Conclusion


World agriculture will need to undergo major changes if the demands of a growing and increasingly rich and urban population are to be met against a background of increasing scarcity of natural resources and other emerging challenges. Smallholders are an important part of the development equation. However, smallholders are not a homogeneous group, and development policies should not treat them as such. Instead the development pathways of smallhold- ers consist of dynamic processes that vary according to the constraints they face and the stage of economic transforma- tion. While some smallholder farmers have the potential to undertake profitable commercial activities in the agricul- tural sector, other farmers should be supported in exiting agriculture and seeking nonfarm employment opportuni- ties. For smallholder farmers with profit potential, agri- culture is risky in the face of climate change, price shocks, limited financing options, and inadequate access to healthy and nutritious food. Smallholders can successfully adapt their livelihood strategies to these challenges but need a supportive policy environment. Tese policies and investments should focus on


(1) promoting context-specific farm-size policies, (2) sup- porting productive social safety nets, (3) improving risk mitigation and adaptation strategies, (4) linking agriculture,


nutrition, and health, (5) promoting pro-smallholder value chains, and (6) increasing smallholder-friendly financing and investment. As with all public investments, the costs of investments


and programs designed to improve smallholders’ produc- tivity need to be compared with the likely benefits in each country. Public funds have alternative uses, such as other investments within or outside agriculture. Moreover, in many circumstances, agricultural development requires addressing the obstacles faced by groups of agricultural pro- ducers other than smallholders. Tis report has identified several areas in which further


research could shed light on the opportunities for small- holder farmers with profit potential to move from subsistence to commercially oriented agricultural systems, as well as the challenges to their doing so. It is now time for governments in developed and developing countries, the research com- munity, and private companies to focus their investments, innovations, and policies on helping these smallholders man- age risk, improve their resilience to shocks, and increase their access to finance and capital while promoting future growth. All of these measures, adapted to each country’s stage of eco- nomic development and transformation, will play a critical but varying role in bringing down barriers to profitable and efficient agricultural operations by smallholders.


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