Does agricultural intensification pay in the context of structural transformation?

• Modern inputs and mechanization can raise smallholder labor productivity and broker the structural transformation. • Intensification increases land and labor productivity, especially when agro-chemicals and mechanized land preparation are combined. • Returns to labor double to triple, inducing specialization and greater market orientation as well as greater food security. • Labor in agriculture becomes more waged, and gender balance remains the same. • Agricultural intensification is a key pathway towards rural transformation. Modern inputs and mechanization are promoted across Africa to raise smallholder labor productivity and broker the structural transformation. Yet, adoption has remained low and the implications for returns to labor and labor allocation remain poorly understood. This paper explores the effects of different intensification packages on farm performance, market orientation, and food security using data from lowland rice farmers in Côte d'Ivoire. Employing a multinomial treatment effect model, the findings reveal that intensification increases land and labor productivity, especially when agro-chemicals and mechanized land preparation are combined. Returns to labor more than triple, inducing greater market orientation as well as greater food security. This opens opportunities to productively release agricultural labor for other activities (on and off the farm). Labor in rice production becomes more waged and slightly more male, but child labor input does not decrease. The findings call for greater attention to labor productivity and confirm that agricultural intensification can pay and enhance rural transformation. [ABSTRACT FROM AUTHOR]