The economics of smallholder farming

Description

Sustainable agriculture is possible when smallholder farmers overcome economic barriers to establish profitable farm businesses. This chapter outlines key economic factors of land, labour, capital and inputs which impact the production costs. Access to markets influences the farmer’s ability to effectively sell their products and affects both the distribution costs and the revenue. These economic factors are combined as inter-related constraints in the farmers mind as decisions about what crops to produce, how to optimize production and where to sell it. Solutions to these barriers that smallholder farmers face within these economic factors are context dependent and may include policy changes, adoption of new technologies, temporary incentives to stimulate market growth and building capacity of actors that results in structural changes. A case study is presented based on the authors’ work with smallholder farmers building a cassava seed system in Tanzania.

Table of contents

1 Introduction 2 Segmentation 3 Land 4 Labour 5 Capital 6 Inputs 7 Market access 8 Decision-making 9 Case study: BEST Cassava 10 Summary 11 Where to look for further information 12 References