Posted May 1996
FAO People's Participation Programme
Introduction | Selecting project participants | Forming groups | Group activities | Savings and credit | Group promoters | Costs and benefits | Further information
Unless the rural poor are given the means to participate fully in development, they will continue to be excluded from its benefits. The FAO People's Participation Programme (PPP) has demonstrated that participation is possible when the poor form small self-help groups that allow them to pool resources in pursuit of their own objectives. PPP projects have been implemented in 12 countries of Africa, Asia and Latin America. Some 13,200 people have actively participated in PPP, while beneficiaries total 80,000. The principal elements of the PPP approach are:
- Focus on the rural poor. PPP beneficiaries include immigrant settlers, artisanal fishing communities and subsistence farmers.
- Small groups. The key element in PPP is the formation of small homogeneous self-help groups. Some 1 080 such groups have been formed.
- Local implementing agencies. Projects are implemented by government ministries, semi-government institutions or NGOs.
- Group promoters (GPs). Some 130 GPs assist in group development and in linking groups to government services.
- Income-generation. Assisted by government services, groups undertake additional income-generating activities to build up and diversify their economic base. Most groups are engaged in staple food and animal production.
- Group savings. Group savings serve as additional credit, cover loan defaults and build up groups' capital base. By 1990, PPP participants had saved a total of $68 000.
- Group credit. To facilitate credit for PPP groups, FAO covers the banks' risk of defaults. Thanks to these arrangements, PPP groups received total credit of $350 000 in 1989.
- Training. PPP members' organizational and production skills are improved through field workshops covering topics such as project planning, recordkeeping, food storage and soil conservation.
- Self-reliance. Self-reliance is stressed through training, savings mobilization and consolidation of PPP groups in self-governing umbrella organizations serving their wider interests.
Selecting project participants
Participatory rural development projects seek to improve the economic, social and political conditions and capacities of the rural poor. The project planner's first task, therefore, is to identify impoverished areas and poor inhabitants who wish to participate in the project. Planners can delineate impoverished areas through discussions with rural administrators and a rapid analysis of existing data.
In selecting areas suitable for participatory development projects, preference goes to those with potential for development of viable economic activities, availability of development services and some market outlets. The next step is to select village clusters where project activities will begin. To identify these clusters, project planners conduct socio-economic surveys in cooperation with group promoters. Villages selected should have development potential and a low degree of social stratification.
The rural poor live at or below subsistence level, depending for their livelihoods on employment in agriculture and related occupations. Levels of deprivation also exist among the poor. Small farmers are sometimes considered "marginally poor" because they have some access to assets and income. Usually worse off are sharecroppers, landless labourers and hawkers (the "very poor"). The most deprived people in rural areas are destitutes who have no economic base whatsoever. To assess the numbers, proportion and main characteristics of the poor and non-poor in the project area, project staff gather existing data on population, land tenure, economic activities and income distribution. For a more accurate assessment, it is sometimes necessary to develop area-specific poverty criteria, such as level of access to productive resources, ethnic and caste characteristics and nutritional status.
Typically, project participants will be people whose main source of income is agriculture or related activities, whose main source of labour is their family, and whose income is below the average in the area. They have little access to inputs, credit, markets, training, extension and other services. A participatory project need not start with the poorest. Some projects seek to involve first marginally poor small farmers who can afford to risk some of their assets in group activities. The very poor may be involved only in later phases of the project.
To identify the poor's priority needs, project staff carry out rapid social and economic studies, consulting a representative cross-section of local people - in particular the poor - as well as key members of local people's organizations and traditional leaders. The team's inquiries cover existing development efforts, felt needs, aspirations and constraints. The information collected is regarded as preliminary and, in part, suspect. More reliable in-depth data is gathered as field staff gain the poor's confidence during project implementation.
The central element in PPP is the formation of self-help groups of the rural poor as the first step in a long-term institution building process. Group membership offers the poor several advantages:
PPP projects follow four guidelines in group formation:
- Groups are starting bases for development activities which, if undertaken by individuals, would involve greater risk and effort.
- Groups are efficient receiving mechanisms for government and NGO development agencies.
- Groups are learning laboratories, promoting such skills as group enterprise management and problem solving.
- Groups help empower the rural poor by providing them with an instrument for participation in local decision-making.
The project then organizes informal meetings with prospective group members to discuss the purpose, methods of operation and benefits of groups, as well as possible enterprises. Group promoters make a list of potential group members and leaders, possible group activities and required inputs. Once the participants have identified viable income-raising activities, they decide on criteria for group membership: for example, whether members should belong to a specific category such as small-holders, tenants or landless. They assess their productive resources, including capital, skills and experience. Group members then elect a chairperson, secretary and treasurer. Project staff encourage rotation of leadership positions among group members in order to give all members leadership experience.
- Groups should be small. Groups of eight to 15 people facilitate dialogue between members, have greater economic flexibility and are less likely to be dominated by elites.
- Groups should be homogeneous. Conflicts are reduced when members live under similar socio-economic conditions.
- Groups should be formed around viable starter income-raising activities. Income-raising activities are crucial to group development because they generate assets that build financial self-reliance.
- Groups should be voluntary and self-governing. Participants decide who should join the groups, who should lead them and what rules they should follow.
The formation of viable and stable groups requires patience and, in most cases, a period of two to six months. Both overly rapid formation and overly long delays, which may dampen the interest of potential group members, are avoided. The process of group formation may face formidable obstacles. In most cases, the rural poor are economically dependent on landowners, traders and middlemen and may fear intimidation if they become involved in independent peasant organizations. Other constraints are posed by local power-holders who may see the groups as a threat to patron-client relationships. At local level, project staff can help overcome this antagonism by calling meetings to sensitize leaders to the objectives of the project and, above all, to illustrate the benefits of its activities to the area as a whole.
Once groups have established a sound economic base, PPP promotes their consolidation into local-level inter-group federations. These federations promote solidarity and economies of scale both in group activities and delivery of development services. Development of local - and, eventually, regional and national - structures also stimulates the formation of more groups. An inter-group federation must be accountable to all group members. It has a facilitating, coordinating and educational role is a source of technical assistance, economies of scale and guidance. For instance, a federation can offer training to new groups, help finance their activities from savings and perform some of the functions of group promoters.
Participatory groups are formed around activities that meet the identified priority needs and aspirations of those who wish to become members. The purpose of these activities is primarily economic and developmental: to increase members' production and income, reduce their costs, promote financial self-reliance and contribute to community welfare. Although group activities vary widely, four general types can be distinguished:
PPP emphasizes income-generating or cost-saving activities based on local experience and low-cost technology. These undertakings do not replace but are meant to supplement members' normal production. Activities of this type are most likely to broaden the groups' economic base, mobilize savings, strengthen group cohesion and develop their enterprise management skills. Groups are encouraged to undertake social or community improvement activities only at a later stage. It is important that - as far as possible - each group identifies, plans, carries out and evaluates its own activities. This is essential for group development and, eventually, self-reliance. While group promoters have an important role in encouraging group activities, especially in the initial stages, theirs is a facilitating role that will be reduced gradually as the groups develop.
- Direct income-raising activities. Groups may intensify production of food or cash crops, develop small-scale animal husbandry, aquaculture or agro-processing, and build small scale irrigation, drainage or anti-erosion systems. Other activities include development of low-cost storage, transport and marketing facilities, supply points for inputs and micro-industries such as blacksmithing.
- Cost-saving activities. These include activities that reduce production costs, such as bulk purchasing of inputs, group transport and marketing of products, and consumer savings through joint purchasing of consumer goods in bulk. Groups might also benefit from social savings - e.g. group agreement to cut spending on alcohol - and social insurance through group welfare funds.
- Production-facilitating activities. These include consolidating members' holdings for joint production, cleaning irrigation canals, building or repairing roads, and village electrification. At the political level, groups might lobby for enforcement of land reform laws.
- Community development activities. Many groups undertake social and cultural activities in the fields of health and sanitation, education and family planning. In many areas there is an acute need for group action to promote better nutrition and improved food storage, and install clean water supplies.
Since the main objective of any enterprise is to produce something that people will buy, the group is taught how to conduct simple market surveys in their community in order to identify a product or service needed and how much customers are prepared to pay for it. The group then decides whether members have the resources and skills to supply it. The group is encouraged to choose a product or service it can produce economically and well, avoiding complex production processes. Next, the group calculates what is required to establish the enterprise, i.e. what skills and other resources each member can contribute. The final, and most important step, is to calculate expected profit.
Each group prepares a simple group business plan dealing with the socio-economic conditions, resources and problems of the participating households. They also prepare a schedule of operations and plans for future subsidiary on- or off-farm income-raising activities of individual members that may strengthen their economic base. Small-scale feasibility studies may be needed in order to produce workable proposals for group activities. These studies consider existing income-generating and other activities promoted by government or NGO agencies in the area. The identification of viable group activities also forms part of on-going action research - for example, a number of proposals may emerge from household survey data.
The first hurdle faced by most groups is that of financing the activity. While the project may envisage the provision of credit for the groups, experience indicates that initial activities should be funded by group members through their own savings. This ensures that the scope of the activity is within the group's existing capacity and resources, builds commitment to the group and reduces debt dependency. Another common problem in developing activities is the groups' need for training. Members often have low literacy and numeracy skills, both of which handicap sound management. The project may need to develop training materials tailored to their learning capacities. Unfortunately, there is a great lack of such materials in developing countries.
As a group develops its activities and sees the rewards they bring, it usually begins to undertake additional, more complex enterprises. The risk here is that groups may "bite off more than they can chew". Group promoters help their groups examine objectively the feasibility of proposed new activities by assessing the availability of group resources, funding and local markets. Finally, the groups need to examine very carefully the feasibility of undertaking collective production activities. Experience with PPP has shown that while group members obtain better returns by sharing production inputs and experience, many have learnt - the hard way - that actual production is often best conducted on an individual basis.
Many attempts to farm communal plots have failed owing to disputes over the allocation of labour and the division of income. Project staff generally advise those groups wishing to use communal plots to plan the activity together, but divide the land into individual plots for production. Collective efforts are better suited to the sharing of newly acquired technical skills, or expensive or laborious tasks such as transporting inputs and produce.
Savings and credit
FAO has developed a set of financial strategies designed to reduce the cost to banks of delivering savings and credit services to small farmers and to lower the cost to project participants of gaining access to these services. Although PPP financial approaches vary according to local conditions, all of them share five basic elements:
- Savings first. Groups are encouraged to initiate group-based savings schemes prior to applying for bank loans. Progress in mobilizing group savings provides a measure of members' commitment to the group enterprise and their loan repayment capacity.
- Group savings and credit. Delivery of financial services to participatory groups, rather than individuals, carries cost advantages for both banks and the poor. A joint loan application submitted by a group of ten farmers reduces the bank's loan administration costs tenfold; group members need to prepare only one loan application and make a single trip to their local bank branch.
- Credit Guarantee Fund. To encourage an interested institution to lend to participatory groups, each PPP project provides a special Credit Guarantee Fund (CGF) to cover losses resulting from loan defaults. The fund, held in an interest-bearing account at the institution, is governed by a written agreement that sets out conditions under which loans are to be granted from the bank's own capital, as well as procedures to be followed in case of non-repayment of loans.
- Linking savings with credit. The cooperating bank requires that groups open a joint savings account and make regular deposits before becoming eligible for loans. Some projects limit the maximum amount that a group can borrow to a multiple of the amount in the group's savings account, or require the group to deposit part of its loan as savings.
- Loans based on social collateral. The cooperating bank is encouraged to relax requirements for physical collateral and use "social collateral" in its place. Members of borrowing groups are held jointly responsible for the repayment of the loan. Should one member of the group fail to repay his or her portion of the loan, the entire group may be barred from obtaining credit until it has been repaid.
The group promoter (or GP) is a key agent in the success of any participatory project. He or she works with the poor, building up their confidence in their own abilities and promoting their self-reliance. As this work must be done without creating dependency, the GP's task is essentially that of an intermediary, with three basic roles:
In FAO's experience, one group promoter can help to organize an average of 15 groups in three years. Thus, each GP can reach directly over three years some 150 households, or at least 900 people. GPs must have experience in working with people and local organizations in rural areas, and familiarity with the problems of the poor. It is essential that candidates have a strong commitment to live with, work with and assist the rural poor for at least two years. Capable group promoters may be recruited from government agencies or local NGOs. In some casees, preference has gone to government agencies willing to second their staff to the project. Several PPP projects found excellent group promoters among government extension staff, who later returned to their agencies to propagate the participatory approach.
- group adviser, strengthening the groups' leadership, organizational and planning capacity
- participatory trainer, teaching groups basic technical, literacy and problem-solving skills
- "link person", facilitating communication between the groups and government and NGO development services.
GPs promote self-reliance by involving the group members in activities that allow them to develop leadership and recordkeeping skills. They encourage group-to-group exchanges, and ensure the presence of one or more group members whenever they deal with supporting institutions such as banks and delivery agencies. When and how should GPs withdraw from their groups? Experience in the implementation of PPP projects indicates that it takes from three to five years for groups to achieve complete self-reliance.
Costs and benefits
Total external aid costs of PPP projects average $63 per year per group member and less than $11 per beneficiary (i.e. the group member's dependants). While average cost per participant and beneficiary is high at the start of the project, it declines rapidly as project staff are trained and groups become more self-reliant. Thanks to economies of scale, the incremental cost per beneficiary of including a participatory component in a large-scale project would be even lower. Incorporating participatory elements involves the following extra costs:
The cost of adding these elements would be balanced by the improved design of the project and, in the long run, by its increased social and economic benefits.
- Financing a small number of locally recruited field workers to act as group promoters
- Inception and training workshops on participatory approaches and procedures
- Training for participants and project staff in participation
- Participatory research and monitoring and evaluation, which cover group formation, action, performance and constraints.
PPP's benefits can be measured from two perspectives, that of individual participants and that of society in general. Benefits to participants include:
Benefits for society include:
- Increased food production. In Ghana, groups' maize output is 20 percent higher than that of non-participating farmers. Similar results have been recorded in Kenya, Sierra Leone and Sri Lanka.
- Higher net family incomes. Proxy indicators such as high loan repayment rates, rising levels of group savings and visible improvements in participants' housing conditions point towards increased net family incomes.
- Increased employment. Production technologies employed by PPP groups tend to be low-cost and labour intensive. The most common indicator of greater rural employment opportunities is the participants' increased output per hectare, which generates demand for more farm labour.
- Higher rates of saving. Per capita savings registered in PPP projects - e.g. $21 in Kenya, $39 in Swaziland and $40 in Zimbabwe - represent a major achievement.
- Acquisition of new skills. A clear benefit emerging from PPP evaluations is the acquisition by participants of technical, organizational and leadership skills.
- Creation of "zero-cost" receiving systems. For delivery systems, the provision of financial, extension and other services to organized small farmers is more cost-efficient than traditional methods.
- Building of rural community infrastructure at low-cost. Groups in all PPP projects have initiated community improvement activities, using their own labour and materials. This infrastructure is built and maintained at minimum cost to government.
- Strengthening of rural institutions. Many rural institutions, such as cooperatives, do not function efficiently because members have little scope for participation in decision making. As PPP groups link up with these institutions, they stimulate improvements in organizational performance, reducing the need for government support.
For further information on the FAO People's Participation Programme, contact:
Viale delle Terme di Caracalla
00100 Rome, Italy