AgCLIR Chapter: Employing Workers
Significant employment in agriculture is seasonal and informal. Employment laws and policies are often misinterpreted as irrelevant in much of the sector; however, for seasonal agricultural labor markets to operate efficiently, workers must have the ability to move among agricultural jobs and/or to pursue non-farm employment or entrepreneurial activities intermittently or simultaneously with their agricultural employment. Given these challenges, and the fact that such large percentages of the adult labor force are engaged in agriculture in many developing countries, employment issues—access to jobs, pay rates, working conditions, provision of health care and housing, migration—are important in virtually all agriculture-dependent developing countries.
Seasonality of employment
Agricultural production is, by its nature, a seasonal business and the peak labor needs of many enterprises are highly correlated; i.e., when one farm needs more labor, all farms need more labor. Three to five months of intensive work in crop production is followed by a one-time harvest—rice, wheat, corn, or cotton—that must be carried out in a relatively short period to maximize output value.
In some countries, or in some ecological zones, it is possible to get another crop or two each year, but in many developing countries the agricultural work demands are highly uneven. Peak seasonal work demands draw-in labor to what are otherwise family farm enterprises; in low seasons, family farm workers migrate elsewhere to find jobs and incomes. Seasonal unemployment or underemployment is, for many, a critical issue. Ultimately, few countries have employment policies well-tailored to the specific needs of the agricultural sector and its highly seasonal labor demands.
Successful farm enterprises are able to manage the seasonality of their businesses by developing, sometimes on a cooperative basis, more capital-intensive and complex farm enterprises that smooth out their production and income streams. On-farm investments in irrigation facilities permit double- or triple-cropping of staple crops each year or nearly continuous production of tropical flowers, fruits, and vegetables. Diversification of production enterprises, such as poultry and dairy production as well as the growth of annual crops, also tends to occupy labor more fully and generate a steadier stream of income for agribusinesses. Construction of storage facilities can further help to even out the sales over time. While many of these enterprises continue to rely on family labor, most of these commercial agricultural enterprises hire labor either full time or on a seasonal basis. Gradually, capital both substitutes for, and increases the productivity of, labor employed.
Off-farm employment
Other farm owners/operators, while not in a position to address the seasonality of their production outcomes, are able to pursue off-farm entrepreneurial or employment opportunities on a flexible basis—often in a related agribusiness such as trading in crops, operating or working in local processing facilities, making crafts, working in tourism—in order to smooth out their income streams. Where there is ease of entry and exit into small business, this situation can provide the kind of employment appropriate to sustain a more seasonal agricultural operation. Empirical evidence shows that while off-farm employment can be important as a source of income for very poor rural households, the higher-income farm household operations often are also most successful in pursuing off-farm employment.
Migration. Some farm enterprises, however, are so small and unprofitable that, to ensure survival, workers from these household enterprises must rent out their labor to better-off neighbors, even where doing so reduces the productivity of their own agricultural production enterprises. These workers are the most likely to be exploited as they work for others (e.g., low pay, hazardous working conditions). When such workers move cross-border, there is the possibility of even fewer worker protections. In some developing countries, seasonal employment on public works has been provided, sometimes using food for work, to ensure that the truly needy respond to such offers of employment.
Permanent employment
Non-farm agribusinesses that purchase and store raw product and transform or process it for sale throughout the year are critical for managing the seasonality of agricultural production, as they bridge the gap between the periodic flood of raw product into the market and the continuous, daily needs of consumers. In low-income developing countries, agricultural trading operations and storage and processing facilities are likely to be less sophisticated and less capable of market stabilization than in higher-income developing countries. They are likely to be an important source of employment for significant numbers of people, although relatively few efforts have been made to quantify this employment as a share of the total agricultural labor force.
Most developing countries, however, envision an expanding share of agricultural employment going into the visible “value added” agribusiness segment of the economy—processing of raw commodities into diverse food, feed, and fiber products for local consumption and export, expansion of market outlets, and the like. Growth of such value-adding jobs depends, inter alia, on:
- Local consumers’ purchasing power and demand for more highly processed products;
- Export markets’ willingness to buy processed or semi-processed products rather than raw materials that can be refined for diverse consumer tastes and market standards;
- The quality of the local labor force; and
- The availability of capital and technology for the local production facilities.
Agribusiness firms that process commodities year-round compete for labor with other manufacturing and service firms of comparable size and are likely to be subject to the same labor costs, labor force rigidities, and firing costs as other firms.
Gender
Finally, in many agribusinesses, there is a tendency to allocate specific jobs to women and others to men. Gender disparities are an important aspect of agricultural employment, as pay, treatment, and working conditions are not equal.
For more information, please see the Employing Workers – Lessons from the Field Briefer.
AgCLIR Case Studies
AgCLIR assessments on ‘Employing Workers’ have been conducted in the following countries: