Sustainable agriculture in a globalised economy, Report for discussion at the Tripartite meeting on moving to sustainable agricultural development through the modernization of agriculture and employment in a globalized economy

Report for discussion at the Tripartite Meeting on Moving to Sustainable
Agricultural Development through the Modernization of Agriculture
and Employment in a Globalized Economy

Introduction

The context

ILO: Decent work,
Report of the Director-General,
International Labour Conference,
87th Session, Geneva, 1999, p. 5.

How is the agriculture sector – the largest employer of the world labour force – affected by globalization? What role does it play, and how can this role be enhanced in a sustainable manner to improve the living standards of farmers and farm workers? These are the themes addressed in this report, the first to be written on the agriculture sector looking into the next century. It will be shown that globalization is affecting agriculture not only through the usual mechanisms of trade and foreign direct investment but, even more importantly, through the fast transmission of ideas made possible by new communications technologies, and in particular society’s demands to bring labour practices into conformity with labour standards. Thus, apart from macro-level issues such as the role of agriculture in development and commodity prices, the report will focus on social issues such as child labour, women’s role in agriculture, occupational health and safety, private voluntary initiatives, and genetic modification, since it is in these areas that the rapid transmission of ideas through modern communications is affecting labour practices on farms. Arguably, these transmission mechanisms may play an even bigger role in changing agriculture in the future than trade and direct investment. How the sector can best benefit from all the modernizing forces of globalization will be the underlying thrust of the report, “modernization” being understood to mean the process of raising productivity levels, diversifying the export base, effecting changes in land tenure, and aligning traditional practices – particularly with respect to occupational safety and health (OSH) – with increasing demands for higher labour standards as embodied in the ILO’s core Conventions. The last aspect assumes added significance in the light of the discussions to be held (at the time of writing) at the June 2000 session of the International Labour Conference, with a view to the adoption of instruments on safety and health in agriculture.

It is increasingly being recognized that meaningful modernization of the agriculture sector – and indeed overall economic development – will only be possible if it encompasses the notion of “sustainable agriculture and rural development (SARD)”, as adopted at the United Nations Conference on Environment and Development (Earth Summit) in 1992. Some of the core components of SARD – sustainable employment and safe working conditions, reform of land ownership and control, acceptance of core ILO labour standards, representation of agricultural workers – are discussed in their own right in Chapter 4 of the report. The objective, as throughout the report, is to show the relevance of the ILO’s core and agricultural labour standards to SARD. In this way, the issues discussed attempt to strengthen the four strategic objectives of the ILO agreed at the 87th Session of the International Labour Conference (June 1999):

The Meeting comes at an opportune time to refocus world attention on the continuing role of agriculture in providing employment and sustenance to a majority of the world’s population and as an “engine of growth” for economic development. There is a need to reiterate the fact that, despite recent progress, 790 million people in developing countries – i.e. about one-fifth of their total population – and 34 million in industrialized countries and countries in transition are undernourished, ^[1] while 1.5 billion people live in poverty, most of them in developing countries and a majority of these in their rural areas. The rate of progress in both these important indicators of well-being is nowhere near sufficient to achieve the target of reducing both by half by 2015 that was set at the 1996 World Food Summit and by the OECD as one of its “Strategy 21” goals. ^[2] Moreover, the gap between rich and poor – people as well as countries – is widening and poor people, most of them rural, are being marginalized in the process of growth. The accepted role of agriculture as the foundation of economic development reinforces the need to refocus attention on the agriculture sector, while the inextricable linkages among hunger, poverty and rural areas reinforce the need to base agricultural development on sustainability and equity.

The Meeting also comes at an opportune time because it refocuses attention on the inexorable drive towards globalization and agriculture’s role in it. “Marginalization”, referred to above, is indeed increasingly the one main effect invariably associated with globalization. The agriculture sector as a whole is being marginalized compared to the modern sector; but the dilemma is that if the sector is opened up to foreign direct investment as part of the globalization process, there is a danger that small-scale farmers may be not only marginalized but actually dispossessed of their lands as farms attached to multinational procuring companies are established in developing countries to furnish standardized products on the world markets. Hence there is an urgent need to debate the role of agriculture under globalization and to draw lessons for how the process can be altered to benefit the maximum number of people and countries. As the Director-General of the ILO recently said in his address to the 17th World Congress of the International Confederation of Free Trade Unions (ICFTU): ^[3]

Background to the Meeting

The Meeting is part of the ILO’s Sectoral Activities Programme, the purpose of which is to facilitate the exchange of information among constituents on labour and social developments related to particular economic sectors, complemented by practically oriented research on topical sectoral issues. This objective has traditionally been pursued by the holding of international tripartite sectoral meetings for the exchange of views and experience with a view to fostering a broader understanding of sector-specific issues and problems; promoting an international tripartite consensus on sectoral concerns and providing guidance for national and international policies and measures to deal with the related issues and problems; promoting the harmonization of all ILO activities of a sectoral character and acting as the focal point between the Office and its constituents; and providing technical advice, practical assistance and concrete support to ILO constituents in order to facilitate the application of international labour standards.

The Meeting was included in the programme of sectoral meetings for 2000-01 at the 273rd Session (November 1998) of the Governing Body. The topic of the Meeting was also decided then to reflect the contextual importance of globalization against which issues relating to “sustainability” and “modernization” of agriculture have increasingly to be viewed. Governments of the following 26 countries were invited to send representatives: Bangladesh, Benin, Brazil, Bulgaria, Chile, China, Costa Rica, Czech Republic, Denmark, Ecuador, Egypt, El Salvador, Ethiopia, Ghana, Honduras, India, Islamic Republic of Iran, Kenya, Malaysia, Mexico, Nigeria, Philippines, South Africa, Sri Lanka, Uganda and Viet Nam. In the event of any of these governments being unable to attend, regional substitutes were to be drawn from a reserve list of countries. In addition, 26 Employers’ and 26 Workers’ representatives were to be chosen after consultation with the respective groups in the Governing Body. These will not necessarily come from the countries listed above.

Organization of the report

The report is issues-oriented. Chapter 1 sets forth the context in terms of its key themes – globalization, sustainability and modernization. Globalization is discussed in relation to the changing roles of States and markets, the traditional role of agriculture in development, and changes in employment structures that occur with development. Sustainability of agricultural development and employment, as well as modernization of agriculture, are discussed in relation to the imperatives of raising productivity levels, diversifying the export base, and modifying land tenure arrangements. (The more recent aspects of “modernization” – i.e. social pressures to improve labour practices – are taken up separately in Chapter 4.) Chapter 2 focuses on the performance of the agriculture sector in the past few decades, with emphasis on agriculture’s contribution to living standards and the transformation of economies. Issues relating to wages and poverty are taken up here. Chapter 3 expounds on the major macroeconomic issues in agriculture – prices and subsidies, commodity prices and external terms of trade, and the role of rural non-farm activities – while Chapter 4 elaborates on the social issues which governments and farmers increasingly have to confront because of changing global attitudes to working conditions: child labour, gender, private voluntary initiatives, occupational safety and health, and genetic modification. Although many of these issues have always been part and parcel of the agriculture sector, some are new (for instance voluntary initiatives, genetic engineering), and even for the old issues (child labour, gender, occupational health and safety) pressures are mounting on governments to bring about changes, often in deference to consumer movements. Of the social issues discussed, the inclusion of genetic engineering needs to be justified, since it is prima facie outside the ILO’s competence. Yet it has the potential to affect employment trends and hence incomes of farmers, apart from being an issue that will increasingly figure in any debate on the agriculture sector. Chapter 5 contains the conclusions and Chapter 6 a summary and suggested points for discussion.

A word about the data used: most have been culled from yearbooks and databases of international organizations – the ILO itself, FAO, IFAD, IMF, UNCTAD, UNDP, the World Bank and the WTO. These have been duly acknowledged at the appropriate places and are thanked further here, as is the IUF for material provided. Most data pertain to the “most recent” year available. As employment and labour force surveys are collected only sporadically, such data refer mostly to 1997. Moreover, differences often exist among data in different yearbooks and between these and data in national sources. Such drawbacks are inevitable and in most cases inconsequential for the kind of broad trends and conclusions derived here.

The report is published under the authority of the International Labour Office and was written by Vali Jamal, Rural Sector Specialist, Sectoral Activities Department.

1. Globalization and agriculture

International trade and direct investment are nothing new: already in 1890 merchandise exports represented 15 per cent of western Europe’s gross domestic product (GDP), compared to around 25 per cent now, and 6 per cent of the United States GDP, compared to 8-10 per cent now, and foreign direct investment (FDI) had reached US$14 billion by the outbreak of the First World War. ^[4]

What is new is the context within which the current globalization drive is occurring. Two aspects are significant: the global ideological shift and the spread of new information and communications technology (ICT). The 1970s and 1980s saw a realignment of national policies towards economic liberalization, with a dismantling of the State’s role in economic management and a greater opening of economies to international trade and investment. Most favoured nation tariffs in developing countries dropped from 34 per cent around the mid-1980s to 20 per cent by 1998 and should fall further to 14 per cent under the Uruguay Round. ^[5] Barriers to foreign investment have been dismantled everywhere. Regional alignments (such as ASEAN, APEC, MERCOSUR, East African Community, NAFTA) have furthered these trends. The spread of digital technology (Internet, mobile phones, fax) and the dramatic decline in its prices (see box 1) have contributed to the increase in trade and investment, the latter particularly remarkable in the form of cross-border production by multinational enterprises (i.e. firms with plants in several countries) and their network of affiliates and partners. Multinationals now control one-fifth of world manufacturing GDP, and one-third of world trade occurs between globally placed factories of multinationals. ^[6]

It is possible to conceive of three mechanisms for the spread of globalization effects – trade, foreign investment, and the transmission of new ideas. International trade has increased the fastest for manufactured goods, in conformity with demand patterns, but changes proposed under the Uruguay Round Agreement could have major impacts on trade in agricultural goods too. Under the Agreement, tariffs on agricultural products had to be reduced substantially from their still current 40 per cent level and the subsidization of exports (most of which occurs in developed countries) had to be cut by one-third of its 1986-87 levels by 2000. The second promise has been kept, but not the first. Once all measures have been implemented, it has been estimated that agricultural trade, could rise by as much as 50 per cent, making the world better off by US$160 billion. ^[7] On the other hand, food prices could rise by 5 per cent over a decade. The need to boost productivity levels in developing countries’ agriculture to ensure survival against competition will increase, while net importers of food – notably in sub-Saharan Africa (SSA) – will have to face up to rising consumer prices. Competitive countries will gain from the global reduction of subsidies. Changes will not occur overnight and hence all countries will have a chance to make the necessary adjustments.

Foreign direct investment has already had some impact on developing countries’ agriculture in the form of the introduction of new export commodities. Flower growing, a booming activity in the last two decades, owes much to cross-border investments in the form of transfers of capital, technology and skilled personnel from developed countries. Further incursions can be expected. One avenue will be the transmission of demands by international supermarket chains that their suppliers meet rigid quality standards. This could even result in multinationals investing directly in the agriculture sector. If such investments occur too rapidly, there could be negative impacts for developing countries’ small-scale farmers, who now account for most of the global labour force. Vigilance is called for.

The fast pace of globalization is indeed where the danger arises for the agriculture sector. Underlying this concern are three facts: (i) domination of the food trade by a few multinational corporations; (ii) the vast technology gaps that exist between rich and poor countries; and (iii) agriculture’s role as the sector employing most of the labour force in the poorer countries. The penetration of developing countries by transnational corporations is bound to increase as they take advantage of the prevailing climate of liberalization. Small-scale farmers could be the casualties in this process. Moreover, foreign enterprises in agriculture may well attempt to replicate the technology known to them, and this would certainly mean the displacement of vast numbers of workers from the agriculture sector. A similar phenomenon has already occurred in the “modern” sectors, with the suppression of small-scale enterprises as a result of FDI, but while many of the displaced urban workers have been able to find employment in fast-growing industries, this would be too much to hope for in the case of agriculture, given the magnitude of the task. For example, in a context where the agriculture sector employs three-quarters of the labour force, as is still the case in many countries, a decline in employment of just 10 per cent would require modern sector employment to increase by 30 per cent. Vigilance is called for and the necessary policy changes need to be made. As the Director-General of the ILO pointed out in his previously quoted speech at the ICFTU World Congress, “We hear a lot that globalization cannot be changed ... We have to expose as a lie the idea that all we can do is to adapt to globalization. It simply is not true.” ^[8] In the agriculture sector, more than elsewhere, countries may indeed have to step in and dictate the pace of globalization and channel its direction.

The third mechanism for the spread of globalization effects – the transmission of ideas – has the potential to play the most important role. Labour practices will have to change under pressure by consumer and interest groups. Child labour, gender equality, and occupational safety and health are some of the areas where changes are being sought. These are perennial areas of ILO concern. They are discussed in detail in Chapter 4 of this report.

States and markets

Globalization has gone hand in hand with liberalization, the external manifestations of the latter, as noted above, being the dismantling of barriers to trade, FDI and capital flows; the internal manifestations in terms of withdrawal of the State from running the economy have been equally dramatic, with important implications for agriculture.

The State’s encroachment on economies grew everywhere in the twentieth century, nurtured on the one hand by a belief that only the State could boost growth and industrial development and, on the other, by the need to prime the pump after periodic economic depressions. Control over the “commanding heights” of the economy was thought to be imperative for this. Accumulating evidence that markets were not delivering equity reinforced the belief in the State’s role in the economy. The crucible was the Russian Revolution; the experiment was repeated in various diluted versions by governments of newly independent countries in Asia and Africa which, apart from espousing growth and equity, were also looking to wean their economies away from the colonial mode of provisioning the core countries with primary products. The Great Depression of the 1930s propelled the State into infrastructure investments and welfare programmes to create multiplier effects as a cure for mass unemployment and at the same time erect a safety net for the unemployed. This provided an enduring rationale for state involvement in the economy in the name of equity through transfer payments and subsidies, the trappings of the modern welfare state. Today government spending as a proportion of GDP still remains above 45 per cent on average for the OECD countries, compared to only half as much for the United States and less than that for sub-Saharan Africa.

Governments everywhere are seeking ways to reduce this spending, and the favoured solution is to entrust the market with hitherto government-assumed functions by privatizing state-owned enterprises (SOEs), as well as health and education. The former course of action is often uncontroversial, since SOEs, prominent in low-income countries, are generally acknowledged to be inefficient and a drain on the budget, to the detriment of spending on worthy social causes, yet despite the spate of recent divestitures they remain important all over the developing continents (see box 2). Controversy arises when the State attempts to divest itself of spending on social causes, primarily health and education. Privatization, again the preferred alternative, leaves vulnerable groups exposed to the vagaries of the market.

Agriculture’s role in development

How did agriculture figure in this model of development and what is its new role in the context of globalization? Based on accepted economic theories, agriculture was seen as having a passive role in economic development, providing a surplus for the growth of the industrial sector. This surplus would take a number of forms: surplus labour freed up from the rural sector for employment in industry; food transferred to feed the urban population; and agricultural products supplied as inputs into industry and as export commodities to generate foreign exchange. The rural sector would also provide a market for manufactured goods. ^[9]

The transfer of surplus from the rural sector to the rest of the economy can be achieved in a number of ways: through forced labour, land expropriation, taxation, marketing board margins, and terms of trade transfers in which relative prices are tilted in favour of non-agricultural goods, often by maintaining overvalued exchange rates. Excessive surplus extraction could harm the incentive to raise agricultural production. In the late 1970s and 1980s, precisely such excessive surplus extraction, through inefficient or corrupt marketing agencies, overvalued exchange rates and distorted pricing policies, was held out as a cause of the crisis in agriculture in many parts of the world. The crisis was exacerbated by a shortage of agricultural inputs and consumer goods against which to exchange farm products. Officially marketed output in sub-Saharan African countries fell. Declines in international prices intensified the crisis. This experience and that of many newly industrializing countries have underlined the importance of agriculture, not just as a passive generator of surplus for industrial growth, but also as a provider of sustenance for the 50-70 per cent of the world’s population that is still agricultural, and as a safety net for urban dwellers facing economic turmoil. ^[10] The Asian financial crisis of 1997-98 underscored this role of agriculture (see box 3).

The surplus-producing role of the agricultural sector remains a constant in all types of economies and at all times. The surplus nurtures an industrial sector which begins to experience faster growth than agriculture, as a result of which agriculture begins to decline relatively. Engel’s Law, which shows how people spend their income as they get richer – a smaller proportion on food, clothing and other basic goods in favour of manufactures and services – informs these relationships.

The declining role of agriculture with development is best seen in changes in the structure of employment. This is illustrated in figure 1, based on a cross-section of countries, and figures 2 and 3 based on a time series for Malaysia. In Madagascar (figure 1), which, with a per capita income of US$250 in 1997, ranked amongst the ten poorest countries in the world, nearly 80 per cent of the labour force was classified as agricultural in the mid-1990s (latest data available); this proportion drops to 67 per cent for India, 17 per cent for Malaysia, and 3 per cent for the United States, the last figure being typical for most OECD countries. In contrast, industry’s share rises, from around 15 per cent for low-income countries to 25-35 per cent for developed countries – e.g. 31 per cent in the Republic of Korea and 24 per cent in the United States. It remains at 25-35 per cent for most of these countries, signifying that eventually economies become more and more services-oriented rather than manufacturing-oriented as they reach higher stages of development.

The figures for Malaysia show the dramatic changes in the structure of the labour force in just 25 years from 1970, as an illustration of the transformation that should be expected in any country undergoing development. At the start of this period, a majority of the Malaysian labour force was still agricultural (figure 2), whereas by 1995 the proportion had declined to under 20 per cent. Industry’s share increased from 13 to 34 per cent during this time, and that of services from 33 to 49 per cent. Figure 3 in absolute terms shows the trends even more vividly. The fact is that Malaysia’s agricultural labour force began to decline absolutely from 1965 onwards, indicating that all the growth in employment occurred in urban areas. By 1995, 25 per cent fewer people were employed on farms in Malaysia compared to 1970. The manufacturing and services sectors not only successfully absorbed the workers displaced from agriculture, but in addition created 1.5 million and 3.1 million jobs, respectively. Equally impressively, as the bottom part of the figure shows, most urban jobs created were in the wage category so that “non-wage jobs”, equated with informal sector employment, dropped to 25 per cent of urban jobs in 1995, compared to 40 per cent in 1970. The number of non-wage jobs declined even in absolute terms after 1988. Thus, Malaysia succeeded spectacularly in creating “modern” employment, transforming its economy from an agricultural base to industry and services and from a predominantly informal urban economy to almost a formalized one.

The shift to wage employment illustrated by Malaysia is an important part of the modernization process. Two forces are at work: (i) the decline of agriculture, with its family-oriented farms; and (ii) the decline of family-oriented small-scale enterprises in the non-farm sectors. Sub-Saharan African countries are still at an early stage of monetized economies: in Uganda, for example, only 13.7 per cent of the labour force was in wage employment in 1994 (latest year available; see table 1), the rest being either self-employed or family workers. Compared to this, the figure for Pakistan was 34 per cent, for most Latin American countries 50-70 per cent, and for the United States and western Europe 90 per cent. The correlation with per capita incomes comes through clearly, since the countries in table 1 are ranked in ascending order. As the table shows, Sri Lanka also experienced rapid structural transformation, with the percentage of the labour force in wage employment rising from 50 per cent in 1990 to 60 per cent in 1996. ^[11]

Sustainability

Along with “globalization” and “modernization”, “sustainable agricultural development”, broadened to include “sustainable agriculture and rural development” (SARD), is one of the key themes of this report. The concept was first elaborated in Agenda 21 adopted by the “Earth Summit” (United Nations Conference on Environment and Development – UNCED) at Rio de Janeiro in 1992 and discussed at length at the 8th Session of the Commission on Sustainable Development (CSD8) in April-May 2000. The overall objective of SARD is to ensure sustainable increases in food production and food security. Employment, income generation, and equity, mandated objectives of the ILO, are very much at the heart of SARD (see boxes 4 and 5), the underlying goal being “sustainable employment”, in terms of returns to labour and workers’ health and safety. SARD enjoins all the concerned parties – farmers, workers, employers, governments, NGOs – to commit to the conservation of the earth’s natural resources so as to ensure that agriculture, forestry and fisheries contribute to the basic needs of not just the present generation but also future ones. ^[12] Although there is no formal definition, the different strands that distinguish “sustainable agriculture” from “agriculture” are by now well known (see box 5): first, the notion of nurturing the earth’s resources for present and future generations; second, the use of locally adopted and integrated farming practices; third, representation of farmers and farm workers (including wage workers) in all aspects of decision-making; and fourth, more equitable distribution of access to resources and food. The SARD concept is further elaborated on the related concept of the “multifunctional character of agriculture and land” (MFCAL) in recognition of the wide range of environmental, economic and social functions that agriculture fulfils, apart from its primary function of producing food, fibre and fuel. MFCAL highlights the potential linkages and trade-offs among rural activities that contribute to sustainable rural development. Four elements are crucial:

Box 4
SARD: Agenda 21

The concept of sustainable agriculture and rural development (SARD) gained currency at the United Nations Conference on Environment and Development (Earth Summit) held in 1992 in Rio de Janeiro. As stated in Chapter 14 of Agenda 21:

The major objective of SARD is to increase food production in a sustainable way and enhance food security. This will involve education initiatives, utilization of economic incentives and the development of appropriate and new technologies, thus ensuring stable supplies of nutritionally adequate food, access to those supplies by vulnerable groups, and production for markets; employment and income generation to alleviate poverty; and natural resource management and environmental protection.

Of the 12 programme areas mentioned in Chapter 14 three are particularly relevant to this report and to ILO concerns:

agricultural policy review, planning and integrated programming in the light of the multifunctional aspect of agriculture, particularly with regard to food security and sustainable development;
ensuring people’s participation and promoting human resource development for sustainable agriculture;
improving farm production and farming systems through diversification of farm and non-farm employment and infrastructure development.

Chapter 19 deals with occupational safety and health issues, and the relevance of that for ILO activities needs no elaboration.

Box 5
“Sustainable agriculture” v. “agriculture”

The Commission on Sustainable Development, at its recently concluded 8th Session (April-May 2000), conducted a multi-stakeholder dialogue on sustainable agriculture. One question posed was how to distinguish “sustainable agriculture” from “agriculture”. Elements proposed included:

… responsible use of resources available to meet the energy, food, and fibre needs of the population (proposed by industry); production in environmental, economic and social harmony with surrounding areas (farmers); agricultural practices that are sustainable over time (a government); agricultural practices that are socially just and environmentally and culturally sound (NGOs and indigenous people). Trade unions said that conventional agriculture was fundamentally unsustainable and that while it was promoted as a way to address hunger, the latter was an issue of poor distribution and access to food rather than productivity.

The stakeholders agreed on the need to continue the debate and share information on “best [sustainable] practices” in different locations around the world in recognition of differences in resource endowments.

Source: United Nations, CSD8, Chairman’s summary, op. cit., paras. 21 and 22.

Sustainable agricultural practices include the use of organic and biological nutrients, crop rotation, integrated pest management (IPM), ^[13] and increased biological diversity. Sustainable practices are not only environmentally friendly but also capable of delivering higher yields. ^[14] Changes in public policies, economic institutions, and social values are called for to promote integrated policies for environmental health, economic profitability, and social equity. Market solutions could be a means of giving proper signals to farmers in making choices about sustainable resource management. Border prices could be used to remove biases against sustainable farming practices. Decentralization and community participation in resource conservation would be crucial in encouraging and fostering sustainable agriculture. Organic farming is an integral part of sustainable agriculture. However, it can only be a long-term goal, given the initial limited availability of natural organic material for recycling in some countries (box 6). What is important is that there be an incremental move towards organic farming and sustainable agriculture in developed as well as developing countries.

Box 6
Organic farming – but later?

Organic farming presumes a prerequisite: the availability of organic material in sufficient quantity for recycling. Lack of this precludes organic agriculture as an immediate solution to food shortages in Africa. “For that”, says Mr. Gordon Conway, President of the Rockefeller Foundation and a leading ecologist and agriculture expert, “you need organic matter to put into the soil. At the moment, [African] crop yields are far too low to provide much leftover stalk to put back. [African] livestock are not very fit and produce poor quality manure – much of which is burnt for fuel. Fifteen years from now [Africa] might be able to afford the luxury of organic farming, but only if first a large quantity of nitrogen [is put] into the soil with inorganic fertilizers out of bags.”

This idea was noted at the multi-stakeholder dialogue at CSD8:

Some pointed out that there is insufficient organic material available in many countries to make [organic agriculture] the exclusive basis of agricultural production. Others noted that [both] organic and inorganic inputs might be appropriate for different local conditions. Examples were presented for and against the industrial inputs to agricultural processes; some advocated their effectiveness while others pointed out the diminishing yields from high input agriculture over time.

Source: Sunday Telegraph (London), 27 Feb. 2000; and United Nations, CSD8, Chairman’s summary, op. cit., para. 12.

Consumers could play a critical role in creating a sustainable food system. The challenge now is to implement innovative strategies such as private voluntary initiatives that broaden consumers’ perspectives, so that concerns about environmental quality, resource use, and social equity are included in their shopping decision along with prices. At the same time incentives have to be created to enable producers using sustainable practices to market their goods to a broader public.

The concept of “decent work” as currently espoused by the ILO, encompassing all categories of workers – wage earners as well as self-employed workers – and all matters relating to employment – remuneration as well as conditions of work and workers’ representation – provides both the end and the means of achieving sustainable agriculture, with the emphasis on sustainable employment, living standards and welfare. Sustainable agriculture could contribute to these goals by ensuring that all rural workers (see box 7) follow sound practices that bring higher yields not only now, but for generations to come. Particularly important in this would be the role of agricultural wage workers – some 40 per cent of the labour force on the farms and growing. Wages and conditions of work in agriculture are generally below those prevailing in other sectors. Yet agricultural wage workers are often a neglected group, partly because they are unorganized and unrepresented, being widely dispersed. This is a serious obstacle in the way of achieving agricultural development, particularly sustainable development, since excluded wage workers may not feel any commitment to the land they are tilling. The best remedy is international acceptance of core ILO labour standards, at the heart of which are recognition of workers’ rights to freedom of association and collective bargaining and elimination of discrimination with respect to employment and occupation, of forced or bonded labour, and of child labour. The labour standards that apply to agricultural workers are listed in the appendix.

Sustainable agriculture has evident links with occupational safety and health (OSH). The ILO Programme on Occupational Safety and Health in Agriculture promotes the notion of sustainable agriculture in terms of the protection of agricultural workers. This goal is achieved through the promotion of core labour standards, eradication of poverty, access to decent employment, employers’ and workers’ participation in the prevention of occupational hazards, the improvement of working conditions, and protection of the environment from the impact of workplace activities. The ILO is actively involved in implementing the recommendations set forth by the Earth Summit in Chapter 19 of Agenda 21, concerning the environmentally sound management of toxic chemicals. The ILO’s role in sustainable agriculture was explicitly affirmed at CSD8 when “participants advocated […] CSD support for international rules that incorporate core labour standards as contained in the relevant ILO instruments”. ^[15]

Modernization of agriculture

“Modernization” of agriculture has at least four dimensions: (i) raising productivity levels by using better technology; (ii) diversifying into dynamic exports; (iii) changing to more durable tenurial arrangements; and (iv) ensuring the adoption of core ILO labour standards as a component of sustainable development. The first three issues are considered in this section, while the last is examined in Chapter 4 of the report.

Productivity and technology

A vast array of technology is now available for the agricultural sector, extending from the more mundane machines, chemical inputs and irrigation to genetic engineering and input monitoring devices using computers. The last, already making its mark in the developed countries (see box 8) must seem remote to the 70-80 per cent of the population in developing countries still dependent on the hoe and the water pail as their basic agricultural tools, although with technology costs tumbling and infrastructure – satellites, software – already in place, these technologies may be expected to “leapfrog” to large-scale farms in developing countries. There are already some instances of this (see box 8). Transgenic crops certainly have this potential to “leapfrog”; because of their importance in terms of employment levels, yield increases and potential hazards, they are discussed more fully in Chapter 4 of the report.

Box 8
IT and agriculture: The future is already here

Futuristic advances in information technology (IT) are already finding their way on to farms in developed countries. Most applications relate to “precision agriculture”. In one version, digital maps generated by global positioning system (GPS) satellites, output measurements generated by “yield monitors” fitted to combine harvesters, and soil samples generated manually are correlated to create a detailed profile of the land to facilitate pin-point application of chemicals. In another version, sensors connected to various parts of a plant are used to regulate, through an automated control system, functions such as irrigation and atmospheric gas concentrations.

Information technology has equal potential for change in agriculture in developing countries. In India, where notable advances – of even global significance – have been made in IT in “Silicon Plateau”, steps have recently been taken to link up rural areas. On 1 December 1999 the Chief Minister of Karnataka in South India launched videoconferencing facilities among nine of his districts. The first question he asked of one of the district collectors was: “What’s the price of tur daal in Gulbarga today?” (tur daal: a lentil, the chief source of protein in India). The priority application areas for IT in India will be agriculture, primary and reproductive health care and low-cost communications. “E-governance will change the way government functions”, said the Chief Minister.

In another giant step, the residents of Siddapur, India, a village relocated after facing dam-induced submersion 15 years ago, hooked up their self-purchased computer to the Internet, provided freely by a local company. “We are proud owners of a computer which has an Internet connection” was the first message they typed to the Chief Minister of Andhra Pradesh. Posting of paddy and turmeric prices, as promised, should prevent the currently endemic cheating by unscrupulous traders.

One important use of IT in developing countries could be in monitoring the food situation in the aftermath of a natural disaster, as happened in Venezuela after the December 1999 storms. An Emergency Intranet Network was set up, with assistance from the FAO, to provide information about damage to agriculture and emergency needs. The Intranet can be accessed by all relevant government ministries, international agencies and non-governmental organizations. Regular updates should contribute to monitoring harvests and attenuating future crises.

Sources: “Agriculture and technology”, op. cit., p. 7; India Today (New Delhi), 27 Dec. 1999; The Times of India (Mumbai), 19 Apr. 2000; and FAO at http://www.fao.org/news/2000/000104-e.htm.

Technology has moved so far ahead in developed countries that one no longer speaks there of “agriculture” but “agribusiness” – the chain from input supplies to production to processing to retailing. Farmers are a small part of this. Already in 1950 the world’s agribusiness was worth US$420 billion, in which farmers’ share was one-third; by 2028 the market could be worth $10 trillion, with farmers’ share down to one-tenth. ^[16] The underlying trend is the consolidation of the supply, processing and retailing sectors. Farming itself in these countries has fewer and fewer links with the soil (see box 9).

Technology questions facing most of the world’s farmers are much more mundane – how to make the most of water drawn from distant boreholes, how to eke out fertilizers, how to graduate from hoe to plough. Well-established correlations exist between the use of these inputs and yields, and these are shown in the next three tables, starting with table 2, which establishes a hierarchy of yields, taking cereals as the representative food group because of their much greater prevalence throughout the world (“roots and tubers”, the second most important food group, being more narrowly confined to the tropical belt).

Table 2. Cereal yield per hectare, kg/ha, 1999, and index 1999 (1975=100)


	Yield (kg/ha)	Index 1999 (1975=100)

World	3 043	159.2
Africa, developed ^a	2 260	139.0
Africa, developing	1 159	115.1
Asia, developed ^b	5 720	99.3
Asia, developing	3 215	177.3
Eastern Europe	3 482	119.0
Western Europe	5 512	170.5
North America	5 125	161.3
Oceania	1 982	137.2
South America	2 891	180.0

Notes: ^a South Africa. ^b Israel, Japan. Source: FAO statistics, 1999.

World cereal yield per hectare rose by 59 per cent over the last quarter century, with the greatest gains occurring in South America (80 per cent) and Asia (77 per cent) (table 2). African countries lagged, perhaps because of the problems associated with modernizing their traditional cereal crops – sorghum and millet. ^[17] Yields rose strongly in eastern Europe up to 1990, then fell abruptly and are now recovering slowly, reflecting the economic disruptions caused by structural changes in these transition economies.

Developed countries in Asia (Japan and Israel) have the highest cereal yields in the world, but have essentially reached a plateau since 1975. Yields in North America and western Europe have improved strongly over the period and are now approaching those in developed Asia. African yields (all countries except South Africa) lag at a level of only one-third of developing Asia. Such disparities are best explained in terms of differences in the use of irrigation and modern mechanical and chemical inputs (tables 3 and 4).


	Irrigated land (% of cropland)		Fertilizer consumption (100 grams per ha arable land)		Agricultural machinery
	Irrigated land (% of cropland)		Fertilizer consumption (100 grams per ha arable land)		Tractors/1,000 agr. Workers		Tractors/ha arable land

	1979-81	1994-96	1979-81	1994-96	1979-81	1994-96	1979-81	1994-96

World	16.6	17.4	867	941	19	20	172	187
East Asia and the Pacific	–	–	2 444	3 076	2	2	55	61
Europe and Central Asia	–	9.7	–	810	67	103	223	172
Latin America and the Caribbean	9.8	11.2	786	931	25	34	95	112
Middle East and North Africa	23.6	31.1	605	992	12	24	61	118
South Asia	27.8	37.2	918	1 370	2	5	26	83
Sub-Saharan Africa	3.6	3.8	419	576	3	2	23	18
Europe (EMU)	–	–	1 949	2 343	451	812	888	953

Source: World Bank: World Development Indicators, 1999.

Irrigation is much less developed in Africa than elsewhere, with the rate of irrigated land as a proportion of total crop land only one-fifth of the world total at mid-1990s and only one-tenth of South Asia’s (3.8 per cent in Africa versus 17.4 and 37.2 per cent respectively; table 3). Fertilizer consumption was at less than one-fifth (18.7 per cent) of that of the East Asia and Pacific region, and tractor use one-third to one-quarter of Asia’s.

Table 4. Growth rate of tractors and irrigated land, 1975-97, and world share in 1997


	Growth rate, 1975-97 (% p.a.)		% of world total, 1997
	Tractors	Irrigated land	Tractors	Irrigated land

Developing countries	5.2	1.7	24.5	75.2
Africa	3.4	1.5	1.7	4.1
Asia	6.7	1.7	16.7	64.3
South America	3.2	2.2	4.9	3.7
Developed countries	0.8	1.3	75.5	24.8
World	1.5	1.6	100.0	100.0

Source: FAO statistics, 1999.

Clearly Asia led the world in terms of irrigation, with around two-thirds of the world’s irrigated land in 1997. ^[18] Despite this, Asia still experienced the highest growth in irrigation of all the developing regions – 1.7 per cent per year in 1975-97. The fastest mechanization also occurred here, with a growth rate of tractors of 6.7 per cent per year compared to 5.2 per cent for developing countries as a whole; Africa and South America experienced around 3.3 per cent. Most of the increase in mechanization has occurred in developing countries, which had three times as many tractors in 1997 as in 1975, 4.4 times as many harvesters/threshers, and eight times as many milking machines. Even so, in 1997, developed countries had 75 per cent of all tractors, 80 per cent of harvesters/threshers, and 5 per cent of milking machines in the world. As the poorer countries progress, no doubt these ratios will change in their favour. Care must be taken so that the occupational and environmental hazards accompanying the greater use of machines and pesticides do not swamp the yield-increasing benefits. This issue is addressed further in the section of Chapter 4 on occupational safety and health.

Export diversification

One avenue for modernizing agriculture is the introduction of “dynamic” export crops – fruits, flowers, vegetables and spices so far being the most prominent. Of these, flower growing has been the most successful, largely thanks to advances in transportation techniques and new marketing arrangements, as well as other globalizing forces, such as foreign direct investment and imported technical know-how (see box 10). Double-digit growth has been achieved consistently by most entrants into this industry. ^[19] However, one drawback is the exclusion of smallholders because of high capital requirements of the industry in terms of greenhouses, cold storage, and imported materials and personnel. Their participation, perhaps on an outgrower basis, should be one prong of the strategy for further expansion of the industry. This would require, among others:

Further expansion of the industry would also require minimizing the hazardous working conditions and environmental damage resulting from the necessarily heavy use of agrochemicals in flower production. This issue is further addressed in Chapter 4, in the sections on OSH and private voluntary initiatives.

Land tenure

Moving to sustainable and high-productivity agriculture will only occur if all current users of land as well as their descendants have assurances of receiving the full benefits of environmentally sound practices. Security of tenure is the sine qua non for this, since many conservation practices only begin to pay off in the long term. A prior condition is that marginalized groups in rural areas have access to land itself. Thus agricultural “modernization” through the use of sustainable technologies requires parallel efforts to modernize tenurial arrangements, understood to mean the division of proprietary and user rights and responsibilities between the State, individuals, communities, and other entities. ^[20] The issue is complicated and controversial – complicated because of the myriad tenurial arrangements that exist, and controversial since changes in land rights, almost by definition, impinge on vested interests.

Land tenure arrangements range all the way from land held commonly by lineage groups to land held under private ownership by individuals or plantations. State ownership also exists, although it is now on the wane. There is a similarly wide variety of tenancy arrangements to enable landless workers to gain access to land, ranging from payment of cash rent, to sharecropping and bonded labour. The problem with some tenancy schemes is the unfair advantage derived by landlords, compounding the general problem of the exclusion of marginalized groups from access to land.

Uneven distribution of land straddles both problems, one extreme manifestation being the historical vesting of ownership of large tracts of land in a few individuals in Latin America, although it is not uncommon in the other developing regions either, as illustrated recently by the land struggle in Zimbabwe. Out of 44 countries for which IFAD had data available, in 28 the Gini coefficient ^[21] was over 0.5, implying that the top 10 per cent of landowners possessed over 40 per cent of the land. While land distribution is called for, and has been a perennial recommendation in all reports dealing with agriculture, there are other less drastic measures available to improve the access of the poor to land, such as privatization of land previously held under customary tenure; settlement of families on newly developed lands; and establishment of individual usufruct rights. The last measure is particularly needed in Asian countries, where, because of growing landlessness, tenants sometimes find themselves shelling out upwards of 50 per cent of their crops in rent. The more common figure, however, is 25 per cent, reflecting the enforcement of recently enacted reform laws. Such laws provide the best remedy against extortionary practices on the part of landlords.

The tenurial arrangements discussed above constitute perhaps the single most important barrier to advancement of the agriculture sector. Some progress, however, must be noted since the Earth Summit (UNCED). These changes have occurred in three parallel processes: ^[22]

Much more needs to be achieved in the above three areas to ensure that investments in agriculture are made from a long-term perspective, including future generations. Progress in these areas would also secure the inclusion of a greater segment of the population in the process of growth, which is the sine qua non for sustainable development.

2. Production and export
performance

Production

World agricultural production grew at an annual rate of 2.2 per cent between 1975 and 1999 (table 5), which, allowing for population growth, implies a total increase of around 15 per cent in per capita terms. Most of the growth occurred in the 1970s and 1980s, the first five years of the 1990s recording the worst performance. Of the two components of agricultural output (food and non-food), the former grew almost twice as much as the latter (71 per cent compared to 36 per cent).


	Index 1999 (1975=100)			Growth rate, 1975-99 (% p.a.)

	Agriculture	Food	Non-food	Agriculture	Food	Non-food

World	168	171	136	2.2	2.2	1.3
Developed countries	118	120	93	0.7	0.7	-0.4
Developing countries	225	231	164	3.4	3.5	2.1
Africa	181	185	139	2.5	2.6	1.4
Asia	246	250	198	3.8	3.9	2.9
South America	204	214	103	3.0	3.2	0.1
Eastern Europe	95	98	38	0.0	0.0	-4.0
Western Europe	124	125	121	0.9	0.9	2.0
North America	147	147	143	1.6	1.6	1.5

Source: FAO statistics, 1999.

Developing countries performed much better than developed countries, with growth of 125 per cent and 18 per cent, respectively (table 5 again). Thus, the global structure of food production shifted to the former: to give some examples, the developing countries’ share of cereals rose from less than 50 per cent in 1975 to 59 per cent by 1999, their share of beef from 29 to 48 per cent, and their share of poultry and eggs from 30 per cent each to 51 and 66 per cent, respectively.

Growth was especially strong in Asia, output rising by 146 per cent for agriculture as a whole and 150 per cent for the food subcategory, implying a gain of 60 per cent in per capita terms. While increased use of improved seed varieties, irrigation, and chemical inputs contributed to this, the impact of liberalization, especially in China, India and Viet Nam, should not be underestimated.

Growth was also substantial in South America, particularly in the food category, with 114 per cent, or 36 per cent per capita. Africa again stands out on the negative side, with food output per capita falling by 3.2 per cent. Although internal policy failures are routinely blamed for this, the impact of droughts must have been considerable (box 11), and AIDS is exacting its toll on agriculture through increased absenteeism and a growing number of female-headed households and child workers in agriculture. Labour forces are shrinking in many countries in Africa as a result of the dreaded disease (box 12). In eastern Europe per capita food production fell even more than in Africa – by 8.5 per cent. In the industrialized world, after modest growth to 1990, agricultural production stagnated in western Europe, but maintained an upward trend in North America with a 47 per cent total gain, 20 per cent since 1990.

Box 11
Drought in Africa

Drought is a common occurrence in Africa – and becoming increasingly frequent. Between 1985 and 1992 four to five African countries suffered drought every year (out of 53 recorded); since then the number has increased, with 16 registered in 1995. Ethiopia had ten drought years between 1980 and 1997, Botswana eight, and Cape Verde seven, while 19 countries, mostly in the equatorial belt, never had a drought.

Number of countries having droughts:

1985              4                        1992                12
1986              2                        1993                  4
1987              5                        1994                  6
1988              3                        1995                16
1989              3                        1996                  6
1990              2                        1997                11
1991              1

Countries having >5 droughts 1980-97: Ethiopia (10); Botswana (8); Cape Verde (7); Niger (7); Chad (6); Zambia (6); Zimbabwe (6); Algeria (6).

Source: World Bank: African Development Indicators, 1998/99 (Washington, DC, 1998), table 8-14 and figure 8-5.

Agricultural exports

World trade in agricultural commodities grew at an annual rate of 5.6 per cent between 1975 and 1998, signifying a 3.5-fold increase in aggregate terms (table 6). However, as may be expected, growth was unevenly distributed, with western Europe and developing Asian countries returning the best performance and sub-Saharan Africa the worst. The final outcome of the underlying trends was a decline in the developing countries’ share of world agricultural exports, from 32 per cent in 1975 to 30 per cent in 1998, the gains in Asia being offset by losses in sub-Saharan Africa and Latin America and the Caribbean. For the world as a whole agricultural exports comprised 10.5 per cent of total exports at late 1990s, clearly a minority and on a declining trend for many decades. Latin American and Caribbean countries relied most heavily on agricultural exports, which accounted for 23.8 per cent of total exports, higher even than Africa with 19.5 per cent.


	Growth rate 1975-98 (% p.a.)	Share of region in world agricultural exports (%)		Share of agricultural exports in total exports 1998 (%)
	Growth rate 1975-98 (% p.a.)	1975	1998	Share of agricultural exports in total exports 1998 (%)

World	5.6	100.0	100.0	10.5
Developed countries	5.8	67.7	69.7	–
Developing countries	5.3	32.3	30.3	–
Sub-Saharan Africa	2.3	6.3	3.0	19.5
Asia	6.7	11.7	14.7	7.7
Latin America and the Caribbean	5.1	14.0	12.4	23.8
Eastern Europe	2.9	4.3	2.3	11.7
Western Europe	6.9	32.6	43.2	10.1
North America	4.5	21.4	16.6	11.1

Source: FAO statistics, 1999; WTO: Annual Report, 1999.

While agricultural exports have been growing more slowly than manufacturing exports, they have at least been increasing faster than agricultural output. Thus, between 1950 and 1998, world agricultural output tripled (index 311, compared to 100 for 1950) but agricultural exports quintupled (index 531). In the meantime, dwarfing this performance, manufacturing output increased ninefold (index 900) and manufacturing exports almost 34-fold. ^[23] Three trends emerge: (i) manufacturing output expanded much faster than agricultural output, as mentioned above, relegating agriculture to a smaller share of the world economy; (ii) a greater share of world manufacturing output began to be traded; and (iii) manufacturing exports totally dominated world merchandise trade by 1998, their share reaching around 90 per cent. Thus, globalization has meant very much a globalization of manufacturing exports.

Developing countries played an increasing role in this, their share of total world trade in agriculture and manufacturing rising from 23 per cent in 1985 to 29 per cent a decade later. Even more impressively, the share of manufactured goods in their total exports grew from 47 per cent in 1985 to 83 per cent in 1995, a trend that is consonant with their increased industrialization (table 7). A large part of these gains went to the Asian newly industrializing economies (NIEs), whose share in world trade rose from 2 per cent in 1968 to 10 per cent in 1996. The cases of Malaysia and Thailand are highlighted in box 13. The NIEs apart, the share of developing countries stagnated at 17.5 per cent. Africa has been among the secular losers, its share halving from 3 per cent in 1968 to 1.5 per cent in 1996.

Table 7. Advanced economies v. developing countries including NIEs:
Diversification of exports (percentage of merchandise exports)


	Advanced economies (excluding newly industrialized economies)			Developing countries plus newly industrialized economies
	1975	1985	1995	1975	1985	1995

Non-fuel primary products	7.1	5.6	4.2	10.1	7.4	5.7
Fuel	5.9	8.9	3.8	61.4	45.4	11.2
Manufactures	87.0	85.5	92.0	28.2	47.2	83.0

Source: IMF, World Economic Outlook, Oct. 1997.

Regional transformations

Agricultural and GDP growth varied from one region to another, as did structural transformations of the economy, the hallmark of development. These differences are discussed here, and significant country experiences are highlighted. Table 8 shows growth rates of total GDP and agricultural GDP since 1980 and the ensuing changes in agriculture’s contribution to GDP and labour force between 1970 and 1997.

Table 8. Growth of output, 1980-97, and structural changes in GDP and labour force, 1970 and 1997


GDP (% p.a.)		Agriculture (% p.a.)		Share of agriculture (%)
				GDP		Labour force

1980-90	1990-97	1980-90	1990-97	1970	19

APEC	Asia-Pacific Economic Cooperation
ASEAN	Association of South-East Asian Nations
CSD8	8th Session of the United Nations Commission on Sustainable Development
ECA	United Nations Economic Commission for Africa
FAO	Food and Agriculture Organization of the United Nations
FDI	Foreign direct investment
GDP	Gross domestic product
GM	Genetic modification, genetically modified
GMO	Genetically modified organism
ICFTU	International Confederation of Free Trade Unions
ICT	Information and communications technology
IFAD	International Fund for Agricultural Development
IMF	International Monetary Fund
IPEC	International Programme on the Elimination of Child Labour (ILO)
IPM	Integrated pest management
IUF	International Union of Food, Agricultural, Hotel, Restaurant, Catering, Tobacco and Allied Workers’ Associations
MERCOSUR	Southern Common Market
MFCAL	Multifunctional character of agriculture and land
NAFTA	North American Free Trade Agreement
NGO	Non-governmental organization
NIE	Newly industrializing economy
OECD	Organisation for Economic Co-operation and Development
OSH	Occupational safety and health
RNF	Rural non-farm
SARD	Sustainable agriculture and rural development
SOE	State-owned enterprise
SSA	Sub-Saharan Africa
TUAC	Trade Union Advisory Committee to the OECD
UNCED	United Nations Conference on Environment and Development (“Earth Summit”)
UNCTAD	United Nations Conference on Trade and Development
UNDP	United Nations Development Programme
WTO	World Trade Organization
Developing Africa	All African countries except South Africa
Developing Asia	All Asian countries except Israel and Japan


Bangladesh, 1996	12.4
Uganda, 1994	13.7
Pakistan, 1996	34.1
Sri Lanka, 1990	49.8
Sri Lanka, 1996	59.9
Venezuela, 1993	61.8
Chile, 1997	71.3
Japan, 1997	82.2
United States, 1997	91.8

Source: ILO: Key Indicators of the Labour Market 1999, op. cit., table 3, pp. 83-91.