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Session 2, keynote paper( hazell)


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Session 2, keynote paper( hazell)

  1. 1. Conference on New Directions for Smallholder Agriculture Peter Hazell Imperial College London January 24, 2011
  2. 2. Key Questions about Small Farms <ul><li>Why should we care about small farms? </li></ul><ul><li>How fast should the transition to large farms be? </li></ul><ul><li>What is a viable small farm? </li></ul><ul><li>What help do small farmers need? </li></ul><ul><li>Does it pay to invest in small farms? </li></ul>
  3. 3. 1. Why should we care about small farms? <ul><li>There are about 500 million small farms less than 2 ha, and they are home to some 2 billion people including half the world’s undernourished people and the majority of people living in absolute poverty </li></ul><ul><li>Small farms produce more output per hectare than large farms and employ more workers but less capital per hectare. These are important economic advantages in poor, labour surplus countries where small farm led agricultural growth can be a win-win proposition for growth and poverty reduction </li></ul><ul><li>Small farms provide food security for many poor people, especially those living in remoter areas </li></ul><ul><li>Small farms spend larger shares of incremental income on locally produced goods and services, and this generates more powerful trickle down benefits for the rural nonfarm economy </li></ul>
  4. 4. 2. How fast should the transition to large farms be? <ul><li>Although most small farms disappear by the time a country gets rich, the tipping point at which their number begins to decline usually occurs when a country approaches middle income status. </li></ul><ul><li>In most Asian and African countries, the number of small farms less 2 ha is still increasing and their average size is declining. </li></ul>
  5. 5. 3. What is a viable small farm? <ul><li>There is a continuum of small farms: </li></ul><ul><li>_______________________________ </li></ul><ul><li>Commercial Part time Subsistence </li></ul><ul><li>It is useful to draw a line to distinguish between small farms with viable business prospects in full or part time farming verses small farms that are trapped in subsistence modes of production. </li></ul><ul><li>Successful commercially oriented small farms typically diversify into high value agriculture and combine this with part time non-agricultural activities. They are market oriented. Subsistence oriented farms are typically net buyers of foods. </li></ul><ul><li>The contributions that each group can make to agricultural growth and poverty reduction are very different, as are the appropriate intervention strategies </li></ul><ul><li>The MDG agenda has emphasised assistance programs for subsistence oriented farms trapped in poverty, while the growth potential of commercially oriented farms has been neglected. This conference will seek to redress that balance </li></ul>
  6. 6. 4. What help do small farmers need? <ul><li>Large farms may not be more efficient producers, but they have many advantages in terms of accessing land, inputs, credit, technology and markets that can make them more profitable than small farms </li></ul><ul><li>These advantages have become more pronounced with market and trade liberalization, the increasing integration of market chains, and the scaling back of many state agencies and programmes that served small farms </li></ul><ul><li>Left to market forces alone, many small farms will be squeezed out of their markets. The problem is especially challenging for women farmers </li></ul><ul><li>Many small farms will also be further disadvantaged by climate change </li></ul>
  7. 7. Small farms need a more level playing field if they are to successfully compete with large farms <ul><li>This conference will discuss ways in which governments, NGOs, the private sector and donors can come together to assist small farms. Key topics to be discussed include: </li></ul><ul><li>Linking small farms to modern market chains </li></ul><ul><li>Improving the productivity and sustainability of small farms </li></ul><ul><li>Increasing small farm access to modern inputs and financial services </li></ul><ul><li>Improving small farm access to land and water </li></ul><ul><li>Creating more entrepreneur farmers </li></ul><ul><li>Empowering women and vulnerable groups to become successful farmers. </li></ul><ul><li>Helping small farmers prosper despite climate change </li></ul><ul><li>Helping to create more rural nonfarm opportunities </li></ul>
  8. 8. 5. Does it pay to invest in small farms? <ul><li>Investments in commercial verses subsistence oriented farms give different returns to public investments: </li></ul><ul><li>The evidence from Asia’s Green Revolution is that investments in small farm led agricultural growth can lead to very favourable rates of return and poverty reduction per dollar invested </li></ul><ul><li>Socially oriented investments that improve the productivity of small subsistence oriented farms can be a more cost effective and sustainable way of alleviating poverty and food insecurity than many safety net programmes </li></ul><ul><li>We need to consider the possibility that it does not always pay to directly target the poorest of the poor to achieve the greatest amount of poverty reduction per dollar spent in agriculture </li></ul>