<?xml version="1.0" encoding="UTF-8"?><rss version="2.0" xmlns:content="http://purl.org/rss/1.0/modules/content/" xmlns:wfw="http://wellformedweb.org/CommentAPI/" xmlns:dc="http://purl.org/dc/elements/1.1/" xmlns:atom="http://www.w3.org/2005/Atom" xmlns:sy="http://purl.org/rss/1.0/modules/syndication/" xmlns:slash="http://purl.org/rss/1.0/modules/slash/" > <channel> <title>IFPRI Ethiopia: Ethiopia Strategy Support Program</title> <atom:link href="https://essp.ifpri.info/tag/off-farm/feed/" rel="self" type="application/rss+xml" /> <link>https://essp.ifpri.info</link> <description>IFPRI INFO Site</description> <lastBuildDate>Thu, 03 Mar 2016 07:25:12 +0000</lastBuildDate> <language>en-US</language> <sy:updatePeriod> hourly </sy:updatePeriod> <sy:updateFrequency> 1 </sy:updateFrequency> <generator>https://wordpress.org/?v=6.4.3</generator> <image> <url>https://essp.ifpri.info/files/2020/04/IFPRI_Logo_400.fw_-150x150.png</url> <title>IFPRI Ethiopia: Ethiopia Strategy Support Program</title> <link>https://essp.ifpri.info</link> <width>32</width> <height>32</height> </image> <item> <title>Off-farm income and labor markets in rural Ethiopia</title> <link>https://essp.ifpri.info/2016/03/03/off-farm-income-and-labor-markets-in-rural-ethiopia/</link> <dc:creator><![CDATA[Nahume Yadene]]></dc:creator> <pubDate>Thu, 03 Mar 2016 07:22:07 +0000</pubDate> <category><![CDATA[Events]]></category> <category><![CDATA[off farm]]></category> <guid isPermaLink="false">http://essp.ifpri.info/?p=4065</guid> <description><![CDATA[The development of well-functioning labor markets is crucial for economic growth and livelihood opportunities, especially for the youth. Moreover, since rural wages are strongly linked with poverty reduction, it is important to understand how these labor markets function. Ethiopia’s economy is changing fast, but it is unclear how important the off-farm income and labor markets […]]]></description> <content:encoded><![CDATA[<p>The development of well-functioning labor markets is crucial for economic growth and livelihood opportunities, especially for the youth. Moreover, since rural wages are strongly linked with poverty reduction, it is important to understand how these labor markets function. <span id="more-4065"></span>Ethiopia’s economy is changing fast, but it is unclear how important the off-farm income and labor markets are in rural areas. ESSP’s Bart Minten and Fantu Nisrane Bachewe delivered some preliminary results on this important topic at the Ethiopian Development Research Institute (EDRI) on 26 February, 2016, with 37 people present.</p> <p>Data for the analysis was used from various sources including: Agricultural Growth Programme (AGP) survey (2011), ERSS (2014) and Feed the Future survey (2015).</p> <p>This presentation centred on four key research questions:<br /> - How important is the rural off-farm economy?<br /> - What are the associates with off-farm income and rural income diversification?<br /> - Are rural wages changing?<br /> - What are drivers and implications of that change?</p> <p>Crop income is by far the most important source of rural income in all sets of data, but the importance of livestock and agricultural wage incomes differ between datasets and between different regions too (see Figure 1).</p> <p>Figure 1: Income sources in rural areas from different data sources</p> <p><a href="http://essp.ifpri.info/files/2016/03/off-farm-fig-1.png" rel="attachment wp-att-4066"><img decoding="async" class=" wp-image-4066 alignleft" src="http://essp.ifpri.info/files/2016/03/off-farm-fig-1-300x150.png" alt="off farm fig 1" width="260" height="130" srcset="https://essp.ifpri.info/files/2016/03/off-farm-fig-1-300x150.png 300w, https://essp.ifpri.info/files/2016/03/off-farm-fig-1-768x384.png 768w, https://essp.ifpri.info/files/2016/03/off-farm-fig-1-1024x512.png 1024w, https://essp.ifpri.info/files/2016/03/off-farm-fig-1.png 1351w" sizes="(max-width: 260px) 100vw, 260px" /></a> <a href="http://essp.ifpri.info/files/2016/03/off-farm-fig-1.2.png" rel="attachment wp-att-4067"><img decoding="async" class="alignnone wp-image-4067" src="http://essp.ifpri.info/files/2016/03/off-farm-fig-1.2-300x157.png" alt="off farm fig 1.2" width="241" height="126" srcset="https://essp.ifpri.info/files/2016/03/off-farm-fig-1.2-300x157.png 300w, https://essp.ifpri.info/files/2016/03/off-farm-fig-1.2-768x401.png 768w, https://essp.ifpri.info/files/2016/03/off-farm-fig-1.2-1024x535.png 1024w, https://essp.ifpri.info/files/2016/03/off-farm-fig-1.2.png 1313w" sizes="(max-width: 241px) 100vw, 241px" /></a></p> <p>The presentation focused on the descriptives and associates that influence off-farm activity and income across regions in Ethiopia, raising some food for thought with regard to further investigations needed to help shape policy decisions in this unknown area of economic research.</p> <p>The major findings on diversification from these preliminary investigations showed:<br /> • Younger heads of households are more likely to be associated with off-farm income<br /> • Education is associated with more enterprise income and non-agricultural income<br /> • Gender distribution - women make up one third of hired labor; men two thirds.<br /> • More and better quality agricultural assets are associated with less diversification<br /> • Distance to cities is an important associate of non-farm income. Households 100 kms farther from Addis have 11 percent lower share of off-farm income.</p> <p>Agricultural wage labor was found to comprise 7 percent of all labor, although this was relatively more in Tigray and SNNP. Most of the labor, however, is undertaken by the family. If labor is hired, this varies by task, with harvest and post-harvest activities showing the largest proportions of hired labor (Figure 2).</p> <p>Figure 2: Agricultural wage labor – varies by activity<br /> <a href="http://essp.ifpri.info/files/2016/03/off-farm-fig-2.png" rel="attachment wp-att-4068"><img fetchpriority="high" decoding="async" class="size-medium wp-image-4068 alignnone" src="http://essp.ifpri.info/files/2016/03/off-farm-fig-2-300x167.png" alt="off farm fig 2" width="300" height="167" srcset="https://essp.ifpri.info/files/2016/03/off-farm-fig-2-300x167.png 300w, https://essp.ifpri.info/files/2016/03/off-farm-fig-2.png 540w" sizes="(max-width: 300px) 100vw, 300px" /></a></p> <p>Minten and Bachewe noted that the identified associates of agricultural wages vary according to a number of variables, including: the time of year, gender, age, remoteness, poverty in the district and region. Moreover, other influences for hiring labor include: household characteristics (e.g. size, dependency ratios, education), farm characteristics (e.g. Size, quality of land), location (e.g. distance from Addis), remoteness (e.g. more remote places rely more on exchange labor).</p> <p>Bachewe emphasized that wages are changing! Over the period 2004 – 2015, wages increased by 46 percent in rural areas, 72 percent in urban, (although compared to other countries, Ethiopia’s wages are significantly lower). Since 2011, wages have been continuously rising.</p> <p>Finally, Bachewe considered the potential drivers for these rapid changes. One such driver is poverty. This has a strong correlation with wage increases i.e. a 100 percent increase in wages leads to a 30 percent decrease in poverty. Further to this, an increase in wages results in activities, such as weeding, being substituted by herbicides (Figure 3).<br /> Figure 3: Increasing the use of herbicides</p> <p><a href="http://essp.ifpri.info/files/2016/03/off-farm-fig-3.png" rel="attachment wp-att-4069"><img loading="lazy" decoding="async" class="size-medium wp-image-4069 alignnone" src="http://essp.ifpri.info/files/2016/03/off-farm-fig-3-300x172.png" alt="off farm fig 3" width="300" height="172" srcset="https://essp.ifpri.info/files/2016/03/off-farm-fig-3-300x172.png 300w, https://essp.ifpri.info/files/2016/03/off-farm-fig-3-768x441.png 768w, https://essp.ifpri.info/files/2016/03/off-farm-fig-3-1024x588.png 1024w, https://essp.ifpri.info/files/2016/03/off-farm-fig-3.png 1238w" sizes="(max-width: 300px) 100vw, 300px" /></a></p> <p>The higher wages also provide incentives for mechanization in agriculture as well as the potential relaxation of credit constraints when extra finance is needed.<br /> In summary, the key findings from this research are:<br /> • Off-farm income makes up 18 percent of total income; wage income is 10 percent of total income, as important as livestock income<br /> • Off-farm income and agricultural wage income especially important for the poorest<br /> • Wages are significantly lower in Ethiopia than in other countries; however, rural wages are rapidly increasing; 50 percent higher in real terms in 2015 compared to 2004<br /> • Implications of wage changes on poverty and agricultural production practices (i.e. more use of herbicides)</p> <p>Bachewe concluded by describing the implications for policy making. First, low wages have been an attractive asset for investors coming to the country, particularly in labor-intensive industries such as in floriculture. However, these results seem to indicate that Ethiopia may gradually lose that edge before it even matures with the rural-urban wage gaps narrowing and future cheap labor sources disappearing. Therefore, Ethiopia needs to make sure that its young population are sufficiently skilled to accommodate those areas of industry where labor productivity is higher. Second, the higher costs of labor as well as the increasing commercialization of agriculture will require increasing adoption of labor-saving technologies in the sector. It is therefore important that Ethiopia implements pro-active policies that make available appropriate technologies at low costs. Third, flexible and responsive labor markets require easier migration to those areas with employment opportunities, and it seems therefore that migration needs to be encouraged through more adapted land tenure and more secure land rental rules.</p> <p>Full details of this <a href="http://www.slideshare.net/essp2/offfarm-income-and-labor-markets-in-rural-ethiopia-58893234" target="_blank">presentation</a> are available on ESSP’s website.</p> <p>This presentation was organized by <a href="http://essp.ifpri.info/" target="_blank">ESSP</a> with support from EDRI. ESSP is a collaborative program undertaken by IFPRI and EDRI, whose objective is to help improve the policy-making decision process in Ethiopia.</p> <p>Please <a href="http://essp.ifpri.info/signup-for-essp-updates/" target="_blank">subscribe</a> to receive regular updates on ESSP’s work and its quarterly <a href="http://essp.ifpri.info/category/newsletter/" target="_blank">newsletter</a>.<br /> <a href="http://essp.ifpri.info/files/2016/03/off-farm-activity.jpg" rel="attachment wp-att-4070"><img loading="lazy" decoding="async" class="size-medium wp-image-4070 alignnone" src="http://essp.ifpri.info/files/2016/03/off-farm-activity-300x252.jpg" alt="off farm activity" width="300" height="252" srcset="https://essp.ifpri.info/files/2016/03/off-farm-activity-300x252.jpg 300w, https://essp.ifpri.info/files/2016/03/off-farm-activity-768x644.jpg 768w, https://essp.ifpri.info/files/2016/03/off-farm-activity-1024x859.jpg 1024w, https://essp.ifpri.info/files/2016/03/off-farm-activity.jpg 1727w" sizes="(max-width: 300px) 100vw, 300px" /></a></p> <p><strong>Keep updated with cutting edge research from Ethiopia.</strong></p> ]]></content:encoded> </item> </channel> </rss>