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Policy Brief 45: Space, Markets and Employment in Agricultural Development: Can agriculture contribute to inclusive rural economies?

by Andries du Toit in 2016
Policy Brief 45

Research conducted by PLAAS indicates that agricultural development can indeed stimulate local non-farm job creation – but the links are neither simple nor direct. While access by farmers to lucrative global markets or national markets can stimulate the local economy, much depends on the precise nature of the forward and backward linkages that connect farming to the rest of the economy. The ability of farming to stimulate the RNFE depends greatly on the scale of agriculture, the social and spatial organisation of agricultural value chains and the political economy of local institutions.

In this project, as part of the Economic and Social Research Council’s (ESRC) ‘Growth and Agriculture’ platform, PLAAS and its partners investigated the linkages between agriculture and the non-farm economy in three rural districts: Weenen in South Africa, Mchinji in Malawi, and Mazowe and Masvingo in Zimbabwe (see map). For this research they recursively mapped the flow of money and resources that connect local agricultural enterprises to upstream and downstream markets.

Each case study revealed a very different scenario: in Mchinji, small-scale farmers in a densely populated, impoverished region accessed local fresh produce markets by venturing into horticulture. Many densely clustered new livelihood opportunities were created but these were small and vulnerable. In Weenen, large-scale agriculture turned out to be locally disembedded, linked to distant markets and contributing little to local non-farm employment. In Mazowe, small-scale tobacco growers benefiting from fast-track land reform accessed significant opportunities in distant markets (particularly tobacco) and created many opportunities for specialised local entrepreneurs.

Analysis suggests that these differences are shaped by the highlevel ‘emergent’ characteristics of the networks created by forward and backward linkages. Four network properties appear to be particularly important: density (the number of local nodes that exist within a given area); local embeddedness (the extent to which the conduct of activities is subject to local social influence, regulation, and governance); external connectedness (access to distant markets and resources), and patterns of power and inequality.