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Smallholders represent a significant proportion of rural poor in most developing countries. Their economic importance is far from negligible, because they constitute virtually the only source of domestic food production as well as, in many countries, a large proportion of export crop growers. In general, by reducing inflation, improving the efficiency of marketing systems and increasing the prices of export crops, structural adjustment policies should have a beneficial impact on smallholders. Conversely, it is also true that mismanaged privatizations, increases in input prices and cuts in public expenditure may have detrimental effects. But more important considerations must be kept in mind. If smallholders are responsive to average prices, they are even more responsive to price variability and, more generally, to changes in the degree of uncertainty in their environment. Consequently, smallholder development necessitates institutional innovations aimed at reducing this uncertainty. This could represent a new dimension in structural adjustment programmes and policies.
In conclusion, further research in this direction is recommended, based on household models on the miero-economic side, and on computable general equilibrium models on the macro-economic side.