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

Mr. David Michael Wondu Business & Technology Services, Australia
08.01.2013
David

Well done. It's a useful report. In terms of constraints to smallholder investment, however, I sugegst the report would benefit from more recognition of and examination of economies of scale in agricultural production. There are significant economies of scale in almost all agricultural production enterprises across grains, horticulture and livestock, not just industrial crops. Economies of scale enable lower production costs and facilitate quality control, market access, financial access, skills access, risk management expertise, access to contracts and access to new technology. The reports cites examples of higher yields in smallholder farms compared to large farms but productivity and growth in productivity is not just about yields. While yields is important total productivity is the main game and comes from superior capital and labour performance. That's why economise of scale are important.

Another area that could be examined in more detal is the retail and wholesale market. We can expect these markets to develop and grow in just about all countries especially those in developing and LDCs. They will be private sector owned and driven. The investment climate will play an important role in their incentive to invest. In the circumstances contestable markets take on added importance. Once again, economies of scale will play an important role. As these retail markets grow they will play an ever increasing role in food security.