Description

The smallholder’s premium is a premium paid to farms under a certain maximum size, mostly to increase the competitiveness of smaller farms compared with large-scale operations (economies of scale) and to preserve a family business structure. By enabling farming families to invest in sustainable and viable farming systems they are enabled to secure a decent income. Besides being paid the premium, small-scale farmers can also be exempted from certain bureaucratic requirements, e.g. relating to social or environmental policy.

Requirements

• A properly functioning country-wide administration and monitoring system with access to the relevant information and sufficient technical and human capacities for its design, implementation and monitoring
• Clear and coherent political strategy and targets for policy-makers and public authorities
• Clear responsibilities in public authorities
• Close cooperation and knowledge sharing with farmers' organisations
• Country-wide register of farms and / or enterprises involved in the agri-food sector
• Regulated and legally protected payment structures
• Skilled / specialised personnel to man the respective institutions / provide the respective services

Possible Negative Effects

• Market distortion
• Risk of reverse structural change (splitting of farms)
• Nepotism and corruption