Summary

The idea of benefiting the people at the bottom of the pyramid by working with those that are somewhat above that level in terms of their economic status and social power is a concept that is derided by many as somehow dishonorable if not an obvious sell-out to the dominant group in a given community.  I make the case here that, when exercised carefully, great leverage can be gained by using those who are somewhat better off and in a better position to take some risk to demonstrate to others that there are some new ways of doing things that are worth trying.  I draw from examples in Ghana, Kenya, Palestine and Armenia to illustrate the point.

If this idea is somewhat provocative, I have satisfied my intent.  Readers who have experience either supporting or contradicting this view are invited to join the conversation by making an entry in the comments box at the end of this post.

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Work With Winners

Heretical Thought:  Just as William Easterly pointed out in his book, The White Man’s Burden[1],  much of the development budget is wasted in fruitless top down comprehensive programs aimed at lifting whole communities out of poverty by “improving the policy environment” or “strengthening democracy” or introducing a microfinance program or improving the role of women or . . . . It is equally true, though arguably at lesser cost, that another portion of the development budget is wasted in vain attempts to help the “poorest of the poor” directly – one by one.  While this approach may well be ideologically pure, politically correct and personally satisfying to the “helpers”, I would argue that in any effort other than pure humanitarian relief and, perhaps, basic health and education, it is also futile.  If we are trying to stimulate dramatic change in an economy, we must recognize that this can only be the result of many people doing things in different, more effective ways. Why would we focus our efforts on those least likely to learn, or to accept, such change. We need leverage and we get it by working directly with those who are most likely to take advantage of our help and demonstrate the benefits of new ways of doing things to others.

We can’t help or teach everybody we want to benefit one on one.  People will all learn and act at their own pace based on a whole bundle of factors peculiar to the individuals involved that we cannot factor into our designs.  I see no use in allowing the slowest learners/acceptors in a group to determine the pace at which the whole group can develop.  Demonstration is a powerful teacher.  We can effect the more reluctant among our target group by focusing our active efforts on the more open and entrepreneurial among them.  Their success will demonstrate the value of the changes they have made to others.  This has proven true in many cases including small farmers improving basic agriculture practices, food processing companies improving their quality control systems or manufacturers learning new financial management practices.

We will always be reminded by the doubters of the dangers that the “winners” (first movers) will monopolize the benefits of new innovations, lock out the late comers and leave them even farther behind than they were before we stepped in to help.  That is a valid concern but we can only do our best to insure equal opportunity while working to make the whole “pie” bigger. In the long run, a growing and evolving economy will benefit all of its members – or at least those who will be somewhat proactive in looking for new opportunities for business, farming or employment. This may sound a bit too much like the old saw that “a rising tide raises all the boats,” but I believe there is some truth in it nonetheless and we can put other efforts into ensuring that all those who wish to participate have an opportunity to do so.

Model Farms in Kenya:

Many years ago in Kenya, when I was much younger, and arguably more naïve than I am now, I would have agreed that we should focus our development efforts on those most in need, by our own definitions.  I had a Swedish friend who was engaged in a model farm program that involved him in working directly with a handful of very small-scale farmers throughout the Aberdare mountain district in which we were both occupied.  He had, as I recall, selected the farmers he would assist on the basis of third party recommendations and his own interviews.  This process may well have been somewhat less than totally objective or transparent but it seems to have worked out pretty well.

He worked with the selected farmers directly, one on one, to plan how to get the most income out of their small farms high in the Aberdare Mountains.  He then provided the inputs (seeds, fertilizers, pesticides, etc.) required to implement the plan and worked with the farmers in the fields as they did the physical work of farming.

I thought at the time that it was extremely unfair that this small group of farmers should get all of the benefit of my friend’s resources and their neighbors should be left out entirely.  His program was successful, though, and the farmers he worked with began to make visible improvements on their farms and prosper.  It wasn’t very long, after a single production season, before it became apparent that many of the neighbors of the directly-assisted farmers also began to adopt some of the changes and prosper as well as they observed what was taking place on their neighbor’s farm.  The value of the “back fence extension agent” was clear before we both left the country and his program had made a significant difference in the farming practices used by a whole community of people. It seemed reasonable to expect that the changes would be sustained and replicated beyond the immediate community – ripples of change making themselves felt..

Most of the second group of people (the neighbors, or so-called “indirect beneficiaries” would not have agreed to work with my friend directly, fearing the risk or cost of new practices and/or doubting that this young man from far away was likely to have any valuable knowledge from which they might benefit.  By focusing on the more progressive and open-minded farmers in the community (“early acceptors” in development parlance) and taking care to insure that his work was easily visible to all who might care to see, he was able to have an impact on the whole community relatively quickly and at relatively low cost.

Nor could it be said that the changes could only be made with continuous outside financial assistance.  Some of the improved practices (for example adjusting plant spacing, changing cultivation/weeding practices, introducing crop rotation) involved no cost at all and provided increased income to participating farmers in a single season.  Others, such as the improved use of fertilizers and agricultural chemicals and better plant varieties, or providing better feed and veterinary care for their livestock, did have a cost but the benefits were quickly apparent.  Once the benefits were clear, other farmers began to adopt some of the new practices either on their own or asking advice from my friend or the farmers who participated in his program.  They could begin with the changes that involved no cost and use the increased income to gradually introduce the other improvements as well. This is sustainable development at its best in my estimation, and it is a model I have kept in mind in the any years since.  Thank you Bengt Fahner and the Swedish Development Service for the good example.

Though I did not realize it at the time, the project on which I was engaged at the time as a Peace Corps Volunteer used much the same principles, though through a different mechanism.  I was assigned to the Cooperative Department of the Ministry of Lands and Settlement in the provincial capital of Nyeri.  This office had been set up only five years earlier, soon after independence, to manage the redistribution of formerly White-owned farm land to Africans. Mmost of whom had been employed on that land previously, often on terms that bordered on indentured servitude if not outright slavery.  Most of these folks were, frankly, not very effective farmers.  They had not actually been “farmers” in a commercial sense before, but only laborers on those larger farmers responsible for carrying out specific tasks assigned by the farm manager.  They had not been involved in decision-making, except on their small subsistence plots of maize, potatoes and beans.  They were legally barred from producing certain high-value crops like coffee and pyrethrum (a natural insect repellant) on their small plots.[2]

I was assigned to a team of agronomists, veterinary specialists and cooperative organizers that had taken on the task of doubling the income farmers in the area derived from milk production in one district.  Even in the “olden times” of the late 1960s it was clear that we could not simply direct that certain things be done that would bring this increase about though some senior government officials might have preferred that. The challenge was to identify specific actions farmers could take that would be appropriate given their lack of capital resources and other limitations.  It was important to find ways to help them understand the benefits they would realize from the suggested changes – as well as any risks that might be involved.

After a thorough analysis of the situation, we realized that there were any number of things that could be done that would have a huge impact on milk production and still leave plenty of room for further improvement.  These ranged from improved feeding practices, to regular dipping of cattle to control the ticks that cause East Coast Fever, to upgrading the quality of their stock by more effective use of artificial insemination, better pasture management, etc..  As the only foreigner on the team, and the designated marketing “expert”, my job was to find ways to improve the means by which the milk passed from the farmers to the Kenya Cooperative Creameries (KCC) milk plant in the region.

The price paid for farmers’ milk was fixed by the government and grading systems at the collection centers were already reasonably efficient.  I found that, after suggesting some relatively minor adjustments in the number of collection centers and their locations, I was at a loss in my search for improvements to the milk marketing system.  Then it was pointed out to me that the amount of milk being down-graded or rejected on quality grounds was very high and that this was because milk was collected by the creamery only once per day while cows are normally milked twice per day. Much of the poor quality milk was being held over by the farmers from the evening before in conditions that did not protect it from deterioration.  While it was not economic for the KCC to make a second collection run for the relatively small amount of available evening milk[3], it became clear that the availability of an effective storage system at the collection centers would reduce the down-grading and rejection rate and probably encourage farmers to bring in more of their evening milk for sale and encourage production improvements.  The development of such a storage system, owned by the local cooperatives and well within their capacity to maintain and operate, created the market confidence the farmers needed to take the steps necessary to increase their milk production.

This case is discussed in more detail in an earlier post. Suffice it to say here that the “winners” among the local farmers, those who responded first once the new coolers were in place, pretty quickly realized that whatever investment they might make in improving their production practices could be quickly overcome by the availability of a reliable and profitable market for the increased amount of milk they would produce.  Training and assistance were provided to any who asked for it.  Others were left alone to make the changes in their own time as they perceived the benefits that would flow from doing so.  And the market was sufficiently large to ensure that the late-comers were not locked out.

In this case the winners picked themselves.  Training and technical assistance were provided to anyone who asked for it.  Others were left alone to make the changes in their own time as they came to understand the benefits that would flow from doing so.  Our team met is objective of helping small farmers double their income from milk production in that region within two years.

Paprika in Ghana:

I saw the “back fence extension agent” at work again in a project I was part of in Ghana in the late 1990s. We (in this case “we” was a USAID-sponsored agribusiness development project) were working with a company that wanted to introduce the cultivation of paprika (mostly for the production of food coloring) into Ghana for export to Europe and, eventually, to support the establishment of a processing plant in the country.  A few initial production trials indicated that the crop would thrive best in the arid Northern Region in areas with readily available irrigation water.  We hired an agronomist to serve as our extension agent on the project and identified one community where the farmers expressed a high level of interest in the crop and where they had the appropriate land and access to irrigation water from the nearby Black Volta to make it work.  We started providing seeds, fertilizers and technical advice to the whole group of farmers – around 15 as I recall.

Results in the first year were decidedly mixed depending largely (though not entirely, I must admit) on the degree to which the farmers followed the advice of our agronomist.  One farmer in particular, a woman, was particularly meticulous in following instructions and, fortunately, located at a major access point to the larger area where most of the others were located.  They could thus see what she was doing and judge the results for themselves as they passed by on the way to and from their own fields.

Paprika is a solanaceous (night shade) plant much like various hot pepper varieties, with which the farmers were already familiar.  The planting and management practices are about 90% the same as for the other peppers, so many of the farmers (mostly the men, for reasons we need not go into here) felt that if they knew how to grow hot peppers, then they could do as well with paprika.  The extra steps and expenses we were advocating were clearly unnecessary.  They decided that they would do just fine relying on their existing practices.

For reasons that I, as an economist and not an agronomist, do not fully understand, that 10% of difference in husbandry practices made the difference between success and failure.  I suppose when we think that the genetic structure of man and chimpanzees is only 1% different, this is not so hard to accept.  At any rate, the result was that our lady farmer did very well. She achieved yields and quality the first year almost equal to our long term expectations.  The results of the others ranged from poor to total failure.  Things were quite different in the second year.  The men, having seen what the woman was doing to bring such success, were now much more willing to follow the prescribed practices.  Their adherence to the program was still several steps short of perfect, but greatly improved – and they got the results to prove it, in terms of marketable product.  The last I heard, that program had become totally commercial and was advancing nicely giving farmers a high value alternative to the low value crops they normally produced and selling them to the company that started and financed the whole thing for export. 

Quality Management Certification:

The same experience applies to private sector enterprises as well.  Long-term assignments in Palestine, Ghana, Armenia and Moldova have all included an element of introducing quality management certification to small and medium scale enterprises.  In all four cases, SMEs were actively, or more often passively, resisting government regulations requiring certain levels of quality certification.

This was partially a result of the fact that state inspections related to those certifications all involved a certain amount of official harassment and/or corruption.  The SME owners simply did not believe that the certification process was serious or that they would benefit in any material way from complying beyond the payment of whatever fees, formal and informal, were required of them.  And, they were probably correct, at least until they started trying to enter export markets where certification is commercially (or legally) required.

Our first attempts to introduce ISO quality management standards and certification in Ghana, Palestine and Armenia were met with skepticism.  In one case, in an Armenian food processing plant that was clearly well short of compliance with any standards with which I was familiar, I was presented with an ISO certificate issued by/purchased from the local State Standards Institute.  I was told, “No problem.  You see, I have a certificate.”  We both knew how he had obtained that certificate and the price he had paid for it.  What that gentleman didn’t know was that he had, in fact, wasted his perfectly good bribe money.  That certificate would neither benefit his international marketing program nor would he gain the benefit of the operational efficiencies that would have been the result of his application of ISO quality management standards.

Our program in Armenia started with the introduction of ISO (quality management systems), and later HACCP (food safety), principles being presented in a series of one day workshops.  These were followed by somewhat more detailed training in what certification might mean for local enterprises – costs and benefits.  Finally, we introduced a program of sharing the cost of consultancy services required for the companies to develop appropriate quality management systems.  In all three cases, our efforts were met with skepticism at first, but the results came fast.

The first company to receive ISO certification in Ramallah, Palestine was a fairly large scale, by Palestinian standards, producer of some 200 different confectionery products.  The owners’ motive for seeking the certificate was that they saw export market opportunities for their products both in Israel and in the Gulf States but their potential buyers required that they be certified.  Our program offered the company a small grant to off-set a part of the cost of the consulting services required and helped in the recruitment of an appropriate consulting firm.  We also provided oversight quality assurance of the process and made sure that the final payment would not be made to the consultant until the client company had passed its certification audit from a prominent international certification body.

The company undertook the process with great seriousness and introduced all of the changes required to qualify for ISO 9000 certification.  Within a few months they were ready for audit and passed on the first inspection.  What they later announced publicly is that the management systems they had introduced as part of the ISO program had increased their operating efficiency to the point that they had more than covered the cost of certification preparation and audit with savings before they had even received the certificate.  After that announcement it became much easier to convince companies of the value of ISO systems in Palestine and within less than two years it was no longer necessary to subsidize the preparation process at all.  New qualified consulting firms had entered the market driving down prices to the extent that companies could finance the costs themselves.

Similar experiences were recorded in Ghana, Armenia and Moldova as well.  The success of early acceptors became a beacon for their more skeptical cohorts to follow.  In Armenia the program has been emulated by several other donors who have (unnecessarily, one might suggest) introduced their own cost sharing programs with subsidies greater than those we offered.  We were able to limit our own program to special areas where more leadership and demonstration are required (e.g. Good Manufacturing Practices, HACCP and Organic certification).  Some donors have developed subsidy programs to encourage very small-scale food processors to seek ISO certification – a standard they neither need nor can afford at their current, or medium term, level of operations – thus proving yet again that every good thing can be carried too far.

The lesson here is to be selective in identifying target clients or enterprises, or in giving them the opportunity to select themselves, and be sure they succeed in such a way as to create lessons and opportunities for others in terms of jobs, markets, spin-offs, copy cats.  For this to be effective, the lessons must be clear and correct based on a correct analysis of the local situation, the risks must be understandable and reasonable within the context of the people who will bear the brunt of failure if the “improvements” don’t work, and the market incentives must be real (and believable).  “Ideal” solutions, or economic models for that matter, cooked up in an ivory tower are only worth the effort spent on them if they relate to the people who are expected to change some part of their behavior based on them.  If the “winners” really do benefit from their participation in the new schemes, others will take note and do likewise.

If I have managed to either pique your interest or provoke your ire in this post, please go to the comments box that appears after the footnotes below to share you thinking.  I would really like to hear the experience the rest of you have had in this important area, even lawyers (perhaps, especially lawyers).  And don’t forget to scroll back to the top and sign up to receive future posts in your email box automatically.  I promise there won’t be too many and I will try to make them both pertinent and interesting.