Structural change and small-farm agriculture in Northwest Portugal

Small farms account for more than 90 percent of Portugal's farm population and more than 40 percent of its cultivated land. With Portugal's entry into the European Community (EC), the continued viability of small-farm agriculture is cause for mounting concern. The agricultural sector will face financial stress in coming years, both from short-run adjustments to EC membership and the long-run process of structural change.

In this book, a team of American and Portuguese policy analysts focus on the Minho region of northwest Portugal to assess alternative changes that might sustain the competitiveness of its small-farm agriculture.

How do the provision of public goods, subsidies to capital investments and labor, and changed regulations in the land and capital markets alter revenues, costs, and net incomes from farming? Can small farms be an attractive source of employment? What are the economic trade-offs within a strategy that emphasizes a heterogeneous farmsize structure? These are some of the issues the authors address in formulating a successful strategy for agricultural development.

Research led them to develop and empirically test a methodology to identify the potential economic impacts of private initiatives and public policies. Their results demonstrate that the future of small-farm agriculture is not nearly so bleak as many observers and policy analysts once thought. Instead, the writers argue that the choices made by policy makers with regard to the best "mix" are crucial.

Spelling out the possibilities for influencing agricultural change, their book is relevant not only for policy formation in Portugal; it can apply to other industrializing countries facing structural changes in their economies, especially in regard to their agricultural sectors.