Ihi. p a p u i r prepared for r t a f f we &nd F. not for publication. The viars are tho- of the author d not n c e a r u r i l y t b r a of the Balk.

braL S t d f YorLing Papar Bo. 195

Ihi. digest report am tbt ARDS has been prepared by Ms. Rachel Yea* drawing iron the snbsmal5ally lmger and more srtcnsive main report by &. U n Lele vhicb in to be published by the Bask ae a book in l a t e 1975. Conderrution of a a d y concernr.? with progmms &nd projects of great d i -n i ty and earplardty iaevitably requfrea a high degree of releetivity. 'Lhi. digeat rcport, theirdore, F. not intended t o d cannot sem u a srrbatitute f o r t b full report. Its purpose F. s i rply t o give wider distribution to ccrttin salient aspects 8nd results of the ABDS pending the publication of HE. Irlc's monograph.

Rployacnt md Rural De-t Mrtrion DeIvalopwnt Ecanordu Dep.rtrmt Developlmnt Policy Staff -23.8

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Page m .

hril Poverty in Kricr mad tho Caartr.int. on Intamalt* . . . . . . . . . . . . . . . . . . . . . 1

m R o j ~ t a W a r n d . . . . . . . . . . . . . . . . . . 3 (a) h t y . or "&port Crop" Rojecta . . . . . . . 3 (b) Integrated Dwdopment ?mjectr . . . . . . . . . 5 (c ) RmctAanal Project s . . . . . . . . . . . . . . . 7 (d) Submcctord Pw: a t . . . . . . . . . . . . . . . . 7

Tbe Heed for hbnced P a -tar . . . . . . . . . . 9 Increaam Rrodoctioa in Wlt lp le Cropping Sprm . . . 10 Ibe Bole of Mdaptiva hearch . . . . . . . . . . . . . . 11 Intra-RegiauiL Income -tits . . . . . . . . . . . . 12

Intensive b r u a g e und the CaPltraintr on Agricultural 9mov8tian . . . . . . . . . . . . . . . . . . . . . . I3

Alturratlva A4pproacbea to ktauh . . . . . . . . . . . 15

saving in tht hraditionil Ibud Sector . . . . . . . . . UI A C C ~ S to krutitoti-1 Credit . . . . . . . . . . . . . 19 Repaymnt of Iw~titw?ior*rl M t . . . . . . . . . . . . 20 h t i m t i o d l Credit md th. Promotion of Innovations . . 21 . . . . . . . . Aptora Approachem t o Agriailtmil Credit 22

Output 2rice Supporta in th. Integrated Projects . . . . 23 . . . . . . . . . . . . . . . . . & r h t h 6 - 8 t i ~ 25 Alternative Approach- t o Efarketing . . . . . . . . . . . 26 1

A h b i c t r a t i n Antonomy in th Irrtepated RegIomlPmjectr.. . . . . . . . . . . . . . . . . . 32

A d d a b t r a t i n Dacmtrallutb: (a) Tbalkny&SEDP. . . . . . . . . . . . . . . . . . 35 (b) UljmmM -t in 'TaumL. . . . . . . . . . 37

VIII. TlUUIlEPORImnru.DWHX)rWrr . . . . . . . . . . . . . 41 km-forrrt M n u t i o a in Rural W t i U . . . . . . . . 41 Trdx&q o f Staff f or Rural Devdoprmt . . . . . . . . . 42

LIST W WibLES

1 Sase Aggregate S t a t i s t i c s for th Cotmtr'se in which thn Project8 Prvicvtd are Located . . . . . . . . . . . . 2

2 Projected and Actual Yieldr of U e md Crotmdnot, L i l o n g W L m d D c v c l ~ ~ t ~ , l w m d . . . . . . . . 11

3 Emthatel Clpital/Bscmrlrrt Expadimre Ratio8 for Educatioa and Health, Trnrroir . . = . . . . . . . . . . 28

4 Plarmsd ~ o p m e n t / R e c u r r ~ t IkpakUttIre Batioe. Kenya 1 9 6 6 7 0 . . . . . . . . . . . . . . . . . . . . . . 29

SACK- PAPERS OK PROJECrS REVIEWED I N AFRICA RUBAL DWEZZPHMT S m Y

French Techuica1,Assistance ia Cwcrcon: A of thc Zoncs d'rfction P r i o r i t a i r a s lntegr& (7)rPI) and tbe ~ o c i i t a du Dcvuloppcmcnt du h'kam (SODENKAM), by C. Balloncqa and D. Ccnti l . Studies In Eoployoeat and Rural Devulopment No. 2.

Rural Development Program i n Ethiopia: A Ibviev of thc Chilalo .%&r:cultural Dzvelopmelrt hit, The Wolama Agr icu l tura l Oevtloplecnt Unit and Ihc Hiniaum Package Program, by T. Tecle. Studics 13 E q l o p e n t and Rural ;)cvclopr.ent NO. 3.

.Range Development i a r Ke~ya: A Wiw of ~ e r c i a l , Company, Ind Lvld11~1 and Group Ranches, by N. Jahnke, It. Ruthenberg, N. ThLw. Scudics i n Employment a04 Rural. Developwnt %. 4.

S d l Farmer Credit i n Yanya: A Rcvicv of Yajor Credi t S c h c m ~ , by J. D. vcn Pischkc. Studies in rPployarcnt and Rural Davelop~xmt So. 5.

Sral lholdor Tca Pro jec t i n Kenya: A Revim o f Kcnyn Tca Dcvelo?~zent Authority, by D. Sull'livan. Studies in Fzplo,mnt and Kural kvc lopncnt KO. 6.

Rural Development k r Kenya: A Reviev of Spccie'l Rural Dcvelopacnt Frogram, by N. Bedi. Studien i n Emp1ov . t s n a i C u r d Dcvhlopmcnt KO. 7.

Land Settlement in Kenya: A k v i w of tho Squatter Problcn, b7 P. :%ithi and C. Barnes. S tudies i n h p l o ) e c n t and Rural Dcvclo?zcnt Xo. 8.

Rural D e v e l o p w t -in Xalari: A R d e v of thc Lilongxc Iand Developrent . Program, by B. H. h e y . Studies in Ikployment and Rural Develo~xcnt

No. 3.

R e a c h Technical Assistance in M i : A R r v i w of Groundnut Operation and Cotton Scheme, by G. Anderson. S r d i e s in Employment and Rt.ral Development so. LO.

Small Scale Rural Indus t r i e s in Higerfa: A Review of I n d u s t r i ~ l Dcvelop~ent Centers, by H. Turner. Studies in kployment and Rural Iicvelop-mt : id . ll. - I Smallholder Tobacco ikvelop~lent i n Tantadia: A Revim of U r d o bid T d i Schemes, by ?I. Aga~wal and D. ~inseaeeyer . ' Studies i n Fmp10)ment ~d Rural Development No. 12.

Cotton Deve!opment in Tanzania: A Reviev of Cotton Program i n S~kumland , by rf. Collinson. Studies -h L y l o p e n t and Para1 Dcvc1oprc;lt ?!a. 13. . Rural Developnent in Tanzania: X !kvir.t of Ujaraa, I J ~ P. Mrahnn snd P. Robinson. Studies in Ernplopent 2nd Rural Devclcpcent KO. 14.

AD?fhxc

AFC

AID

AIDB

ARDS

BAT

W A

CADU

CDC

c m

m CUT

DM:

DDPC

EPID

KPL

KRB

PAC

FA0

Agrictil~nre %rket% md Dcoelopwnt Corporation Cl4alavl)

Agmq f o r I n t a n m t ~ Developrant

Agricultural .nd Indust r i r l Developrsnt lhDL (Ethiopia)

f f r i c u r Rural Developmt Study

Brit ish A w r i u n Tobuzo Company

Buraru pour 18 Daveloppcunt dm Productlob Agricole (Prance)

Chilalo Agricultural D e v e l o ~ t DDit (Ethiopia)

-1th Devaloprarrt Corporation (United Khgdasr)

-a R m c a i s a poor l a Developpaant den Fibres Textiles (Rmce)

Corpagnia J'Btudes Xndustriellee e t d ' l d ~ g e m e n t dn Terri toira (Prance)

k n t r a l Parsorme1 Agency (Ethiopia)

Cooperative lhrift Sebrv (Kenya)

Coop?zaeim Union of ZPaganyika, L? 1. (Tanzania)

Dietr ict Development Ccmdttee (Kenya)

District DePcl.opmmt md Pluming C a d t t e e (Tanzania)

Extension md Project hplercnta t ion Deparmt (Ethicpla)

Local Progress Enterprise (rmrpraan)

Econde Research Rureum (Dar err Salaam)

I& F-.I dtMd e t da &ation (Rtnce)

Food d l Agriculture Org&nization of tbe United Ihtions

1ntenul:iolril f o r Reconstrrrction a d Development (the World Bank)

IDA Intematianil Dem!oprmt Aswci.tion

IDS Institute for Daraloprmt S M i u @airobi)

XRAT Tn8titut da Recberchu pour Agrowrique eopicile (Rurec)

a9p m a uvutock ~.*.ropamt project

XM Keay. Tua -t htbority

LIaP Lilcmgm Lmd M o p r a ~ t m.r Isla Lint sad rrrd I(uk8tipd boud Chnt.ni.)

rwirid Input &ea amP, Zkl.vi)

&inn Package F'r0gr.r (Bthiopi.)

Mo~orrsgiurr &ency for I n t m u t t d Dmdopwnt W m y )

IhtiOEi). Bord OcPcloprcnt M t t e e (Kenya)

Offlce d u Probits Agrlcolu do Lkli

PM Programing d ~ ~ t a t l o n Lknagamt System (SBDP, Imyb)

PPO Rovincfal P- Off lcer (Kenja)

PSC Public M C e -aim o h l a w l )

~IK' ~ 2 g i d . ~av-t e t t - (hnrmir)

RDP Regid . Developmeat PIlnd (-)

BZm Reaidant Hiasion in &at Africa W r o b i )

ACAER S d e du &&it a t d ' ~ ~ t Brrrd Okdi)

S a x ~ocdtcs' C4nt.rdlc pour lu tt& do Tsrritoirc-Coopcratlon Cooperation m-6)

S f M Swdblb laternatiorul Developant Authority

SIP SaqoartiAl XDplenutatioo Program (SILDP,

SODEOCbn Socdtd pour 10 Dkl- d.1 IRa (Qmamm)

SRDP Special Rural Damloprmt Program (Kenya)

TAC Tmgtn~i lu A&culttud brporatlon (Trauob)

TAW T a u m i . Afriu llrtianil lhba

rU T.nrrmir Tobacco Authority

R11 Tmuaula Tobacco Board

USAID United States Agency for h t a r r r o t M D e o t l o ~ t

VSC Village Settlemeat (T.nuni.)

VSD V i l w a Sett lenut Division (Tmrurf.8)

YbW W o k Agrtculttud DcPclopvlt U d t ( E t h i o p i a )

YBO World W t h dtg.niu0h

". -- 1. Purrf years have seen a graving m r a n e r r in deva lopmt l i t e ra tu re md in the programe of national govetaraatr Ird aid agencies of the need to fwan attantion on the rainla8 of l iv iag standards in tha rura l areas of lean developed countrian. Despite thane advancer in theory and the accmmulation of practical expariance, the aarn of the vorld'n ru ra l population reuuins I:! poverty, the p r o x h t e caunen of thei r poverty r a a i e ~ diverre and, vhich in barely rurpriring, no blue- print8 for succem trava been made available t o planners of rura l devel- opma~t strategy. Vhere, a8 in moat nub-Saharan African countries, A/ the proportion of the population l iving In n ~ r a l poverty md dependent on agriculture in vary larga, davelcpment of : . rural rector is part i- cularly urgent. Reither can i t ba approaehc6.nrely a s a "holding operationn un t i l indltutrial and urban growth can abmrb large numbers oE marginal rura l people; rather, it has t o be adopted a s the most efficient mean8 of s~ t i ru la t ing w e r a l l devclop3tnt.

2. Of the 313 n i l l ion or no people of sub-Saharan Africa, i t is e r t imetd tht approxiarately nine out of ten l ive In ru ra l areait, v i th average per capita annual incomer of under USS100, derived largely from lw productivity agriculture and litrrntock. Altbough the s t a t i s t i c s in Table 1 are for a d l group of coantries they help U u s t r e t e sore broadly t y p i d characteristics. Agricultural production is mainly subsistence oriented and the proportion of the r u r a l populatim engaged in comercidl farming is extremely mall. Horeover, such increases in productivity u have. occurred in the couuterclal sub-sector have not had a s ign i f i cmt effect on rura l incomes a t large, md vi th in the ru ra l sector even kcamen from c-rcial crops tend to be lw. In general, the distr ibution of income i n mst of ttese countries is in fact relat ively equitable. _2/ Per capita cultivable land is higher in most

1/ Soutb Africa, Rhodesia, Mozambique and Angola do not come vi th in the - prwince of t h i s paper.

2/ See Adelnn, I and Xorria, C. T., "Who Benefitn from Economic Develop- - merit?" Appendix; Paper presented to tbe International Xeeting of Directore of Development Researc? and Training, Belgrade, 1973.

of Africa than in the more densely populated par t s of Asia ( for example, an average of 7 . 0 ac re s in Ethiopia compared with 0 . 7 in India) and there a re of course f a r grea te r areas a s ye t unadapted t o cu l t i va t i cn , but s o i l s rare in general poorer and awerrage y ie lds of pr inc ipa l crops lover than irn Asia. 11 Vitb population growing a t r a t e s of 2-3 .5 percent per year, pressure on land has been r i s i n g rapidly. Nor has there been m c h r e l i e f from e f f o r t s t o induscrial ize; urban q l o y m e n t oppor tmi t i e s In sectora of high labor productivity have not been Facreasing a s f a s t a s might be hoped. Indurtr i r l l production in these countr ies has t r ad i t i ona l ly been cap i t a l intensive and r e t i a n t on imported inputs; there have been r e l a t i ve ly few indigenous entrepreneurs and manufacturing industry has had few linkages t o domestic resourcen o r t o ru ra l demand. In f ac t , with- out a s ign i f icant r i s e in incomes i n the r u r a l sec tor there cen be l i t t l e scope fo r demand-led grcuth Fa industry.

3. Ihe inmediate object ives of r u r a l development pro jec ts of course vary, a s do approach- t o s t ra tegy , but the basic goal which underl ies the argument of t h i s paper &races both long-term e c o n d c growth and the equitable d i s t r i bu t ion of beuefi te accruing from growth. Such an idea l i ep l i ce t ha t i n t e rven t i am should mot a h only t o r a i s e Lacom leve ls , but a l s o to eneure that the poorest sectlocm of tha c-tp have accees t o services which vlll enhance t h e i r productivity and t h e i r s o c i a l v e l f a r e .

4. Interventions which seek t o break the cycle of low productivity- poverty-low product ivi ty in ru ra l a reas need i f they a r e t o be guaranteed any measure of success t o be based an an iden t i f i ca t i on of i t t t contr ibutory causes and an understanding of t he processes of i n t e r ac t ion betveen them. The sources of cons t ra in ts on ag r i cu l tu ra l product ivi tp a r e In essence familiar. But planning for ru ra l development in Africa has been, and continues t o be, hampered by lack of da t a and the lack of a framework of analyeie vhich provider for the clear-cut i den t i f i ca t i on of those cons t ra in ts on productivity which per ta in ia spec i f i c areas, o r fo r t he predict ion of responses t o intervention. In t h e be l ie f t ha t an examhation of past experience could be helpful , the Africa bra1 Development Stucly undertook a serdes of revievs of rural development pro jec ts in African couutries, v l t h a viev t o evaluating the poten t ia l of d i f fe ren t typas of s t ra tegy under d i f fe ren t c o n d i t ~ s , describing the typ ica l operat ing problems they may face, aad providing some t en t a t i ve guidel ines f o r fu tu re plarmFag.

5 . Lack of da ta and of a framevork of ana lys is a r e not of course the only cons t ra in ts on the success of interventions: plnnning f o r rurd dwe l - opment has very of ten t o be reconciled t o the existence of government pol ic ies and soc i a l h t i t u t i o n s vtrich have, on balance, an adverse e f f e c t

- - - - -

11 Lawrence D. Stamp and V.T.V. Mrgan, Africa: A Study i n 't'ropical - Development, 3rd cdn. ; New Pork, Viley, 1972 .

on r u r a l welfare. la addit ion t o shortages of f i ~ c a l resources. there .Ire tuo other binding and more pecul ia r ly African cons t ra in ts on the rcope of intemencions: the s ca rc i t y of trcined manpower ava i lab le t o r u r a l areas, and the veakness i n most of these ccunt r les of l oca l govern- --rlt adminirtration. By examining the administrat ive forms adopted f o r ,he implementation of d i f f e r en t types of projects some conclueions can be d r a m a s t o hml t o tackle such l a t t e r obstacles i n future.

6. Tbelvs reviews of r u r a l Jevelopaent pro jec ts i n sub-Saharan Africa and a revitw of spontaneous squat te r settlement i n Kenya rrere undertaken L/ fo r analy3is by the ARDS, which drew in addit ion on the r u r d sector survtays of Kenla and Tanzania carr ied out by IBRD, i n Fa l l 1972 and Pa l l 1973, respectively. All t he project revievs vere based largely on data col lected previously by project au tho r i t i e s and other agencies. In sow, cases, the i n foma t ion ava i lab le vas very lirnited: even responses normally considered quantif iable, such a s increnses i n agr icu l tura l prodrrction, could not (as f o r the Ujanrae pro8ram i n Tanzania or t he French Technical Assistance Programs in Uali) alvays be assessed with any accuracy.

7. lhe pro jec ts a r e m e t e a s i l y introduced i f c l a s s i f i ed i n to four broad types, accordiag t o t he i r i au td f r t e objectives:

The Projects Rev invv

(a) CamDOdity, o r "export crop" projects. The e a r l i e s t inter- v e n t i o n ~ in the lw income ag r i cu l tu ra l s ec to r aLaed to h c r e a s e the production of export crops by d l h o l d e r s , and vere fiuanced by European co l lwrc ia l colponies, development corpo- ra t ions o r na t iona l gwemments. Four s e t s of such pro jec ts were reviewed. The ltmya 'lea Development Authoritx (RIDA) was establie~hed in 1960 by t h e Kenya Sovernrseat, a s s i s t ed by fore%@ loans. By 1972, KTDA had brought 61,500 ac re s in t en d i s t r i c t s of the country under tea cul t iva t ion by approximately 66,500 smallholders, giving an average t e a holding of 0.93 acres. S m o l d e r s present ly account f o r a p p r h t e l y 21 percent o f t t h e sormtry's t o t a l t e a production. The development of smallholder tobacco production was undertaken in Vrambo, Tanzania, by t h e Tmzaniam Agric*dtural CorporeLion in 1951, and i n Tumbi, nearby, by the Br i t i sh and !.mericaa 'lobac o Company, in 1954. Both

I/ For ease of e n w s i t i o v the term pro jec t w i l l be used to def ine the - r a the r diverse. g r w of r u r a l development ventures under consideration. While it w i l l be c l e a r tha t many of then do cons t i t u t e "projects" i n the accapted sense, o thers such a s t he Kenya SRDP and the Ujamea movement in Tanzania a r e much broader i n scope.

21 heviews were produced between F a l l 1972 and December 1973. -

these schemes a r e n w managed by cooperative s o c i e t i e ~ . By 1970 the Ur& scheme i n ~ l v a d over 2,400 farmers with an average of 2.9 acres under tobacco, and the Tumbi scheme 4,600 farmers v i t h an average tobacco acreage of 1.7. I n Halli, development of cotton production was undertaken in 1952 by the g w e r n w n t v i t h assis tance from the Caqagnie Prnncaise pour 18 Developpcpcnt des Fibres e t Text i les (CFDT), arrti a r a the r similar scheoa fo r groundnut production, Operation Arachide, was r t a r t e d in 1967 by the Bureau pour 1. Developpe= ~ l l t do Production Anricole (BDPA). Both rewived aseiscance frtra the Ponds d'Aide e t de Cooperation. Ey 1972, the CFDT scheme involved a population of one mil l ion, vho accounted f o r v i r t u a l l y a l l M i ' s cot ton production, and tha t of the BDPA, cotrering a b u t 750.300 people, accounted for about half of the c a n t r y ' s t o t a l g r o d n u t production. The expansion of cot ton pr tduc t ion in Sukvaland (population 2.5 mil l ion) i n North Went Tanzania, wan i n i t i a l l y stimulated by the govercusmt i n the l a t e 1940s. 'Ihr number of farmers producing cotton increased from 203,000 in 1948 t o 315,000 in 1967, aqd while the average s i z e of operat ional household holdin5 remained cons t ta t a t 6.6 acres , acreage d e r cotton per f a m increased from 0.67 ac re s i n 1948 t o 3.36 acres i n 1967. Total cotton product im in the a rea increased from 40,000 bales in 1950 t o 405,000 ba les In 1970. In all of tha c o m d i t y project#, except tt.it i n Sukrmrland, ag r i cu l tu ra l services have been provided t y pa ra s t a t a l bodies or p m i e c t au thor i t ien which a r e t o a l a rge ex ten t autonomous, w e n though minis t r ies of agr icu l ture m y nominally have jur i sd ic t ion over them. Such external ly ass i s ted p ro j ec t s a r e generally character ized by higher resource costs , b e t t e r aaministrat ioe coordination and higher densi ty of f i e l d s t a f f than thone, l i k e thu S u M m d s c h m , vhich havu not bear s o aeeis ted.

(b) Intenrated Developavnt R o l e c t s . Pro jec ts which a h t o r a i s e living standards through the introduct ion of d iverse serv ices f a l l i n t o two types: regional pro jec ts f h a n c e d princLpally bg donor agencies a d planned and implemented t o a la rge extent by expatr iates; and those undertaken by na t iona l qovernmeats and hpleuented la rge ly t h ~ o u g h t h e i r ex i s t i ng aa. n i s t r a t i ~ e s t ruc tures . The f i r s t type is represented in the study by the ChlLlalo cultural Developarenc Unit (W), and th+ Wolarr*, Azr-icUrt~ral Development U n i t (UADUj i n Ethiopia, t he Lilongwe

d Develo Proman (LLDP) i n M a v i , and the seven Zones %tion R z a i r u I n t e g r a u (=I) and ~ o c i e ' t d de Developpe- mextt de Hlum (SODEHKAM settlement scheme, both Ja Cameroon. Keuya's Special Rural Development Rogram and the Tanzania Ulumaa movw-s~t represent t he second. The donor-aided integrated pro jec ts have introduced p r d a c t i v e and s o c i a l services eirmultaneouely in the be l ie f t h a t a c r i t i c a l minim= e f f o r t is

5,6311, covering anr two mfllloa people, or about 15 percent of tb. country's rural poprilatim. Ibo strategy seeks alao to docoatralizo tba h k r b t r a t l o a of rural raas and axplAcitly t o fos tar tho partfcipatloa of locally elected repremantatives in tho plannhq d impl-tation of projectr vhich b111 affect them. Sfnco 1972, the ultLMte authority for devalopmemt projects and for the allocation of f i sca l remurces in rural areas hu boen vested in r e g i o d adminis- t r a t i w e , rather cham in the central riPi.tries.

P u n c t b a ~ l Projects. Yhilo th. rrgiorul projects are m u l t i - f au t ed . €unctiaru< projocts aim to rsaoclr s im le . c r i t i c a l obstacles t o d w & t . Such projects have clear and limited objectives and tb.t do not gau ra l l y n q u i r e complex a h h i i s - t ra t ivo forme for choir irplrrmtatioa. Iba smallboldrr credit project6 of tho Agricultural Pfarnco Corporation (AFC) axcaplify such tioorl" approach t o develomtat. Tbe APC v u established in 1963 v i th d&r u s l s t ance .ab has f h c e d a h , rge number of rural sector a c t i d t i e s throughout the corntry, benefiting both large md m - s c d l e farmers. AB of _&mh 1971, its assets totalled USS33 rillLon, of which USS2B a i m were f i n m c d by t h t government. Ihrough 1972, the Corp!eration drfioad "W" f a r r r s u those earning under lE$1.,400 per .no\a, but several of its md lho lde r credi t projects have Ima d i m t d a t groups earning substantially lesm than this. D u r a ET70/71, it loaned a to t a l of USS4.3 rFll.ioa, of vhicb about U) percent went t o d l h l d e r s . It is generally b a l M that it. interes t ra tes of 7.5-8.0 percent per anazrp oo agp'llhnlder credit are substantially lower thim~ those chargad by tradit iondl soorces.

Submetoral Project#. Such projects u, the Kenya Livestock kveibputent R o j u t (KLDP), the Indaatr t i l Development Centers in Bligeria and tba Ethlopim Mnimm Package Program W) a i m co stimulate the developmeat of rpecific subseetors, usually apev vide geographkd areas, by the delivery of basic s e d c e s . Tbe KLDP began o p e r a t f o ~ in 1970 ucristed by I D A and SIDA, ubfeh together loaned it US$11.4 m i l l i o a for the period 1970-74, and, t h r a y h its lending schare, it bas dweloped company, individual a m l graap owned ranches in the Central, Eastern and Rift V A U W provkrcu. Its developneat of grazing bloeL. in Northerut province ~ l v e s d i rec t grants and is rsslsted by USAID. Total cost for tha g ruk rg block scheme i s srpected to b. VSS1.5 million. Industri.al dwelopment cmrers were established v i t h USAID assistaace in &ria in 1962 md in (kerri tho following year, working in c o n j ~ c t i o n v i th the Rigerian Gova rmmt*~ S r u l l Industry Credit Schemes.

Betwrar 1969 and 1972, loans w r t h USS2.7 mil l ion vere gr.rrted d e r the centers ' awp ice r t o 194 -11-wale burlnerraao in mch W u r t r i e r am baking, ruvacllling, printi- md vehicle repa i r , 64 percent of vhom vere re r ident in turd arum. Tba HPP m a undertaken by the Ethiclpim CoPatr t~mt t o de l ive r critical r e rv i ce r t o agr icu l ture on a wider geographical bani. than the opera~tionr of the hro integrated r e g i d p ro j ec t r CAWT und W. h r i 8 t e J by S I M and X M , it provider fo r ag r i cu l tu ra l ar tenrion, the i r a t e of inputs on c r ed i t , coopccratiw development m d the conrtruct ion of feeder road.. f o u l project coat t o 1976 i. e a t h t e d a s US$28 a i m , a d by 1981 ewerags vill extend t o the country'r e n t i r e ag r i cu l tu ra l population, excluding tho mlo~rdic t r i b u .

8. In tb~e absence of intervention, cmniderable iaprovemmtr i n liv* standardla can be brought about through mmmmity-initiated "relf- belp" rchemes. An a r e s u l t of landlcssness and l ack of employment opportunltier, about 300,000 bnyans of various t r i b a l e r ig in s from the Central, Wartern and Eastern Provinces have er tab l i shed rqua t te r s e t t l e - ments in the Ccust and Ri f t Valley Provincer. W e they receive feu, i f my, goventmatt s u v i c u , tbey have neverthelea8 es tab l i rhed rchoolr and heal th c l i n i c s . Data on three such s i t a r vcre co l lec ted f o r the ARDS .

. . 9. The e p u p of projects reviewed represents a d ive r s i t y of Inmediate objec t ives a d of methods f c r achieving them, though v i t h the exception of t h e conmadity projects , all were designed v i t h the underlying objec t ive of isproving rural welfare. Their inracdiate a* notwithstunding, all have brought abcmt increases in product ivi ty and have raised aggregate income l e v e l s within t h e i r t a r g e t area., though with vary* degrees of succesr and v i t h varying degrees of equity. The emu* sec t ions of thie paper focus on the &n ice of se rv ices t o be delivered to1 rural eoPamrmities and the choice of methods f o r t h e i r delivery under given conditions. l%e p r inc ip l r underlying the argument is e cmcept of rural development vhich involves both growth abd the equitable dis tzlbut iorr of the bene f i t s of growth.

10. The lw income rural sec to r in African cormtrier is c d y characterized by f r v t e d murkets and lw and f luc tua t ing ag r i cu l tu ra l y i e ld s which talgethcz make for a high degree of uncertainty a r t o irramer, ag r i cu l tu ra l p r i ce s and the a v a l l a b i l l t y of food in t h e off-rtasbn.. Where people a r e near the n r g i n of ~ubs i s t rmce and where marketr a r e i f r agma i td , the promotion olf crop spec ia l iza t ion in the u r l y years cf development u y

under certain conditions be haraful, even though regional specialization may evolve ae a longer term consequence of development. But successful e f fo r t s t o r a i se food production through the introduction of technical innovrtioas are by no xteans a simple matter ei-her; they msst be accompanied by the organization of integrnted markets so that marketable eurpluses can be disposed of and de f ic i t s in bad yeare supplied.

11. The d e v e l o p n t of new farming systems for poor cult ivators and the organization of integrated markets vfll not necessarily reduce income dispar i t ies , t=! which insufficient at tention has been paid in past projects. Raising aggregate levels of production and income in project areas can i n fac t exacerbate income inequali t ies i f the n w farrning system favors one ecological zone over another, or is particu- l a r ly ar i ted t o certain s ize classes of farms.

The Ueed for Balanced Farming System

12. While the export oriented comedity projects studied raised the cash incomas of the smallholders they affected, they were characterized by a general reluctance t o provide services for the production of food crops o r livestock; and a l t h g h they introduced e f f i c i en t marketing systems for the export crops they promoted, they gave l i t t l e or no a t t a t t ion t o developing trade in food crops. The exclusive production of axport crops m y not be o p t i w l in terms of long-term economic growth. Purthwmre, where food markets are fragmented, such l~onocultural systems may also have an adverse ef fect on welfare. An exadnation of trends in agricultural production in the cotton growing area of Sularmdland i n Tantanfa v l l l help I l l u s t r a t e the complex interrelat ionships which exist between production of food aid non-food crops, and vill give weight t o the arguPent that , optimally, services should be provided t o f a c i l i t a t e both. Agricultural policy in Sukumaland s h e the l a t e 1940s has been orianted towards cotton production and, frcm 1950 t o the mid-1960~~ annual income from cotton on an average sized f d y farm of 6.6 acres increased from USS6 t o ESS100. During this period, foodgrain production shifted from sorghum t o high yielding maize, and more recently, fram maize t o rice. Meanwhile, the volume of t o t a l foodgrah production dropped and purchases of food increased. k c h of the acreage previously under foodgrains was shifted t o cotton: during the period 1948 t o 1967, the area per farm al lo t ted t o cotton increased from 0.67 acres t o 3.36 acres. Bouever, f a w e t s s t i l l wanted to maintain mlninnrm levels of food production fo r domestic use; in such cases labor and other on-farm resources l a y be diverted away fram production of the export crsp to food crops, t o sa t i s fy the household's consumption needs, res-.-lting m lover levels of productivity of the export crop ttm might be expected frum a given technical package. Evidence suggests that in Suktnnaland, labor IS a crueia l constraint on the adoption of intovative practices in cash erop produetion. For example, although veeding cotton in January eould stlbstantfally increase t h e i r cash r e t t m a , farmers continued to

a l loca t e t h e i r searce labor t o t h e p lan t ing of maize. A/ Such may be the case .ither because the innovations thearselvea appear r e l a t i ve ly unprofitable i n the context of local resource endovmcnts, o r because fanners a r e aver- t o rimklng a b o r t a m of food in the n r b t during the off-season. Where farnera wish t o maintain m i n i m u m l eve l s of subristence production, product ivi ty in the cash crop har t o be high f o r increares in carh crop output t o occur a t the in tenr ive rather than the ex tena im mrg in .

13. Farmers1 concern t o maintain food supplier may a f f ec t fac tor productivity in lush crop8 adverrely even i f they do not attempt t o be ee l f - suf f ic ien t in food production. For example, a s vas obrerved in the ear ly years of t he Urambo tobacco scheme, food shortages in the o f f - a~a ron m y force them t o re11 input r purchased f o r cash crop production t o buy food, thus a f f ec t ing y ie lds and a l s o the repayment r a t e of credi t .

14. I f farrwrs with bigger holdingr a r e more ab l e t o assume the r i r k s of rpecial izat ion, the prowt ion of the carh crop alone may lead t o greater inequality.

h c r a a r i n g ProdPcrtion in M t i p l e Cropping S y s t w

15. In cont ras t t o t he caoaodity pro jec ts , which a s o r ig ina l ly conceived were cha rac t e r i s t i c of the colonial phase of r u r a l development, the more recent integrated r u r a l development pro jec ts have been designed t o increase overa l l production while min t a in ing a d ive r r e pa t te rn of agriculture. T h d r experience ah- t h a t s imilar r a t e s of success f o r d i f fe ren t crops o r in areas with d i f f e r ing resource emdovmeats may be d i f f i c u l t t o achieve. CADU1s m j o r *act on l eve l s of production has been on wheat, 21 desp i t e e f f o r t s t o t h e contrary and despi te t he f a c t tha t the acreage under barley has remained greater ; there appears t o have been a decl ine in recent yaars in the production of milk, a t t r i bu t ed t o t he subs t i tu t ion f o r wheat cu l t i va t ion of former grazing land. Large surpluses of wheat have b u i l t up over a period of only t h ree t o four years, and have led t o p r o b l m in ~ a r k e t h g and the f i x ing of prices. To take another example, while t h e LLDP in Wavi aimed t o increase y ie lds of a l l t he pr inc ipa l crop8 govn jn t he pro jec t a rea , it intended t o obtain its major e c o n d c re turn from high value groundnuts. However, i ts ef forcs t o stimulate groundnut production have been conspicuously unsuccessful: y i e ld s declined cons is ten t ly over t h e Pro jec t ' s f i r a t four years ( t o 1972173) t o a l eve l aubr tan t ia l ly b e l w those outside t he pro jec t area. UP'S mlin success har been in the product im of @roved m i r e :

1/ See 8. Ruthenberg, ed., Smallholder Farming and Smallholder Developaient - in Tanzania: Ten Case Studies, Mrika-Studien No. 24, Wunich: Weltforum Verlag, 1969.

2/ Output of wheat in the pro jec t area increased from 32,000 tons i n 1966 - t o about 102,000 tons in 1971.

Table 2: PBafECTED AHD ACTUAL YIELDS OF U I Z AND GROUNDNUT L I I m c m LAND D m - PBOGBAH, HALAWI

1969/70 - 1972173

I h i r e Yield (lb/ac) C r d e u t Yield (lb/ac) Seaaon Ikoj ac ted Ac trul Projec td Actual

1969/70 1,263 1,028 531 553 1970/71 1,322 1,210 541 494 1971/72 1,384 1,714 552 468 1972/73 1,449 1 , 455 563 N.A. /.

Source: Based on the Ph.se I Appraiul of the D P sad the data collected by LLDP'a evaluation unit.

/a P t a l h h a r y resu l t s indicate that average yield is belov that of the preceding beason.

average yields for the aame four y u r a conformed to p n j e c t i o n s despite the i r annual var iabi l i ty which vu due ~ain lp to veathcr conditions, and the acrenge under m i r e more thaa doubled during tbis period.

16. WADO'a projected targets fo r v i r tua l ly a l l the principal crops g r m in the project area have been rapidly surpassed. Interestingly, its research component has been f a r w r e limited than tha t of e i ther CADU or the LLDP ,and has been largely confined t o f e r t i l i z e r trials. Observers a t t r i b u t t the project 's success in t h L sphere t o the area's very f e r t i l e e o i l ~ d t o the W o k farmers' wllliqness t o adopt innovations, combined with an ef f i c i en t extension sccvice.

The Role of Maptlve Bcsearch

17. Althoqgh it ia unlikely that research can ever guarantee tbe success of i n t e ~ t f o a s in ru ra l areas, such divergences between projected production targets and the ac tual rcsultrr of intervention an those experienced in CAKNJ and the LU3P r igh t possibly be reduced if project author i t i re could achieve a greater under@-ing of the inter- action@ of social , economic aad ecological variables in existing farmlag system, o r of the c b q t a in these relationships t h a t a re generated by the introduction of innovstione. Many of the p r o j e t s revieved by the AWS have not be- ve l l equipped t o develop such an underscanding durtng the course of implementation, o r to adapt the i r a c t i v i t i e s in the l i g h t

of neu information. Project-linked research c f t en needs t o encompass w r e than a g r o n d c t r i a l s , and should a t tach Importance t o the adapta- t i on of technology fo r the pa r t i cu l a r conditions in which i t :c t o be used, taking in to account soc i a l and economic a s v e l l a s ecological fac tors , Mapt ive research in u u l t i p l e cropping s y s t e m i n undoubtedly complex and demanding a s is the establishment of an ef fec t ive l i n k between research vorkers and extension s t a f f , who can prove invaluable i n feeding back t h e i r observations. Nevertheless it can help t o ind ica te appropriate remedies where adverse responses have btcll -tit ip.td. For example, the decl ine in groundnut y ie lds in the U P area has not yet been ea t i s f ac to r i l y explained. Possibly the applicat ion of sulphur, introduced in small amounts a s pa r t of t he c r ed i t package i n t he 1970/71 season and the rea f t e r used in d r a s t i c a l l y increased quant i t ies , has adversely affected the s o i l pH value. Rovever, groundnut production has a very high labor requirement and i t may be t ha t , a s in other cen t r a l Mr ican countr ies a l s o experiencing decl ines in groundnut yields. an increasing proportion of scarce farm labor is being al located away from groundnuts t o t he production of high y ie ld ing mnize. Unti l research can reveal vhether changes in the s o i l pH, the pat tern of labor a l loca t ion , r e l a t i v e pr ices o r some other f ac to r is a t vork, i t vill be impassible t o s e l ec t an i n t e l l i g e n t course of ac t ion i n t h e l i g h t of t h i s trend.

Intra-Regional Imccme Dispar i t ies

18. Grovth need not make f o r a w r e eves d i s t r i bu t ion of income, and i t may be r e l a t i v e l y easy t o r a i s e aggregate incomes o r l eve l s of production v i t h i n a given region through concentrating serv ices on one well endowed geographical a rea o r c l a s s of farmer, o r by promoting one par t icu lar ly p ro f i t ab l e crop, v h i l e bypassing a subs t an t i a l sec t ion of t h e population.

19. Planning f o r t he reduction of intra-regional income d i s p a r i t i e s is demanding. Given the limlr,ations imposed by the sca rc i t y of t rained manpower, the l imited choice of ava i lab le technologies and the paucity of information, fu tu re r u r a l development pro jec ts in M r i c a may be forced t o concentrate t h e i r initlal a c t i v i t i e s around the introduct ion of simple ag r i cu l tu ra l innovations which, v i t h only s l i g h t local modification, can be e f fec t ive thraugbout t he t a rge t area. The a l t e r n a t i v e of designing d i f f e r en t farming s y s t e m appropriate t o d i f f e r en t d i s t r i c t s within the t a rge t area, utrfle a b e t t e r rec ipe fo r intra-regional equity, may prove 80 cos t ly t ha t o ther p a r t s of the country may be c-surately deprived of at tent ion.

20. Agricul tural extension serv ices in the developing world have t r r d i t i d y suffered from shortage. of f i e l d s t a f f , and such s t a f f a s they q l o y a r e of ten ill-paid, i l l - t ra ined and ill-equipped t o i den t i fy tnd solve problems a t t he amall-farm level. The extension serv ices of many of tha pro jec ts r e v i d have been designed t o provfde intensive coverage (I.@., a high r a t i o of extension agents t o farmer.) in the be l i e f tht high s t a f f dens i ty i a l i k e l y t o produce high r a t e s of adoption of ag r i cu l tu ra l innovatiow. A/

Intenalve Coverage and t h e Constraints on Agricul tural Innovation

21. 'Ibe f inanc ia l coat8 of d i f f e r en t extension ayst- vary according t o w h a t is spent on t ra in ing , facilities and a t a f f s a l a r i e s , in addit ion t o t he s i z e of t he population sewed; highly in tens ive axteamion systema involving la rge recurrant budgetary expenditurea have t o j u a t i f y themeelvea against o ther a l t e rna t ive investmanta. I n LLDP t he cos t of extension is r e l a t i va ly lw. Ibc o r i g i n a l pro jec t plans ca l led f o r a s ta f f l fa rmer r a t i o of 1:200, t o be reduced a f t e r t he f i r s t 2-112 years t o 1:400 and subsequently s tab i l ized a t 1:600 o r 1:800. Over t he pro jec t ' s 13 yeare of operation its planned expenditure per family on extension. excluding the cos t of t ra in ing , is DS90 cents per annun. Indicat ions that the spread of innovations i n t h e pro jec t a rea has been ra ther e~lw suggest tht such a lou investment per farmer in extension may have been insuf f ic ien t ; t h e rep l ica t ion of such investment on a nationwide male would involve an annual expenditure of nearly USSO.9 mil l ion, o r over 1.5 percent of t h e Hal& Goveruntent's t o t a l out lay of $58.2 nmlllion f o r 1972. The investment in extension has been much higher: i f the cos t s of executive and f i e l d s t a f f p lus

:that of t he input package are included, t he t o t a l cos t per farmer s ince t h e pro jec t ' s inception has been USS200, o r USS18 per annuat. In t h i s case t he recurrent cos ts of a countrywide s e m i c e on t h i a s ca l e would be cr ippl ing.

11 The following estimates of exteosion agent t o farmer r a t i a s a r e dravn - from the pro jec t reviews:

(1968) Tanzania 1:1,500 . Suhmraland 1:1,020 (1968) Kenya 1:500 . RDDA 1:120 (1968) hlavi 1:1,200

o r 1,300 . LLDP (projected) /a 1:200 I n 1968,Ethiopia, with a rural population of 22 mil l ion, employed only 124 extension agents. 1972173 r a t i o s in CADU and WADU vere 1:470 and 1 :335, respectively.

/a Not rea l ized u n t i l Phase 11.

22. Heatluring the e f fec t iveness of ag r i cu l tu ra l extension is fraught v i t h meth~Aological problems, some of vfiich a r i s e from the in te rac t ions of tntteneim a c t i v i t i e s v l t h those of o the r services. while others may be introduced by the physical var ia t ions ( for instance in s o i l and r a i a f a l l pat terns) betveeu farms receiving t h e same treatment. The degree of soc la l cohesion v i t h i n t he t a rge t colnaunity has a l so t o be taken in to account s lnce it of course influences the coors;mication of ncv ideas. In agro-indrutr ial en t e rp r i s e r including cash crops it is oft- r e l a t i ve ly easy t o measure adoption r a t e s , s i nce fanners' acceptance of ncv inputs and inaovative prac t ices clln usually be gauged by t h e i r use of other services, much a s i n s t i t u t i o n a l c r ed i t and marketing f a c l l i t l e s , for which s t a t i s t i c s may be eas i e r t o obtain. In the case of food crops, however, farmers may ac tua l ly adopt innovative prac t ices p r o w t a i by the u t c n ~ i o a serwice, such a s nnr plant ing, o r close veedlng, without necessari ly ruing a pro jec t ' s services. Supposi- t ions about the effect iveness of i n t c ~ ~ i v e cwerage may be w d i f i e d fur ther i f agents* l eve l s of t ro in lng a r e considered. I n Kenya, for example, most of the Junior Agricul tural Ass is tan ts In the gwernment's extension serv ice have undergone only o one-ucek course a t a farmer t ra in ing center , vhereas junior s t a f f in t h e LLDP in H a h i have been given a period of pre-training and p rac t i ca l experience in addit ion t o an intensive courise in p rac t i ca l agricul ture. Transportation may be another l imi ta t ion on effect iveness vhere fa- a r e sca t te red o r country d i f f i c u l t t o t rave l , even i f s t a f f / f a r ae r r a t i o s a r e high.

23. Intensification in i t s e l f v F l l of course be f u t i l e i f the Innovations t o be promoted a r e not inherent ly prof i tab le ; i ts payoff may be subs tan t id l ly reduced i f the extension s t a f f a r e unable t o idenD**y and solve problems a t the farm level . It may, howwer, of ten be the case t h a t ]regardless of t he densi ty of cwerage, the p r o f i t a b i l i t y of new techniques and Inputs, t he l e v e l of project Investment in t ra in ing of extension agents, o r the type of staff incent ive schemes adopted. the success of an extccnsiod serv ice in promoting innwa t ions vill remain qu i t e dependent on the a t t i t u d e s of t h e t a rge t population t o pro jec t a c t i v i t i e s a t l a rge and by t h e i r a b i l i t y t o bear r isk.

24. Data from a survey takem i n the LLDP in 1970/71 suggest t h a t *ere a profitablte technical package is being promted, y i e l d s vill be pos i t ive ly correlated v l t h t h e number of exteasiw visits, but tha t if the technical package is not inherent ly p ro f i t ab l e t h i s need not be t he case. While maizts y i e ld s wcre pos i t ive ly correlated v i t h extension v i s i t s , t he da ta a m b i t a curious re la t ionship between numbers of v i s i t 8 and yie lds of gro~mdwts . The groundnut package promoted by the project vae d e widely ava i lab le before i t bad been su f f i c i en t ly tes led , and as has already hem observed, he use of sulphur a s p a r t of t he package may d i r e c t l y accolmt f o r t h e decl ining groundnut y i e ld s in the area. Farmers receiving no extension v b i t e during t h e year had mean y ie lds of 440 lbs/acre, d i l e those receiving f i v e -its averaged 365 lbs/acre, and those v i s i t ed between 11 and 2 0 t imes averaged only 312 lbs/acre. W y &ere over 20 visits were made w a s t he re a pos i t i ve cor re la t ion between in t ens i ty of extension and groundnot yield.

25. The folloving two examples suggest that an extension service, however densly i t covers the population, may be unable t o induce increases in productivity i f i ts agents a r e insufficiently aware of technical p r o b l w and pract ica l d i f f i c u l t i e s a t the farn level . Tobacco yields in the U r e scheme in Tanzania in the l a t e 1960s were lover than those in T d i , and th i s has frequently been at tr ibuted t o a shortage of exteasion s t a f f in the former area, The revicv undertaken for ARDS pointr out that agcntlfawer ra t ios actually declined in both schemee 1_! during th i s p e r i d , but productivity in Tumbi nevertheless increased. Ur& fernrere tended t o overcultivate and thus t o c h a u s t the s o i l , and the exist ing extension s t a f f could very possibly have averted t h i s had they dwioed suitable crop rotations. The extension services of both ZAP1 and SODENKUI in Cameroon work on the ~ssrrmption that the primary causes of resistcnnce to innovation a re psychological, and that only through p e r m 1 contact v i th the agenc, or vulgaritmttur, can the farmer be convinced of the usefulness of new techniquts. tlealwbile, many practical d i f f i cu l t i e s vhich hinder the i r use remain largely unsolved. A survey undertaken in the ZAP1 revealed that although large numbers of farmerr were convinced of the value of copper spraying t o combat brown rot in cacao budst, one in four did not have treatment equipment, two i n four uho had the equipment had d i f f i cu l ty in using it, one i n three had di f f icul ty in obtaining the necersary water, one in three could not c m d sufficient labor, and one in two had received the equipment only l a t e r than the date they vished to begin the treatment.

A l t e r a t i v e Approaches t o nttension

26. Several projects have solqht to promote agricultural innovations using members of the i r target conmunities, rather than by relying ent i re ly on faxm v i s i t s by extension s t a f f . Under certain conditions it is possible thet popular in teres t in innovation may be generated on a large scale, i f the prof i tabi l i ty of n w techniques and inputs can be readily observed. WADU has achievecl higher ra tes of adoption than vere projected, and its extension service has used "demonstrator fields" t o popularize innovations, generally bor rd tng the f i e l d s of different farmers, or *'demonstrators," fo r different crops simultaneously. The cohesiveness of Volamo society and the t radi t ional ly equitable d is t r ibut ion of land are said t o have contributed in large part t o the vide success of UUIU's extension service.

27. CAW und ZAP1 both use a rather different technique, that of on-farm demonstrations of innovative practices by *'model farmers" or "f-r leaders" who a r e members of the target colmunities chosen by the extension service. However, there a re more constraints on innovation than

11 Betveen 1965 and 1970, the agentlfarmer r a t i o i n Uraah declined - from 1:323 t o 1:802, and in 'Rrmbi f r m 1 : l i C co 1:575.

the lack of information, and a danger e x i s t s where t h i s approach is re l ied on heavily tha t the non-innovatory a t t i t u d e s of the poorer sec t ions of the cozmunity may restain unchanged; such farmer leaders may of ten be r e l a t i ve ly w e l l favored both soc i a l l y and econamically, and i n t h e i r a b i l i t y and willingness t o innovate m y be a typica l of t he population a s a whole. Host of the ZAPIS' farmer leaders were found t o be young, a l l were l i t e r a t e (Cameroon'> male l i t e r a c y r a t e is about 57%) and 47 percent of them could be c l a s s i f i ed am "large sca le planters" whereas only 17 percent of other farmerr in the ZAP1 areas f e l l i n the same s i ze c lnss . It is inportant t o recognize too tha t those selected a s fanner leaders by extension agents may not necessari ly have respected s t a t u s within the community, but may instead have been chosen f o r such o ther a t t r i b u t e s a s an a b i l i t y t o speak the language used by the extension service. Their usefulness i n popularizing innovations v i th in the coqpu.ity may thus Le limited.

28. Leonard's data 1/ s h w that in Kenya's Western l rovince the average extension agent makes 57 percent of h i s v i s i t s t o progressive farmers, vho cons t i t u t e only 10 percent of the region's t o t a l fanning population. That extension agents a r e apt t o focus a t t en t ion on those farmers (usually the r icher ones) vho s h w wst apt i tude fo r progress is noted in several of the project reviews and has been widely observed in the l i t e r e*u re on extension. Such a tendency might have l e s s se r ious long-tern consequences fo r equity i f r u r a l society were per fec t ly cohesive. Unfortunately, c l a s s and o ther soc i a l b a r r i e r s may l imi t the spread of nev knwledge. Moreover, i t is un rea l i s t i c t o ass- t ha t all sect ions of a farming couanunity w i l l be able t o b%.: r i s k equally e a s i l y o r tha t a l l (including tenants under sharecropping agreements) dl1 have comparable incentives t o increase production. m e behavior of farmers who do not adopt innovations, even a f t e r seeing the r e su l t s obtainable under pa r t i - cu l a r conditions, has in the past been too of ten dismissed by extension agents a s curmudgeonly and unprogressive. I f income d i s p a r i t i e s between the educated snd the uuedacated in rural areas o r between d i f f e r en t &see of f.rrus are not t o be exacerbated, it v i l l be aanAItox-y In fu ture f o r exteaaion serv ices to d h e operating acthads vhlch ensure that the poorest and the 1-t able t o bear r i s k are given the chatxe t o raise their product ir i ty .

29. The type of incent ives o r sanctions t h a t should be b u i l t i n t o extension systems t o bring about this i d e a l s t a t e of a f f a i r s has of course long been a vexed question. While it seems reasonably c l e a r t ha t extensic... agents' conditions of se rv ice should provide fo r promotion on grounds of

11 David K. Leonard, Some Ihtpothases Concerning the Impact of Kenya - Government Agricul tural Extension on Small Farmer:, I n s t i t u t e of Development Studies, Nairobi, 1972.

ab i l i ty rather than on length of tenure, i t is by no means so certain that paying then high salarier, is always desirable. Cood ra tes of pay for m a n s i o n s t a f f in a given area v i l l no doubt a t t r a c t larger n~nabers of s t a f f t o work ttbtcre (with potenttal adverse consequences for inter- regional equfty), but a large incoute gap between them and the trmall farmers they a re to serocr m y not be conducive t o good Mrking relationships. Whether s t a f f vbo are reaident within the i r areas of w r k vill give more of t h e i r t h a t o d l farmers than those vho are not boused locll led is mother open qrrantion: thr l i t e r . ~ u r e r e v i d appenrs t o be clivided here. '2ba se t t ing of quantity targets is not always a good method for guaranteeing the poor a f a i r share of agents' at tentioc. For -inntatice, the cse of a c r e q e targets can be counterproductive w5ere land distr ibution is o w e d : the transaction cost t o tbe extareion agent of one interview v i th a farmer avlling f i f t y acre8 is fa r d l e r than t h a t of f i f t y la ter - v i e w v i t h indivsdruls each holding one acre, who m y in any case be f a r l e s s receptive t o hie r a c d a t i o n s . An extareion system t h i ~ t requires usats t o maiatrrin "hui tbaad~ ratings," c r records of progresu, for individual fa-8 does have a bet ter p o t e n t i d for success, but pay (an LUIP's experience suggests) f a i l vbere each agent har, a large target populatioa md is pressed fo r time, o r i f mperoisory s t a f f aru l e s s than conscientiotur o r again h a ~ e a large Mrk load. I'inrlly, i t is Important to racognixe tht the p e r f o m c e of an axtamicr! r emice often re f l ec t s that of the project o r local government administration a t large. Where the l a t t e r does rDot v1ths:and preasures from local vested in teres t , the extension s e n d c a can hardly be expected t o operate on a radically different basis. Planning fo r ef fec t ive agr icul tura l extension t o reach the poor oper vide areas can thus only be undertaken in the context of vidar abin.;strative reform.

30. Most of the Ins t i tu t ional credi t available t o the agricultural sector in A f W countries has been directed a t th+ developlnent of large scale comercia1 farms, and subsistence farmers have had un t i l recently t o rely on nan-institutional credit generated vithin the ru ra l areas. There k or m a l l y assumed to be a posit ive correlat ion betveen .acc-ee t o ins t i ru t ional credi t sod the adoption of agr icul tura l irmovhrions, iltboygb tht thi. k so rrrmnt be e8uSllAed d t b certdnty. Since incores i n the t radi t ional ru ra l sector are lw and thus, intuit ively, saving potent ia l appears t o be anrall, most projects a b h g t o stimulate agricultural production have d e the delivery of seaesnal credi t (usually

in tlhe form of laaterial inputs) a ccntral focus of the i r ac t iv i t i e s . l-/ The credi t delPvery systems @f the integrated projects reviewed are cumbersome, expensive and highly demanding of trained manpouer, and although they have sought t o change existing patterns of credi t d i s t r i - bution in favor of the emall farmer,many have been unable to ensure equality of access or s a t ~ e f a c t o r y repayment ra tes .

Saving in the Traditional Rural Sector

31. The rura l poor ~ a y have a f a r g r a t e r capacity t o generate savings than h a m been c o d y aesunud. The reviev of rc~allholder credi t in h y a undert,nken for the ABDS points out, for instance, that deposits by small farmerrm under the Cooperative Thrift Schcmc reached the qui te aanticLp,ted f igure of US$2 a i l l i o n bj 1973, the scheme's third year of operation. Slrall mutual s a w s ~ o c i ~ t i ~ s , whereby each umber contrib- utes a fixed amount of cash a t regular group meetings and the t o t a l s thus a c c d a t e d a re distr ibuted t o each member on a rotat ion basis, have been observed by raoiswrs in Ktnya and l a Camarm. A survey taken by CADU in hro d i s t r i c t s of Chilalo, prior t o the intensif ication of the project 's credit scheme, gives sow ineight in to t radi t ional ru ra l credit patterns. Its findings a re corroborated by observers in other par ts of Chilalo, but insufficient data a r e available from alseuhere l a Africa t o establist: h w widely typical they are. Of the 109 farmars interviewed. 41.3 percent were owner-cultivators and 58.7 percent tanante. Fifty-one percent had some debt. It is significant t o note that of the loans, 54 percent vere used fo r on-farm investment, fo r instance the purchase of a new p l w , o r the hiring of extra labor fo r veeding. The other 46 percent were used t o finance consumption which included feas t axpensea, tax payments Lad court casa expenses. The mujor sources of c n d i t wra not traders o r ~rmeylcnders but relat ive8 and friends (only six percent of the loans were frcm the former), and aa pany a s 27 pcrcent of the t o t a l number of loas were granted without col la tera l o r security. Where in te res t was charged (on 46 percent of the loans f r o r re la t ivee and friends, and on 95 percent of those from traders and moneyleaders) the average annual r==o ranged from 34 percent t o about 110 perccnt. For loam of cash tbn_ mst co- in teres t r a t e w a s 10 percent per month.

1/ The following figures give a rough indication of the scope of the - integrated projects' seasonal lending:

Total value Population of Year Project No. of loans (US$) proj ec t area

1971/72 CADU 14.000 560,000 400.000 1972 ZAP1 - 373 , 500 23,000 1972/73 W A D U 7,400 121,000 240,000 i972/73 LLDP 23.000 469,000 550, 000

32. A survey taken by !IADU of 33,000 households i n a r e a s of Wolano Awraja t o t covered by t h e p r o j e c t again shova o t h e r farmers a s t h e major source a f c r e d i t ; 66 percent of t h e households b o r r w e d from o t h e r farmers, and only t e n percent b o r r w e d from t r a d e r s . Almost 40 percent of t h e households vere paying i n t e r e s t a s t i g h a s 100 percent per annurn. Borrowing in these a r e a s v a s l a r g e l y t o f inance pre-harvest Ceasts. and 95 percent of loans v e r e of cash.

33. Such p o t e n t i a l f o r mobilizing cash savinffs has a l e o b e m observed in Nalavi, vhere group purchases of F e r t i l i z e r f o r cash have q u i t e f requen t ly been observed in a r e a s border ing t h a t o f t h e LLDP and not covered by i t s c r e d i t scheme. The p launer r of LLDP i n f a c t envisaged t h a t t h e cash purchase of a g r i c u l t u r a l i n p u t s p r o m t e d by t h e p r o j e c t would assume inc reas ing importance over t h e d i s t r i b u t i o n of i n p u t s on c r e d i t , bu t t h i s was not t o be so. I n 1970-?1 p r o j e c t farmers v e r e expected t o purchase about 3,000 t o n s of f e r t i l i z e r , 1,756 of vhich w u l d be paid f o r i n cash, t.)e r e m i n d e r being purchased with c r e d i t advanced by t h e LLD', but t h e m u n t a c t u a l l y issued van found t o be 4,000 tonr , of uhich onry 58 tone bad been purchased v i t h cash. I t appears that where farmers have r e l a t i v e l y easy acccsJ t o i n s t i t u t i o n a l c r r J i t they w i l l p r e f e r t o take advantage of it , and may pcanvhi le hoard q u i t e l a r g e cash savings in t i n cans and rvnder mmttresses. 'It is worth no t ing h e r e t h a t t h e i n t e r e s t r a t e s on s e a s o ~ l c r e d i t charged by t h e p r o j e c t s ~ n d e r dislcussion a r e very much l o v e r than t h o s e t r a d i t i o n a l l y charged i n Chi la lo and Wolam: Kenya's Agr icu l tu ra l Finance Corporation charges smal lholders an annual r a t e of 7.5 t o 8 percent , LLDP's annual r a t e is 10 percent and t h a t charged by CAM] and WADU is 12 percent. None of t h e p r o j e c t s ha-. : devised s a t i s f a c t o r y methods of ensur ing t h e repa)ment of t h e loans they issue. It is no t c l e a r , given 0t.r c u r r e n t understanding, ;*ether t h e deqiver). of i n s t i t u t i o n a l c r e d i t i n t h e e a r l y s t a g e s of r u r a l developmemt is p r o f i t a b l e use of sca rce resources o r not.

Access t o I n s t i t u t i o n a l Cred i t

34. It is axiomatic :hat t h o s e who r e c e i v e c r e d i t a r e o f t e n not those wbo wst nced it. In t h e a t tempt t o ensure high r a t e s of repayment, t h e c r e d i t schemes of t h e i n t e g r a t e d p r o j e c t s reviewed have adopted s t r i n g e n t c r i t e r i a of e l i g i b i l i t y and e l a b o r a t e procedures f o r t h e se lect iorr o f app l ican t s , vhich a r e c o ~ t l y and h igh ly demnd'hg o f t r a i n e d manpwer. Clear ly , both t h e c r i t e r i a used t o determine a p p l i c a n t s * e l i g i b i l i t y and t h e l e v e l o f s e c u r i t y on l o a n s a r e c r a c i a l detemLPaa:s of a c c e s s t o c r e d i t . In t h e e a r l y y e a r s of' CUM, i t becane apparent tic.: l a r g e larrdovners were receiving t h e bulk of p r o i e c t ?.oms, and t h a t t h e easy ava l l l ab i l i ty of c r e d i t , ci.goormded w i t h t h e absence of t axes on t r a c t o r s and f u e l , vas r e s u l t i n g in e v i c t i o n s of' t e n a n t s on a l a r g e sca le . In 1970, u s e o f t h e p r o j e c t ' s c r e d i t scheme v a s r e s t r i c t e d t o landovair?g.

cult ivators with utdr- 62 acres and tenants farming under 100 acres, L/ md tw years l a t e r fur th t r res t r ic t ions vcre imposed, the nev upper l imi ts being 50 acres for owner-cultivators a d 75 acres for tenantlr. Une of the WP's credi t schema war s ' l i l a r ly res t r ic ted from its incep- tion, but landovners, who eoar t i tu te l e s s than 50 percent of the rura l popularion, have received the bulk of the loans. It is estimated that in 1973, tenants accounted for only f ive percent of the t o t a l credit issued Mdar the Program. The follow-up study of LLDP also indicates a skewed di~ t r ibu t io r r of credit : f a m r s in recei>t of project loans had higher than average w e b - e c o n d c statucl, cultivated up t o one- third more land than average, and had avoragc incomes up t o 84 p e r c a t higher than those not using the schane

35. Where the security requirements on loans a re stringent, the poorest sect3onr of the populatioo may effectively be denied access t o c re i i t . It vlll be remubered that 27 percent of loans from nw- in r t i tu t ionr l murces in Chilalo were granted without security. The credit rchmea of both CArm and HPP require dovnpayments, signed one year lease agrecaarts 2/ and nro acceptable guarantors, one of vhom mist be :he landlord if the applicant is a tmaat. Interviews with f ie ld agents and with prolect s t a f f have suggested that poorer farmers have often bem unable t o t1ff2rC the Eecesnary dovnpayment or t o get thei r landlords to sign a leane agreesent. UADV's requirements a r e l e s s demonding, and applicants ham only t o preaent tvo guarantors. but i n t e r v i m have nevertheless Indicated that poorer tenants applylng for loans often have di f f icul ty in finding guarantors acceptable t o the screening c d t t e e . Ibzse a r e lthus prormds for believing that such credi t schemes a re not clways of ne t t m e f i t t o the poorest par ts of the ru ra l conrnrmity and may wen uorsen the exist ing patterns of incone distr ibution in project areas.

Repayment caf Ins t i tu t ional Credit

36. W y hypotheses have been put forvard t o explain l o w repayment r a tes of production credit , a l l of vhich may have substantial elements of validity. Poor yields or lowr hamest prices than expected may resul t in low repayment r a tes regardless of the efficiency of local agencies fo r the enforclarnt of Inr. l lm we of slaborate procedure6 f o r selecting applicmt. who a r e a r f f i c i m t l y "credit portlyn haa not gmrmftcd matie- 'factory r8p8ywat ra te8 in n n y of the projects reviewed. ZAP1 achhmd a 90 percent repapent of l o m u iemsd in i972, CaD9 achieved repspen t ntu of 90 gsrcmt, 85 paceat mb 92 percent during it. f h t thrtc years; that in llPP ru 90 percent in th Progrrr'm f i r s t year. UAMI, knrever, achfmd ratu of 98 parunt and 95 percent iin :it# firmt two yews,

I f The avmraga size of f a y b o l w in the project area i. 7.5 acres. - 21 l l k ~ leua agreement. u e required an 8 guarantee agr i ru t eviction. -

Analysis of r e p a p a i t f igures in all three EthlopF.n projects ra ises doubts as t o the general rrmtantlon that m a l l a r f a k e r s a re a greater credit rimk t b n large (because thep divert production credit or , a l t e n . a t i d y , rue the i r increased incopcs fo r conauqtion rather than tepay!ng t b i r debts). b r g e farmers in the CADU project area, possibly because they can exert more influenee than sarnller ones, have f e l t able t o rsr.aga oar the i r debts, and because of the inefficiency of the courts, the lack of cooperation from the l o u l government administration and cw#aignfng against the project authori t ies by local in teres t groups, Pt p r m inpossible to take legal a c t h against them. The refusal of large facmtrr t o honor t h e i r debts may v e l l have influenced other borrowers. &J use of the project 's credit schema expa~ded, due date repayment r a tes declined. Coading defaulters is m unpleasant task, d-fng of t b a and m e y and may be by no mans conducive t o good relat ions between project author i t ies ud the coaauaitier thep serve. LLDP has consistently faced lov ra tes of repapent , and the inabi l i ty o r umrillin(Cnerr of the courts t o force defaulters t o meet the i r debts has bean grcmi.ng. Without the cooperation of strong local ins t i tu t ions d local government administrations, projects 8ay continue t o face such problem8 of recovery regardless of the selection procedures they -lop in the di8t1:ibution of credit .

37. WAWl u n t i l recently required no d o v n p a m t s on the loans it issued, but adopted the strategy of bolding all farmers v i th in a given area jo int ly reeponeible fo r the t o t a l credi t extended: if the repapent r a t e fo r the arm f e l l below 95 percent in a given year it would be denied access t o c red i t i.a future. It is poseible that this explains the higher repayment ra tes achieved by the project, and CADU and W P have recently resorted t o the same strategy. Bowver, Uolamo society is observed t o be a good deal more hmaogentoue than in the areas d e r CAW. Clrd dis t r ibut ion l a more even and average boldings (1.25 acres) a r e d l a r than ia Chilalo (7.5 acres). Uhether group responsibil i ty for the repayment of externally injected credi t is a viable proposition &ere the group ccmtains widely varying s i ze elassee of farmers remains to be seen.

Hnstitutioaul Credit and the Promotion of Innmations

38. On the basie of available information it cannot be stated whether access t o ins t i tu t iona l credi t does o r dour not crucial ly determine the r a t e of adoption of nev agricultural inputs. Experience in the early peara 02 SRDP'a Vihiga &ire Credit S c h m suggests a t leas: that i f c redi t is t o be used by ru ra l development projects ae a m j o r vehicle fo r enhancing productivity, credi t achenee need t o be carefully designed v i t h local rocio-economic conditions in v i e w , othenriee thep mey r i s k being irrelevant. O f the 600 farmers selected a t random t o part icipate in the r c h a a when it s&arted in 1971, only 63 f inal ly wed its services, and chair r a t e of repayment was only 80.7 percent. In 1972 the expanded echeme

was only ued by 383 farmers. The poor r e p a p e n t r a t e mey be a t t r i bu t ed t o the lw p r o f i t a b i l i t y of rmlze production i n the area: Btdl 's review of the schema indica tes t h a t t he net income t o repayment r a t i o was around 321. It appcurs t h a t advances of cash fo r the h i r i ng of labor w u l d have beem f a r moru productive than t h e muterial inputs vhich the schew did provide. Bec~tur thara a n o p p o r t ~ l t l e s in off-farm employment t he re is subs t an t i a l eutrlgratiorr, uhich,despite t he a rea ' s high population dansi ty, has frequently reoulted in abortages of family labor during peak f a m i c g periods. Of 22 farmers who did not reapply f o r c r e d i t a f t e r the 1972 hamest , 10 indicated t h a t t h i a va8 muinly because l o a m under the achcmc cculd not be u d f o r land preparation expenses.

Future Approcuhes t o Agricul tural Credit

39. Ibu reviews indica te with rcaarkable consistency tha t the c r ed i t delivery s y s l : ~ u usad by rural dweloparmt p ro j ec t s a r e elaborate and hi&hly dcnanriing of the very l imited t rained mnpover available. Even so, as t he numbers of appliclmts f o r loans increase, t he repayment r a t e s s l i de , and accordingly t h e cost of d i s t r i bu t ion and recovery r i s e . A genuine doubt already exists a s t o vhether and bov poorer farmers can be benefited by current i n s t i t u t i o n a l c r e d i t schemes.

40. Xf c r e d i t del ivery is t o form par t of fu ture r u r a l development project a c t i l d t i e s , new approaches based on community par t ic ipa t ion map be an e c o n d c necessity. Wherever t he ex i s t i ng s t ruc tu re of soc ie ty permits them t o do so, p ro jec ts n ight f r u i t f u l l y t r y t o organize c r e d i t del ivery through c m t y groups, s o as t o reduce operating cos t s and t o assure relpayeents. Whatever t he fu tu re s t a t u s of ex terna l ly in jec ted c r ed i t in rural development pro jec ts , ways nust ce r t a in ly be found t o mobilize rural aadngs . ('lhe travel* s a v i q s banks t r i e d out by t h e LLDP have no t pa t been very successful s ince people do not trust vans vhich "go arap" v i t h t h e i r m e y . ) One approach w r t h t ry ing m y be the introduct ion of c r e d i t grants in proportion t o t h e volume of savings mobilized by local grcmps. Adoption of such a s t r a t egy vould e n t a i l the use of t ra ined man- i n i t i a l l y f o r the development of l oca l c o ~ i t y groups, and a r e they exist, f o r In s t i t u t i ona l i z ing self-help savings groups, r a the r than f o r the rapid expansion of a d i s t r i bu t ion system imposed from above. This approach d i f f e r s in p r inc ip l e from tha t present ly used (in d i f f e r en t forms) in CIIDU, YADD and LLDP, of using l o c a l c ~ d t t e e s t o d i s t r i b u t e a t e m a l l y i n j ec t ed c r e d i t and t o br ing pressure on b o r r w e r s t o repay. 1-1- nual -ties in saving as w e l l as in receiving cred i t should lead t o a more d i r e c t i n t e r e s t in ensuring repaypent. Bui ldhg l o c a l b t i t u t l o n s which a r e both e f f i c i e n t and genuinely repre- sen ta t ive of the colpunitiu, they a r e t o serve is a t a sk ne i ther easy nor without r i s k s of f a i l u r e , bat it seems clear that in the long run only a par t ic ipa tory a. d i s t i n c t f r a r a p a t e r n a l i s t i c approach t o c r e d i t d i s t r i - bution in rural areas w i l l be economically v i ab l e o r assured of benef i t ing the poor.

V. MMKETINC OF AGRICTJLTllItAC OUTPUT

41. Fragmented nrarketr, l imited mrke t ing in f r a r t ru s tu re , inadequate c c m m d c a t i m ~ r and transport f a c i l i t i e r , and crop pr icer which a r e lw and unpredictable~ a r e all cha rac t e r i s t i c obr tac le r t o rural development i n Africa.

42. Although the b a r r i e r s t o the development of integrated markets CM be idant i f ied with nome degree of accuracy, evidence from the project reviesin giveu r i s e t o doubt3 a r t o the eff icacy of exlut ing attempts t o remove them. The marketing s e ~ c e s introduced by the integrated pro jec ts have faced a number of complicated operating problems, do not ensure t ha t food cropr grown in t h e i r t a rge t a reas w i l l continue t o be marketed beyond the s tage of donor involvement, have high recurrent co r t r , and of course rcrve r e l a t i ve ly smell numbers of people.

Output Pr ice Supports i n the Integrated R o j e c t s

43. Several of t he integrated pro jec ts have introduced output pr ice supports a s a me.thod of maintaining production incentives. (The problem of pr ice dec l ine is of course a p t t o be pa r t i cu l a r ly revere where rapid increarer in output a r e induced i n d l geographical a r ea s before countrywide marketing n e t w r k s a r e su f f i c i en t ly developed t o handle them.) CADU and LLDP have introduced guaranteed m i n h m pr icer f o r ce r t a iu crops grovlr by pro jec t farmers, t o reduce seasonal snd year t o year p r i ce f luctuat ions. It is thereby intended t o s t a b i l i z e income l w e l s and t o give farmers an incentive t o accept imwvations. It has not , however, been establ ished whether such a p r i ce support system ac tua l ly does provide incent ives t o increased production: gross re turns t o the fan=cr depend on a colnbination of fac tors , and input cos t s and t he physical re turns t o inputs a r e a s s ign i f i can t f o r him in deciding whether t o innovate as che outpxt p r i ce he expects. It has already been argued tha t although r u r a l d e v e l o ~ t programs cannot influence the weather they vould do w e l l t o pay more a t ten t ion , in p r m t i n g the use of new inputs , t o t be on-farm fac tors (such as the a v a t l a b i l i t p of t he most s u i t a b l e inputs a t t he r i g h t time) which a f f e c t yields, f o r as long as y ie ld s vary subs tan t ia l ly from year t o year, s t ab i l i za t i on of harvest pr ices w i l l aggravate income fluctuations. The extent t o which fa reers respond t o f luc tua t ions in income r a the r than f luc tua t ions in output prfcee is s o f a r only a matter f o r conjecture. However, evidence from LLDP and the Ethiopian projeccs suggests t h a t t he primary cause of small fanners' and tepants' aversion t o innovations is the unpredic tab i l i ty of yield@, r a the r than consldera- t i on r of barvest pr ices, which mke~ them a f r a i d of incurr ing debts f o r new inpi ta . A survey taken in 1972 In t he LLDP area, though the v a l i d i t y of its tern of reference has been questioned by t h e program nanag-t, ouggcatr t h a t farmers' avareners even of c o r t m t crop purchaee p r i ce s may be very law.

441. Whatever tlr. gnunds for supporting output pr ices i n project are-, such a policy may ir. prac t ice be extremely d i f f i c u l t t o implement: it is unlikd,y t ha t project a u t b o r i t i r s v f l l be the so l e marketers of output in thrrir t a rge t a reas and they my f ind themselves i n con f l i c t d t h aistin~l marketing boards and v i t h t 3e pr iva te t rading sector . Harketing boards have t r ad i t i ona l ly handled only export crops, produced largely by cctmercial f a m r s , and lack the a d p l n b t r a t i v e capacity and the s t a f f t o handle food crops fo r domestic consumption. Commercial crops a r e r e l a t i ve ly easy t o procure: such marketing inf ras t ruc ture a s exists in rural areas is usual ly geared t o them. By cont ras t , surpluses of food a r e runully extremely sca t te red .ad d i f f i c u l t of access. k'here rapid increases i n t he production of food crops a r e being Induced, pro jec ts m y see no a l t e rna t ive but t he development of t h e i r own autonomous marketing sen t i ce s i n the i n t e r e s t s of isrrwdiate welfare o r shor t term efficiency. An example from the U P i l l u s t r a t e s t h e type of pr iclng probleam that: can occur In such a si tuat ion. The Netional Agricul tural Harketing andl Development Corporation ha8 ove ra l l ju r i sd ic t ion over inpct and output marketing i n the l l 9 P area. flouever, i t has so f a r been reluctant t o purchase maize from project farmers, bel ieving tha t l eve l s of production a r e not yet su f f i c i en t t o make its involvement conmercially viable, and the project au tho r i t i e s accordingly undertook t o purchase maize in t h e e l a g e s fo r resale in bulk t o the Corporation. LLDP's maize purchase p r i c e l o higher than t h a t offered by t h e Cqrporation in other areas, which has had bad consequences f o r regional equity and has under- standably led t o trouble: r a i z e growers in these l a t t e r a reas t r i e d (unsuccessfullly) t o make the Corporation rdse its price. LLDP s t a f f did not f e e l ab l e t o reduce the pro jec t ' s purchase pr ice , fear ing the consequences f o r project farmers' w l f a r a , unless a subs t an t i a l volume of prodnctiari were t o be shifted -away f r a m e .

45. Tbcre is too l i t t l e da t a ava i lab le t o est imate with any accuracy what proportllan of t h e uarketed surplus of food crops in pro jec t a r ea s is handled by txadi t iona l t raders , but evidence from LLDP and from CAW suggests t h a t it remains very large. I n 1972 LLDP's marketing serv ice found i t s e l f in diff icul l t ies . Since the export p r i ce of uaize was high. pr iva te t r ade r s were of fer ing farmers much higher pr ices than those fixed by the pro jec t and by ADMARC, and when farmers rea l ized t h i s , s tones began t o be thrown a t some of the LIDP marketing centers . The f ix ing of guaranteed minimum pr ices f o r grain can indeed by fraught with d i f f i c u l t i e s , given the fragmented nature of domestic food learkets and the unpredict- a b i l i t y v i t h vhich nat ional gra in boards may export, import and d i s t r i b u t e grain. CADU incurred heavy f inanc ia l lo8ses in 1970171 and 1971172 a s t he r e s u l t of g r a in purchases from pro jec t f a m r s a t p r i ce s (often substan- t i a l l y above those of pr iva te t raders) bared on forecas ts vhich turned out t o be uareal:Lstic. For the 1972173 hamst a two-payment system was proposed, vhereby farmers vould i n i t i a l l y be paid 90 percent of t h e prevai l ing loca l market pr ice. Since the l o c a l t r ade r s - e r e prepared t o pay farmers t h e f u l l market p r i c e the l a t t e r of course refused t o s e l l t o CbMJ, vhich T- thus forced i n t o buying a t t he market pr ice a f t e r a l l .

CAMl's management has obstrocd that the subsequent drop i n app1icat;ons f o r c r ed i t may have re f lec ted farmers' dissat isfact iol l . s ince t h c ~ trJd accused the pro jec t of t ry ing t o make a p r o f i t st t h e i r cost. m e - r icnce i n WADtl a l s o lends weight co the suggecltion tha t vhere pr iva te t raders a r e operating pro jec ts ' a t t - ts t o s t a b i l i z e output pr ices may be counterprduct ive i n that they generate fanners' mis t rus t .

46. The operating cos t s of the marketing serv ices i n the integrbted 2rojects a r e tntremely high. CADU's uni t cos t s (excluding overheads) of marketing vhurt between Aeella in Chilalo and M d i s Maba a r e double those of pr tva te tnrders . Such high cos t s ra i se 'ques t ions a s t o hov these m ~ h t i n g d c a m are t o continue t o function in the le nm: so f a r t he marketing charges levied oa farmers have not included any allotment fo r the s t a f f ,-alrrries o r such o ther c o s t s a s the depreciat ion of equipment.

Harketing Cooperatives

47. A number of the pro jec ts reviwed have establ ished marketing cooperatives, a s an a l t e rna t ive o r a complement t o more cent ra l ly administeled rsystems. Marketing of food crops is not an easy sphere i n v t ~ i c h t o encourage successfcl cowmmity par t ic ipa t ion i n the ea r ly s tages of development. Developing the l o c a l organirat ional and entrepreneurial a b i l i t i e s necmsary f o r the success of cooperatives i n t h i s sphere is a lengthy task, and t ra in ing f o r cooperative development has often, a s i n CADU, f a i l e d to take sufficient account s f its t rad ing and soeculat ive aspects. Cooperative marketing of -port crops has t r ad i t i ona l ly been l e s s demanding of entrepreneurial skllls, its funct ion being primarily t o procure standard graded crops a t p r ices already fixed by marketing boards, f o r fur ther processing o r dir-lct export. Cooperatives set up t o deal with foodgrains have t o be able t o coacpete successful ly with pr iva te t radere in t h e i r a b i l i t y t o speculate and t o o?erate a t r e l a t i ve ly low cos t in dlmaestic markets imich a r e a s yet highly fragmented, and trading can be par t icu lar ly d i f f i c u l t f o r inexperienced people when confronted by i l l i t e r a c j , poor t rans2ort and communication f a c i l i t i e s and the v i r t u a l acsence of f i nx i c i a1 in s t i t u t i ons . There is evidence too t h a t fraud,ae veLl a s inexperience and lack cf cornpetense,can be an extensivz. p r sb lm, e v a -51 Tanzania, which has one of the most highly developed cooperative networks in Africa. Despite such operating d i f f i c u l t i e s , a pa t e rna l i s t i c a t t i t u d e on the pa r t of pro jec t au tho r i t i e s can bz co-mterprduct ive. The reviews indica te cons is ten t ly how such attitu'es have e f fec t ive ly discouraged ru ra l people from giving t h e i r h e r g i e s :.o ntake projec t - in i t ia ted i n s t i t u t i o n s work. Ta some extent the measure of such paternalism is the degree of dependency of the cooperatives being fostered on f i s c a l resources and s k i l l s not generated local ly. Siace marketing can be cos t ly and is s o demanding of s k i l l s , it a ight be argued that cooperatives t o handle food crops should not be s p t up u n t i l t he c o m i t i e s they a r e t o serve can provide people with su f f i c i en t skills t o take ga t l i ne respotis ibi l i ty . Furthermore, in the

ea r ly s tage8 of development, marketing cooperatives mey be more susceptible t o pressure from i n t e r e s t groups. Ueabership of cooperatives i n f i v e d i s t r i c t s under CADU was found t o be over representat ive of landlords: althoogh the M e r e h i p requirements do not discrimLDate against tenants , many of t h e l a t t e r c l a s s have not joined because they f ea r lcs ing t h e i r tenure.

Alternative Approaches t o Marketing

48. The experience of marketing intervention in the integrated projects thus r a i s e s some d is turb ing queetions. It is c l ea r t ha t i f ser ious bottlenecks i n the d isposa l of marketable surpluses a r e t o be avoided i n t h e fu ture and i f d e f i c i t a reas a r e t o be e f f i c i e n t l y supplied, increases i n food production need t o be induced gradually and over wide geographical areas. Increases in output need t o be comensurate v i t h t he cdvelopment of i n s t i t u t i o n s capable of handling them. There is no guarantee t h a t once such pro jec ts a s these cease t o exist in t h e i r o r ig ina l form, marketing boards vill spontaneously dwelop the capaci ty and the uilllmguess t o handle food crops produced by small fanners. There is surely a naed fo r pro jec ts t o devote t h e i r p r io r a t t en t ion t o rewving the most bas ic cons t ra in ts on long run dewelopmcnt, by encouraging t h e gravth of v iab le l d i n ~ t i t u t i o n s and by the provision of communications and transport f a c i l i t i e s . Only then can the more immediately npparent cons t ra in ts such as lw leve l s of productivity and lack of f e r t i l i z e r be e f fec t ive ly tackled. Purposive ac t ion t o encourage the growth of t rad i - t i d trad* networku has not figured ammg the msrketing Interventions of tbe pro jec ts under discussion, vhich have t o a l a rge -eat aimed t o replace them rritbin the ta rge t a reas (as we have seen with not unmitigated success). Arb~uably t h i s is t h e i r most s ign i f i can t sbortcoming. Tbe ex is t ing docune!ntation, 2 though mostly on Weet African countr ies ,

11 See Hodder and U h , H. P. Miracle, "Market S t ruc tures i n the Tribal - Economies of West Africa" and K. R. Anschel, "Agricultural Marketing in the P o r ~ e x B r i t i s h West Africa" i n K. R. h c h e l . R. H. Branuon and E. D. Sai tb, eds., A@cultural Cooperative and k r k e t s in Developing Countries, Rew York: Redr i ck A. Praeger, 1969; and Miracle, "Market Structure in C d i t y Trade and Capital Accumulation i n West Africa" in Hoyer rmd Hollander, eds., g r k e t s and Hrrketinn i n Develo~irtg &onomlee, &mewood, Ill., Richard D. Irwir , 1968.

Good, Rural Uarkets and Trade in E a s t Africa: A Study of t he Functions and Development of Exchange I n s t i t u t i o n s in Ankole, Uganda, Chicago: Dn1versit:y of Chicago, Department of Geography, Research Paper No. 128, 1970.

(continued)

indicater, t ha t in many a reas t r a d i t i o n a l t raders a r e highly sk i l l ed an8 t h e i r systems a r e e f f i c i e n t . m e r e means of communication and trans- portat ion a r e w e l l developed, regional pr ice movements a r e observed t o be w e l l coordinated. Rural dwe lopwnt pro jec ts could, i f they e l e c t t o encourage the a c t i v i t i e s of t r ad i t i ona l t raders , introduce a number of r e l a t i ve ly low cos t and simple measures t o increase producers* bargaining power and range of choice. Studies conducted by WU*s evaluation uni t and by W i g a d Thoday (see footnote 1, below) note thac most o i t he p r i ce explo i ta t ion observed in Ethiopian markets is covert, through t h e use of f a l s e weights and measures, ra ther than overt. I f t r ue weights and reaaurer a r e made ava i l ab l e f o r use, no matter who the par tners in tramsaction (as has been done i n W U ) , t h e w l f a r e gains can be subs tan t ia l . Informetion on current p r i ce s obtainable from d i f f e r en t sources usually t r ave l s f a s t where c o n a ~ ~ n i - cat ions a r e r e l a t i ve ly well dweloped, but espec ia l ly where t h i s is not the case, the disseminatio