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Agricultural labor productivity: The key to economic growth, changes in structure of industry and peasants' income

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Agricultural labor productivity (ALP) is a factor that affects the economic growth, changes in structure of industry and peasants’ income. In the past, however, ALP was low and slow to improve. Identifying scientifically effects of ALP and factors influencing ALP is a challenge to researchers and policy makers in Vietnam. | RESEARCHES & DISCUSSIONS Agricultural labor productivity (ALP) is a factor that affects the economic growth, changes in structure of industry and peasants’ income. In the past, however, ALP was low and slow to improve. Identifying scientifically effects of ALP and factors influencing ALP is a challenge to researchers and policy makers in Vietnam. This research employs data about the years 1991 – 2009 and regression model to identify nature of these relations. We note that the ALP has a significant and forward effect on economic growth, agricultural development and changes in the structure of industry. Authors also suggest five groups of measures to improve the ALP, namely: (1) encouraging changes in the structure of industry to land yield; (2) increasing the supply of credit to peasants; (3) helping peasants improve their agricultural knowledge; (4) encouraging cooperation in producing and distributing farm products; and (5) developing the infrastructure and non-farming businesses in rural areas. Keywords: ALP, key, growth, changes in structure of industry, peasants’ income. 1. Introduction The ALP is a factor that can lead to changes in economic growth, structure of industry and peasants’ income. Moreover, in the post-WTO period, ALP is also a decisive factor in improvement in peasants’ competitiveness. Many studies have examined the ALP but full attention has not been paid to effects of the ALP on economic growth, changes in structure of industry and peasants’ income, and these effects have not been quantified properly. That is why identifying scientifically effects of ALP and factors influencing ALP is a challenge to researchers and policy makers in Vietnam. This paper focuses on three major issues: (1) effects of ALP on economic growth, changes in structure of industry and peasants’ income; (2) factors affecting ALP; and (3) Policy implications that aim at improvement in ALP in Vietnam. 2. Economics of ALP Lewis (1955) [2] observes a labor surplus in .