecosystems. The path ahead necessitates bridging diverse worldviews while aligning to planetary boundaries.

The Road Ahead

This calls for inclusive participation and locally-attuned solutions co-created through bottom-up dialogues - not centralized, silver-bullet policies. Smallholder farmer cooperatives, civil society groups, responsible businesses, impact investors and policymakers all have pivotal roles in stewarding the transition.

The challenges are great, but so is the opportunity to reorient agriculture and economies toward the greater good of thriving, interconnected communities and ecosystems. By illuminating interdependence, effect-based approaches provide compass points for navigating toward that future.

I welcome your feedback on this analysis.

Sources

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