Breakout session 3: LATIN AMERICA

Paper "Latin America: The state of smallholders in agriculture " by Julio Berdegué and Fuentealba, RIMISP

Chair’s remarks and key points:  Ruben Echeverria, GD CIAT-LAC

The paper has four clear messages that set up the discussion:

• Targeting development strategies and policies should reflect the greater heterogeneity across farmers in Latin America. The 2ha definition of small farm in Latin America leaves out an important number of family farmers. This middle category comprises family farmers that have not scaled up to commercial farming but are not subsistence farmers, and are therefore farmers for whom interventions could bring better results in terms of rural development. A typology also needs to look at inequality rather than per capita income, as evidenced by the issue of land grab, and include a gender perspective.

•  Policies should not only focus on developing the assets and capabilities of farmers, farm households, and farmers' organizations but also consider the “proximate context”, or the environment in which they operate. This territorial perspective is found to be a crucial complement to policies focused on asset building.  

• Greater attention should be paid to domestic food markets, with an emphasis on commodities, as this is where the opportunities and potential of rural development lie. The potential of agro-ecological farming and export-orientation is debatable; some argue that they are niche markets that will benefit relatively few smallholders, while others see opportunity for scaling up within domestic markets.

• Delivering public services and public goods to the scale of 15 million family farms will require policies that go beyond cash transfer schemes, or targeted, project-based development initiatives. Public goods that can be accessed by large numbers of smallholders need to be emphasized and receive greater attention from agencies like IFAD.  A way to recognize heterogeneity of family farmers through policy is to differentiate those that aim for rural development by targeting family farming and those that focus in poverty alleviation by targeting subsistence farmers.

Synthesis of discussion

Latin American countries are characterized by a less fragmented rural land ownership structure than that found in Asian and African countries, but a highly unequal distribution of land. In this sense, a focus on farmers holding less than two hectares will exclude a large number of family farms. Instead it is proposed that Latin American family farms be categorized in a threefold typology that divides them according to the asset endowments and by how favourable or unfavourable is the context in which they operate. A pattern among LA countries is that there are a significant number of family farmers who are not subsistence farmers but either the asset endowment or the context is constraining their transition into commercial farming. Out of 14 million family farms in twelve Latin American countries, 60% are subsistence smallholders (10 million), 28% are small farmers in transition (4 million), and 12% are consolidated family farms (1 million).             

This scenario raised an urgent need to differentiate development strategies and policies according to the three categories of family farms. The 2ha criterion disregards the heterogeneity of farms in LA and leaves out a significant number of family farms who usually hold a larger amount of land than subsistence farmers. This middle category of family farmers in transition, it is argued, are the farmers for whom interventions could bring better results in terms of rural development. Representatives of IFAD assured that the organization’s focus has not solely been on farmers under 2ha but broader perspective of small farms.  It was then agreed that it is important to have a definition of smallholders that is consistent with IFAD's practice.

“Policies ought to focus not only on developing the assets and capabilities of farmers, farm households, farms, and farmers' organizations, but on the territorial contexts in which they operate” (Berdegué and Fuentealba, 2011). To clarify this statement, the point was raised that assets are still relevant, especially as a strategy for poverty alleviation, but that the focus of policy on the “proximate context” can bring better results in terms of rural development. However, further understanding is required on what kind of context different farmers need. Also, what policies can promote the right environment for the heterogeneity of farmers?

Unequal access to land arising from skewed land distribution is deemed a factor that undermines a favourable environment for smallholder agriculture, interferes with opportunities for expansion, and continues to foster land fragmentation and unviable minufundio units among family farms.  These conditions contribute to ‘land grabbing’ (large scale appropriation of land), also noted as a concern in Latin America.

Linking smallholding farmers to markets in Latin America has commonly involved export commodities and niche products. However, it is argued that these markets are only a small fragment of the agricultural economy. There ought to be much greater attention paid to domestic food markets, with an emphasis on commodities, as this is what is most relevant for the vast majority of smallholders. The importance of domestic markets is heightened by the general growth trend of small-to-medium size cities in Latin America. Urban expansion is considered to increase demand and synergies in the territories where the growth occurs. Finally, the debate over agro-ecological agriculture as a niche or as a scalable style of farming was left unresolved.     

The scope of programs that give priority to transferring private assets has to be revised to make policy work for a large population of 15 million family farms (rounded number for LA). The proposed approach is to emphasize development of public policies that deliver services that can work for a larger proportion of family farmers. An example highlighted the positive aspects of conditional cash transfers to develop human capital and break trans-generational poverty traps. This led the discussion to a broader debate over effective policies to generate rural development.