Evaluating De-Agriculturalization Patterns: Insights for Economic Sustainability and Policy Recommendations

Abstract

Objective: The research aims to analyze the transition from agriculture to non-agricultural activities in rural areas, focusing on the socioeconomic implications of this shift.

Research Gap: The study addresses the limited research on the de-agriculturization process in rural areas, particularly the socioeconomic outcomes for households that transition away from agricultural activities.

Design/Methodology/Approach: The study employs a mixed-method approach, combining quantitative data analysis with qualitative interviews to assess the impact of de-agriculturization on rural households. Using data from the World Bank on employment and output shares in agriculture and industry from 1991 to 2021, the study applies convergence criteria to determine the possibility of convergence in labour and output shares in the agricultural sector. Additionally, the study employs the Cobb-Douglas production function model to measure employment elasticities concerning agricultural output

The Main Findings: The research finds that de-agriculturization leads to both positive and negative socioeconomic outcomes, with some households experiencing improved income levels while others face challenges in adapting to non-agricultural employment. The findings contribute to the understanding of rural development by highlighting the complexities of economic transitions. Practically, the study suggests the need for targeted policies to support households in rural areas during the shift away from agriculture.

Originality/Value: The research is valuable as it provides a comprehensive analysis of the de-agriculturization process, a topic that has received limited attention in the context of rural socioeconomic development.

Critical and Policy implication: Therefore, the authors recommend that policymakers implement policies to support the agricultural sector, such as increasing investment in agricultural infrastructure, managing water resources, building dams, and promoting research and development to improve agricultural practices.