IFAD RESEARCH SERIES 39 - Smallholder farming, growth linkages, structural transformation and poverty reduction

In the context of urbanization and expanding markets for agricultural products, the prospects for smallholder farming systems to contribute to development across sub-Saharan Africa is particularly relevant today. Despite scepticism among some, arguments in the literature point to potential productivity, inclusion and multiplier non-farm growth benefits arising from the development of small-farming systems. This research investigates such viewpoints by categorizing countries according to whether national agriculture is small-farm dominated or large-farm dominated and looking at variables dependent on relevant socio-economic phenomena. Findings indicate small-farming countries have performed better in improving levels of productivity, reducing poverty and advancing structural transformation in the period in question. Findings are robust to the effects of differing levels of rural investment. However, sample sizes and the nature of data collection in a context of scarcity limits the capacity to generalize findings. Although the research finds small-farming countries outperform large-farming countries in progress across these variables, bivariate analysis does not establish that linkages from agricultural development to first, poverty reduction and, second, structural transformation are stronger in small-farming contexts. Overall, findings show that possessing an agricultural sector dominated by smallholdings is no impediment to making progress across key indicators of social and economic development. Consequently, reflection on the merits of public expenditure to support smallholder models and opportunities to leverage private finance in smallholder farming are emphasized. Further, the scope for integration of small- and large-farming models in mutually beneficial arrangements can be a useful complement to mechanisms that support exclusively smallholder farming models.