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Perspectives for Small* Farmers in Developing Countries: Do They have a Future?

By Professor Ramesh C. Agrawal, Centre for Advanced Training in Agricultural & Rural Development, Faculty of Agricultural and Horticultural Sciences, Humboldt University, Berlin, Podbielskiallee 66, D 14195 Berlin, Germany

"The combined wealth of the world’s 200 richest people hit US $ 1 trillion in 1999; the combined incomes of the 582 million people living in the 43 least developed countries is US $ 146 billion" Human Development Report, 2000 Page 82.

Most of the farmers in developing countries are small, both in terms of resources and incomes. In the two most populous countries of the world, viz. China and India, where more than one third of the World’s population lives, the small holders account for more than 50% of the farm households. In the Sub-Saharan Africa, smallholder population constitutes nearly 3/4th of the rural population. What is worse, their numbers depict an increasing tendency over time. In India, the number of small and marginal farmers (i.e. having a farm size of less than 2 hectares) went up from nearly 49 million in 1970-71 to more than 82 million in 1990-91. Therefore, such farmers accounted for nearly 78% of all Indian farmers in 1990-91 as against 69.7% two decades ago and could well be above 82% by now.

Unfortunately, the small farmers in developing countries are also amongst the poorest. Nearly 70% of the world’s poor live in rural areas; most of them are small farmers. Most of the women-headed farm households also fall under the category of small and disadvantaged. "It is widely accepted that female-headed households are more likely to be poor than male-headed households (Folbre 1991:89-90), an observation supported by many reports, including the Kenya PPA: In 35 villages people were asked to mark all of the female-headed households on a map. Overall, while 25 percent of the study population was categorised as very poor, there were over twice as many female-headed households (44%) as male-headed households (21%) in this group......The pattern of greater poverty among female-headed households was true for every district and for all 35 villages". (14, pp 201-202). The welfare of most developing countries is directly related to the well-being of small farmers and definitely to the well-being of the women folk in these countries. Throughout this paper, the term ‘he’ is gender-neutral and refers to both ‘she’ and ‘he’.

II. THE PROBLEM (Worsening situation of small farmers)

These farmers have benefited little from the so-called various revolutions in agriculture. The strategies of focusing agricultural policies, expecting from this sector only aggregative national food self-sufficiency and playing a second fiddle to the industrial sector (by providing raw material, cheap labour, savings, etc.) had a built in bias against small farmers. In fact, in many cases, their situation has worsened over time. The incidence of poverty in terms of absolute numbers of poor in India, most of whom are farm-households of small means, is arguably estimated not to have improved. On a general note, it can be said that not only their __________________________________________________________________

* The term, "small farmers" as used here includes marginal farmers also. The word ‘small’ is a generic term and comprises highly diverse members. Their definition may vary not only from country to country, but also within a country and even a region.

number is increasing but their level of living (measured in terms of not only economic but human development ) is not improving (if not deteriorating). In the absence of proper steps, their future seems to be very bleak .


This paper argues that this state of affairs is for no fault of the small farmers. As ever, they have been doing their best and not only bravely fighting for their survival but also contributing to the well-being of their nation in diverse ways, directly or indirectly, e.g., through economic growth, absorption of increasing labour force, enhancing food self-sufficiency and autarky, improving balance of trade through increased exports, providing their savings for investment in non-agricultural pursuits, providing impetus to the non-agricultural sectors, thereby accelerating overall national economic growth. In fact, it is well recognised that in the rich industrial countries, it is usually the consumer who subsidises the farmer. The reverse is true in the developing countries - the poor farmer shares the burden of providing cheap food to the consumer and raw materials to the industries.

The problems facing the small farmers in developing countries often/ mainly lie with weak institutions and faulty national policies (their formulation and execution). In planning documents of these countries, a lot of lip service can be found, giving the misleading impression that improving the lot of these farmers is given high priority by the politicians/ policy makers. Unfortunately, the reality is different. These farmers have been marginalised in the true sense of the word in the execution of national policies. The policies of industrialised countries have not helped.

The premise of the paper is that these farmers are not, and need not be, a helpless lot. Far from it (How could they have survived for thousands of years against such heavy odds?). They also do not expect/need any charity. What they require is ‘equity and justice’ in terms of (i) fair access to the agricultural inputs (e.g. land, water, seed, fertiliser, credit, etc.), markets, information, policy provisions and (ii) politicians/policy makers with an open ear – in other words, a level playing field.

With the increasing degree of globalisation, the problem has assumed a greater international dimension. The paper pleads that both the developed and developing countries have a responsibility to co-operate in this endeavour, because the policies of the developed countries have many times been as harmful to these small farmers in developing countries as their domestic policies. The international institutions and non-governmental organisations also have a very vital role to play. Therefore, the action for enabling the small farmers to have a future is needed at all levels - local, national, and international.


In this section, an attempt has been made to draw a profile of the small farmers, in most of the developing countries in Asia and Africa, in respect of selected/important variables, point out some of the accompanying problems, and examples of potential, if the problems are obviated.

4.1. Size of holdings

The distribution of land holdings is fairly skewed in most developing countries. The top decile (10%) of farmers account for 30% - 50% of the operated area. In India, for example, in 1990-91, the 8.8% of the farmers, belonging to the top two categories of ."medium" and "large", operated 44.6% of the cultivated land, whereas the share of the "marginal and small farmers" accounting for 78% of India’s farmers ( nearly nine times of the former category) was only 32.2% in the operational holdings ( i.e. only 72% of that of the former). The small farmers are characterised by relatively smaller area of land with relatively high inputs of labour and small quantities of capital, generally higher index of cropping intensity and diversification. According to the Indian Agricultural Census (1985-86), cropping intensity of was found to be 143.1% on marginal farms; the corresponding figures for small, medium and large farms were 129.9%, 119.6% and 111.6% respectively. (6,.p. 167)

4. 2 Contribution to over-all production:

The smallholders’ contribution to the total crop production varies widely from country to country, but is often higher in proportion their share in arable and permanent crop land .

Table 1:.Share of smallholder farmers in total crop production (mid-1980’s)

Share in %
Country Rice Wheat Maize Other food crops Cocoa Cotton Arable and permanent Crop land
Bangladesh 70 30         67.9
Bolivia 15 20 30 30 20   13.2
Cameroon     25 25 100 100 14.6
Ethiopia   90 90 90     28.4
Indonesia 75   75 90 40 100 72.0
Kenya     45 50     21.1
Malaysia 30     30 18   26.1
Mexico 35 35 35 35     12.0
Nigeria 90   90 90 90 90 70.9
Pakistan 23 25 47 11   17 14.0
Thailand 48   37 33   44 20.9

Source: Derived from IFAD: The State of World Rural Poverty, 1992 (pp 410 – 411)

4. 3 Natural conditions

Small farmers are concentrated in drought-prone areas and grow primarily coarse grains or inferior grains, millet, pulses, roots and tubers. Advances in improved technology for these areas, as well as these crops, have been negligible or at best slow. In India, for example, between 1960-61 and 1997-98, yields per hectare increased by 190% in wheat, 87% in rice, 86% in maize, 36% in sorghum, and a miserable 6% in pulses. In fact in pigeon pea, the yield level of 849 kg. declined by 1/3rd to just 563 kg. during this period. The deficiencies in the focus of modern technologies have contributed substantially to inter-regional income and also to inter-farm inequalities. The dearth of appropriate technologies and, when they exist, the lack of proper extension and supporting institutions and services, become major barriers. " Serious gaps among experimental plot yields, demonstration plot yields and farmers’ yields under rain-fed farming have been reported. In general, the yield gaps were much wider in case of groundnut and sorghum" (7, page 98). Relatively smaller number of farmers in rain-fed areas apply fertiliser, and that too in much smaller quantities as compared to those in irrigated conditions. The yields on the former are much lower than the latter and subject to greater variability due to vagaries of monsoon, making farmers in these areas even more susceptible.

Watershed management approaches, being developed in several countries, offer considerable promise in such areas. However, it is necessary that these approaches are participatory and in line with the resource endowment and the absorptive capacity of the farmers/target groups.

4.4. Level of formal education:

There is enough evidence to suggest that the size of holdings and level of formal education are positively correlated. They are probably inter-dependent. Since small farmers are far behind in terms of formal education, they are inherently at a great disadvantage as compared to the large farmers and are caught in a vicious self-perpetuating problem. Formal educational level could affect their disposition as well access to credit, extension, new technology, and avenues to improve their lot. Better-off farmers are able to provide their children education, thereby giving them a head start.

4.5. Access to external inputs - fertiliser, irrigation, extension, institutional credit

The condition required by the High Yielding Variety (HYV) technology to succeed seem to favour, at least in the initial stages of its introduction, large (few in number) farmers to the detriment of the large number of small ones. Usually, the proportion of farmers using fertiliser and modern inputs increases with an increase in the (i) size of holding (Table 2), (ii) level of education, (iii) and availability of irrigation facilities. The availability of credit from institutional sources and access to extension service are inversely related to the farm size. The distance from the road has a negative impact on access to inputs, extension service, and markets and, therefore, puts the relatively isolated, poorer farmers in the interior/ inaccessible areas at a

greater disadvantage, often with dire consequences. This year, a number of cotton growing small farmers are reported to have committed suicide (Frontline, May 13 - 26, 2000) in Mahbubnagar District of India, because of their inability to pay huge debts owed to the money lenders (in the absence of access to institutional credit) after the failure of their crop caused by a combination of the failure of rains and use of spurious seeds and ineffective pesticides.

Table 2: Use of selected inputs according to size of holding
Farm size


Total number 

of farmers

Farmers using

no modern


Farmers using fertiliser
Farmers using improved


Farmers using chemicals
Less than

0.5 ha.

40 (45)
34 (39)
31 (35)
13 (15)
0.50 -

1.00 ha.

16 (29)
35 (63)
32 (57)
18 (32)
1.01 -

2.00 ha

4 (10)
31 (78)
33 (83)
17 (43)
More than

2.00 ha.

2 (7)
24 (89)
20 (74)
17 (63) 

Notes: 1. Figures in parentheses are the percentages of farmers in a given size of holding

2. The total of percentages in a row need not be exactly 100 because one farmer may be using more than one input. Source: ( 1, p. 75)

4.6 Rights to land ownership:

Almost by definition, land is the most limiting factor, in the resource structure of a small farmer. Its efficient use is facilitated if the farmer either owns it or has a security of tenure, i.e. is assured that he would continue to cultivate it in the foreseeable future. Though land reform programmes have been initiated in a number of countries, often they have failed to have the desired effect, either due to wrong concept, or due to their half-hearted/ poor implementation. Tenancy is still prevalent, though its incidence varies. Assured tenancy, per se, might not be bad but poor programs are. Lack of clearly defined rights to cultivate implies that (i) the tenant farmers have little incentive to carry out permanent improvements in land, being cultivated by them, have problems with collateral for getting credit, and are, therefore, constrained in improving productivity, and (ii) the landlords prefer to leave their land idle rather than sub-let to the tenant for cultivation, for the fear of its passing into the hands of the tenant.

4. 7 Integration into market:

It is incorrect to perceive that most of the small farmers, being subsistence in nature, are either not interested in market or are not influenced by it. Often, they keep food grains enough only for the next few months and sell the rest of the (meagre) produce (which they might have to buy later at a higher price) in the market for various reasons, including meeting social and/or financial obligations. For example, the share of Bangladesh smallholder farmers’ output marketed varies from around 20% for rice (their staple food crop) to 60% for wheat, and 80% for maize. In case of nearly all cash crops like cocoa and cotton, they market almost all of their production ( e.g. 100% of cocoa in Benin, Ivory Coast, Indonesia, Malaysia, Nigeria, The Philippines. (12, pages 410-411). Even the marginal farmers (having no more than 1 hectare of operated holding) marketed nearly 20% of their product; the figure for small ( 1<= 2 hectares) and large farmers (>= 2 hectares) being respectively 29.7% and 41.1% (3, p. 77).

However, the prices they receive are usually very low because of their weak bargaining capacity. According to a study, in India, the increases in yields per hectare of wheat after the adoption of improved varieties were of the order of 59% in case of small farmers, 60% for medium farmers and 79% for large farmers. However, this translated into a change in income of only 44% in case of small farmers ( a reduction of about 25% in comparison to the production; the corresponding figures for medium and large farmers were 49% and 68%( indicating a reduction of 18.5% and less 14% respectively) (5, Table 18). In the absence of any thing to sell, they resort to taking credit, primarily for consumption. During high price periods also, more often than not, it is the middleman who benefits.

4. 8. Productivity levels/per hectare

The small farms are in general not less efficient than large farms. When the small farmers had access to irrigation, not only a larger proportion of them (45%) used these facilities to irrigate wheat as compared to the larger farmers (35.7%), they also obtained higher yields: 21.9 quintals per hectare as against 20.3 quintals on large farms.(3, p. 96). Given right conditions, after the initial 'transitory' period, the small farmers catch up and in some cases, even surpass the large farmers in use of the HYV technology, when they are backed up by improved access to inputs and credit. In the Indian state of Andhra Pradesh in the early stage of the adoption of HYV rice technology, the yields and incomes per hectare were positively related to the farm size (Table 3). The average harvest on small farms was 2467 kilograms per hectare as against 2720 kg on medium and 2750 kg on large farms. A decade later, this relationship was in reverse. The small farmers produced an average of 5050 kg of rice, thereby surpassing both the medium (average yield: 4800 kg) and the large farmers (average yield: 4550 kg.). Their incomes per hectare also increase accordingly, by 161 %, as compared to 101 % and 86 % in case of medium and large farmers. However, these increases in per hectare yield and income were, in most cases, not enough to compensate for the disadvantage of the small area of holdings - partly due to high costs of production per unit. Therefore, the disparities in absolute incomes between various farm sizes increased. Inter-farm differences are found in high agricultural growth regions as well. In Haryana, the incidence of poverty was found to be inversely related to the level of irrigation as well as the farm size. Poverty was conspicuous by its absence among the large farmers.

Table 3: Yield/ha and income from rice by farm size
R i c e
I r r i g a t e d
Size of farm & year

(metric tons)


(US $)


Before (1976)

After (1987)








Before (1976)

After (1987)








Before (1976)

After (1987)








Source: Agrawal, R. C. (1, p. 75)

4.9 Access to provisions of policies (e.g. support prices, subsidies, etc.)

Growth is a function of value, i.e. not just yields but also the prices, received by farmers. To meet this objective, the governments often resort to the announcement of minimum support prices of selected commodities, which are either too low or not accessible to the small farmer. During the time of glut, when the market prices fall below the support prices, the government machinery is not able to cope with the large number of farmers coming to sell their produce or tries to exploit them for accepting it. In the absence of the right price, the farmers often revert back to the old practices and patterns. It is too risky for them to adopt something "new". Because of the institutional weaknesses and leakages, the schemes specifically targeted at the ‘poor’ (e.g. differential rates of interest in India) end up benefiting the people in power that be, i.e. large, influential farmers and the officials administering these schemes. The situation of Nigerian agriculture is not much different. "Subsidies such as those for fertiliser benefited only the middlemen. Marketing boards, to which farmers were obliged to sell most exportable crops, had originally been set up to ensure that farmers got a reasonable price for their produce, but the prices were set too low, so the boards imposed a hefty implicit tax on impoverished peasants." ( 8, Nigeria Survey, page 12.)

4. 10. Significance of non-farm income

The proportion of farmers having off-farm income is usually inversely related to farm size. In case of small farmers, the insufficient levels of income from farm alone and higher man-land ratio forces them to look for avenues of income other than agriculture. In order to improve their lot, income-generation activities outside agriculture are undertaken. However, launching of such activities alone does not automatically guarantee the trickle-down effect of the benefits to the intended beneficiaries . The experiences of employment generating schemes and relief operations in Orissa and Gujarat show that a big chunk of money allocated for such activities often ends up in the pockets of the unintended beneficiaries.

The growth of rural non-farm incomes is doubly (forward and backward) linked to that of agriculture, via upstream activities (e.g. supply of inputs, consumer goods, and services to agriculture) and availability of agricultural raw materials for downstream activities. It is estimated that every 1% increase in value of agricultural output generates an economic growth of US $ 2.32 (11). In regions with better infrastructure, better governance and improved access to the inputs, extension, markets and provisions of policy, the multiplier effect is higher.

4.11 International Environment:

Increasing degree of globalisation has added an even greater international dimension to the problem. The policies of heavy subsidisation and protectionism, widely practised by the industrialised countries, often have a negative effect on small farmers in developing countries. Nearly all industrialised countries, though having a very small proportion of their population in farming, can go to ridiculous lengths to protect their agriculture. It is estimated that in 1998, in addition to receiving a support of nearly US $ 21, 000 from the state; a Japanese farmer also got a support of US $ 577 per consumer via higher prices. In the same year, the average state support provided by the European Union and USA to each of their farmers was US $ 19, 000. Such policies have a devastating effect, among others, on (i) the farmers in developing countries and (ii) the international environment (natural, economic, political and social).

4.12 Summing up - the vicious circle of poverty

In most of the developing countries in Asia and Africa, majority of the farmers are small. They produce under severe natural, institutional, social and policy handicaps. Nevertheless, they produce (i) proportionately more than their share in the land, and (ii) both for subsistence and for the market. In general, they are not less efficient than large farms. Given right conditions, after the initial 'transitory' period, the small farmers catch up and even surpass the large farmers in use of the HYV technology, when they are backed up by improved access to inputs and credit. They are caught in a vicious circle of

Poverty of Small Farm-Households/Small Quantities of Land and Capital à Low Capacity to Invest in Farming à Smaller Total Production à Weak Bargaining Power à Poor Access to Public Institutions à No or Inadequate Access to Inputs, Markets, Credit, Support Prices (Provisions of Policy) due to failure of proper formulation and execution of policy à Low Incomes à Poverty.

and have to be supported in their relentless struggle to get out of this muddle to attain their full potential and to have a future.


A farmer, whether small or large, takes his own decisions about cropping pattern, production and other activities. He is rational under the conditions dictated by the surrounding environment - the physical, social, his resource endowment, his knowledge, the institutional, policy and the like. Simply put, his environment has to be improved, e.g. with regard to:

5.1 Education:

Both formal and informal forms of education are important. They expand farmers’ knowledge horizon, inform them better about the availability of various supporting services, give them greater confidence and, hopefully, more social (and political) clout. They might also be able to better assess a new technology vis-à-vis their existing indigenous knowledge and absorptive capacity rather than try to pre-judge it as definitely risky. Imparting training in simpler technologies, which address their felt-needs, gives these farmers opportunities not only to learn new skills, but also to exchange information (i) amongst themselves and (ii) between themselves and, if they care to listen, the educators, researchers and policy makers.

5.2 Access to inputs and provisions of policy:

This is the most serious constraint facing the small farmer. Theoretically, the governments, in their plans and white papers accept their role to provide a supportive environment to increase production and productivity in the form of price support, agricultural research, public investment in irrigation and infrastructure, support to credit and marketing, support to agricultural export besides creating and strengthening institutions like co-operatives which support agricultural activities. But as we have seen, the practice leaves much to be desired. There are plenty of examples to support the view that, given the right conditions, small farmers can be, both innovative and enterprising. In Western Gujarat, in 1998, due to the initiative of a state government official and a local industrialist, the residents of Vichiawad village built, with their labour, 12 check dams at a cost of less than 10,000 DM on two streams of the village. "A single downpour was enough to garner water to irrigate 300 of the 2000 acres of arable land." (10). This drought-prone region was an oasis amid the recent desiccated landscape caused by severe draught in the last couple of months. The example of small farmers in Andhra Pradesh has already been cited above (in 4.8).

5.3 Diversification into high value horticultural crops (a focal points of this Conference):

Judicious introduction/expansion of suitable horticultural crops can be very useful to improve the lot of small farmers, and contribute to the exports. These can provide not only supplementary income to the small farmer but also improved nutrition, additional employment and use of hitherto unused (surplus/idle) resources. According to a study conducted in the Maharashtra State of India, horticultural crops have been adopted chiefly on poor, hitherto uncultivated land, helped in generating additional employment, augmenting income and have, "direct wealth augmenting effects in terms of an increase in the value of land (with standing crop), development of pipelines, in some cases drip and sprinklers, construction of ‘pucca’ houses, purchase of two wheelers, better education" (15, page 309), if the farmer is supported with the provision of initial capital investment, knowledge and necessary inputs to raise, store, transport, market and process these crops. These are the very factors which are crucial to small farmers in non-horticultural crops as well.

    1. Secure marketing for urban and peri-urban small farmers
Nearly 800 million urban residents are estimated to practise urban and peri-urban agriculture for food and cash on small pieces of land. They undertake widely varying activities from field crops to vegetables and flowers to poultry, hogs, and dairy. Their contribution to the (i) improvement in the quality and quantity of nutrition, (ii) additional regular income, (iii) generation of employment and (iv) utilisation of resources like recycled waste water, pieces of vacant land, etc. which would have otherwise gone waste, is often ignored and at best highly underestimated. For such farmers, access to secure markets, enabling them to get high returns as long as they have access to land, may outweigh the risks normally associated with insecurity of tenure.

5.5 Domestic and international policies:

Domestic policies often tend to be contradictory and ‘anti-agricultural’. Wrong priorities, leading to lack of investments e.g. in (i) rural infrastructure, crucial for access to inputs and markets and (ii) agricultural research, have to be corrected. However, formulation of good and consistent policies is only one aspect; their proper management and execution is no less important. Poverty can not be reduced by lip-service but by translating into action various promises which are made in various national and international jamborees. Both the developing and developed countries have to make their contribution. The former have to put their own house in order by becoming more accountable, honest, setting their priorities by using their resources for the uplift of their people rather than whiling away on arms; and given this, the latter should provide more aid, access to information technology as a matter of right to the disadvantaged, reduce or completely forgive the debts of deserving countries and in any case follow policies of opening their markets - the virtues of which they are not tired of preaching to their poor brothers.


Small farmers are tough and not a helpless lot. Given the right conditions, as a catalyst, they are capable of taking care of themselves and even of others. It is borne out by innumerable examples, all over the world, of persons like Kusum. (in Maharashtra, India) cited in the "Human Stories of the Rural Poor" (13). She was hesitant to the extent of venturing even to a nearby school in her village, could not attend village meetings, and was afraid of approaching men and strangers, till she was persuaded by a group of women from a neighbouring village to join a local savings group. With the grant of a loan and training in goat rearing under the auspices of this group, she purchased goats. She now sells milk and goat kids and has significantly improved the financial and nutritional condition of her family. However, most importantly, joining this group has given her and her fellow members confidence in themselves; this enablement is empowerment. Such seemingly small steps are very significant to get the small farmers out of the vicious circle. These would ensure a better future for to-day’s small farmer and saving her/him from becoming an extinct species, i.e. from being reduced to a mere landless labourer.

Selected References:

  1. Agrawal, R. C.: Impacts of high yielding variety technology on rural population in developing countries – an overview (in Auswirkungen biotechnologoscher Innovationen auf die ökonomische und soziale Situation in den Entwicklungsländern), Bonn, 1995.
  2. Agrawal, R. C.:Sustainability of resource use and development in agriculture – some challenges for policy (in Ressourcenknappheit und Erhaltung der Lebensgrundlage – die Herausforderung für die Zukunft), Berlin, 1997.
  3. Agrawal, R. C., Agricultural credit for small farmers in Uttar Pradesh, India, Berlin, 1980
  4. Artha Vijnana, Pune, 2000
  5. Asian Productivity Organisation: Technology transfer for small farmers in Asia, Tokyo, 1992
  6. Asian Productivity Organisation: Agrarian structure and reform measures, Tokyo, 1994.
  7. Asian Productivity Organisation: Rain-fed agriculture in Asia, Tokyo, 1997
  8. The Economist, January 15, 2000, Nigeria Survey
  9. The Frontline, Chennai, May 13 - 26, 2000
  10. India Today, New Delhi, May 8, 2000
  11. International Food Policy Research Institute: Foreign Assistance to Agriculture, Washington, D.C., 1995
  12. International Fund for Agricultural Development: The State of World Rural Poverty, Rome, 1992
  13. International Fund for Agricultural Development: "Human Stories of the Rural Poor", Rome, 2000.
  14. Narayan, D. Voices of the Poor: Can Anyone Hear Us?, Washington, D.C. 2000
  15. Parchure, S. : Abstract of Ph.D. thesis, "Economics of Agricultural Diversification with special Reference to Recent Horticultural Developments in West Maharshtra (Published in ARTHA VIJNANA, Vol. XLI No. 3, September, 1999, Pune
  16. United Nations Development Programme: Human Development Report, 2000, New York, 2000