Credit will probably not solve the problem of family farming in the developing world, but it may help a lot. The paper recently published by Alexandre Gori Maia, Gabriela Eusebio and Rodrigo Lanna da Silveira (UNICAMP) at the journal Agricultural Finance Review evaluates the impacts of one of the largest programs of rural credit in the developing world, the PRONAF in Brazil.

Brazil has nearly 5 million of smallholder family farmers (84 percent of the total number of farmers), but their production represents a minor share of total Brazilian agricultural production, due to their relatively smaller share of land and lower productivity. PRONAF, which offers subsidized credit to small farmers at low interest rates, is the main policy targeted to family farming in the country. Gori Maia, Eusebio and Lanna da Silveira show that the impact of PRONAF on the total value of production ranges between 11% and 25%. Moreover, the impact is larger in the less developed regions, which contributes to attenuate the huger assymetries of agricultural production in the country.