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Farmer Groups: Why We Love Them, Why We Do Them and Why They Fail

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.

OTHER NEWS
17/11/2020
Georgian Milk Mark in Ministry Magazine

Our Village, the Ministry of Environmental Protection and Agriculture of Georgia (MEPA) magazine with a circulation of 10,000 copies a month is publishing an article about the Georgian Milk Mark (GMM) in its October issue. The article provides comprehensive information about the GMM, a list of the GMM dairies and their products. Rural farmers across Georgia will receive the magazine through fifty-four MEPA Information Consultation Centers (ICCs) for free.

Currently, sixty-seven types of GMM dairy products from eighteen GMM  dairy companies are being sold  in Madagoni, Spar, Ori Nabiji, Nikora, Zgapari, Fresco, Foodmart, Carrefour, Goodwill, Willmart, Libre, Deili, Bilion supermarket chains. Details on www.georgianmilk.ge.


15/07/2020
Georgian Beekeeping Highlighted in German Magazine

A German beekeeping magazine Deutsches Bienen-Journal with circulation of 52,000 copies a month published a comprehensive article on beekeeping in Georgia and its history, local bee breed Mountain Grey Caucasian Honey Bee (Apis mellifera caucasica) and Jara honey a special mention of the project’s work.


29/10/2020
Improvements in Sheep Shearing


In 2018, while thinking about improving the quality of supplied wool, the Georgian Wool Company purchased twelve sheep shearing machines and trained a group of twelve shepherds, to provide a shearing service to sheep farmers. The service is available on the pastures at the beginning of spring and at the end of summer, when sheep are usually sheared in Georgia. This year, up to five-hundred farmers were served, with hundred thousand sheep sheared.

 

Before, the wool suppliers of the company sheared sheep by hand, which damaged wool fiber and the quality of wool was poor. It took time with only up to thirty sheep sheared a day. The sheep farmers had to ensure the workforce for shearing by hand, they also had to arrange wool storage space in pastures and transportation of wool from pastures to wool collection centers. Incompliant shearing and storage was decreasing the quality of wool and causing about a ten percent loss (up to thirty kilos), which was usually left on pastures polluting the local environment.

 

Now, the sheep shearing machines prevent damaging of wool fiber and respectively, the quality of wool has been improved. The company’s sheep shearing machine service includes storage and transportation of wool from pastures to the company`s warehouse in Tbilisi. Sheep shearing is now time-efficient with up to hundred sheep/day sheared by one trained shepherd. While shearing of thousand sheep by hand took at least three days, now the same is done just in one day. For the company it means a stable supply of wool in better, cleaner quality; For farmers it translates into reduced transaction costs, time and about 0.7 Gel saved per sheep.

The Georgian Wool Company first exported wool to the United Kingdom back in 2016. Ukraine, Kazakhstan, India, Afghanistan are now among top wool export destinations. Along with growing demand, improving quality has become a particular interest of the company.

09/10/2020
VET Colleges to Teach Jara Wild Honey Production

On October 8th, the Georgian Beekeepers Union (GBU) hosted representatives of thirteen VET colleges from across Georgia and sectoral skills organization Agro Duo in Tbilisi. The meeting occasioned the integration of Jara honey production as a topic in VET college beekeeping programmes, something that the Georgian Beekeepers Union have been facilitating over the last year.

The participants received the Jara Honey Production Handbook and Bio Certification Guidelines for Beekeepers; and were introduced to two new websites www.honeyofgeorgia.com and www.jarahoney.com and a honey promotion video Discover Georgia: The Land of the Oldest Honey.

This year Akhali Talga VET College in Kobuleti and Khulo integrated the Jara materials into their one-year beekeeping programme in which twenty-eight beekeeper students are attending. At the meeting, Akhali Talga VET College shared their experience of successfully integrating the Jara materials into their beekeeping programme.

‘I had many calls before and after the meeting and I can say that the interest from the colleges is very high. We will provide support required and I am sure from the next year there will be more programmes with the Jara materials and improved content.’ – Aleko Papava, the Head of the GBU.

At the beginning of the meeting, the GBU and sectoral skills organization Agro Duo signed a Memorandum of Understanding pledging to work together to integrate Jara materials into the beekeeping programmes in all VET colleges in Georgia.

Jara is traditional wild beekeeping producing unique and pure honey rarely practiced nowadays, except for remote dwellings located in the subtropical and alpine zone of Georgia. However, for the first time in decades Jara production is being practiced again by new beekeepers or taken up again by those who had stopped. In 2018 the Jara Beekeepers Association was formed to represent producer interest and in the country first, twenty-three Jara beekeepers in Ajara have received Bio certification. Jara honey was commercially harvested and branded for the first time in 2018 and since then the market for Jara honey has grown in strength which is why the producers decided to become Bio Certified to further increase the value of their product. The Jara honey mark was registered this year to further protect this culturally important product.  

06/10/2020
Jara Beekeeping Brings Hope: Vazha’s Story

  

Fifty-seven years old Vazha Kedelidze from Kedlebi Village, Khulo is one of ten students who enrolled in the beekeeping programme at Akhali Talgha vocational college in August.

Vazha retired from his position as a fireman five years ago. Soon after, his wife had a severe injury that left her unable to take care of their farm. As Vazha says, beekeeping is now the mainstay of his family. His beekeeper friend helped him to arrange an apiary of twenty hives.

I discovered that beekeeping is a philosophy on its own. Sometimes I sit for hours and observe bees working. I am trying to understand the process.’- Vazha says.

As a beginner beekeeper, Vazha is striving for knowledge and struggling to gain comprehensive information, as internet sources are not targeted to beginner beekeepers and he needed something hands on. He then heard about the beekeeping course at the Akhali Talgha VET collegein Khulo.

‘I do not know curriculum details yet, but I am sure I will get answers to my questions and I am looking forward to starting the learning process.’ – Says Vazha.

Vazha was even more surprised when he found out a Jara beekeeping module:

‘I had heard about Jara from villagers and television. It is a fascinating and very unique tradition. Last year, I even made six Jara hives and could not proceed further due to a lack of knowledge. So, I am glad that I will learn more about this traditional beekeeping.’ – Says Vazha.

Akhali Talga VET college in Ajara is the first college in Georgia to have integrated Jara teaching in their beekeeping programme. They will teach the integrated programme from this semester to twenty-eight students.

In total, there are ten VET colleges in Georgia with either a two month or one-year beekeeping course. The Georgian Beekeepers Union (GBU), along with the Jara Beekeepers Association (JBA),  is now facilitating the integration of Jara module into beekeeping programmes of these ten colleges in cooperation with the sectoral skills organization Agro Duo and the Ministry of Education, Science, Culture and Sport of Georgia. The JBA developed the Jara Honey Production Handbook: for Beekeeping Programmes at VET Colleges.

Jara is traditional wild beekeeping, rarely practiced nowadays, except for remote dwellings located in the subtropical and alpine zones of Western Georgia, namely, Ajara, emphasizing the importance of co-existence between humans and wild nature. It is a family activity led by a family head, with strong roots in traditional agriculture practice, culture and a way of living as a whole. That makes Jara unique. However, due to a limited market, it was nearly fading outback in 2014 when the ALCP found out about it, and this is when the Jara journey began. It is now growing in 2018 the first commercial Jara harvest was 500kg it is now over 3 tonnes. Twenty-three Jara beekeepers are now Bio Certified and many people such as Vazha are anxious to start. Jara is a high value product with very strong demand it retails for 90 Gel/kg.

24/09/2020
Third Georgian Dairy Exports to USA

In mid September, dairy enterprise Tsintskaro+ Ltd in Kvemo Kartli sent 280 kg of different types of cheese (Sulguni, Smoked Sulguni, Georgian Cheese) and clarified butter produced by Milkeni Ltd through distribution company Geoproduct Ltd,  for sale in New York, USA after positive feedback received on product samples sent earlier in August. Both dairies are members of the Georgian Milk Mark the quality assurance label for Georgian natural milk and their products bare the GMM. The company expects a repeat order for at least 250 kg in the near future.

LATEST NEWS
Georgian Milk Mark in Ministry Magazine
17/11/2020
Our Village, the Ministry of Environmental Protection and Agriculture of Georgia (MEPA) magazine with a circulation of 10,000 copies a month is publishing an article about the Georgian Milk Mark (GMM) in its October issue. The article provides comprehensive information about the GMM, a list of the GMM dairies and their products. Rural farmers across Georgia will receive the magazine through fifty-four MEPA Information Consultation Centers (ICCs) for free. Currently, sixty-seven types of GMM dairy products from eighteen GMM  dairy companies are being sold  in Madagoni, Spar, Ori Nabiji, Nikora, Zgapari, Fresco, Foodmart, Carrefour, Goodwill, Willmart, Libre, Deili, Bilion supermarket chains. Details on www.georgianmilk.ge.
Georgian Beekeeping Highlighted in German Magazine
15/07/2020
A German beekeeping magazine Deutsches Bienen-Journal with circulation of 52,000 copies a month published a comprehensive article on beekeeping in Georgia and its history, local bee breed Mountain Grey Caucasian Honey Bee (Apis mellifera caucasica) and Jara honey a special mention of the project’s work.
Improvements in Sheep Shearing
29/10/2020
In 2018, while thinking about improving the quality of supplied wool, the Georgian Wool Company purchased twelve sheep shearing machines and trained a group of twelve shepherds, to provide a shearing service to sheep farmers. The service is available on the pastures at the beginning of spring and at the end of summer, when sheep are usually sheared in Georgia. This year, up to five-hundred farmers were served, with hundred thousand sheep sheared.   Before, the wool suppliers of the company sheared sheep by hand, which damaged wool fiber and the quality of wool was poor. It took time with only up to thirty sheep sheared a day. The sheep farmers had to ensure the workforce for shearing by hand, they also had to arrange wool storage space in pastures and transportation of wool from pastures to wool collection centers. Incompliant shearing and storage was decreasing the quality of wool and causing about a ten percent loss (up to thirty kilos), which was usually left on pastures polluting the local environment.   Now, the sheep shearing machines prevent damaging of wool fiber and respectively, the quality of wool has been improved. The company’s sheep shearing machine service includes storage and transportation of wool from pastures to the company`s warehouse in Tbilisi. Sheep shearing is now time-efficient with up to hundred sheep/day sheared by one trained shepherd. While shearing of thousand sheep by hand took at least three days, now the same is done just in one day. For the company it means a stable supply of wool in better, cleaner quality; For farmers it translates into reduced transaction costs, time and about 0.7 Gel saved per sheep. The Georgian Wool Company first exported wool to the United Kingdom back in 2016. Ukraine, Kazakhstan, India, Afghanistan are now among top wool export destinations. Along with growing demand, improving quality has become a particular interest of the company.
LATEST PUBLICATIONS
Measuring Urban Consumers Awareness of the GMM
A National Qualitative Review of the Municipal Women's Rooms
Deutsches Bienenjournal about Georgian Beekeeping