In many countries, individual family farms are very small and cannot provide a decent standard of living for their owners. Smallholders with limited education and economic understanding still pursue the traditional system of land utilization. Primitive agricultural practices and over-grazing of pastures further contribute to the deterioration of the soil.
Further, the small peasants and the tenants with uneconomic-sized holdings have perforce to work on the big farmer's holdings and thus have to compete with the landless labourer for the limited employment opportunities. The medium-sized farmers have justifiably tried to take land on tenancy from other farmers in order to increase the size of their holdings to make them more viable; this has, however, meant competition between the (small) pure tenant and the medium-sized owner-cultivator.
More than a million small Polish farms (less than 7 hectares) are threatened by the coming entry of Poland to the European Union, which favors large conventional farms and methods which are harmful to health and the environment, the traditional landscape and biodiversity, and which would uproot small farmers and create further unemployment, migration to unhealthy, overcrowded cities, and destruction of the rural culture and way of life.
The substantial rise in the number of smallholders in many developing countries is a result of many diverse factors, such as growing population pressures, slowdown in the growth rate of industrialization, acquisition of land by the big owner-cultivators, acquisition of land by urban resident investors and subdivision and fragmentation of land due to the laws of inheritance.
The position of the small peasant, the tenant and the labourer has actually deteriorated with the increase in population; inadequate access to services offered by government and other institutional agencies only worsens his position vis-à-vis that of big farmers. In their anxiety to encourage improved techniques, many governments have adopted policies which in effect subsidize the big farmer to the virtual neglect of small farmers; such policies, though quick-yielding in the short run, may create grave long-term socio-economic problems.