This paper examines different paths and challenges in stages of agricultural transformation in two Asian countries. It contrasts their respective mechanisms of labor transfer from the agriculture sector to non- agriculture sectors and the up-skilling of the agricultural labor force in the process of an agricultural transformation. The paper describes this as a critical contribution from agriculture to economic growth. The important finding is that without such mechanisms and the corresponding instruments that increase agricultural labor productivity and improve rural livelihoods, an agricultural transformation is not assured.