Implications of Farm Size and Staple Production on Rural and Urban Food Security and Dietary Diversity

We investigate how the distribution of domestic staple crop production by smallholders and commercial farms influence staple prices, and the implications it has on food security and dietary diversity in rural and urban areas. Using three waves of the World Bank’s Living Standards Measurement Survey (LSMS) data as well as data from other national sources in Ethiopia, we find that proportional shift towards commercial and large-scale farms of staple crops significantly decreases their prices in both rural and urban areas, which then increases dietary diversity. Previous literature has focused on commercialization and its implications for food security in rural areas. This paper contributes to the literature by including food security and dietary diversity in urban areas. Our findings provide governments and international organizations insights on how to consider contextual specificities when implementing programs and policies aimed at either sustaining smallholder farming or incentivizing commercialized farms, keeping in mind their implications for consumer welfare, food security, and diet.