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Re: HLPE consultation on the V0 draft of the Report: Investing in smallholder agriculture for food and nutrition security

Gilles Allaire INRA, France
FSN Forum

1) Definition and significance of Smallholder agriculture: is the approach in the report adequate?

As it is said in the report the reality, the importance and social inclusion of SH is very diverse for historical reasons. This led to a complete definition, but which covers a large diversity of situations. Proposing typology is tricky issue for a typology makes sense according to a question.

Although the future of SH ag is depending on individual and local collective capacities, the social and economic dynamics which transform the situation in one or other direction (to strengthen or the reverse food security) are depending of the whole economic context at national and international level and of the macroeconomics trends. To cover this issue different criterions can be considered to distinguish different types of SH populations facing different economic structural issues:

  • The degree of the livelihood dependency on monetary exchanges both considering earnings of member of the family (in large and including migrants) and the sale of food, wood or other products of the family activity
  • The type of labor market the SH population is depending on (local, industrial more or less protected, international if migrants)
  • The degree of commoditization of the agricultural activity (versus self-consumption)
  • The type of market opportunities: local, regional, export
  • The degree of inclusion/exclusion regarding local or regional society.


The report considers two political (development) issues: poverty and the development of a market integrated and efficient “small” agriculture. Providing and securing the conditions to invest to the SH is engaging processes of market integration of the small agriculture, in the extent of the rising of market opportunities. We know for sure that these processes are selective and that only a more or less small part of all the population which can be considered as SH will enter in the dance. Thus from this process can result more or less poverty, notably depending on the non ag opportunities.

Even if the growth ratio is high like in Brazil, the policies should address differently but in a complementary manner the two issues, because in general it cannot be expected that market development will rapidly suppress poverty. They both concern national food security; that in two ways: the family agriculture producing for regional or national market and the poorest population getting means of subsistence. In both case it is the issue of “investment”, but not of the same type.

From these considerations, it results that the relations between local/regional economies and the whole economy, and the respective dynamics of export and domestic markets are major determinants of the economic opportunities for SH agriculture development and economic integration (productive investments).

Necessary in the report the analysis of the constraints the SH face is decomposed. But some considerations on the systemic economic aspects allowing or limiting development strategies could be added.

Even though macroeconomic modeling is generally not able to represent complex multi-scaled economies, there are institutionnalist pieces of economic research which address the issue of the agriculture development in a macroeconomic perspective as, for example, the (old) induced innovation theory or the (French) regulation theory, with the notion of “model of development”…

2) Framework for Smallholder agriculture and related investments: is the typology useful, adequate and accessible for the problem at hand?

The typology proposed in the report (point 4.5, pp 51sp) is certainly useful. The idea of simplifying in considering two polar situations in three dimensions is exciting: assets; markets (I would say market structures) and institutions (including market institutions, as property rights, governance structures and various kind of rules applying to monetary exchanges).

I have two comments.

1. The 8 ideal-types cover contrasted situations. When there are two + the situations allow small ag development with more or less dynamism and insecurity. The other cases are illustrated with different situations: involution, self-consumption (isolation), extreme poverty or illegal production. All the illustrations seem relevant. The issue is to which strategic level this typology help for analysis?

Certainly it is at the local/regional level (more than at the national level). At this level, the criterion to qualify positively or negatively the three dimensions (assets, markets, and institutions) could be different according to the context. The six criterions proposed upper can be used to document the context and identify dynamics.

In addition, in a region it is possible that different communities of SH face different types of situations, with some linkages.

2. Finally there are several described situations in which development dynamics of family productive ag. But in most of them the issue of poverty in link with development processes has also to be addressed. For example, even if markets are offering opportunities, the issue of self-consumption and the necessary collective (public) investments in this regard as generally to be considered as well.

3) Constraints to smallholder investment: are all main constraints presented in the draft? Have important constraints been omitted?

As I said before, macroeconomics or political economy matter in agriculture dynamics. If the report analyses extensively the different types of constraints to smallholder investment including social and institutional dimension it is not totally clear which are the governance or geo-political levels where strategies can emerge and obtain political support.

If we can say that in any case the political and professional organization of SH communities play a key role in the emergence or the construction of development policies but there also and importantly coordination of class interest to allow development. According to the large diversity of situations it is not the same conflict and the coordination of interest which determinate the social dynamic.

For this reason I was asking myself on the proposition of elaboration of a “National Smallholder Vision and Strategic Framework.” Certainly calling the governments to elaborate such framework is way to promote the issue. But it cannot be a general set of dedicated policies or development tools. Indeed it is a class alliance.

I add an extract on a 2009 paper (presented at IAAE congress) on Induced innovation theory

The theory of “induced innovation” developed by Yujiko Hayami and Vernon Ruttan explains the orientation of innovation in agriculture and corresponding market creation as a global process for a region or a country by relative scarcity of the two factors of production: land (and water) and labour. Innovation here includes individual strategies to adapt productive frameworks to upstream and downstream market opportunities as public policies and institutional changes. Factor scarcity leads to reallocation of collective and public resources (including agronomics) for capacities and market building. The inductive effect is both systemic (convergence of knowledge, assets and action models) and institutional. The systemic effect result from the application of the principle of efficiency in economic action, while the institutional induction result of the selection of meta-rules or “reasonable values”. Scarcity reflected in the factors’ costs correspond with structural constraints to which responds innovation. The analysis corresponds with the dynamics of modernization of agriculture and industrialization. The first ideal-type formulated in the thesis (Hayami, Ruttan, 1971) corresponds with settlement agriculture in North America in which labor is rare and land structurally in extension (according to the historical conditions); factors structural disposition which as oriented innovation to mechanization and the rise of labor relative productivity. The second ideal-type formulated corresponds with Japan agriculture, with small holdings and high population density ratio and even increasing in rural areas, implying structural trend of reduction of available land by worker; factors structural disposition which as oriented innovation to resources rising the land relative productivity by provision, e.g., of water installation or selected seeds. From the principle of efficiency, confronted to different structural trends, economic actors follow different strategies and if convergent strategies solve the structural issues, efficient market arrangements can result. Market strategies can be unable to solve structural constraints. If in the second ideal-typical model the rising of the land productivity does not compensate the reduction of the quantity of land by workers in regions or periods where demographic pressure is high, due to family strategies keeping on land resources or to lack of wage labour opportunities or barriers to migration, the solution to the structural problem is still inefficient and markets are not likely to develop rapidly. On the same manner structural constraints limit the efficiency of the first ideal-typical model if the rising of the labour productivity does not compensate the reduction of available workers in certain regions or periods, the total production being falling. A point which made debates which the induced innovation thesis has to be stressed. It is not rare that a region or a national economy combines the two models; the persistent duality of the agricultural sector when coexist large and small farms which can historically be found in several countries is not a contradiction to the thesis of induced innovation by factors allocation, while the fact was opposed to it by critics: due to organizational forms labour costs can be higher on large than small farm, and the reverse for land. Different classes corresponding with different historically inherited productive factors distribution can be constituted in different groups of interest and that can be considered as a general case. The conflict of interests leads to more or less sustainable differentiation of agricultural systems of production at the sub-regional and sub-sectoral levels which is persistently reflected in institutional layers. The induced innovation thesis helps to understand the complex geography of agriculture and food resulting from a long period of market economy development.

The historical development of the industrialization of agriculture (which diffuses since the middle of the XIX° century) exhibits a paradox stressed by Chandler (1977): while in general the vector of the industrialisation is the building of large firms and cartels, in agriculture it comes with the “triumph” of family agriculture and the regression of the latifundium mode of production inherited from the colonial past (but today new forms of agrarian capitalism can be observed). This issue has generated a huge literature It was notably argued that the cost of monitoring subordinated work is higher than in a manufacture due to the spatial dispersion of agriculture activity (e.g., Hayami, 1996); it has to be added that, due to nature of the activity which rests on life processes, ordinary tasks include facing continuous repairable lapses in the functioning of a farm, which give unpredictability to the tasks organization. Beyond this structural dimension of agricultural work, there are institutional preconditions for agriculture modernization. Major market control stakes for modern agriculture (when markets are the main way for exchanges) are: access to land, to bank credit, to knowledge and intangible resources, and to public resources (subsides and rights, laws regulating professional activities, public standards). In modernisation crisis, there is struggle within the rural social classes to access to these resources; but for stable markets to emerge agreed sharing of resources have to be made and maintained under governance structures such as a profession or a local productive institutional arrangement or a functioning type of value chain integration allowing variety of components. For example, a dominant conception of control in agriculture can limit either competition for land or either for the access to market at the level of the primary production when generic agricultural products are concerned, competition being therefore placed on the control of techniques of production; and in this example the actors concerned by land control are not necessary the same than for product control. This observation stresses the complex architecture and geography of markets, in which develop control projects for productive arrangements.