Dear Dragos.

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I agree with you that commercial-scale production is not the solution nor the issue of food production or for poverty reduction. I quote some of the reasons.

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First: We must keep in mind that any large machinery was developed for wheat, soybeans and corn. Except corn the other two products are not important food traditions of Africans. Manioc, for example, an important product in African traditions has not least advantage in large-scale agriculture.

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Second: Agriculture requires large-scale agricultural implements that are not produced in most African countries. The primary products have low value added while machinery, fuels and lubricants and other inputs have high added value, so this type of agriculture will only download resources for industrialized countries.

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Third: A diversified subsistence agriculture provides the livelihood of farmers and their families surpluses generate extra gain. Monocultures lead these employees to obtain supplies on the market, making much of their wages are spent on imported products.Quarto: Uma agricultura de pequeno porte gera emprego próximo de fornecedores de equipamentos menos sofisticados, não retirando parte dos lucros da região de produção.

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Fourth: Africa has several fragile environments like the whole Sahel, who did not resist industrialized monocultures.

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Fifth: The small farming allows the use of natural composting using composting and other recovery techniques ground, since the large need of large amounts of fertilizers and pesticides which will have to be imported.

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Sixth (IMPORTANT NOTE): The productivity per hectare is higher on small farms than large-scale production that is greater per farmer, but as the case is combating unemployment this has the least advantage.

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What is missing in Africa are public actions in rural extension design simple equipment for small property and sharing of experiences.

And finally the most important, developed countries, with a heavily subsidized agriculture should stop shedding their stocks at prices below the African farmers, taking these bankruptcy and rural exodus.

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Dear Rogerio,

Thank You for a very detailed answer and thorough explanations!

Dear Dragos,

Yes, Rogerio makes some very good points, I don't really see any that I disagree with.

Also, I have some work that goes into some depth on the superiority of small versus large farms in Poland. Also, I have shown the importance of market structure for the products of small farms in Armenia. There is general market failure for the products of small farms, but appropriate development projects, see USDA Marketing Assistance Project in Armenia, can easily correct this. The literature on Poland and Armenia can be found in millerbillr.com See the Vita chapter for literature.

I hope as economists we can get beyond attributing economic efficiency to "Scale Economies" Scale economies only exist in theory. There is no empirical proof except by miss-specification of functional forms in econometrics. Rather, we should concentrate on finding "Economies of Size". These do exist for some types of equipment a indicated by Roberio although he does incorrectly refer to them as scale economies.

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Dear Bill.

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You may need to define what we're talking about productivity, I'm not talking in terms of conventional [production / (inputs + labor)]. Really compare an agribusiness 1,000 ha of planting soybeans with small farms of 10ha to 20ha, agribusiness will certainly return about a single product, such as soybeans, than a small property.

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But we have to take into account not this relationship for the case of developing countries, these countries if this criterion is employed and encouraged, probably the greatest part of the human contingent that is in the fields will be transferred to the cities. There are no towns or services in these industries to absorb this labor would be necessary to account for the purposes of national development entire contingent that is out of production with the costs related to this.

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No use dislodge by economic problems ten or more family farmers to deploy a productive agricultural industry. The country may even produce more, but the result of this production will not reach the hands of most of the population.

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If on the other hand, these small productions have technical support to diversify even in small areas of their production and at the same time we marketing support, the productivity of the various possible products is greater than a monoculture.

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Dear Bill,

I share your opinion regarding Poland or Armenia. However, the issue of large vs small holdings and individual vs. corporate could have have a different impact on African agriculture and rural development.

In my opinion, large scale commerical production in Africa can have negative or positive results according to how it is implemented. Currently majority of these commercial initiatives are aimed at foreign markets (export) and not African domestic ones. So most of the positive effects on African food secuirty can only be indirect ones. Large scale investments can bring necessary infrastructure improvements to rural areas in addition to technological knowhow. But in current circumstances largescale investments end up in grabbing the best soils and water sources from small farms. Instead of it, another way of oragnisation of such large scale investments involving the small holders and retaining their water rights (eg: large scale contract farming) is required. In addition, to harness the positive sides of largescale commerical investment, there is a need stronger government, which many a times can not be taken for granted under African conditions.

Dear Amjath,

Agree with your arguments, but only partial. Your arguments in favor of large scale investments focus on farm efficiency. I agree that such investments will bring technological knowhow, but at the same time number of people involved in agriculture will decrease significantly, which, in context of little development of other sectors of economics, will lead to an increase of poverty level. As about land grabbing, I fully share your opinion.

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Dear Bill, Dragos Cimpoies and Amjath Badu.

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First one more response to Bill about the reference to http://millerbillr.com/ site, I've been looking at this site and it seems that the current North American aid, said well confusingly this website is not a good example of cooperation international. Permeates the middle of the news cooperative a strong political reference the need to create a sort of buffer country to Islamic countries that surround it. There along with agriculture and training of cadres of managers reference to issues such as terrorism, ie, far from a clear cooperation on agriculture and development in the country, is more an ideological program than supply. It is clear this statement due to the emphasis on Marketing Assistance Project in Armenia (MAP).

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It is only in Africa that the small farmer is responsible for feeding the population. In Brazil the main crops are also geared towards exports (soybeans, coffee and cocoa), since the production of beans (very important in the Brazilian table food), cassava, corn, horticultural, rice is produced by small and medium farmers.

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Indirect effects of exports are very small in weakly industrialized countries once the export is generally tax-free, large plantations provide little return to general population.

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Dear Bassam,

Thanks a lot for sharing your opinion. When you write: "...to unite small farms", do you mean reduction of number of farms and number of agricultural operators or cooperation/association between farmers?

Dear Rogerio,

Your review of Millerbillr.com suggests that I have buried significant results in too much history and comment. I apologize. The real story is that in just a few years we created a maket infrastructure for products of small landholders. The results were dramatic and I am sure similar results can be achieved elsewhere as market failure for products of small farms is endemic throughout the world, including the United States.

Dear Bill.

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My criticism is simply the mix between technical and geopolitical aspects that cover the first.

On the website it is not clear the technical achievements.

Dear Bassam Handar.

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Detaching horticultural farms below a certain threshold area (in Brazil we call "agricultural module") is not possible in agriculture or subsistence level. In the case of Lebanon is what should happen. When it passes below this minimum the farmer does not generate resources to invest logically and productivity falls.

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But this level depends on the type of product, the physical characteristics of soil and climate conditions (I'm stating the obvious). However European countries work with strong subsidies and limited areas, being more a strategic issue than economic.

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Dear Rogerio,

Yes, the technological achievement of USDA in Armenia is an important subject. They can best be seen by looking at "Armenian Food Products Catalog" available from www.CARE.AM who are the NGO successors of our project. Do see their website. Our project supplied technical and financial assistance in creating the many new products you will see there. As I mention in millerbillr.com each of the 60+ marketing firms we assisted would warrant a special study. Hopefully the chapter on highlights should give some idea of the total scope of work.

Creating new food products and markets for these products were a focus of our work. Next, we moved into the farm sector with technical assistance and a credit club program for farmers who supplied raw materials for the products you see in the Food Catalog. Numerous field trials for new seed were also successful. I include our success with tomatoes in Millerbillr.com as an example and there were many others.

Dear Bassam I hope you do not include the U.S. farm subsidy program as a success of government intervention. I, as well as many others, have a deep respect for its failure. Take a close look at the failed U.S. tobacco and peanut programs. They are gone and the world is better off.

Dragos,

There is no simple answer to your question depending on the African country in question.

Yes large scale farming is better in terms of country-level economic development and growth. However, there are many issues to address before jumping to this conclusion. (1)For instance, in many African countries you have the majority of farmers as smallholders who own fragmented pieces of land in some cases miles apart. Large scale farming has to involve significant Land Reform Policies enacted in these Sub-Saharan countries. Land reform would imply large investors buying (or government buying) land from these these smallholders and then amalgamating the small pieces into large farms. The political will must be there to implement such land reforms.

(2) What are the options of transferring these peasants from their ancestral fragmented pieces of land?? Will the state have invested in manufacturing or agro-processing industries so that these peasants move to urban areas to earn a living there by getting employed in these industries (as is the case in Developed Countries)???

(3) To boost the productivity and incomes of smallholder farmers there must be a number of things in place that include:- (a) Existence of well functioning farmer organizations that help them access (i) yield-augmenting inputs such as improved seed, fertilizers, business skills, ICT-based market information; (ii) post-harvest loss mitigating facilities such a crop threshing machines, drying cribs or tarpaulins, moisture meters, etc, etc.

(b) Existence of state assistance in finding or locating niche markets that pay very good prices to these these smallholder farmers for their produce. Developed countries use subsidies to keep large scale farmers happy. The least African countries can do is to help smallholder farmers secure markets with good prices compared to the UNIT COST OF PRODUCTION. (c) Existence of storage infrastructure where excess production can be purchased and stored by the state, then delivered to famine or drought areas in bad times. (d) The LIST GOES ON AND ON AND ON!!!

Your question is a development issue that does not have one magic bullet. You Need MANY MANY magic bullets shot from various angles in order to solve Africa's food production challenges. These include a big role that has to be played by the State and the private sector actors. Productivity increase among smallholders depends a lot on Output Price Incentives obtained. These incentives imply adoption of yield-augmenting technologies and thereafter increased probability of food security and farm income. How this can be done for smallholders is still a problem for development partners, African governments and the private sector. The alternative is massive land reforms and the creation of land available for large scale investors (both domestic and foreign) .but this is not currently feasible politically YET!!!

Barnabas Kiiza

No. The the verdict  is out and seems to favor ways in which capitalism can be harnessed to create a market for feeding the poor rather than the current reliance on philanthropic efforts and international aid.A capitalism that is by the people and for the people. Large scale commercial agricultural production tends to be the preserve of developed and well-fed economies, that can afford to waste and are spoilt for food choices. Even though such an approach is executed by proxy through the use of cheap and fertile African land. In fact large scale agricultural production tends to feed the "upstream" of livestock and the top of the economic pyramid.It would trickle to nothing by the time the poor's turn is up to be served. Even though the job creation, multiplier effects may partly alleviate the situation

http://mobile.nytimes.com/2013/09/25/opinion/the-end-of-poverty-soon.html?referrer=&_r=0

https://www.google.com/url?sa=t&source=web&rct=j&ei=8kFjVcqVM4-RuAS0toOoBw&url=http://eprints.lse.ac.uk/56404/1/Alden_China_long_march.pdf&ved=0CCYQFjAA&usg=AFQjCNHBO9iAm0sYhJR6EvNoIXw9iwumwA&sig2=QpiaWeBVVyO3O20fAuDWBA

http://www.psmag.com/books-and-culture/smart-guy-jeffrey-sachs-nina-munk-idealist-poverty-failure-africa-65348