The Importance of Smallholder Farmers for Sustainable Development

Despite the pivotal role small-scale farmers have in economic transformation, there are critics who question the viability of small farming as a way out of poverty and as a vehicle for achieving sustainable development, including the writer of the article that appeared in EBR’s 37th edition. Tsegaye Tegenu (PhD) outlines the multifaceted challenges that small farmers continue to face that undermine their potential for economic growth.However, globally there is empirical evidence that proves smallholder farmers have a critical role to play in creating a world free from poverty and hunger – one in which everyone gets enough healthy and nutritious food. According to the 2016 World Food Report prepared by the International Food Policy Research Institute (IFPRI), small-scale farming has a vital contribution for the global food security and nutrition.
The report states “smallholders have a unique role to play in this new development agenda and can contribute to several developmental goals. Smallholder agriculture, especially if well integrated into a diversified rural economy and food value chains, can contribute to more inclusive growth and…to employment generation.” The contributions of family farming to food security, poverty reduction and sustainable development were specifically recognised in 2014 when the United Nations declared that year the International Year of Family Farming.
Certainly, agricultural development plays an important role in rapid poverty reduction. Research demonstrates that agricultural growth is a primary driver of poverty reduction, particularly in countries that depend on an agrarian-based economy. Its poverty-reducing effect is 1.6 times that of industrial growth and three times that of growth in the service sector, according to the United Nations Conference on Trade and Development’s (UNCTAD) 2015 Least Developed Countries Report. Therefore, in the context of sustainable development agenda, the impact of smallholder farming is strong.
As it is well known, agriculture is also crucial as a source of food and inputs for manufacturing plants, particularly in agro-processing and light industries such as textiles. And, in almost all developing countries, small-scale farmers are at the centre of agricultural development.
According to UNCTAD, despite differences within countries and regions in the average size of small farms, it is estimated that an individual or a family manages more than 90Pct of the 570 million farms worldwide and that they mostly rely on family labour. The report also illustrates that 84Pct of these farms are smaller than 2 hectares and that about 2.5 billion people depend on agricultural production systems for their livelihoods, either as full- or part-time farmers, or as members of farming households.
These demonstrate that policy makers in poor countries should give more focus to small-scale farmers. Just because they face problems doesn’t mean it is not plausible to conclude that family farmers cannot be reliable development agents. These challenges could be overcome with the right policy interventions.
The main point critics continue to raise is that because family farmers usually possess a small plot of land and cannot enhance production and productivity. Again, research proves that though they have small plots of land their productivity will be high if the enabling inputs and environment are fulfilled.
However, according to the UNCTAD report, “though puzzling to many sceptics, empirical studies reveal the existence of an inverse relationship between farm size and productivity. They show that smaller farms have higher yields than larger farms. This has been one of the most astonishing facts in development economics.”
The UN Food and Agricultural Organisation underscores this point: smallholders manage only 12Pct of all agricultural land but produce more than 80Pct of the world’s food, in value terms. This is another reason to prioritise small-scale farms.
This is not, however, to suggest large-scale commercial agriculture is not desirable. Both family farming and large-scale farming could coexist and contribute to agricultural productivity and food security.
Moreover, family farming has continued to show resilience despite multiple challenges, due in part to the fact that it’s about more than profit generation. Farming is a way of life with its own social and cultural values.
The other compelling factor why small-scale farmers should get state policy attention is that development must be people-centred. Any genuine and long-term poverty eradication agenda will not be realised by neglecting 570 millions farmers and the 2.5 billion that depend on them. Policy makers shouldn’t ignore small-scale farming. They should identify the challenges and address them in a comprehensive manner so that it can realise its development potential.
Of course, small-scale farmers continue to face a number of challenges that hinder their positive contribution towards poverty reduction. Limited access to well-functioning agricultural markets impedes them from earning enough to continue with farming as a reliable source of income and it also lessens their productivity. Smallholders also face many constraints that limit their access to agricultural inputs and services such as seeds and fertilisers as well as extension services.
Obviously, this leads to low productivity. Ineffective land utilisation and management systems also affect sustainable productivity. A lack of access to finance in the form of credit services, technology and skills are the other major obstacles family farmers continue to face.
Perhaps more than these, climate change is one the biggest threats farmers face. Its impacts are felt globally, but especially in poor countries, as their agriculture is still dependent on nature, which increases vulnerability. But these are problems that can be addressed by effective, comprehensive policy instruments centred on national and local circumstances.
With the right policy interventions, smallholders should be integrated into a rural economy. Comprehensive rural transformation focusing on, inter alia, health, education, rural infrastructure and women’s empowerment is crucial for the success of small-scale farming. The UNCTAD and IFPRI reports highlight the importance of treating smallholder farms as viable businesses, arguing they are the key to unlocking their potential to contribute to the sustainable development agenda. These could include facilitating a shift from traditional subsistence farming to high-value, climate-resilient, market-driven agriculture.
As business entities, smallholders should be linked with a well-functioning market to raise their income and productivity. Strengthening urban-rural linkage is crucial. Smallholder farmers need access to financial services, including climate finance and affordable insurance facilities that will mitigate the impact of climate vulnerabilities.
To build resilience to the adverse consequences of climate change, investments must be made in mitigation and adaptation programmes. Extension services that can provide skills and knowledge should be expanded and investment on agricultural research and development that addresses local demands should be increased.
Finally, poor farmers should be provided with social protection programmes, including social safety nets, to cope with external shocks and facilitate investment in long-term productivity enhancement or rehabilitation.

4th Year • July 16 2016 – August 15 2016 • No. 41


Leave a Reply

Your email address will not be published. Required fields are marked *

Ethiopian Business Review | EBR is a first-class and high-quality monthly business magazine offering enlightenment to readers and a platform for partners.

2Q69+2MM, Jomo Kenyatta St, Addis Ababa

Tsehay Messay Building

Contact Us

+251 961 41 41 41