market in Ghana

market in Ghana 2007

A good friend who works for the US Department of Agriculture generally buys in to the theory that big agriculture is more efficient and productive. I have wondered about that, because a lot of what I have been reading seems to point in the opposite direction. Today I found documented confirmation that smaller farms are more productive farms, courtesy of George Monbiot:

Though the rich world’s governments won’t hear it, the issue of whether or not the world will be fed is partly a function of ownership. This reflects an unexpected discovery. It was first made in 1962 by the Nobel economist Amartya Sen(2), and has since been confirmed by dozens of further studies. There is an inverse relationship between the size of farms and the amount of crops they produce per hectare. The smaller they are, the greater the yield.

In some cases, the difference is enormous. A recent study of farming in Turkey, for example, found that farms of less than one hectare are twenty times as productive as farms of over ten hectares(3). Sen’s observation has been tested in India, Pakistan, Nepal, Malaysia, Thailand, Java, the Phillippines, Brazil, Colombia and Paraguay. It appears to hold almost everywhere.

If governments are serious about feeding the world, they should be breaking up large landholdings, redistributing them to the poor and concentrating their research and their funding on supporting small farms.

There are plenty of other reasons for defending small farmers in poor countries. The economic miracles in South Korea, Taiwan and Japan arose from their land reform programmes. Peasant farmers used the cash they made to build small businesses. …

But the prejudice against small farmers is unshakeable. It gives rise to the oddest insult in the English language: when you call someone a peasant, you are accusing them of being self-reliant and productive. Peasants are detested by capitalists and communists alike. Both have sought to seize their land, and have a powerful vested interest in demeaning and demonising them. In its profile of Turkey, the country whose small farmers are 20 times more productive than its large ones, the UN’s Food and Agriculture Organisation states that, as a result of small landholdings, “farm output … remains low.”(9) The OECD states that “stopping land fragmentation” in Turkey “and consolidating the highly fragmented land is indispensable for raising agricultural productivity.”(10) Neither body provides any supporting evidence. A rootless, half-starved labouring class suits capital very well.

Big business is killing small farming. By extending intellectual property rights over every aspect of production; by developing plants which either won’t breed true or which don’t reproduce at all(14), it ensures that only those with access to capital can cultivate. As it captures both the wholesale and retail markets, it seeks to reduce its transaction costs by engaging only with major sellers. … As developing countries sweep away street markets and hawkers’ stalls and replace them with superstores and glossy malls, the most productive farmers lose their customers and are forced to sell up.

This leads to an interesting conclusion. For many years, well-meaning liberals have supported the fair trade movement because of the benefits it delivers directly to the people it buys from. But the structure of the global food market is changing so rapidly that fair trade is now becoming one of the few means by which small farmers in poor nations might survive. A shift from small to large farms will cause a major decline in global production, just as food supplies become tight. Fair trade might now be necessary not only as a means of redistributing income, but also to feed the world.

You can read the article Small is Bountiful. For those who wish to see the source material, the citations are listed at the end of the article.