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Hundreds of millions of small farmers are struggling to earn livelihoods and produce agricultural goods for the developing world. What will it take to increase their productivity and help lift them out of poverty?

At the Scottish resort of Gleneagles in July, leaders of the world's industrialized nations pushed through a pro-African agenda that included one groundbreaking pledge: new support for agricultural development, which may improve the lives of millions of small farmers forming the continent's bedrock.

For some experts, this summer's G8 summit underscores a larger sea change underway in international development. After years of neglect, they argue, agriculture is again being embraced as the driving engine for prosperity and progress in some of the world's poorest countries.

Or is it? Even as some analysts hail pro-farming initiatives such as efforts to reduce international trade barriers, others suggest the answers to economic growth in developing countries may no longer lie on the farm. Experts on both sides of the debate met in Wye, England, in June at a workshop organized by IFPRI and its 2020 Vision Initiative, the Overseas Development Institute (ODI), and Imperial College, London, to explore the future of small farms. They assessed ways to reenergize small-scale agriculture as a force for development—or to find viable economic alternatives for millions of small farmers in poor countries (for more information on the workshop, see www.ifpri.org/events/ seminars/2005/20050626SmallFarms.htm).

If views on the future of small-scale farming differ radically, one fact is indisputable: With an estimated 525 million small farms in the world—of which 8 out of 10 are less than two hectares in size—they cannot be dismissed lightly. Indeed, trends indicate small farms will continue to dominate the landscapes of many developing countries, at least for the next few decades.

Today, small farmers face daunting handicaps, both old and new. Patchy communications, ramshackle roads, aging rails, and non-existent bridges can turn African farm goods into unreliable commodities for domestic markets and price them out of foreign ones. HIV/AIDS has sickened and killed millions of rural laborers, hobbling agricultural production in many developing countries. And supermarket chains are posing both opportunities and risks for small-scale producers around the world.

No region has more small farms than Asia—accounting for more than 80 percent of the world's farms of under two hectares. And few rural regions have witnessed such breathtaking economic strides in recent decades. The Green Revolution of the 1960s and 1970s tripled yields of wheat and other food crops in some parts of Asia.

Now other sectors are driving economic growth in Asia. China, for example, is peppered with some 200 million tiny farms, averaging about half a hectare in size. But according to Simon Maxwell, director of the London-based Overseas Development Institute, "The poverty situation in China is being transformed not by agricultural development but by manufacturing along the coast. So there are many routes to growth. Agriculture may be one of them in many countries. And small farms may be one of them in some of them."

The industrial boom also presents alternative employment opportunities for a new generation of Chinese farmers. "Half of farmers' income now comes from off-farm activities," says Jikun Huang, director of the Center for Chinese Agricultural Policy at the Chinese Academy of Sciences, in Beijing. "Earlier, many were working in rural industries—textile industries, construction, all kinds of industries. Now, more are migrating to urban areas."

Huang estimates that 8 out of 10 Chinese farm families have at least one member employed in nonfarm work, either full time or part time. Finding employment in other economic sectors does not necessarily come at the expense of small-scale farming. The remittances, for example, can help improve agricultural production—and the welfare of those remaining on the farm. But this situation does raise the specter of an increasing poverty divide between rural and urban areas and between different regions of the country.

Equally worrying is another trend, Huang says: Young people are leaving small farms in China in droves, in search of better job opportunities elsewhere. Increasingly, he says, small-scale agriculture is becoming the occupation of old people and women. "This trend is definitely not good for China's development," Huang says. "The question is, why can't the agricultural sector attract young people? That's an issue we need to look at."

Nor are past agricultural success stories necessarily replicable today. Like China, Indonesia has witnessed stunning agricultural strides, particularly in rice yields. "But that occurred in a very big country with a huge internal market, which was simultaneously beginning to industrialize and which also had oil wells," says Frank Ellis, development studies professor at the University of East Anglia, in Britain. "And agricultural growth was supported with subsidies and interventionist policies."

Can Indonesia's example be applied to Sub-Saharan Africa, emerging from a very different era of structural reforms and market liberalization? Ellis, for one, has doubts. There is very little extra fat in current government budgets to spend on agricultural subsidies and inputs, he says.

Many developing countries are also struggling for a slice of increasingly competitive, if not unfavorably tilted, world markets. Small cotton farmers in Burkina Faso, for example, face larger and richer rivals in the United States, who receive more than US$4 billion in domestic subsidies. That sum, the United Nations notes in its latest Human Development Report, is larger than Burkina Faso's entire national income.

And while one new phenomenon—giant supermarket chains sweeping into virtually every corner of the world—may ultimately enrich some small farmers, it also has the potential to sink others further into poverty. Both indigenous and foreign chains have already made major inroads in Asia and Latin America, where riding the supermarket boom often demands a major overhaul in small-farm practices. Farmers there often lack training and financial resources needed to meet new food safety and quality requirements. In Latin America especially, where farm sizes vary dramatically, supermarket chains tend to prefer dealing with large farmers or the more successful smaller ones.

Even organizing small farmers into associations to better negotiate with supermarkets and large-scale processors is proving a challenge. "We're trying to do this—to get farmers organized," says Mercy Karanja, an agricultural advisor who also raises dairy cattle, maize, and beans in central Kenya. "But it will take a huge amount of resources and time. I'm not sure how long supermarkets will wait for us to get organized."

In some cases, farmers appear to be struggling with seemingly insurmountable odds, both man-made and natural. The images of famine that emerged from Niger in summer 2005 may send an instructive message. "The basic story is that if you don't invest in small-farm agriculture, you're going to have a lot more Nigers," says Peter Hazell of IFPRI. "Expecting poor countries to quickly generate enough productive nonfarm jobs to pull large numbers of workers out of farming is totally unrealistic. If agricultural growth and small farms are neglected, then a mass exodus of small farmers could simply overwhelm countries in terms of the social, political, and environmental problems this will create. The relevant question is not do you give up on small farms, but what can you do to help them seize new opportunities?" Investing in small-scale agriculture does not merely head off famine and other catastrophes, Hazell and others argue. It may actually offer a viable future for farmers.

In some cases, investment in small-scale farming may mean moving away from subsistence agriculture to production for the market. Farmers' organizations in Meru, Kenya, for example, are now raising high-milk-yielding Toggenburg goats. The milk is being sold locally, and there are plans afoot to introduce cheese and yogurt making into their operations, says Christie Peacock, chief executive for Farm-AFRICA, a London-based nonprofit.

Breeding the goats is proving financially successful as well. "People are coming from other parts of East Africa—Uganda, Tanzania, and elsewhere—to buy the goats," Peacock says. "There is a huge demand, and we're one of the very few suppliers."

Ultimately, the best argument for investing in small-scale agriculture may be the simplest one: few low-income countries have viable alternatives. And if small farmers are to survive and prosper, analysts believe they need assistance.

"I think there will always be 10–15 percent [of small farmers] who have sort of fallen off the bottom. And those people will need social protection," says Peacock. "But the vast majority of small farmers can become self-reliant and place themselves above absolute poverty."

For that to happen, however, both public and private sectors will need to make major investments. "Many countries suffer from poor infrastructure, poor institutions, poor ways of using assets to improve productivity," says Prabhu Pingali, who heads the Agricultural and Development Economics Division at the Food and Agriculture Organization of the United Nations in Rome. "Many countries have poor human capacity—in schooling, in the ability to use and access new technologies and technical information. What's needed are really a lot of fundamental investments over a broad set of factors."

It's a message that appears to be sinking in, underscored by the G8's commitment in July to encourage agricultural development in Africa. G8 leaders also agreed to set a date to end agricultural export subsidies in rich countries, which have helped price farmers in poorer ones out of the international market. And at the U.N. in September, U.S. President George W. Bush called on world leaders to abolish all tariffs and subsidies. Still, the U.N.'s Human Development Report notes that richer nations have broken many past promises to help poorer ones.

Many of the solutions, however, may lie closer to home. If the supermarket revolution is inevitable, it does not necessarily doom small farmers. In some cases, it can work to their advantage. "The supermarket chain locally can be an export channel for local producers, as the chain supplies its stores in other countries," says Thomas Reardon, an agricultural economist at Michigan State University.

Indeed, the failure of many small Asian and Latin American farmers to sell their produce to supermarkets may serve as a lesson for Africa, where the retail chains are only beginning to gain a foothold. "But if governments don't put support packages in place for small farmers, the scenarios are not very good. Small farmers won't be able to compete" and will be cut out of local as well as international markets, says Nick Vink of Stellenbosch University in South Africa.

On the other hand, he added, "we know from past history that when African farmers have the opportunity to get into the market they don't stay small. They can compete and become as industrial as anywhere in the world."

To create those opportunities, African governments in particular may have to intervene where the private sector does not, by facilitating farmers' access to services and goods ranging from credit to new technology and promising seed varieties. State action may also be necessary to help open up markets for farmers' products.

"Particularly when it comes to food crops, the state has to play a more proactive role in terms of kick-starting markets and doing more than simply creating a level playing field for the private sector to come in," says Colin Poulton, a research fellow at the Imperial College in London. "The state's got to play a role [in Africa], even if it's not the really heavy intervention that took place in Asia."

Just how to create a government responsive to small farmers—while also avoiding the downsides of state intervention, such as corruption and inefficiency—remains an open question, Poulton admits. But what is clear, he says, is "one size won't fit all." Countries and even local communities need to find appropriate avenues for public-sector intervention, which will depend on farmers' needs and the crops they grow.

Diversifying into other types of agriculture or even industries is another option. Chinese youths may be underwhelmed about raising cotton and oilseeds for a living. But new, more lucrative opportunities in livestock, fish, and horticultural production may lure some back into agriculture, Huang of the Chinese Academy believes. In Africa, more imaginative proposals for rural income generation are needed, such as, perhaps, tourism or small-scale rural industry.

Other options are more problematic. More equitable land distribution that might help small farmers in Latin America, for example, demands reforms that "remain politically difficult to implement," says IFPRI research fellow Regina Birner.

Ultimately, however, improving agricultural productivity is critical to lift many small farmers out of poverty—and the countries they live in as well. "Historically, no major country has been able to achieve rapid, broad-based poverty reduction without significantly increasing agricultural productivity," says Steve Haggblade, a senior research fellow at IFPRI.

Perhaps the best prescriptions come from small farmers themselves. Good roads are not worth much without vans and other means to deliver their goods to market, says Glyvyns Chinkhuntha, a vegetable and fruit farmer who lives 45 kilometers from Malawi's capital, Lilongwe. Privatization has been heralded, but small growers need the government to provide good extension services that the private sector will not, Chinkhuntha said in an address at the June workshop in Wye, England.

In northern Zambia, coffee farmer Kaniki Bwalya also admits earning a living is "pretty rough." A member of Zambia's national farmer's union, Bwalya ticks off a host of problems facing small-scale producers: the high cost and scarcity of fertilizer and other inputs, the hard time selling maize right now, the difficulty obtaining credit. But Bwalya sees few alternatives to farming in Zambia. "There aren't many jobs or moneymaking activities people can get into," he says. "So agriculture has to be an activity people can get involved in." Bwalya's assessment is shared by many.

"The world's farmers are small farmers," says David King, secretary-general of the Paris-based International Federation of Agricultural Producers. "They're not just an aberration that will go away as people put all the research and resources into the commercial sector or the nonfarm sector."

"In the short term," King adds, "these people are here to stay. And we need to help them become more productive."