1. Patterns of Structural Transformation and
Agricultural Productivity Growth in 109 Countries:
With a Special Focus on Brazil, China
Indonesia and India
Uma Lele,
Based on a paper by Uma Lele, Manmohan Agarwal, Peter Timmer and Sambuddha Goswami
Global Conference on Agricultural Research and Development, Punta del Este, October 29, 2012

2. What is Structural Transformation?
• Declining share of agriculture in GDP,
• Declining share of agriculture in employment,
• Rural-urban migration,
• Growth of the services and the manufacturing sectors and
• A demographic transition with reduction in the population growth rates.
• The final outcome when differences in labor productivity between the
agricultural and non -agricultural sectors narrows considerably.

3. Questions Addressed
How do patterns of structural transformation vary across countries?
What role does agriculture play in the structural transformation?
 How does agriculture’s role vary across and within BCII and in developing
countries at large
What do measures of agricultural productivity growth tells us about ?
What policies, investments and institutions explain the differences?
What Lessons?

4. Changing Location of Global Hunger
No. of Undernourished by Region, 1990–92 and 2010–12
Caucasus and Developed Western Asia
Central Asia 9 Developed Western Asia Region 16 and Northern
Region 20 and Northern Caucasus and Africa 25
Oceania 1 Africa 13 Central Asia 6
Latin America Oceania 1 Latin America
and Caribbean and
65 Caribbean 49
South-Eastern
Asia 65
India 240
India 217 Eastern Asia
(excluding
South-Eastern
China) 9
Asia 134
Eastern Asia
(excluding
Southern Asia China) 7 China 158
(excluding Southern
India) 87 Asia
(excluding
India) 87
China 254
Sub-Saharan
Sub-Saharan Africa 234
Africa 170
1990-92 2010-12
Total=1000 million Data Source: The State of Food Insecurity in the World 2012 Total=868 million

5. Changing Location of Poverty Headcount Ratio at $1.25 a
day (PPP) (% of Population)
(1990-2009)
70
60
50
40
30
20
10
0
1990 1995 2000 2005 2009
BRAZIL CHINA INDIA INDONESIA

6. Declining Share of Ag Value Added With Respect to
Per Capita Income
109 Developed and Developing
Countries 88 Developing Countries
.8
.8
agriculturalvalueaddedshare
.6
.6
.4
.4
.2
.2
0
0
4 6 8 10 12 4 6 8 10
lngdppcconstant2000us lngdppcconstant2000us

7. Declining Share of Employment
109 Developed and Developing 88 Developing Countries
countries
1
.8
agriculturalemploymentshare
.8
.6
.6
.4
.4
.2
.2
0
4 6 8 10 12 4 6 8 10
lngdppcconstant2000us lngdppcconstant2000us

8. Total Ag. Value Added W.R T Per Capita
Income
109 Developed and Developing 88 Developing Countries
Countries
7
6
lnagrvainmilconstant2000us
5.5
6
5
4.5
5
4
4
3.5
4 6 8 10 12 4 6 8 10
lngdppcconstant2000us lngdppcconstant2000us

9. Per Worker Ag. Value Added
109 Developed and Developing 88 Developing Countries
12
Countries
9
10
8
lnagrvapworker
8
7
6
6
4
5
4 6 8 10 12 4 6 8 10
lngdppcconstant2000us lngdppcconstant2000us

10. Difference between the Share of Value added in Agriculture
and Share of Employment in Agriculture
109 Developed and Developing 88 Developing Countries
.1
.1
Countries
agrvaddedshareminusagremplshare
0
0
-.1
-.1
-.2
-.2
-.3
-.3
4 6 8 10 12 4 6 8 10
lngdppcconstant2000us lngdppcconstant2000us

11. Share of Agricultural Value Added in Total Minus Share of
Agricultural Employment
19 Countries in Asia 24 Countries in Latin America
0
-.1
agrvaddedshareminusagremplshare (Fitted)
-.15
-.05
-.2
-.1
-.25
-.15
-.3
-.2
-.35
4 6 8 10 12 6 7 8 9 10
lngdppcconstant2000us lngdppcconstant2000us
-.2
38 Countries in Sub-
-.25
Saharan Africa
-.3
-.35
-.4
-.45
4 5 6 7 8 9
lngdppcconstant2000us

12. Intersectorial Duality
Value Added Per worker in Non-Ag and Ag: 4 Countries and All
Regions
Ratio: Value Added per Worker (Non- Ratio: Value Added per Worker (Non-
14
Agriculture/Agriculture) Agriculture/Agriculture) by Region
18
(BIIC) 12 (1980-2009)
16 (1980-2009)
10
14
12 8
10 6
8 4
6
2
4
0
2 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008
0 Source: WDI & Global Development Finance, World Bank and FAOSTAT 2011
East Asia & Pacific (developing only)
Latin America & Caribbean (developing only)
Middle East & North Africa (developing only)
Source: WDI and Global Development Finance, World Bank South Asia
and FAOSTAT 2011 Sub-Saharan Africa (developing only)
Brazil China India Indonesia High income

13. Intersectorial Terms of Trade Differences Among Regions
Terms of Trade Terms of Trade by Region
(Deflator for Agriculture/Deflator for Non-Agriculture 2.5 (Deflator for Agriculture/Deflator for Non-Agriculture
[Industry + Service] [Industry Service])
(in US$) (BIIC) (in US$)
3 (1980-2009) (1980-2009)
2
2.5
1.5
2
1
1.5
1 0.5
0.5 0
0 East Asia & Pacific (developing only)
High income
Latin America & Caribbean (developing only)
Middle East & North Africa (developing only)
Brazil China India Indonesia South Asia
Sub-Saharan Africa (developing only)

14. Difference between the Share of Value added in Agriculture and the Share of Employment in Agriculture
in Brazil, China, India and Indonesia (1980-2009)
-.08
Brazil
-.1
-.1
-.12
-.14
-.15
-.16
-.18
-.2
8 8.1 8.2 8.3 8.4
lngdppcconstant2000us
China
India
-.25
Indonesia
-.3
5 6 7 8 9
lngdppcconstant2000us

15. WHAT EXPLAINS THE DIFFERENCES IN
THE SPEED OF TRANSFORMATION?

16. What Explains Differences in the Speed of Transformation?
(NOT TO BE PRESENTED DUE TO TIME LIMIT!)

17. Land Productivity Differences
Total Cereals Yield Growth
Total Cereals Yield
(1961-2010)
(hg/ha)
60000 (1961-2010) 450
400
50000
350
Base Year 1961=100
40000 300
30000 250
200
20000
150
10000 100
50
0
0
1961
1964
1967
1970
1973
1976
1979
1982
1985
1988
1991
1994
1997
2000
2003
2006
2009
1961
1964
1967
1970
1973
1976
1979
1982
1985
1988
1991
1994
1997
2000
2003
2006
2009
Brazil China India Indonesia
Brazil China India Indonesia

18. “Technology capital” Is strongly correlated with agricultural TFP growth
Source: Fuglie/Evanson
Bar height shows average TFP growth of countries with increasing technology
capacities
Source: Evenson & Fuglie (2010)

19. Long-run Average Agricultural TFP growth (1971-2008)
(% per year)
Former USSR
Caribbean
Developing
Oceania
Sub-Saharan
Africa
Average annual
TFP growth
> 2%
Circled regions show persistently
1-2% low TFP growth
< 1% Source: Keith Fuglie, Productivity Growth in the Global Agricultural Economy.

20. Regional Productivity Growth in Parts of China _Some of the highest
Wang et al on Top Ten Provinces
The top ten provinces in TFP growth
for the 1985-2007 period
(* Six of them are on the east coast)
Jiangxi 8.17%
Guangdong* 8.11%
Hebei* 7.95%
Fujian* 7.89%
Shandong* 7.37%
Hubei 7.34%
Inner
7.26%
Mongolia
Zhejiang* 7.19%
Sichuan 7.18%
Liaoning* 6.83%

21. DISTRIBUTION OF TFP GROWTH INDEX
VALUES BY STATES IN INDIA: 1975-2005
JAMMU & KASHMIR
HIMACHAL PRADESH
PUNJAB
UTTARANCHAL
HARYANA ARUNACHAL PRADESH
DELHI
SIKKIM
RAJASTHAN UTTAR PRADESH ASSAMNAGALAND
MEGHALAY
BIHAR A
MANIPUR
TRIPURA
JHARKHAND MIZORAM
GUJARAT MADHYA PRADESH WEST BENGAL
CHHATTISGARH
DADRA & NAGAR HAVELI ORISSA
MAHARASHTRA
ANDHRA PRADESH
GOA
KARNATAKA Note: (1999-2009)
PONDICHERRYPONDICHERRY
KERALA TAMIL NADU (Red circle) Agricultural Growth Rates > 4%
(Black circle) Agricultural Growth Rates 2% to 4%
TFP Growth Score Class
N.A
Below 60 [Low]
60.00 - 70.00 [Moderate] (Major State Average=70.1)
(while circle) Agricultural Growth Rates <2 %
70.01 - 90.00 (High)
Above 90 [Very High]
Source: Based on Total Factor Productivity and Contribution of Research Investment to Agricultural Growth in India: Ramesh Chand et al. NCAP 2011

22. BSource: Chapter 7: Productivity and Structural Transformation in Brazilian Agriculture: Analysis of Agricultural Census Data by José Garcia Gasques, Eliana Teles astos, Constanza Valdes and
Miriam Rumenos Piedade Bacchi.

23. TFP Growth By Farm Size and Tenure Types
Asia:
Inverse Relationship of Productivity and Farm Size
Measured mainly by using land productivity in Asia
“Poor but Efficient” hypothesis of Theodore Schultz for farmers lacking
access to inputs, extension and markets
Latin America:
U Shaped Relationship Between Farm Size and Productivity
Productivity by Tenure Type—Corporate, Owner
Operated, Tenant, Contract Farms,
New Production Technologies
Vertical Integration and importance of value chains,

24. Public Agricultural R and D Spending
Source: ASTI as reported in Beintema and Stads (2011)

25. Growth in Transport Infrastructure
4500
Operations of Road Transport Operations of Railway Transport
4000 (India and China) (India and China)
(Thousand km) (Thousand km)
100
3500
90
3000 80
70
2500
60
2000 50
40
1500
30
1000 20
10
500
0
0 1980-81 2010-11
1980-81 2010 Note: 2010-11 data for India is provisional
Length of Highways (National + State) (Thousand km)--India* (Latest National Electrified Railways (Thousand km)---India
available data is 2007-08) Length of Railways in Operation (Thousand km)---India
Length of Highways + Expressways (Thousand km)--China National Electrified Railways (Thousand km)--China
Length of Railways in Operation (Thousand km)---China

26. Openness of Agricultural Cereal Trade
Food Imports as Percentage Share of Domestic Food
Tariff Rate (Most Favoured Nation), Simple Mean
Supply 35 Primary Products (Percentage)
(BIIC) (1999-2009)
(1961-2007) 30
14
25
12
10 20
8
15
6
10
4
2 5
0
0
1961
1963
1965
1967
1969
1971
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
1999 2005 2009
Source: FAOSTAT 2011 Source: WDI and Global Development Finance, World Bank
Brazil China India Indonesia
Brazil China India Indonesia

27. Efficient Water Use Is a Growing Challenge in Indian Agriculture—India uses
far more units of water per unit of crop than China
Groundwater Trends of public expenditure in major and medium irrigation
and net irrigated area under different sources in India
60 42
50 36
(billion US$, in 2000 prices)
Groundwater
30
Net irrigated area
40
(million ha)
Expenditure
24
30
Canal 18
20 Irrigated Area
12
Expenditure US$
10 Tank 6
Irrigated Area
0 0
1960 1970 1980 1990 2000
Expenditure Tanks Canals Groundwater
Source: Amerasinghe et al

28. Thank You