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	Our best chance of feeding the World - The Small Farm by George Monbiot The Guardian   June 2008   Though the rich world’s governments won’t hear it, the issue of whether or not the world will be fed is partly a function of ownership. This reflects an unexpected discovery. It was first made in 1962 by the Nobel economist Amartya Sen, and has since been confirmed by dozens of studies. There is an inverse relationship between the size of farms and the amount of crops they produce per hectare. The smaller they are, the greater the yield.   In some cases, the difference is enormous. A recent study of farming in Turkey, for example, found that farms of less than one hectare are 20 times as productive as farms of more than 10 hectares. Sen’s observation has been tested in India, Pakistan, Nepal, Malaysia, Thailand, Java, the Philippines, Brazil, Colombia and Paraguay. It appears to hold almost everywhere.   The finding would be surprising in any industry, as we have come to associate efficiency with scale. In farming it seems particularly odd, because small producers are less likely to own machinery, less likely to have capital or access to credit, and less likely to know about the latest techniques.   There’s a good deal of controversy about why this relationship exists. Some researchers argued that it was the result of a statistical artefact: fertile soils support higher populations than barren lands, so farm size could be a result of productivity, rather than the other way around. But further studies have shown that the inverse relationship holds across an area of fertile land. Moreover, it works even in countries such as Brazil, where the biggest farmers have grabbed the best land.   The most plausible explanation is that small farmers use more labour per hectare than big farmers. Their workforce largely consists of members of their own families, which means that labour costs are lower than on large farms (they don’t have to spend money recruiting or supervising workers), while the quality of the work is higher. With more labour, farmers can cultivate their land more intensively: they spend more time terracing and building irrigation systems; they sow again immediately after the harvest; and they might grow several crops in the same field.   In the early days of the green revolution, this relationship seemed to go into reverse: the bigger farms, with access to credit, were able to invest in new varieties and boost their yields. But as the new varieties have spread to smaller farmers, the inverse relationship has reasserted itself. If governments are serious about feeding the world, they should be breaking up large landholdings, redistributing them to the poor and concentrating their research and their funding on supporting small farms.   There are plenty of other reasons for defending small farmers in poor countries. The economic miracles in South Korea, Taiwan and Japan arose from their land reform programmes. Peasant farmers used the cash they made to build small businesses. The same thing seems to have happened in China, though it was delayed for 40 years by collectivisation and the Great Leap Backwards: the economic benefits of the redistribution that began in 1949 were not felt until the early 80s.   Growth based on small farms tends to be more equitable than growth built around capital-intensive industries. Though their land is used intensively, the total ecological impact of smallholdings is lower. When small farms are bought up by big ones, the displaced workers move into new land to try to scratch out a living. I once followed evicted peasants from the Brazilian state of Maranhão 2,000 miles across the Amazon to the land of the Yanomami people, then watched them rip it apart.   But the prejudice against small farmers is unchallengeable. It gives rise to the oddest insult in the English language: when you call someone a peasant, you are accusing them of being self-reliant and productive. Peasants are detested by capitalists and communists alike. Both have sought to seize peasants’ land, and have a powerful vested interest in demeaning and demonising them.   In its profile of Turkey, the country whose small farmers are 20 times more productive than its large ones, the OECD states: “Stopping land fragmentation … and consolidating the highly fragmented land is indispensable for raising agricultural productivity.” The body does not provide any supporting evidence. A rootless, half-starved labouring class suits capital very well.   Donor countries and the big international bodies loudly demand that small farmers be supported, while quietly shafting them. Last week’s Rome food summit agreed “to help farmers, particularly small-scale producers, increase production and integrate with local, regional, and international markets”. But when, earlier this year, the International Assessment of Agricultural Knowledge proposed a means of doing just this, the US, Australia and Canada refused to endorse it as it offended big business, while the United Kingdom remains the only country that won’t reveal whether or not it supports the study.   Big business is killing small farming. By extending intellectual property rights over every aspect of production, and by developing plants that either won’t breed true or don’t reproduce at all, big business ensures that only those with access to capital can cultivate.   As it captures both the wholesale and retail markets, it seeks to reduce its transaction costs by engaging only with major sellers. If you think that supermarkets are giving farmers in the UK a hard time, you should see what they are doing to growers in the poor world.   As developing countries sweep away street markets and hawkers’ stalls and replace them with superstores and glossy malls, the most productive farmers lose their customers and are forced to sell up. The rich nations support this process by demanding access for their companies. Their agricultural subsidies still help their own large farmers to compete unfairly with the small producers of the poor world.   This leads to an interesting conclusion. For many years, well-meaning liberals have supported the fair trade movement because of the benefits it delivers directly to the people it buys from. But the structure of the global food market is changing so rapidly that fair trade is now becoming one of the few means by which small farmers in poor nations might survive. A shift from small to large farms will cause a major decline in global production, just as food supplies become tight. Fair trade might now be necessary not only as a means of redistributing income, but also to feed the world. Visit the related web page
	Ban speculators from global agricultural markets by Bloomberg News USA   May 2008   Jeffrey Harris, the chief economist for the Commodity Futures Trading Commission (CFTC), said it was clear that there were more institutional investors in commodities.   Michael Masters, a portfolio manager for Masters Capital Management, told the lawmakers that investors are buying up commodities and holding their positions, creating an artificial premium. Assets allocated to commodity index trading strategies rose to $260 billion as of March, from $13 billion at the end of 2003, he said.   Senator Claire McCaskill, Democrat of Missouri, said the CFTC is failing to adequately regulate this speculative investing and tighter regulations are be needed.   The U.S. Department of Agriculture said Monday that it expected food prices to rise at least 5.5 percent this year, up from an earlier forecast of 5 percent and the fastest increase since 1989.   Masters, of Masters Capital Management, said the CFTC was turning a blind eye toward market-distorting speculation.   "Institutional investors are one of, if not the primary, factors affecting commodities today," he told the committee. "As money pours into the markets, two things happen concurrently: the markets expand and prices rise."   A report released Wednesday by Greenwich Associates argued that surging commodity prices reflect rising involvement of speculative investors.   Greenwich, a research firm, said a third of those investors had been in the markets for less than three years. Goldman Sachs Group and Morgan Stanley top the rankings of derivatives dealers, followed by Barclays Capital Group and JPMorgan Chase.   Masters proposed that the government prohibit commodity index investing as a vehicle for pension funds, curtail swaps trading and reclassify some positions to distinguish between legitimate physical hedgers and speculators.   * The Universal Rights Network strongly believes that action should be taken to regulate all speculators on global commodity markets, most particularly the Food Sector.   Over 3 Billion people worldwide live on less than $2 dollars a day, they are being severely impacted by food price rises.   All pension and superannuation funds must held accountable for their investments in the commodity markets. These funds are derived largely from working people in the developed world who would be outraged to learn of the consequences of their fund managers investment decisions on poor families.   It is criminal that worldwide poor families are struggling to afford to feed their children while institutional CEOs are paid hundreds of millions of dollars for their speculative dealings on the commodity markets.   Civil society organisations worldwide should organise to bring this issue to centre stage at all international business meetings, to demand an immediate change to this practice.   The global economic system is failing to meet the most basic needs of the world"s poor and increasingly working people in developing countries. To simply be able to afford to feed themselves.   The United Nations Human Rights Council should consider citing speculators and institutional investors trading unscrupulously on international commoditiy markets.   The Millenium Development Goals agreed to by all countries in the year 2000 requires all countries to meet 0.7% of GNP for development aid. It is high time to deliver on these promises.   Kim Gleeson. Director, Universal Rights Network
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