The political economy of agriculture for development today: the ‘small versus large’ scale debate revisited

The role of agriculture in economic development and the development politics of promoting smallholder versus large‐scale agriculture have both been at the center of a long‐lasting and controversial debate. Using an innovative methodology which combines a value chain approach with input‐output‐analysis, the growth multipliers and productivity of both farm types in Guatemala are analyzed. Results show that smallholder agriculture has the same potential to stimulate output growth as large‐scale agriculture. Smallholder value chains include mainly informal sectors and create more jobs than commercial agriculture. Therefore, a reorientation of agricultural and land policies toward small‐scale food producers and within a comprehensive policy of integrated rural development is not only necessary in terms of social equity but also for boosting economic development.