Smallholder Agriculture and Inclusive Rural Transformation

In spite of the predictions of gradual withering away of small farms in developing countries, they still exist in large numbers. This paper examines the rationale for their persistence, and the opportunities they and rural small and medium enterprises (SMEs) offer for rural and hence overall economic development in the rapidly diversifying rural sectors of developing countries. The paper notes that the urban manufacturing and the services sectors have not been able to create employment in large enough scale to absorb the rural un- and under-employed, and argues that small farmers and rural SMEs with larger and well-managed investments can achieve inclusive rural transformation, i.e. help these countries to achieve zero poverty and hunger (Sustainable Development Goals 1 and 2), promote growth and take the countries beyond the “Lewis turning point.”