the future of small farms - overseas development institute · developing world • equity labour...
TRANSCRIPT
![Page 1: The future of small farms - Overseas Development Institute · developing world • Equity labour use, strong consumption links to local economy T-cost advantages SF LF Labour supervision](https://reader033.vdocuments.net/reader033/viewer/2022050209/5f5c1084ec899a267936c37d/html5/thumbnails/1.jpg)
The future of small farms
International Food Policy Research Institute
Imperial College
&
Overseas Development Institute
www.ifpri.org/events/seminars/2005/20050626SmallFarms.htm
![Page 2: The future of small farms - Overseas Development Institute · developing world • Equity labour use, strong consumption links to local economy T-cost advantages SF LF Labour supervision](https://reader033.vdocuments.net/reader033/viewer/2022050209/5f5c1084ec899a267936c37d/html5/thumbnails/2.jpg)
Questions to be covered
• Why rural development?
• Why agricultural development?
• Why small farms?
• Importance of context
• Policy and research pointers
![Page 3: The future of small farms - Overseas Development Institute · developing world • Equity labour use, strong consumption links to local economy T-cost advantages SF LF Labour supervision](https://reader033.vdocuments.net/reader033/viewer/2022050209/5f5c1084ec899a267936c37d/html5/thumbnails/3.jpg)
Why rural development?
• MDG 1: halve poverty by 2015
• 75% of the world’s poor live and work in rural areas will be no less than 60% in 2025
• NB: Rural areas will lose population but will take time
• Some will benefit from transfers from urban economy, but …
• … most of these poor will depend heavily on their own incomes, and from transfers within the rural economy
![Page 4: The future of small farms - Overseas Development Institute · developing world • Equity labour use, strong consumption links to local economy T-cost advantages SF LF Labour supervision](https://reader033.vdocuments.net/reader033/viewer/2022050209/5f5c1084ec899a267936c37d/html5/thumbnails/4.jpg)
Why agricultural development?
Two arguments:
(1) Agriculture can sustain livelihoods of many; by growing it can reduce poverty:
• Theory: • Farming can employ much labour, little capital
• Generates returns to land, an asset that some poor have
• Agricultural growth pushes down food prices
• History — few if any countries have industrialised without an agricultural revolution
• Recent analyses:
• A 10% rise in farm yields → 7% fall in poverty [Irz et al. 2001]
• In Africa, through farm incomes, in South Asia through farm wages, in Latin America, through jobs in food chains [de Janvry & Sadoulet 2002]
![Page 5: The future of small farms - Overseas Development Institute · developing world • Equity labour use, strong consumption links to local economy T-cost advantages SF LF Labour supervision](https://reader033.vdocuments.net/reader033/viewer/2022050209/5f5c1084ec899a267936c37d/html5/thumbnails/5.jpg)
Case for agricultural development (2)
(2) What’s the alternative in rural areas?
• Agriculture can be difficult, with growth rates that
struggle to beat 5% a year; while manufacturing
industry can expand at twice that rate
• But mining, tourism, rural manufacturing all
have limited possibilities
![Page 6: The future of small farms - Overseas Development Institute · developing world • Equity labour use, strong consumption links to local economy T-cost advantages SF LF Labour supervision](https://reader033.vdocuments.net/reader033/viewer/2022050209/5f5c1084ec899a267936c37d/html5/thumbnails/6.jpg)
Average real wholesale prices rice & wheat, 1980–2000,
Bangladesh [IFPRI]
![Page 7: The future of small farms - Overseas Development Institute · developing world • Equity labour use, strong consumption links to local economy T-cost advantages SF LF Labour supervision](https://reader033.vdocuments.net/reader033/viewer/2022050209/5f5c1084ec899a267936c37d/html5/thumbnails/7.jpg)
Why small farms?
Clarifications
Note debates may be:
• SF Kenya versus LF Brazil
• SF Kenya versus LF Kenya
Small farms: how small? India classifies :
• The prospects for SF (and semi-medium) are
much better than those for marginal farms
![Page 8: The future of small farms - Overseas Development Institute · developing world • Equity labour use, strong consumption links to local economy T-cost advantages SF LF Labour supervision](https://reader033.vdocuments.net/reader033/viewer/2022050209/5f5c1084ec899a267936c37d/html5/thumbnails/8.jpg)
The case for small farms
• Efficiency: SF use land
more intensively
inverse ratio of farm size:
yield/ha
• … and this may explain
why farm sizes fall in the
developing world
• Equity labour use,
strong consumption links
to local economy
T-cost advantages SF LF
Labour supervision X
Local knowledge X
Self-provisioning X
Knowledge of markets &
technology
X
Access to inputs, credit,
markets
X
Quality assurance X
Risk management X
![Page 9: The future of small farms - Overseas Development Institute · developing world • Equity labour use, strong consumption links to local economy T-cost advantages SF LF Labour supervision](https://reader033.vdocuments.net/reader033/viewer/2022050209/5f5c1084ec899a267936c37d/html5/thumbnails/9.jpg)
India: farm sizes
DESRIPTION SIZE AVERAGE
SIZE HA
% OF Total
HOLDINGS
% OF
AREA
% OF
IRRIGATED
AREA
MARGINAL FARMS <1 ha O.4 62 17 21
SMALL FARMS 1-2 ha 1.42 19 19 20
SEMI-MEDIUM 2-4 ha 2.73 12 24 24
MEDIUM 4-10 ha 5.84 6 25 24
LARGE >10 ha 17.2 1 15 11
ALL FARMS 1.41 100 100
![Page 10: The future of small farms - Overseas Development Institute · developing world • Equity labour use, strong consumption links to local economy T-cost advantages SF LF Labour supervision](https://reader033.vdocuments.net/reader033/viewer/2022050209/5f5c1084ec899a267936c37d/html5/thumbnails/10.jpg)
Brazil & India: farm size & yield/area
India: Farm size and output per unit area
0
100
200
300
400
500
600
700
800
0–5 5–15 15–25 > 25
Acres
Ru
pees/a
cre
Brazil: Farm size and output per unit area
0
10
20
30
40
50
60
70
80
90
100
0–9.9 10–49.9 50–99.9 100–199.9 200–499.9 > 500
Hectares
US
$/h
a
![Page 11: The future of small farms - Overseas Development Institute · developing world • Equity labour use, strong consumption links to local economy T-cost advantages SF LF Labour supervision](https://reader033.vdocuments.net/reader033/viewer/2022050209/5f5c1084ec899a267936c37d/html5/thumbnails/11.jpg)
Farms sizes fall in developing countries
![Page 12: The future of small farms - Overseas Development Institute · developing world • Equity labour use, strong consumption links to local economy T-cost advantages SF LF Labour supervision](https://reader033.vdocuments.net/reader033/viewer/2022050209/5f5c1084ec899a267936c37d/html5/thumbnails/12.jpg)
Do small farms have a future?
• The share of both holdings and cropped area accounted for by small farms continues to rise in most developing countries.
Small farms are not about to disappear!
• Is this rising share of small farms indicative of:
• their superior ―efficiency‖
• market imperfections (especially for land)
• social, insurance or other values attached to land?
• Can increasingly small farms still act as a ―driver‖ for growth and poverty reduction?
![Page 13: The future of small farms - Overseas Development Institute · developing world • Equity labour use, strong consumption links to local economy T-cost advantages SF LF Labour supervision](https://reader033.vdocuments.net/reader033/viewer/2022050209/5f5c1084ec899a267936c37d/html5/thumbnails/13.jpg)
The changing world for small farms
This is not mid-1960s Asia!
• Lower international commodity prices
• Environmental limits to intensification
• Exhausted easy options in crop technology
• HIV/AIDS
• Climate change
• GR context of closed domestic markets & heavy subsidies now unthinkable in many developing countries
These affect all farms in given countries / regions, but may be differential impacts across regions
• Concentration in supply chains
![Page 14: The future of small farms - Overseas Development Institute · developing world • Equity labour use, strong consumption links to local economy T-cost advantages SF LF Labour supervision](https://reader033.vdocuments.net/reader033/viewer/2022050209/5f5c1084ec899a267936c37d/html5/thumbnails/14.jpg)
Concentration in supply chains
• Key point: to keep down T-costs, buyers favour a
few large suppliers
• Different contexts
• Two key questions:
• How fast is concentration?
• If this responds to economic growth, then impact on SF/MF
is much mitigated
• Ability of SF to organise and meet new demands
![Page 15: The future of small farms - Overseas Development Institute · developing world • Equity labour use, strong consumption links to local economy T-cost advantages SF LF Labour supervision](https://reader033.vdocuments.net/reader033/viewer/2022050209/5f5c1084ec899a267936c37d/html5/thumbnails/15.jpg)
High LowDemand for Output from Small Farms
Inequality in Farm
Structure
High
(Dualistic)
Low
(Mainly small)
Importa
nce
of
credence
attrib
ute
s
Co
mp
ara
tive
Ad
va
nta
ge
of S
ma
ll
Fa
rms
Low
High
1
2 4
3
High
Low
![Page 16: The future of small farms - Overseas Development Institute · developing world • Equity labour use, strong consumption links to local economy T-cost advantages SF LF Labour supervision](https://reader033.vdocuments.net/reader033/viewer/2022050209/5f5c1084ec899a267936c37d/html5/thumbnails/16.jpg)
Importance of context
Driver Supporter
Export manufacturing
potential, coastal
- √
Mineral economies - √
Agrarian potential, unimodal
land distribution
√ -
Agrarian potential, bimodal
land distribution
√ -
Low agrarian potential,
landlocked
? ?
![Page 17: The future of small farms - Overseas Development Institute · developing world • Equity labour use, strong consumption links to local economy T-cost advantages SF LF Labour supervision](https://reader033.vdocuments.net/reader033/viewer/2022050209/5f5c1084ec899a267936c37d/html5/thumbnails/17.jpg)
Pointers for policy
• Need good governance, macro-economic stability, rural roads, research … but also following need attention:
• Follow demand … and look for competitiveness
• Institutional innovation in supply chains
• Farmer organisation
• Rural financial systems
• Encouraging linkages & providing jobs for marginal farmers