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Updated November 1999

E-mail conference
24 September-11 November 1998
Small farmer group associations: Bringing the poor together

Proceedings: Executive summary, Summary report


Introduction

Proceedings Conference documents

Executive summary

Main issues discussed

From the outset, it was clear that there were very varied interpretations of the term "SFGA," and the debate extended much more than expected into the concept of cooperatives in the rural context.

Certain topics stimulated more response than others. In particular, the issue of what might be the stimulus and appropriate process for SFGA formation received a lot of attention, closely followed by the significance of savings mobilization versus concessionary credit in the establishment and sustainability of SFGAs. The issue of SFGA organization and management was given less attention.

Some key parameters were identified as influencing the establishment and survival of SFGAs:

In conclusion, the conference emphasized the importance of internal initiation of SFGAs, initial self-financing through savings mobilization, and ensuring transparency and accountability in activities and transactions.

The modalities of SFG representation at SFGA level and what constituted "membership" of an SFGA were topics which also received considerable attention, as did some operational aspects of SFGAs, including the costs and benefits of formal versus informal association, and the diversification and scope of SFGA activities. There were clearly many facets to this topic, and the local social, political, religious, legal and economic contexts were all factors. No absolute recommendation was possible - it all depended on the circumstances.

However, there was little discussion regarding other, more practical, management issues, including the organization of SFGA enterprises; mechanisms for marketing; the role of internal and external capital in sustaining growth; and practical systems for accounting. The conference organizers viewed these latter issues as also important as they would provide additional practical guidance for GPs supporting SFGA formation and development. Appropriate mechanisms for internal monitoring and evaluation of SFGA activities and progress were also required, as discussions of the monitoring and evaluation function were more oriented to external assessment mechanisms. These topics will clearly be prime subjects for future E-mail conferences.

Conference modalities

Participants seemed satisfied with the format and operation of the conference, despite the limitations that it was conducted in English only. It was regarded as a cost-effective way to reach a large, diverse group of persons with an interest in promoting rural development from the ground up. The Secretariat requested suggestions for future activities related to the topic, and proposals were made for similar conferences on related topics, and for alternative applications of electronic communication technology.

Follow-up

These Proceedings constitute the primary output from the conference. The material that makes up the interventions, together with FAO in-house material, are expected to provide a substantial foundation for the elaboration of a set of field guidelines or sourcebook in support of SFGA formation, consolidation and sustainability. The draft publication be prepared by FAO and circulated for comment.

One of the recommendations arising out of the conference was that communication among practitioners on issues related to autonomous farmer organization development in developing regions should be continued, possibly through similar conferences or by setting up a more permanent, but unmoderated, discussion list. FAO, or another interested organization with similar practical experience in this field, were invited to coordinate such an effort. Some specific aspects of the SFGA formation and maturation cycle were singled out as deserving future discussion in a similar E-mail conference.


Summary report

Introduction and background

Addressing the issue of small farmer group associations (SFGAs), i.e., federations of existing small farmer groups (SFGs), was considered by the conference participants to be both important and timely.

It was important since this intermediate form of inter-group collaboration seemed to offer much promise for broadening and improving the economies of scale, market power and access to services of small farmers who had already organized themselves into SFGs but who were not yet served by formal organizations, such as cooperatives. In terms of organizational development, SFGAs were a quantum leap from SFGs in more ways than one: the number of persons involved in an SFGA was probably tenfold that of the average individual SFG; at the same time, the managerial skills required to run an SFGA were greater due to the complexity. Field research findings showed that such informal small group collaboration often served as an important "schoolroom" where small farmers could acquire collective decision-making and problem-solving skills prior to joining more formal organizations, like cooperatives or other types of farmer organizations.

These same findings indicated that small groups had their limits, in both economic and socio-political terms. The market and bargaining power that a small group of 5-15 farmers could bring to bear was obviously less than that of a larger group. By aggregating into even larger associations, such as inter-group associations, small farmers had the potential to achieve even greater economies of scale in accessing services and markets.

Unfortunately, few comprehensive reviews of inter-group association "success cases" have been conducted and field guidelines on inter-group association development, based on such reviews, have yet to be drafted, discussed and disseminated. Instead, inter-group association promotion had continued to be more the result of a trial-and-error process of learning than that of a more systematic approach to farmer organization development. There was a clear need for practical guidelines based on field experience and prepared with the help of SFGs themselves.

By 1995 it was clear that some type of operational guidelines for strengthening these important second-tier small farmer organizations were desperately needed, and so FAO embarked on a field research programme aimed at identifying some of the key problems encountered at local level by group promoters in developing these organizations. Four in-depth case studies were launched in Indonesia, Nepal, Sri Lanka and Zambia, and the preliminary findings from those studies have now been analysed. Within each country, four operational SFGAs were studied. They were selected so as to form a representative sample of SFGAs in that country, and included both weak and strong SFGAs.

Though these studies were useful in identifying many common problems in group association development, the sample was small and restricted to FAO and ex-FAO projects. The limited size of the sample did not permit valid extrapolation of results. Nevertheless, they provided a better understanding of how SFGAs operate, and analysis of the results led to the identification of indicative success indicators for potential sustainability. Although experience in this field was now much broader as a result of the studies, the findings of the FAO studies were insufficient to provide a firm basis for development of a good manual on SFGA promotion.

Hence the proposal for an E-mail conference to try to obtain a broader input that could form the starting point for the preparation of such a handbook on SFGA development.

Implementation

The FAO E-mail Conference on Small Farmer Group Associations (SFGAs) was held between 24 September and 11 November 1998. There were over 400 persons on the list of participants, of whom over 60 made interventions. In all, there were 112 interventions, plus some additional notes and comments from the Secretariat. The starting point for discussion was a Theme Paper prepared by FAO and set out in the form of 27 Questions addressing what were considered to be key parameters of SFGA initiation, establishment and consolidation.

Objectives

The aim of the conference was to stimulate discussion on the rationale for and modalities of forming such SFGAs, and to identify the factors contributing to or hindering successful SFGA establishment and sustainability.

The immediate output of the conference was to be a report of the proceedings, with the substantive content of the interventions then providing the basis for a first draft set of guidelines for those assisting in the establishment and development of SFGAs.

General discussion

Definitions

SFGA was defined for the purposes of the conference as an

informal, voluntary and self-governing association of small farmer groups (SFGs), formed at local level, for the purpose of economic cooperation aimed at improving the economic and social conditions of its affiliated individual members. Typically, an SFGA involves 5 to 10 groups, serving 25 to 150 individual members, with geographic scope varying from a village to a cluster of neighbouring villages or hamlet.

There were clear differences between participants in their conceptual interpretation of "Small Farmer Group Association (SFGA)." Participants appeared to apply the term SFGA to a range of groupings: all based on SFGs but with their formation stimulated either internally or externally, and then either top-down or bottom-up, with differing approaches to group rules, activities and responsibilities, and displaying varying degrees of formal organization. Nevertheless, there was a degree of unanimity concerning the philosophy inherent in the concept, i.e., collective self-help serving disadvantaged groups[1].

There was general agreement that "SFGA" referred to a type of "cooperative," but there was a conceptual dichotomy in the use of the term "cooperative," possibly deriving from the difference between top-down and bottom-up approaches. In current English, the terms "cooperative" and "cooperation" have several definitions, although in essence the definitions are the descriptive "working together" versus "a legal entity owned by and operated for a particular group of persons." These two usages were not distinguished clearly in the interventions. Thus the different concepts of "cooperative" coloured many comments, blurring or ignoring distinctions such as formal vs informal, registered vs unregistered, commercial vs self-help, and so forth.

SFGA growth

There were a number of parameters seen as influencing the growth, the development of self-reliance, and the sustainability of SFGAs, including:

Since most of the SFGs that form the basis for SFGA groupings had been supported in their establishment and early operations by the presence of a group promoter (GP) or equivalent, it was logical that, at a certain point in the maturation of the SFGs in an area, the GP might indicate the possible benefits to be gained from association. Apparently, this was done in some cases, but not in others. There was some discussion as to when SFGs were mature enough to form an SFGA, but the consensus appeared to be "not before at least two years of successful operation as an SFG." It was clear that in some projects there was a deliberate policy to speed-up the association process to meet certain (arbitrarily set) operational targets, with negative results. There were also cases of GPs promoting SFGA formation out of personal ambition, in the hope of demonstrating their ability. The generally accepted view was that GPs should be facilitators, not instigators of the SFGA formation process, providing support and advice as and when needed.

Where there was a systematic national policy to develop SFGs and SFGAs, such as in Nepal, the process had been swifter, with a lot of top-down encouragement. Activities were guided with the idea of second-level association-forming being a natural step to be taken after a short time of SFG operation, possibly after only one year. In parallel with SFGA formation, Nepal provided credit and other support services. While only preliminary results of the Nepalese approach were so far available, in general, the opinion of the conference was that using the "credit carrot" alone was not always the best approach, since it too often induced harmful dependencies, undermining self-reliance. It was argued that a balanced approach, giving emphasis to local resource mobilization and savings - perhaps supplemented by matching credit - was more effective and sustainable.

Where SFGs were more spontaneous and represented the coming together of similarly motivated people, with less external direct support, the process of establishing the SFG and ensuring sustainable operation had to take precedence. When the SFG felt itself to be well established, then it might start looking farther afield to improve its economic base, or to ally itself to confront a common external threat. At that point, the motive for establishing an SFGA would be stronger, and the SFGA could start off more positively, with a good chance of succeeding.

The interventions supported an approach consisting of providing the SFGs with the idea, and advice on possible modalities of SFGA formation, with encouragement and support from the sidelines, but participants emphasized that SFGs had to make their own decisions and then take responsibility for those decisions.

The original conceptualization of the conference had the SFG as its starting point, with a focus on how SFGs could achieve greater economies of scale and access to services by forming inter-group associations or SFGAs. This implied giving SFGs the conceptual and operational tools to facilitate their working together with other SFGs for the chosen objective. The desire to work together as an SFGA could be stimulated by external change agents, but for the SFGs to have ownership of their SFGA, they must have instituted it and they must acknowledge responsibility for sustaining it.

It was agreed that aid should not be an incentive for SFGA formation; the provision of matching loans for clearly specified purposes was possible, but care had be taken to avoid dependence on incentives - given that the supply of credit aid was short term, strictly limited, and often subject to political vagaries. The formation of SFGAs should be a natural evolution in the empowerment process, and it should also have the potential to ultimately achieve self-reliance and autonomous sustainability - it should not be something forced upon SFGs so that even a non-ambitious but conscientious GP could satisfy a paper quota by the end of a project phase!

When and where should the development professional come in as facilitator? The general consensus was that it should occur when SFGs expressed a wish to form an SFGA, and the well trained development professional could then provide advice derived from knowledge of similar activities elsewhere, and base that advice on experience, to ensure that the SFGA concept minimizes potential conflict with the local environment - agro-ecological, social, cultural, religious, political, economic, etc. - before the event.



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