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Additional resources for Agricultural Policies for Poverty Reduction
2). For most middle income (transforming) countries, the decline in agriculture's share of employment has been more rapid than the fall in the sector's share of GDP, reflecting stronger gains in labour productivity in agriculture than in other sectors, and more rapid increases in labour demand outside agriculture (Johnson, 2000). The labour adjustment has been larger for upper-middle income countries than for lower-middle income countries such as India, as alternative employment possibilities have become more widely available and the transition of labour out of semi-subsistence farming is more fully underway.
Improving the competitiveness of farrn households Income diversification for farm households and salaried agricultural workers Income diversification is essential for many farm households. For the poorest farm households, this is likely to provide some insurance and is in effect a "coping" strategy. For other farm households, having one or more family members draw income from outside agriculture may be the start of a successful move into more remunerative activities. Policies that support farm income alone, such as market price support, act as a disincentive for income diversification outside agriculture, and create an obstacle to one of the key "adjustment pathways".
In few cases, however, have policy makers openly acknowledged that long-term competitiveness is not a realistic goal for the majority of smallholders and decided to focus their programmes on potentially viable operations. At the same time, there is no documented case of a smallholder programme in which the majority of farmers enrolling have succeeded in progressing through the programme to successfully join the ranks of efficient commercial producers. In other words, no programme has reversed the structural tendency for smallholders to leave the sector.
Agricultural Policies for Poverty Reduction by OECD Publishing