| Summary: | This paper discusses the adjustment pressures faced by smallholders in middle-income countries, considers the types of policy response that are warranted, and proposes an integrated framework for more inclusive development. Central to this framework is the recognition that the long-term (i.e. inter-generational) future of the majority of smallholders lies outside farming. Hence a range of development pathways need to be facilitated, including improved competitiveness within the sector, income diversification (either within or outside agriculture) and the movement to jobs in other sectors. In order to facilitate adjustment, targeted agricultural policies need to be designed in conjunction with a range of complementary economy-wide measures
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