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.
On March 16th, 2018 the Alliances Caucasus Programme (www.alcp.ge) funded by the Swiss Agency for Development and Cooperation SDC and implemented by Mercy Corps in Georgia, hosted eighteen Swiss Ambassadors and Mission Directors of Development Cooperation of Switzerland from Azerbaijan, Moldova, Ukraine, Tajikistan, Kyrgyzstan, Kazakhstan as well as representatives of the Federal Department of Foreign Affairs’ headquarters in Bern. The visit was part of a regional seminar hosted by the Swiss Ambassador to Georgia and Head of Mission Olivier Burki, Regional Director of the Swiss Cooperation Office in Georgia.
'This forum is the first steps where women economic empowerment starts from. The Ajara Chamber of Commerce and Industry (ACCI) is ready to support women entrepreneurs and startups. Through the Women’s Room of ACCI we will help them in preparing Business Plans, liaising new business contacts and follow up their way of achieving success in businesses’ - Tamaz Shavadze, Chairman of ACCI.
The National Women Business Forum for 300 participants including 180 women entrepreneurs from all regions of Georgia as well as public, private and civil sector organizations concerned with women’s entrepreneurship was held in Batumi on International Women’s Day, March 8, 2018.
Management of Animal Movement Route (AMR) and Bio Security Points (BSPs) were the main topics discussed at the ALCP’s 9th Advisory Committee meeting on January 31st, 2018.
The Minister of Agriculture highlighted the importance of AMR and its Bio Security Points, their importance in underpinning animal healthcare and livestock export and the need for continued efforts to ensure progress in his opening speech.
‘Despite the positive dynamics there are still challenges and the governmental, non-governmental and private sectors should consolidate to overcome them’ - stated Mr. Davitashvili.
Existing gaps in management as well as the positive impact of BSPs were highlighted at the meeting. A short film: What shepherds think about the BSP’s available at ALCP/Videos allowed shepherds views to be presented in full.
All participants debated responsibility for managing the AMR and its infrastructure. Land overlaps, lack of resting areas, watering points at the Route, issues of concern for decades - were also discussed.
‘I think inclusion of self-governments in provision of BSPs’ operation is quite possible, local residents can be hired there and I’m ready to discuss this issue with the heads of local municipalities of Kvemo Kartli” - Grigol Nemsadze - The State Representative-Governor of KK Region.
As a result of this meeting the Regional Government of Kvemo Kartli and the Ministry of Economy have agreed to work together for final resolution of contested land on the route. Existing infrastructural gaps at BSP’s will be also solved in time for spring season, stated the Head of the NFA. With regards to BSP’s management and its future ownership the issue is clearly on the table for further facilitation and discussion with all interested parties to find the best solution and develop pertinent strategy going forward.
On December 5th the National Geographic Magazine Georgia presented its latest edition which features an article on Jara honey, at the National Museum of Georgia. About hundred guests tasted Jara honey and watched a special screening of the Jara movie, which had originally inspired the Georgian National Geographic to do the Georgian bee and honey story.
‘We were thinking about doing an article on Georgian Bees and honey, but we were not certain what direction to choose. One day, I got a call from Nika Tsiklauri, who invited me to the Jara premiere and while watching this truly fairytale, – I discovered the storyline we had been looking for’. – Natia Khuluzauri, Editor in Chief of the National Geographic Magazine Georgia.
The movie Director, Nika Tsiklauri, did a photo session of the Jara hives in Ajara. The magazine story writer, Irakli Pipia, enthusiastically worked on the topic and in addition came across documentation that showed that the Caucasian Gray Bees had been exported to the USA from Georgia atthe end of the 19th century.
‘This was a discovery none of us expected. Who knew that the Caucasian Bee had travelled so far? So, both authors, Nika and Irakli, did a great job and we have this beautiful elaborated story covering practically all aspects related to the Caucasian Gray Bee and honey they make’ – says Natia.
The event opened an exhibition of photos, Jara hives and beekeeping artifacts from Ajara. The Ajarian Beekeepers Business Association gave attendees a unique opportunity to taste recently harvested Jara wild honey from its members and personally explore traditional Jara hives and beekeeping handicrafts.
Photo Source: The National Geographic Georgia
A new Bio Security Point (BSP) has been opened by the Minister of Agriculture of Georgia on in Kakheti, Telavi municipality. It is the fifth point now open on the
Animal Movement Route along with the BSP’s in Marneuli, Rustavi, Dedoplistskaro and Signagi municipalities and the third point built by the government in addition to the two points built under the ALCP as part of the activities agreed between the government and the project.
‘We are conducting complex works for supporting sheep and cattle sector development and one of the most important components of this work are identification ®istration of official Animal Movement Route and a proper management of it. We now have five BSP and this helps us to manage the movement of the livestock and their health control’ Mr. Davitashvili stated.
Georgia and the Georgian honey were successfully and widely promoted at the 45th Apimondia Congress in Istanbul, Turkey, by the Ajarian Beekeeping Business Association (ABBA). The Jara honey along with Chestnut and Acacia honey were the most popular among the honey importers from all over the world. Markets for Georgian honey seems diverse based on the high interest from countries such as France, Germany, Kuwait, Iran, Turkey and India among others. More to be found in the TV slot prepared by Ajara TV
