Agricultural commercialisation – where it’s hot and where it’s not

Published on 12 July 2017

James Sumberg

Emeritus Fellow

Greater agricultural commercialisation, through engagement with value chains, is seen by many as the only viable way forward for small-scale farmers in Africa. In this view, increased commercialisation has the potential to deliver significant income and livelihoods benefits to rural people, including young people. Indeed thinking along these lines underpins the recently launched, DFID-funded Agricultural Policy Research for Africa (APRA) programme.

But how is commercialisation supposed to change rural young people’s opportunity space?

To begin to answer this question we need to look at agricultural commercialisation from a local economy perspective (as opposed, e.g. to an individual, farm, crop or commodity perspective). A local economy perspective starts with economic and employment opportunities associated with the commercialisation of agricultural production itself. But it also encompasses the activities that support (e.g. seed and fertiliser sales) and/or add value (e.g. marketing processing and transportation) to this production, and all the other economic activities that are enabled by or linked to agricultural commercialisation (e.g. business offering goods or services that are purchased with income derived directly or indirectly from agricultural commercialisation). Agricultural commercialisation as an economic and rural development phenomenon is about much more than producing and selling agricultural products.

Commercialisation cold spots and hot spots

Using this perspective it is instructive to consider two stylised local rural economies – one a commercialisation “cold” spot, where agricultural commercialisation is not well developed or intensive, the other a “hot” spot where commercialisation is well developed. There are of course many shades and variations between these two ideal types. 

Nevertheless, in the commercialisation cold spot we would expect that aside from domestic work, the local economy is dominated by small farm production based primarily on family labour, with perhaps some limited agricultural wage labour (see left side of the figure below). Both the farm-service economy and the non-farm economy are limited, and they provide few economic opportunities for young people (or anyone else for that matter). If they are not farming on their own account or working on the family farm, young people might decide to leave the local economy by migrating to other rural areas and/or urban areas in search of opportunities. Money, goods, knowledge, skills etc. may flow back to the local rural economy as a result.

Cold and hot spots in agricultural commercialisation

In contrast, in a commercialisation hot spot, while farm production continues to be very important, it is a much smaller part of the story (right side of figure). In addition to greater demand for wage labour on farms, there are significant opportunities for young people to work for or to operate farm or non-farm businesses. We would also expect these local economies to be more dynamic as indicated by, for example, more rapid growth in individual and household incomes, and the development of new business types. As above, young people might also decide to migrate to other rural areas and/or urban areas in search of different opportunities.

If there are more, and a greater diversity of economic opportunities for young people in the commercialisation hot spot, the central research question becomes: which young people are able to take advantage of these different opportunities, and how do they take the initial steps to engage with a highly commercialised local economy as producers, workers or business operators? 

For example, it would be reasonable to expect that good land will become increasingly difficult and expensive to access in a commercialisation hot spot. As access to land is a prerequisite for own-account farming, this is likely to block some young people from immediately pursuing this particular opportunity. On the other hand, the increased demand for wage labour – on and off farms – will open other opportunities for which access to land is not required. 

What do we learn from studying hot spots?

The fact that there are additional economic opportunities for young people in the hotspot does not necessarily mean that the resulting jobs are particularly remunerative, secure or desirable, or that they satisfy the basic criteria for decent work. A further question must be addressed: how are the benefits arising from agricultural commercialisation – including conditions of and returns to employment – distributed throughout the local economy, and which young people are able to share in these? 

Another important question concerns the triggers for hot spot development. We know that these areas tend to be places with good biophysical production endowments (e.g. soil, rainfall and/or irrigation), good access to markets, and moderate to high population densities. But within such areas, some spots are clearly hotter than others. What key conditions or catalytic investments enable these places to take off? Figuring out how to engineer the development of a hotspot is a key development planning question, and is critical to African growth corridor development projects like Southern Agricultural Growth Corridor of Tanzania (SAGCOT). A further step is to understand whether and how emerging hot spots can be shaped so that they become more “youth inclusive”.

These are the questions that the APRA Youth Policy Study will address. Working in well-established agricultural commercialisation hot spots in Ghana, Tanzania and Zimbabwe the research will look specifically at how young people get themselves established in farming or associated economic activities. 

We argue that an analysis of the pathways that these young people use will provide valuable and policy relevant insights about opportunities and challenges for youth in contexts of agricultural commercialisation. As such the study seeks to engage with and contribute to current debates about youth employment in Africa and the degree to which agriculture and the agri-food sector more broadly might provide decent work opportunities for a significant number of young people. 

This blog is a collaborative effort of the APRA Youth Policy Study team and the research team implementing the new IFAD-funded project Challenges and Opportunities for Rural Youth Employment in Sub-Saharan Africa. It also builds on the analysis laid out in the unpublished paper: Ripoll, S.; Andersson, J.; Badstue, L.; Büttner, M.; Chamberlin, J.; Erenstein, O. and Sumberg, J. (2017) ‘Rural transformation, cereals and youth in Africa: What role for international agricultural research?’, Outlook on Agriculture (accepted)


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