The large scale displacement of small farmers in the South is an important concern to all persons interested in the problems of low-income people. Despite a decline in the numerical significance of farming, a large part of the South remains rural, and agriculture continues to significantly influence the rural economy and rural labor markets. The South also contains a heavy concentration of the rural poor, many of whom are or have been part of the agricultural scene. The nonwhite rural poor and nonwhite farmers, most of whom are small, are overwhelmingly Southern. Any policy to deal with the problems of small farmers must be based on an understanding of the major categories of farm operators. The policies of the U.S. Department of Agriculture have been based largely on the assumption that small farms are not economically viable and that the world's food and fiber needs can best be met by large-scale energy-and-capital intensive agriculture; this position has come under attack since it is not clear whether large-scale farmers are intrinsically more effective than smaller ones. The use of labor saving technology makes little economic sense in view of the social costs created by the displacement of people. Among factors responsible for displacement of small farmers are technical economies of size, external factors such as access to bargaining power in agricultural markets, access to land and credit, and the effects of U.S. agricultural tax policies. The future of small farmers, without substantial changes in the institutional environment and without concerted effort by public institutions, is bleak. Included are 16 tables presenting data related to the delineation of major categories of farm operators. (EJ/BR)