Is Small Still Beautiful?
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n the coming decades, world agriculture will need to undergo major changes to meet the future food demands of a growing and increasingly rich and urbanized population.
Smallholders in developing countries play a key role worldwide in this food security equation. Tey supply a large share of global agricultural output and are among the poorest and most food- insecure people in the world. However, smallholders are not a homogeneous group but rather a diverse set of households with varying farm and household characteristics. Smallholder farm systems are also not a permanent phenomenon that should be maintained at all costs. Whereas some smallholders have the potential to shiſt from subsistence farming to commercially oriented and profitable farming systems, others have more opportunities to improve their livelihood strat- egies outside of the agricultural sector.
Traditionally, literature on smallholders has focused
on challenges to their livelihood strategies, such as lack of human capital and limited access to infrastructure, mar- kets, and technologies. But smallholders have also become increasingly vulnerable to a spectrum of emerging cli- matic, health, price, and financial risks and challenges. Not only does the occurrence of these shocks endanger already fragile food production systems, but the mere likeli- hood of their occurrence makes some smallholders more risk adverse and more likely to pursue more subsistence- oriented activities, thus causing smallholder poverty to per- sist (Dercon 2009). In the face of these emerging challenges, smallholder
farmers who have the potential to become profitable need access to the right set of productivity-enhancing tools, such as technology and capital, to become profitable and resil- ient participants within the agricultural sector. At the same
time, conditions should be created for other smallhold- ers to exit agriculture either altogether or as their primary activity, so that the remaining efficient smallholders can increase the size of their operational holdings. Tis report presents a typology of the diverse liveli-
hood strategies and development pathways for smallholder farmers, followed by a discussion of the emerging risks and challenges facing smallholders. It concludes with policy rec- ommendations that focus on interventions for potentially profitable smallholder farms.
THE IMPORTANT BUT SHIFTING ROLE OF SMALLHOLDERS
Tinking about the role of smallholders has evolved over time, and this role is increasingly being seen in a broader economic context. Te discussion about smallholder farms should be expanded beyond a strict focus on small versus
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