Modernization of traditional agriculture entalls increased participation of the smallholder sector in the exchange economy. The achievement of this participation requires an open trade regime, domestic policies that ensure against market failures and public policy that effectively permits use of a new production technology for sustained growth. To open up these opportunities to small farmers, investment in rural intrastate is essential, as is investment in education that will enable these farmers to participate as entrepreneurs in the growth process must stimulate employment and increased returns to land. Nontraditional vegetables for export have a higher labor content and therefore promise to help foster rural modernization. In this study of nontraditional export crops and traditional smallholder agriculture in Guatemala, Joachim Von Braun, David Hotchkiss, Maarten Immink highlighted the potentials and risks of export orientation in smallholder agriculture for food security. The policy implications of the report reach far beyond the study area in Central America. The multidisciplinary team of IFPRI and the Institute of Nutrition of Central America and Panama (INCAP) has gone far toward tracing the critical linkages between economic development and nutritional crops, is necessary to actually capture the grain from specialization in typical risky market environments. Second, joint operation and development of the health and sanitation infrastructure in rural areas is required in order to translate the growth effects into nutritional welfare effects for the poor. This study, which is the component of IFPRI’s ongoing research effort in the field of commercialization of agriculture for food security and poverty alleviation, provides evidence that the income and employment effects of cash can be considerable and, if accompanied by appropriate public policy, can make a major contribution to eliminating hunger and malnutrition.


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