family farms in the developing world, with the two terms oſten used interchangeably in Asia and Africa south of the Sahara—places where family farms have limited access to land. While more than 80 per- cent (475 million) of the world’s farms operate on less than two hectares of land, these farms account for only 12 percent of the world’s farmland.4 Tere are significant regional variations in farm size: farms in Asia and Africa average 1–2 hectares while, at the other end of the spectrum, farms in the Americas average 74–118 hectares (Figure 1).5
HOW SMALL FAMILY FARMS CAN IMPROVE GLOBAL FOOD SECURITY AND NUTRITION
Global and national food security and nutrition are closely tied to small family farms through a two-way relationship: small family farmers are likely to expe- rience the three challenges of poverty, food insecu- rity, and undernutrition, yet they also play a crucial role in improving food security and nutrition. Te three challenges are inextricably linked and remain primarily a rural phenomenon: approximately three-quarters of the world’s poor live in rural areas, and half of the world’s hungry are estimated to live on small farms.6 Agriculture remains the main source of income
and employment for 2.5 billion people in low income countries: 60 percent of these people are members of smallholder households.7 At the same time, food production systems in many parts of the world are heavily dependent on small family farms.8 Tis is particularly true in Asia and Africa south of the Sahara, where small farms (which are mostly family operated) provide an estimated 80 percent of the regional food supply.9 Tus, the food security and nutrition of many small family farms depends (at least partly) on their involvement in the agricultural sector, either through the consumption of food from their own production or from income earned as a result of agricultural activities. Empirical evidence shows that small family
farms oſten have efficiency benefits—that is, higher land productivity (or higher farm output per unit of land) than large family farms.10 Tese advan- tages come from more intensive use of inputs, lower
labor supervision costs, and beter local knowledge compared with their larger counterparts.11 How- ever, small family farms exhibit lower labor produc- tivity than large family farms. Tis trend is reflected in an overuse of mainly family labor (as a result of both scarce alternative sources of employment and income and labor market imperfections) as well as in an underuse of modern farming technologies.12 Te role of small family farms in advancing
national and global food security and nutrition, as well as overall development, is increasingly seen in a broader context. Te old wisdom of “small is always beautiful” because of efficiency gains cannot be universally applied. Research suggests that small is still beautiful in countries where nonfarm growth is weak and the rural population is increasing (such as in agriculture-based economies), but bigger is bet- ter where the nonfarm sectors are booming and the urban population is increasing (as in transforming and transformed economies).13 Tus, optimal farm size is a dynamic concept that changes as a country’s overall economy grows and as nonagricultural sec- tors develop.14
A SPECTRUM OF CHALLENGES HINDERS THE PROFITABILITY OF SMALL FAMILY FARMS
Small family farms are increasingly faced with a mix of challenges, including those that are natu- rally occurring and those that are caused by humans, that influence their capacity to increase production and move toward profitable farming systems. Tese challenges lead farmers to undertake lower-risk and lower-yielding agricultural activities that perpetuate a cycle of poverty, including that of litle or no profit. Women on small farms—who account for an average of 43 percent of the agricultural labor force in devel- oping countries—are particularly disadvantaged in accessing productive resources, such as land, live- stock, agricultural inputs, technology, markets, and extension and financial services.15 Yet women play a vital role in improving agricultural output, enhanc- ing food security and nutrition in the household, and promoting overall development. High production constraints also make agriculture unatractive to young people—the very ones who can bring energy,
THE BUSINESS IMPERATIVE 27
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