Why poor farmers stay stuck in small farming

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Every time I am in rural farming areas, I realize the very same truth that is very hard to deny. Poor farmers are caught in a bad circle of small scale farming because of lack of capital. This could literally be for the rest of their life.

It is sad to see such eager people not being able to join the big farming group, but why?

The answer is very clear to me, they lack the ability to get modern means of production like the seeds, fertilizers, equipment, and other farm stuff.

These small scale farmers cannot find any financial help from commercial and agricultural banks, the Banks are not willing to give them the loan and their farm is probably to small collateral. Their main need for heavy collateral forces such people to give up hope in getting a loan. Those few small scale farmers that own land or valuable things also face another problem, high interest rates.

The food system cannot be held back like this. We need both government and community effort to find a way out of this. The government needs to come in and fund the cost of farm stuff well. This will help the struggling small scale farmers reduce the cost of getting the necessary and help them increase farm size.

The farmers also need to organize themselves in groups. Through sharing resources, each member of the group can contribute money and benefit as a group. The power that comes with being part of a group will help in talking with lenders or investors.

This I've felt before because I tried getting a loan two years ago. The banking sector needs to make conditions easier for loans and credit services. Commercial and agricultural banks need to give loans to food producers at, at least fairly low interest rates. Instead of asking for a physical asset as collateral, farmers personal guarantees will work well.

I know it's not charity event we're doing, loans can't be given to just anyone, but it'll help the farmers that are eager to work.

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