In this essay we will discuss about small-scale farming.
By small scale farms we mean the farms where division of labour and management are not possible and the production is carried on individually. The work is not done entirely by hired labour the members of the family also work on the farm. This type of farming generally prevails in countries where there is a large population and the great majority depends upon land.
In countries with small scale farming, the yield per acre is often large but the income per farmer is low. However, beyond a certain limit the large, farms create their own difficulties and they tend to encourage small ones. Small-scale farming is prevalent in Japan, India etc.
It is necessary, to examine the reasons for the tenacity with which the small entrepreneur has maintained a numerically predominant position in the agricultural structure not only in India but the world over.
In doing so it is not enough to consider technical and economic factors only, for non- economic considerations are of equal significance to an understanding of the position. Both in factories and on farms the technical advantages of the large unit of production are more pronounced where the work can be done, with expensive machines and with large staffs of workers.
(1) Intimate Care and Personal Attention:
On the other hand, where the emphasis is on intimate care and personal attention to detail the advantages are with the small producing unit. Broadly speaking, the latter qualities characterize most operations in farming, concerned as they are with growing crops and with living animals. This places the small family farm employing little or no hired labour in a favourable position.
(2) Qualitative Intensity of Work:
Not only does the financial interest of the family workers ensure the qualitative intensity of their work, but the more intimate relationships existing on small farms also ease the supervision of any hired workers that may be employed.
Moreover, family labour is much more flexible to cope with the irregularity of much farm work arising from the variable conditions of seasons and weather and the unpredictable needs of crops and of livestock. Because of this, reliance on family workers may make it possible for the small farm to gain more than it loses from the absence of the potential benefits of division of labour and the use of machinery.
(4) Better Quality:
In farming the rates of physical output are measured in terms of the crop yields per acre, or milk yield per cow, or egg yield per hen and so on. There is no technical reason why these rates or output should have any relation to the sizes of farms as such. Thus crop yields depend not on the acreage of crops grown, but on the quality of the land, variety of seed and the degree of manuring and cultivation.
Likewise rates of livestock output are determined by the breed, quality, feeding and management of the animals and not by the numbers of animals kept. Nevertheless, in as much as both crops and animals respond to individual care and attention, the small farmer has the advantage in that his’ sphere of supervision is not beyond his personal capacity.
(5) Intensive Farming:
Moreover, since small-scale farming is more intensive while large-scale farming tends to be more extensive, higher gross production per acre is generally obtained from the smaller farms. In this connection, it is necessary to stress the difference between gross and net outputs, for it is the latter which really tests the efficiency of production.
It is also relevant to point out that small farms have high gross outputs per acre not because they are small farms, but because they have to be intensively cultivated. Intensively cultivated large farms can, and do, attain comparable results.
(6) Marketing of Certain Products:
It cannot be denied that small farms, worked as independent business units, have serious commercial disadvantages with which to contend. They are rarely able to offer regular supplies of their products for sale, nor are they able, to buy their requisites in sufficiently large quantities to take advantage of the cheapest terms. But it is claimed that these commercial drawbacks can be largely overcome by joint action on the part of small farmers themselves.
Thus cooperative organizations can go far towards ensuring for the small farmer many of the benefits of bulk purchase and bulk sale, as well as many other trading privileges enjoyed by the large farmer in virtue of the greater size of his business transactions. Moreover the small farmer is not in practice, so seriously handicapped as might be expected in the prices he obtains for many of his products even when he acts in isolation.
This is obviously so in so far as the prices of some of his major products (milk is an important example) are fixed and non-competitive. But is also true of certain other products with competitive prices, e.g., livestock which are generally sold on the, basis of individual animals or in small lots, and the more highly perishable fruit and vegetables the prices of which depend more on rapid transit to good markets than on the bulk in which they are sold.
(7) Farm Workers Ranked as Farmers:
Small holdings and small farms form the first rungs of the so-called agricultural or rural sodal ladder. They provide a in cans for the experienced farm workers to start on their own and rise into the ranks of farmers. Apart from its social implications, this argument is sometimes advanced as being in the interests of the efficiency of the industry as a whole.
(8) Large Number of Persons per Acre:
Small holdings and small farms support a large number of persons per acre than do large farms. In this way they help to impede the rural exodus.
(9) Satisfaction of Lund-hunger:
Small holdings satisfy the “natural” ambition of the “land-hungry” who regard farming primarily as “a way of life”.
Small sized farmers, cater for those who value independence and who are not in love with working to orders.
(11) Thrift, Sobriety and Diligence:
Small-scale farming is also calculated to foster certain socially desirable characteristics such as thrift, sobriety and diligence.
In times of economic stress and depression the noncommercial aspects of small-scale farming, such as the small cash out goings and the ability of the farm family to “live off the holding,” give the small farms a measure of stability which is of great importance.
(13) Political Significance:
Small farms possess an important political significance in as much as they distribute property or its control thereby acting as a bulwark against revolutionary changes. These are the considerations which have caused many countries to cling tenaciously to the “peasantry” as the mainstay not only of their agriculture but also of the whole national economy.
Thus, it is generally said, “You may admire a large farm, but cultivate a small one.”
When the farms, are too small the farmer has to suffer serious disadvantages which are given ahead:
(1) High Cost but Low output:
Small farms result in a deficit economy with high cost of production and low output. Below a certain size their is no reduction in the fixed costs on a holding, so that the expenses of each unit of production rise with every diminution in it. Relatively small output has to bear these expenses when the holding is small.
(2) Waste in the Employment of Labour:
There is waste in the employment of manpower under the small-scale farming in the country. The cultivators over a majority of holdings remain underemployed with long periods of enforced idleness.
(3) High Cost per Acre of Fencing:
The cost per acre of fencing increases with the diminution of the area enclosed and in many cases of small holdings becomes almost prohibitive so that the fields in country in general, lie unfenced and unprotected against stray cattle which cause, heavy losses.
(4) Exploitation by the Dealers:
The small-scale farmer is unable to ‘achieve’ marketing economies and he is usually exploited by the dealer. The rate of interest and rent rises as the scale of farming is reduced and the petty cultivator, due to the operation of the long chain of middlemen and the very small-scale of his transactions, has usually to purchase from a dear market and sell his produce in a cheap one.
(5) Wasteful and Expensive:
Small-scale farming not only means a lower output but, is also wasteful and expensive. Goods like tools and implements, manures, seeds, etc., are purchased at retail prices and the total expenses increase.
(6) No Adoption of Improved Methods of Farming:
The adoption of improved methods of cultivation, machinery and labour-saving devices is usually out of question.
(7) Permanent Land Improvements:
Even the permanent land improvements such as in the direction of irrigation, leveling and fencing are beyond his, capacity and the expenditure on these may be wholly disproportionate to the size of his field.
(8) No use of Good Manure:
The small farmer cannot afford even to manure his field properly. He has not enough land to grow a crop for green-manuring. The fields lie in a state of under-cultivation growing crops from year to year with little or no manure and water and exposed all the time to the invasion of weeds; the raids of stray cattle, etc.
(9) No Benefits of Specialisation of Labour:
The small size not only impedes all agricultural improvements but hinders the adoption of even intensive cultivation. Advantages of specialised labour and division of labour cannot be enjoyed.
(10) No Commercialisation of farming:
Commercialisation of farming is obviously out of question on holdings which are hardly sufficient even for subsistence.
(11) No Scope of Mixed Farming:
Mixed farming with dairying becomes impracticable.
(12) Inadequate Supplies of Credit:
The smaller the size of the farm the greater is the difficulty of the farmer in securing adequate supplies of credit at reasonable rates or interest. With inadequate financial resources, improvements are not possible. Thus, the combined effect of all these disadvantages is that it reduces the income and standard of living of the small-scale farmer.
The disadvantages of small-scale farming can be offset partially if the farmers take to agricultural co-operation and subsidiary rural industries. Again, a number of small farmers can combine in a co-operative society and buy their requisites and sell their produce collectively. This enables them to secure the marketing economies. Co-operation ushered in an era of prosperity to the small-scale farmers in Denmark.
“Whatever substance there may be in these arguments for the small farm, the impressive fact is that small farms remain the prominent feature of the agricultural structure. Indeed, small farmers are so numerous and control so much of the total agricultural resources that the efficiency and the productivity of the industry as a whole depend to a considerable extent on the standards attained by them.
Moreover conservative forces which make for rigidity in farming are so strong that any radical change is only likely to be brought about slowly. In these circumstances economic arguments for and against large and small farms are not likely to lead very far.
The important practical consideration therefore is to recognize not that small farms are better or Worse than large farms but that they are different. From the economic angle there are two important aspects to this difference.
The first is that, although the bulk of small farmers are concerned with production for the market, there are influence other than the profit motive, which’ still determine their actions as producers. In particular, although they may not satisfy their needs in the old “subsistence” manner, they do nevertheless work primarily to provide an income for the family.
This may mean that, so long as the small farmer can obtain enough money for his domestic needs from a way of farming which is familiar and which appeals to him, he is not much concerned about increasing his profits by alternative methods of production. It is here that economic theory is badly handicapped, for it is necessary to remember these non-economic stimuli in interpreting the response of agricultural production to the price mechanism.
The second aspect is concerned with the organization of special measures to overcome the various diseconomies under which small farmers operate while retaining the small-scale farming system itself.
In the field of management it is not surprising if the general standard of efficiency in an industry run by some quarter of a million small entrepreneurs is not very high. This has long been recognized by the provision of a salaried class of consultants maintained not by the industry itself but out of public funds.
In the field of equipment the small producer needs special attention from the engineer and the implement manufacturer if he is to obtain small and cheap machines suitable for his special circumstances; there is also need for some organization, co-operative or otherwise, to enable the small farmer to have the occasional use or the bigger machines for special purposes.
Again, the small farmer’s livestock policy needs to be helped by the outside supply of good sires etc., for his herds and his flocks are generally too small to enable him to pursue an adequate policy of livestock improvement on his Own. Finally, in the commercial sphere special organization must be forthcoming to remedy small farmer’s deficiencies in the supply of capital and credit, in the sale of his small output in purchase of his requisites.