One version of an old joke features a shipwrecked economist on a deserted island who, when asked by his fellow survivors what expertise he can offer on how they can be rescued, replies, “Assume we have a boat.” Economists have a well-deserved reputation for making their theories work only by making unrealistic assumptions about how the real world operates.
I was reminded of the joke often in the five years I traveled the world researching my book, “Eating Tomorrow: Agribusiness, Family Farmers, and the Battle for the Future of Food.” Policymakers from Mexico to Malawi, India to Mozambique, routinely advocated large-scale, capital-intensive agricultural projects as the solution to widespread hunger and low agricultural productivity, oblivious to the reality that such initiatives generally displace more farmers than they employ.
Where are the displaced supposed to go? “Assume we have employment,” can be the only answer, because economic growth sure wasn’t generating enough jobs to absorb those displaced from rural areas. No one can sail home on an economist’s assumed boat. And assumed jobs wouldn’t address the chronic unemployment and underemployment that characterize most developing countries.
With demographic shifts creating youth bulges, job creation remains an urgent priority. Indeed, growing populations are often portrayed as a demographic “time bomb,” conjuring images of unemployed youth joining gangs, insurgent groups, or just falling into despair in urban slums.
But what if we saw all those unemployed workers as a resource rather than a curse? Economist Michael Lipton and others have long argued that the bulge in working-age youth can be a demographic dividend rather than a demographic time bomb, but only with policies that focus on creating and rewarding work, beginning with labor-intensive farming in agricultural societies. That is exactly what I see starting to happen in Mexico under its new president.
The demographic dividend
Lipton makes what should be an obvious point: Labor creates wealth. So a society with a large share of able-bodied workers has a vast resource to generate economic development. The economic success stories in South and East Asia relied on an increase in the number of young people entering the workforce to accelerate economic growth. Lipton estimated that about one-third of the widely acclaimed “Asian miracles” of growth and poverty reduction could be attributed to those countries’ low dependency ratios — the share of the population (children and older people) who don’t work and are therefore dependent on the share of the population who can.
The United States now faces the opposite problem, with baby boomers collecting their Social Security checks and with fewer workers paying into the government retirement system. But in Africa, low dependency ratios, economically, mean fewer mouths to feed per able-bodied worker. In 2012 there were 120 working-age people for every 100 dependents; in 2050 there are projected to be 196, a 63 percent rise in workers-per-dependent.
That should be a boon to economic growth, but only if those available workers can be put to productive work. In contemporary Asian success stories, such as China’s, the first place they were put to work was in labor-intensive agriculture, with land reforms that created and supported intensive production on small farms of about 2 acres each.
Sub-Saharan Africa is the ticking demographic time bomb everyone now worries about; populations are expected to double, or more, by 2050. But that could be a demographic dividend if governments pursue policies that put people to work, first in agriculture. The young will be a resource, not a curse. And bottom-up economic development, particularly if it improves the lives of women and girls, will slow population growth, as it has in other developing countries.
Little support for labor-intensive agriculture
In my research in Africa, I didn’t see much evidence that governments saw working-age youth as a resource. And they certainly were not investing in the kind of labor-intensive small-scale farming that was the foundation for Asia’s economic miracles. But I saw plenty of examples of farmers taking matters into their own hands and intensifying their own production, generally with scant government support.
Intensification now has a bad name among many sustainable agriculture advocates because the term has become associated with increased use of commercial inputs to raise productivity. Even “sustainable intensification” has been co-opted by advocates of Green Revolution technologies to argue for “sustainable” use of chemicals.
But everywhere I traveled to research “Eating Tomorrow,” I saw farmers creatively intensifying the farming of their small plots, in truly sustainable ways. Those few who had access to irrigation could essentially double production, growing a second set of crops on the same land by irrigating it in the dry season. Even those who couldn’t irrigate raised goats or other small livestock, composted the manure, and applied it to their fields, increasing soil composition, fertility, and productivity. Farmers inter-planted various food crops with their corn, ignoring Green Revolution monocultures and the bribes — subsidies for commercial corn seeds and chemical fertilizers — that backed them up.
Farmers knew when they harvested cowpeas from the same fields from which they had recently picked their corn that they had indeed intensified production — two harvests rather than one — from their land. Agricultural economists measure yield as corn-per-acre, not total-food-per-acre, so those shipwrecked economists see intercropped fields as less productive than monocultures. But these farmers know better. And when corn crops fail due to drought or pests, they also know they have grown other foods that survive to sustain their families.
Lipton’s policy advice is to provide public support so small-scale farmers can intensify production, putting all able-bodied family members to productive work. Organic and ecological agriculture, in fact, require more intensive farm management, more labor. If that labor is rewarded with good prices, it can initiate a virtuous cycle of economic development, taking advantage of the productive resource represented by a large working-age population, turning a potential demographic time bomb into a demographic dividend.
Making rural Mexico great again
Interestingly, I now see such policies being implemented in Mexico, 25 years into the rural disaster that the North American Free Trade Agreement (NAFTA) helped create. The new approach comes from the government of Andrés Manuel López Obrador, who was swept into office last year in a landslide of discontent with Mexico’s corrupt leaders and their failure to sustain a decent standard of living for the majority of Mexicans.
In 1994, NAFTA opened the floodgates to cheap, subsidized U.S. corn, wheat, soybeans, and other crops, inundating rural Mexico. Corn imports jumped fivefold, driving local corn prices down by two-thirds. Some 5 million able-bodied workers fled rural Mexico, and they did not find waiting for them any of the jobs NAFTA’s economists had assumed would materialize. Some ended up as seasonal laborers on Driscoll’s strawberry farms in Northern Mexico. Others swelled city slums. Many risked the increasingly dangerous crossing to seek work in the United States. Most sent money back home so the family could keep its farm, often its only asset.
Today, an embarrassing 57 percent of Mexico’s able-bodied workers are in the informal sector, the broad category of off-the-books work ranging from street vending to drug trafficking. That is a higher share than before NAFTA. Clearly, Mexico hadn’t put its able-bodied people to productive work to jump-start economic development.
The new López Obrador administration, however, seems determined to make rural Mexico great again by investing in the productivity of the country’s family farmers in the most neglected areas of the country. The leader of his new Office of Food Self-Sufficiency, veteran farm leader Victor Suárez, has ambitious programs underway to reinvigorate rural economies by paying support prices for key food crops — corn, beans, wheat, rice, and milk — and using that public procurement to provide high-quality foodstuffs to schools, hospitals, and other public institutions, as well as to the poor. A host of other policies, such as a massive agro-forestry program, aim to invest in soil fertility and sustainable resource use on the country’s small farms.
If that approach sounds familiar, it should. It is exactly what the U.S. government did in the Great Depression, and it is part of what won Brazil’s “Zero Hunger” campaign international recognition. It is the cornerstone of India’s National Food Security Program, which I document in my book.
In Mexico, López Obrador says that the explicit goal is to eliminate the root causes of rural out-migration and illicit drug trafficking. In other words, echoing Lipton, to create dignified work in agriculture to turn Mexico’s chronic youth unemployment into a demographic dividend.
Timothy A. Wise directs the Land and Food Rights Program at the Small Planet Institute in Cambridge, Massachusetts. He is the author of the recently released “Eating Tomorrow: Agribusiness, Family Farmers, and the Battle for the Future of Food” (New Press, 2019), available wherever books are sold.