Enabling Smallholder Prosperity through Commercialization and Diversification

Abstract

As India becomes the world’s most populous nation, the two central concerns for food security is how to increase and diversify food production. Although this is an opportunity for income growth for small farms, rectifying disadvantages owing to low economies of scale and poor access to capital, technology, and mechanization is critical to leverage it. In this chapter, we look at the scope of institutional interventions such as aggregation models in the form of cooperatives and farmer producer organizations in addressing the scale and access disadvantages. We also touch upon the need to revisit the issue of land reforms to enable land tenure systems to improve access to land and access to mechanization and credit.

Agricultural commercialisation, poverty reduction and pro-poor growth: evidence from commercial agricultural development project in Nigeria

“…This increased productivity can be achieved through commercialization. Commercialization is central to the structural transformation process as greater input market orientation increases the demand for industrial goods and technology essential for production, increases household welfare through employment generation and increased labor productivity and enables the transfer of surplus in the form of food, labor and capital from the agrarian sector to the other sectors (Pingali et al, 2019).…”

Determinants of smallholder commercialization of livestock: A case study from Tigray, Ethiopia

“…On the other hand, marketing is fundamental to the systemic transition cycle since greater input market alignment raises the demand for manufactured products and technologies necessary for growth, improves consumer welfare by work development and improved labor efficiency, and enables the shift of surplus in the form of food, labor, and capital from the agricultural sector to other sectors (Pingali et al, 2019). Smallholder marketing is also a key aspect of the social transition cycle that most growth economists find to be the primary road through a semisustainable farming community to a more dynamic and food-secure environment with higher general living standards as the systemic transformation cycle starts with broad-based agricultural production, allowing millions of smallholder farmers to build up buying power (Jayne et al, 2011), which can also be related to benefits and challenges.…”

Rural infrastructure and smallholders commercialization: analysis of crop input market from Jimma Zone, South-West Ethiopia

“…Provision of credits together with agricultural extension and entrepreneurial skills would be vital to enhancing rural development through fostering smallholder commercialization. Many empirical evidences such as (Osmani et al, 2015;Rosewell, 2010;Qaim and Ogutu, 2018;Pingali et al, 2019;Kabiti et al, 2015;Moti et al, 2009), of the many lists, acknowledged the role of credit service to foster smallholder commercialization in agriculture. The results were found to applicable in both markets; i.e., the inputs and outputs markets.…”

“…Besides, commercial transformation of subsistence agriculture is also vital to ensuring food security and peoples' welfare. According to (Pingali et al, 2019;Afework and Endrias, 2016;Katerega et al, 2018), commercialization of subsistence agriculture is expected to bring comparative advantage, economies of scale, exchange of knowledge as well as technological innovations. The technological innovations are further meant to reduce average costs of production among recipient countries, increasing gains from international trade and argued to bring economic growth and transformation.…”

“…Commercial transformation of subsistence agriculture couldn't be achieved without due consideration to the inputs market. In support of this argument, (Katerega et al, 2018;Pingali et al, 2019;Qaim and Ogutu, 2018) pointed out that, commercialization occurs from the output side with intensified market surplus, which can only be achieved through enhanced input market participation. Development of input market involves increasing size and quality of purchased inputs and relevant technology aimed to boost farm productivity.…”