Family farms produce 80 percent of world's food, speculators seek land

ROME (Thomson Reuters Foundation) - Despite renewed interest in industrial agriculture by investment banks and sovereign wealth funds, more than 80 percent of the world’s food is still produced by family farmers, according to new U.N. research published on Thursday.

A worker inspects tomatoes in the family owned farm "Kligeni" in Cesis August 22, 2014. REUTERS/Ints Kalnins

More than 500 million family farms manage between 70 and 80 percent of the world’s agricultural land, the U.N.’s “The State of Food and Agriculture 2014” reported.

Some analysts, however, worry that family farms are under increasing pressure from speculators, as prices for land rise due to a growing world population.

Speculative capital is moving into agriculture, threatening family farmers, said Devlin Kuyek, a researcher with the international organization GRAIN.

“It’s a structural change, you have companies who weren’t investing in agriculture now jumping in: hedge funds, pension funds, different elites and governments,” Kuyek told the Thomson Reuters Foundation.

Only 1 percent of the world’s farms are larger than 50 hectares, but this small group controls 65 percent of the world’s agricultural land, the FAO report said.

Farms smaller than one hectare account for 72 percent of all farms, but control only 8 percent of agricultural land.

“The highly skewed pattern of farm sizes at the global level largely reflects the dominance of very large farms in high-income and upper-middle-income countries and in countries where extensive livestock grazing is a dominant part of the agricultural system,” the report said.

“Land is somewhat more evenly distributed in the low-and lower-middle-income countries.”

Small and medium sized farms tend to have higher crop yields per hectare than larger operations, the report said “because they manage resources and use labor more intensively”.

Analysts worry that large agribusiness firms could undermine these productivity trends on smaller farms.

“A lot of the new players, including hedge funds, don’t have much of a track record on agriculture,” Kuyek said. They are more interested in buying land from small farmers and then flipping it to other investors when prices rise.

Unsurprisingly, wealthy countries have higher yields per hectare than poor countries, as they have better access to capital and technology and use labor more productively.

Global food production needs to grow by 60 percent before 2050 to meet the anticipated demand from an expected population of 9 billion, FAO director Director-General José Graziano da Silva said last month.

Environmental challenges will put increasing pressure on family farms in the coming years. “Land and water resources are becoming ever more scarce and degraded,” the FAO stated. “Climate change will make these challenges yet more difficult.”

There is, however, scope to increase production on family farms through new and more effective use of technology and investments in infrastructure and research.

The UN has declared 2014 the International Year of Family Farming.