Patterns of Labor Productivity and Income Diversification in the Rural Farm and Non-farm Sectors in Sub-Saharan Africa

In many sub-Saharan African (SSA) countries, high population growth in rural areas has reduced farm sizes and encouraged growth in non-farm employment and income sources with the aim of improving rural incomes. As agricultural productivity grows, so does agricultural labor productivity, the latter has long been recognized as an important instrument for structural transformation while contributing to accelerated poverty reduction. Unemployment and underemployment in the agricultural sector can be reduced through increased labor productivity, which also promotes the transfer of agricultural labor into non-farm activities in both rural and urban areas. This transfer is a central factor to economic growth in SSA countries where agriculture still accounts for about one fifth of the national GDP and employs over half of the total labor force. However, studies have so far not investigated how the agricultural and non-farm sectors are transforming, the patterns and dynamics of this change, nor the determinants of this process. Understanding of labor productivity gaps between traditional food staples and high value agriculture and other non-farm sectors, which can provoke the gradual transfer of family labor from the low to high labor productivity sectors, remains low. A team of local researchers in Africa aims to bridge this knowledge gap by examining patterns of labor productivity in agriculture and related non-farm sectors, productivity gaps across the sectors, and how this affects household income diversification strategies within agriculture and the non-farm sector in the process of structural transformation. Understanding patterns of labor productivity across sectors and constraints to labor productivity growth, especially in the agricultural sector, is necessary to facilitate structural changes to African agricultural and rural economies.