Is There a Case for Support for Smallholder Agriculture?

Introduction

The paper by Kim Palmer and John Sender makes the following argument:

Claim (i): Rural households are currently not benefiting much from agriculture.

Claim (ii): The current situation cannot be improved by policy changes (for example, in agricultural policy).

Conclusion: We should direct resources away from agriculture, to non-farm sources of income (for example, wages, social grants).

Palmer and Sender set their argument against the advocates of land reform and agrarian change who argue that land reform is important to promote rural liveli- hoods. They argue that the availability of more land will not improve the liveli- hoods of poor rural households.

The evidence is primarily statistical (which is on the whole very well presented). But the basis of their evidence does not lead to such a policy conclusion, because there is a missing premise. There are many other kinds of policy changes apart from land reform which could improve the effectiveness of agriculture. For ex- ample, the provision of productive rural infrastructure (farm roads, fences, dams, boreholes, shearing sheds, bridges); the provision of rural credit; more improved extension services; and improved marketing facilities and systems.