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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 nonfarming 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 globalization and 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,

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 strengthening tenure security and access 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 on nonfarm 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 a program 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 cases inhibited 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.