‘Smaller farms tend to out-produce large ones’

Press, 19 July 1979, Page 17

‘Smaller farms tend to out-produce large ones’

All over the world, high-quality farmland is becoming a scarce commodity. The urgency of boosting output on proven farmlands as the global demand for food inexorably climbs is thus underscored. Soaring wheat prices in commodity markets this summer further remind us that the battle to provide an assured, adequate food supply is far from won.

Talk of raising crop yields usually turns to talk of investments in fertilizers, irrigation, and other agricultural infrastructure, and to the need for technological breakthroughs in plant productivity. Equally needed in many countries, however, is a transition to land-tenure structures that give more people access to farmland and provide them with incentives to make it as productive as possible. Maximising world food output requires social reforms as well as financial and technological investments. Land reform — a central topic of discussion at the World Conference on Agrarian Reform and Rural Development, being held in Rome this month — is important for economic reasons as well as for the more familiar reasons of social equity.

In much of Latin America the latifundia pattern, in which the huge estates

of a few wealthy families occupy most of the better lands, has persisted since the colonial era. Seven per cent of Latin America’s landowners possess a startling 93 per cent of the arable land. In the United States, in contrast, the largest 7 per cent of farms accounted for 27 per cent of the farmland in 1974. Land tenure in Latin America is not merely socially exploitive; it is also grossly inefficient. Many large estates are under-utilised and inefficiently farmed, while others grow mainly export crops. Meanwhile, food imports soar in country after country. Even in densely populated Asia, where most land is intensively tilled and where disparities in ownership tend to be narrower than in Latin America, smaller farms worked by families that either owm them or hold secure tenancy rights tend to outproduce larger farms that rely mainly on hired labour. Indian farms of less than five hectares produce, on average, 80 per cent more per unit of land than do farms larger than 20 hectares.

Comparisons within many countries have reached the same conclusion: under similar ecological conditions, small farms tend to out-produce large farms, mainly because of the greater

labour inputs and personal attention they are apt to receive. With equal access to credit and modern inputs — not normally granted at present — small farmers in many countries might well show even more production superiority than they do already. | Comparing farm size and productivity in Brazil, Colombia, India. Malaysia, Pakistan, and the Philippines, the authors of a recent study commissioned by the World Bank and International Labour Office demonstrated the potential economic benefits of land reform. Other factors remaining the same, a transition in each of these countries to uniformly small, family farms would increase national agricultural output by amounts ranging from 19 per cent in India to 49 per cent in Pakistan.

Analysing conditions in Brazil’s northeastern region — notorious for its concentrated landownership — these authors argued that the redistribution of land into small holdings there would cause an astounding 80 per cent rise in production.

Exploitive tenancy practices also hold down production in many regions. When properly regulated, farmland rentals need not oppress humans and sup-

press technical progress. But where tenents do not have secure multi-year rights to the land they till, where they bear all the costs and risks of input purchases, and where they pay exorbitant rents, their motivation to invest and innovate is destroyed. Sharecropping in Bangladesh, for example, is a major obstacle to agrarian progress. Fewer than onethird of the tenants have worked the same plot for more than three years, so most have no stake in the long-term quality of the land. Half or more of their produce must be handed over to the landlords, who seldom help pay for crop inputs. Hence if a tenant goes $2O into debt to buy seeds, fertilisers, and pesticides, and realises a $4O increase in output as a result, he has gained nothing for his risk because he must pay $2O to the land owners.

Giving farmers the means and motivation to maximise crop output is important everywhere — not just in less developed countries. The family farm system in the United States, renowned as productive and innovative, deserves strong governmental protection from the various economic pressures now undermining it. In the Soviet Union, the legendary inefficiency of the large state farms must be reduced if that country’s periodic huge grain

imports — so disruptive and inflationary' for people everywhere — are to be minimised. True, the Soviets face basic climatic instabilities and constraints. Still, the high productivity of private family plots there, which now provide more than half the nation’s potatoes and nearly one-third of its vegetables, meat, and milk, draw attention to the comparative lack of personal incentives for productive effort on the socialised farms — and perhaps to the in efficiencies inherent in any large-scale, centrally planned agricultural system.

Throughout the Third World, the juxtaposition of a rising tide of landless people with highly disparate ownership patterns is sure to generate increasing political pressures for land reform. At the same time, rising food prices and increased dependence by more and more countries on imported food will highlight the economic need for land reform. The available farmlands will have to produce as much as possible, and do so in a way that provides benefits to the greatest possible number of people. For both political and economic reasons, societies cannot afford to maintain land-tenure systems that are at once inequitable and inefficient.