How Large Should African Farms Be?

If one thing is common in most of sub-Saharan African countries, it is the sight of families laboring in small plots of land with primitive farm implements and very little use of fertilizers and pest control chemicals. And this leads to the argument in Africa whether there's a way out of poverty for most of these farmers. Part of the argument made by Jeffrey Sachs in this book is that it is possible to tackle poverty in Africa and South Asia by a set of mutually-reinforcing initiatives. These involve interventions for the reduction of diseases, supporting farmers through inputs, reducing hunger and better education for their children.

One of the amazing assumptions that I encounter is the belief that agriculture is still the way out of poverty for most citizens of sub-Saharan Africa. Taking forward this argument, it is understood that peasant agriculture is affected by very low productivity and that it is indeed possible to substantially raise productivity through investments in the development and deployment of agricultural inputs as seeds, implements and fertilizers. Given the very low productivity of peasant agriculture, one cannot argue much with this belief.

To my mind though, the defining feature in African farming lies in the observation that agricultural land has been divided into very small and almost uneconomical units. This suggests that there will be rapidly diminishing returns to any investment aimed at raising the productivity of these farms even with the rise of Africa's expected green revolution. Anne Perkins considers the issue in this piece in the Guardian. Judging from the series of responses contained in that piece, it is still an unsettled matter. What appears to be approaching certainty is that a green revolution on its own or the consolidation of farms may not suffice.

My addition to the argument would be that there would be immense value in consolidating farms in order to benefit from scale, improving seed variety and other forms of biotechnological interventions. Peasant farming in the continent provides poor value but without any alternatives, many keep their land to farm again in the next season for lack of other employment. Surprisingly, a study by the World Bank of South African firms suggests that in spite of a public policy bias towards larger firms, smaller firms were more efficient in an overall sense. This World Bank study records the counter intuitive finding that there an robust inverse relationship between efficiency and land size in South Africa farms. I interpret this to mean that peasant farming is certainly not efficient but consolidation should be guided by the realization that there's a point at which it would not be helpful. This calls for very thoughtful policy.

Part of the solution appears to be about trying to get Africa's agricultural markets to work better. This quest towards enhancing the operation of markets would push the farms towards the ideal size depending on crop or place. As it is now, it is a clear indictment of the continent because a vast majority of its people are farmers and yet they are starved. But whatever happens, bigger farms in some area is surely part of the overall solution. The scale-efficient size for African farms will most definitely vary by geographical area.