Mega-Farms in Brazilian Agriculture: What is the Future of Small and Medium Sized Farms?

• In Event: The Agrarian Question, Family Farms, and Public Policies in Brazil

Abstract

For at least a century, there have been debates about the imminent disappearance of the peasantry and the viability of small farms. Rapid technological change and a booming agricultural sector in Brazil have revived the discussion in this country, with some authors arguing that modern large scale farms will soon dominate the entire sector. We contribute to this debate with recent empirical evidence from Brazil. Section 2 shows that the exodus of people from rural areas since 1970 has not been reflected in a similar reduction in agricultural establishments. Section 3 shows that production is in fact extremely concentrated, with 9.5% of farms accounting for 86% of the value of output in 2006. Surprisingly, 89% of these “large scale” farms had less than 500 hectares (which we define as small and medium in the Brazilian context). Section 4 focuses on small and medium sized farms, and seeks to understand what differentiates “large scale” producers from the rest. The paper concludes that small and medium sized farms are unlikely to disappear anytime soon. First, a significant minority of small and medium sized farms are competitive. Second, the majority—which has more difficulty generating income—has few alternatives outside of agriculture. They will continue to produce what they can in order to survive, and complement it with off-farm earnings. Third, there are a wide variety of public policies that permit families to stay in agriculture even if it does not provide completely for their sustenance.

Author

• Steven M Helfand, University of California/Riverside