From Shanghai to São Paulo, people around the world are living longer than ever, challenging long-held ideas about retirement and well-established national retirement systems. Stanford health economists Karen Eggleston and Victor R. Fuchs offer an innovative view of the global aging phenomenon in an article published recently in the Journal of Economic Perspectives.
Drawing on a century of demographic data from 17 countries, Eggleston and Fuchs show that the share of increases in life expectancy realized after age 65 was only about 20 percent at the beginning of the 20th century but close to 80 percent by the dawn of the 21st century. Expected lifetime labor force participation as a percent of life expectancy is now declining. Eggleston and Fuchs share four interrelated responses to the economic and social challenges posed by this “new demographic transition:”
Increase the retirement age.
Encourage savings.
Strengthen education.
Emphasize healthy lifestyles early to ensure productivity in old age.
Eggleston is director of the Asia Health Policy Program at the Shorenstein Asia-Pacific Research Center. Fuchs is Henry J. Kaiser, Jr., Professor Emeritus, in Stanford’s Department of Economics and Department of Health Research and Policy, and a senior fellow at FSI and SIEPR.
Of the four policy responses the article proposes, is one especially critical?
Fuchs: The most important solution in terms of its potential impact would be people changing their attitudes toward retirement. This would mean people postponing retirement and saving more during their working years. If you work five years longer, for example, you would have greater savings and a shorter period of time when you would need the money.
Eggleston: We tend to think of the solutions as being interrelated. To address this longstanding and inevitable global demographic transition, organizations and policy structures need to support changes in individual behavior. In the case of the retirement age in the United States and European countries, policymakers need to change the many incentives that encourage people to retire younger. What do you most hope policymakers will take away from the article?
Fuchs: We hope they will recognize the absolute need for individuals and organizations to plan for later retirement.
What are the special challenges faced by China and India, the world’s largest populations?
Eggleston: Longer lives in China and India contribute to improved human development, yet population aging also brings special challenges. China’s population is aging more rapidly than India’s and both countries need to invest more in the education and health of their young people, especially in poor rural areas.
In India, nutrition and education will help to reap a one-time boost to economic growth if the large cohorts of the working age population can be productively employed, while building a foundation for sustained improvement of living standards. China’s youth need to be as productive as possible to support the elderly while continuing to improve the national living standard.
The coming decade will be crucial in China, as the country transitions into a new economic phase and expands its fledging social protection system. The goal should be to ameliorate disparities and protect the vulnerable, while maintaining a financially sustainable and culturally appropriate balance of government and family responsibility for old-age support.
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Elderly athletes listen to instructions before a competition in Taibei, Dec. 2007. | Flickr user Ivan Yeh
Education has provided the critical foundation for Asia’s rapid economic growth. However, in an increasingly globalized and digital world, higher education faces an array of new challenges. While the current strengths and weaknesses of educational systems across Asia differ considerably, they share many of the same fundamental challenges and dilemmas.
The fourth annual Stanford Kyoto Trans-Asian Dialogue examined challenges and opportunities in reforming higher education in Asia. At its core, the challenge facing every country is how to cultivate relatively immobile assets—national populations—to capture increasingly mobile jobs with transforming skill requirements. This raises fundamental questions about skills needed for fast-paced change, domestic inequality, the role of government, and choices of resource allocations.
Scholars and top-level administrators from Stanford University and universities across Asia, as well as policymakers, journalists, and business professionals, met in Kyoto on September 6 and 7, 2012, to discuss questions that address vital themes related to Asia’s higher education systems. These included:
Can higher education meet the challenges of economic transformations?
As skill requirements change with the increasing use of IT tools that enable manufacturing and service tasks to be broken apart and moved around, how can higher education systems cope? How can education systems address the increasing need for global coordination across languages and cultures? How can countries deal with demographic challenges, with developed countries facing overcapacity and developing countries with younger populations facing an undercapacity of educational resources?
How are higher education systems globalizing?
What are the strategies for the globalization of higher education itself? How are universities positioning themselves to attract top talent from around the world, and what are their relative successes in achieving this? What are the considerations when building university campuses abroad? Conversely, what are the issues surrounding allowing foreign universities to build within one’s own country?
How can higher education play a greater role in innovation?
What is the interplay between private and public institutions and research funding across countries, and what are the opportunities and constraints facing each? What is the role of national champion research initiatives? For developed East Asian countries, a focus on producing engineers raised the economic base, but many are discovering that they are still not at the leading edge of innovation. What are ways to address this dilemma? For developing countries, the challenge is how to improve basic education from the level of training basic factory workers to creating knowledge workers. How might this be accomplished? Is there room for a liberal arts college model?
What are the challenges and opportunities in reforming higher education?
What are effective ways of overcoming organizational inertia, policy impediments, and political processes that hinder reform? What are the debates and issues surrounding ownership, governance, and financing of higher education?
The Walter H. Shorenstein Asia-Pacific Research Center (Shorenstein APARC) established the Stanford Kyoto Trans-Asian Dialogue in 2009 to facilitate conversation about current Asia-Pacific issues with far-reaching global implications. Scholars from Stanford University and various Asian countries start each session of the two-day event with stimulating, brief presentations, which are followed by engaging, off-the-record discussion. Each Dialogue closes with a public symposium and reception, and a final report is published on the Shorenstein APARC website.
Previous Dialogues have brought together a diverse range of experts and opinion leaders from Japan, South Korea, China, Vietnam, Thailand, Indonesia, Singapore, India, Australia, and the United States. Participants have explored issues such as the global environmental and economic impacts of energy usage in Asia and the United States; the question of building an East Asian regional organization; and addressing the dramatic demographic shift that is taking place in Asia.
The annual Stanford Kyoto Trans-Asian Dialogue is made possible through the generosity of the City of Kyoto, the Freeman Spogli Institute for International Studies at Stanford University, and Yumi and Yasunori Kaneko.
Kyoto International Community House Event Hall
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Sakyo-ku Kyoto, 606-8536
JAPAN
Ramesh Srinivasan, Associate Professor at UCLA in Design and Media/Information Studies, studies and participates in projects focused on how new media technologies impact political revolutions, economic development and poverty reduction, and the future of cultural heritage. He has worked with bloggers, pragmatically studying their strengths and limitations, who were involved in recent revolutions in Egypt and Kyrgyzstan, as discussed in a recent NPR interview. He has also collaborated with non-literate tribal populations in India to study how literacy emerges through uses of technology, and traditional Native American communities to study how non-Western understandings of the world can introduce new ways of looking at the future of the internet. His work has impacted contemporary understandings of media studies, anthropology and sociology, design, and economic and political development studies.
Indonesia’s rainforests are among the world’s most extensive and biologically diverse environments. They are also among the most threatened. An increasing population and growing economy have led to rapid development. Logging, mining, colonization, and subsistence activities have all contributed to deforestation.
But the recent and booming expansion of palm oil plantations could cause the most harm to the rainforests, and is generating considerable concern and debate among industry leaders, environmental campaigners and scholars.
Joanne Gaskell in Sumatra, Indonesia.
Joanne Gaskell has dedicated her graduate studies to better understanding the tradeoffs and demand side of this dilemma. The doctoral candidate and researcher for the Center on Food Security and the Environment recently defended her thesis before an audience of advisers, friends, and fellow students from Stanford’s Emmett Interdisciplinary Program in Environment and Resources (E-IPER).
“You need to understand the economics and politics of palm oil demand if you want to understand the regional dynamics of oil production and associated environmental impacts,” Gaskell said. “From a conservation perspective, this is as important as understanding supply since demand patterns affect the incentives facing producers.”
In the past 25 years, palm oil has become the world’s leading source of vegetable oil. Indonesia is currently the world’s top palm oil producer. Since the 1980s total land area planted to palm oil has increased by over 2,100 percent growing to 4.6 million hectares – the equivalent of six Yosemite National Parks. Plantation growth has predominately occurred on deforested native rainforest with major implications for global carbon emissions and biodiversity.
And Gaskell projects the demand for palm oil for food will double by 2035, requiring more than 8 million new hectares for production. Plantation expansion has already begun in Kalimantan and Papua, and Indonesian companies are now looking beyond Indonesia for new investment opportunities. Just as palm oil production spread from Malaysia to Indonesia to escape rising land and labor costs, palm oil production is now spreading to parts of Africa, where the crop is native, and Latin America.
Demand for palm oil is quickly rising in Asian markets – notably India and China – where it is used for cooking and industrial processes. Indonesia has the highest level of per capita palm oil consumption, resulting not just from population and income growth, but also from government policies that promoted the use of palm oil instead of coconut cooking oil.
“Taste preferences and investment more than international prices have driven palm oil demand in Indonesia,” Gaskell said.
Biodiesel production and speculation have also contributed to the rapid expansion of palm oil plantations, but to a lesser extent. Gaskell said the success of palm-based biodiesel hinges on remaining cheaper than petroleum diesel and whether governments subsidize the industry, as the United States has done with corn and soybean farmers.
Interest in palm oil as a cleaner burning fuel is already waning in Europe and the United States. The short-term carbon costs of deforesting and preparing land, fertilizing and managing the crops, then processing and transporting them outweigh the benefits. This is particularly true when palm oil plantations are grown on peat soils that release potent methane gas when drained for growing palm oil.
Palm oil seedlings ready for planting. Photo credit: Wakx/flikr
Growing plantations on ‘degraded land’, land that had been previously converted for other purposes, such as logging, is a much more favorable option over forest expansion. In theory, there is an abundance of degraded areas that can be profitably converted into palm oil plantations. But there are hurdles: The areas are not necessarily contiguous, making it difficult to organize a plantation, and ownership rights in these areas are often contested.
Palm oil’s considerable productivity and profitability offers wealth and development where help is most needed. Half of Indonesia’s population lives on less than $2 a day. But along with the negative ecological impacts, palm oil production increases competition for land and could exacerbate inequalities between the rich and the poor.
Gaskell believes sustainable expansion strategies are possible, and says smaller mills and different processing technologies are needed so production is affordable in scaled-down, more distributed systems.
Palm oil plantation in Cigudeg, Indonesia. Photo credit: Achmad Rabin Taim/flickr
Her work is feeding an international conversation about palm oil production. The Roundtable on Sustainable Palm Oil (RSPO), an international organization of producers, distributors, conservationists and other stakeholders, has promoted better ways of managing palm oil production and encouraging transparency and dialogue among corporate players, governments, and NGOs.
“We need to protect the most ecologically valuable landscapes from agricultural production and we need to make sure that, in areas where palm oil agriculture occurs, there are ecological management strategies in place such as riparian buffers, wildlife corridors, and treatment systems for mill effluent,” she said. “From a food security perspective, small palm oil producers, who might be giving up rice production or the production of other food staples, need strategies to minimize the economic risk associated with fluctuating global palm oil prices.”
Kavita N. Ramdas, executive director of the Ripples to Waves Program on Social Entrepreneurship at the Center on Democracy, Development and Rule of Law, has been appointed as the Ford Foundation representative to New Delhi serving India, Nepal and Sri Lanka. In this capacity, Ramdas will be leading the foundation's grant-making efforts to support democracy and social justice in South Asia.
In August 2012, Ramdas will step down as executive director of the Program to assume leadership of the Global Practitioner Council to provide strategic direction and guidance to the program's development and selection of the Social Entrepreneurs-in-Residence at Stanford (SEERS). Deborah Rhode, the Ernest McFarland Professor of Law and director of the Stanford Center on the Legal Profession at Stanford Law School who has served as the program’s faculty primary investigator since its launch last year, will assume leadership of the program. The Program on Social Entrepreneurship congratulates Ramdas on her new position and looks forward to welcoming Rhode in her new role as the program’s faculty director.
Y2E2 (Energy & Environment Building)
473 Via Ortega, room 349
Stanford, CA 94305-4205
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sujith@stanford.edu
Postdoctoral scholar
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Sujith has an undergraduate degree in Agricultural Sciences from Kerala Agricultural University (India) and an MS and PhD in Environmental Sciences (Hydrology) from University of Virginia. His research interests are in the areas of ecohydrology, soil science and land degradation (biophysical and human dimensions). Prior to joining FSE he worked as an assistant research professor at the Biosphere 2 facility of the University of Arizona. As a postdoctoral scholar at FSE, Sujith is investigating the environmental impacts (on land and water resources) of large scale solar infrastructures in deserts and exploring opportunities for integrating solar projects with agriculture/biofuels.
The Center on Democracy, Development, and the Rule of Law (CDDRL) at Stanford University is pleased to announce the 2013 class of undergraduate senior honors students.
Honors students will spend four quarters participating in research seminars to refine their proposed thesis topic, while working in consultation with a CDDRL faculty advisor to supervise their project. In September, the group will travel to Washington, D.C. for honors college where they will visit leading government and development organizations to witness policymaking in practice and consult with key decision-makers.
Please join CDDRL in congratulating the 2013 Senior Honors students and welcoming them to the Center.
Below are profiles of the nine honors students highlighting their academic interests, why they applied to CDDRL, and some fun facts.
Keith Calix
Keith Calix
Major: International Relations
Hometown: Astoria, NY
Thesis topic: What is the relationship between the coloured experience and youth involvement in gangsterism in Cape Town, South Africa?
Why is this topic important to the field of democracy, development, and the rule of law? Schools are one of the principal generators, justifiers and vehicles of radicalized thoughts, actions and identities. The challenge in a post-apartheid South Africa continues to be whether and how the roles, rules, social character and functioning of schools can reform to challenge the retrograde aspects of such formation and stimulate new forms of acknowledgement, social practice and acceptance. Ultimately, I hope my research will provide insight about how education reform can be used as a tool to promote democracy and improve human rights conditions.
What attracted you to the CDDRL undergrad honors program? In many ways my personal and academic experiences have led me from a more general interest in education development to a more specific interest in post-apartheid education reform as a form of retrospective justice, the institutional, social and economic barriers to education reform, and understanding education reform as a means of promoting democracy and respect for human rights. Pursuing this in the work in the CDDRL community alongside talented and experienced faculty and students from a wide array of disciplines, interests, and experiences will ultimately enhance my understanding of development and one day, I can hopefully use these insights and experiences as a practitioner.
Future aspiration post-Stanford: Human rights lawyer/fieldwork in education development.
What are your summer research plans: During the summer I will be working on my thesis in Cape Town, South Africa.
Fun fact about yourself: I’ve recently appeared on Italian television for an interview, bungee jumped from the world’s highest commercial bridge, and rode an ostrich.
Vincent Chen
Vincent Chen
Major: Earth Systems & Economics
Hometown: Taipei, Taiwan
Thesis topic: How democratic and autocratic systems affect the formation and efficacy of their environmental policies.
Why is this topic important to the field of democracy, development, and the rule of law? As the importance of climate and energy issues continue to rise in the global political agenda, both developed and developing nations are in dire need to identify individually tailored policy routes for sustainable development. With a wide array of political systems across countries, my research aims to shed light on the difference of environmental policy creation between democratic and autocratic governments and hopefully provide real world applications for policy makers in charting the most appropriate development route. In particular, I hope to provide insights for developing democracies to leapfrog the environmental impacts associated with democratization and avoid mistakes mature democracies have committed in the past.
What attracted you to the CDDRL undergrad honors program? My studies in environmental science ultimately manifested the important role social sciences play in solving our environmental challenges. In the center of this challenge lies the tricky balance between development and environmental stewardship. The CDDRL program serves as a great opportunity for me to explore the complex relationship between these concepts.
Future aspiration post-Stanford: Although I am interested in opportunities that span public, private and social sectors, I will definitely be working on issues pertaining to our environment.
What are your summer research plans: I will be spending my summer in Washington, DC with the climate and energy team of the United Nations Foundation, as well as conducting interviews for my research back home in Taiwan.
Fun fact about yourself: Spent five weeks on a uninhabited island the size of four square miles in the middle of the Pacific Ocean during my sophomore summer.
Holly Fetter
Holly Fetter
Major: Comparative Studies in Race and Ethnicity (B.A.), Sociology (M.A.)
Hometown: Dallas, TX
Thesis topic: The influence of U.S. funding on the development of China's civil society
Why is this topic important to the field of democracy, development, and the rule of law? Organizations and individuals from the U.S. are eager to support democracy, development, and the rule of law in foreign countries. Through my research on the U.S. presence in China, I hope to understand how we can do this work more ethically and effectively. How can we avoid imposing our values and priorities onto a nation's bourgeoning civil society? How can we promote indigenous modes of fundraising and management training, thus avoiding any potential expressions of neo-imperialism?
What attracted you to the CDDRL undergrad honors program? I wanted a challenge, and I knew that writing an honors thesis in a foreign discipline would be a rewarding intellectual experience. The apparent support from faculty as well as the connections to experts on my topic were also enticing. And I'm looking forward to the big D.C. trip.
Future aspiration post-Stanford: I'd like to practice community lawyering in the U.S.
What are your summer research plans: I'll be in Beijing, China, interviewing folks at NGOs and grant-giving organizations, reading lots of books and articles, and eating good food.
Fun fact about yourself: I like to write and cause a ruckus, so I started a blog for Stanford activists called STATIC. You should check it out!
Imani Franklin
Imani Franklin
Major: International Relations
Hometown: Atlanta, GA
Thesis topic: How Western beauty standards impact the preference for lighter skin in the developing world, with case-studies of India, Nigeria, and Thailand
Why is this topic important to the field of democracy, development, and the rule of law? This question matters for global development, in part, because it is an issue of public health. Researchers have long associated high rates of eating disorders and other mental health issues among American women with their continuous exposure to Western media’s narrow image of beauty. Given the unprecedented globalization of this image of beauty throughout much of the developing world, are non-Western women experiencing similar psychological health problems? From findings on skin bleaching cream in Tanzania to the rise of bulimia in Fiji in the late 1990s, a growing body of research attributes harmful body-altering practices to increased exposure to American consumerist media. I want to assess whether this causal link stands under empirical scrutiny, and whether this relationship shifts in different regional contexts of the world.
What attracted you to the CDDRL undergrad honors program? I am drawn to CDDRL’s honors program because of the intimate scholarly community of peers and mentors it provides. I believe this program will empower me to think more critically and scientifically about how one social issue impacts another.
Future aspiration post-Stanford: In the future, I hope to work with international policy to improve human rights protections in the Middle East and North Africa.
What are your summer research plans: I am currently studying Arabic in Jordan and will conduct primary research for my honors thesis in Amman.
Fun fact about yourself: In my free time, I enjoy learning the dance moves from High School Musical movies and attempting to make peach cobbler from scratch.
Mariah Halperin
Mariah Halperin
Major: History
Hometown: San Francisco, CA
Thesis topic: The development of democracy in Turkey under the Justice and Development Party (AKP)
Why is this topic important to the field of democracy, development, and the rule of law? Turkey has taken a unique path to democracy, beginning with Ataturk, yet many scholars worldwide have presented Turkey as a model for the rest of the Islamic world. The AKP, the party in power for the last decade, has in many ways changed the path Turkey had been on previously. With these changes and the recent uprisings in the Middle East, my thesis will hopefully speak to the viability of other countries following Turkey's example.
What attracted you to the CDDRL undergrad honors program? The CDDRL undergraduate honors program is an amazing opportunity to deepen my studies of a topic that interests me so much. Working with a small group of dedicated, like-minded students will be a great way get feedback to develop and strengthen my thesis. Additionally, the outstanding faculty (and staff!) of the CDDRL are so supportive and eager to help students pursue their interests in any way they can.
Future aspiration post-Stanford: Either diplomacy or journalism in Turkey and the Middle East.
What are your summer research plans: I will be in Turkey for over two months this summer, conducting interviews with a wide range of people who can lend their perspective on my topic.
Fun fact about yourself: I am an extreme San Francisco Giants baseball fan.
Thomas Alan Hendee
Thomas Alan Hendee
Major: Human Biology
Hometown: Sao Paulo, Brazil / Grand Rapids, Michigan
Thesis topic: I will be looking at the social determinants of health in Brazilian informal settlements and how they affect child health.
Why is this topic important to the field of democracy, development, and the rule of law? By 2050, seventy-percent of the world will be living in cities, and the World Bank estimates that 32.7% of urban dwellers in developing regions will be living in slums. These informal urban settlements pose a significant problem for economic development, governance, and public health.
What attracted you to the CDDRL undergrad honors program? This program will allow me to spend my last year engrossed in a topic of interest, and put my Brazilian heritage and Portuguese language skills to academic use by adding to the dialogue of a field that I hope to enter. I look forward to being surrounded by a group of peers from whom I can learn, and at the same time have the chance to be mentored by some of Stanford’s most renowned faculty.
Future aspiration post-Stanford: I am still debating if medical school is a part of my future; however, I am confident that I will be involved with some kind of internationally focused health work.
What are your summer research plans: I will be doing a tremendous amount of reading in order to get a better understanding of what has already been said; furthermore, I plan to perform as many Skype interviews as possible with involved individuals in Brazil.
Fun fact about yourself: In the summer of 2011, I spent one-week on Rapa Nui (Easter Island) participating in an ecotourism consulting job.
Lina Hidalgo
Lina Hidalgo
Major: Political Science
Hometown: Bogotá, Colombia
Thesis topic: What allowed citizen resistance to turn against the state in Egypt in 2011, but not in China.
Why is this topic important to the field of democracy, development, and the rule of law? I hope that my project will offer some hints as to why citizens faced with economic and social grievances fail to challenge - through their protests - the state structure that perpetrates those grievances. This can provide a lens through which to study other developing societies that fail to rise against oppression.
What attracted you to the CDDRL undergrad honors program? I have been able to see development challenges firsthand growing up and am honored to have the opportunity to learn from experts in the Center about the ideas and approaches taken to tackle these issues.
Future aspiration post-Stanford: I hope to learn more about development challenges globally by working in the Middle East or Asia, and eventually help implement better development policy worldwide through an international organizations, government work, or activism.
What are your summer research plans: I will be in China interviewing factory workers about their perceptions of inequality and speak with scholars about the broader issues I plan to address in my thesis. I will then travel to Egypt to interview political party leaders about how they saw long-standing grievances translated into the political sphere.
Fun fact about yourself: I've broken my two front teeth.
Kabir Sawhney
Kabir Sawhney
Major: Management Science and Engineering
Hometown: Morristown, NJ
Thesis topic: The effect of regime type on a country’s propensity to default on its sovereign debt obligations.
Why is this topic important to the field of democracy, development, and the rule of law? The link between a country’s regime type and its sovereign debt is crucial to further understanding the differences in the choices democracies and autocracies make in regards to their sovereign debt. Debt itself is important, because sovereign debt crises can have many negative consequences, including setting economic development back many years in some countries.
What attracted you to the CDDRL undergrad honors program? I took Professor Diamond and Professor Stoner-Weiss’ class in my sophomore year, and I really loved the course content and wanted to engage more with these topics. For my honors thesis, I really wanted to have an interdisciplinary experience, combining my interests in democracy and development with my academic focus in finance and financial markets, and the CDDRL program was a great place to do that.
Future aspiration post-Stanford: I’d like to work in financial markets; my long-term career goal is to one day run my own hedge fund with a mix of investment strategies.
What are your summer research plans: Since my thesis doesn’t require any field work, I’ll be working on refining my quantitative analysis and gathering relevant data from databases and other sources, to be able to carry out my analysis in earnest starting in fall quarter.
Fun fact about yourself: Cooking is one of my favorite hobbies! I like making all sorts of different kinds of foods, but my favorites have to be Thai, Indian and Chinese.
Anna Schickele
Anna Schickele
Major: Public Policy and Economics
Hometown: Davis, CA
Thesis topic: Determinants of farmer participation in agricultural development projects in rural Peru.
Why is this topic important to the field of democracy, development, and the rule of law? If non-governmental organizations are to implement successful development projects, they must figure out how to effectively engage would-be participants.
What attracted you to the CDDRL undergrad honors program? I'm attracted to the academic community. Though writing a thesis is a solitary activity, I hope the other students and I will support each other and form friendships as we go through the process together.
Future aspiration post-Stanford: I'd like to find a way to perfect my Spanish, improve my French, and maybe learn Arabic.
What are your summer research plans: I'll be in Peru at the end of August. If all goes well, I plan to make a second trip in December.
Fun fact about yourself: I've eaten alpaca, camel, guinea pig, and snails.
Commentary on Hans Binswanger-Mkhize's symposium on "India 1960-2010: Structural change, the rural non-farm sector and the prospects for agriculture". The symposium is part of a 2-year, 12-lecture series on Global Food Policy and Food Security.
Commentary on Hans Binswanger-Mkhize's symposium on "India 1960-2010: Structural change, the rural non-farm sector and the prospects for agriculture". The symposium is part of a 2-year, 12-lecture series on Global Food Policy and Food Security.
Despite accelerating economic growth in India over the last thirty years, India’s structural transformation remains stunted, said economist Hans Binswanger-Mkhize at a May 10 FSE symposium on global food policy and food security. Unlike China, urban migration and labor absorption have been slower than expected, especially in the typically labor-intensive manufacturing sector. Formal sector jobs are few and declining as a share of employment, and agricultural employment (and growth) remains low.
The rural non-farm sector has been left to pick up the slack, and has emerged as the largest source of new jobs in the Indian economy. This will likely remain so over the next few decades given that two-thirds of India’s growing population is projected to live in rural areas. Add to the equation the need to increase crop yields by 50 percent under changing climate conditions and it becomes apparent that improving rural incomes and supporting agricultural growth is essential to decreasing poverty and unemployment in India now and in the future.
“The importance of India's rural non-farm sector shows us that structural transformation does not follow a recipe,” said commentator Marianne Banziger, a senior scientist at the International Maize and Wheat Improvement Center (CIMMYT) in Mexico.
While non-farm jobs offer significantly higher wages than farm labor, most jobs are informal and/or insecure (i.e., no health benefits, unemployment insurance or pensions). These jobs go mostly to men 18-26 years old who have some education, while the illiterate and women struggle to transition into this sector. Retail trade and transport, construction, and services (internet and phone booths, maintenance and repair of motor vehicles, and hotels and restaurants) are growing especially fast, partly due to urban-rural spillovers, but manufacturing is still only 20 percent of non-farm jobs.
“For rural households, non-farm employment is not distress employment, but a profitable diversification strategy,” said Binswanger-Mkhize. “At the same time, it has selectively absorbed young males into wage employment, decreased the number of farmers, and increasingly concentrated women in agriculture, contributing to a progressive feminization of agriculture.”
As a result, farms on average have declined in both land and household size, and have moved toward the production of higher-valued goods and a modern model of part-time farming. This transformation concerned Banziger.
“Will the urban and land-less poor be held hostage by part-time farmers?” she asked.
Banziger projects in the next 20 years food and energy price inflation will likely exceed the income growth of the urban poor. Food price increases will push net consumers, who spend a third of their income on food staples, back into poverty.
“For food prices to remain constant, farmers yield gains will have to increase by 50 percent on essentially the same land area, with less water, nutrients, energy, labor and as climate changes,” said Banziger. "The more we delay investments, the steeper the challenge.”
Fortunately, small farmers are now better equipped to respond to these challenges, but are still limited by scale. Precision irrigation and fertilization technology coupled with remote sensing and cell phone technology enable better yield predictions that affect nutrient application. Better farm-level nutrient management increases farmer income and nutrient use efficiency.
For an optimistic Indian future to be realized government policy must support ways in which households increase their incomes, said Binswanger-Mkhize. A positive outcome for rural areas depends on continued urban spillovers, and on better agriculture and rural development policies, institutions, and programs.
Productivity growth needs to be sustained at very high levels. This requires more responsive, accountable, and better-financed research systems, more diversification of agriculture, and larger, better financed, and more accountable agricultural extension system. India currently employs one-seventh the number of extension workers as China.
"Rapid policy and institutional change will be required to overcome poor performance of many government programs," said Binswanger-Mkhize. "Current subsidies to fertilizer, electricity, water, and support to crop prices are already large, but are an inefficient means to transfer income to farmers."
Direct payments may be a more efficient way of supporting income growth. This is beginning to happen with fertilizers, but should be extended to electricity and food subsidies, said Binswanger-Mkhize.
“Maybe the people who have been disadvantaged in the past are the core for future change. With appropriate support, smallholder farmers can become the engines for agricultural productivity growth and transform India's growing economy,” concluded Banziger.
Keith Calix
Vincent Chen
Holly Fetter
Imani Franklin
Mariah Halperin
Thomas Alan Hendee
Lina Hidalgo
Kabir Sawhney
Anna Schickele
