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Is there a future for small farms?

The context in which the article of Peter Hazzell is written talks about the unprecedented

susceptibility of small farms. This new threat, brought about by rural population growth, price distortion

by international trading of OECD countries, consumer driven market integration through market

liberation and globalization and spread of HIV increases the pace of the economic transformation the

reduction of labor-intensive agriculture driven by rising labor costs replaced by large capital intensive

with some diverse farming. The unnatural pace however leaves the small farmers displaced and in

substandard condition. Hazzells article presents to us a review of these problems and the possible

policy interventions to mitigate them.

Why bother intervene at all? The main argument lies in the economic efficiency of small farms

compared to larger farms. This is because of multiple factors leading to greater productivity in terms of

per hectare farmed such as, labor-intensive agricultural methods stemming from the abundance of

labor. This can be more appealing to developing countries since it can provide employment, food

security and reduce poverty. There are benefits to richer countries as well such as the maintenance of a

vibrant rural economy and consumers of rural products and services.

The implication of the benefits of the small farm, with regards to a developing country, would

be that it eventually leads the country to a more developed economy as incomes increase and rural non-

farming grows. However, due to the intrinsically low labor productivity, the transition to a more

developed economy leaves small farms vulnerable and that makes it very tricky. One certain aspect

would be the importance of the growth of diversification and non-farm livelihoods as they can augment

incomes of rural households thereby influencing the number of small farms and their respective sizes.

Literature provides attempted farm size transitions that failed and others that are left with farmers

needing subsidies from the government.

The concern, therefore are what threatens small farmers. As mentioned above, the four

variables deserving attention are rural population growth, market structure changes due to globalizationand market liberation, the protectionist policies of other countries and the spread of HIV/AIDs. These

variables create problems that hinder the success of the small farm. For instance, since the amount of

agrarian land is fixed, increasing rural population decreases the size of small lands into subsistence

proportions. This creates an opportunity for unsustainable farming methods with can lower current and

future productivity of land. This can also result to a high rate of rural-urban migration which can pose a

problem since the urban areas cannot necessarily absorb population increase. Changes in market

structure on the other hand, creates a more competitive atmosphere for the farmers. Suddenly they are

asked to produce at a higher quality level if they want to stay competitive. This can be an opportunity to

those who can compete and assess the market, but a disadvantage to those who cant. The protectionist

policies of most OECD create an unfair atmosphere for small farmers as well. Not only do they have

limited access to international markets, but they face subsidized products in their own domestic

markets. The gains from the efficiency of small farmers are off-set by distorted prices markets and

limited access to the global consumer market. The last variable deals with the crippling effects of the

spread of HIV/AIDS virus to the abundance of labor force. This limits the able adult workers tilling the

farm. Since small farms are labor-intensive, the loss of its abundance would be detrimental to them

removing the entire basis of the efficiency of small-time faming.

The government has an important role addressing these problems. The task would be

indentifying what kinds of policies are needed to ensure that small farmers have a viable future. Broadly,

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there would be two cases the rich and poor countries. The article suggests targeted subsidies for the

rich countries. This however, would not work for developing countries due to prevalence small farmers.

A viable policy would be one that creates a development environment for the small farmers in which

they can play a key role in the growth and sustenance of the economy.

A policy regarding the assistance of organizing of small farmers for marketing is one way of

intervening. The logic lies in the sub-standard quality, low quantity, lack of market information and few

links with buyers in the marketing chains due to their size. Organizing them could create forward and

backward links to manufacturers, increase market power through cooperatives and gain more market

access. Another would be with regards to research and extension. The benefits of research could result

to greater productivity of labor-intensive technologies as well as improvement of crops and livestock.

Providing an agricultural credit for small farmers is a huge benefit as well. Because of the inherent

seasonal production nature of farming where there are many risks, there is a void of financial access to

the agricultural sector for small farmers. Access to credit improves the ability of small farmers to save

and invest in their own development. As mentioned above, agriculture is a risky undertaking hence risk

management aids can reduce this in conjunction with research and credit. For example are the

developments provided in irrigation or water storage to mitigate drought. Another form would be the

assistance or subsidies given to catastrophe stricken farmers. A policy strengtheningtenure security andaccess to land would help development of rural small farmers. The improvement of existing or

replacement of inefficient systems would allow farmers to make long-term investments in their

resources specifically their land. Examples are assistance in registering land by community groups,

simple measures of recording land transactions and resolving disputes. With a secure land they would

also need a secure market, hence a legal environment where they can sell their products and rent land

and so forth. Since nonfarm and remittances are sources of income, accounting for half of their total

income in some cases of rural households, a policy onnonfarm opportunities and migration makes a lot

of sense. The challenge of the policy is how to give them access to more lucrative nonfarm

opportunities. Examples are investments to human capital and removing gender, social status

restrictions that prevents access to opportunities. Similar but more specific than risk management aids

would be a policy targeting the vulnerable. This simply means that there should be a safety net aprogram in which assists those who are stricken by catastrophes to get back at their feet immediately.

An example would be involving the local community to help.

The article presents to us an example of applying the rural livelihoods framework. It analyzes the

context market liberalization, diseases like HIV, population growth and prize distortions as the

implication of the policies of richer countries. It studied the livelihood platform of small farmers citing

multiple examples of African and South East Asian casesinhibited by limited systems or gender. This

resulted numerous starting points as policy intervention. The policies would combat the said problems,

providing better access to financial markets and land, better opportunities with human capital

investments, risk aversion through risk management aids and safety net programs and job security

through organizing small farms.