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Is Bigger Better?

Many economists will argue that small farms make sense in agriculture-based countries (like those in sub-Saharan Africa) and that smallholder agriculture remains vital for reducing rural poverty. It may be less practical in more urbanized settings though where there are larger populations living away from the land and diverse consumer demands.

In an outline for a fuller report on agriculture and development to be released in 2008 (see interview in this issue), the World Bank will assert that that poverty can best be reduced in urbanizing economies when national companies involved in food production become competitive, when smallholder farms can consolidate in order to provide goods to supermarkets at competitive prices, and when local economies can offer more jobs outside the agricultural sector.

Since the costs of products tend to fall as output increases, many believe such economies of scale may be the only way to feed a global population of over 6 billion people at a relatively low cost. As Todd Benson at IFPRI notes, “it makes little economic sense to use high cost local producers when big businesses can provide more at lower costs to reduce poverty.”

And, supermarkets are part of the equation to bring more food to more people at lower prices. A document prepared by the FAO for World Food Day 2006 adds that “supermarkets are becoming the biggest players in national, regional, and international food supply chains, setting grades and standards and even making cross-border supply chains work.” Of course, supermarkets usually prefer to work with big suppliers that can produce goods at lower cost and demonstrate adherence to increasingly stringent food safety and quality standards.

© Organisation des Nations Unies / DPI Although the economic utility of a “bigger is better” approach is clear for the increasingly fast-paced, urbanized, and consumer-driven parts of the world, a vast percentage of the world’s population continues to face hunger and poverty—often as a result of inequities in the global trading regime and because small suppliers are left out of a market that is increasingly dominated by big agricultural supply chains. But there is often more at stake than economics. Indigenous communities have expressed concerns about losing a way of life and culture based on farming.

A statement from Latin America in Movement calls for agrarian reform that will “assure the creation of the spaces of life where we maintain our culture, to provide a home for children and youth...and so we can construct a citizenry on the basis of our relationship to the land, the sea, and the forests.”

Many indigenous communities remind those in consumer-driven societies that preserving a way of life, caring for natural resources, and promoting sustainable agricultural practices are important values in themselves and a legacy for future generations.

Page 1 - Introduction Page 2 - The Global Food Supply Page 3 - The Future of Small Farms Page 4 - Is Bigger Better? Page 5 - The Debate over Seeds Page 6 - Examining Solutions

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