Cocoa production in Ivory Coast in the context of "Futures contract"

A smallholding or smallholder is a small farm operating under a small-scale agriculture model. Definitions vary widely for what constitutes a smallholder or small-scale farm, including factors such as size, food production technique or technology, involvement of family in labor and economic impact. There are an estimated 500 million smallholder farms in developing countries of the world alone, supporting almost two billion people. Smallholdings are usually farms supporting a single family with a mixture of cash crops and subsistence farming. As a country becomes more affluent, smallholdings may not be self-sufficient. Still, they may be valued for providing supplemental sustenance, recreation, and general rural lifestyle appreciation (often as hobby farms). As the sustainable food and local food movements grow in affluent countries, some of these smallholdings are gaining increased economic viability in the developed world as well.

Small-scale agriculture is often in tension with industrial agriculture, which finds efficiencies by increasing outputs, monoculture, consolidating land under big agricultural operations, and economies of scale. Certain labor-intensive cash crops, such as cocoa production in Ghana or Côte d'Ivoire, rely heavily on smallholders; globally, as of 2008, 90% of cocoa is grown by smallholders. These farmers rely on cocoa for up to 60 to 90 per cent of their income. Similar trends in supply chains exist in other crops like coffee, palm oil, and bananas. In other markets, small scale agriculture can increase food system investment in small holders improving food security. Today, some companies attempt to include smallholdings into their value chain, providing seeds, feed, or fertilizers to improve production.