Hari Sharma

Globalisation has brought with it a trend of rampant migration across the world with unexplored consequences especially for the developing economies. In the last decade, the exodus of labour from Nepal has been unprecedentedly very high, and this trend has been further pushed by sluggish economic growth and political instability.

As of 2010, there were 1.6 million Nepalis (5.9 percent of the population) working abroad. Foreign employment has been credited for bringing down the poverty level from 31 percent to 25 percent during the period 2004-05 to 2010-11.

However, its long-term consequences on our economic growth has been overlooked. It is said that foreign employment generates financial and human capital, and that remitttance increases domestic industrial production. Considering the country’s soaring imports, it is doubtful if foreign employment has helped domestic industry. Imports ballooned from Rs 115,687.2 million in 2000-01 to Rs 396,175.5 million in 2010-11.

The trend matched a surge in remittance from Rs 9,797.6 million to Rs 232,963.2 million during the same period. Furthermore it’s astonishing to note that the import value of daily consumption goods jumped almost 600 percent. Remittance plays a significant role in maintaining the BOP, but we have to understand that it is no panacea for economic development as most of the money is spent on daily consumption, not economic development.

The beneficial effect of foreign employment on agriculture also remains to be seen. Most of the migrant workers going to India, the Gulf and Malaysia come from the farm sector. As a result, agriculture has been suffering from a shortfall in labour and lack of technological growth, inputs and resources. Before developing any specific strategy, it is necessary to understand better the mechanism via which migration affects the farm sector and thus economic growth.

There is ample evidence to prove that a shortfall in the labour force in the agriculture sector has affected rural farm production. Migration is taking away a substantial proportion of the young male working population from the agriculture sector. Evidence reveals that people between the ages of 18 to 39 years are mostly involved in migration for employment.

Although migration adds to the household income, it simultaneously leads to a moral hazard problem as assured income in the form of remittance generally acts as a disincentive to the rest of the family members to work more in the agriculture field. Also, migrant labout remittance reduces the need for physical work in the agriculture field.

My recent research on the effect of migration on food security in Karnali zone illustrates how labour migration has affected the agricultural production of migrant households more than that of non-migrant households. I have found that rural households are unable to find hired labour to replace family members working abroad. In most cases, households are reluctant to use hired labour due to higher costs. This study suggests that households having a member working abroad is more likely to exhibit a fall in agricultural production than non-migrant households when controlling land and other relevant household variables.           

In addition, the selectivity and effect of migration are unlikely to be gender neutral; it particularly changes the role of women in the household once a male member migrates. Therefore, the effect of male migration is not only limited to a fall in productivity on the part of male members. It also affects the women’s own farm productivity due to the addition of one more responsibility of farm management.

Women, thus, are increasingly left with the task of farm management including overcoming production constraints caused by the absence of male members of the household. This trend has led to a feminization of agriculture.

Similarly, focused group discussions held as part of my research have revealed significant changes in the role of women in a migrant household. Women are required to work longer hours, but they show a lower farm production because they find it difficult to replace the physical competence of men. In a nutshell, migration of a male member affects women negatively in the case of poor households or marginal farmers.

It is irrefutable that a country cannot dream of achieving industrial growth in the absence of competent human resource. According to Arthur Lewis and his “two sector growth model”, it’s equally imperative to have a sufficient amount of human resource in the agriculture sector for the growth of industry in the economy.

The Lewis model emphasizes that with the growth of the industrial sector, surplus labour can be channeled into nascent industries. Therefore, it can raise productivity in the agriculture sector too.

In the context of Nepal, the excess labour force in the agriculture sector has already been exhausted. Therefore, considering the current exodus of labour to foreign lands, we cannot think of achieving industrial growth, and consequently, Nepal’s overall economic development in the near future.

Sharma is a freelance researcher

 Published on: 17 September 2012 | The Kathmandu Post