Unproductive subsistence agriculture

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.