Understanding Work and Employment

The different ways employment figures are calculated has an impact on small-scale agriculture — Some thoughts

Photo: © Toby Richards, ETP 

Impact measurement of GIZ employment promotion in small-scale agriculture is supposed to ensure comparability across countries and to enable aggregated impact measurement. Inin day-to-day project application this however proves to be a difficult undertaking. There are no company-wide standards on qualitative or quantitative requirements that a newly created job should meet; no uniform definition how many annual working days should be considered as employment equivalent to that of a full-time job.

A common definition of decent rural employment and standardised measurement of employment creation should enshrine quantitative (number and intensity of employment opportunities) as well as qualitative (i.e. employment conditions, income, safety) dimensions of employment. 
With regard to employment quality, newly created jobs have to ensure decent employment conditions and to comply with ILO’s core conventions on labour and other international standards. In addition, decent rural employment should provide an adequate living income while allowing for sufficient time for rest (i.e. on average, a normal work week, without overtime and public holidays, should have a maximum of six working days and a daily working time of no more than 8 hours). 
With regard to employment intensity, employment measurement in small-scale agriculture is often faced with the challenge to convert seasonal or incremental employment creation into indicators for full-time equivalent job creation, which are comparable across countries and projects. Common practice in current GIZ projects is the use of 225 effective annual working days as a full-time equivalent. In general, a full-time equivalent can be defined as the amount of actually effective working days usually spend in a full-time job per year after all days spend off-work are subtracted (i.e. vacations, weekends, sickness, etc.).

Measurement of additionally created employment through employment promotion in agriculture

In small-scale agriculture, employment is typically promoted by intensifying production, which is usually linked with increased inputs (improved seed, fertilizer, weeding) and associated costs, additional labour input and higher yields. Additional labour input means a higher amount of working days to cultivate the same area of farmland (the case of intensification via mechanisation is not considered here). Consequently, a smallholder farm will have to provide a bigger share of household labour when intensified production methods are adopted thereby providing increased on-farm employment opportunities for the household (i.e. more working days). Given that many smallholders are rather underemployed than unemployed, intensification is therefore most likely to result in an incremental increase of working hours in already existing jobs on smallholder farms without creating many new working places.

To calculate the net employment effect of intensification projects, the number of additional working days caused by intensification have to be aggregated, while taking into account potential substitution effects between newly created and already established working opportunities. For example, smallholder farmers whose labour force is not fully absorbed by on-farm cultivation of cash crops might be engaged in other income generating activities outside the farm or pursue other on-farm activities such as subsistence farming of food crops or livestock keeping. If the household is not significantly underemployed before the intervention, intensified cultivation with higher labour input would lead to a significant reduction of other income generating activities, as the absolute labour supply of a smallholder household is limited. If nobody from outside the farm household is employed, the household would substitutes other income generating activities on and off-farm with more profitable but also more time-consuming intensified cultivation of targeted crops. Consequently, the net increase of working days caused by the intervention might be lower than the absolute increase of working days in the targeted area of production. While this effect is very difficult to measure, this trade-off needs to be considered when calculating the typical increase of working days on a smallholder farm within the target group.

To aggregate the net employment effect of an intensification project, the number of targeted farms is multiplied with the typical net increase of required working days on an average farm caused by intensification. The total amount of additional working days is then divided by 225 days as a full-time equivalent and results in the number of additionally created full-time equivalent jobs.

While simple on paper, this calculation method is quite challenging in praxis. It is, for example, particularly difficult to record the substitution effect since required data is often lacking and the typical extent of this effect is mostly unknown. In the case of countries or regions with an agrarian structure of very small land holdings one can assume that households tend to have free labour capacity. There one could justify that expected labour substitution effects are negligible. However, where more land is available and where thus labour availability becomes a limiting factor, one may need to undertake particular surveys before and after the intensification intervention in order to work out the substitution effect and to include it in the calculation. In such labour studies one should investigate the labour capacity of households in general (persons, sex and age engaged in agricultural and off-farm work) and inquire in particular which production systems (crops, livestock) and activities (land preparation, fertilizer application, weeding, harvesting) have increased and which ones have decreased. Further, it should be assessed if employment of external labour, i.e. non-household labour, has been increased or reduced.

Further reading


Veronika Däges, Veronika.daeges@giz.de
Section 4D30 – Rural Development, Food and Nutrition Security

Eberhard Krain, eberhard.krain@giz.de
Section 4D30 – Rural Development, Food and Nutrition Security