Extension and Issues Related to Poverty

V. LENIN

            Many People go to bed daily hungry. Many children are crippled with malnutrition related diseases. Lot of children could not go to school and loose their childhood innocence and do unskilled work in industries. Poverty induced malnutrition & hunger are the root causes of the peoples’ sufferings. Poverty is the major problem of the world at present. Most of the efforts of the nations, world development organizations are directed towards reduction of poverty. Majority of the people live in rural areas. Their predominant occupation is agriculture. Manipulation in their agriculture may bring out favourable changes in their livelihood and help them, significantly, in getting out of the clutches of poverty. The government intervenes in agriculture through extension agencies. Here comes the role of extension organizations in helping the people to escape from poverty through changes in the way they cultivate the crops, diversification of agriculture, providing access to resources, information and assisting in efficient marketing etc.

What is poverty?

            Poverty means many things to many people. For a person who does not get 2 meals in a day, poverty means lack of sufficient food to eat. For a person who eats well but do not have money to provide better medical facilities to his family, poverty means lack of health services. For the point of discussion, in this term paper, let us adopt the definition provided by United Nation Development Organization is its poverty report 2000, given below:

What is extension?

            Extension means ‘stretching out’ in Latin. It is essentially taking products developed at the laboratories to the farmers’ field. It evolved with time, taking different duties from teaching, facilitating to empowerment of farm families. Classical extensionists called it as education. In 1980s Neils Roling upgraded it to science. We would like to call extension as knowledge. We should empower the poor with the needed knowledge so that he manipulates the environment with his wisdom for his development. Anil Gupta calls knowledge as a resource. Knowledge is power. Twenty-first century is a knowledge century and one who has the knowledge is going to rule the world.

            In this term paper, let us look into the new roles of extension, taking broader responsibilities of reducing the poverty.

Who and where are the poor?

            Most of the poor are to be found in rural areas, and among these, the majority are located in the more difficult areas characterized by combinations of low and erratic rainfall, hilly topography, poor soils and weak infrastructure. These people are hampered by poor information and weak infrastructure in any effort to take up employment opportunities. Efforts to link them and their products to major domestic or export markets are likely to be costly, especially where populations are widely dispersed.

Broader Trajectories

          Some of the broader trajectories that are shaping the issues related to poverty, vulnerability and extensions are as follows:

1. The Agriculture and Natural Resources Context

2. Likely Impacts of Globalization

3. Vulnerability

4. Systemic Collapse and HIV/AIDS

5. Privatization and Changing Organizational Roles

6. Democratization and Decentralization

7. Adopting Sector-Wide Approaches (SWAps)

1.                  The Agriculture and Natural Resources Context:

            Agriculture involves cultivation of crops, rearing animals, etc. The important factors are production system; environment; horizontal linkage with natural resource management; vertical linkage with input supplies, processors and markets; and wide spatial linkages of allocation of resources at national level, environmental question at international level.

            Access to land through ownership or tenancy is a key issue in poverty reduction. Land re-distribution following the imposition of ceilings for individual ownership is taken up in Latin America and South Asia. Changes in inheritance laws, for instance, women getting equal rights to land, are the real issues. Agriculture sector policies include appropriate technical change capable of increasing the returns to labour in small farm agriculture in difficult areas; Farmer-Public-Private Linkage; formation of common resource user groups; and formation of groups to increase the capacity of the poor to voice their needs in relation to the creation of locally relevant future options in agriculture and natural resource management.

2.                  Likely Impacts of Globalization:

            Globalization helps in finding market and better price for the produce of poor in international market. It enabled rapid spread of new technologies, reduced the costs of international transport, spreaded telecommunication & information. However, international movement of labour is not liberalized. Only 2.3 per cent of the world’s population lives outside its country of birth (World Bank, 1999). The Developing countries may increase exports embodying large inputs of unskilled labour, thus increasing employment, raising wages and reducing poverty.

3.                  Vulnerability

            Vulnerability means exposed to danger. Many people in the world are vulnerable due to lack of assets, unstable income, disasters, conflict, market turbulences, political instability, etc. Fear of destitution and alleviating suffering may often be more immediate concerns than getting rich. Risk aversion is more important to these people than asset accumulation. They use the micro-finance programmes to absorb the livelihood shocks. Agriculture diversification is increasingly attractive as a risk mitigation strategy. Decentralization and the existence of democratic and responsive governmental institutions at local level may create a sense of greater security. Public sector, Non-Government Organizations and private sector may collaborate and work synergistically. Migration of labour across regions and nations, access to food for work also helps reducing vulnerability. Short-term survival (migration, relief aid, public works, etc.) and long-term development efforts may be synchronized.

4.                  Systemic Collapse and HIV/AIDS

            Prolonged armed conflict in many nations have pushed back government authority, allowing uncivil society to fill the vacuum. The poor inhabitants have adapted cropping patterns to minimize risk, many others have joined the drug economy.

            HIV/AIDS is a feature of systemic crises, affecting health and agriculture sector. Due to HIV/AIDS many breadwinners’ precious lives are lost, leaving female-headed households and child-headed households. Survival strategies of the poorest households, such as the sale of assets and use of any savings, make them particularly vulnerable following the death of a household member.

5.                  Privatization and changing Organizational Roles

            Due to financial crisis many of the functions related to technical change in agriculture are being ether privatized or internalized private sector principles in public administration, i.e., new public management. Cost-recovery, fee-for extension, contract are the few privatization approaches. Producer organizations are given much importance by the international donors.

6.                  Democratization and Decentralization

            The public administration is being decentralized to district levels and further sub-district levels. It includes both fiscal and political decentralization. Strong local government allows pressure from below to be exerted on the public administrations. With necessary funds and mandate, local governments can take on a wide range of planning and service-delivery activities related to agriculture.

7.                  Adopting Sector-Wide Approaches (SWAps)

            SWAps are intended to ensure that all public support (government and donor) to a sector is informed by a common vision and strategy, implemented through a common management framework with increasingly effective and accountable institutions, and based around a public expenditure programme.

What implications for extension?

1.                  Extension has to come out of production context and concentrate more   

            towards  production system and livelihood context.

2.                  Shift from risk taking technologies to risk aversion technologies.

3.                  It has to provide information and other support system.

4.                  It has to provide horizontal, vertical, and spatial linkages.

5.                  It has to collaborate synergistically farmer, public & private organizations.

6.                  It has to be demand-driven and market-led.

7.                  It has to provide more importance to stability rather than asset accumulation.

8.                  It has to integrate rescue, relief and development activities.

9.                  It has to provide rapid access to assets; information and other services to

           small farmers so that the gap between rich and poor is narrowed, in adoption 

           of new  technologies and marketing of produces and realize the benefits of 

           globalization.

10.              It has to become more accountable to local government & producer

            organization  at village level.

11.              It has to support more labour consuming and less capital intensive

            technologies.

12.              It has to encourage the poor to avail the micro-finance facilities.

13.              It has to mobilize the poor people to organize as groups, for instance,

            producer organization.

14.              It may support the exit of labour from agriculture to rural micro-enterprises.

                                                                       Country Study

Extension, poverty and vulnerability in Uganda

            Uganda is an east African country with an area of 236040 sq. km and population of 28, 195, 754. It is landlocked, fertile, well-watered with many lakes and rivers. It got independence on 09 October 1962 from UK. Kampala is the Capital. Its GDP is US $ 48.73 billion.

            Since 1980s civil strife is ruining the nation. An estimated 4, 00, 000 people have been left homeless. The cause of civil strife is regional inequality. Agriculture is the most important sector of the economy, employing over 80 per cent of the work force. Coffee accounts for the bulk of export revenues.

            Uganda ranks 158^th out of 174 countries in terms of UNDP’s Human Development Index.

Policy Frameworks

            Since 1987, Uganda undertook a strong economic reform programme, with liberalization, privatization and decentralization as key themes. From 1992, macro-economic stability emerged.

            In 1997, the government prepared a Poverty Eradication Action Plan (PEAP). It is revised and accepted as a Poverty Reduction Strategy Paper (PRSP). The revision was informed by the findings of the national household surveys, participatory Poverty assessments and rolling stakeholder consultation process. Uganda Participatory Poverty Assessment Project (UPPAP), commenced in January 1998, is established to provide a mechanism for linking the perspectives of the poor to the policy formulation process.

            Plan for the Modernization of Agriculture (PMA) is adopted. National Agricultural Advisory Services (NAADS) programme is the programme of implementation of PMA.

            PEAP/PRSP sets out a national strategy for eradicating poverty and is established on four major pillars: creating a framework for economic growth and transformation; ensuring good governance and security; directly increasing the ability of the poor to raise their incomes; and directly increasing the quality of life of the poor.

Uganda Participatory Poverty Assessment Project (UPPAP)

            UPPAP is an initiative of the Government of Uganda that seeks to bring the perspectives of poor Ugandans, through consultations, into the formulation and the implementation of policies and planning for poverty reduction at both district and national levels.

            The project commenced in January 1998. Nine districts out of 45 districts were chosen based on 10 criteria. These criteria included the Human Development Index, natural calamities, civil strife, social and physical isolation, population density land fragmentation, environmental degradation, poor soils and yields, participation-social nets, and access to road and water.

            Core research partner organizations - national NGOs and academic institutions- are identified. A multi-disciplinary research team was assembled form 9 core partner research organizations and the 9 selected districts and trained in August 1998. Through purposive sampling, 3 rural and 1 urban community was selected in each district- a total of 36 community studies. Teams of 3 core and 3 district researchers undertook field research. Core researchers undertook research in 3 districts in each of 3 cycles, while district researchers operated in their district of residence only. Fieldwork began in September 1998 and was completed in March 1999. In each district, the researchers divided into two sub-teams for community work. Each sub-team consulted 2 communities in conjunction with a community facilitator who was familiar with the participatory consultation method, and / or the community. Technical advisors assisted the research teams in each district in order to guide the planning, oversee the methodologies, assist in sorting out problems, and to heighten the quality of data collection, in general. Mobilisers were utilized as the contact persons for the community. Community consultations involved facilitation of local people to analyze realities, gaining insight into their situations, and proposing strategies for coping in the present and future. These consultations utilized a flexible package of participatory methods, collectively known as Participatory Rural Appraisal during a five-week period. Researchers actively listened, encouraged interaction and analysis amongst local people, and facilitated discussion. In addition to community consultations, local government officials, leaders and government and non-government service providers are interviewed. Lastly, a second round of district consultations is performed following the national synthesis workshop in order to fill the identified gaps in data collection.

            Reporting is performed in 4 tiers: Daily reports, site reports, district PPA reports and National UPPA report.

Plan for the Modernization of Agriculture (PMA)

            PMA envisioned poverty eradication through a profitable, competitive, sustainable and dynamic agricultural and agro-industrial sector. Levels of public action ranges from international trade negotiations to deepening decentralization and empowering producers. The strategies followed are deepening decentralization for efficient service delivery; reducing public sector activities and promoting the role of the private sector; supporting the dissemination and adoption of productivity-enhancing technologies; guaranteeing food security through the market and improved incomes, thereby allowing households to specialize, rather than through household self-sufficiency; enhancing and strengthening stakeholder consultation and participation in the planning and implementation of programmes; designing and implementing gender-focused and gender-responsive programmes; and ensuring the co-ordination of the multi-sectoral intervention to remove any constraints to agricultural modernization.

PMA has six main public expenditure intervention areas, namely,

1.      Research and technology development: Client-oriented research and participation of the key stakeholders in the formulation of research. Decentralized bodies will have increasing capacity to contract researchers.

2.      Agricultural Advisory Services: private sector delivery and financing of advices on production, marketing, storage and agro-processing.

3.      Rural Finance: private sector delivery of financial services, through micro-finance institutions.

4.      Agro – Processing and marketing.

5.      Agricultural education.

6.      Sustainable natural resource management.

Decentralization: Local Government Act. 1997, devolved the power to local levels. The political, financial and planning responsibilities are transferred from center to local government. Local people participated in development planning and decision-making. Accountability of service providers enhanced. The administration is decentralized further up to sub-countries and the role of producers in governance in broadened.

National Agricultural Advisory Services (NAADS)

            NAADS programme is implemented under PMA. It is entering ‘trail-blazing phase’ throughout 2001. The main objectives are to increase the security of rural livelihoods with sustainable improvements in agricultural productivity and household incomes, with the main strategy for achieving this being through increased commercialization of farming. The programme is planned as a mechanism for directing public investment in extension in a way that is demand - driven, client-oriented and farmer-led, particularly targeting the poor and the women. NAADS is intended to increase overall spending on agricultural extension from just over 0.4 per cent of agricultural GDP currently to over 2 per cent in the long term.

            Responsibility for extension is delegated from district to sub-county level to producer institutions. Producer groups can be registered to become eligible to be clients of the advisory services. These groups will be represented on fora  at sub-county, district and national level. Advisory service provision will be based on the aggregated demands of producer groups and will be ensured through contract arrangements with private service agencies. Awards of contracts will be based on the needs expressed by farmer representatives in farmer fora . Producer will also be involved in the monitoring and evaluation of contracts.

Country Study

Poverty reduction in India

            India is a South Asian country with an area of 3, 287, 590 sq. km. and population of 1, 095, 351, 995. Capital is New Delhi. It got independence on 15^th August 1947 from UK. Its GDP is US $ 3.611 trillion. The climate varies from tropical in south to temperate in north. About three-fifth of the work-force is in agriculture. The staple food is rice, wheat. Planning Commission estimated the poverty rate as 26.1 per cent in India in 1999-2000. The proportion of households that were hungry during any part of the year is 2.1 per cent 1999-2000.

What are the causes of poverty?

            The income of a household is the sum of what it earns from the various income earning assets which it commands, e.g., land, capital and labour of various levels of skill. The extent of poverty in simply the resultant of two outcomes of the development process: (i) the distribution of income-earning assets across households; and (ii) the rate of return or income earned by these assets in the relevant factor markets.

            A household is poor if the sum total of income earning assets which it commands, including land, capital and labour, cannot provide an income above the poverty line. The poor in rural areas are those who do not own any land, or at any rate, not enough of it. Lack of skilled labour is another cause of poverty. Lack of capital, low technology are also the causes. Lack of access to social services such as health and education; information and other support services; credit are the important causes of poverty.

What are the strategies for poverty reduction?

            There are two approaches by which poverty can be reduced. One is the “direct approach”. Government directly intervenes through targeted programmes aimed at giving land, credit in support of self-employment schemes, or direct employment in government funded employment programmes.

            The other approach is the “indirect approach”. This approach focuses on the poverty reducing potential of the growth process by appropriate choice of policies and development strategies which would enhance the flow of benefits to the poor.

The Indirect Approach: Poverty reduction through Growth

            The key factors which are likely to have a powerful impact on incomes of the poor are as follows:

 Availability of Land: Ownership of land is an important determinant of poverty. Due to fragmentation of land holdings over generations the average size of operational landholding has declined to 1.82 ha in 1981. Existing stock of land has to be redistributed through land reforms. Technologies, which increase the productivity and income and employment, be generated. Shift from large-scale farming to smaller sized but viable family farms is needed. The land ceilings need drastic reduction.

Employment in the Non-Agriculture Sector: Shift of the labour force from the low-productivity low-income agriculture sector into high-productivity high-income non-agriculture employment is needed. As the size of the non-agriculture sector increases relative to the agriculture sector, its growth has a greater potential impact on poverty through a larger capacity to absorb surplus labour from agriculture. It is necessary to guard against biases in policy which operate in favour of capital-intensive investment choices and discriminate against labour-intensive choices.

Human Resource Development: An abundant supply of skilled and well-trained labour is likely to encourage the establishment and expansion of labour-using activities, generating both wage employment and self-employment possibilities. Universal literacy and improvement of primary and secondary education are important. Education and skill development is a powerful instrument for reducing poverty.

Controlling Population Growth: Any given population growth rate implies a disproportionately greater demographic pressure on the lower income groups. With a corresponding greater dilution of per capita income growth among the poor, population growth hurts poor to a greater extent by its impact on land concentration in rural areas and on labour markets in general. Reducing population growth is not simply a matter of providing birth control techniques, but equally of bringing about attitudinal changes in society and economic changes in the status of women, including especially advances in female education and the associated increase in participation of women in the labour force.

The Direct Approach: Targeted Programme for the Poor

            The direct approach relies on targeted programmes aimed directly at increasing incomes of identified poverty groups. Two types of programmes undertaken are discussed below:

A.                 Wage Employment Programmes:

            Direct provision of wage employment is obviously an attractive instrument for poverty reduction wherever the poor depend heavily upon wage employment for their income and also suffer from considerable unemployment and under employment. Rural Manpower Programme (1972), Food-for-Work Programme (1977), National Rural Employment Programme (1980), Rural Landless Employment Guarantee Programme (1983), Jawahar Rozgar Yojana (1989), National Rural Employment Guarantee Programme (2006) are the wage employment programmes taken up by Government of India.

B.                 Promotion of Self-Employment for the Poor:

            Members of poor households are assisted to set up as independent self-employed producers engaged in commodity production or provision of services with a fairly small capital investment. These ventures are financed by provision of subsidized credit, which is made available on special terms and through special procedures (e.g., without collateral security) in order to overcome some of the problems which limit access of the poor to institutional credit. Integrated Rural Development Programme is undertook by India.

Smart Card System

            Virmani (2006) suggests the introduction of Smart Card System as a poverty reduction strategy. The Smart Card would also constitute a national identity card. For instance, the card could contain information on citizenship and voting eligibility (constituency for voting). Cash delivery through smart card would be akin to a modern version of the post & Telegraph department’s money order system, already operational with specialized companies that intermediate international / national remittances. The cost of setting up and running a nationwide cash delivery system for the poor would probably be significantly less than that of a commodity related system. The bottom half of the population may be issued smart cards (with complete entitlement related information). Annual updating of entitlement related information could be done for those below the poverty line and those up to half this percentage above the line (i.e. if poverty rate, HCR, is 24% cover poorest 36%).

            Smart card would be programmed with identity (photo & biometric fingerprint) and have information on social and personal / household characteristics. Each person / households’ entitlements could be in the form of specified subsidies for the purchase of a set of items. The entitlement could be varied with and dependent on various economic and social handicaps. In this way all the current stakeholders, special interest group and social policies could be accommodated within a simple integrated system.

A case study of India’s Milk Revolution - Investing in Rural Producer Organizations

            The Polsons – a private dairy at Anand, Gujarat, established in 1929- procured mild from milk producers through middlemen, processed it and then sent it to Mumbai, mainly to the Bombay Milk Supply Scheme. Polsons profited immensely. In the mid-1940s, when the milk producers in Kaira asked for a share of the profits, they were denied even a modest increase. The Kaira mild cooperatives began as a response to put an end to this exploitation. The first dairy cooperative in Gujarat was the result of a farmers’ meeting in Samarkha village (Kaira district, Gujarat) on 4^th January 1946, called by Morarji Desai on the advice of Sardar Vallabhbhai Patel. Sardar Vallabhbhai Patel assigned Tribhuvndas Patel the task of “making the Kaira farmers happy and organize them into a cooperative unit”. The infant cooperative dairy, Kara District Cooperative Milk Producers’ Union Limited (KDCMPUL) – now famous as AMUL- was fighting a battle with the Polson Dairy. V.Kurien was posted as a Dairy Engineer at the government Creamery, Anand, in May 1949. Kurien helped Tribhuvandas Patel, the chairman of KDCMPUL, to set up a processing plant. At that time, only two village milk cooperatives were involved, representing only a handful of farmers. By the early 1960s, modest experiment in Kaira had not only became a success, people began to recognize it as such. It came to be called as ‘Anand  Pattern Dairy Cooperatives’.

Farmers came from all parts of Gujarat to learn from Amul’s success.  They started Anand pattern cooperatives in Mahasana, Surat, Valsad, Bharuch, Sabarkantha, Baroda, Ahmedadad, Panchmahals and Rajkot.  After years of struggle, the cooperatives began to produce dramatic results. Gujarat cooperative Milk Marketing Federation (GCMMF) was established in 1973 to jointly market the products produced by the dairy cooperative unions in Gujrat.  Today GCMMF sells Amul brand products not only in India but also overseas.  In 2002-03, the GCMMF’s turnover was over Rs.2700 crores making it the largest in the food industry.  What started as a fledgling cooperative has now become a multi crore dairy industry.

National Dairy Development Board (NDDB)

In October 1964, on the occasion of the inauguration of Amul’s cattle feed plant, the then Prime Minister of India, Lal Bahadur Shastri, spent a night as the guest of a village milk cooperative society near Anand.  Impressed by the socio-economic changes brought about by the milk cooperatives, he expressed the desire for a national level organization to replicate Anand Pattern Dairy cooperatives throughout the country.  In 1965, National Dairy Development Board (NDDB) was established at Anand.

Operation Flood Programme (OF)

            OF programme started in 1969.  It was implemented in three phases between 1970 and 1996.  Working through the state governments, the OF programme created the 3-tier structure of Anand Pattern dairy cooperatives all over India.  During phase-I (1970-79) the main thrust was to set up dairy cooperatives in India’s 18 best milksheds, linking them with the four main cities of Mumbai, Kolkata, Delhi and Chennai.  Phase-II (1979-85), covered some 136 milksheds linked to over 290 urban markets.  By end 1985, 43,000 village cooperatives covering 4.25 milk producers, was created. Milk powder production went up from 22,000 tonnes in the pre project year to 1,40,000 tonnes in 1989.  Phase-III (1985-96) ensured that the cooperative institutions became self-sustaining.  The programme achieved substantial expansion of the dairy processing and marketing facilities, an extended milk procurement infrastructure; increased outreach of production enhancement activities; and professionalization of management in the dairy institutions.

            In 2003, dairy cooperatives account for the major share of processed liquid milk marketed in the country.  Milk is processed and marketed by 170 Milk Producers’ cooperative unions, which federate into 22 State Cooperative Milk Marketing Federations.  There are 1,01,000 village level societies, owned by nearly 11 million farmer members.

            Anand pattern envisaged decentralized milk production by small milk producers; milk procurement by primary dairy cooperatives of milk producers; centralized milk processing by union of dairy cooperatives; and marketing of milk and milk products done by federation of unions.  The core feature is farmer control on all three stages, that is, procurement, processing and marketing of milk and milk products.  The value addition at procurement and processing stages can be realized by the cooperatives only through control over marketing, thus making control over marketing an essential and critical features for success.

BIBLIOGRAPHY

World Bank (1999).  World Developmet Report, 1999/2000 :  Entering the 21^st Century.  Washington, D.C.: World Bank.

Virmani, A. (2006).  Poverty and Hunger in India : What is Needed Eliminate Them.  Planning Commission working Paper No.1/2006-PC, New delhi: Planning commission.

Kurien, V. (2004).  India’s Milk Revolution – Investing in Rural Producer Organizations.  In scaling up Poverty Reduction: A Global Learning Process and Conference Shanghai, May 25-27, 2004.

Ahluwalia, M.S. (1990).  Policies for Poverty Alleviation.  Asian Development Review : Studies of Asian and Pacific Economic Issues, 8(1).

Kidd, A.D. (2001).  Extension, Poverty and Vulnerability in Uganda Country Study for the Neuchatel Initiative.  ODI Working Paper 151, London : ODI.

Christoplos, I., Farrington, J. and Kidd, A.D. (2000).  Extension, Poverty and Vulnerability.  Inception Report, London : ODI.

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