Small farmers are one of the more disadvantaged and vulnerable groups in Nigeria. Studies shown that majority of people living in absolute poverty can be found on small farms with half in this group undernourished and three-quarters of small farmer’s children malnourished. Small farms still dominate agricultural practices in terms of numbers of producers of agricultural commodities. It has been observed that, 74.5% Nigerians population is rural and derived their livelihood from small farms. The question is that these small farms are they going to be a prospering farms or vice-versa? This is the rationale behind this study. Specifically the study looks into heterogeneity in circumstances and diversity in rural livelihoods, the growth of small farms, poverty levels and institutional development facilities available for them was all explore. The index of heterogeneity at 29.1 indicated growth of small farms and about 42% of the respondents were categorized as very poor. The study identified that smallness of farms is not correlated to poverty but the traditionally tried and sometimes fool-proof farming systems. Size of the farms is not the problem, but the operationalization. Evidence from China and India revealed that smallholders are better off in times of productivity. These countries are better in terms of fertilizer consumption, tractor per 100 sq. Km of arable land use and agriculture value added per worker. Conversely, small holder and traditional farmers in Nigeria still use rudimentary production techniques, limited use of improved planting materials and fertilizer consumption, thus suggesting for commercialization of small farms.