Droughts have a significant negative impact on the growth of agricultural labour productivity of countries that face persistent rainfall shortages such as Burkina Faso and Cameroon. New research evaluates their impacts by the means of a counterfactual: how would the economy have behaved if there were no droughts? The results indicate that in the absence of droughts, the share of workers in agriculture would be considerably lower, which would raise overall growth prospects.
In sub-Saharan Africa, agriculture represents a major sector of the economy: 53% of workers were employed in this sector in 2014. In the region, rainfed farming dominates agricultural practices, covering around 97% of total cropland such that almost the entire production relies solely on rain for water.[1] Since the 1980s, several countries in sub-Saharan Africa have experienced episodes of long lasting droughts and most of them occurred concomitant with periods of economic stagnation.
The new research quantifies how important were these droughts for a group of sub-Saharan economies, focusing on how they interact with the structural transformation process of the economy – that is, the reallocation of workers between the agricultural and non-agricultural sectors – and on aggregate labour productivity.
The work builds on the ‘food problem’ idea that dates back to Schultz (1953):[2] until countries can produce a sufficient amount of food, labour is trapped in agriculture and cannot start the process of modern economic growth.
If a shortage in rainfall reduces agricultural production, then periods of prolonged droughts delay the reallocation of labour away from agriculture. And because the non-agricultural sector is much more productive, postponing the reallocation of labour to this sector has large impacts on aggregate labour productivity. In other words, droughts trap workers in agriculture and reduce the prospects of economic growth.
Cross-country estimates indicate a significant negative impact of droughts in the growth of agricultural labour productivity of countries that faced persistent rainfall shortages such as Burkina Faso, Cameroon and others. The study evaluates their impacts by the means of a counterfactual: how would the economy have behaved if there were no droughts?
The results indicate that droughts can have substantial impacts. For example, in Burkina Faso, the share of workers in agriculture would be 4.5% lower and aggregate labour productivity would be 22.4% higher than observed in 2014. In Cameroon that has been suffering with large droughts more recently, the share of workers in agriculture would be 2% lower and aggregate labour productivity would be 12% higher.
The results of the study indicate that climate may have sizable impacts in poor economies. At a broader perspective, the results are associated with the research on climate change, for example. Severe and persistent droughts are likely to become more common in face of climate change and the experience of sub-Saharan Africa in the past forty years gives us a better understanding of the potential impacts on poor economies.
ENDS
References
[1]See Calzadilla, A., T. Zhu, K. Rehdanz, R. Tol and C. Ringler (2013), ``Economywide impacts of climate change on agriculture in Sub-Saharan Africa,'' Ecological Economics, 93(C), 150--165.
[2] See Schultz, T. W. 1953. The Economic Organization of Agriculture. New York: McGraw-Hill.
Contact:
Marcos Thiago de Araújo Marcolino
Postdoctoral researcher at the Potsdam Institute for Climate Impact Research
Email: marcosma@pik-potsdam.de
Website: https://sites.google.com/site/marcosaraujomarcolino/
Phone: +49 176 20277742
Twitter: @marcosthiagoma