1: Total production per unit
area versus farm size in 15 countries.*]
* From a previous paper by Dr. Rosset, Benefits of Small Farm Agriculture In the Context of Global Trade Negotiations Sep99 ]
Large farms impose a "scorched earth" policy on the land.
For more than a century, economists have predicted the demise of the small farm, which they label "backward, unproductive and inefficient". But in fact, far from being stuck in the past, small-farm agriculture provides a productive, efficient and ecological vision for the future.
Today's ongoing process of liberalisation in international agricultural trade--taken a step further in the WTO Millennium Round last month in Seattle--is having dramatically negative effects on small farmers everywhere. If small farms are worth preserving, then now is the time to educate the world's economists and policy-makers about why we should do so. But are small farms worth preserving? Can they possibly compete with large farms? what are their benefits, in economic and ecological terms?
The Arguments for Small Farms
In arguing the case for the continuation--indeed, for a resurgence--of small farms, it is important to note three key points. The first point is that, though small farmers have been driven out of rural areas across the world in their millions over the last five decades, they still persist. In many areas, such as the US, they continue to be numerically dominant. In the 'Third world', they are central to the production of staple foods. The predictions of their demise continue to be premature.
The second point is that small farms are far from being as unproductive or inefficient as many economists would have us believe. In fact--crucially--there is ample evidence that a small-farm model of agricultural development can produce far more food than a large-farm pattern ever could.
The third point is that small farms have multiple functions which benefit both society and the biosphere, and go far beyond the production of a particular commodity. These should be seriously valued and considered before we blithely accept yet another round of anti-small-farm policy measures handed down by the WTO and its client governments.
Small-Farm Virtues in the USA
Perhaps surprisingly, the US government--one of the most committed to liberalisation and corporate agriculture in the world--agrees with my analysis of the virtues of small farms. The US Department of Agriculture's (USDA) National Commission on Small Farms released a landmark report in 1998 entitled A Time to Act.  what the USDA calls the "public value of small farms" in this report includes:
Small-Farm Virtues in the Third World
A similar pattern holds in the Third world, where policies promoting large farm, export-orientated agriculture have increasingly eroded the viability of small farms.
In traditional farming communities, the family farm is central to the sustainability of agricultural production. On the small farm, productive activities, labour mobilisation, consumption patterns, ecological knowledge and common interests in long-term maintenance of the farm as a resource, contribute to a stable and lasting economic enterprise. Short-term gain at the risk of degrading essential resources places both the family and the farm at risk of collapse. Family farmers regularly achieve higher and more dependable production from their land than large farms operating in similar environments. Labour-intensive practices such as manuring, limited tillage, ridging, terracing, composting organic matter and recycling plant products into the productive process enhance soil conservation and fertility. 
Small farmers have developed, sometimes over the course of 5,000 years, a variety of unique technologies, crops and farming systems. Perhaps most important in an era of diminishing non-renewable resources, small farmers across the Third World produce bountiful harvests with minimal recourse to expensive external inputs such as pesticides, machines or genetically modified seeds. 
How many times have we been told by 'experts' that large farms are more productive than small farms? Or that they are more efficient? Yet the actual data, when examined, shows exactly the reverse for productivity: that smaller farms produce far more per unit area than larger farms. So why is the establishment crusade against small farmers continuing? One reason is that, because the conventional method of measuring 'productivity' is flawed, we are receiving the wrong answers to our questions.
If we are to fairly evaluate the relative productivity of small and large farms, we must discard 'yield' as our measurement tool. 'Yield' means the production per unit area of a single crop--for example, "metric tons of corn per hectare" - and is the basic measurement used by economists to assess the productivity of farmland. Often, the highest yield of a single crop is achieved by planting it alone on a field--in a monoculture. But, while a monoculture may allow for a high yield of one crop, it produces nothing else of use to the farmer. The bare ground between the crop rows - empty 'niche space' in ecological terms - invites weed infestation. The presence of weeds means the farmer must then invest labour in weeding or capital in herbicide.
Large farmers tend to plant monocultures because they are the simplest to manage with heavy machinery. Small farmers, on the other hand, are more likely to plant crop mixtures--'intercropping'--where the empty niche space that would otherwise produce weeds is occupied by other crops. They also tend to combine or rotate crops and livestock, with manure serving to replenish soil fertility. Such integrated farming systems produce far more per unit area than monocultures. Though the yield per unit area of one crop - corn, for example--may be lower, the total output per unit area, often composed of more than a dozen crops and various animal products, can be far higher. If we are to compare small and large farms, we should use total output, rather than yield, as a more accurate measure of productivity. Total output is the sum of everything a small farmer produces: various grains, fruits, vegetables, fodder, animal products, etc. When we do this, a very different picture emerges.
Surveying the data, we indeed find that small farms almost always produce far more agricultural output per unit area than larger farms. This is now widely recognised by agricultural economists across the political spectrum, as the "inverse relationship between farm size and output".  Even leading development economists at the World Bank have come around to this view, to the point that they now accept that redistribution of land to small farmers would lead to greater overall productivity. 
The four charts accompanying this article illustrate just some of the many examples of how productivity and farm size across the world show this inverse relationship: as the size of the farm increases, so its total productivity decreases.
There is a variety of explanations for the greater productivity of small farms. Some of these are:
While small farms, then, are clearly more productive than large farms in terms of output, claims are often made that large farms are still more efficient. But this claim, too, is misleading.
The definition of 'efficiency' most widely accepted by conventional economists is that of 'total factor productivity' - a sort of averaging of the efficiency of use of all the different factors that go into production, including land, labour, inputs, capital, etc. Tomich  provides data from the 1960s, 70s and early 80s, which shows that small farms have greater total factor productivity than large farms in Sub-Saharan Africa, Asia, Mexico and Colombia. More recently, the same pattern has been found in Honduras. 
In industrial countries, the pattern is less clear. The consensus position is probably that very small farms are inefficient because they can't make full use of expensive equipment, while very large farms are also inefficient because of management and labour problems inherent in large operations. Thus, peak efficiency is likely to be achieved on mid-sized farms that have one or two hired labourers. In other words, even in the 'developed' countries there is no reason to believe that large farms are more efficient - indeed, they may be quite inefficient.
But there is far more to the economic importance of small farms once we move outside the farm gate and ask questions about economic development.
Small Farms in Economic Development
Squatters occupy land owned by the wealthy absentee landlords in Acre, Brazil.
Surely more bushels of grain is not the only goal of farm production; farm resources must also generate wealth for the overall improvement of rural life--including better housing, education, health services, transportation, local business diversification, and more recreational and cultural opportunities.
In the US, the crucial question was asked more than half a century ago: what does the growth of largescale, industrial agriculture mean for rural towns and communities? Walter Goldschmidt's classic 1940s study of California's San Joaquin Valley compared areas dominated by large corporate farms with those still characterised by smaller family farms. 
In farming communities dominated by large corporate farms, Goldschmidt found, nearby towns died off. Mechanisation meant that fewer local people were employed, and absentee ownership meant that farm families themselves were no longer to be found. In these corporate-farm towns, the income earned in agriculture was drained off into larger cities to support distant enterprises, while in towns surrounded by family farms, the income circulated among local business establishments, generating jobs and community prosperity. Where family farms predominated, there were more local businesses, paved streets and sidewalks, schools, parks, churches, clubs and newspapers, better services, higher employment and more civic participation. Studies conducted since Goldschmidt's original work confirm that his findings remain true today. 
If we turn toward the Third World, we find similar benefits to be derived from a small farm economy. The Landless Workers Movement (MST) is a grassroots organisation in Brazil which helps landless labourers to organise occupations of idle land belonging to wealthy landlords.  When the movement began, in the mid-1980s, the mostly conservative mayors of rural towns were violently opposed to MST land occupations in surrounding areas. In recent times, however, their attitude has changed. Most of their towns are very depressed economically, and occupations can give local economies a much needed boost. Typical occupations consist of 1,000 to 3,000 families, who turn idle land into productive farms. They sell their produce in the market-place of the local towns and buy their supplies from local merchants. Not surprisingly, those towns with nearby MST settlements are now better off economically than other similar towns, and many mayors now actually petition the MST to carry out occupations near their towns. 
It is clear, then, that local and regional economic development benefits from a small-farm economy, as do the life and prosperity of rural towns. The question now must be: can we re-create small farm economies in places where they have been lost in order to improve the well-being of the poor?
Improving Social Welfare Through Land Reform
Recent history shows that redistribution of land to landless rural families can be a very effective way to improve rural welfare. Sobhan examined the outcome of virtually every land reform programme carried out in the Third World since World War II,  When quality land was genuinely distributed to the poor, and the power of the rural oligarchy broken, real, measurable poverty reduction and improvement in human welfare were invariably the result. Japan, South Korea, China and Taiwan are all good examples of this. In contrast, countries with reforms that gave only poor quality land to beneficiaries, and/or failed to alter the rural power structures that work against the poor, have failed to make a major dent in rural poverty. Mexico and The Philippines are typical cases of the latter. 
In Brazil, IBASE, a social and economic research centre, studied the impact on government coffers of legalising MST-style land occupations. When the landless poor occupy land and force the government to legalise their holdings, it implies costs: compensation to the former landowner, legal expenses, credit for the new farmers, etc. Nevertheless, the total cost to the State of maintaining the same number of people in an urban shanty town - including the services and infrastructure they use - exceeds, in just one month, the yearly cost of legalising land occupations. 
The conclusion to be drawn from such case studies is a clear one. Land reform to create a small-farm economy is not only good for local economic development, but is also a more effective social policy than driving the poor out of rural areas and into burgeoning cities.
The benefits of small farms extend, of course, beyond the economic sphere. Whereas large, industrial-style farms impose a scorched-earth mentality on resource management - no trees, no wildlife, endless monocultures - small farmers can be very effective stewards of natural resources and the soil. To begin with, small farmers utilise a broad array of resources and have a vested interest in their sustainability. At the same time, their farming systems are diverse, incorporating and preserving significant biodiversity within the farm. As such, small farms provide valuable 'ecosystem services' to society at large.
In the US, small farmers devote 17 per cent of their area to woodlands, compared with only five per cent on large farms. Small farms maintain nearly twice as much of their land in "soil-improving uses", including cover crops and green manures.  In the Third World, peasant farmers show a tremendous ability to prevent and even reverse land degradation, including soil erosion.  In many areas, traditional farmers have developed and/or inherited complex farming systems, which are highly adapted to local conditions. This allows them to sustainably manage production in harsh environments while meeting their subsistence needs, without depending on mechanisation, chemical fertilisers, pesticides or other technologies of modem agricultural science. 
Compared with the ecological wasteland of a modern export plantation, the small farm landscape contains a myriad of biodiversity: the forested areas from which wild foods and leaf litter are extracted; the wood lot; the farm itself, with intercropping, agroforestry, and large and small livestock; the fish pond; the back garden, allow for the preservation of hundreds if not thousands of wild and cultivated species.
Free Trade: The Enemy of Small-Farm Agriculture
If we are concerned about food production, small farms are more productive. If our concern is efficiency, they are more efficient. If our concern is poverty, land reform to create a small-farm economy offers a clear solution. If the loss of biodiversity or the sustainability of agriculture concerns us, small farms offer a crucial part of the solution.
Despite decades of anti-small-farm policies adopted by nation states, small farmers have clung to the soil in amazing numbers. But today we stand at a crossroads. As a world, we are poised to take steps toward global economic integration that pose far greater threats to small farmers than they have ever faced. Trade liberalisation and globalisation pose grave threats to the continued existence of small farms. Over the past couple of decades, Third World countries have been encouraged, cajoled, threatened and generally pressured into unilaterally reducing the level of protection offered to their domestic food producers in the face of well-financed foreign competitors. Through participation in GATT, NAFTA, the World Bank, the IME and the WTO, they have reduced or eliminated tariffs, quotas and other barriers to unlimited imports of food products. 
Typically, Third World economies have been inundated with cheap food from major grain-exporting countries. For a variety of reasons (subsidies, both hidden and open, industrialised production, etc.) this food is more often than not put on the international market at prices below the local cost of production. That drives down the prices that local farmers receive for what they produce, with two related effects.
First, a sudden drop in farm prices can drive poor, indebted farmers off the land in the short term - they simply cannot compete with the cheap, subsidised products of giant monoculture farms. Second, a more subtle effect kicks in. As crop prices stay low over the medium term, profits per unit area -per acre or hectare - stay low as well. That means the minimum number of hectares needed to support a family rises, contributing to the abandonment of farmland by smaller, poorer farmers - land which then winds up in the hands of the larger, better-off farmers who can compete in a low-price environment by virtue of having a lot of land. They overcome the low profit per hectare trap precisely by owning vast areas which add up to good profits in total, even if they represent very little on a per hectare basis. The end result of both mechanisms is the further concentration of farmland in the hands of a few large farmers. 
A penalty is paid for this land concentration in terms of productivity - as large farmers turn to monocultures and machines to farm such vast tracts - and in terms of the environment - as these large mechanised monocultures come to depend on agrochemicals. Jobs are lost as machines replace human labour and draft animals. Rural communities die out as farmers and farm workers migrate to cities. Natural resources deteriorate as nobody is left who cares about them. Finally, food security is placed in jeopardy: domestic food production falls in the face of cheap imports; land that was once used to grow local food is used to produce export crops for distant markets; people now depend on money - rather than land - to feed themselves; and fluctuations in employment, wages and world food prices can drive millions into hunger.
Cause for Hope?
But, fortunately, there is less than unanimous support among the world's nations for the increasingly-global US-led corporate farming agenda. A number of countries have taken up the call made in Chapter 14 of Agenda 21, the declaration drawn up at the 1992 Earth Summit, that "agricultural policy review, planning and integrated programming [be carried out] in the light of the multifunctional aspects of agriculture, particularly with regard to food security and sustainable development."
According to this viewpoint, agriculture produces not only commodities, but also livelihoods, cultures, ecological services, etc. - and, as such, the products of agriculture cannot be treated in the same way as the products of other industries. While a shoe, for example, is a relatively simple good, whose world price can be set by supply and demand, and the trade in which can be regulated through tariffs or de-regulated by removing them, the products of farming are very different.
The Japanese government, in a preparatory document for last month's Seattle negotiations, put it this way:
"Agriculture not only produces/supplies agricultural products, but also contributes to food security, by reducing the risks caused by unexpected events or a possible food shortage in the future, to the preservation of land and environment, to the creation of a good landscape and to the maintenance of the local community, through production activities in harmony with the natural environment. All of these roles are known as the 'multifunctionality' of agriculture... Market mechanisms alone cannot lead to the realisation of an agricultural production method that will embody the multifunctionality of agriculture." 
Norway has also endorsed the concept of 'multifunctionality' as the basis for special treatment of farming,  as has the European Union to some extent,  and a number of other countries. 
More governments need to swiftly endorse this agenda. Ignoring the multiple functions of agriculture has caused untold suffering and ecological destruction in the past. The time is long overdue to recognise the full range of contributions that agriculture - and small farms in particular - make to human societies and to the biosphere. Farms are not factories that churn Out jeans or tennis racquets, and we cannot let narrow arguments of simple economic expediency destroy the world's agricultural legacy.
All of us should demand, loudly and firmly, that our governments respect the multi-functionality of agriculture and grant each country true sovereignty over food and farming, by stepping back from free trade in agricultural products. Instead of deepening policies that damage small farms, we should implement policies to develop small-farm economies. These might include genuine land reforms, tariff protection for staple foods - so that farmers receive fair prices - and the reversal of biases in policies for credit - technology, research, education, subsidies, taxes and infrastructure, which unfairly advance large farms at the expense of smaller ones. By doing this, we will strike at the root causes of poverty, hunger, rural decline and degradation of ecosystems around the world.
Peter Rosset, PhD, is Executive Director of Food First, based in Oakland, California, USA, and co-author of World Hunger: Twelve Myths, published in 1998 by Earthscan and Grove Press. website: www.foodfirst.org
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Figure 1: Total production per unit area versus farm size in 15 countries.