[url=http://vnmanpower.com/en/search-blog/Labor%2520market.html]Labor market[/url] plays a key role in determining employment and income levels in rural areas. While agriculture cannot be expected to absorb all of the rural labor force, its direct contribution to the generation of employment, including wage employment and its indirect contribution through greater diversification of the economy, are critical. There are more workers in waged employment in agriculture today than at any time. In other words, as the agricultural sector is undergoing a process of concentration of ownership, leading to fewer and bigger farms with a higher number of waged workers- as opposed to a sector based on smaller production units and self-employed farmers-waged workers become central to agricultural production.


In 1996, the highest average shares of waged employment were found in Eastern and Central Europe and Central Asia (over 80%), followed by Latin America and the Caribbean (over 50%), Asia (over 40%) and sub-Saharan Africa (30%), Organization for Economic Cooperation and Development countries (35%) and Near East and North Africa (25%).

Four major elements affecting wage levels in agriculture can be identified:

- Agricultural growth
- Food prices and food security
- Labor supply
- Minimum wages

Agricultural growth

Agricultural productivity growth can translate in a sustainable reduction of hunger and poverty, as farm incomes rise following productivity increases. Increased farmers’ incomes and higher agricultural workers’ wages create increased demand for basic non-farm products and services in rural areas. Positive changes in wage rates seem instead to be associated with bargaining by agricultural workers or with the availability of alternative work opportunities. Despite the nominal gains, real wages have in fact deteriorated as consumption goods that were earlier available free of cost (water, fuel, fodder, wild vegetables and river fish) are now becoming marketable commodities.

Food prices and food security

Worker households often spend over 70% of their cash wage on food. Rising food prices can push significant numbers of waged workers and their families below, or even further below, the poverty line. Improving earning power and livelihoods and ensuring food security are closely linked issues for agricultural workers and their trade unions. Because of low earnings, agricultural workers lack the purchasing power to buy sufficient food from the market. Furthermore, changes in crop patterns from staple food grains towards higher priced cash crops have worsened food insecurity for many worker households. The unions believe that dependence on imported food is likely to increase, eventually leading to lack of food sovereignty.

Labor supply

Real increases in wages are closely associated with rising labor absorption in agriculture, or land-augmenting agricultural practices based on higher cropping intensity, stimulated by investment in irrigation. Robust agricultural growth, fuelled by exports, can also be an important means of real wage increases.

Minimum wages

National or sectorial statutory or negotiated minimum wages aim to protect the most vulnerable and lowest paid workers so as to guarantee a living wage to all workers. As collective bargaining is often weak in agriculture, some form of national wage-fixing machinery, involving government, can be important to set minimum wage levels.

Enforcement of minimum wages is widely thought to be difficult if not impossible in rural areas in view of the extent of surplus labor and widespread unemployment. The largely informal nature of labor contracts in agriculture seems to preclude the possibility of enforcing a non-market determined minimum wage.

Unfortunately, no comprehensive survey or data sources are available to enable any assessment of minimum wages in agriculture.

Source: Factors Affecting Wages of Agricultural Worker

Nice one man

Thank you. I appreciate that you find it's useful