Rethinking the Role of Agriculture in Development: An Analysis of South Asian economies

Dasgupta argues that South Asia has one of the highest shares of employment from agriculture and allied activities in the world. The current figure of approximately 42% is second only to sub-Saharan Africa where the share is almost 50 per cent. 

The mainstream academic and policy literature has regularly identified this high share of employment in agriculture in conjunction with the relatively low share of output from agriculture, as an indicator of slow or stunted structural transformation with detrimental implication for the development process. The solution is often located in enhancing the rate of growth and generating more avenues for productive employment outside agriculture or in other words, reviving the structural transformation process along the historical trajectory witnessed in the now developed economies.

In this Development Research Seminar, Professor Dasgupta suggests that the role of agriculture in contemporary development needs a serious rethink. Drawing on his earlier work (Dasgupta 2021; Banerjee and Dasgupta 2025), he argues that although the importance of agriculture for generating investible surplus or in supporting non-agricultural demand has receded somewhat in recent times, the sector continues to be critical for fulfilling three functions:

• supplying cheap food
• supporting (often marginal) livelihoods 
• regaining planetary ecological balance

Of these, only the food provision role of agriculture was part of the traditional thinking in developing economics.

The importance of agriculture as a source of livelihoods and its potential as an ecological ‘stabiliser’ are borne out of contradictions in contemporary capitalism that have become apparent in the last few decades. 

In his presentation, Dasgupta will use the case of four labour surplus countries in South Asia - Bangladesh, India, Nepal and Pakistan - to illustrate how these roles of agriculture play out specific contexts and propose a framework for public policy to facilitate them.