Economic efficiency is one parameter attained through efficient use of farm resources but livelihood of human factor cannot be overlooked. In the wake of large population dependent upon farming, small holding with resource use efficiency is only option. But if siphoning out of population from agri. is possible, then going in for commercial farming is appropriate solution.  

The option will depend on national goals. Where the goal is to position agriculture to contribute significantly to GDP and produce a surplus for export, smallholdings may not be the best option. It would be better to grow smallholders into commercial integrated farming. This transition is often problematic given the traditional orientation of most farmers in the developing world, yet it is inevitable if agriculture must drive economic growth. I think countries should aim at transiting from agriculture as a tradition to agriculture as a business. Efficient resource use in smallholder agriculture should,  therefore, be viewed as a first step toward commercialization in a globalized world