Questions on farm structures (such as superiority of large farms) are typically linked to economies of scale. Economies of scale are normally a matter of investments in energy consuming technologies (large machinery). In contrast there is the issue of remaining prevalence of labour intensive, small farms (meant to be inferior); but which are less energy intensive. We see a revival in theoretical and policy debates on pathways of agricultural development concerning energy use. We analyse, how one can develop an approach that includes incentives to save energy and produce less GHG, and develop a framework of coexistence of farm types.