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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
14/04/2021
The First International Agri Journalism Conference

On April 13th, an online event of the Journalism Resource Center (JRC) International Conference in Agricultural Journalism and Agricultural Education brought together regional academic and media representatives from Georgia, Armenia, Azerbaijan, Moldova and Ukraine. The enthusiasm for, dedication towards and interest in agri journalism and its importance for people and youth were striking.

The Deputy Regional Director of the Swiss Cooperation Office (SCO) did the opening speech. The representatives from Georgia showed that they understand the demand for and are fully engaged in the media market for agri journalism. 

‘Agri journalism is an integrated course for bachelor’s students. After Training of Trainers for lecturers we will develop a separate course. We also see the demand from students. Cooperation with media and government agencies is crucial in this regard.’ - A representative from Brusov State University in Armenia.

A freelance journalist from Baku talked about the usage of multimedia tools in agri journalism. The field of agri journalism is attractive but seems difficult to attain to media representatives from Moldova and Ukraine. A Producer of Volinsk Branch of National Public TV and Radio Company of Ukraine expressed his willingness to co-operate with the JRC to copy some activities related to agri journalism.

‘I am surprised by hearing about Georgia and Armenia, where agricultural education works so well’. - The LikTV Founder in Moldova, who empathized with the difficulties expressed by the representative of Ukraine and stated that universities in Moldova need to work on establishing agricultural journalism.

The ALCP Team Leader spoke about the programme support for agri journalism development in an interview on Agrogaremo TV. An agri journalism course alumni shared his experience and motivation with the JRC. A short documentary video by the JRC tells us a story about agri journalism development.

16/02/2021
Georgian Honey Export Expands

Nena a honey export company has been exporting since 2019. Chestnut and Jara honey have been sold in twenty shops in New York, Pennsylvania and New Jersey from January, 2021. Nena also exported Jara honey to Japan. And by the end of February, Bio Jara honey, a new product will be exported to the USA. Canada is a promising market and has repeated its order for the fourth time.

05/02/2021
Jara Beekeeping a National Treasure

Producing honey in Jara hives has officially been granted Intangible Cultural Heritage status by the National Agency for Cultural Heritage Preservation of Georgia. The Jara Beekeepers Association (JBA) applied to the Agency back in 2020.

Jara is traditional wild beekeeping, a practice which almost died out but which has since 2014 begun a slow revival with the facilitation of the ALCP. The ancient tradition with strong roots in traditional agriculture, culture represents a unique way of life. The status recognizes Jara’s need to be preserved for future generations earning a place amongst other honourable Georgian traditions, including, Qvevri wine-making and Georgian song and dances. This status and will contribute to its further preservation and promotion.

It also brings hope and feeling of pride to those beekeepers who are continuing or are now taking Jara beekeeping up.

Jara has been on a fascinating journey since 2014. This journey includes The first commercial harvesting, registering the Jara honey mark, being promoted at the international exhibitionsfirst Bio certification, being taught at the VET college and reaching export markets in the US and Canada. And we can be sure, more things are on their way.  

21/01/2021
Power of Christmas Spirit Shown by Municipal Women’s Rooms

Christmas is a magical time awakening the holiday spirit in us. They say, Christmas is the spirit of giving without a thought of getting.

Before Christmas this year, the managers of the municipal Women’s Rooms in Kakheti, who like everyone else have adapted themselves to remote working due to the COVID-19 pandemic, established an online Christmas Charity Auction on Facebook to help families in need affected by the pandemic. The managers selected seven families in need for help. Their stories are heartbreaking; of a single mother, a victim of domestic violence, raising her children by herself, grandparents raising orphans, a child with disabilities and families with many children living in extreme poverty. Up to five hundred people joined in the auction donating or buying things in the auction with the money raised going for donation. The auction raised more than two thousand Gel over two weeks and besides money, the families received sweets, books, gifts; and special food for a girl with Celiac Disease.

The Christmas of the seven families was changed for the better. The Christmas Charity Auction finished on the 7th of January, though the online group on Facebook remains active, as the Women’s Rooms are planning to continue sharing the act of kindness with families in need and are open to anyone willing to contribute to any future auctions.

There are twenty-eight Women's Rooms in twenty-seven municipalities of four regions of Georgia. Find more about Women’s Rooms here.

30/12/2020
Woman Entrepreneur on Overcoming Challenges during the Pandemic

An article Challenges Emerge for Women Entrepreneurs as a Result of the Covid-19 Pandemic  has been published on Civil Society Portal in Georgia as part of an essay competition. The woman entrepreneur-Zeinab in the article is the Director of the dairy enterprise Tsintskaro+Ltd in Tetritskaro, Georgia. The Alliances Programme, an SDC and ADA project implemented by Mercy Corps Georgia, has been facilitating this dairy since 2016. Zeinab wrote this article by herself and won the Civil Society Portal essay competition. The article comes at the right time. We all need this kind of encouraging information during the pandemic period.

You might be interested in information on how businesses in Georgia are dealing with challenges caused by COVID-19 and can check our report COVID-19 Effects on the ALCP Clients Businesses.

14/12/2020
Jara Honey Bio Production Grabs Newly Appointed Minister’s Interest

The Jara Beekeepers Association (JBA) hosted the new Minister of Agriculture of Ajara Autonomous Republic. One Bio certified Jara beekeeper invited the Minister to Namonastrevi village in Keda to watch the Jara harvest. He also visited the Agro-Keda factory where KTW produce the Nena honey brandto see the Bio honey production and packaging process following strict Bio standards. The JBA together with its members talked about their work, education materials they have disseminated among their members, results and planned activities.

‘Jara honey is an amazing product it’s tradition and now Bio certification. It has great export potential. Even though, the pandemic has significantly limited our budget, we will support the JBA to help ensure the sustainability of the Jara honey production and Bio certification.’ – Giorgi Surmanidze, Minister of Agriculture of Ajara.

In a country first, there are now twenty four Bio certified Jara beekeepers, including the Jara apiary in the Goderdzi Alpine Garden. The Agro-Keda Factorythe only company commercially harvesting Jara honey, received Bio certification in October 2020, thus the company is eligible to sell the Bio certified Jara honey crop with a Bio label soon available in the supermarket chains throughout Georgia.

The JBA is due to start selling the honey of its members under its own label from December this year. The Agroservice Center of the Ministry has already allocated a room in Keda municipality center for the JBA for the compliant packaging and labeling of its products.

More details on Jara honey to be found on www.jarahoney.com.

Photo source: The Ministry of Agriculture of Ajara Autonomous Republic

LATEST NEWS
The First International Agri Journalism Conference
14/04/2021
On April 13th, an online event of the Journalism Resource Center (JRC) International Conference in Agricultural Journalism and Agricultural Education brought together regional academic and media representatives from Georgia, Armenia, Azerbaijan, Moldova and Ukraine. The enthusiasm for, dedication towards and interest in agri journalism and its importance for people and youth were striking. The Deputy Regional Director of the Swiss Cooperation Office (SCO) did the opening speech. The representatives from Georgia showed that they understand the demand for and are fully engaged in the media market for agri journalism.  ‘Agri journalism is an integrated course for bachelor’s students. After Training of Trainers for lecturers we will develop a separate course. We also see the demand from students. Cooperation with media and government agencies is crucial in this regard.’ - A representative from Brusov State University in Armenia. A freelance journalist from Baku talked about the usage of multimedia tools in agri journalism. The field of agri journalism is attractive but seems difficult to attain to media representatives from Moldova and Ukraine. A Producer of Volinsk Branch of National Public TV and Radio Company of Ukraine expressed his willingness to co-operate with the JRC to copy some activities related to agri journalism. ‘I am surprised by hearing about Georgia and Armenia, where agricultural education works so well’. - The LikTV Founder in Moldova, who empathized with the difficulties expressed by the representative of Ukraine and stated that universities in Moldova need to work on establishing agricultural journalism. The ALCP Team Leader spoke about the programme support for agri journalism development in an interview on Agrogaremo TV. An agri journalism course alumni shared his experience and motivation with the JRC. A short documentary video by the JRC tells us a story about agri journalism development.
Georgian Honey Export Expands
16/02/2021
Nena a honey export company has been exporting since 2019. Chestnut and Jara honey have been sold in twenty shops in New York, Pennsylvania and New Jersey from January, 2021. Nena also exported Jara honey to Japan. And by the end of February, Bio Jara honey, a new product will be exported to the USA. Canada is a promising market and has repeated its order for the fourth time.
Jara Beekeeping a National Treasure
05/02/2021
Producing honey in Jara hives has officially been granted Intangible Cultural Heritage status by the National Agency for Cultural Heritage Preservation of Georgia. The Jara Beekeepers Association (JBA) applied to the Agency back in 2020. Jara is traditional wild beekeeping, a practice which almost died out but which has since 2014 begun a slow revival with the facilitation of the ALCP. The ancient tradition with strong roots in traditional agriculture, culture represents a unique way of life. The status recognizes Jara’s need to be preserved for future generations earning a place amongst other honourable Georgian traditions, including, Qvevri wine-making and Georgian song and dances. This status and will contribute to its further preservation and promotion. It also brings hope and feeling of pride to those beekeepers who are continuing or are now taking Jara beekeeping up. Jara has been on a fascinating journey since 2014. This journey includes The first commercial harvesting, registering the Jara honey mark, being promoted at the international exhibitions, first Bio certification, being taught at the VET college and reaching export markets in the US and Canada. And we can be sure, more things are on their way.  
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