Forum for the Future of Aid

Stephen Lewis, a Canadian who is the UN Secretary-General’s special envoy for HIV/AIDS in Africa, recently presented "Race Against Time" in the 2005 Massey Lecture Series on CBC, our National broadcast radio.

While many things Stephen said made me take notice, there was nothing more compelling than the call support to the role of women. It seems half of the continent lays in shadow, women struggle to meet the needs of families and yet so little aid reaches them because of male dominated governance structures. Direct support to women individually and as a group is crucial; it could unite them as a group to learn, understand and support each other across the continent. Their efforts could conceivably create a wave of change altering the destiny of Africa.

The radio lecture series by Stephen Lewis was reviting; it was well informed, passionate and made many reasoned recommendations for change. I heartitly recommend listening to the first lecture available online at: http://www.cbc.ca/ideas/massey/massey2005.html There is also an accompaning book of the same title and a CD of the five lectures.

What irritates me a bit about DFID policy and also that of your site, is the insistence on focusing only on the poorest countries, mostly in Africa. As a social policy consultant working in the former Soviet Union I sometimes feel that if a country that needs aid is not a former UK colony, then DFID does not find it interesting. DFID is withdrawing from the Russian Federation already, but there are an awful lot of people stuck in very poor countries like Tajikistan, where many live on under 1 USD per day in a climate which gets very cold in the winter (so they would really need more than that one USD), and people in these parts of the world are almost excluded from this kind of dialogue. Politically speaking this gives countries like Iran plenty of scope for intervention in such countries (let's face it, aid is not only about helping people).

Please make sure that Eastern voices are also included - not all of Asia (central or otherwise) is a progressive economy.

Submitted by Dick Tinsley from www.smallholderagriculture.com

With regards to your up coming meeting of Friday, I would appreciate if you could consider the following concerns as it may relate to agriculture development and rural poverty alleviation.

First I am an agronomist who has worked with smallholder communities for over 30 years. I am also the author of the book Developing Smallholder Agriculture: A Global Perspective and manage the website www.smallholderagriculture.com. Please feel free to visit the website. I also participated extensively in the DFID sponsored E-Forum held this time 2 years ago.

The two issues that I wish to call to your attention and for which I have attached appropriate pages from my website are:

1. The basic premise under which we have tried to assist smallholders for some 40 years. That is we have addressed the problem as a technology problem without considering if the farmers had the resources to extend the technology from the small research or demonstration plots to their full farms. I would contend that it is more of a resource limitation problem in which the farmers are skillfully working at full capacity their total resource base will allow, with the limited operational resource needed to manage their land in terms of labor and power being a major drag on the climatic potential for which the technology is aimed.

The best example of this is the mechanization of Asian paddy farmers with the retirement of the water buffalo in favor of the power tiller, and continuing to the contract access to small combines for harvesting. All of this was done without any donor assistance and thus took place under the technical assistance radar screen including the capital expanse of the power tillers without institutional credit assistance, that could have facilitated the effort. How farmers financed this would make an interesting study as it would relate to the need for institutional credit. Some of it was financed by selling the water buffalo or other livestock. I notice the same thing is now slowly taking place in Africa, again without donor assistance to facilitate the process.

I fear that future economic assistance to rural areas will continue at a snail's pace until the issue of limited operational resources to manage the land can be addressed. This will actually have to be address more at the community level than individual farm level, where efforts have historically be concentrated.

2. The other issues I would appreciate if your consideration is the heavy emphasis on Farmer Cooperatives as a business model without verifying if cooperatives actually have a competitive advantage over the private traders they are intended to replace. It appears that it is assumed they will have a competitive advantage and ideally they should, but in the reality of smallholder communities in developing country economics do they? Has anyone ever done a cost of business comparison to confirm they actually have the envisioned competitive advantage? I raised this issue in the DFID forum 2 years ago and received no replies from the 500+ subscribers to the forum. Thus the default assumption is no studies have been conducted in the 20 plus year development efforts have funneled assistance through the cooperatives. I have been unable to identify any in the 2 years since the forum.

I fear that by assuming the competitive advantage is automatically there, no effort is made to keep the cost of managing the cooperative down and they lose there competitiveness. What appears to me is that few cooperatives initiated as part of development projects can continue without external facilitation. I know of none. Thus they are not really viable sustainable means of assisting smallholders. I do know that often over 50% of the commodities intended for processing through the cooperatives are side sold, either because of a better price or more often the convenience of immediate case settlement. For this farmers are willing to accept up 20% discount on what the cooperative receive.

While I will agree there is tremendous amounts of literature supporting cooperatives as a development tool, I fear most of it is more promotional then objective leaving many questions that would be crucial for them to be sustained without donor facilitation unanswered. The questions I would like to see answered that appear to be overlooked are:

1. An objective evaluation of the costs of doing business comparison between cooperatives and private traders.
2. An accurate show of the number of community members actively participating in the cooperatives as a percent of the entire community or beneficiary pool?
3. Information on what the overhead or other costs are that the farmers are charged and are needed to operate the cooperative at least on a cost recovery basis. Does the reported accounting end at the cooperative and or extend to the farm gate?
4. Quantitative information on the percent of “side selling�?. That is the goods intend according to the by-laws to be handled by the cooperative, that are sold directly to competing private traders.
5. The lapse time between when goods are left on consignment with the cooperative and the farmers finally receives their payments.
6. The discount on the cooperative price the farmers will accept for an immediate cash payment.
7. Any dividends paid by the cooperative to it members promoted in the by-laws.
8. The percent of cooperative that survive for 2 years without any donor facilitation and how they have evolved so they did survive.

I think these are serious issues that need to be address in future development issues. I hope you can review this material and perhaps visit the website for expansion on the topics. I also hope this message will assist you in moving forward with your discussions and develop the most effective means of providing sustainable support to smallholder communities providing the best return on donor funds invested, with the biggest impact on smallholder communities and poverty alleviation.

Thank you for your consideration