From the ISET Economist news (http://www.iset.ge/news/?p=3056)
By Tim Stewart
As Georgia embarks on an ambitious program to develop farmer organizations, it is worth considering both the positive and negative lessons from the experience of similar initiatives, both in Georgia and elsewhere in the developing/transition context. The piece by Tim Stewart, originally published on www.springfieldcentre.com, identifies some of the main reasons for the failure of start-up farmer organizations. The challenge for Georgia is to learn from these mistakes in planning and implementation, and ensure improved coordination among the many cooks involved (the newly created Agency for the Development of Agricultural Cooperatives, the Ministry of Agriculture, international donors, NGOs, and farmer associations).
A village in the Zestafoni area. It is a picturesque landscape, but the farms are not operating very efficiently. (Photo: Nikoloz Pkhakadze)
Someone once told me that I couldn’t be a real agriculturalist until I had at least one failed chicken project under my belt, illustrating both their ubiquity and propensity to flop. The same can be said of projects that seek to establish farmer groups (farmer organisations, cooperatives etc.) and for much the same reasons – although I believe we should learn from failure, not repeat patterns that lead to it.
Conventional programmes working in agricultural markets often include a component of forming and supporting farmer groups in their various guises. Their justification for this is the perceived benefits to small farmers that can accrue from economies of scale of production (assets, labour and inputs), marketing (reduced transaction costs and bigger volumes) and voice (representation to government etc.). My concern is that farmer group formation and support is frequently a waste of effort and money because they overwhelmingly fail, and there is little honest recognition of, let alone learning from, that awkward reality.
Literature drawn mainly from projects supports farmer group formation and strengthening as a panacea for agricultural advancement, and often backs up the case for intense external resourcing. It suggests that farmers in groups are more likely to adopt technologies than those who aren’t, or are more likely to grow project-supported crops. Proponents also highlight their significance to the supply of inputs into food production and of food to the market. Indeed, the FAO estimates that nearly 40% of Brazil’s agricultural GDP is produced through cooperatives while in Europe, 60% of agricultural produce and 50% of inputs are marketed through one.
However a glance at the 2012 “Exploring the Cooperative Economy” report from the World Cooperative Monitor, reveals an almost total cooperative vacuum in Africa and, to a lesser degree, Asia. More directly, in my work I am frequently confronted with the reality of failed farmer groups that evaporate once the project ends, with unused equipment rusting in the corner of a field, an image, which has become a cliché of dysfunctional development in the popular press. And for many people engaged in development, farmer groups are a byword for failure.
Yet as far as I can establish (and I have searched), there have been few honest and objective ex-post reviews of farmer group formation components of projects to look at failure and the reasons for failure. (If I’m wrong and there are real data on groups’ success and sustainability, please send it to me!) Failures, if reported, are attributed to external “unforeseen challenges” and written up as “lessons learned”. Farmers groups have become a prime example of the development industry’s “emperor’s new clothes syndrome”, where official views are positive and glowing and formal research and evidence are at odds with what we know to be common (naked!) reality. So, in that context, I would argue that farmer group formation is a poor way to improve the lot of farmers positively and sustainably. How much more money needs to be spent; how many more pet Farmer Field School projects do we need to implement; how many more constitutions do we need to write; how many MOUs do we need to sign or how many ‘Farming as a Business’ trainings do we need to subject farmers to, before we understand that this form of development is not working?
The factors leading to the failure of farmer groups (rapid decline post-project) are numerous, but broadly they fail because they were formed for the wrong reasons, by the wrong people and/or in the wrong way.
THE WRONG REASONS TO FORM FARMER GROUPS
Agencies often form farmer groups because it helps them – the agency – achieve economies of scale of delivering services, assets or grants to them. In addition some may feel more comfortable ethically with the transfer of expensive assets or technical assistance to a group rather than an individual. The ethos of communal ownership to cosiness of the collective is pervasive in certain quarters of the development industry, even in the face of the common observation of poorly managed group-owned assets. Farmer group membership is also too often a pre-condition for farmers to receive giveaways from agencies. Groups therefore become entities built on artificial incentives created by agencies wanting an easy repository for their resources and buying short-term transitory impact.
Clearly then, ill-conceived or self-serving reasons are the wrong ones for forming farmer groups.
THE WRONG PEOPLE TO FORM FARMER GROUPS
Agribusinesses often face problems interfacing with small farmers because of high transaction costs, small transaction sizes, poor organisation and communications and a general lack of understanding of them. Farmers are often observed to face challenges finding markets for their products or face poor terms of trade. The absence of institutions (like groups) and services which would help them overcome these challenges (supporting group formation) is often justification enough for agencies to intervene impulsively by stepping in on behalf of small farmers – telling and selling the narrative of the “farmer being exploited by the middleman”.
The problem here is not only do agencies avoid addressing the root causes of the problem that lies beyond the farmer-trader interface, but in stepping into this space by performing “farmer group services” they undermine the possibility that it will ever be solved. Rather than solutions cemented firmly and sustainably in the market system, emerging “farmer group services” are seen as a development agency space. Thus it becomes a self-fulfilling prophecy: farmers are disadvantaged in markets because of weak vertical and horizontal linkages and there are no services to address this market failure: justification enough for agencies to step in and undermine the market further…
Development agencies are also the wrong people to offer farmer group services because, typically, they are poor at business:
- They are not market based, they are subsidised and non-commercial and their success/failure isn’t dependent on a viable offer but on continued support from their donor.
- Their incentives are therefore aligned to the agendas of the donor and their own HQ, not the market.
- They are not cost-effective, indeed they are prohibitively expensive if the true cost of delivery is taken into account (drivers, cooks, HQ fund-raising etc.).
Development agencies are therefore the wrong people to form farmer groups because they are not long-term players in the market, undermine legitimate market players if they attempt to do so, and, put simply, are usually bad at business.
THE WRONG WAY TO FORM FARMER GROUPS
Agencies form farmer groups on the basis of an abstract, theoretical notion of potential benefits, or experience in distant contexts of limited relevance. Seldom do they ask the more grounded starting question: if groups are such an obviously “good thing”, why aren’t farmers forming groups already? Understanding the answer to this question would lead to understanding and addressing systemic problems in the market, or simply not wasting resources by attempting to do something that would be unsuccessful. The reasons that farmers don’t form groups are many, but often related to a lack of incentives or capacity.
Incentives: It may be that additional income does not accrue by aggregation, or that which is created may not be sufficient to overcome other issues such as distrust of others in financial matters. Other actors may be able to provide incentives that induce group formation such as a commodity buyer that provides inputs on credit. There may also be disincentives related to the wider political economy such as additional tax or administrative burdens to formal groups.
Capacity: There may be other obstacles to forming groups such as inefficient business registration procedures, weak advisory services, or a lack of adequately available information that would allow farmers to make an informed decision to form a group. This shouldn’t be seen as an open justification for agency intervention to address these directly for example through business services and setting up one-stop-shops for business registration etc. Rather it should lead to enquiry into who could and should be delivering these and why they are not.
The wrong way to form farmer groups is therefore to do it without understanding the central market failures that prevent farmers from forming them.
WHAT TO DO ABOUT IT
The problem for an agriculturalist and development practitioner like myself, is that working with farmers is fun and endlessly fascinating: it’s one of the things I got into the business for! However instead of being drawn to act impulsively on behalf of the small farmer, I think agencies would serve them better by doing more of the following three things.
Firstly, go in with their eyes and minds open, conducting ex-ante market analysis rather than making unsubstantiated assumptions about what farmers need. Don’t arrive with a farmer group solution pre-prepared and engineer an analysis to justify this. Establish the reasons that farmers are not cohesive, what incentives are shaping their behaviour and what capacities may be lacking. Get a valid answer to the key question: why isn’t the market system working?
Secondly, build and don’t undermine. Guided by the above analysis, work with relevant, long-term market players (private and public) to address the issues underlying farmers’ poor performance and low incomes.
Thirdly, be honest about and learn from failure. This is not especially difficult or time consuming to do, but I suspect is a place where many fear to tread.
My argument is not that farmer groups cannot be beneficial to farmers. Rather, by adopting a systemic approach aimed at fostering the conditions for self-organisation among market players, agencies have a far better chance of supporting small farmers – which may or may not involve farmer groups.
The 46thApimondia Congress 2019, the most significant event in beekeeping worldwide, took place from 9th of September to 12th of September, in Montreal, Canada. For the second time in Apimondia’s hundred years of history, Georgia was at this world forum, represented by the Ministry of Environment Protection and Agriculture (MEPA), the Georgian Beekeepers’ Union (GBU) and Kakhetian Traditional Winemaking company, exhibiting the different types of honey of its members and promoting Georgian honey and beekeeping.
Apimondia promotes scientific, ecological, social and economic apicultural development in all countries and the cooperation of beekeepers' associations, scientific bodies and individuals involved in apiculture all over the world. This event is a unique opportunity for Georgia to promote itself as a honey producer and claim a place next to world leading honey producers. The recent placing of Georgia on the list of third countries for honey only further cements the credibility of Georgia as a viable producer country.
Georgia has been extensively promoted internationally as the birthplace of winemaking. Apimondia provides the opportunity to put energy into a new promotion of Georgia as the homeland of the oldest honey ever discovered, preserver of ancient beekeeping traditions as shown in the Jara movie and producer of a wide variety of artisanal natural honey and bee products fueled by the un-paralleled flora of Georgia’s uniquely bio diverse and unspoiled landscape.
The Georgian Beekeepers Union (2018) as an umbrella association for advocating and representing beekeepers’ interests developed Honey promotion video, websites/catalogues of Jara Honey and Georgian Honey for further promotion of Georgian honey.
The first participation at the congress was facilitated by the Swiss Agency for Development and Cooperation (SDC) project the Mercy Corps Georgia implemented Alliances Caucasus Programme (ALCP) in cooperation with the Ajarian Beekeeping Business Association (ABBA) operating under the Ajara Chamber of Commerce and Industry (ACCI) in Istanbul, Turkey in 2017.
Follow the links on the Apimondia Congress 2019: Interpressnews, Palitranews.ge
The Women’s Room in Alaverdi municipality, Armenia was officially opened on the 25th of July by the Governor of Lori Province, Andrey Ghukasyan, the Head of Alaverdi Municipality, Sasun Khemuchyan and the ALCP Team Leader, Helen Bradbury. The Head of the Department of Family, Women and Youth of the Ministry of Labour and Social Issues, the Head of the Municipality, the representative of Association of Lawyers, local businesswomen and other guests attended the opening ceremony. The Mayor of Keda Municipality of Ajara region and the Manager of Women’s Room in Keda were invited, representing one of the most successful Women’s Rooms in Georgia. Keda and Alaverdi Municipalities forged links when the representatives of Alaverdi Municipality were invited to the Women's Business Forum held in Batumi, Ajara in March, 2018.
“This service is very important for women and their families to improve their business skills. I would like to thank all of the initiators and supporters of the project and I am ready to discuss the opening of this service in other municipalities as well” - Andrey Ghukasyan, Governor of Lori Province.
“The Idea of the opening of the Women’s Room in Alaverdi came when we visited the Women’s Room in Keda, Ajara region three years ago. The Alliances Caucasus Programme expressed their readiness to share their experience with us how to establish and operate the WR. This service will help women with accessing resources and training to get finances for their businesses. When we help women, we strengthen their families’ Sasun Khemuchyan, the Head of Alaverdi Municipality.
Photo Source: Facebook page of Women's Room in Armenia
All the managers of the municipal Women’s Rooms and representatives of the Governor’s office in Kakheti region attended a training on Business Plan Writing and Fundraising held by the Georgian Institute of Public Affairs (GIPA) with ALCP facilitation. For three days George Turkia and Nikoloz Abuashvili, full professors of GIPA, explained how to transform ideas into real plans and where to find the money for them.
‘This was the most interesting training I have ever had. A lot of women are coming to my room with business ideas but I cannot provide help because of lack of knowledge. Now I am full of enthusiasm and ready to help them. It is also important for me that helping women with starting businesses in rural areas will be supported by the local government through the Women’s Room. We will make it happen’ – Bela Marukashvili, the Women’s Room Manager in Akhmeta municipality.
Background information: Twenty-eight municipalities of Ajara, Kvemo Kartli, Samtskhe-Javakheti and Kakheti have established free information-consultation spaces - Women’s Rooms to support women’s equal participation at local decision making fora and their economic empowerment. In 2016 the Women’s Rooms in Ajara pioneered to help rural women with applying to the government grant programmes and after a year the model was copied by Kvemo Kartli and Samtskhe-Javakheti as well. To date 88 women business start-ups have been funded through the Women’s Rooms in Georgia.
Honey and bee products of four Georgian companies were exhibited at the event WORLD BEE DAY COMES TO LONDON on 21st of May, in the Conway Hall by the initiative of the Embassy of Slovenia to the UK.
The Embassy of Georgia to the UK organized a stand for Georgian companies with the help of the Alliances Caucasus Programme, the Georgian Beekeepers Union, the Jara Beekeepers Association and the Georgia Chamber of Commerce and Industry. Georgian honey was well promoted by the Embassy.
Twenty-seven countries exhibited their bee products. More than 500 guests tasted Georgian honey; Chestnut and Jara honey were one of the favorites.
Photo source: The Embassy of Georgia to the UK
Seven dairy enterprises are using the Georgian Milk Mark: Milkeni Ltd Rustavi, KK; Tsintskaro + Ltd Tetritskaro, KK; Khiza Ltd Akhaltsikhe, SJ; Badri Gogoladze I.E Bolnisi, KK; Gocha Gagashvili I.E Telavi, Kakheti; Tsolak Grigorian I.E Ninotsminda, SJ; Karen Simonian I.E Akhalkalaki, SJ.
Six dairy enterprises are being audited: Imeruli Ltd Marneuli, KK; Zekari Ltd Terjola, Imereti; Tsezari Ltd Khulo, AJ& Tsalka KK; JTA Ltd Tsalka, KK; Ramaz Nazrashvili I.E Gori, Shida Kartli; Tanadgoma Gardabani, KK.
The products with the mark are available in Spar; Nikora; Zgapari; Fresco and Madagoni supermarkets’ chain.
Eleven additional dairy enterprises have already applied to use the mark.
Billboards of the mark are on Tsereteli Avenue, in Vake Tbilisi; Rustavi; Kutaisi and Akhaltsikhe.
Information per enterprise is uploaded on a www.georgianmilk.ge. This allows consumers to look up the products they are buying using a unique register number printed on the label.
GMA international marketing company has been conducting a national promotion campaign to introduce the mark to the public and retailers since the end of March. Facebook of the mark is active with more than 3,000 subscribers/consumers.
The Georgian Milk Mark is officially registered and serves to distinguish dairy products made from natural milk.
Follow the links on the Georgian Milk Mark: Ferma, Agrinews, Imedis Dila, Radio Marneuli, Marneuli TV, Georgiandairy.org, Agrokavkaz.ge, Interpressnews.ge, Ambebi.ge
Up to thirty students of the agri journalism course at the journalism department attended a lecture given by the ALCP programme Team Leader Helen Bradbury in the state university. Agriculture and tourism; environmental protection, preservation and biodiversity; the honey, sheep and dairy sectors; Georgia’s rich cultural heritage and its main treasure - people/farmers with their strong traditions were the main themes of the lecture.
All the students highlighted that the lecture was inspirational, they did not know many things, found different perspectives of agriculture and environment and they will report about the themes in the future.
‘Agriculture is about people and you should do your work with your heart if you want people to be opened to you. Try to understand the process and choose your own path. Be different and always find something new that no one else can see.’ - Helen Bradbury, Team Leader of the ALCP programme.
Since spring fifty-three students have been learning agri journalism as a selective module for two hours/week, during the whole semester at the state university.
‘We see more and more reports about agriculture but it is not enough. Reporting about rural life, people and agriculture is very important and it is our and your responsibility to think about it and be more enthusiastic as you are future journalists or media managers.’ - Natia Kuprashvili, Head of the Journalism Resource Center.
Fourteen universities in Georgia, four in Armenia and one in Azerbaijan established or are establishing agri journalism module in their courses. 369 students have already studied the course.
