Farmers can land a blow against poverty Agriculture is critical to developing economies. But the debate about farming is too often polarised between extreme views that hold back its future. On one side, there is the "big is beautiful" brigade. They argue that poor countries should follow Brazil's model of large-scale commercial agriculture, replacing small farms with enterprises big enough to take advantage of economies of scale. On the other side are those who insist that promoting large-scale agriculture would lead to the exploitation of poor people in the name of international trade. The solution, as is often the case in such polarised debates, can be found somewhere in the middle of these two very different views. Large-scale farming has been economically successful in Brazil - although there are questions about its social and environmental impact - and it exists alongside a thriving sector of small-scale producers who supply 70 per cent of the country's internal food market. But Brazil is a huge country where big farms are often larger than 20,000 hectares. In Tanzania, for example, the same space can be occupied by as many as 12,500 farmers. Clearing them to make way for a commercial farm would have disastrous human and environmental consequences. Investments in smallholder agriculture are vital for poverty reduction but the hardships faced by families tending small plots of often marginal land cannot be ignored. When you add growing populations, higher energy prices and increased competition for land, the challenges look greater still. So what is the solution? The answer is a mix of public and private investment that encourages small farms to grow themselves out of poverty while adapting to climate change. Sadly, donor support has been lacking in recent years. Aid to farmers in developing countries fell by 77 per cent between 1983 and 2006. But even if there was enough aid to help each of the 500m small farms in developing countries, it would not change the fact that farming is inherently a private sector endeavour. For the millions of small-scale farmers looking to sell surplus produce at local markets, private investment could make a massive difference. They need the kind of investment that spots untapped opportunities and where the interests of business and local communities coincide and long-term commitments are made to small farmers. How should business engage with small-scale farmers? Some principles are self-explanatory - investing in sustainable agriculture may reduce short-term gains but it will help ensure the long-term viability of the farmer and ultimately a greater return on investment. Likewise, working with producer organisations makes sense for both farmers and investors. Other principles are more contentious. While there has been a tendency, particularly for foreign investors, to target specific crops for exports to international markets, greater benefits could come from a focus on staple crops and sale at local or regional markets. This is an expanding sector. The consumption of the cereals, roots, tubers and livestock products that make up the bulk of Africans" diets is set to double in the decade to 2015. The success of Fairtrade and other ethical goods has helped build a growing market for brands that can demonstrate that they benefit those at the other end of their supply chain. Of course, such brands need to "do no harm" and respect the rights of local communities and workers but with a €4.9bn market for fair-trade alone, the potential rewards are significant. With increasing demand for agricultural resources, building relationships with groups of small farmers also offers companies the chance to secure supplies for the future. Realising the potential of small farmers also requires governments to set the right climate for foreign investment: to protect rights, tip the scales towards investment that is pro-poor and sustainable, and to help those not yet ready for the market. But perhaps most importantly it needs food companies to see the long-term potential of small farmers around the world. With growth in small-scale agriculture having twice the effect on the poorest as growth in other sectors, here is a real opportunity for them to play a part in delivering a knockout blow against poverty while also earning a profit. The writer is chief executive of Oxfam