Knowledge Note

In developing countries, structural transformation started much later, mostly in the 1900s. The structural transformation of the agricultural sector has been characterized by the relative decline of basic agriculture; the rising importance of agribusiness, which includes the value added for agro-related industries and for agricultural trade and distribution services; as well as the growing share of high-value agricultural products in international trade with respect to traditional exports. Agricultural structural transformation has been shaped by three interrelated processes: improvements in productivity; change in composition in production; and change in mode of commercialization.