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Creating more and better jobs in global value chains
M. Maertens & A. Fabry
The Future of Work in Agriculture Conference World Bank, Washington DCMarch 19-20 , 2019
Introduction
High-value export
expansion
Labor markets
Rural develop
ment
Dual economy framework
Literature review
3 original case-studies
Overview
High-value export
expansion
Labor markets
Rural develop
ment
Horticultural export expansion • Horticultural exports from developing countries
0
10000
20000
30000
40000
50000
60000
70000
80000
mill
ion
curr
ent U
SD
A. Export value
Africa America Asia
0
10000
20000
30000
40000
50000
60000
1000
tonn
es
B. Export volume
Africa America Asia
Horticultural export expansion • Share of horticultural exports in total agri-food exports
Latin America 26 % Asia 27 % Africa 34 %
Mexico 58 % Philippines 56 % Egypt 67 %Peru 45 % China 40 % Morocco 48 %Chile 45 % Viet Nam 26 % South Africa 54 %Ecuador 39 % Thailand 21 % Ethiopia 34 %Brazil 7 % India 13 % Senegal 18 %
Ghana 16 %
Data • Senegal
o Export company surveys (2003 → 2019)
o Farm household surveys (2005 → 2018)
• Peru, Ghanao Export company surveys
(2012 - 2015)o Worker surveys
(2013 – 2015)
Data, evidence, articles
Horticultural export expansion • Horticultural exports from Senegal, Ghana & Peru
0102030405060708090
100
1995
1998
2001
2004
2007
2010
2013
2016
Expo
rt v
alue
(mill
ion
US$
)
Senegal
Beans, green Tomatoes
(Water)melons Fruits
Processed Vegetables
0
20
40
60
80
100
120
140
1995
1998
2001
2004
2007
2010
2013
Expo
rt v
alue
(mill
ion
US$
)
Ghana
Mango Fruits
Processed Vegetables
Bananas Pineapples
0
500
1000
1500
2000
2500
3000
1995
1998
2001
2004
2007
2010
2013
2016
Expo
rt v
alue
(mill
ion
US$
)
Peru
Asparagus Avocados
Grapes Fruits
Processed Vegetables
Agro-industrialization
Smallholder contract-farming → Large-scale vertically integration Product market participation → Labor market participation
Research on contract-farming → Research on labor market effects
→
Agro-industrialization • Supply chain characteristics
Senegal horticulture
Peruhorticulture
Ghana pineapple
Sourcing from smallholders Green beans 60% (1990’s) 35% (2011)
Asparagus95% (2000)29% (2018)
Pineapple45% (2006) 5% (2015)
Mango < 5% (2015)
Grapes 85% (2007)22% (2018)
Approx. # companies 25 100 15Average company size 380 ha 270 haAverage share of FDI 33% 40% 47%GlobalGAP companies 95% 88% 100%
Agro-industrialization• Impact of standards in asparagus sector in Peru
A dual economy (Lewis) model
Lt2
Overview
High-value export
expansion
Labor markets
Rural develop
ment
More jobs • Employment dynamics
Country Sector Year Approx. # employees
Female employees
Senegal Horticulture 2018 27,200 57 %Ghana Pineapples 2015 3,450 62 %Kenya Green beans 2011 66 %
Flowers 2019 100,000 75 %Zambia Horticulture 2010 10,000 65 % Ethiopia Cut flowers 2013 200,000 80 %Peru Asparagus 2013 100,000 50 %
Grapes 2015 210,000 40 %Chile Fruits 700,000 50 %Mexico Horticulture 2000 94,000 11 %
Better jobs • Wage dynamics
Year of observation 2003 2006 2013 2016 2018Av. nominal wage (FCFA/day)
All employees 2,537 2,550 2,750Casual employees 2,240 2,423 2,620Permanent employees 3,484 3,748
Av. real wage (FCFA/day)
All employees 2,537 2,443 2,239Casual employees 1,824 1,975 2,044Permanent employees 2,837 3,055
Months employed per yearCasual employees 6.8 6.96 7.03
Permanent contracts 15% 12%
Better jobs • Private standards and decent work
Country Year Item Wage Peru 2013 Certified to labor standards 4.74 PEN per hour
Not certified to labor standards 4.58 PEN per hourSenegal 2010 GlobalGAP certified 1,940 FCFA per day
Not GlobalGAP certified 1,638 FCFA per dayGhana 2015 Fairtrade certified 10.10 Cedi per day
Not Fairtrade certified 9.22 Cedi per day
Better jobs • Private standards and decent work
Country Year Item Period of employmentPeru 2013 Certified to labor standards ± 85 days
Not certified to labor standards ± 70 daysSenegal 2010 GlobalGAP certified ± 100 days (beans)
± 60 days (mango)Not GlobalGAP certified ± 75 days (beans)
± 45 days (mango)Ghana 2015 Fairtrade certified 244 days
Not Fairtrade certified 244 days
Better jobs • Private standards and decent work
Country Year Item ContractPeru 2013 Certified to labor standards 93% written contract
Not certified to labor standards 33% written contractSenegal 2010 GlobalGAP certified
Not GlobalGAP certifiedGhana 2015 Fairtrade certified 87% permanent contract
Not Fairtrade certified 53% permanent contract
Overview
High-value export
expansion
Labor markets
Rural develop
ment
Income mobility and well-being• Income, poverty and inequality
0%
10%
20%
30%
40%
50%
60%
70%
2006 2013 2005 2011Senegal River Delta Senegal
Pove
rty
inci
denc
e
Poverty Extreme poverty
0.36
0.37
0.38
0.39
0.40
0.41
0.42
0.43
0.44
2006 2013 2005 2011Senegal River Delta Senegal
Gin
i coe
ffici
ent
Income mobility and well-being• Subjective wellbeing or happiness Employed (poor) women happier than non-employed
women
Linkages & spillover effects• Technology & managerial spillovers ?
• Investment linkageso Agro-industry employees investing in household farm (input
expenditures)o Agro-industry employees investing in off-farm businesses
• Consumption linkages ?o Purchasing power and demand expansion for domestic goods
and services
Indirect and long-term gender effects • Female employment and child schooling
0%10%20%30%40%50%60%70%80%
boys girls boys girls
primary schoolenrolement
secondary schoolenrolment
05
101520253035404550
total per child
school expenditures (1,000 CFA)
Indirect and long-term gender effects • Female employment and fertility
0
0.5
1
1.5
2
2.5
3
3.5
4
18-24 25-29 30-34 35-40
Num
ber o
f chi
ldre
n
Age cohort (years)
1516171819202122232425
18-24 25-29 30-34 35-40Ag
e at
mar
riage
Age cohort (years)
Conclusion• Agro-industrialization
Employment dynamics: more jobs
Wage dynamics: better jobs
• Linkages agro-industry & smallholders More AND better jobs
High-value export
expansion
Labor markets
Rural develop
ment
Future perspectives• International market demand for fresh produce → further
expansion of horticultural export sectors
• Existing producing regions: slowdown in expansion, increasing wages and incomes, long-term
development effects, decreasing inequality
• New producing regions ?
Policy perspectives• Regional development processes (cfr Justin Yifu Lin & Célestin Monga)
• Government strategies: more AND better jobs Labor market regulations, internal migration policy, location of export
activity
• Corporate strategies: high wages AND high profits Higher-value products, higher-value (demanding) markets, year-round
production
Research perspectives• Research attention to agro-industrialization and labor market
dynamics in global value chains
• Particular gaps Long-term development effects, role of rural-to-rural migration, linkages
between agro-industry and smallholder sector, …