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Is small beautiful? Farm size, productivity, and poverty in Asian agriculture

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  • Shenggen Fan
  • Connie Chan-Kang

Abstract

Small farms characterize agriculture in Asia. With the fragmentation of land holdings, the average size of farms fell in the region, while the number of small-size holdings increased significantly. These small-scale farmers play an important role for food security and poverty alleviation. However, whether and how these small farms can survive under globalization is a hotly debated topic. In particular, the traditional claim that "small is beautiful," which is based on empirical observation that small farms present higher land productivity than large farms, is being challenged. It has been shown that a positive relationship also exists between farm size and labor productivity (and therefore income). To help these small farms prosper under increasing globalization, the governments have to change the "business as usual" attitude. Innovative land reform, for example, is crucial to secure property rights to farmers and to increase farm size. Equally important is the reform of public institutions in order to help small farmers to have access to credit, marketing, and technology. Moreover, promoting diversification in the production of high-value commodities can play an important role in raising the small-holders' income. Finally, policies that facilitate urban-rural migration and promote the development of the rural nonfarm sector are essential to help alleviate poverty among small-farm households and among the rural poor in general. Copyright 2005 International Association of Agricultural Economics.

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  • Shenggen Fan & Connie Chan-Kang, 2005. "Is small beautiful? Farm size, productivity, and poverty in Asian agriculture," Agricultural Economics, International Association of Agricultural Economists, vol. 32(s1), pages 135-146, January.
  • Handle: RePEc:bla:agecon:v:32:y:2005:i:s1:p:135-146
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    1. Butzer, Rita & Larson, Donald F. & Mundlak, Yair, 2002. "Determinants Of Agricultural Growth In Thailand, Indonesia And The Philippines," Discussion Papers 14979, Hebrew University of Jerusalem, Department of Agricultural Economics and Management.
    2. Fan, Shenggen & Zhang, Linxiu & Zhang, Xiaobo, 2002. "Growth, inequality, and poverty in rural China: the role of public investments," Research reports 125, International Food Policy Research Institute (IFPRI).
    3. Kawagoe, Toshihiko, 1999. "Agricultural land reform in postwar Japan : experiences and issues," Policy Research Working Paper Series 2111, The World Bank.
    4. Mundlack, Yair & Larson, Donald F. & Butzer, Rita, 2002. "Determinants of agricultural growth in Indonesia, the Philippines, and Thailand," Policy Research Working Paper Series 2803, The World Bank.
    5. World Bank, 2002. "World Development Indicators 2002," World Bank Publications, The World Bank, number 13921.
    6. Rasmus Heltberg, 1996. "How Rural Market Imperfections Shape the Relation Between Farm Size and Productivity - A General Framework and an Application to Pakstani Data," Discussion Papers 96-20, University of Copenhagen. Department of Economics.
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