Measuring employment and job quality in agrifood systems: Accounting for backward and forward linkages

As the agricultural transformation associated with economic development proceeds, the economic fulcrum of the agrifood system moves from primary production to nonfarm activities, such as input supply, food processing, food services, and wholesale and retail trade. Traditional measures of farm employment and value added (or GDP) represent a shrinking share of the agrifood system’s total contribution. Better quantification is important not only to appreciate the role of agrifood system transformation in broader economic development, but also to inform policies that create more and better-quality jobs and accelerate structural transformation in developing economies. This study considers two broad approaches to measuring the agrifood sector: (1) measuring agrifood activities, and (2) exploiting the economy’s full input–output structure to measure the direct and indirect resources needed to meet final demands for agrifood products and to transform agrifood output into nonfood products such as biofuels and clothing. We apply both approaches using the Global Trade Analysis Project (GTAP) database and comparing their results. We then use the input–output approach to estimate the employment generated by the agrifood sector, including employment in backward and forward linkages. The findings suggest that the input–output approach provides a more comprehensive assessment, with the agrifood sector generating 15.2 percent (near one-sixth) of global GDP and one-third of global employment. The findings further show that the off-farm segments of the agrifood system provide better-quality jobs than the farm segments, particularly for women. These findings provide insights on the potential for improving welfare and reducing poverty and inequality through agrifood system transformation.