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What is your challenge? Creating Jobs and Livelihoods for the bottom 40%

Parmesh Shah's picture
A farmer harvests mung beans in Cambodia's northern province. Extreme poverty in the world has decreased considerably over the past three decades. In 1981, more than half of citizens in the developing world lived on less than $1.25 a day. This rate has dropped dramatically to 21% in 2010. Moreover, despite a 59% increase in the developing world’s population, there were significantly fewer people living on less than $1.25 a day in 2010 (1.2 billion) than there were three decades ago (1.9 billion). However, 1.2 billion people still live in extreme poverty—an extremely high figure, so the task ahead of us remains herculean.
 
Among the poor, 78% live in rural areas, and 500 million of these are small farmers. Of these, 170 million are women farmers. Globally, 2.5 billion are dependent on small farms as a source of livelihood and employment.  Agriculture contributes one third of GDP in Africa and more than 65% of the workforce depends on this sector. There has been significant progress in increasing agricultural production and expansion of livelihood and economic opportunities in rural areas. There are about 40 million enterprises, from very small to medium-sized, involved in agribusiness. 
 
Nevertheless, they are too small in size and quality to make the kind of dent in jobs and employment that is needed.  Agriculture accounts for 32% of total employment globally, according to the ILO’s Global Employment Trends Report 2014.  In 2013, 74.5 million youth – aged 15-24 - were unemployed, an increase of more than 700,000 over the previous year. That same year, the global youth unemployment rate reached 13.1%, which was almost three times as high as the adult unemployment rate. One contributing factor in these rates is the lack of interest in agriculture among youth cohorts.  Simply put, agriculture is not a preferred job and livelihood option for young people.
 
Can Agriculture and Food become the next growth engine and job creator/promoter? 
 
As we look at the potential of agriculture to become a job and livelihood creator for the bottom 40%, including rural youth and women, many opportunities emerge. 
 
Firstly, food production is no longer restricted to cereals.  With the demand for fruits, vegetables and dairy products increasing in urban settings and rural areas, there is significant potential to expand employment opportunities.  Global vegetable production is about to reach 1.1 billion metric tons.  Global milk production has already exceeded 750 million tons, and approximately 150 million households around the globe are engaged in milk production. In most developing countries, milk is produced by smallholders, and milk production contributes to household livelihoods, food security and nutrition. Milk provides relatively quick returns for small-scale producers and is an important source of cash income. In addition, aquaculture and fish production has reached 158 million tons. 
 
There is significant difference in employment and enterprise opportunities created in vegetables, fruit, milk and aquaculture as compared to cereals.  In Kenya, 6 jobs are created per hectare of vegetable crops that are exported, including 3 positions in the field, 2 in packed houses and one with the exporter.  In Nigeria, for every 10 metric tons of catfish 8 jobs are created; one on the fish farm and the rest in supply chain including “Market Queens”, “Market Mamas”, and ladies running the Buka restaurants.  The implication of all this is that a large proportion of future jobs will be created not only on farms but also in positions connected to food servicing and delivery.
 
Pathways to Inclusive employment in agriculture

There are four pathways emerging for the bottom 40% to access more, better, and inclusive jobs in agriculture and related sectors in rural areas. 
  1. Firstly, small farmers need mechanisms through which they can aggregate their produce to deal with the market.  They need to be organized as producer organizations and companies and engage with the market differently. 
  2. Secondly the value chains should be developed in such a manner that they become more inclusive and developed with jobs and enterprises perspective. 
  3. Thirdly, there needs to be more investment in expanding the ecosystem of small and medium-sized enterprises (SMEs).  Existing SMEs should be encouraged to grow faster and new SMEs to emerge. 
  4. Fourthly, youth need to be provided opportunities for skill development and enhancement so they are able to access entrepreneurship opportunities and acquire jobs in agribusiness, non-farm, and rural labor markets.
 
A new Global Solution Group for the Agriculture Global Practice
 
The Agriculture Global Practice at the World Bank works with Governments and clients to support them design and manage policies and investments that promote new opportunities in agriculture, food and related sectors in rural areas.  A new Global Solution Group has been recently set up in the last six months to match problems and challenges with solutions in this area.  It has a multi-sectoral composition, with professionals from various practices across the Bank participating. Bank staff who are designing or managing programs within the Agricultural sector share challenges or problems, and the Global Solution Group identifies solutions that have previously been tried in the Bank and outside.  The GSG and Bank staff then work together to consider the possible solutions and how they might impact the design or evaluation of programs.  These lessons are also shared with clients and presented to senior decision makers to help them take decisions and carry out informed dialogues. 
 
Informed presentations and discussions with the Minister for Agriculture and Rural Development of Kosovo about how to create a more favorable ecosystem for Agribusiness investment and Rural Enterprise ecosystem in the country were conducted.  Tunisia and Morocco Teams are looking for approaches which integrate poverty reduction, value chain development, and market based approaches to climate smart agriculture and will launch an interesting set of studies and dialogues with clients in the country.  A team in Tanzania is looking at designing a new Horticulture Development Project informed by analytics, including a tool which will enable the team to apply a Jobs lens to value chains. 
 
All these experiences are being documented and curated by the GSG and will be offered on the GSG website platform to enable all staff of the World Bank to access this knowledge, including papers, presentations, videos and other material.  The GSG team is also trying to make this interactive so that individuals could post both challenges and solutions and create a vibrant community of practitioners.
 
Please throw a challenge to the GSG on the issues mentioned above!
 
We will crowd source the World Bank Group and also ensure that we bring collective global learning to inform you and support you in designing, managing and evaluating investments, analytics, policy advice and strategic communication. 
 
We would like to invite agencies and individuals outside the World Bank to suggest solutions they have found which have worked or not worked— both can encourage learning. We would like you to become solution contributors. We hope that we will have an active community of solution finders and a frank exchange on what works and does not work. 
 
It is your forum.  Please join it.

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Comments

Submitted by André Hindley on

Working in DRR and development, with seasoned poverty reduction and resilience icons (such as Mma Tshepo Khumbane in SADC) for many years, it has become evident that sustainable poverty reduction and societal resilience should be driven by three main principles. In summary:
1. Creating an enabling environment and incentives for people to become economically active. This can only be lead by responsible governance.
2. Effective skills transfer. Training and capacity building to disadvantaged communities are frequently contracted to or provided by people not sufficiently experienced or equipped to do so. This is unfortunately often due to corrupt or irresponsible procurement processes.
3. Lessening focus on social grants. Standard social grants (not humanitarian relief) are unfortunately too often utilised for political gain. This, if not managed responsibly, can contribute to dependence and further social imbalance.

Submitted by Amit Dutta on

Hi Parmesh,

I was looking forward to connect with you and this I think is a great opportunity to do that! By way of introduction, I'm a Director with the Government Advisory Practice of EY, India and I am incidentally leading the EY assignment on Rural Retail Chains with SERP in Telangana. I am looking forward to connect with you in relation to the project separately.

I think the article above is very insightful and informative and forcefully highlights the enormity of the global poverty challenge that we are crusading against. I also feel that synergising efforts through the Global Solutions Group is an excellent idea. It will act as a force multiplier.

I however would like to know what is the World Bank's view on the adequacy of the definition of poverty or measurement benchmark. The current definition suggests "people living on less than $1.25 a day". In that case, the question on my mind is whether $1.25 in 1980 can be equated with $1.25 in 2010. If one were to assume that global inflation has averaged at a CAGR of 6%p.a, then $1.25 in 1980 would settle somewhere around $ 5 in 2010. Would it be a more accurate and objective way to estimate how many people live under $ 5 currently to get a real sense of the global poverty. I am certain that number could be astounding and perhaps discouraging in some way. We perhaps also need to factor that global income inequality has risen sharply over the decades, not only between the developed and less developed countries but also within countries ( for instance it is estimated that 1% of America's population controls 40% of the nation's wealth) and Do you see any merit in this idea of a new/ revised definition - by all means not a novel one as I am certain this issue would certainly have been discussed on the high tables of development economics several times. I am just eager and curious to know why the $1.25 benchmark should not be challenged.

Submitted by Madhukar SJB Rana on

Hi Pramesh, I wonder if the World Bank will support a project idea that I have. The megaquake and the economic blockade in the face of the massive outmigration of Nepalese to the Remittance Economy in West Asia and Malaysia has posed humongous challenges but it has opportunities too for women's empowerment, nay emancipation. I seek a small grants to chose from 3 communities dependent on remittance and design a 3 year project to promote women entrepreneurship and women in farming by avoiding both the extra burden on them and the feminisation of agriculture. This call for social innovations involving new appropriate agri-technologies and also institutions at the community level to free them of the burden and chores of household management and subsistence farming. As I am also involved in undergraduate and graduate level Business Studies (BBA and MBA) I wish to involve such students as additional entrepreneurs to take the farm products an deb engaged in supply chain management nationally and hopefully later regionally. Import substation potential in the agriculture sector is immense as Nepal has been reduced from a food surplus economy in the 1970s to a food deficit one now. Other products will also be assessed such as dairy and livestock, fisheries, horticulture, sericulture and floriculture taking advantage of our favourable mini climates. Any possibilities for WB support. FYI I was Project Director in the 1978 USAID funded landmark study on the Status of Woman in Nepal led by Dr Lynn Bennet, who was later associated with WB.

Submitted by Achille Zrobla Kayode KOFFI on

The challenege is big, but we entrepreneurs are ready to change the world and bring solutions to the poor people.
Here in Africa, for instance, the sector of agriculture suffers from lack of investments and non-availability of loans nor warranties.
This lead us to think about a projetc : bring innovatives changes in the agricultural games by making a platform where farmers meet with investors. The investors here are the emerging middle class of Africa,diapora and the rich people, who will be invite to finance the farmers based on study and warranty of their gain.
We still work on the project and would like the World Bank to help us get in touch with some investors to pull the project up.

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