Social change, Out-migration and Exit from Agriculture Dirgha J. - PDF document

Social change, Out-migration and Exit from Agriculture Dirgha J. Ghimire William G. Axinn Prem Bhandari Population Studies Center Institute for Social Research University of Michigan * Direct correspondence to Dirgha J. Ghimire at Institute for Social Research, the University of Michigan, 426 Thompson St., Ann Arbor, MI 48106-1248, email: nepdjg@umich.edu. The authors thank all the staff of the Institute for Social and Environmental Research in Nepal. Finally, the authors also thank the Economic and Social Research Council under Award No. ES/L012065/1, DFID-ESRC Growth Research Programme for their generous support for this research. All errors and omissions in this manuscript are the sole responsibility of the authors. 1

Abstract Though international labor migration has become widespread, there is relatively little scientific evidence regarding the consequences for economic change in sending countries in general, and in the densely populated rural agricultural areas of Asia in particular. We examine the influence of outmigration and migrant remittances on agriculture change in Nepal. The literature offers two opposing views of the consequences of outmigration for agriculture change: (1) loss of farm labor reduces engagement in agriculture, vs. (2) loosening credit constraints from migrant remittances increases engagement in agriculture. Of course it is entirely possible that both of these mechanisms could operate at the same time. Using multilevel dynamic models we estimate the effect of outmigration and remittance by members of agricultural households on subsequent exit of those households from agriculture. The results show that outmigration increases the hazard of exit from agriculture. The amount of remittance, on the other hand, substantially decreases the hazard of exit from agriculture. These results are robust against several key variations in model specification. 2

Social change, Out-migration and exit from Agriculture International labor migration has become widespread, with important social and economic consequences for both sending and receiving populations. In 2015, 244 million people, or 3.3 percent of the world's population, lived outside their country of origin (UN 2016). Unfortunately there is relatively little scientific evidence regarding the social and economic consequences of this migration for the sending populations. Massive labor out-migrations from the densely populated rural agricultural areas of Asia have the potential to create watershed changes in engagement in agriculture, the social organization of productive activities and the food supply resulting from those activities. But long term longitudinal studies of these sending populations are rare so these potential consequences remain undocumented. Here we use long term, multilevel panel data from rural Nepal to provide new information regarding the consequences of international labor migration for the sending populations. In many rural agrarian societies—which are home to a majority of the world’s population—both agriculture and labor outmigration are key livelihood strategies. More importantly, consequences of the massive international migration on poor agricultural setting are a primary concern in the policy arena 14 . A large body of literature has now documented important multidimensional influence of migration on subsistence agriculture. We focus on one specific, but crucial consequence—the impact of labor outmigration on exit from farming . Even though exit of small farm holders from farming in highly mechanized agricultural settings may lead to consolidation of farm land and potentially lead to increase in agricultural productivity. In much of subsistence agricultural settings with no or low farm mechanization, exit from farming generally results into conversion of agricultural land into non-agricultural land such as fallow, regeneration of forest or into built in environment (road, public infrastructure, residential area). This loss of agriculture land has potential for lower agricultural production, primarily food, 3

which is connected with one of the world’s epidemic problems: food security . The UN World Food Programme (WFP) reports that 110 out of 210 countries—primarily poor countries with subsistence agriculture—are facing food security problems and this number is expected to continue growing 15 . Knowing the influence of outmigration on exit from farming in subsistence agriculture settings will provide new insights into growing global food security problem. The consequences of out migration for rural, agricultural sending areas are hypothesized in two potentially opposing ways. First, the lost labor hypothesis predicts that out migration causes shortages of farm labor which will be associated with declines in agricultural production, decreased participation, or complete exit from agriculture (de Brauw 2007; Jokisch 2002; Adhikari 2001). Second, the financial credit hypothesis predicts that the inflow of remittances from migrants will encourage investments in agricultural improvement, including agricultural technology use, stabilizing or even increasing engagement in agriculture (Mendola, 2008; Quinn 2009; Jokisch 2002; Sharma and Gurung 2009; Pant 2008; Rivera, Jose 2005; Seddon 2004; Stark and Bloom 1985). We argue that both processes could occur simultaneously. We also argue that because migrant remittances may encourage farm mechanization that creates surplus labor that may encourage additional out migration (Massey et al 1988) scientific investigation of these relationships must use carefully constructed longitudinal measures to account for the potential reciprocal associations between migrant remittance and agriculture change over time . The empirical demands for adjudicating among these associations are high, limiting the ability of previous research to investigate these relationships. Jasso et al. (2000:127) write, “[i]n perhaps no other area of demographic and social science research has there been such a persistently large gap between information needs and existing data. Consequently, many fundamental questions remain unanswered.” The lack of sufficient data for the study of migration 4

has been lamented for several decades (Bilsborrow et al. 1997; Durand and Massey 2006; Fawcett and Arnold 1987; Jasso et al. 2000; Levine et al. 1985; Massey 1987; Massey and Capoferro 2004). Comprehensive panel measures of sending communities and households with temporally ordered measures of migration, remittance and agricultural change are necessary for assessing these relationships (Adams, 2011). The study we report here is a rare exception, with the long-term household and community measures to investigate the consequence of outmigration and remittance for agricultural change. This study makes several important advances in our understanding of the relationship between international migration and agricultural change in rural agrarian settings. First, uniquely detailed neighborhood history calendar measures provide information to account for effects of preceding community context on both subsequent labor migration/and exit from agriculture. Second, household registry measures of migration with monthly precision provide the time order of moves across a decade of high international labor migration. Third, an innovative household agriculture and remittance calendar provides the temporal ordering of agricultural change and reception of remittances across the same ten years. Together these unique measures from rural Nepal provide an unparalleled window into the consequences of international labor migration for agriculture in the densely populated rural regions of Asia. Theoretical framework Careful investigation of associations between international labor migration and sending population outcomes in general, or sending population agricultural practices specifically, requires theoretical consideration of two complex topics. The first, of course, is theoretical consideration of the likely mechanisms linking international migration of household members to subsequent household decisions among those who remain behind. In the case of sending 5