Most of the world’s poor people work on family farms. Where mass poverty persists, increasing employment and incomes on family farms is the only effective way to start reducing it.

On family farms, most labour and management comes from the family that controls the farm. Research from the Poverty Research Unit at the University of Sussex, UK, examines how growth on these farms can reduce mass poverty in developing countries. In many places, it has already been critical to poverty reduction – for example in China after egalitarian distribution of collective lands to family farms. Successful growth increases labour demand and productivity (increasing output from fewer inputs).

Farm growth must meet three conditions to reduce poverty. Appropriate technology to create employment should be made available to farmers. Land and water should be distributed sufficiently equally for poor people to benefit. Finally, policies should create market incentives for family farms.

The research shows:

• Family farms retain competitive advantages over larger farms where labour is abundant relative to 'capital' inputs (such as farm machinery). 
• Between 1960 and 2005 small farms raised their share of cropland in Asia and Africa. Modern marketing (supermarkets, grades and standards) can create problems for them, but there are clear examples of successful solutions. 
• Improved output of staples - cereals, root crops - from small farms is critical, so poor people can afford more staples.
• New, employment-intensive farm technology from formal science institutions is almost always needed, but must reflect poor farmers’ priorities.
• The need for sufficiently equal and widespread access to land and water has not been met in much of eastern and southern Africa and Latin America.
• Expanding agriculture into marginal lands in developing countries is not an alternative to increasing on-farm productivity; environmental costs are too high.

South and South-East Asia, and Africa have falling ratios of dependent populations (the old and the young) to working populations. This 'dependency ratio' will start to increase again in approximately 30 years, offering a one-off chance to reduce poverty - if these extra workers can be productively employed. In East Asia, where this worked, technology-led small-farm growth was the main source of affordable employment.

Stimulating growth in family farm productivity poses challenges for policymakers:

• The private sector plays an increasing role in agricultural research. Policies must create incentives to develop technologies reflecting poor farmers’ priorities.
• Crop scientists should concentrate on technologies that raise yields and ‘crop per drop’ faster than they raise labour productivity, so that farm employment rises.
• Policies must address unequal access to land and water, sometimes including direct land reform.
• The spread of irrigation in sub-Saharan Africa is essential. Rapid crop productivity growth normally requires fertilisers. It seldom benefits farmers to use these unless water is fairly reliable.
• Policy reforms must reduce farm subsidies and tariffs and eliminate quotas in developed countries.
• Institutions that connect poor people with markets and information must improve. These include small bulking-up and processing centres for fruit and vegetables, mobile phone rentals (and internet cafes) so farmers can learn about recent prices  and more importantly agricultural extension. All these will increase the chances of small farmers benefiting from globalisation.

Source(s):
'The Family Farm in a Globalizing World: the role of crop science in alleviating poverty' International Food Policy Research Institute, 2020 Policy Brief No.74 by Michael Lipton, June 2005
'From Policy Aims and Small Farm Characteristics to Farm Science Needs' available from ‘The Future of Small Farms’, research workshop organised by the International Food Policy Research Institute and Imperial College, Withersdane Conference Centre, Wye, UK, June 26-29, 2005

Funded by: International Food Policy Research Institute, Washington, DC; Fourth International Crop Science Conference, Brisbane

id21 Research Highlight: 27 January 2006

Further Information:
Michael Lipton
Poverty Research Unit
University of Sussex
Brighton
BN1 9SN
UK

Tel: + 44 (0) 1273 678739
Contact the contributor: M.Lipton@sussex.ac.uk

Poverty Research Unit, University of Sussex, UK

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'Getting to market: support for smallholder farmers'

'How can agricultural extension workers support small farms?'

'Food for thought: are West Africa’s family farms worth saving?'

'The value of rainfed agriculture in a world short of water'

'Minimising the impact of HIV/AIDS on farming households'

'Helping the rural poor: the key to halving world poverty'