1. U NDER THE RADAR SCREEN : THE RAPID RISE OF EMERGENT FARMERS IN A FRICA Milu Muyanga, T.S. Jayne, Antony Chapoto, Nicholas Sitko Agricultural, Food and Resource Economics Department Michigan State University, USA Photo: Christiaensen and Demery (2007) Presented at the World Bank Annual Conference on Land and Poverty 2014, World Bank, Washington DC, USA, March 26, 2014 1

2. Introduction Smallholder farmers constitute the bulk (70%) of agricultural producers in sub-Saharan Africa Majority of them are poor and food insecure Agricultural-led growth strategy has been touted as solution for reductions in poverty and food insecurity in this region However, recent turn of events cast doubts about the viability of the agriculture-led strategy Smallholder farming is sliding into landlessness situation as population density rises A substantial fraction of Africa’s rural population lives in high densely populated areas where land scarcity preclude extensification Increased inaccessibility to land and limited off-farm opportunities 2

3. What does small landholding sizes mean for feasible poverty and food insecurity reduction in Africa? Based on the Asia’s Green Revolution experience, smallholder-led strategy could be an option for Africa Asian revolution contributed greatly to increased smallholder productivity and reduced poverty Smallholder agriculture is more equitable development approach and compensates for urban-biased policies Besides equity concerns, efficiency considerations too exist in support of smallholder agriculture over large farms Without agricultural productivity gains, food production will stagnate or decline as land frontiers close 3

4. The rapid rise of emergent farmers in Africa [I] Shrinking landholding sizes notwithstanding, many African countries have witnessed an explosion in the number of indigenous medium-scale famers, also known as “emergent” farmers Defined as farmers cultivating between 5 to 100 hectares Emergent farmers have little in common with large-scale farmers Farm size, access to finance, input application, farm management practices Yet, the processes behind this group’s growth and its productivity compared to smallholder farmers is unclear in many countries Is this growth driven by farmers who began as smallholders, and now transitioning to a larger scale status through the capital and assets accumulation? Is the growth driven by institutions and policies (deficient policies) that encourage investment in land acquisitions by individuals from non- agricultural employment 4

5. Smallholder vs medium farm productivity Literature exists rooting for smallholder family owned farms advantages over relatively large farms Relationship known as the inverse-productivity hypothesis Defining feature of smallholder farms is the reliance on family labor instead of hired labor Argued that reliance on family labor make them more efficient However, the debate on whether the emphasis on smallholder agricultural-led strategy is misplaced is still lingers “… excessive peasant farming romanticism” (Collier, 2008) 5

6. Study objectives Examine the factors driving the growth of this class of farmers using Kenya as a case study What are their characteristics of the medium-scale farmers What modes of land acquisition did they embrace to build up their landholding scale to the current levels? Is the growth green or blue? Examine the inverse-productivity hypothesis Are the smallholder more productive than the medium-scale farms Is small still “beautiful”? 6

7. Data sources Household level survey data with 200 medium scale farmers Farmers cultivating 5-100 hectares Survey year– 2012 Household level survey data from 296 smallholder farmers Farmers cultivating less the 5 hectares Survey year-- 2010 2012 prices deflated using CPI to make them comparable to 2010 prices 7

8. Figure 1: Study sites 8

9. Data analyses Bivariate descriptive analyses Medium scale farmers sample is divided into two mutually exclusive analytical groups based on the primary source of capital Farm-led strategy Non—farm led (lateral entry) strategy Examine how smallholders and medium scale farmers compare in terms Demographics; farming patterns; farm production, assets and incomes Econometric analyses Pathways into medium scale farming and production differences Comparing smallholders and medium scale farmers Estimating output supply function 9

10. Descriptive results [I] 10 Majority (60%)of medium-scale farmers used non-farm entry strategy Majority of them are current/former public sector employees Had high education attainment Acquired land from savings from non-farm, largely urban jobs Only a minority were primarily engaged in agriculture But had sufficient initial endowment of land Owned over two times more land than they were using for crops : High degree of land owned for speculative purposes Inability of these farmers to make productive use of their land

11. Descriptive results [II] 11 Acquired most of their land through purchases Owned comparably more fertile land and close to motorable roads Had more land outside the location in which they were born Farmers to initial household heads had relatively large land endowment Farm-led strategy group acquired most of their land before 1990s Non-farm led strategy group acquired most of their land in 1990-2000

12. Smallholder vs medium scale farms 12

13. Non-parametric regressions results (I) 13

14. Non-parametric regressions results (II) 14

15. Econometric regression results (I) 15 Area cultivated 25 th = 0.94ha 50 th = 1.93ha 75 th = 6.07ha 95 th = 27.11ha 99 th =72.84ha

16. Econometric regression results (II) 16

17. Econometric regression results (III) 17

18. Econometric regression results (IV) 18

19. Conclusions Current land policies undermine the long-term potential of smallholder agriculture as a pro-poor growth engine Land policies and markets are not working for the smallholders Medium scale farmer growth is the outcome of political and economic processes related to land administration These preliminary results indicate that the relationship between farm sizes and productivity is not necessary inverse Productivity increases with farm sizes up to a certain threshold, and thereafter falls Small may not be beautiful after all Rural poverty and food insecurity is likely to persist unless government institutes pro-smallholders’ land access and enhanced agricultural productivity policies 19

20. Milu Muyanga muyangam@msu.edu Assistant Professor, AFRE, Michigan State University THANK YOU 20