To compete globally it has to be input intensive and highly automated,agreed. Yes, this will increase productivity and increase income of farmers.But, ain't automation take away jobs in labour surplus countries like India and China( These are the countries of absolute poverty,um, not so sure about China though)? But, as you are referring to US ( Here relative poverty exists) where involvement went down from 70% to 4%,as it transitioned towards manufacturing and finally towards service sector driven economy.

By, agricultural based industries I was thinking to utilise Village based industries model as propounded by Gandhi, in a labour surplus, job deficient country.

But,here, in my opinion, you are referring towards Lewis model for Economic development of shifting surplus labour from agriculture (where marginal productivity is almost zero) towards manufacturing sector.

You are probably right, India almost skipped manufacturing sector in terms of contribution towards GDP and jumped directly from Agrarian to service Service sector based economy( Which prefers white collar skilled jobs and hence the inequality),and hence we have our story of jobless growth!

But with regard to China I can't get the scene, they initially worked very well for increasing agriculture productivity, then under Deng Xiaoping went under transformation towards manufacturing( mostly low value added) , but still poverty and inequality exists there, may be population problem.

WIth respect to directly protecting the workers, yes i do feel that liberalisation has resulted in more and more informalisation of economy,and lesser social security measures to workers.But, the current mood of the governments across the world seems to be labour reforms making it pro business.

Directly protecting workers may be helpful in US, in India we have to expand manufacturing and business for job creation, so the pro business reforms are taking place here.

Okay, let the capital be generated but its redistribution must be effective and government must seriously focus on social sector such as education, health and skilling of workforce.