Economics of Small Scale Agriculture:

(3) The small scale cultivation deprives a farmer from internal and external economies. As a result, neither his cost will decrease nor the quality of his product will improve. In this way, not only the consumers will be affected but the farmers will also remain entrapped into poverty.

(4) The agri. sector is furnished with uncertainty and risk. There are natural calamities along with fluctuations in prices. The commission agents make unlawful deductions while the money lenders insist upon repayment of old debts. In such circumstances the farmers have to struggle hard for existence. This is very much true in case of poor and small farmers. As they have limited financial resources, particularly when they have pledged land and the prospective crops. In such situation, how the small farmers can go for progressive cultivation.

(5) A majority of small scale farmers consists of the tenants. They have to pay rent to the landlords along with their own survival. Accordingly, they have to struggle very hard. They are at the mercy of the landlords who have divided their lands into small parts in order to increase their tenants. These landlords exploit the small farmers.

Above all, the public policy hardly benefits the small peasants. Despite these problems of small scale agri. business, it is being observed in Latin America, Asia and Africa that the small farmers use their land efficiently. There is reduced mismanagement of resources as there is fuller utilization of land and labor. There is reduced wastage of agri. produce and the farmers may get due prices of their product. Here, there is neither absentee landlordism nor the lands remain idle. Again, the small farmers make proper arrangements regarding storage of their produce.