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Updated November 1999

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

Main discussion paper


Introduction

Proceedings Conference documents

ADDRESSING the issue of small farmer group associations (SFGAs), i.e. federations of existing small farmer groups (SFGs) is both important and timely. It is important since this intermediate form of inter-group collaboration seems to offer much promise for broadening and improving the economies-of-scale, market power and access to services of small farmers who have already organized themselves into small farmer groups but who are not yet served by formal organizations, such as cooperatives.

In terms of organizational development, SFGAs are a quantum leap from small farmer groups in more ways than one: the number of persons involved in an SFGA is probably tenfold that of the average individual small farmer group; at the same time, the managerial skills required to run an SFGA are greater due to the complexity. Field research findings show that such informal small group cooperation often serves as an important "schoolroom" where small farmers can acquire collective decision-making and problem-solving skills prior to joining more formal organizations, like cooperatives or other types of farmer organizations.

It is timely because, with the privatization of markets and downsizing of public sector programmes, many cooperatives and small farmer service programmes are now struggling for survival as government subsidies are reduced and markets reformed; therefore they are less able to serve their small farmer clientele adequately. As a consequence, small farmers may have to find other organizational vehicles for achieving their economic and social objectives.

This discussion paper looks at SFGAs, in the light of FAO experience, and poses a set of key questions arising from analysis of that experience. The questions are posed in order to seek answers especially from other UN Agencies, governments, NGOs and individuals directly or indirectly involved in the promotion of such small farmer associations in the developing world.

Small group approaches have proved effective

The use of small informal group approaches to deliver development services to small farmers (provided by government, NGOs and/or the private sector) has proven to be an effective institutional device for lowering the delivery costs of these services, for reducing the expenses small farmers incur in gaining access to those same services, and to markets, and for promoting small farmer self-development. Small farmer groups (SFGs), are also seen a useful organizational mechanism for mobilizing small farmer collective self-help actions aimed at improving their own economic and social situations and that of their communities. This is the conclusion of FAO after more than two decades of direct project implementation experience in 17 countries. Indeed, the benefits of using small group approaches for the more efficient delivery of credit as well as other agricultural and development services to small farmers are now widely appreciated. Even the World Bank - long a champion of a more expensive and individualized approach to delivering agricultural extension services - has now introduced a modified Training and Visit (T+V) approach to make it more group-based and participatory.

The advantages of small group approaches over larger group (village-based) approaches have much to do with simple principles of small group dynamics. People tend to learn more quickly in small group situations; there is more face-to-face contact and therefore less room for misunderstandings; and decisions can be reached more quickly than in larger group situations. When small group membership is homogeneous - i.e., when members share some common bond, like locational proximity, a similar income activity, or they come from the same socio-economic background - then there is also less potential for inter-member conflict and consequently more solidarity.

Small farmers adopt group approaches when the expected benefits of collective action - in terms of improved economies-of-scale in gaining access to information and services and acquiring market power in purchasing inputs or selling outputs - outweigh the expected costs. These costs include the costs of attending meetings and reaching collective decisions, of potential mismanagement of the joint enterprise by elected leaders and of the risk of economic or physical reprisal taken by more powerful forces who might feel threatened by such action. Generally, experience with promoting small group approaches to economic and social cooperation as opposed to political cooperation, has been positive for both small farmers and for promoting agencies. There have been failures, yes, that is true, but the number of projects and programmes that utilize small group methods continue to rise and the number of active small farmer groups - now numbering tens of thousands - continues to grow..

Small farmer groups may be organized for the pursuit of social, cultural and religious aims, to pursue political objectives and for purely economic economic reasons. FAO experience in SFG development has largely focused on the promotion of SFGs that pursue primarily economic objectives and therefore is confined to a subset of the total universe of SFGs - albeit a most important one. After more than two decades of experience in promoting economic SFGs , it can be said that most successful and sustainalbe economic SFGs share a number of common features, vis.:

Yet this same experience has taught us that small groups have their limits, in both economic and socio-political terms. The market and bargaining power that a small group of 5-15 farmers can bring to bear is obviously less than that which a larger group can bear. By aggregating into even larger associations such as inter-group associations, small farmers have the potential to achieve even greater economies of scale in accessing services and markets.

SFGAs: are they the next step up?

The apparent success of small group approaches in facilitating economic cooperation begs a question: Can the same organizational principles that succeeded at the small group level be applied at higher levels, i.e., in the formation of of inter-group associations ( federations of small farmer groups)? Wouldn't it be more practical to work towards the gradual expansion of the membership of the small group. Unfortunately, answering these questions is more difficult than formulating them, since our experience in developing these higher-level organizations have been more limited and less subject to examination and review.

SFGAs can be either informal or formal, traditional or modern, involve small or large groups and pursue a variety of economic as well as non-economic ends, but for the purpose of this conference and this paper we will choose to define them as:

informal, voluntary and self-governing associations of small farmer groups, formed at local level, for the purpose of economic cooperation aimed at improving the economic and social conditions of its affiliated individual members. Typically, they involve 5 to 10 groups, serving 25 to 150 individual members, with geographic scope varying from a village to a cluster of neighbouring villages or hamlets.

Our decision to adopt a comparatively limited definition of the term SFGA is based on two main considerations.

  1. In the rapidly changing policy conditions currently encountered in most developing countries, informal and voluntary mechanisms of farmer group cooperation are, in our opinion, more flexible and able to take advantage of changing opportunities in a way that is difficult for more rigid and formal ones. It must be stressed that SFGAs, as defined here, excludes other, more formal, associations, such as cooperative unions, agricultural labour unions or other agricultural associations which have a recognised legal personality and are often subject to specific legislation and government intervention.

  2. The viability of an SFGA seems to depend most on its success in improving the economic conditions of individual members through better economic cooperation between member groups, and in generating income for the running costs of the SFGA.

While most promoters of SFGAs acknowledge the theoretical advantages - in economic and collective bargaining terms - that small farmers can obtain by forming secondary and higher-tiered cooperation networks, many governments and some donor agencies have been less eager to promote them, either because they are not yet convinced that such organizations are economically useful, or because they fear the promotion of informal small farmer associations of this type would disturb the existing socio-political and economic status quo. In spite of these reservations, informal inter-group associations of small farmers are being formed - either spontaneously by groups themselves or externally by outside change agents. However, many SFGAs seem poorly organized and led, and are so far unduly dependent on outside support for survival.

Higher-level organizations are more complex, in institutional terms, than the small groups they represent and are supposed to serve, and field evidence shows that they are much more difficult bodies to manage. While there have been some successes, the failures are many. Few seem to be self-sustaining, i.e., able to support themselves with minimal external inputs and support. Some possible reasons include:

Unfortunately, few comprehensive reviews of inter-group association "success cases" have been conducted and no field guidelines on inter-group association development, based on such reviews, have yet been drafted, discussed and disseminated. Instead, inter-group association promotion continues to be more the result of a trial-and-error process of learning than of a more systematic approach to farmer organization development. There is a clear need for practical guidelines based on field experience and prepared with the help of small farmer groups themselves.

FAO experience in promoting SFGs and SFGAs

The launching of the FAO Small Farmer Development Programme (SFDP) in Nepal in the early 1970s, followed by similar SFDP projects in Bangladesh, Indonesia, the Philippines and Thailand, was a landmark event. It was the first time that a UN agency had developed a well-articulated strategy for reaching and assisting resource poor farmers based on the formation of small informal self-help groups, organized around income-generating activities the farmers' themselves chose, and assisted by specially-trained group organizers or promoters. Another less-publicized, but nevertheless important, element of the SFDP approach included the eventual formation of inter-group associations, i.e., informal federations of small self-help groups at local level, once groups matured.

SFDP architects saw inter-group associations as an important second step in a longer social institution-building process in support of small farmers. The FAO People's Participation Programme (PPP), which began in 1980 and had as its major aim the expansion of the SFDP approach to other regions, has drawn much from SFDP field experience. Since 1975, FAO has implemented SFDP and PPP projects in 17 developing countries and tens of thousands of small farmer groups and thousands of inter-group associations have formed. FAO direct involvement in such initiatives is now declining, due partly to changing donor and government priorities, but the number of small farmer groups and inter-group associations continues to grow as NGOs, bilateral donors and governments - as well as the farmers themselves - move to fill the gap.

The experience gained in small group formation has been generally positive, and much of that experience has now been passed on to others through a variety of widely disseminated publications, practical field manuals and resource books. These have proved valuable, if the number of requests for the FAO Group Promoter Resource Book and the Group Enterprise Resource Book are anything to go by. As a result of national initiatives, the former is known to have been printed in at least seven languages. In contrast, the sustainability of SFGAs has proved less positive. This is partly because the experience is more recent and partly because such second-tier organizations are more complex and require different approaches and management skills.

By 1995 it was clear that some type of operational guidelines for strengthening these important second-tier small farmer organizations was 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, selected so as to form a representative sample of SFGAs in that country, and including both weak and strong SFGAs.

Though these studies have been useful in identifying many common problems in group association development, the sample is small and restricted to FAO and ex-FAO projects. The limited size of the sample does not permit valid extrapolation of results. Nevertheless, they provide 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 is now much broader as a result of the studies, the findings of the FAO studies are not enough to provide a firm basis for development of a good manual on SFGA promotion.

Hence this E-mail conference has been set up to try and obtain a broader input that could form the starting point for the preparation of such a handbook on SFGA development.

Aim of this conference

The purpose of this global conference is to stimulate constructive debate on the topic of SFGA development: initially in the forum of the E-mail discussion, later on a wider stage. The hope is that this debate will lead to a wider sharing of global experience in promoting and strengthening these organizations so that some generally valid conclusions can be drawn. Such conclusions will be a valuable support for those engaged in promoting these organizations at field level, providing guidelines or "rules of thumb" based on what has produced positive results in one socio-cultural situation or another, in one political system or another.

The paper is designed to launch that debate and consists of a series of key questions on SFGA development, based on FAO's own experience, and refer to five aspects of SFGA development:

We are looking for answers to each of these questions, and for reactions to the topics implicit in each question. To start the argument, some preliminary comments of each question are given, based on FAO experience. These are from our experience and point-of-view, and we know that others will have different opinions. We wish to hear them and hear them discussed.

Upon completion of the conference, a synthesis Report-cum-Proceedings collating all the interventions will be prepared by the Conference Secretariat, and distributed to all participants.



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