publication May 6, 2018

Unlocking the Potential of Agriculture for Afghanistan’s Growth

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Photo Credit: Ministry of Agriculture, Irrigation and Livestock / Government of Afghanistan 2017


STORY HIGHLIGHTS

  • Agriculture has traditionally dominated Afghanistan’s economy and contributed for a large part to its growth. About 70 percent of Afghans live and work in rural areas, mostly on farms, and 61 percent of all households derive income from agriculture.
  • Despite a decline in its share of Afghanistan’s overall economy, the sector still employs 40 percent of the total work force, and more than half of Afghans living in rural areas contribute to agriculture.
  • With the right mix of policies and investments, the agriculture sector can drive down poverty and boost sustained growth in Afghanistan through jobs, better productivity, and inclusiveness.

A joint report by the Government of Afghanistan and the World Bank Group, Jobs from Agriculture in Afghanistan, explores the agriculture sector’s role in explaining the dynamics of rural employment. The report analyzes three dimensions:

  1. the current jobs structure in rural areas;
  2. the inclusive nature of agricultural jobs for vulnerable groups, such as women, youth, and the landless; and,
  3. the role of public-private sector interventions in supporting job creation in agriculture.

KEY FINDINGS

  • The rural economy, however, is not yet equipped to absorb all workers into the labor market. As a result, more than 50 percent of rural youth workers are involved in agriculture and livestock, mostly as unpaid family workers.
  • Four out of five female rural workers are unpaid family workers, compared with only one out of five male workers.
  • The low share of agricultural income, despite high employment share, is mainly due to limited market participation and the high number of unpaid family workers. Few rural households that own garden plots or raise livestock sell at the market and to earn income. Youth and women constitute a large portion of this unpaid workforce.
  • The crop agriculture subsector is not diversified and overly concentrated on wheat. The lack of crop variety has made farm households vulnerable to stagnant or declining wheat prices in local markets. While farmers continue to produce wheat and other food crops for subsistence to ensure food security, the lack of profitability in wheat production may prompt them to cultivate poppy on irrigated land.
  • The production of fruits, vegetables, flowers, and livestock have great potential to create more, sustainable, and inclusive jobs if farmers are provided with technical knowledge, financial support, and greater access to market facilities. Commercial production of fruits and nuts, as well as livestock products would increase income and employment, including helping to create new jobs for young workers in related areas. By improving the horticulture and livestock economy, the government could also increase the employment share in food processing.

"I cultivate vegetables and sell them and also use them as food in my home. I previously had no job, but after receiving support from the Ministry of Agriculture, Irrigation and Livestock's National Horticulture and Livestock Project, I set up an off-season micro-greenhouse and received technical assistance on vegetable production. "
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Zarmina
local villager, Parwan Province

POLICY RECOMMENDATIONS

  • Diversification toward high-value agriculture and livestock. While policies to improve crop productivity, such as rice, should be in place, policies to diversify agriculture toward high-value agriculture including fruits, vegetables and livestock should be prioritized. Expansion of irrigation facilities and improved seeds availability can support productivity growth.
  • Linking farmers to markets through continued investment in connectivity and infrastructure – the development of agricultural value chains is key to raising productivity and supporting job creation.Continued investments in rural roads and local infrastructure, information and communication technology, and reliable and affordable access to energy are key to enable local producers to access markets and increase agricultural productivity. It is also important to improve women’s access to markets to catalyze the livestock and horticulture subsectors, and manufacturing and processing sectors, where female workers are predominantly employed.
  • A balanced development strategy for an enabling environment for farm and nonfarm sectors. Increased agricultural productivity can boost demand for nonfarm services and products, and a vibrant nonfarm sector can increase demand for high-value agricultural products. Operations in the agriculture sector can be developed to strengthen forward, backward and consumption linkages, providing opportunities to establish value chains that, if exploited adequately, can support economic growth in the farm and nonfarm economies.
  • Access to finance and providing skills development training for job creation. While the report shows that literacy supports women to join the workforce, evidence from agricultural/rural development interventions shows that women who have access to finance and linkages to markets are successfully engaging in nonfarm activities. Policies and interventions that ease financial constraints and improve the skills of the rural workforce, mainly for the most vulnerable groups, should be promoted.
  • Strengthening the private sector presence in agriculture and its linkage with the public sector by means of promoting agribusiness. Private sector efforts in the sector should be underpinned by a conducive institutional, regulatory and business environment to realize the potential of agriculture. The report shows that two policy levers can enhance the growth potential of jobs in the agro-processing sector: (i) enhanced investments and advisory services to promising agro-processing firms to stimulate rapid job creation in local and regional economies; and, (ii) government policy must support the increased use of vertical integration (or at least coordinated linkages) to mitigate risks in the supply chain.