Labour productivity in manufacturing industry is commonly three or more times larger than that in agriculture in developing countries (Szirmai 2012), so that when labour moves from farm to factory, output rises rapidly. This is why it has long been thought (see, for example the ideas of Lewis 1958) that developing countries could, by industrialising, grow much faster than already industrialised countries. East Asia in the second half of twentieth century has shown, with a vengeance, just how powerful this motor of development can be. Late industrialising countries have grown far faster than the early industrialisers did (Szirmai 2012).

But what if the attractions of manufacturing lead to a mass exit of labour from agriculture and loss of production on farms? This has usually not happened: labour productivity on farms has risen sufficiently to ensure that agricultural growth has at least matched population growth in industrialising countries. What’s more, in many cases, with China as the prime example, a burst of agricultural development took place before the take-off of manufacturing, thereby making it possible to shift labour from farm to factory, while agricultural output increased rapidly enough to hold down food prices – to the great benefit of urban workers (Tiffin & Irz 2006).

What does this imply for agriculture?

Agriculture plays a remarkably important role in these transformations: remarkable because agriculture is the sector in relative decline.