This document summarizes drivers and outcomes of structural change in agri-food systems and economies. It discusses changes in economic structure like declining agriculture GDP share and employment. Production structure changes like land use, yields and resource use. Farm structure changes such as increasing farm size and household income. Consumer behavior changes like diet, expenditures and health. Finally, it examines changes in markets and governance structures like value chains and policy networks.

1. Economic development &
Agri-food system transitions
Drivers & Outcomes of Structural Change (& Shocks)
Ruerd Ruben & Krijn Poppe

2. 2
 Changes in Economic structure
● Agriculture in GDP
● Agricultural employment & income
 Changes in production structure
● Land use & cropping pattern
● Yield & net returns
● Resource use & environment
 Changes in farm structure
● Farm size (Gini)
● Household income (farmers & workers)
 Changes in consumer behaviour
● Household expenditures
● Dietary pattern & Health
 Changes in market & governance
● Value chains & value added
● Governance structure
Structural Change & Tipping points
Strategic Plan
WECR
Transition to Inclusive &
Sustainable Economy
Transition to Integrated
agri-food policies &
healthy Food Systems

3. 3
Dietary Transition
Agicultural Transition
Demograhic Transition
Climate Transition
Technological
Change
&
Innovation
Market
reform
&
Trade
Standards
Social
innovation
&
cooperative
practices
Governance
regimes
&
net
works
Multiple trends & Policy challenges
Source: v.d Logt & Ruben, 2018

4. The Agrarian Question : different challenges
4
Economic
Growth
•Yield potential
•Input efficiency
Labour
Surplus
•Farm consolidation
•Labour product & wages
Food
Surplus
•Food (super)markets
•Non-food preferences
Market
upgrading
•Value addition
•Bio-based economy
Societal
resilience
•Circular systems
•Income distribution

5. Dynamics & Drivers of Sector Change
5
DRIVERS OF CHANGE
 Infrastructure
 Technology
 Markets
 Governance
 Networks
 Population growth
 Income
 Mobility
Declining share of primary sector during the
process of economic development

6. Population dynamics
Large population growth in Africa
Growing urbanization in Asia & Latin America
Declining share of rural population

7. Rural (farm & non-farm) employment
Declining total employment in agriculture
Feminization of rural labour force
Growing non/off-farm employment in rural areas

8. Land use change
Expansion of grassland & cropland area
Reduction of forest reserves

9. Technology change: Factor substitution
9
Substitution of labour by machinery & pesticides
Substitution of land by fertilizers & (hybrid) seed
Substitution of animals by tractors

10. Farming systems
10
From subsistence farming to commercialization
From mixed farming to specialization
From extensive cultivation to intensive farming

11. Life cycles
11
Coops: rise and fall of cooperative life cycle (Cook)
Peasantry: inverse U-shape of family life cycle (chayanov)

12. 12
Decline in number of farms ; increae in average farm size
Bi-modality: Reducing middle class farmers (USDA)
Farmers & farm size

13. Farm size & Factor productivity
13
Inverse relationship: higher yields on family farms (Brazil)
Bimodal distribution: higher profit in small & large farms (India)

14. Factor Productivity (& competitiveness)
14
Important differences in TFP growth
between countries & regions

15. 15
Increasing Agricultural Value Added by GDP
per capita
Declining Share of Agricultural Employment
by GDP per capita
Employment & Agricultural Value Added

16. Resource use efficiency (energy & water)
16
Improved energy resource efficiency (Dutch horticulture)
Improved wáter use efficiency (C3 plants)
Production Energy use

17. Agriculture & Environment (Nexus)
17
Share of CO2 emissions and agricultural value-added
Kuznets curve (inverse U)

18. 18
Three Pathways
 Falling out
 Stepping up
 Stepping out
Three strategies
 Innovation
 Intensification
 Integration
Pathways out of rural poverty

19. Income & food consumption
Declining income share for food expenditures
Increasing out-of-home food consumption

20. Changes in consumption pattern
Growing share of Processed Foods & Meats
Decling importance of cereals & starchy staples
Growing importance of F&V, pulses & fish

21. Market dynamics (retail outlets)
Growing supermarket’s share in food sales
Retail concentration
Supermarket penetration rises with per capita income

22. Value Chain Organization
Inputs Production Trade Processor Exports
Finance
Land
Extension
Inputs/ Seed
Exporter
Trader Exporter
Cooperative / Exporter
Producer
Producer
Producer

23. Value added distribution
23
Farmer share no more than 5-10%
High costs for transport & packaging
Large retail share

24. Institutional change
24
Increasing complexity of food system governance
Shift of resource intensity in farming systems

25. Food system governance (hourglass)
25
Food Value Chain Funnel
- Many smallholder producers
- Some Local traders
- Aggregation
- Processing
- Few Retailers
- Large number of consumers

26.  Supply shock
(production, prices &
stocks)
 Demand shock
(employment, wages,
remittances, income)
 Financial shock
(finance, interest rate,
credit ceilings)
26
Structural change & economic shocks

27. Drivers for Agri-food system change
27
 Role of markets & (public) institutions
 Local sourcing & international trade
 Power differences (producers – traders – consumers)
 Dovetailing capital & labour markets
 Information exchange & connectiveness (ICT)
 Innovation & (long-term) competetiveness

28. Great sources of Data
28
 Our World in Data (Oxford University)
 World Bank
 IMF
 FAO
 IFPRI
 USDA
 Eurostat (FADN , Farm structure survey)

29. Tanks for your attention
29
RuerdR
Ruerd.ruben@wur.nl
Krijn.poppe@wur.nl
Krijn_J_Poppe