Future Of AID: Smallholder Communities – A Symbiotic Association

FOA-SymbioticMaxed-out Producers: To summarize and look forward, what would be a more effective, innovative approach to rural poverty alleviation? It seems that somehow we are committed to working directly with the smallholder producers. Why? However, as mentioned earlier, what happens if the smallholder beneficiaries are “maxed-out”, in which the limited resources to manage their land is the main drag on obtaining the full potential their physical environment will allow, based on the research and extension results and demonstrations, including those associated with value-chain, high value, high risk, quality sensitive crops? Along with this could be a diet so restricted that what might appear to be idleness that can be mobilized for economic gain, is in reality hunger and exhaustion.

In this case it would be very difficult to provide direct assistance to the smallholder producers. Thus, would we be better off if we looked at smallholders as members of a community comprised of the smallholder producers and service providers? Furthermore, the relationship between them is symbiotic and not exploitive as usually considered concerning private service providers. As mentioned previous sections, the overall suppressed economic environment makes the potential for exploitation highly unlikely, and the symbiotic relationship highly probable. Can anyone provide any solid evidence to the contrary?

Village Based Family Enterprises: If the community is primarily a symbiotic association of producers and service providers then assisting one component will automatically assist the other. Thus, if the smallholder producers are effectively maxed-out, the most effective way to assist them might be backing away from the working with the smallholder producers directly to work with the service providers and enhance the services available and effectiveness of those services. Why does it appear so difficult to conceptualize on indirect assistance to smallholders? Who are the service providers? For the most part they are village based individual family enterprises. The emphasis here is on family enterprises as it seems there is considerable difficulty when enterprises expand beyond the family, other than for casual piece meal labor. Someone with a business background might wish to look into this, but it is most likely associated with trust and extensive pilferage that frequently happens with larger enterprises. Currently, attempts are made to enhance village enterprises via income generating clubs composed mostly of farmers or their spouses. However, they are usually seen as providing income for the members and not a more broadly community based service. Such group enterprises actually go against the established and successful practice of individual family enterprises. What is the long term sustainability of such income generating group activities beyond donor assistance and facilitation? The experience with cooperatives would make one skeptical if they can hold together, and, if they can provide a competitive advantage over individually owned and operated business providing the same services. Do the club members, when derived from farm families, really have time to actively participate in such enterprises, or will this be at the expense of other economic activities, such as increasing the quality of high value crops? Has anyone ever encountered any group enterprises in any field visits that were not still being assisted with donor funding and facilitation? Ultimately the development community may have to undertake a major reconciliation with the private sector they have been slandering for decades. It must be accepted that when development cooperatives collapse the private traders are the default service providers and historically have provided the most cost effective link between smallholder producers and the large agro-industry organizations operating within a host country.

REAP Project: The services provided could be the typical ones usually considered for providing inputs and marketing produce. The REAP (Rural Enterprise Agro-Business Project) or at least the version CARE managed for USAID in Zambia in the early part of the current decade was an example of a project assisting these family enterprises. It is regrettable that the continuation ran into political problems. Perhaps it was too good for the vested public sector interests. According to the CARE representative in Lusaka the project persisted for two years after donor funding, before finally dying out. The ultimate problem was the cash float for purchasing the crop after harvest. That should be short term commercial loans. Someone might want to take a closer look at this.

Drudgery Relief: However, it might be desirable if the family enterprise services were expanded beyond the traditional providing inputs and marketing crops to cover those drudgery relief activities that appear to be largely overlooked in the development process, but could have been critical to some of the rice based agriculture development in Asia. This would include providing contract access to tractor for basic crop establishment. Here it may be desired to separate access from ownership with the emphasis on access, as few smallholders can afford or justify the capital expense for even a used tractor. The important need is increasing access by providing the financial support for individuals in the community to become primarily contract tractor service providers. While the most critical need might be for land preparation, such individuals most likely will quickly expand their services to include transport of both people and goods through the area and on to larger towns to market goods and procure inputs, etc. Individually owned and operated private tractors are the primary means for basic land preparation throughout much of the Middle East including Egypt, Pakistan, Iraq and Afghanistan. In Africa this is slowly taking place virtually below the radar screen of the development community, as was the case in Asia. This is noticed by the increase in used tractors that had been purchased in Madibira, Tanzania in the five years after donor funding and technical assistance ended, and the interest expressed by various communities in Zambia, that included open quotations of the costs. Knowing the price per hour is a good indication of a major demand.

Impact of Contract Mechanization: Making tractors available in smallholder communities could have some major impact on improving the prospects of value-chain projects emphasizing high value, high risk, quality sensitive crops; enhancing environmental issues associated with protecting the natural resource environment; as well as mitigating the impact of the HIV/AIDS epidemic in Africa. Improving the value chain would be by expediting the crop establishment time so that the staple crops can be timelier planted increasing the yield potential and enhancing food security. This would allow the farmers to turn their attention to the value-chain cash crops earlier, expand the area they could commit to them and enhance the quality of these high value, high risk, and quality sensitive crops, so they can received the envisioned higher profit and not have as much discarded for failing to meet the strict quality standards. This is simply following the example of Asia where the conversion to power tillers resulted in the spontaneous diversification into value chain cash enterprises. The environmental impact is that it really takes a minimum 65 hp tractor equipped with disc or chisel plows to effectively incorporate crop residues in anything like a timely manner across an entire farm, and get away from the less environmentally friendly burning that is so common, but essential when smallholders don’t have access to a mechanized means of land preparation and have to rely on manual labor with hoes or even animal traction with nearly starved animals emerging from the dry season. This again is the difference between what can be easily demonstrated with small plots, and what is needed to expand a demonstration to a full farm. As for mitigating HIV/AIDS access to tractors is even more critical as the epidemic continues to reduce the available labor in rural areas and force farmers to shift to cassava as the crop that provides the most calories per unit of labor input, and thus at least allows people to prolong their existence, but becoming progressively more malnourished.

Indirect Resource Enhancement: While mechanization may be the primary means of enhancing the resources farmers have to manage their lands, there are a couple of indirect means of accomplishing this that are also slowly taking place as fast as individuals in various communities can self finance them. The first would be grain mills. These can have a major impact on the domestic drudgery and will free women for other activities including being more rested when assisting in the next day’s field activities. While some of these are included in income generating clubs, the vast majority are self-financed. It would be interesting to see some studies on the agronomic impact of village grain mills, and how well the group ownership has done in comparison to private mills if the group enterprise survived beyond donor assistance.

Another indirect effort would be domestic water supply. While this is being done as part of public health concerns, it can also have some major impact on saving labor and thus an indirect agronomic and economic impact. In parts of Uganda, where the water table can be as much as 100 m below the surface, it is estimated that women can spend 20% of the daylight hours commuting a kilometer or more to obtain spring water and ascending the 100 m plus back home with a 20 lit jerry can balanced on their heads, just to obtain the minimum WHO 50 lit/person/day recommended minimum supply of water for her and her husband, with additional time for any children’s water needs. Women could find more economically rewarding use of their time. Again it would be interesting to have some studies on the agronomic and economic impact on improved domestic water supply as an addition to the health impacts.

Micro-Finance: Perhaps the most effective use of micro-finance would be to promote these village support service enterprises, particularly those involving capital investments in which the capital good like the mills or used tractors could provide collateral. However, unless someone can provide verifiable proof that group enterprises are sustainable for at least two years beyond donor assistance and not more a scandalous misuse of public funds, this should be provided to individuals or non-extended families. They seem the most stable entity for village support services. It might be worth further consideration that emphasis be on working with those individuals with the least amount of land. What you are trying to provide is support services to the community as a full time activity, for which managing land would constitute a conflict of interest. In sub-tropical Egypt with its fully irrigated double cropping system divided between mutually exclusive winter and summer annual crops, contract tractor operations have an estimated 220 day work year just doing land preparation and not considering other activities such as threshing crops at night and transport. This is a larger number of annual workdays than the standard work year for most developed countries working 8 to 5 five days a week, when weekends and holidays are included!

Production Credit: It might also be suggested that development projects avoid direct production credits to farmers, and allow that to flow through the informal credit system, even with the quoted 100% seasonal interest rates. This again needs a closer looks as to what are the administrative costs incurred by the lenders that might justify the quoted 100% seasonal interest in terms of:

supervisory effort the lender has to work with the borrower,

possible need to hire someone to supervise the borrower’s harvest,

need to chase down the borrower to make payments and listen to all the sob stories,

need to reprocess the in-kind payment to remove all the straw, chaff, and other junk so the payment is marketable, (Estimated at up to 25% discard which is an automatic reduction in the actual interest rate),

cost of monetizing the in-kind payment back to cash,

defaults, and

discounts, such as the 10 kg of good seed given to borrower by a lender in Zambia, for timely repayments with ready to market bags of maize.

Factor all that in and the quoted 100% interest might just be the cost of doing business of local lending, and not the excessive profit margins that appears clearly apparent at first glance. That should be easy to check, just ask anyone managing a micro-credit development project providing production credit to smallholders to itemize the problems they have in repayments, and how much that actually costs, or at least the local hired staff that could sustain the project after donor funding.

Community Organizations: For those insisting on organizing people, it might be reasonable to have an organization to coordinate the community development, but this should include both the producers and service providers. They both have an equal vested interested in the outcome.

Summary

The bottom line is the need to take a closer look at the whole smallholder community and not jump at the first impressions. Things are often not what they seem at first. Thus, returning to the initial saying of Alexander Pope: “A little learning is a dangerous thing; drink deep, or taste not the Pierian Spring …”. So it should be with those assisting the smallholder producers of the world.

That is, unless there is something more sinister taking place and the real objective is what donors can promote for the benefit of the smallholders regardless of the effectiveness. The extent to which the excluded information referred to above is readily apparent would separate donor promotions from true sustainable interventions capable of continuing beyond donor assistance and are reasonable easy to tabulate, but are deliberately omitted from project documentation gives substantial creditability to primary objective being what can be promoted rather then effective or sustainable. If this is the case the rural poverty alleviations program is at best a demonstration of the donor’s good intentions, and at worst nothing more than a very expensive publicity stunt. In this case the smallholders are just pawns in the continuation of the Great Game so excellently described by Rudyard Kipling in his classic Kim over 100 years ago and linked to some of the same parts of the globe involved in today’s development efforts. In this case, both the smallholder producers and their respective communities, as well as developed country tax payers obligated to fund the effort deserve better. While such idealistic promotions may be acceptable to donors’ constituency, it is highly unlikely the smallholder beneficiaries and their national societies are as gullible. Ultimately, if the true objective is more publicity then subsidence, for bilateral efforts, if there are any inadvertent adverse impact on national security they are well deserved. It is interesting that the same level of investment in less idealistically more pragmatic programs could have a substantially higher impact on poverty alleviation for the multitude of smallholder producers throughout the developing world.

Last Revised: 4 July 2007

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