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2. Land and labour are the main factors of production, while capital investment is minimal.
3. It is threatened by the failure of rains, and the potential appropriation of the land by the money lender.
4. Labour is underemployed most of the year, but highly occupied for planting and harvesting.
5. Farmers are often resistant to technological innovation due in part to the limited access to credit, insurance and information: there is a lot of uncertainty and risk involved in subsistence farming.
Encourage technology and innovation in farms, not in the form of labour-saving machinery (since developing countries are abundant in labour), but rather in the form of hybrid seeds, irrigation and fertilizers.
Policy # 2:
Better design of government policies to guarantee equitable access of all farmers to credit and technological innovations. Often the benefits of these policies are only enjoyed by large-scale farmers.