The UN Food and Agricultural Organisation says small-scale farmers who produce the majority of food in the developing world need to be better integrated into markets to reduce global hunger and poverty.
David Hallam, Director of the UN Food and Agriculture Organization’s (FAO) Trade and Markets Division says ,Policy interventions that aim at encouraging greater levels of smallholder production for sale in markets need to take better account of the heterogeneity of smallholder households.
In the foreword to the report, Smallholder Integration in Changing Food Markets, Mr. Hallam added that just as smallholders are a heterogeneous group, the markets in which they participate are also diverse in terms of their size, geographic location, connectivity to other markets, power relations between market players, and institutional setting.
The report notes that with greater market integration and more inclusive value chains, small farmers are more likely to adopt new technologies required to achieve productivity growth.
The report also notes a paradox of high food prices. Seen by some policymakers as an opportunity for farmers to produce more and earn more, the response by many farmers has been muted.
“High levels of price, production risks and uncertainty, and limited access to tools to manage them deter investment in more productive new technologies that would enable smallholders to produce surpluses for sale in markets,” according to the report.
It also highlights the negative consequence of inadequate infrastructure, high costs of storage and transportation, and non-competitive markets.