Assisting Smallholders Producers: An Innovative Approach

HandWinnowingOptIf, as mentioned elsewhere on this website, the Basic Premise which has guided the development effort for the poverty alleviation of smallholders over the past 40 years has over looked the limited resources most smallholders have to manage their land, including some Major Calorie Deficits that will restrict the hours they smallholder can work each day, and this is the main reason for Limited Adoption of the technical packages developed and promoted for their benefit, what might be a more effective approach to poverty alleviation for smallholders and their communities?

Maximum Efficiency: The first thing might be to recognize that smallholders, despite possible limited education, are reasonably intelligent and very capable of adjusting to changes in agronomic technology and economic conditions, and they have been doing so for generations, at least to the limit their operational resources will allow. Thus they might best be considered as skilled practitioners of the art of farming, who are most likely managing their land at the maximum efficiency their total resources will allow, with the limited operational resources to manage their land being a substantial drag on the climatic potential for which most production technologies are developed and promoted. Basically, to use the vernacular, the farmers are “maxed out”. The visual manifestation of this is the extended crop establishment period that frequently extends up to eight weeks from the start of the growing season, and renders any early establishment promotions, as well as all management practices dependent on them, beyond the capacity of the farmers to utilize, except on a very limited portion of their holdings.

While this might go contrary to conventional wisdom of labor surpluses in rural communities, the conventional wisdom may be more an operating hypothesis that needs to be reviewed and substantiated than proven fact. A review of which may be decades overdue. It is possible to have a adequate labor force in terms of people, but have only sufficient calories to work only three or four hours a day. To accept the surplus of labor in rural communities would require some alternative explanation as to why smallholders would risk their livelihood in deliberately delaying their crop establishment, with declining potential yields increasing the risk for food security with each days delay. Risk aversion does not really make a lot of logical sense, and has to be considered as another long standing working hypothesis that needs to be substantiated.

Under these conditions, about the only technical advances smallholders can utilize are those with limited labor requirements such as improved varieties, which are a simple substitution for what they are already doing, and perhaps nitrogen fertilizer, provided there are no ceiling price policies on staple crops that reduce the economic optimal rates. Maybe some low labor inputs technical advances such as insecticides will also be accepted. Time of planting and plant populations interact directly with the prolonged crop establishment time and efforts to reduce the time by lower the plant population. In addition, weeding has to wait until most crops are planted and since it is already to late, impacts of the quality of the weeding. The delay in weeding and the rush to complete it can quickly impact yield potentials and produce quality, particularly for quality sensitive high value crops currently being heavily promoted for poverty alleviation as part of value chain promotions. Since all these management practices interact with the limited resource base, they most likely represent things farmers fully understand, appreciate the importance of, would like to do, but do not have the means to accommodate, and do not require extensive extension demonstrations to inform farmers what they know but can not take advantage of.

Community Interventions: Under these circumstances the best assistance to smallholders might be indirect assistance through the larger community. As discussed elsewhere in this website, smallholders might best be considered as members of a community composed of producers and support service providers, with the relation between them more Symbiotic than exploitive, if for no other reason than the overall Financially Suppressed Economy which limits discretionary funds, restricts what business can charge for the services they provide, forces the small business to operate at a maximum of administrative efficiency, and severely limits profits.

Community service providers would include the traditional village based retail shops and the private traders that migrate in and out of communities, and serve as the primary link between producers and agri-industry to provide agriculture inputs and buy produce, as well as providing other household needs that have to be purchased. While private shops are often considered to be exploitive of the smallholders there is really no hard evidence to support this, particularly when they offer the immediate cash settlements smallholders depend upon. They are also better able to deal with a Financial Management Strategy the emphasis retaining assets in kind as long as possible. This means marketing small quantities over a prolonged marketing period, for which cash payments are essential.

Perhaps most of the condemnation of private traders has to be viewed as representing the vested interest of those promoting government parastatals or development projects mandated by the donors to funnel assistance through farmer cooperatives. Instead of being exploitive of smallholders the private businesses tend to be highly fragmented into village based family enterprises with limited market volume that requires substantial markups just to support their families as is the case for Tomato Traders in Nepal. They could actually be operating below the poverty standards as are the Tomato Vender in Zambia and Banana Trader in Uganda. Rather then being exploitive of the smallholders, these private dealers are more likely the most cost effective and convenient provider of these essential services. They also provide much of the Informal Credit with the potential usury 100% quoted interest rates. However, these rates maybe more reflecting the cost of administering the credit and the games producers play, than the availability of credit. The true cost of credit could be substantially lower for those smallholders who, as most developed country debtors do, provide rapid high quality in-kind repayments shortly after harvest and are given an in-kind discount such as 10 kg of maize seed as reported in Zambia.

In addition, support services, not usually considered by the development community, but could be the most effective at alleviating poverty, would include village based businesses emphasizing resource enhancements that relieve the drudgery of farming. The biggest would be those providing access to contract mechanization services for land preparation, mechanical threshing, and transport, etc. This would assist the farmers to expedite the prolonged crop establishment and allow them to concentrate on other crop management activities including those with high labor requirements needed to enhance the quality of high valued crops and take full advantage of the projects promoting value chains of high valued cash crops for poverty alleviation. The key word here is “access” as most smallholders can not afford tractors and their limited holdings do not justify it. Thus, the emphasis is on providing private, individually owned tractors to members of the community who would then drifted out of farming to become primarily contractors to the smallholders for land preparation, transport and possible threshing, etc. Most of the land preparation and threshing for smallholders in Egypt, Pakistan, Iraq and Afghanistan is done via these privately owned tractors. In irrigated subtropical areas like Egypt, with two mutually exclusive annual cropping seasons each year (winter and summer), tractor operators can easily have a 200+ day work year just for tillage, excluding additional opportunities for transportation and threshing. This would compare to a 220 day work year for most professionals in developed countries. The emphasis has to be on private, individual ownership, as public sector mechanization units and group ownership has proven highly ineffective. Typically group ownership, either as part of a public sector mechanization unit or community cooperative, will only get 3000 or the 10,000 designed service life, before the equipment has to be surveyed out.

In part because of the Basic Premise that has guided the assistance effort for smallholders has emphasized technical solutions rather then resource enhancement, mechanization has been under rated by the development community, but certainly not by the smallholder producers. The example is the retirement of the water buffalo in favor of power tillers for paddy production in much of Asia. This was done without any donor assistance and halved the crop establishment time for rain fed paddy and perhaps allowed some diversification and intensification of farm enterprises including the combination of poultry or swine production suspended over fish ponds. In irrigated areas, the shift to Power Tillers has increased the crop intensity to five rice crops every two years. This is further assisted by the use of contract combining with small combines that can operate in the 1 rai (1/6th ha) fields common in Thailand. Similarly mechanization is slowly taking place in Africa, again without donor assistance as noted in the Madibira rice irrigation scheme in Southern Tanzania. Here in the five years after donor funding and advisory facilitation ended the farmers have purchased 50 Asian manufactured power tillers. Three fourths of these were self financed with those financed through the local project sponsored credit union mostly going to officials in the credit union. Perhaps one of the most effective projects could be rounding up Used 65 hp Tractors in developed countries and shipping them to developing countries for reconditioning and sale to individuals in smallholder communities.

In addition to farm mechanization some indirect means of enhancing the resources available to smallholders could be undertaken. An example would be Grain Mills that have virtually eliminated the pounding of maize by mortar and pestle in most of Africa. Some of these grain mills may have been financed via development projects seeking income generating activities for women’s clubs, but most have been self financed. Again, over the past five years in Madibira the number of maize and rice mills has more than doubled as people invested their proceeds from the newly constructed irrigation scheme into service providing businesses. Such mills will have a crop production impact as they decrease the domestic drudgery, mostly for women, and allow them more time to assist with the management of crops or engage in other economically rewarding activities. Another means of indirectly enhancing the resources smallholder have to work with is improving Domestic Water Supplies. This can substantially reduce the amount of time women spend collecting water, and that time can be used for other economic activities.

The Donor Contributions can effectively facilitate the community based assistance to smallholder with technical assistance and micro-finance to establish the support service business or improve the overall community infrastructure of domestic water supply and feeder roads. However, little Government Contributions should be anticipated or encouraged as most governments are too Financially Stalled to effective facilitate most efforts, as noticed by the extent Variety Improvement has been deferred to the IARCs as part of the CGIAR system. All to often government officers are inclined to take advantage for development opportunities for Informal Income opportunities.

Farmer Organizations: As reviewed extensively elsewhere in this website,  Farmer Organizations should be viewed more in terms of information sharing and political empowerment similar to producer associations in the USA, and not as a business model for providing inputs and marketing produce. Somehow, with the overall suppressed economic conditions and administrative environment, which is largely determined by informal income seeking civil servants, common to most developing countries, cooperatives have not been able to obtain the Competitive Advantage envisioned. This has resulted in most of the produce intended for the cooperatives to be side sold to private traders even accepting a 20% discount on the cooperative price for immediate cash settlement as is the case in Zambia. Such side selling has to be recognized as representing a perceived loss of competitive advantage on the part of the farmer beneficiary rather then a violation of contracted commitment to an out-grower scheme or obligation under cooperative by-laws. The continued emphasis on the cooperative business model for assisting smallholders has to viewed as the result of some Deceptive Bordering on dishonest reporting, needed by implementing contractors to assure future extensions and projects. The primary mechanism for this deceptive reporting is to overlook the sustainable overhead cost to operate the cooperative or worse allocating the overhead costs as a financial benefit to the smallholders.

Last Revised: 24 March 2010

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