Sustainable Development Banner

Updated November 1999

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

FAO experience: SFGA formation process


Proceedings Conference documents

There are a number of basic principles that both promoters and small farmers should consider when deciding on whether or not to establish an SFGA.

Question 5. What are the economic and social reasons for farmers forming SFGAs?

FAO experience

While promoters may see clear advantages that would accrue to small farmers in forming an SFGA, it's the farmer and his/her group who ultimately makes the choice.

Our experience has shown us that initially the main reason is for growth. Small farmer groups recognize that they can and do generate significant economic benefits by cooperation on a small group basis rather than as individuals. As the groups reach a certain level of maturity and self-reliance, many begin to see the limits to small group action and the additional benefits that might accrue to them through some form of inter-group cooperation, particularly in gaining access to extension services, input supply and marketing.

  • What has been your experience? Or what is your opinion on this matter?

    Question 6. Should SFGAs be launched to address a single issue or multiple issues?

    FAO experience

    Initially, SFGAs seem to be formed to address a variety of issues that groups acting individually are having trouble coping with, including handling credit delivery and repayment to and from groups, facilitating information exchange between member groups, settling disputes within member groups or between member groups, or collective purchase of inputs and bulk marketing. Very quickly, though, most initiating SFGAs learn that pursuing multiple objectives or providing multiple services simultaneously can lead to management problems and so they settle down to handling one or two.

    Our experience seems to confirm that tendency. Focusing on a few issues initially allows SFGA leaders the opportunity to polish their collective activity management and decision-making skills before taking on additional tasks.

  • What has been your experience? Or what is your opinion on this matter?

    Question 7. When is the right moment to start? What are the first steps that should be taken in promoting the self-organization of a small farmer inter-group association?

    FAO experience

    When the economic advantages of SFGAs appear obvious to small farmer groups, there is often a tendency to move too fast in forming SFGAs, i.e., before small groups are organizationally and technically ready to manage the new and more complex organization and have the economic capacity to co-finance its support group activities. Getting groups to this level takes time, generally 2 to 3 years at a minimum, and after some inter-group collaboration actions have been performed successful.

    In FAO-executed projects of this type, we have urged that no SFGAs should be organized until small farmer groups:

    1. first see a strong economic need for one;
    2. possess the minimum of group leadership and organizational skills needed to manage such a body; and
    3. have mobilized or agreed to mobilize the economic resources required to finance the SFGA's initial development.

    Our experience tells us that unless these three pre-conditions are met, success is unlikely.

    One of the most important pre-conditions for SFGA formation is the existence of strong consensus among a number of groups that inter-group cooperation would be economically advantageous and feasible; therefore, one of the first steps in developing such a consensus is to encourage the forging of this "common bond" by encouraging inter-group visits and meetings and actions - particularly among neighbouring groups - thus providing opportunities for neighbouring groups to get together and share ideas, to know each other, to exchange information, and to identify common problems and needs.

    Once that is done, the next step would be to encourage a series of pre-organizational meetings at which the proposed SFGA goals and structures are discussed and agreed upon, and the local resources to be provided by member groups to start the organization committed.

  • What has been your experience? Or what is your opinion on this matter?

    Question 8. Who can be a "member" of an SFGA? A group, an individual or both? Should the rights and duties differ?

    FAO experience

    Our answer would probably be "both," but the rights and duties would differ. In an operational sense, the members of an SFGA are its affiliated groups since the group is the main recipient of SFGA services and collaborator in SFGA economic activities; nevertheless, the individual small farmers within the affiliated groups should also have some stake in running the SFGA since ultimately, if they don't benefit economically from belonging to the SFGA (through their affiliated group), it is likely that they will convince their group leadership to withdraw.

    One way to handle this problem to make the group the responsible unit for all business transactions between SFGA and group, and make the individual members of all affiliated groups responsible for electing SFGA leadership and establishing overall SFGA policy. Obviously, there are many modalities for doing this.

  • What has been your experience? Or what is your opinion on this matter?

    Question 9. How should SFGA leaders be chosen so that they do not lose contact with and accountability to the base? What are the advantages and disadvantages of "shared" leadership?

    FAO experience

    The most common form of SFGA leadership representation observed in most SFDP and PPP projects is an indirect form of individual member representation, whereby SFGA leaders are elected and chosen by the elected leaders of the small farmer groups. This system tends to be easier to administer and set up but it may not be the best type since, in our opinion, it encourages formation of an "upward-looking and upwardly mobile leadership elite" in which the leaders at each level elect the leaders at the next higher level and tends to distance higher-level leaders from the base membership from where they came. This tendency can be minimized by requiring SFGA leaders to be elected by the aggregate base membership rather than by group leaders

    Another tendency found in some SFGAs is to constantly re-elect the current leader, since he/she is regarded as the more experienced one and therefore better able to lead. The negative side of this is that it narrows the pool of potential leaders the SFGA can draw upon to lead or to monitor the actions of current SFGA leaders. In an effort to minimize this tendency, most SFDP/PPP projects have sought to encourage a system of "shared leadership" in which the duration of leadership is limited and re-election to a 2nd consecutive term not allowed. This broadens the pool of potential leaders by giving a larger number of applicants the opportunity to lead; however, one disadvantage is that it can lead to discontinuities in SFGA management and performance, and for that reason it is probably better in earlier stages in the SFGA's development (when it may be necessary to develop a cadre of potential experienced leaders capable of assuming SFGA leadership should there be need for a change) rather than in later stages when the maintenance of some degree of leadership continuity may be more important.

    A third issue relates to when SFGAs are used as channels for distributing grants or below-market priced services and inputs (a frequent occurrence). This practice can create an artificial condition of "excess demand" whereby SFGA leaders assume the role suppliers of a scarce service or product (offered at a below-market prices) which cannot fully satisfy market demand. The only "market solution" for the SFGA leader is to arbitrarily ration the product or service to a limited number of users, based on some arbitrary criteria either imposed by the SFGA leader or influential outsiders - not an ideal situation - and one which almost always leads to some form of corruption or abuse. (see also Question 18)

    One mechanism we have found that seems to enforce the "bottom-up" accountability of leadership is "member financial stake." Our experience shows that when SFGA member financial contributions to the organization are high, they tend to watch their leaders more closely, since any mismanagement of the SFGA may endanger member financial stakes. Their ultimate sanction, if things don't improve, is of course to withdraw from the SFGA and withdraw their financial stake. Since the influence and prestige of SFGA leaders is partly a function of the size of that pooled member financial stake in the SFGA, the number of affiliated groups and the volume of SFGA service activities, they tend to respond positively to the withdrawal threat.

    Sometimes, making SFGA leaders more accountable to their base membership requires the establishment of other organizational control mechanisms, such as the establishment of "supervisory or watchdog committees" elected independently of leadership and whose primary task is guaranteeing that things are done properly.

    But it is also important to recognize that not all leadership accountability problems can be solved by just "getting the incentives right." Many leadership styles are deeply imbedded in cultural norms built up over centuries and difficult to change in the short run. Indeed, some critics argue that concepts of "administrative transparency," "democratic control", "shared leadership" and the importance of member and financial stake in guaranteeing leadership accountability are essentially western concepts and not everywhere compatible with local traditions of management.

  • What has been your experience? Or what is your opinion on this matter?

    Question 10. How important are factors such as coverage, size, member group activities and socio-cultural (and gender) influences in promoting SFGA member solidarity?

    FAO experience

    Maintaining a high level of group solidarity is essential for the success of any collective action, especially those undertaken by SFGAs.

    The main factor determining the limit of SFGA coverage seems to be the distance one can travel by foot in one day. There are exceptions to this rule, but they are few. Most SFGAs tend to have even smaller radii of coverage, typically ranging from a village to a cluster of nearby villages. The greater the radius, the more difficulty inter-group networks will have in ensuring full member participation in group meetings and group services.

    Our experience shows that both large size and broad geographic coverage have a negative impact on SFGA inter-group communications, slowing the speed of decision-making and placing some limits on SFGA management and performance. With respect to size, within PPP/SFDP projects, the average SFGA size is in the range of 5 to 10 small farmer groups. Since small farmer group size runs at about 7 members per group, this means the total base membership of a typical SFGA will be between 35 and 70 individual small farmer members.

    A high number of SFGA member group income-generating activities also has a negative impact on SFGA solidarity and performance, since economies of scale are more difficult to realize under conditions of diversity; nevertheless, when member group income activities complement one another, they may even strengthen SFGA member solidarity and performance.

    Socio-cultural factors also affect SFGA member solidarity and performance. The principle of "group homogeneity" practised at group level applies to the SFGA level. The higher the level of socio-cultural homogeneity, the greater the possibility of minimizing conflicts and disagreements and the negative aspects of patron-client dependencies.

    While gender problems can be easily solved at group level by forming male, female or mixed groups, depending on the cultural situation, they seem to become more difficult to solve at SFGA level. In most SFDP and PPP projects, leadership of SFGAs composed of both male and female or mixed groups tends to be dominated by males. One of the socio-cultural factors influencing this relates to women's more limited mobility, particularly (but by no means exclusively) in Moslem societies. Special efforts therefore need to be taken to overcome this.

  • What has been your experience? Or what is your opinion on this matter?

    Question 11. What should be the role of a group promoter or group organizer in establishing an SFGA? Should he/she be an initiator or facilitator? How?

    FAO experience

    The role the group promoter adopts in the early stages of SFGA development is a critical factor determining SFGA success and sustainability.

    The tendency - a natural one - is for the group promoter to move too quickly in forming an SFGA, before the interested groups are organizationally and technically ready. This tendency should be discouraged. Instead, the key role of the group promoter during the first two years of small farmer group development should be to prepare groups within their area well for this second step by first strengthening small farmer group problem-solving, resource mobilization (savings) and group business management capacities. Once their capacities are sufficiently developed and they have achieved a satisfactory level of self-reliance, then the group promoter should encourage the broader sharing of information and experiences between neighbouring groups by promoting and encouraging inter-group visits, meetings and actions on topics of common interest and concern.

    The group promoter's role, however, should always be that of a facilitator rather than a leader or director, leaving the main initiatives up to the small farmer groups and encouraging a "go slow," careful approach. Only when interested small farmer groups have identified common inter-group problems and needs should the promoter suggest the possibility of inter-group cooperation to address or solve an immediate common problem. If the first mutual cooperation experience is positive, then they should suggest that interested groups examine the feasibility of establishing a more permanent mechanism of informal cooperation, such as an SFGA, always keeping in mind that there are costs as well as benefits involved in such cooperation.

    Once the SFGA begins to strengthen its own self-management and financing capacities and ability to delivery useful services to its member groups, the group promoter should gradually begin delegating some of their small group development functions to the SFGA.

  • What has been your experience? Or what is your opinion on this matter?

    Back to Top FAO Homepage