Labor absorption in large scale agriculture, theory and empirical evidence from Ghana

The inability of urban industries to provide employment for the rapidly growing population in most African economies has compelled policy makers to look to the agricultural sector as the labor absorber of the last resort. However, for a number of reasons, the strategy of agricultural modernization emphasizes large scale-farming although the latter still accounts for a very insignificant proportion of the cultivated area and output. In order to make the large farms contribute more significantly to employment, it is suggested that efforts be made to bring the private cost of mechanization close to the real cost to the economy by reducing the multi-various elements of subsidies now in operation.