The Rise of Large Farms in Land-Abundant Countries: Do They Have a Future?

Abstract

After a long period of neglect, policy makers have recently re-discovered the importance of agriculture for food security, poverty reduction, and broader development. A recurring debate in the development literature is the relative emphasis to place on the roles of small-scale farms versus large-scale farms in fostering agricultural growth and economic development. In the 1960s, T.W. Schultz’s landmark study, Transforming Traditional Agriculture (1964), convincingly argued the case for the efficiency of small-scale family operated farms and their responsiveness to new markets and technologies. This, together with the success of the Green Revolution in the 1970s, placed small-scale farm productivity at the center of the development agenda. Other work also showed that broad-based gains in productivity of small-scale farmers favored better development outcomes in terms of overall economic growth, employment generation, and poverty reduction (Mellor, 1976). The much greater success of Asian countries in building on the Green Revolution to transform their economies and reduce poverty relative to Latin America with its highly unequal agrarian structure, further re-enforced this development model.