Subsistence agriculture is characterized by extremely limited capital resources, constancy in the use of traditional methods of production and in the commodities produced, and low productivity of land and labour. These characteristics tend to perpetuate the existing situation whereby agriculture produces barely enough for survival, and cannot therefore make a substantial contribution to economic growth. As a result, countries in which the majority of the population is engaged in subsistence agriculture, and which have no other important natural resources, are inevitably poor and their economies remain stagnant. The low productivity of subsistence agriculture is perpetuated by a vicious circle of problems: from low productivity of resources to underemployment to low income to low savings to low investment in farm to low yields, back to low productivity. In order to acquire the necessary agricultural inputs to produce, the traditional farmer uses brokers and obtains funds at a very high price. He buys the inputs from merchants who charge high prices and impose harsh payment conditions. The farmer's production is acquired by middlemen who pay the lowest possible price. This situation is widespread and always to the disadvantage of the farmer who is unable to extricate himself from the cycle. Subsistence farming can be held to be responsible (at least in part) for deficient diets and subsequent malnutrition and disease, for keeping peasants largely isolated from the rest of society, and for an outlook which, through its sociocultural context, keeps the peasant at a subsistence level even though he could possibly improve his lot. In addition to resulting in poor economic production and participation, subsistence farming can be a causative factor in peasant revolts.
In 1980, approximately 70 million Latin American subsistence farmers had, after providing their own food requirements, less than $20 per year left over to spend on manufactured articles.
In 2014, there was no widely available nor reliable data on subsistence farmers. However, an estimated 1-1.2 billion smallholders worldwide suffer precarious living situations.
1. Subsistence farmers are the most numerous class of humanity and industrial growth within individual nations, particularly developing ones, depends on a general increase in peasant spending power. Subsistence agriculture is characterized by extremely limited capital resources, constancy in the use of traditional methods of production and in the commodities produced, and low productivity of land and labour. And the critical characteristic of subsistence agriculture is low productivity. The result is grinding poverty, massive unemployment, drift to the cities, and a pervading atmosphere of unrest and irritation conducive to peasant risings, religious millennialism, and the empty-eyed apathy of those whose social circumstances make a mockery of hope.
Subsistence is far more than marginal existence. It is a way of living and often the basis of traditional economies and cultures. It provides food, shelter and clothing, albeit at a very low level, to all members of the farm family, thereby avoiding their becoming a charge to society as a whole. Subsistence farming develops skills and and understanding of the local environment enabling people to live directly off the land. The environment is protected because of the direct relationship between the farmer and nature. It involves cultural values and attitude different and often alien to those of the urbanized world, mutual respect, sharing, resourcefulness and understanding of the intricate interrelationships between the environment, animals and humans. It implies protecting the land from over exploitation.