“The economic situation of smallholder farmers is on a downward trajectory almost everywhere in the world. This is in part because, in the world’s economy, scale is paramount, and being able to get more product to market is unlikely to mean more than a slight increase in income for small farmers, who can produce only so much. A more dismal sign is the fact that few small farmers’ children want to follow in their parents’ footsteps. Aid-agency projects intended to improve food storage and decrease costly waste—encompassing everything from promoting cooperatives to providing warehouses and technical innovations—have had few lasting results in the past several decades. More often than not, aid agencies’ and governments’ need to get money out the door quickly, combined with local factors, makes progress difficult..” - Thomas Dichter/Letter in The New Yorker, October 3, 2022 Issue
In conditions of extreme poverty, life is pretty much hand-to-mouth. Short-term survival takes precedence over long-term planning and stewardship of natural resources. Take the case of El Salvador, where rural poverty and variability of income have been a leading cause of tree cover loss in coffee growing areas. Since shade grown coffee sells at a premium, many farmers seek to maintain trees on their lands for their coffee to be certified as shade grown. But the coffee market is subject to periodic oversupply crises, and when that happens, prices drop so much that even premium beans cannot command enough for poor farmers to meet their basic subsistence needs. So they clear portions of their land, sell the wood, and plant basic food crops.
The main lesson: small scale subsistence farming is a lose-lose proposition. It perpetuates poverty and degrades the environment. Smallholders cannot afford to be stewards of their environments. Between the vagaries of growing conditions and food prices, they can’t count on a stable income year to year, so they have little incentive to forego additional income or food now for better returns later. Larger farms are in a better position to ride out price fluctuations and to maintain the long-term vitality of their land.
Reference:
Allen Blackman, Beatriz Ávalos Sartorio, and Jeffrey Chow (2007) Tree Cover Loss in El Salvador's Shade Coffee Areas RFF Discussion Paper 07-32