 The structural transformation is a long-term historical process that all successful societies, economies have gone through. It's the progressive reduction of importance of agriculture, the growing importance of, historically, the manufacturing sector, the urban industrial sector, but increasingly it's a modern service sector that is also employment intensive. And so, during a structural transformation, and it can take a century or longer for this to play out, the share of agriculture in the economy, in its contribution to gross domestic product income, declines reasonably rapidly in successful countries. The share of labor working in agriculture in the overall workforce declines, but historically it has not declined as fast as the share of income, and so there is a structural lag. People in agriculture are typically poorer than people in the cities, in urban industrial service jobs. As part of that change in the economic structure, we see a migration of the surplus labor out of agriculture to those urban jobs. We see a demographic transition, often a spurt in fertility and then a decline in the birth rate, but there's almost always a bulge of population that works its way through historically. And so, at the end of the structural transformation, there's no real distinction in economic terms between working in agriculture and working in non-agriculture. Real wages are the same, poverty rates are the same, labor markets are connected, financial markets are connected, and there's very good physical connection of commodity output from the farms into the modern urban food system. The structural transformation has pretty regular pattern in successful countries that achieve this rapid growth outside of agriculture and release surplus labor from agriculture and productivity, agricultural transformation takes place. When that whole pattern works, you get rapid reductions in poverty, rapid reductions in hunger, food security at the societal level. We can always have poverty and hunger even in the United States, but we get, you pretty much solve the problem of food insecurity as a societal problem. But what happens if that nice combination of outside agriculture, inside agriculture changes in the family? What happens if it isn't working? It's clearly not working in sub-Saharan Africa. And I'm not an African specialist. Most of my work has been in Southeast Asia, where the big success stories are. And I cannot yet convince my colleagues of what the reasons are for the failure to have a successful structural transformation. But what we are seeing in Africa are rapid population growth, in rural areas, smaller and smaller farms because it's very difficult to expand in these intensively producing areas. Population pressure building up, people basically being forced off the farm to go take a very low productivity job in the service sector, either rural non-farm sector or in urban areas. I actually saw that kind of low productivity, non-transformation going on very early in my work in Indonesia. I got there in 1970. Gunnar Mirdal had just published Asian drama where he said, no economist has any hope for Indonesia. So we were pretty discouraged about what the prospects were. I remember going out to Java and seeing 10-year-old kids would walk into town and buy a pack of cigarettes and walk back to the fields and sell them one at a time to the workers. And that's how they made their income, was selling cigarettes a pack at a time. Well, you know, that's not a very productive use of labor and especially not of 10-year-old time. A generation later, all of those kids have gone to school. They have pretty decent jobs. The agricultural transformation as well under way, the urban industrial transformation, it's not Taiwan or South Korea, but it's a whole order of magnitude better than anything we would have expected in 1970. So what's the failure? Why is the structural transformation failing? Colleagues at USAID have decided we can't fix the macro scene in Africa. We can't fix the urban industrial sector, but we could increase agricultural productivity. And so a lot of the donor activity now is being pushed into raising agricultural productivity on small farms as the way out of poverty. And the difficulty, I totally agree, that's fine. I'm a consultant to the Gates Foundation. I spend time helping them with their Africa strategy. But that's not going to be a sustainable pathway out of poverty. It may help alleviate poverty in the short run on these farms, but eventually you've got to get some of that labor out of agriculture and end up more productive jobs. Otherwise the whole society stagnates. And that's the problem of a failed structural transformation. So the agricultural transformation is what has to take place on the farms that stay in production by the farmers who stay. I am a farm migrant. I grew up on a farm. I left my two brothers stayed on the farm and transformed that farm from a fairly low-key family farm into a 2,000-acre mechanized, highly tech-based agriculture. So the agricultural transformation is the productivity gains that come both land and labor that allow the remaining farmers to earn good incomes using high technology and modern seeds and fertilizer and plugging into the modern food system, the food marketing system. So agriculture has to change a lot from being subsistence-oriented, feeding the farm household to being a larger scale mechanized using technology and feeding the cities. I mean, the first question is, well, why didn't they have it when Asia went through the agricultural revolution, the Green Revolution? I remember my first visit to Africa in 1980 driving through the Machakos district of Kenya, seeing very small farms. Each farm had an intercropped system, very complex, but there would be 10 or 15 different crops growing on a one-acre farm. And the nature of the cropping system changed as you went up and down the hillside. I contrasted that with West Java where you could drive for an hour and not change altitude by two feet, and it was irrigated rice as far as the eye could see. Now, you're an agricultural scientist, and you're trying to come up with new crop technology to improve productivity. In Asia, on Java, if you come up with a really good rice variety, in five years every farmer was using it, double their yields. They had to use fertilizer, they had to have good water control, they had to have a market for the output, all those other things were important, but having the new technology available and spreading like lightning, like wildfire, we had a Green Revolution very quickly in Indonesia. How do you do that in Africa when you've got 21 different crops that the farmer is growing on one plot of land and no control over the water because there's no irrigation? The marketing system was fractured, wasn't working very well. So even in 1980, I said, I don't know how to do this. I don't know how to have a Green Revolution in Africa, and my sense at the time was you're going to have to come at it from the demand side rather than the supply side. You're going to have to work backward and basically have the supply chains give signals to the farmers on what was really needed, what was good for them to produce as a surplus. And what we see, of course, in Kenya, there's actually been a revolution, it's not a Green Revolution, it's a White Revolution. There's a pretty modern, successful, small-scale milk industry. That's what the consumer demand is. It's translated back. The technology has been there, the feedstuffs are there, and now they've got the marketing chains working. And so that means it has to be demand-led. Well, that frustrates agricultural scientists no end because they work from the technology supply side rather than the demand side. So it's a much more complicated story to do an agricultural transformation in Africa than it was in East and Southeast Asia. And the dietary transition is driven by two basic forces. One is simple income growth. The human species seems to be pretty hardwired to favor diversity in the diet. We even call it Bennett's law in economics. So when people's incomes go up, they try to consume fewer starchy staples, cassava, tubers, event corn, wheat, rice. They want fruits, vegetables, meat, dairy, eggs, seafood. That is the dietary transition. The thing that seems hardwired and which really worries... I spent a lot of time in the Department of Nutrition, so it worries me on the nutrition side of things. We seem to be hardwired to have a preference for salt, sweet sugar in particular, and fats. And if we get rich enough to indulge those tastes, we get fat. And so the dietary transition at one level is a very good thing because it's a much healthier diet if you have fruits and vegetables and meats and good animal protein. Kids grow better and it's a healthier diet. But if you don't keep up the hard work that when you're on the farm or you don't exercise enough or if you consume too many of these things, we end up with obesity and then type 2 diabetes and then all the second round effects of malnutrition. There are more people overweight in the world now than there are who don't get enough to eat. So we've gone a long way in that dietary transition.