IS SMALL STILL BEAUTIFUL? THE FARM SIZE-PRODUCTIVITY RELATIONSHIP REVISITED Milu Muyanga & T.S. Jayne Agricultural, Food and Resource Economics Department Michigan State University, USA Photo: Christiaensen and Demery (2007) Presented at the at the 2014 Conference on Land Policy in Africa The African Union Conference Center, Addis Ababa, Ethiopia, November 12, 2014 28
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IS SMALL STILL BEAUTIFUL? THE FARM SIZE-PRODUCTIVITY
RELATIONSHIP REVISITED
Milu Muyanga & T.S. JayneAgricultural, Food and Resource Economics Department
Michigan State University, USA
Photo: Christiaensen and Demery (2007)
Presented at the at the 2014 Conference on Land Policy in AfricaThe African Union Conference Center, Addis Ababa, Ethiopia, November 12, 2014
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Emerging trend #1
27
Farm sizes are shrinking due to mounting population pressure in sub-
Saharan Africa
Total rural population projections
Source: UN Pop Council, 2013
26
Shrinking farm sizes .2
.4.6
.8he
ctar
es p
er p
erso
n
1960 1970 1980 1990 2000 2010year
World Sub-Saharan Africa Zambia
Source: World Development Indicators, World Bank
1960-2010Arable land per capita
25
24
1960-69 1970-79 1980-89 1990-99 2000-091 2000-09 land-person ratio as %
Total 820,341 1,438,779 1,399,737 70.6% 100.0% 100.0%
Source: Ministry of Agriculture Crop Forecast Surveys, 2009, 2012. *2001 figures are land under cultivation. ** Growth rate computed from 2009-2012 only. “na” means not available.
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Who are the emergent farmers?
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What are the medium-scale farmers characteristics?
• Is this growth driven by farmers who began as
smallholders, and now transitioning to a larger scale
status through the capital and assets accumulation?
• Is the growth driven by institutions and policies (deficient
policies) that encourage investment in land acquisitions
by individuals from non-agricultural employment
• How does their agricultural productivity compare to that
of the smallholders?
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Who are the medium-scale farmers?
• Majority of them used non-farm entry pathway
• Urban and rural elites
• Most them are current/former public sector employees• Relatively well-educated
• Only a minority were primarily engaged in agriculture• But had sufficient initial endowment of land
• Owned over two times more land than they were using for crops:
• High degree of land owned for speculative purposes
• Inability to make productive use of their land
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Descriptive results [I]• Majority (60%)of medium-scale farmers used non-farm entry
strategy
• Majority of them are current/former public sector employees• Had high education attainment
• Acquired land from savings from non-farm, largely urban jobs
• Only a minority were primarily engaged in agriculture• But had sufficient initial endowment of land
• Owned over two times more land than they were using for
crops:
• High degree of land owned for speculative purposes
• Inability of these farmers to make productive use of their land
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Large scale
Medium-scale
(5-100 ha)
Millions hectares
Ghana 3.08
Kenya 0.69
Zambia 2.11
Medium-scale farmers control more land than large-scale enterprises!
Source: Jayne et al. 2014 (JIA)
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Large scale
Medium-scale
(5-100 ha)
Millions hectares
Ghana 3.08 4.214.21
Kenya 0.69 0.840.84
Zambia 2.11 2.472.47
Medium-scale farmers control more land than large-scale enterprises!
Source: Jayne et al. 2014 (JIA)
15
Smallholder farms productivity- Kenya
14
Farm income
Crop income
020
4060
8010
0
'000
KSh
/ha
plan
ted
25% 50% 75% 95%0 1 2 3 4 5 6
land -- planted (ha)
Figure 2b: Farm and crop income per hectare planted
Medium-scale farms productivity- Kenya
13
Gross value
Net value
2060
100
'000
KSh
/ha
plan
ted
25%50% 75% 95%0 5 10 15 20 25land -- planted (ha)
Figure 2a: Value of crop production per hectare planted
Medium-scale farms production costs- Kenya20
22.5
2527
.530
32.5
35
'000
KSh/
ha p
lant
ed
25%50% 75% 95%0 10 20
land -- planted (ha)
Figure 5a: Total crop production costs per hectare planted
12
Medium-scale farms’ production costs- Kenya
11
-50
510
1520
2530
'000
KS
h/ha
pla
nted
25%50% 75% 95%0 5 10 15 20 25land -- planted (ha)
Fertilizer SeedLand preparation LaborFixed costs
Figure 6: Total crop production costs by components
How is changing farm structure affecting the potential for land
expansion to support smallholder agricultural growth?
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Large scale
Medium-scale
(5-100 ha)
Millions hectares
Ghana 3.08 4.21
Kenya 0.69 0.84
Zambia 2.11 2.47
Medium-scale farmers control more land than large-scale enterprises!
Source: Jayne et al. 2014 (JIA)
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Large scale
Medium-scale
(5-100 ha)
Small-scale
(0-5 ha)
Millions of hectares
Ghana 3.08 4.21 5.08
Kenya 0.69 0.84 2.63
Zambia 2.11 2.47 2.09
Medium-scale farmers controlling significant proportion of farmland
Source: Jayne et al. 2014 (JIA)
8
Large scale
Medium-scale
(5-100 ha)
Small-scale
(0-5 ha)
Total land
controlled
Millions of hectares
Ghana 3.08 4.21 5.08 = 12.37
Kenya 0.69 0.84 2.63 = 4.16
Zambia 2.11 2.47 2.09 = 6.67
Medium-scale farmers controlling significant proportion of farmland
Source: Jayne et al. 2014 (JIA)
7
Large scale
Medium-scale
(5-100 ha)
Small-scale
(0-5 ha)
Total land
controlled
Potentially available cropland
remaining
Millions of hectares
Ghana 3.08 4.21 5.08 = 12.37 3.56
Kenya 0.69 0.84 2.63 = 4.16 1.01
Zambia 2.11 2.47 2.09 = 6.67 3.35
Medium-scale farmers controlling significant proportion of farmland
Source: Jayne et al. 2014 (JIA)
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Optimism that small-scale farms can expand
• Is the smallholder-led agricultural development still
feasible?
• Some medium-scale farmers started out with less
than five hectares of land
• At least some room for optimism that small-scale farms can
expand into commercialized medium-scale stature under
favorable conditions including access to land
• Smallholder-led growth is more broad-based and
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Conclusion
Most governments’ strategies are oriented to
promote agricultural growth and food security
for the millions of their rural constituents who
are smallholders assume unhindered access to
land
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Looming employment challenge in SSA
62% < 25 years old
3
2
Government policy orientation• Wage employment will be able to absorb two thirds of the
people entering the labor force between 2010 and 2020
• Access to land will largely determine whether millions of rural
Africans will make a decent livelihood and be able to feed
themselves
• This will depend on how supportive the land allocation and
agricultural policies are to smallholders
• African leaders may soon perceive that political stability will