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Questions and answers - The State of Food and Agriculture 2014

What is innovation?
Innovation, the process of doing things better, is a process and is distinct from invention as it may not involve completely new knowledge or product. Using existing inputs in new ways is also innovative.

How can farmers innovate?
Change can involve products (e.g. new types of crop or high-yielding varieties), processes (e.g. zero-tillage or different crop rotations) and/or managerial (e.g. new business models or ways of interacting with value chains, increasing storage capacity).  Farmers may produce more with the resources and inputs they already have, or to expand, change or diversify their marketable output, increasing profitability. Innovation may also allow them to free up resources (e.g. labour) for use elsewhere. Innovation can make production as well as the provision of ecosystem services more sustainable.

What is an innovation system?
Innovation in agriculture involves multiple actors such as farmers, producers' organizations and cooperatives, private companies in supply and value chains, extension services and national research organizations. Previously, the main focus of innovation was research as a means of generating technologies and knowledge, and extension as a means of disseminating the results of research. Recently, increasing attention has also been given to other sources of innovation, which is increasingly perceived as taking place within a system or network of actors that fosters interaction and learning.
What is family farming?
Several different definitions of family farming exist, some created for national policy or statistical purposes. The criteria used in SOFA 2014 include farm management by a household or an individual and the use mainly of family labour, but not limitations in farm size.

How many farms and how many family farms are there?
Based on data from 167 agricultural censuses, SOFA 2014 estimates that there are more than 570 million farms in the world. In a sample of 52 countries FAO found that, in almost all countries, more than 90 percent (often close to 100 percent) of farms were managed by an individual, a group of individuals or a household, and that by far most of the permanent workers on farms are household members. Based on these common criteria we can therefore say that at least 90 percent of the world's 570 million farms are family farms.

Why are family farms important?
They occupy large tracts of the world's farmland and contribute an even larger share of food production. In a sample of 30 countries around 75 percent of the land is managed by households or individuals, and family farms are likely to produce more than 80 percent of food.

How large are farms across the world?
In a large sample of countries, 72 percent of holdings are smaller than 1 hectare and 84 percent are below 2 hectares. Including farms up to 5 hectares, the share increases to 94 percent. Small and medium-sized farms are important in all countries regardless of income level.

How important are small farms?
Globally, farms of more than 50 hectares operate two-thirds of the world's farm land while farms up to 2 hectares only cover about 12 percent and those up to 5 hectares around 20 percent. However, this reflects the situation in high-income and upper-middle-income countries (especially in Latin America).  In low-and middle-income countries small and medium-sized farms are much more important. In low-income countries, farms up to 2 hectares occupy about 40 percent of the farm land and those up to 5 hectares about 70 percent, underscoring their fundamental contribution to food security.

What are other important characteristics of family farming?
Diversity may be the most important characteristic. Also, most farming families do not rely exclusively on farming for their livelihoods but have multiple sources of income. Household survey data on farming families show that:
• Small family farms achieve higher yields per hectare than larger family farms, but have lower labour productivity, which implies that they have lower per capita incomes from farming.
• Small family farms also rely to a greater extent on non-farm sources of income.
• Small farms tend to use less modern technologies (e.g. mechanization, improved seeds).
•Small farms sell a smaller share of their output than do larger farms.

Are there limitations to the role of innovation?
The potential for escaping poverty mainly through farming is limited for many of the smallest farms. They need other supplementary or alternative sources of income, so efforts to promote innovation on family farms must go hand in hand with policies promoting overall rural development.

What is the role of innovation in family farming for global food security and environmental sustainability?
We must reduce the huge gaps in land productivity (yields) between high-income countries and countries with lower incomes and the even-larger differences in labor productivity. Innovation is also key to striking a balance between productivity growth and natural resource preservation. Input-intensive production cannot meet the challenge of sustainability, while traditional low-input systems cannot meet the challenge of productivity growth.

What is the role of markets in driving innovation?

Access to markets - local, domestic, or international - is an essential driver of innovation on family farms. Improving family farmers' access to markets (e.g. through investing in physical and institutional market infrastructure) provides an incentive for them to innovate. While some family farms are primarily subsistence operations, improving the market integration of family farms that have the potential for commercial production is fundamental to promoting innovation.

What are other key obstacles do farmers face to adopting practices leading to sustainable productivity growth?
Farmers often face barriers that hamper their capacity to innovate, including high initial costs of new practices and limited access to inputs, information, markets and technologies suited to their needs. Such constraints are often much more severe for women farmers. Closing this gender gap can lead to major increases in sustainable agricultural productivity growth.

What is the role of agricultural R&D for family farms?

Private investment in agricultural R&D is growing rapidly, especially but not only in high-income countries. Public-sector investment is indispensable to ensure adequate research investments in areas of little or no commercial interest, such as "orphan crops" that smallholders grow on marginal land.  An extensive body of empirical evidence confirms the high returns to public investment in agricultural R&D, whose benefits are felt through three main channels: higher farm incomes, increased rural employment, and lower food prices for consumers.

Do countries spend enough on public agricultural R&D?
While some public research systems are well funded and well managed, R&D expenditures and capacity is low and/or declining in others. Countries must maintain and in many cases increase public expenditure on agricultural R&D. Stability of funding is important for it to be effective.

How can we better coordinate national and international research efforts?

Basic scientific research is needed to enhance the overall long-term potential for sustainable production. As the results are global public goods, such research may best be done by international public institutes. Countries with limited financial resources may choose to build on research results from larger countries or international institutes and focus their own efforts on adaptive research. There is potential to increase South-South cooperation between countries with larger public-sector research institutes and smaller national agricultural research institutes in countries with similar agro-ecological conditions and challenges.

Why is public investment in extension and advisory services so important?
Agricultural extension and advisory services can provide family farmers with information that allows them to make more informed choices about product mix, appropriate technologies and practices, and farm management. Empirical evidence suggests there are high returns to public expenditure on agricultural extension. Given the large yield gaps in many low- and middle-income countries, there is a strong case for increasing the priority they give to this aspect of their national innovation systems, especially as the scant evidence available suggests fewer than one in four farmers currently access information in this way.

What role can producers' organizations play?

Producers' organizations, cooperatives and other community-based organizations can play a central role both in providing inclusive advisory services to smallholders and helping them voice their requirements. Strengthening the capacity of family farming organizations to advocate for and provide services can help ensure more transparent and demand-driven extension and advisory services as well as ensuring that members' needs are considered by public policies.