In my agricultural history class, we talked about the vast differences in farming between regions, which is also reflected in the average farm size in different areas. This motivated me to go into more detail about where farm holdings are the smallest or largest, and to do some research on reasons behind it. This is what I learned:
- According to the FAO’s World Census of Agriculture, and this working paper, there are about 570 million farms in the world, and around 513 million of them can be considered family farms. Family farms thus constitute around 90% of the world’s farms and own around 70% of the world’s land. The data also shows that there are about 410 million farms less than 1 hectare in size and more than 475 million small farms that are less than 2 hectares in size. These 84% of the world’s farms (that are smaller than 2 ha) only control 12% of the farm land. Conversely, 16% of the world’s farms operate 88% of the world’s farm land.
- It’s instructive to take a look at mean farm sizes across continents (source: this great Oxfam paper – reading recommended! – which cites as its source the World Bank):
|Region||Mean size (ha)||% < 2 ha|
|West Asia & North Africa||4.9||65%|
To put that into context, I actually googled “how large is a hectare”, and stumbled upon this helpful website. Basically, a hectare is about as large as a football field or the inside of an athletic track:
So many farmers are deriving their livelihoods from just about the size of a sports field! We see that there is a massive range of farm sizes, which are linked to a massive range of production systems. This is, according to the World Bank and Oxfam, because agricultural production has relatively few inherent technical (dis)economies of scale which would make large-scale farming obviously better than small-scale or vice versa. Instead, there are tradeoffs that have to be made.
- Indeed, Oxfam has drafted a nice comparison of advantages and disadvantages between smallholder and large-scale farming:
- There are many empirical studies that have shown an inverse relationship between plot size and land productivity. This is due to a number of factors, but the main story is that there are more incentives for family farmers to work their own land hard and be effective. When you increase farm size, you have to hire outside labor and supervise them so they don’t just hang out under your fruit tree in the shade (hyperbolising here). But you’ll never get everybody to work as hard as you would be working yourself. Furthermore, small-scale farmers aren’t driven by work-by-the-hour, rather their whole livelihood depends on making due – which again makes them work harder. It should be said that this is not necessarily a good thing; the expansion of production on the back of small-scale farmers has also historically been labelled self-exploitation. Also, in some contexts there are economies of scale – e.g. in plantation-style work or among highly perishable crops that have to be shipped or processed quickly.
- Would small-scale farmers actually benefit if they gave up their plot and went to work on a large-scale farm for wages instead? The evidence says no: This table, also from the Oxfam report, shows that remaining on their small plot and growing the equivalent amount of output grants them up to 10 times the amount of income that wage labor would have given them.
- Furthermore, small-scale farming, because it is so labor-intensive, also provides employment opportunities for rural youth and is a major contributor to the food provision in undeveloped areas. It also contributes more to the local economy. There are dozens of challenges though, ranging from lack of access to assets and capital, problems in adjusting to market developments, lack of market information and access, variability in product quantity and quality, limited use of modern risk-management tools, unfair competition in regional and global markets, and possible negative consequences for the environment, according to Oxfam.
- Naively, it seems as if the push towards modernization would mean that average farm size would increase with more and more large-scale farms, but the trend is actually reverse: globally, and particularly in most low- and lower-middle-income countries, average farm size has decreased over the last 10 years. However, a larger share of upper-middle-income countries and the majority of high-income countries have indeed found increases in average farm size:
- The Oxfam and this IFAD article point out that a lot of large-scale interventions to ‘push’ large, industrialized ag onto developing countries and kickstart the transition process have failed, leading to costly lost opportunities for more efficient growth and employment strategies. The IFAD article posits the following, which I think is a great way to end this list:
Small farms typically face a tilted playing field compared to large farms in terms of accessing land, inputs, credit, technology, and markets. These problems have become more pronounced with the removal or scaling back of the many state agencies that served agriculture prior to the market liberalization programmes of recent decades. Left to themselves, liberalized markets and private agents tend to serve larger farms that are favourably located near roads, while smaller farms are neglected because they are more costly or difficult to serve. The problems are especially challenging for women farmers. If more small farmers are to have a viable future, then there is need for a concerted effort by governments, NGOs and the private sector to create a more equitable and enabling economic environment for their development.
For further reading, check out “Five Big Questions about Five Hundred Million Small Farms” and “Who Will Feed the World? The Production Challenge“, which go into wayyyy more depth on challenges and opportunities for smallholder farmers than can be addressed in one blog post.