is small still beautiful? the farm size-productivity ... · is small still beautiful? the farm...

IS SMALL STILL BEAUTIFUL? THE FARM SIZE-PRODUCTIVITY

RELATIONSHIP REVISITED

Milu Muyanga & T.S. JayneAgricultural, Food and Resource Economics Department

Michigan State University, USA

Photo: Christiaensen and Demery (2007)

Presented at the at the 2014 Conference on Land Policy in AfricaThe African Union Conference Center, Addis Ababa, Ethiopia, November 12, 2014

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Emerging trend #1

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Farm sizes are shrinking due to mounting population pressure in sub-

Saharan Africa

Total rural population projections

Source: UN Pop Council, 2013

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Shrinking farm sizes .2

.4.6

.8he

ctar

es p

er p

erso

n

1960 1970 1980 1990 2000 2010year

World Sub-Saharan Africa Zambia

Source: World Development Indicators, World Bank

1960-2010Arable land per capita

25

24

1960-69 1970-79 1980-89 1990-99 2000-091 2000-09 land-person ratio as %

of 1960-69 Ethiopia 0.501 0.444 0.333 0.224 0.218 43.5% Zambia 0.643 0.607 0.398 0.342 0.297 46.2% Kenya 0.462 0.364 0.305 0.264 0.219 47.4% Uganda 0.655 0.569 0.509 0.416 0.349 53.3% Malawi 0.480 0.466 0.357 0.304 0.307 64.0% Zimbabwe 0.613 0.550 0.452 0.420 0.469 76.5% Rwanda 0.212 0.213 0.195 0.186 0.174 82.1% Mozambique 0.356 0.337 0.320 0.314 0.294 82.6% Ghana 0.646 0.559 0.508 0.492 0.565 87.5% Nigeria 0.982 0.860 0.756 0.769 0.898 91.4%

Hectares of arable land per person in agriculture --10 year average--

Emerging trend #2

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Rapid increase in medium-scale farmers (5-100 ha)

Emergent farmers

• Defined as farmers cultivating between 5 to 100

hectares

• Emergent farmers have little in common with large-

scale farmers

• Farm size, access to finance, input application, farm

management practices

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Table 2: Changes in farm structure among small- and medium-scale farmers in Zambia (2009 - 2012)

Landholding size Category

Number of farms % change

(2001-2012)

% of total farmland

Share of landholding

2001* 2009 2012 2009 2012 cultivated (2012)

0 – 2 ha 638,118 916,787 748,771 17.3% 24.1% 16.2% 91.2% 2 – 5 ha 159,039 366,628 418,544 163.2% 33.8% 31.7% 66.4% 5 – 10 ha 20,832 110,436 165,129 692.6% 20.3% 25.0% 49.5% 10 – 20 ha 2,352 35,898 53,454 2272.7% 12.3% 15.0% 36.7% 20 – 100 ha -- 9,030 13,839 53.3%** 9.5% 12.0% 10.9%

Total 820,341 1,438,779 1,399,737 70.6% 100.0% 100.0%

Source: Ministry of Agriculture Crop Forecast Surveys, 2009, 2012. *2001 figures are land under cultivation. ** Growth rate computed from 2009-2012 only. “na” means not available.

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Who are the emergent farmers?

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What are the medium-scale farmers characteristics?

• Is this growth driven by farmers who began as

smallholders, and now transitioning to a larger scale

status through the capital and assets accumulation?

• Is the growth driven by institutions and policies (deficient

policies) that encourage investment in land acquisitions

by individuals from non-agricultural employment

• How does their agricultural productivity compare to that

of the smallholders?

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Who are the medium-scale farmers?

• Majority of them used non-farm entry pathway

• Urban and rural elites

• Most them are current/former public sector employees• Relatively well-educated

• Only a minority were primarily engaged in agriculture• But had sufficient initial endowment of land

• Owned over two times more land than they were using for crops:

• High degree of land owned for speculative purposes

• Inability to make productive use of their land

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Descriptive results [I]• Majority (60%)of medium-scale farmers used non-farm entry

strategy

• Majority of them are current/former public sector employees• Had high education attainment

• Acquired land from savings from non-farm, largely urban jobs

• Only a minority were primarily engaged in agriculture• But had sufficient initial endowment of land

• Owned over two times more land than they were using for

crops:

• High degree of land owned for speculative purposes

• Inability of these farmers to make productive use of their land

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Large scale

Medium-scale

(5-100 ha)

Millions hectares

Ghana 3.08

Kenya 0.69

Zambia 2.11

Medium-scale farmers control more land than large-scale enterprises!

Source: Jayne et al. 2014 (JIA)

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Large scale

Medium-scale

(5-100 ha)

Millions hectares

Ghana 3.08 4.214.21

Kenya 0.69 0.840.84

Zambia 2.11 2.472.47

Medium-scale farmers control more land than large-scale enterprises!

Source: Jayne et al. 2014 (JIA)

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Smallholder farms productivity- Kenya

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Farm income

Crop income

020

4060

8010

0

'000

KSh

/ha

plan

ted

25% 50% 75% 95%0 1 2 3 4 5 6

land -- planted (ha)

Figure 2b: Farm and crop income per hectare planted

Medium-scale farms productivity- Kenya

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Gross value

Net value

2060

100

'000

KSh

/ha

plan

ted

25%50% 75% 95%0 5 10 15 20 25land -- planted (ha)

Figure 2a: Value of crop production per hectare planted

Medium-scale farms production costs- Kenya20

22.5

2527

.530

32.5

35

'000

KSh/

ha p

lant

ed

25%50% 75% 95%0 10 20

land -- planted (ha)

Figure 5a: Total crop production costs per hectare planted

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Medium-scale farms’ production costs- Kenya

11

-50

510

1520

2530

'000

KS

h/ha

pla

nted

25%50% 75% 95%0 5 10 15 20 25land -- planted (ha)

Fertilizer SeedLand preparation LaborFixed costs

Figure 6: Total crop production costs by components

How is changing farm structure affecting the potential for land

expansion to support smallholder agricultural growth?

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Large scale

Medium-scale

(5-100 ha)

Millions hectares

Ghana 3.08 4.21

Kenya 0.69 0.84

Zambia 2.11 2.47

Medium-scale farmers control more land than large-scale enterprises!

Source: Jayne et al. 2014 (JIA)

9

Large scale

Medium-scale

(5-100 ha)

Small-scale

(0-5 ha)

Millions of hectares

Ghana 3.08 4.21 5.08

Kenya 0.69 0.84 2.63

Zambia 2.11 2.47 2.09

Medium-scale farmers controlling significant proportion of farmland

Source: Jayne et al. 2014 (JIA)

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Large scale

Medium-scale

(5-100 ha)

Small-scale

(0-5 ha)

Total land

controlled

Millions of hectares

Ghana 3.08 4.21 5.08 = 12.37

Kenya 0.69 0.84 2.63 = 4.16

Zambia 2.11 2.47 2.09 = 6.67

Medium-scale farmers controlling significant proportion of farmland

Source: Jayne et al. 2014 (JIA)

7

Large scale

Medium-scale

(5-100 ha)

Small-scale

(0-5 ha)

Total land

controlled

Potentially available cropland

remaining

Millions of hectares

Ghana 3.08 4.21 5.08 = 12.37 3.56

Kenya 0.69 0.84 2.63 = 4.16 1.01

Zambia 2.11 2.47 2.09 = 6.67 3.35

Medium-scale farmers controlling significant proportion of farmland

Source: Jayne et al. 2014 (JIA)

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Optimism that small-scale farms can expand

• Is the smallholder-led agricultural development still

feasible?

• Some medium-scale farmers started out with less

than five hectares of land

• At least some room for optimism that small-scale farms can

expand into commercialized medium-scale stature under

favorable conditions including access to land

• Smallholder-led growth is more broad-based and

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Conclusion

Most governments’ strategies are oriented to

promote agricultural growth and food security

for the millions of their rural constituents who

are smallholders assume unhindered access to

land

4

Looming employment challenge in SSA

62% < 25 years old

3

2

Government policy orientation• Wage employment will be able to absorb two thirds of the

people entering the labor force between 2010 and 2020

• Access to land will largely determine whether millions of rural

Africans will make a decent livelihood and be able to feed

themselves

• This will depend on how supportive the land allocation and

agricultural policies are to smallholders

• African leaders may soon perceive that political stability will

depend on the profitability of family farming

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