The Future of Rural Youth in Developing Countries

Chapter 3. Towards decent work opportunities for rural youth

Abstract

Without structural transformation happening fast enough in rural areas to create more employment in a sustainable manner, the vast majority of rural youth in developing countries have little choice but to be self-employed in the informal sector, take up poorly paid jobs, or migrate for better opportunities. The increasing demand for diversified and processed food in developing countries is, however, offering the opportunity for rural economies to create various types of jobs along the agricultural value chains, both upstream and downstream. This chapter provides recommendations to policy makers in adopting a comprehensive and local approach to rural economic development to make rural areas attractive again to young people.

Providing decent jobs for youth has become a national priority in both Organisation for Economic Co-operation and Development (OECD) and non OECD countries. The youth bulge is a common phenomenon in many developing countries, and needs to be addressed urgently. In Africa, particularly in sub-Saharan Africa, the youth population will continue to increase until 2050. Without structural transformation and green industrialisation happening fast enough to create more wage employment in a sustainable manner, the vast majority of youth in developing countries have little choice but to be self-employed in the informal sector or take up poorly paid jobs, without any social protection and hope for better job prospects. The challenge is particularly acute for rural youth, who still represent the majority of youth in developing countries. Yet, rural economies are transforming slowly. In order to absorb this growing young rural labour force, opportunities in rural areas and intermediary and small towns must become attractive and include decent wages and incomes and prospects for better lives.

In recent years, household dietary pattern changes, coupled with new demands by a rising middle class for diversified and processed foods, are creating off-farm employment in food-related manufacturing and services. Agri-food industries are labour-intensive and can create jobs in rural areas, as well as ensure food security in the regions. Food processing is particularly relevant for job creation in rural areas because agro-industries (e.g. millers, beer breweries, processors) are more likely than other sectors to locate in small towns and rural areas and not in primary cities (Christiaensen and Lawin, 2017; Henderson and McNamara, 2000;). In addition, food processing creates strong forward and backward linkages with other food and non-food system activities, implying potentially large wage employment effects in local economies. Furthermore, the agri-food processing sector tends to employ low-skilled labour, providing wage job opportunities for the current large number of low-educated rural youth and rural women in developing countries.

In this context, the employment landscape along the agricultural value chains represents a huge untapped opportunity of entrepreneurship, business development and wage labour. However, value chain development projects seldom apply an employment lens, and even less a youth employment lens. Their objectives are usually about increasing revenues and export volumes, meeting consumer needs and improving efficiencies along the supply chains. Value chain analyses consider only partially the consequences on poverty, inequality, food security and environment (Bolwig et al., 2010). In fact, young entrepreneurs in sub-Saharan Africa are reluctant to become involved in agriculture as a business (Kew, 2015).

Governments can play an important role in enacting legislation and implementing regulations; providing incentives, support schemes and standards to identify and promote agricultural value chains that create farm and non-farm employment for youth. The creation of new job opportunities downstream in the value chain, in food processing and distribution for example, can help keep young people in the sector. For this to happen, governments need to design policies that take into account the constraints and priorities of rural young men and women. This chapter provides some policy recommendations on how to support agricultural and local value chain development as well as non-farm activities, with the objective of creating rural youth employment.

Promoting local value chains as an engine for the creation of decent youth jobs and food security

Although the focus of value chain development has often been on higher-value products for trade in more lucrative and export markets, processes of value chain development are also significant in domestic and basic food production chains. Global value chains tend to exclude a large proportion of farmers, especially smallholders, as they face a range of constraints, e.g. small size of production unit; lack of information, knowledge, financial means, and capacity to comply with the requirements, food regulation, and quality standard of global markets; and price volatility. With the appropriate support (technology, finance, training), the development of local value chains holds opportunities for small farmers as producers to be linked with small- and medium-sized businesses and markets, and for the creation of wage labour – for example in service provision and agro-processing (see Chapter 2).

The growing domestic demand in agri-food products, both for quantity and diversity, is largely underexploited. Different value chains entail different opportunities and the cost of entering some value chains, such as those in the export market, is probably too high for the majority of small-scale farmers. The challenge is greater for young people living in rural areas in developing countries because they are largely unskilled and low educated, with limited access to land, credit and information on market opportunities. Promoting local value chain development is not only necessary for youth inclusion but also for ensuring food security in the context of rapid urbanisation, increasing dependence on food and feed imports, and growing domestic demands. Youth involvement in a local value chain can happen in several ways.

Promoting an entire value chain requires actions at the macro, meso and micro levels and better co-ordination between actors along the value chain. At the macro level, there are regulatory frameworks, national development strategies and trade policies that will support or hinder certain value chains (see Box 3.1). At the meso level, there are industry standards and businesses that will determine the channels and efficiencies of the value chains. At the micro level, there are small-scale producers and young people who need capacity building, skills and equipment upgrades, and access to capital in order to integrate into the value chain as self-employed workers or wage workers (see Chapter 2). Using a value chain approach to development means working on all three levels at the same time. For example, creating incentives for the private sector to provide the necessary goods and services to small-scale producers can help the latter integrate into the value chain as suppliers or business partners. At the same time, improving the efficiency and capacity of processors or other downstream actors can create additional demand and higher prices for crops, with direct benefits for small-scale producers (IFAD, 2014a).

Box 3.1. Selecting the right value chain: A chicken-and-egg problem

With the growing urban demand for diversified food, especially in meat, cities in the African continent represent a huge market potential for locally produced agricultural products. African chicken consumption for example has risen sharply over the past two decades. Imports of chicken to sub-Saharan Africa tripled between 2004 and 2014, according to data from the US Department of Agriculture. However, the rising demand has been met by increased imports from the European Union, Brazil and the United States and not by increased local supply and job creation. In fact, local poultry farmers have not been able to compete against the flood of cheap frozen imports and are closing down. In particular, bone-in frozen chicken portions – an unpopular part of the chicken in developed countries – are dumped into the market at very low prices.

Poultry farming requires large quantities of maize and soya, which often have to be imported at a high cost. Ghanaian poultry farmer Napoleon Oduro runs a 500-bird farm on the outskirts of Accra. He relies on imported feed, which costs him a as much as USD 625 per month to feed his 500 birds (each bird requires about 2.5 kg of feed per month and 50 kg of feed costs USD 50). African chickens are also a different breed from imported ones and they require more feed and are less productive.

Despite the stiff competition, African poultry farmers are not giving up. Many are getting informed about better breeds and are looking for local ingredients to substitute traditional chicken feed. Other business opportunities exist in processing by products (pre-cooked meat) and investing in broiler breeding facilities. To protect local industries, some countries such as Botswana have imposed import restrictions, but in the long run the problem will need to be resolved by strengthening the overall agricultural systems in Africa.

First and foremost, investing in low-cost and high-quality feed production will be needed. Stronger phytosanitary regulations and disease control must be enforced to protect the animals from infectious diseases. Infrastructure (energy, roads and transport, cold storage facilities, water distribution) must be significantly improved, especially in rural areas, in order for the poultry industry to be productive and meet the rising demand from cities in terms of quality and quantity. There is also limited research in agriculture in the continent. Research to support breeding programmes and expand the range of feed sources will go a long way in helping to upgrade the overall system. African governments need to make a leap in modernising the agricultural system, including through research, while ensuring sustainable practices.

Solving the chicken-and-egg problem will require striking the right balance between imports, responsible local consumption and production while preventing unfair trade practices and ensuring sustainable poultry farming.

Currently, in developing countries, many value chain interventions are at the primary production level, as seen in Chapter 2. Production has a lower entry barrier than downstream activities and is therefore an easier sector for the more vulnerable groups to enter. However, the agro-processing industry is labour intensive and can provide opportunities to generate wage employment for young people. Highly labour-intensive value chains such as horticulture offer wage employment opportunities for landless rural youth (IFAD, 2014a). Interventions can therefore be at different points downstream in the value chain: collection, processing, transportation, wholesaling and retailing. Some jobs downstream in the value chain require higher levels of education, attracting more educated youth in managerial positions. The processes of agro-industrialisation bring about the emergence of providers of managerial and other business services (da Silva et al., 2009). Selecting the right value chain to integrate into will require fully assessing demand from consumers and understanding the power dynamics between value chain actors and pull-push factors. Whether a value chain is producer-driven or buyer-driven, for example, can impact a firm’s ability to move up the ladder (AfDB/OECD/UNDP, 2014).

A crucial component of the agricultural value chain model is the presence of sufficient demand for the product being supplied, especially in urban areas which have more spending capacity. The rise of supermarkets in some developing countries changed the food market structure. The penetration of supermarkets was greatest in South Africa, South America and East Asia. The rise of supermarkets has attracted foreign direct investment (FDI) as well as set new standards for food safety and quality. Supermarkets in developing countries have also been changing their procurement strategy to shift away from wholesale procurement to specialised procurement agents, centralisation and regionalisation, and cultivating preferred suppliers to secure consistent supply. These strategies have helped in better organising the suppliers, improving the production processes, and ultimately helping to increase revenues (da Silva et al., 2009). Small-scale producers, if organised to ensure economies of scale and quality (e.g. through co-operatives), could tap into this market. However, as supermarkets take increasingly larger shares of the retail market for food, there is a definite shift of power towards a buyer-driven supply chain for processed food products. Therefore, market development must be balanced and paced so that agricultural production can increase without crowding out small-scale producers. The 2008 World Development Report calls for inclusive procurement systems in integrated supply chains and supermarkets, so that small-scale farmers can share in these growth opportunities (World Bank, 2007).

The focus on strengthening local value chains based on sustainable use of mainly local resources can also contribute to reducing the dietary dependence on imported food and prioritising local foods for domestic markets, including growing tourist markets in certain countries. Local food markets are also one of the key mechanisms to enhance access to and availability of food. The International Planning Committee for Food Sovereignty specifies four pillars of food sovereignty: the right to food; access to productive resources such as land, water, forest, fisheries, seeds and capital; mainstreaming agroecological production based on local and renewable resources and the preservation of natural resources; and access to trade and local markets. Finally, with the concerns around energy use in the globalised food economy and the energy supply becoming short and more expensive, it is expected that locally and regionally traded food will be more competitive than imports, constituting a complementary mechanism to local production when needed (HELVETAS Swiss Intercooperation, 2013).

Reducing food loss is another pathway to improve farmers’ income and uncover employment opportunities. About 40% of staple foods in sub-Saharan Africa are lost before they can reach the market (Aulakh and Regmi, 2013), with consequences on food availability and quality, scarce natural resources, greenhouse gas production, and loss of income. Total food spoilage could feed about 300 million people per year in sub-Saharan Africa (AfDB/OECD/UNDP, 2016). Food losses can occur at different stages of the supply chain, from harvesting to storage, processing, packaging and sales. They result from wide-ranging managerial and technical limitations in harvesting techniques, storage, transportation, processing, cooling facilities, packaging and marketing systems, as well as from pests and weather patterns.

Simple methods and training can improve production planning, processing, packaging and transportation practices. Cassava in Africa is a good example of the benefits of adding value to a staple crop, e.g. increase income for producers, create employment in rural areas in village processing units, and reduce the need to import wheat. In Nigeria, after harvesting, cassava tubers are transported to the processing plants in trucks. Cassava tubers must be processed within 72 hours of harvesting, due to rapid fermentation that renders them sour and unfit for consumption. As a result, harvesting typically only occurs once a guaranteed buyer is identified. This simple precaution helps to avoid food loss and increase farmer revenues.1

Finally, one of the critical factors of successful local value chain development is understanding the governance and power structure of the particular value chain. What are the agreed terms of trade, quality standards and pricing structure that small-scale producers and young people should know in order to assess the opportunities and risks of their engagement? The more dialogue there is with actors at all levels, the more likely the economic gains will be fairly distributed among them. Micro, small and medium enterprises are a major source of employment and income, and therefore it is important to integrate them into rural value chains. Partnerships among smaller enterprises can help gain leverage to compete with larger firms. Co-operatives of producers in this sense can help increase the bargaining power of small-scale farmers.

Linking rural and urban development using a territorial approach

Population growth, urbanisation, and economic growth present opportunities for businesses connected to the agricultural sector. Urbanisation can contribute to higher agricultural productivity and rural development, and ultimately to economic development and structural transformation, by better connecting rural economic activities (particularly food production chains) to large urban markets (AfDB/OECD/UNDP, 2016). Urbanisation plays a central role in changing Africa’s food system by: 1) increasing the consumer base for food producers; 2) benefiting the post-farm food value; and 3) transforming the rural non-farm economy. More densely populated places tend to handle post-farm segments of food value chains, i.e. activities beyond primary production, such as wholesaling, processing, logistics, distribution, retail and food stalls. In Africa, the growth of towns and intermediary cities has strengthened the reciprocal linkages between rural and urban development. Reducing the travel time to the nearest city of 100 000 inhabitants from 24 to 4 hours increases the ratio of actual to potential crop production by 16. Greater agricultural production also develops the rural non-farm sector in countries at a lower stage of the post-farm food value chain, creating a virtuous circle of agricultural and rural development (AfDB/OECD/UNDP, 2016).

Focusing resources and investments on the development of secondary towns would offer new markets to small farmers and processors while creating new job opportunities for youth, including skilled youth, e.g. in the service and retail sector (Hathie, 2016). Investments should go into strengthening rural-urban linkages and intraregional trade and prioritising transport and marketing infrastructure to improve market access and value addition, reduce post-harvest losses, and expand input markets and support services in rural areas. While metropolitan areas are the main interface with global markets, small cities and towns are the main interface with the rural economy and serve as a means by which urban food habits spread into rural areas (Staatz and Hollinger, 2016). While national accounts of most countries largely ignore the economic activities of the informal sector, in most low-income countries informal or local agro-processing remains strong (da Silva et al., 2009). Furthermore, the role of supermarkets has increased rapidly, accompanied by a rise in the local demand for high-quality food products and processed food, especially in Asia. In West Africa, modern food retailing remains underdeveloped relative to the market size, urbanisation levels and economic dynamism (Allen and Heinrigs, 2016). In Africa, local agro-enterprises are increasingly engaging in the delivery of agricultural services to small-scale farmers (often as a response to weak public services). Investment such as joint ventures, contract farming with local buying and marketing groups, out-grower schemes, and infrastructure investments can have positive impacts on employment, including for youth (Arias et al., 2013), especially if they include decent work aspects (UNIDROIT/FAO/IFAD, 2015).

In Viet Nam, a study (Duteurtre et al., 2016) of value chain development in three districts (Ba Vi, Moc Chau and Mai Son) shows the different factors in the functioning of markets beyond costing and pricing to include collective organisation, access to resources and spatial organisation. Each district has a unique comparative advantage in the production of milk (Ba Vi), vegetables (Moc Chau) and maize (Mai Son), and produces for household consumption and local markets first, then for the urban markets of Hanoi.

The study concluded that the commercialisation of these products was a process that was highly dependent on the intricate linkages between producers, businesses and traders. Actors upstream and downstream in the value chains played an important role, but equally important was the role of the state. Geographic indications such as “Ba Vi milk” and “Moc Chau tea” added value to these products and helped their commercialisation. Deals were made through formal contracts, personal networks, credit arrangements or simply through the exchange of information and know-how which created trust and enabled transactions.

Increased commercialisation of products led to introducing new animal and seed varieties and diversifying the methods of production and transformation in these regions. The success of these value chains also attracted new farmers and investors who were not native to the regions. However, these changes came with new risks; increased production also meant intensification in terms of land use and capital investment, causing soil pollution and erosion as well as increased debts for farmers. The government will need to enforce strict rules and regulations for all actors along the value chain and apply limits to manage production and natural resources in a sustainable manner.

The G20 calls for the following action areas to promote secondary towns: 1) create an environment attractive for firms to locate in secondary towns, including policy incentive considerations and provision of necessary infrastructure (access roads, energy and communication); 2) create conditions that also make secondary towns attractive to young men and women to live and work there, including education, health and recreation; 3) consider territorial approaches to development in order to strengthen rural-urban linkages and maximise the use of secondary towns as key conduits to connect rural and urban business activities, focusing on jobs-intensive activities in agricultural value chains and in other processing, trade and services sectors; and 4) identify patterns of labour movements and remittance flows between rural areas, intermediary towns and urban centres to best influence the set of opportunities for young people who are integrated into a multi-local household livelihood system (World Bank/IFAD, 2017).

Adopting a comprehensive approach to rural development

Growth in productive sector wage employment will need to be stimulated in order to address youth employment challenges. The regions that have successfully increased demand for labour are those where the proportion of productive sector wage earners in total employment has been rising. Unless demand for labour expands, it is difficult to design and implement programmes to increase the inclusion of disadvantaged youth (Bennell, 2007). Investments to promote growth sectors in rural areas in line with the comparative advantage of the territory and to support access to markets can contribute to the creation of on-farm and off-farm wage employment.

FAO assists policy makers, planners and development practitioners in building more integrated interventions through an Integrated Country Approach (ICA) for decent rural employment. The ICA looks at:

• core functions such as capacity development, policy support, partnerships and knowledge generation

• policy areas such as employment, migration, sustainable agriculture and agribusiness development, gender, and social protection

• the four pillars of the International Labour Organization’s (ILO’s) Decent Work Agenda: employment creation and enterprise development, social protection, standards and rights at work, and governance and social dialogue

• gender equality and environmental sustainability as cross-cutting issues.

The ICA aims, in particular, to enhance the employment content of national strategies, policies and programmes for agricultural and rural development in order to optimise the contribution of the sector to improving the quantity as well as the quality of rural jobs.

The first phase of the programme was implemented in Malawi and Tanzania (2011-14), where FAO facilitated the commitment of national stakeholders to a long-term theory of change on employment, providing systematic support on decent work inclusion into the design of policies, strategies and programmes, such as the Tanzanian National Agriculture Policy (2013). In particular, technical support and capacity development were provided on youth employment and child labour prevention in agriculture.

The second phase of the ICA (2015-17) was implemented in Guatemala, Senegal and Uganda, focusing on youth as the main target group. The approach provides capacity and technical support to enhance the employment content and youth focus in policies and programmes for rural development based on country-specific contexts. For example, in Senegal, the ICA programme supports the development of a national policy on rural youth employment and its related strategy. In Uganda, with the support of the ICA programme, the government is developing a national strategy for youth in agriculture and is focusing on understanding how to integrate rural youth along agricultural value chains and ensuring that youth employment issues are integrated into other parts of strategic programmes.2 In Guatemala, the programme targets the department of San Marcos, with the aim of increasing knowledge of youth challenges and needs and defining a rural youth employment strategy within the framework of the Implementation Plan of the National Policy of Integrated Rural Development.

The OECD calls for a New Rural Development Paradigm (NRDP) to consider the new set of challenges and opportunities that developing countries face today. The NRDP provides a framework for building rural development strategies for developing countries that are tailored to the specific socio-economic, political and institutional characteristics of each country. It adopts a multi-level and multi agent approach, recognising the different roles of national and sub national authorities and enabling adequate co-ordination mechanisms that improve the policy delivery process. This approach implies the strong involvement of sub national and local governments, as well as local communities, in designing rural development strategies.

The NRDP is based on eight components (OECD, 2016):

• Governance. A consistent and robust strategy is not enough if implementation capacity is weak. It is therefore important for an effective strategy to build governance capacity and integrity at all levels.

• Multiple sectors. Although agriculture remains a fundamental sector in developing countries and should be targeted by rural policy, rural development strategies should also promote off-farm activities and employment generation in the industrial and service sectors.

• Infrastructure. Improving both soft and hard infrastructure to reduce transaction costs and strengthen rural-urban linkages is a key part of any strategy in developing countries. It includes improvements in connectivity across rural areas and with secondary cities, as well as in access to education and health services.

• Urban-rural linkages. Rural livelihoods are dependent on the performance of urban centres for their access to goods, services and new technologies; exposure to new ideas; and temporary or even permanent employment. Successful rural development strategies do not treat rural areas as isolated entities, but rather as part of a system comprising both rural and urban areas.

• Inclusiveness. Government policy should explicitly target poverty and inequality in multiple dimensions (health and nutrition, education, other hard and soft infrastructure, job creation) and combat the exclusion of certain groups.

• Gender. Improving rural livelihoods should take into account the critical role of women in rural development, including their property rights and their ability to control and deploy resources.

• Demography. High fertility rates and rapidly ageing populations are two of the most relevant challenges faced by rural areas in developing countries today. Although the policy implications of these two issues are different, addressing these challenges will require good co-ordination across education, health and social protection policies, as well as family planning.

• Sustainability. Taking into account environmental sustainability in rural development strategies should not be limited to the high dependence of rural populations on natural resources for livelihoods and growth; it should also consider their vulnerability to climate change and threats from energy, food and water scarcity.

Rural development strategies must be at the heart of national development strategies to ensure equal, inclusive and sustainable development for all (OECD, 2016), and youth mainstreaming in these strategies will become increasingly important. It would therefore be worth adding to this list the need to disaggregate data by age groups (e.g. 15-24 or 15‑29 years) when designing, implementing and measuring the results of rural development programmes.

Box 3.2. Geographical indications for territorial development

Products standards such as regional labels, organic labels or controlled designation of origin allow the recognition of a particular product coming from a specific geographic area, and could potentially support value addition and the development of local value chains in Africa and Asia. The African Union Commission, with the support of the European Union, is promoting geographical indications (GIs) as a development tool that can protect the identity of local and indigenous products throughout Africa.

GIs have attracted increasing attention from policy makers and trade negotiators, and from agricultural producers, since they were mentioned in the Agreement on Trade Related Aspects of Intellectual Property Rights (the TRIPS Agreement) in 1994. This form of intellectual property (IP) now appeals to more and more nations beyond the restricted list of countries that have traditionally pursued active GI policies. According to the World Intellectual Property Organization (WIPO), a GI is a sign used on products that have a specific geographical origin and possess qualities or a reputation that are due to that origin. In order to function as a GI, a sign must identify a product as originating in a given place. In addition, the qualities, characteristics or reputation of the product should be essentially due to the place of origin. Since the qualities depend on the geographical place of production, there is a clear link between the product and its original place of production. A GI right enables those who have the right to use the indication to prevent its use by a third party whose product does not conform to the applicable standards. For example, in the jurisdictions in which the Darjeeling GI is protected, producers of Darjeeling tea can exclude use of the term “Darjeeling” for tea not grown in their tea gardens or not produced according to the standards set out in the code of practice for the GI.

The basic concept underlying GIs is simple, and familiar to any shopper who chooses Roquefort over “blue” cheese or Darjeeling over “black” tea. “Cognac”, “Scotch”, “Porto”, “Havana”, “Tequila” and “Darjeeling” are some well-known examples of names associated throughout the world with products of a certain nature and quality, known for their geographical origin and for having characteristics linked to that origin. Kampot pepper, produced in the Kampot province in Cambodia, won GI status in 2010. Since gaining GI status, prices for Kampot pepper increased from USD 5 per kilogramme before GI status in 2010 to about USD 18 per kilogramme in 2014.

Studies show that, under appropriate conditions, GIs can contribute to development in rural areas. Regional producers become entitled to use a GI and the added value generated by the GI therefore accrues among all such producers. Because GI products usually generate a premium brand price, they contribute to local employment creation, which ultimately may help to prevent rural exodus. In addition, GI products also have important spin-off effects, for example in tourism, creating additional jobs. GIs may bring value to a region not only in terms of jobs and higher income, but also by promoting the region as a whole, contributing to the creation of a “regional brand” (WIPO, 2017). Unfortunately, research usually focuses on the impact of standards in global value chains, but rarely on those impacts in local value chains or the effects on employment.

Exploiting the opportunities in regional and international markets

Despite the large share of agriculture in gross domestic product (GDP), many developing countries are increasingly dependent on imports. About 85% of global value chain trade in value added takes place in and around three regional hubs: East Asia, Europe and North Africa (AfDB/OECD/UNDP, 2014). As an example, Africa’s share of global imports in intermediate goods has remained the same at 2% since the 1990s compared with non-OECD countries which have increased from 25% to 40% on average for the same period (AfDB/OECD/UNDP, 2014). Exploiting the opportunities in regional and international markets will be essential for Africa and South/Southeast Asia to be able to tap their agricultural potential.

Global agro-industrial exports have diversified significantly since the mid-1990s towards processed and high-value horticultural products – accounting in 2008 for around half of global agro-industrial exports (three quarters if semi-processed commodities are added). In Africa, the diversity of agriculture and climate provides major opportunities for regional trade. However, currently only about 10% of agricultural trade is from within the region. Cross-border trade continues to incur high transaction costs from administrative red tape and bribes. Simplification, greater transparency and harmonisation of procedures (on export/import licences, certification of origin, standards and sanitary regulations) are required (Schaffnit Chatterjee, 2014).

A concrete example of policy facilitating the creation of export and trade channels can be found in the Sri Lankan floriculture value chain. The Ministry of Export, through an ILO-Sida project (2005-09), established a new export zone to cater for approximately 10 000 existing and potential new flower growers. Growers could import supplies duty free, improve contacts with exporters and more effectively meet their requirements thanks to an export-oriented processing and packaging plant. Nearly 100 growers boosted export earnings from close to zero to between LKR 500 and LKR 1 000 per week. Flower exports grew by an average of 9% annually over the project period, generating high net foreign exchange earnings for the country. The project is credited with impacting the value chains of an estimated 52 000 micro and small enterprises, tripling household income in the targeted districts, and increasing the employment rate by 15% in businesses in the targeted districts.

The Sri Lankan floriculture case demonstrates a more “systemic” approach to intervening in value chains. Besides creating a new export zone, the project focused on strengthening the bargaining power of flower growers through a new Tropical Floriculture Association. The association helped growers negotiate better input prices and share knowledge and marketing information. A better understanding of export markets encouraged growers to move towards meeting export standards. In addition, this organised structure helped growers access loans from banks (Barlow, 2011).

Another space for opportunities is the aquaculture sector, which is very dynamic, particularly in Asia. FAO indicates that in 2014, 84% of the global population engaged in the fisheries and aquaculture sector was in Asia, followed by Africa with barely 10% (FAO, 2016). Aquaculture provides half of all fish for human consumption. Youth are involved in aquaculture in different activities: young men are often involved as casual part-time employees (e.g. pond construction and harvesting) whereas young women, although they play a large role in post-harvest activities, are often limited to sales and marketing. Youth engagement as owner-operators of fish farms is limited, due to the entry barriers in the sector (FAO, 2014).

Worldwide, the proportion of people employed in capture fisheries decreased from 83% in 1990 to 67% in 2014, whereas the proportion of people employed in fish farming correspondingly increased from 17% to 33%. Women account for about 50% of the workforce in small-scale fisheries, particularly in processing and trade. Unfortunately, statistics largely fail to capture the youth and children working in the sector, and the limited data available are rarely disaggregated by gender. The level of intra African trade in agricultural and food products is low: By the end of the 2000s, only 17% of the total foreign trade of African countries was conducted at the intra-regional level, mainly with flows of local unprocessed products (coffee, fruits, vegetables, tobacco, etc.). Animal products (cattle and fish) are the most traded products in the different African sub regions. Cereal trade is also important. The three regional organisations – the East African Community, the Common Market for Eastern and Southern Africa and the Southern African Development Community – have been committed since 2008 to creating a vast “tripartite” free trade area.

Many developing economies in the Asia Pacific region have focused on export-led growth. In more recent years, agricultural trade between Association of Southeast Asian Nations (ASEAN) countries has increased. In 2008, ASEAN was both the major destination and origin of agricultural products in Southeast Asian countries (Chandra and Lontoh, 2010). However, there is also considerable potential for growth in domestic demand, as these economies benefit from favourable demographics in terms of younger populations, rapid urbanisation and an expanding middle class. Southeast Asian governments have opted for policies that ensure sufficient domestic production and manage the stability of food prices. Government interventions are commonly found to affect a small set of agricultural products, typically between 8 and 10 products, such as rice, cereals (e.g. wheat and maize), sugar, meat products, dairy products, vegetable oils and other agricultural products (Chandra and Lontoh, 2010).

Investing in agriculture and rural infrastructure

FAO estimates that net investments of more than USD 80 billion per year are needed if food production is to keep pace with rising demand as incomes grow and the population exceeds 9 billion in 2050. FDI flows to developing countries doubled between 2005 and 2008, but negligible amounts went to agricultural production in South Asia and sub-Saharan Africa. The bulk of FDI flows went to downstream activities in upper-middle and high-income countries (FAO, 2013). According to OECD statistics, official development assistance or agriculture and rural development declined from 24% in the 1980s (OECD, n.d.) to 8% in 2013 (OECD, 2015). The increase in agricultural commodity prices and, in particular, the food price crises of 2007 08, led to notable growth in public and private investment in primary agriculture, even if the level of national budget allocation remains low. The majority of private domestic investors are farmers and they are by far the largest source of investment in agriculture (crops, livestock, aquaculture, agroforestry) in low- and middle-income countries (Lowder, Carisma and Skoet, 2012). In 2010, only nine countries in Africa had reached or exceeded the target of allocating at least 10% of their national budget to agriculture. The average regional spending on agriculture is approximately 4% (NEPAD, 2013).

Box 3.3. Transforming agriculture in Africa: Is CAADP the answer?

CAADP is the African Union’s strategic policy framework for the agricultural transformation of the African continent. It was established in 2003 by the African Union and the New Partnership for Africa’s Development (NEPAD) in Maputo. The objective is to achieve an annual growth rate of at least 6% in agricultural GDP in every country involved through an investment of at least 10% of annual national budgets in the agricultural sector by 2015.

CAADP experienced a difficult beginning. The NEPAD Secretariat acknowledges that the initiative encountered ownership issues at the country level which stalled investment in the sector by governments and development partners. It also did not have the human or financial resources or legal status to enable it to fulfil its mandate and role (NEPAD, 2013). Although CAADP’s objective has not been reached, some countries (Benin, Burkina Faso, Burundi, Côte d’Ivoire, Ethiopia, Ghana, Kenya, Liberia and Malawi) have made progress and CAADP is again picking up momentum. As of today, 43 African countries have formally joined CAADP and at least 40 have developed a National Agricultural Investment Plan, presenting agriculture as a top priority.

The 2014 Malabo Declaration launched the second generation of ten years of CAADP by adopting the below key commitments:

• recommitment to the principles and values of the CAADP process

• commitment to enhancing investment finance in agriculture

• commitment to ending hunger in Africa by 2025

• commitment to halving poverty by the year 2025 through inclusive agricultural growth and transformation

• commitment to boosting intra African trade in agricultural commodities and services

• commitment to enhancing the resilience of livelihoods and production systems to climate variability and other related risks

• commitment to mutual accountability to actions and results.

In the future, policy makers will need to ensure sufficient co-ordination, accountability, and compliance, as well as successful resource mobilisation, including domestic resources, to boost agricultural productivity and address food insecurity. Agricultural productivity could be increased by developing infrastructure to facilitate market access; optimise land, water, and resource management; increase agricultural research; and stimulate the private sector to unleash productive investments in the sector (Signé, 2017). Ultimately, the success of CAADP will depend on individual countries’ ownership of and commitment to meeting the goals.

The United Nations Conference on Trade and Development’s (UNCTAD’s) survey of investment promotion agencies indicates which industries are more likely to witness an increase in FDI activity. Agencies in developing and transition economies consider the best targets in their countries to be in the agricultural and agribusiness industry, along with the transport and telecommunications, hotel and restaurant, construction, and extractive industries. Moreover, there is an increase in intra African flows. More than 70% of all African outward-bound food, beverages and tobacco FDI is intra continental, with 44% of the investment capital flows accounted for by projects comprising primary production. This trend is encouraging, because it may help reduce Africa’s dependence on extra continental FDI to stimulate its economies (UNCTAD, 2015). Greater efforts from governments are needed to meet the Comprehensive Africa Agriculture Development Programme’s (CAADP’s) goal of investing 10% of national budgets in agriculture and to attract FDI in ways that complement and promote rather than “crowd out” domestic agri-food system actors (see Box 3.3).

Rural and market infrastructures need to be improved, with the aim of improving access to education, training, inputs, markets, technology (including ICT) and finance. What will attract young people is not only the profitability of agriculture but also the basic services and the amenities that local rural areas and small towns can provide (IFAD, 2014b), hence the importance of investments in rural infrastructure such as roads, storage and market facilities, access to land, energy, cell phone coverage, water and technologies, and social protection schemes.

Finally, for agriculture to really become a competitive industry in developing countries, more investment in agricultural research is needed. Investing in agricultural research and development can help maintain a competitive edge. The “green revolution” – a combination of genetics and the heavy use of fertilisers and pesticides in the 1950s and 1960s – had an enormous impact on production, but also brought about a raft of ecological and health problems. Feeding the growing population of today and tomorrow cannot be sustained by this form of intensive, fuel- and chemical-dependent agriculture. As such, plant biotechnology could be a major tool in the fight against hunger and poverty, especially in developing countries. Biotechnology is a technique that uses living organisms to make or modify a product and improve plants or animals. Promising results have been reported through a range of biotechnology applications in improving plant breeding and controlling plant diseases. Diversity of the genetic base of the new plants, the reduction of chemical inputs, and the integration of soil, nutrient and water management on farms, are the three pillars of any new sustainable agriculture intensification effort (De Gannes and Borroto, 2016). If agriculture is going to assist in the development of sustainable rural livelihoods in developing countries, then policies focusing on improving technology use in this sector while ensuring environmental sustainability will need to be explored.

Greening and diversifying rural economies

The ILO defines green jobs as jobs that are attractive and generate good returns and income, and that reduce consumption of energy, raw materials and natural resources, reduce emissions of greenhouse gases, minimise the production of waste and pollution, protect and restore ecosystems and biodiversity, and help adapt to climate change. Examples of such jobs are those related to reforestation, land and water management, organic agriculture, the development of clean sources of energy, ecotourism, and recycling of agricultural waste.

Rural populations often depend directly on the environment and natural resources for their livelihoods, such as in agriculture, forestry, fisheries, mining and tourism. However, the ecosystem on which they rely is increasingly threatened by excessive and unsustainable exploitation. Greening the rural economy is key to boosting resource and labour productivity, reducing poverty, increasing income opportunities and improving youth well-being in rural areas (ILO, n.d). The modernisation of agriculture and the expansion of ICT and products and services around renewable energies (e.g. solar, biogas) therefore hold employment opportunities for youth, especially rural youth.

The job creation potential through the production and supply of clean energy systems is significant in rural economies, as the majority of the 1.5 billion people who do not have access to electricity live in rural areas. The sources of renewable energy, e.g. sun, wind, biomass or geothermal sources, are often widely available in rural areas. This means that jobs related to the construction, operation, maintenance and distribution of the new energy system can be created, and the access to energy in rural areas will open doors for other productive activities such as food processing and storage, and the transport of agricultural products. Many of these jobs can be attractive to youth, as they require advanced skills and offer relatively better income opportunities (ILO, n.d.).

Ecotourism has significant economic and employment potential for rural areas. According to the World Travel and Tourism Council, in 2016 tourism directly created over 108 million jobs (3.6% of total employment) and this is expected to rise by 2.2% per annum to 138 million jobs (4.0% of total employment) in 2027 (World Travel and Tourism Council, 2017). In 2016, the industry directly and indirectly supported a total of 292 million jobs (9.6% of total employment) and this is expected to rise by 2.5% per annum to 382 million jobs in 2027 (World Travel and Tourism Council, 2017). This means that 1 in 11 jobs will be related to tourism. These jobs can be highly attractive to youth, as the sector and related activities are viewed as “modern” and requiring advanced skills, while constituting a good source of income. The potential of the tourism industry to contribute to economic and social development has also been recognised in the Sustainable Development Goals (Goals 8, 12 and 14).

A number of studies and quantitative assessments show that a global transformation to a greener economy could generate 15 to 60 million additional jobs globally over the next two decades, and lift tens of millions of workers out of poverty, with important improvements in productivity and income levels for rural communities (ILO, 2012).

Rural non-farm activities are the source of about 40% to 70% of rural households’ income in Africa, Asia and Latin America (ILO, 2015a). Non-farm activities can include agri-food processing industries, home-based cottage industries, handicrafts and services such as storage, transport, basic farm equipment repair services, retail trading, extension services, tourism, and recreational services, among others. The amount spent on food and drink products, for example, has been increasing year on year in all parts of the world, and the related industries are a major source of employment worldwide. Food and drink processing in 2005 accounted for 4% of world GDP and employed 22 million people. The agro-processing sector is by far the most significant component in the agri-food industry, covering post-harvest activities, packaged agricultural raw materials, processing of intermediate goods and fabrication of final products derived from agriculture. Within the agro-industrial sector, food processing and beverages are the most important sub-sector in terms of value added, accounting for more than 50% of the total formal agro-processing sector in low-income and low-middle-income countries, whereas rural industries account for only between 20% and 25% of rural non-farm employment (da Silva et al., 2009).

Box 3.4. Blue Economy and the potential for large-scale job creation

Blue Economy is an open-source movement bringing together case studies that aims for a reduction in consumption without diminishing the economy. It looks at bundled portfolios of innovations based on pragmatic solutions to redefine the competitive business models which are the hallmark of our current paradigm. It relies on natural processes and physics, and derives inspiration from the natural environment around us to learn how living organisms have evolved over millennia to meet their requirements. Blue Economy tries to modify these phenomena to suit the material needs of human beings by changing existing business models to strive for sustainable development. The idea is that instead of constantly dealing with the waste in an environmentally harmful manner, residue of production becomes an input in another totally unrelated business to realise new and greater cash flows overall. The solutions it finds are determined by the local environment and physical/ecological characteristics.

The example of mushroom cultivation best exemplifies Blue Economy and provides insight into future avenues for large-scale employment generation in developing countries. Mushrooms overtook coffee as the second most traded commodity in the 21st century, and their cultivation is labour intensive. Europe is the world’s biggest market for mushrooms, and demand has been rising in North America as well. Mushrooms are traditionally farmed on agricultural waste, which is considered a nuisance and is often burned. Mushrooms convert plant waste into fruiting bodies, and it is these fruiting bodies which are consumed as edibles. Increasing demand for mushrooms presents the opportunity to utilise this waste-to-food chain to create thousands or even millions of jobs.

But Blue Economy does not end here. There is potential to grow mushrooms on coffee waste. In the period between the coffee beans leaving the farm and ending up in brewing pots, 99.8% are discarded as waste and only 0.2% are ingested. Given that the annual world consumption of coffee in 2008 was 134 million bags, the total biomass wasted was 23.5 million tonnes. This biomass represents a perfect medium for growing mushrooms. The economic opportunities also make sense from a business point of view, since it involves a venture that converts waste into a nutritious yet cheap source of food, thus providing an economic stimulus for job creation in rural areas. With a minimum of two jobs being generated per coffee farm for mushroom cultivation, there are a total of 51.2 million jobs available worldwide in this venture. Entitled the Pulp-to-Protein model, it has been tried and tested in Colombia by Cenicafé, the Colombian Coffee Growers Federation research institute. By scientifically converting coffee biomass into food, it has helped achieve direct and indirect employment for 10 000 people, along with ensuring food security. Many other ventures are also involved in this approach and are reaping the benefits from a sustainable approach to mushroom cultivation.

Source: Pauli, G. (2010), The Blue Economy: 10 Years, 100 Innovations, 100 Million Jobs: Report to the Club of Rome.

The share of employment in the services and manufacturing sectors (including agribusiness and agricultural services) is particularly important in South Asia. However, according to the ILO, on average 60% of the workers in the food and beverage industry are in the informal economy, often occupying precarious jobs. Non-farm activities can also be precarious, poorly remunerated and hazardous. Indeed, youth may be moving out of vulnerable work in agriculture into vulnerable work in the services industry. Those in rural areas especially tend to work as self-employed and casual wage labourers (ILO, 2015a). Many high-valued agri-food and non-food value chains are characterised by increasing levels of female participation (e.g. in Kenya, over 65% of workers in horticulture packhouses and farms are women) (da Silva et al., 2009). Promoting decent work in non-farm activities requires skills development, including in business management, technical skills, occupational safety and health, among others.

Box 3.5. Organic farming in Asia and the Pacific

Youth unemployment is a growing socio-economic challenge in Asia and the Pacific region, having increased by almost 5% between 2011 and 2013 to a rate of 11.3%, representing 33 million unemployed youth. In seeking productive employment opportunities and decent work, migration, either from rural to urban areas or outward to another country, is a popular choice among youth (UNESCAP, 2016). Young people with a certain amount of schooling do not see a future in pursuing a farming career. Often, they also do not possess the knowledge of their parents and grandparents. They are attracted to towns and cities by the prospects of taking on more prestigious employment.

The Asian Farmers’ Association for Sustainable Rural Development confirms that the number of organic farms has increased in the region and that mostly youth are involved in the promotion of organic farms (AFA, 2015a). For youth, organic farming provides some meaning in their work, as well as more opportunities for innovation and learning from old and new ways of farming. The global market for organic products continues to grow. The recent International Foundation for Organic Agriculture (IFOAM) report The World of Organic Agriculture: Statistics and Emerging Trends 2016 estimates that Asia has the third-largest market for organic products. Forty percent of the world’s organic producers are in Asia, followed by Africa (26%), and many countries in Asia are encouraging organic agriculture. While the focus has been on exports, there is also the potential for growth in domestic markets.

In Sri Lanka, the domestic market for organic products is expanding from urban communities to rural areas, where local communities are increasing their consumption of organic foods. In Viet Nam, domestic demand for organic products, particularly tea and vegetables, is growing. Building on the recognition that the market for organic products is expanding and organic farming is attracting youth, a series of initiatives focusing on skills development for youth to seize opportunities in the organic food market are being implemented in the Asia Pacific region.

Bhutan has committed to a 100% organic target, and organic farming is now seen as an attractive and better way of farming, with high school and college graduates choosing organic farming as a livelihood and a business opportunity (Willer and Lernoud, 2016). The Bhutanese initiative Organic Farmers Exchange Programme aims to reduce youth unemployment by promoting organic farming as a meaningful profession. The programme offers study tours and targets young villagers who will dedicate their lives to organic farming and village life. The intention is to facilitate integrated small-scale quality exchange by offering young, preferably female, Bhutanese farmers the chance to experience organic farming in Austria within a particular socio cultural context. Similarly, the Austrian farmers will be visiting the organic farms of their Bhutanese colleagues in order to understand the particularities of Bhutanese farming. The aim will be to establish a long-term connection and exchange at the farmers’ level to mutually benefit and strengthen the organic grassroots movement – highlighting differences as well as similarities. This will stimulate a growing awareness among young farmers that organic multi-resource farming is not an outdated activity.

ActionAid Thailand works with the Sustainable Agricultural Foundation and networks to promote organic farming. The project “Building Capacity and Expanding the Group of New Generation Farmers in the Methods of Sustainable Agriculture” supports young farmers’ capacity building on effective farming technology, such as local seed breeding and sharing experiences to replicate best practices and lessons learned among youth. It aims to develop and raise the level of a cadre of new-generation farmers to serve as peer leaders. The first phase of the project (2013-14) included the implementation of a training curriculum. The training included principles of sustainable farming; expansion of the farmers’ network through self-empowerment; primary collection and preservation of indigenous seeds and plants; analysis and development of markets for produce; distillation of the lessons learned from the sustainable farming plots; participation in lessons learned forums with others working in this area domestically and internationally (e.g. Viet Nam); and production of educational media in various formats. During this phase, five new-generation farmers were trained as peer leaders in organic agriculture in the Sanam Chai Khet district.

Ensuring social and environmental safeguards

Since the early 2000s, large-scale industrial agriculture has been promoted in tropical countries in response to the global increased demand for food, fibre and fuel (Biénabe et al., 2016). This has led to deforestation and the use of chemicals to increase productivity, to the detriment of biodiversity and the environment. Rising concerns over these issues and denunciations have forced multinational agri-food companies to ensure that they themselves and actors along their supply chain are applying responsible and sustainable methods of production and manufacturing. Multinational companies play an important role in ensuring inclusive value chains and also in training and hiring young people. Several guidelines and principles to ensure responsible business conducts exist, but these are not always applied.

The UN Global Compact is a framework with 11 principles covering the areas of human rights, labour, the environment and anti-corruption. By adhering to these principles, companies commit to a different approach to doing business and can make a positive impact on food systems and sustainable agriculture. As part of its decent work principle, the UN Global Compact community calls on businesses to promote entrepreneurship among young people and invest in youth-owned enterprises (e.g. by integrating them into their supply chains or providing venture capital to new enterprises). In 2014, the UN Global Compact launched the Food and Agriculture Business (FAB) Principles, the first set of six global voluntary business principles for the entire food and agricultural sector. One of the principles relates to the creation of decent work. UN Global Compact companies are invited to report on progress against the FAB Principles, but are not required to sign on to them.

FAO developed the first handbook on sustainable food value chain development, Developing Sustainable Food Value Chains: Guiding Principles (Neven, 2014), which provides practical guidance and shares innovative solutions emerging from the field. The handbook describes how to tackle value chain constraints one by one and how value chains create added value and growth loops (an investment loop, a multiplier loop and a progress loop), including by creating decent employment. The handbook suggests that as productivity of farm labour increases, opportunities for job growth will happen mainly in service provision further downstream in the food value chain (e.g. processing, trade) and in non-food value chains. As an example, the handbook mentions Blue Skies, a European fruit processing company which has operations in Ghana. The company invested in a processing and packaging plant which employs 1 500 staff, with around 60% permanent positions, and 40% of the management team is women (including the General Manager). The company pays almost four times the minimum wage and ensures a safe working environment for employees. Around 200 commercially oriented small-scale farmers and a few large plantation operations supply the produce. Blue Skies provides free training, free technical support and interest-free loans for inputs and equipment to small-scale farmers (Neven, 2014).

Youth-specific guidelines are starting to emerge, such as the Netherlands Development Organisation and the Royal Tropical Institute’s (KIT’s) principles to address youth- and gender-inclusive agri-food chains (Pyburn et al., 2015). In 2014, the Committee on World Food Security developed the Principles for Responsible Investment in Agriculture and Food Systems, in which Principle 4 is to engage and empower youth (OECD/FAO, 2015). In 2015, the OECD and FAO developed guidance to help enterprises observe standards of responsible business conduct to ensure that their operations do not lead to adverse impacts, but contribute to sustainable development. This guidance integrates the dimensions of child labour and youth employment: “Provide appropriate training, education and mentorship programmes for youth to increase their capacity and/or access to decent work and entrepreneurship, and promote access to training by women” (OECD/FAO, 2016).

Raising the voices of rural youth in policy dialogue

While many countries have renewed their commitment to support youth employment, the role of agriculture in employment for young people has not yet been translated into public policies (AGRA, 2015). The integration of youth in agricultural sector policies remains a challenge. The State of Youth Policy in 2014, produced by the Youth Policy Press, indicated that despite advances in most countries, a number of challenges remain, including funding, as well as legal and institutional frameworks (AGRA, 2015).

Participation of young women and men in the design and implementation of policies is an important part of ensuring that their needs and aspirations are taken into account. Little information is available on the level of participation of youth in policy processes related to agriculture and rural development, especially at national level. But in 2012, the United Nations Inter-Agency Network on Youth Development, through a survey of the 13 000 respondents representing 186 countries from all regions around the world, found that young people, especially those from rural areas, have limited opportunities for effective participation in decision making processes (AGRA, 2015).

The first barrier is that youth may be perceived as having little capacity to shape their own destinies (AGRA, 2015), and in certain cases are not allowed to speak out or voice their concerns. It is even more challenging for women who face traditional norms excluding them from any decision making process. When looking at youth participation in policies, different dimensions need to be considered: who represents youth, how they participate and in which processes they participate. For agricultural policies to be more conducive to youth, youth representation needs to match the diversity of this group, as they may require different sets of interventions to facilitate their engagement in different segments of the agriculture value chains.

There are different levels of participation; the UN Youth programme (MIJARC/IFAD/FAO, 2012) identified five: providing information, consulting (decision maker initiated), consulting (youth-initiated), shared decision making or co-management, and autonomy. There is still a long way to go to reach the shared decision making and autonomy end of the continuum. Rural youth need to acquire certain skills, e.g. communication and leadership, in order to feel more confident and participate actively in policy dialogues. They also need to be supported in order to better understand existing policies, so that they are able to provide inputs that will make those policies more responsive to their needs. These skills are also important within youth groups/organisations to build trust and a common voice, as well as when partnering with other organisations.

By organising themselves in youth-only organisations or joining existing mixed organisations or networks, youth can find sustainable channels to get their voices heard at the local and national levels. However, there are still a small number of organisations representing only rural youth, and they often lack resources and bargaining power. But some examples can be inspiring.

This is the case of the network of young producers and agricultural professionals of Togo (REJEPPAT), created as a youth college within a national producers’ organisation. Beyond its participation in drafting national policy on access to land for youth and women, REJEPPAT’s lobby resulted in the state clearing farmland and supporting rural youth setting up in farming. When supporting these organisations (youth-only or mixed), special measures need to be taken to build the capacity of rural youth groups and to facilitate young women’s participation, e.g. setting quotas in membership and raising awareness among men (FAO/CTA/IFAD, 2014).

In Cambodia, the Farmer and Nature Net has established a youth committee, which is represented on its board. The young farmers are also being developed into young leaders and farmer entrepreneurs (AFA, 2015a). In the Philippines, the Asian Farmers’ Association for Sustainable Rural Development is pushing for the crafting of a Magna Carta of Young Farmers that will recognise the aspirations of young women and men farmers and promote their roles and contributions to family farming. The proposed bill will protect the rights of young farmers aged 15-40 years; establish programmes for young farmers, e.g. agriculture-sensitive educational curriculum and broader scholarships for all agriculture-related courses; promote “farm take-over” schemes; and institutionalise young farmers’ representation in all agricultural policy-making bodies and other agencies with reserved seats for youth (AFA, 2015b).

An initial step from the government side to include youth in agricultural policy dialogue is to make the participation of different youth groups systematic in consultations (and provide resources to support this participation) giving them space to examine existing policies and evaluate alternatives. Ultimately, youth are the best experts when it comes to expressing the challenges they face, deciding on their priorities for the future and designing solutions. Co-ordination between different ministries (youth, agriculture, labour, trade, social protection, etc.) should also be enhanced to support integrated and co-ordinated approaches that facilitate youth’s engagement in the agriculture and agri-food sectors, and support decent work. Too often, sectoral and youth ministries act independently on issues that affect youth, thereby affecting the identification and allocation of sources of funding targeting youth and governments’ capacity to monitor and evaluate the impact of their interventions (Youth Policy Press; AGRA, 2015). Concerted national dialogues and efforts should also include non-governmental organisations (NGOs), development partners and the private sector, especially when targeting special value chains.

The Global Initiative on Decent Jobs for Youth was launched in February 2016 in New York, under the auspices of the United Nations Economic and Social Council (ECOSOC) Youth Forum 2016, with more than 20 ministers of youth and over 500 youth delegates in attendance. The objective of the Initiative is to facilitate an extensive partnership with governments, businesses and youth organisations, with a view to promoting new employment opportunities and helping young people acquire the appropriate skills. The Initiative includes a focus on promoting decent employment opportunities for young people in agriculture and in the rural economy. While agriculture cannot be the only answer to youth employment, for those who decide to engage in the broader agricultural sector, this focus on rural economies, if followed by appropriate financial and political actions, can provide concrete answers for rural youth.

Providing skills development and second-chance programmes for rural youth

Large skills gaps go hand in hand with low-productivity employment opportunities and act as a major impediment in economic development. Despite high unemployment and underemployment rates in many developing countries, private sector employers struggle to find qualified candidates to fill posts, even in promising sectors where labour demand is high. At the same time, the large number of low-educated and low-skilled employees, particularly in the informal sector, widens the productivity gap. In sub-Saharan Africa, 58% of 15-17 year-olds have already left school and in North Africa this figure is 25%. Traditional technical and vocational education and training (TVET) programmes either fail to reach out-of-school and low educated youth or do not provide training in subjects that are relevant for the labour market. The average vocational training enrolment rate by secondary school students in Africa is only 10% and only between 2% and 6% of educational budgets are earmarked for TVET.

Despite the potential for new jobs in agri-food value chains and non-farm activities in rural areas, the majority of rural youth in developing countries are low educated and low skilled. Skills mismatch, mostly related to underqualification, hinders attempts at moving up the value chain or getting better jobs. Various training modalities exist (Table 3.1) and while there are plenty of evaluations and analysis on traditional TVET programmes, not much is known about the role of the private sector, especially small and medium enterprises and informal businesses, in youth skills development.

Table 3.1. Training modalities in developing countries

Training modalities	Strengths	Weaknesses
Public training centres	- have a capacity to deliver courses in capital-intensive trades - follow-up national policies and may address priority skills needs, support national economic and social development	- often inflexible and irresponsive to market demand; routinely deliver the same courses without regard to demand - tend to deliver courses with outdated curricula - commonly underfunded, with serious impact felt on quality and access - overly centralised training systems leave institutions little freedom for flexibility and initiative - unable to offer broad access to training, due to limited seating capacity and financial constraints - do not reach low-skilled and out-of-school youth
NGOs	- important providers of training in many African countries - commonly provide training for vulnerable groups free of charge or for low fees - high proportion of women in training - better managed and more responsive to labour market needs and graduate employability	- show large variation in quality - tend to focus on training requiring low capital investment - often fragmented and not part of a coherent skills strategy
Private training providers	- fastest growing segment of training provision - able to absorb the growing demand for technical education and skills training flexibly	- the range of programmes and quality of delivery vary and may be rather low - high tuition fees tend to exclude the poorest segments of the population - more operationally flexible and less responsive to the market demand for skills
Traditional apprenticeship	- major training avenue in the informal economy - based on on-the-job instruction and show high relevance to actual job requirement in the informal economy - offer training opportunities to the poorest and least educated segments of the population - self-financed and self-regulated - in general, very effective and large coverage among out-of-school youth	- training is often of poor quality and generally does not integrate technical innovations - requires long periods for acquiring a trade - skills acquired are often limited to the demands of the informal economy and may be unsuitable to the needs of modern industry - there are acute problems of signalling acquired skills to potential employers, since most training is carried out in the informal sector and is not recognised
Enterprise-based training	- self-financed and self-regulated - based on actual tasks performed by workers - closely linked to existing production technology	- mostly provided by large firms, where it targets highly skilled positions and workers with highest level of education - small participation of small and medium enterprises (SMEs) - do not reach low-skilled and out-of-school youth

Source: Adapted from AfDB/OECD (2008).

SMEs offer great potential for youth skills development. In Africa, SMEs create the majority of jobs (AfDB/OECD/UNDP, 2017). As such, the potential for these actors to train young people and hire them is tremendous. However, SMEs are reluctant to invest in training youth because the costs are immediate but the benefits only accrue over time; moreover, the risk of trained workers being poached by other firms is high (DEG/BCG, 2016). Thus far, private sector participation in training remains largely limited to multinational and large domestic firms (Table 3.2). Evidence suggests that employers’ direct involvement in training is an effective way to equip young people with soft and hard skills needed to close the skills gap (Glick, Huang and Mejia, 2015.). Little information exists on incentives that work for SMEs to contribute to youth skills development, as few of them participate in training, and also because many operate in the informal sector. More incentive schemes to involve SMEs in rural youth skills development should be provided.

Policies and public and private investment can be designed to intentionally support SMEs and local value chains that create decent youth employment. Policies and programmes can support the strengthening of smallholders and small and medium agribusinesses and create specific incentives for youth, for example by supporting and legally empowering youth co-operatives and youth participation in mixed co-operatives, and providing financial and/or technical support to businesses that hire young people. Employment services should also support motivated young entrepreneurs in rural areas to develop new value-added products and services along the agri-food value chain. Access to finance and social protection will be crucial to enable rural youth to become entrepreneurs and develop SMEs.

Table 3.2. Constraints and incentives for private sector engagement in TVET programmes

Firm size (formal or informal)	Type of training provided	Desired level of education of candidates	Level of firms’ engagement in TVET	Incentives for firms	Constraints for firms
Multinationals (formal)	Skills training Entrepreneurship promotion	Higher education Secondary education	High to medium	Corporate social responsibility; direct productivity or commercial benefits (i.e. to have a better skilled workforce or more reliable supply and distribution networks for their in-country operations) Tax rebates	Finding qualified candidates
Domestic firms (formal)	Skills training (manufacturing and services) Job placement	Higher education Secondary education	Medium	Skilled workforce Tax rebates	Finding qualified candidates High cost High turnover rate
Domestic SMEs (informal)		Secondary education	Low	Skilled workforce Subsidies/vouchers to upgrade and formalise apprenticeship systems Collective training in order to lower costs	High costs relative to benefits Lack of information Lack of technical and administrative resources High turnover and risk of trained workers being poached by other firms
Micro firms (informal)		Low	Low	Receiving training themselves	Collective engagement in organising and financing interventions is difficult, due to diversity and large number of micro firms. Fear of competition by more qualified apprentices

Source: Authors’ own elaboration.

Box 3.6. Developing entrepreneurial culture and skills: UNIDO’s Entrepreneurship Curriculum Programme

UNIDO’s Entrepreneurship Curriculum Programme (ECP) is a cost-effective investment in the development of entrepreneurial capacity of young people. ECP is inclusive since it reaches out to both girls and boys in rural and urban areas.

Entrepreneurship is introduced as a subject in general secondary schools or technical and vocational schools on a nationwide basis. Universities and colleges serve as centres of excellence to support national efforts to promote entrepreneurship and technology absorbing capacities. Young people acquire personal qualities such as self-confidence, innovation and creativity, the ability to take initiatives, as well as the willingness to take calculated risks and to collaborate. They learn to save, invest and grow. These competencies help them select and shape their career path as employees or entrepreneurs.

The curriculum is action-oriented: more than 50% of the programme's time consists of practical research in identifying business opportunities, assessing resources for setting up and steering a business, and learning from successful entrepreneurs in their companies and in the classroom.

UNIDO assists authorities in developing their own curriculum with syllabus, teachers’ guides, textbooks, monitoring and evaluation tools, assessment guidelines, training ECP teachers, piloting and ultimately embarking on a nationwide roll-out of an entrepreneurship curriculum with the initiatives of the national authorities.

Several countries are currently implementing ECP, and more are preparing for it. With its expertise and international knowledge network, UNIDO supports the development of each country’s own ECP. An important factor for success is the building of partnerships with the local private sector.

UNIDO also supports the efforts of national authorities in improving the performance of public services to encourage entrepreneurs to start and operate businesses. The goal is to create an environment conducive for an entrepreneurial society where initiatives by existing and potential entrepreneurs can unfold, and lay the ground for private sector development.

Source: ECP website, https://www.unido.org/our-focus/creating-shared-prosperity/agribusiness-and-rural-entrepreneurship-development/entrepreneurship-curriculum-programme.

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Notes

← 1.  http://reports.weforum.org/enabling-trade-from-valuation-to-action/enabling-trade-from-farm-to-fork/a6-case-studies-f2f/nigerian-cassava-flour-broadening-value-chains-for-traditional-crops/.

← 2.  http://www.fao.org/rural-employment/resources/detail/en/c/389287/.