Riddle of SHG Movement

Why SHG movement failed in *North-East India but successful in Kerala ? Kerala and North East are both quite high in literacy rate and women dominated society.  Even recently Tripura has become the most literate state in the country overtaking Kerala. This question was asked by a government officer in Ganjam district where I was deputed in my stint at Odisha Livelihood Mission.  The argument seems valid but I had three reasons for the failure now.

1. These are matrilineal societies, not matriarchal ones. Matriarchy is not just about descent and inheritance being traced through the female line. The matriarchal system means a system where women have power in “all activities relating to allocation, exchange and production, as well as socio-cultural and political power." When descent and inheritance are traced through women it’s called a matrilineal system. Matrilineality is only a sub-system of matriarchy and the power in the social power structure remain in the hands of male only. Traditionally, it was communities like the Nairs, Ezhavas and Warriers in Kerala & it’s the the Khasi, Jaintias and Garo tribes (majority of the population of Meghalaya) who practice or used to practice this system. For more about women in North East, please read Status of Women: North Eastern Region of India versus India by Dr Ira Das

2. Population Density is the biggest difference between them. Kerala is home to 2.76% of India's population; with a density of 859 persons per square km, its land is nearly three times as densely settled as the Indian national average of 370 persons per square km. [Reference] This is the major reason as sparse population in the hilly region create a high operational cost and challenges in the last mile connectivity in North-east India.

3. Lack of penetration of financial services is the major reason behind failure of SHG drive. There are only 2.3 per cent of total account in Northeast India.while the maximum no of 27.44 per cent of total account in South India. Read more Financial Inclusion in India:A Brief Focus on Northeast India. Stronger presence of MFIs in the Assam and Tripura helped reduce the disparity but there is a long way to go.

4. In a region ravaged by conflict, business as usual is no longer an option. The political risk due to constant terrorist and insurgent activities with AFSPA have also led as a major hindrance for investment in infrastructure. There has been chaotic process of creating a peaceful state, an economy and a workable political settlement from the violent, corrupt, and poverty-ridden area shows the development process in all of its historical reality.

The picture with inclusion in the development emerges is of increasingly nuanced collaborations and partnerships: business-state, business-society, and between formal and informal business. The promise of financial inclusion in India has been for long time but has never materialised.The Reserve Bank of India is navigating the path to financial inclusion by means of regulations and guidance. RGVN (North East) Microfinance Limited, the only micro-finance company from the region to be selected by the RBI to set up a small bank. The development of financial services will also be a source of growth in North East in the future.

*The Northeast India comprises of contiguous eight states of Arunachal Pradesh, Assam, Nagaland, Manipur, Meghalaya, Mizoram, Tripura and Sikkim - is geographically, ethnically and culturally different from the rest of the country.

Young Professional @ Odisha Livelihood Mission--- 2

Young Professional (YP) is a short-term work opportunity (three years) to experience development and gain exposure to government operations and policies. Panchayati Raj Department, Odisha is the agency in implementing National Rural Livelihood Mission (NRLM) program delivery and interface in Odisha serving to the marginalized section of the population. While the government is always reluctant to share or de-valuate power to the community, NRLM has tried to build sustainable community institutions at the Panchayat level. YPs served either at the district or block administration level. In simpler words, YP is just another name of Management Trainee in a government agency doing the contractual job without any power.

Why I joined Odisha Livelihood Mission?  One can't have the right to voice their disappointments unless one understands the functionality of the government. I have also considered the government as the biggest development agency in India. Hence, it is of utmost importance to understand governance in India. Corporate look into so many people as consumers and term them as "Bottom of Pyramid". In contrast, OLM was trying to build the capacity of people without throwing away subsidized schemes. These are a few of the many reasons why I was able to work with the state.

I always wanted to have a balance between theoretical and practical work. It is different to know the name of something and actually observe or experience it. A course in rural management doesn't offer subjects that make their students ‘understand’ the rural people. Even with a bit of knowledge acquired in the college, I was looking for a job as a practitioner, not a professor. I have written in detail on this topic previously Young Professional @ Odisha Livelihood Mission.

I worked as YP in OLM from April 2013 to January 2014. This work gave me the opportunity to work with the Government and the community jointly. This time span has good, bad, and even ugly moments. I was able to show true character and talent by taking up the challenge and worked with a zeal to learn.

The Good:

The single strongest predictor of group effectiveness is the amount of help that peers do to each other. A bunch of YPs was no exception to the rules. Our workplace has qualified men and women with diverse professional, academic and cultural backgrounds from educational institutions like TISS, NIRD, IIFM, XIMB, XISS, & KSRM recruited as YPs. Diversity is reflected in our inclusive environment that embraces all sorts of values and ideas; The best part was having people who weren't sycophants rooting for their college brand rather than cross-engaging for new collaborations.

I developed a decent understanding of the Odiya language. Rural India has been transformed over the last half-century, the people are freer and filled with aspirations, but the old values continue to extract a toll. What I saw was how significantly social networks influence people’s decision-making. There are people out there who didn't get the option to graduate or study in regional medium alone but have sound knowledge on development. There is also a feeling of powerlessness and an inability to make themselves heard in the corridors of power.

To counter the dimension of being voiceless, I tried to reach out to many people as possible and ask tons of questions. Typically, people don’t like to be questioned, but it is essential to engage with people in a friendly way and listen to them. It's a bit like an investigative journalist checking narratives of the beneficiaries, non - beneficiaries, government officials, & elected representatives. I was also lucky to interact with Dr. H.K. Pradhan, a senior faculty member of XLRI spearheading an initiative in Balasore. And yes, there are government officials doing honest work in a thankless job.

Our simple assumptions like simplifying schemes, running awareness campaigns, and make the public goods widely available were critically assessed in the light of new evidence. There is a wide gap between community, market, and government - like coordination problems and inequality in access to power and information. I was able to oversee as an insider working of Indira Awas Yojana, Mo Kudia, Mo Pokhari, MGNREGS, Gramsabha, social audit of government programs, and Panchayat administration. I learned two lessons on public policy and government.

1. Efficiency isn’t always the goal of policy as one has to give attention to social and cultural complexity. Public policy requires fairness, which doesn't lend to the most efficient policy but is virtuous nonetheless.

2. Government is anything but well-tuned, acting coherently and consistently in pursuit of a well-defined set of objectives, captured by a single social welfare function. Government is a crucible of interest groups, rather than a black box of noble intentions.

The Bad:

It is necessary to get the first step right to reach the solution to the problem. Once the first step is incorrect and the entire problem gets way too complicated. A sharp glance at the old schemes of the central and state government shows more tweaking rather than the innovative design of new programs. Hence, the failure rate of the government is of utmost high. There was quite a low emphasis on Monitoring & Evaluation (M&E) job. Too much emphasis was given on the framework of old government programs; I have written in detail on this topic: Why Government Schemes Fail? and Why Government Schemes Fail? -2

Even Lord Curzon has complained, "Round and Round like the .... revolutions of the earth goes file after file in the bureaucratic & daily dance, stately, solemn, sure and slow". Guidelines, plans, programs, or projects tend to be neatly prepared for submission, but agencies and individuals return to business as usual once it comes to implementation. Meetings are important as they give part of the thought process of various govt departments. But in short, there was more time wasted in aligning the process than measuring qualitative results.

The Nobel Prize-winning behavioral economist Daniel Kahneman has established that unfairness is a larger motivator for action than fairness. YPs were assigned different salaries even with the same job profile that is unfair and the issue was pushed down under carpets. It puts the act of cohesion and coordination in jeopardy.

The Ugly:

Appointing consultants on a contractual basis, instead of employees on the rolls, is a common practice adopted by companies but most NGOs as well. It is done to evade the responsibility of providing PF benefits which are mandatory under labor law. And, this was done to YPs by an agency working on behalf of a government department.

The problem isn't that the staff don't contribute, it's that the official who takes feedback don't think of themselves as ignorant enough to learn something new in face of new proofs. Even officials are not cold to the problems faced by them but they are more tied in the tight framework of government norms. But, it was indeed a hierarchical institution with less space given to honest feedback as it may undermine the authority and raise questions. Shooting from the hip in presentation is an easy way out, but do dig a little deeper people will tell the real stories on the field. There was more tendency of risk aversion than performance in the staff.

Why I left Odisha Livelihood Mission? Personal reason to work close to home was the primary factor behind the decision. Due to being vocal initially, a lot of negative images was build in the central team. Yet, lack of mentorship, no clarity on the role, and working without powers was a frustrating experience to be as professional. Hence, the scope to take any concrete work was quite limited. I am a work in progress and don't want to stifle in starting phase of my career. Hence, I shifted to another grass-roots organization.

Rural Awareness Campaign

Communication for development (C4D) in rural areas employs the same tools as MNCs but serves different purposes. Rural Communication campaign for awarding people by NGO/Government has to put forward facts before target audiences to appraise them with the Government scheme or value of Sanitation, Education, Health, Gender, and Public Rights. The use of ICT like government department websites in distributing information is limited to English rather than the local language. Searching and cutting parts of data from the website is not easy for villagers using telephone-based connectivity.

Mid-media activities such as street plays, mobile vans, screening of video films, and even Puppet shows are used as a medium of communication in rural areas. Hoarding, Wall paintings & danglers in the local vernacular language also form an important part of the marketing communication strategies. They come at a low cost and the visibility is high, and so is the stickiness. Booklets, Pamphlets, and newsletters can be used in states with high literacy rates like Kerala. Social media such as Community Radio can be beneficial and accelerate the awareness of people. Community halls, Anganwadi centers, Health sub-centers, Schools, Bus-stops, Tea-stalls, dhabas, Dharamsalas (public rest-houses), and Private houses(with permission)are the centers for the campaign.

Motivational messages in Rural Odisha (Renga Village, Koraput District)

Sensitisation Program on NRLM at Bibhutia Village, Surada Block, Ganjam District.

'Ghanta Mrudunga' is the form of art used here for the Information, education, and communication (IEC) campaign. This type of event is helpful in channelizing the information on NRLM through street play sessions. Partner agency has developed IEC material for creating awareness among the public as well as the targeted communities. This event has its drawback. It was organized in interior hamlet but no emphasis was given on the convenient time of women or daily wage laborers etc. The notable absence of the target group in accessing the information on the importance of livelihood shows the approach of the government machinery. I was only monitoring the campaign as it unfolds. The low turnout was a professional failure.

I am still searching for outstanding examples concerning the use of communication to support rural development. Grievance redressal and social audit are good examples of the two-way communication campaign. Against this rural background in Odisha, the question of rural development quickly gives way to a broader, even more, difficult question: Does communication matter for good governance? How can one-way communication enhance good governance, participation, and transparency? How do grassroots democracies evolve, and how do they grow stronger?

Drudgery Reduction for Women

It is time to invest in agriculture, rural development and food security. That's where the future of India lies.There is lot of women's participation in agriculture and allied activities in addition to the household work. Manually women were not able to increase the productivity and some of the health problem occurs. Simple Machine and tools like Coconut peeler, fishinh net, sugarcane stripper always act in drudgery reducing technologies and help to reduce the incidence of the health issues.

Odisha government launched an innovative scheme, “Women SHGs for Drudgery Reduction". The vision behind is to make a positive impact on the health of women folk of the state by reducing their physical exertion. As per the scheme, each SHG would get Rs. 10,000 as financial assistance through which they can buy different types of technical equipments and enhance their productivity. Mahila Vikas Samabaya Nigam, the Women’s Development Corporation, was established as the Nodal Agency for implementing Schemes and Programmes for the welfare, development and empowerment of women.

There was planned disbursement of funds to SHG accounts in e-transfer mode. The project involved District level committee entrusted with the responsibility of transparent selection of SHGs and identifying the main activities that are undertaken in the district. Priority was given to SHGs with SC/ST/PWD/BPL families. Monitoring and random field verification was the guideline provided by the government for the proper implementation. On receipt of funds, SHG members will procure in a transparent involved in at the lowest possible market price.

Physical Target for DRDA was nearly 245 SHGs while financial was 232.75 Lakh in Ganjam district. Manual operated Pulse Thresher, Manual Weeder, Smokeless cook stoves and Paddy Ripping Sickle were the main procured items. This scheme must be evolved for workers involved in MSME. There is a cashew processing cluster employing mostly women in Ganjam district along coastal belt. Workers require gloves but the employers are apprehensive that output would reduce if gloves are used. Small machines enhance the efficiency of their work of shelling, peeling, and grading.

This is one of the better scheme launched by the government. Such initiative will help in increasing production and productivity besides reducing drudgery of labour associated with farm activities. Only time and project management can give us the result of this scheme. But there has been no baseline study before implementation of this scheme. Hence, questions such as - " Has drudgery / no of hours of work/ been reduced by technological improvements?" will remain unanswered. I saw this scheme as an extension of Conditional Cash Transfer(CCT). There is a good article on cash transfers at World Bank blog. Please read Cash Transfers: Sorting Through the Hype.

Indian Government had started the ambitious direct benefit transfer (DBT) scheme on January 1, 2013. Direct Cash Transfer can work wonders when the beneficiary is identified correctly. Who are these beneficiaries and how to identify them ? A pretty useless and a stupid question to ask if it was pertaining to India. Identification is not a statistical exercise, but is a major political activity at ground level. Hence, even with either conditional or unconditional cash transfer, nothing can work with money going through non existing beneficiaries into corrupt bureaucracy and political leaders. Cash in the hands of sensible people does more than in the hands of corrupt state or senseless aid agencies;

Micro Investment Plan (MIP) of SHG

The international standard for the definition of the poor i.e. a household that spends more than one-third of its income on food is followed in India, 95 percent of all households would be considered poor. Every country needs an inclusive political and economic institution to break out the cycle of poverty. The delivery of financial services at an affordable cost to the vast sections of extremely poor and vulnerable groups of people is a necessity for the development of India.

Plans are useless, but planning is indispensable. — Dwight D. Eisenhower

Budgets help to determine how much money one has, where to invest it, and whether one can achieve your financial goals. A budget is a forecast of all cash sources and expenditures. MIP is a tool for financial planning that can be used for both SHG and its members. Socio-Economic Analysis of each SHG is performed as risk is involved in giving loans without any collateral. The format used in TRIPTI can be downloaded here.

Indicative Components/ Seven Steps for preparing a Micro Investment Plan (MIP) :

Step 1-SHG Details Format

Step 2-Members’ socio-economic details Format

Step 3-Income and expenditure statement of members Format

Step 4-Listing of Household Investment Plans (for economic, social, and household needs) Format

Step 5-Prioritization of Members Format

Step 6-Financing and Rotation Plan Format

Step 7-Terms of Partnership Format

MIPs are promoted under National Rural Livelihood Mission as it helps in better planning to avoid bad loans on behalf of the banks. Micro Investment Plan is prepared with the initiatives of Community Resource Person Strategy in the Project. MIP is used for SHG members where many factors like a priority, wealth ranking, Investment in the activity proposed, Loan Amount, Life of Asset, Monthly Incremental Income, Saving Capacity of Household, Installment Amount, No. of Monthly Installment and other entitlements (PDS, Insurance, Pensions, etc) are considered. MIP includes plans for investment on asset creation for income generation and household needs investments. MIP is assessed at a Household-level where assets, liabilities, risks, vulnerabilities, entitlements, and other expenses are noted down in the detail.

But such detail exercise exists only in theory. Most of the MIP forms had not been filed properly. Activity proposed, No. of installation, Payback amount, and signature of President & Secretary is the main focus of Banks. The low-income who have been excluded from the financial services of formal institutions lacks financial literacy in most cases. Financial literacy for poor villagers is really important but it doesn't mean training by government officials once in a blue moon. There is always a need for the Livelihood mission/MFI/NGO to reach and build the capacity of SHG members. People need awareness about financial products, fraud activities, or else they are misleading and fall to misdeeds of chit fund companies promising high returns; This often ends up losing the lifetime savings.

Let us see a practical example of credit linkage. An SHG demanded nearly 1 Lakh as per their MIP and each member of the SHG deliberately had put Rs 10,000 as the investment capital for the proposed activity. Rs 50000 from the GPLF (Gram Panchayat level Federation of SHG under Livelihood Mission) at a nominal interest rate of 7% was given as a loan to SHG. Group divided this money among themselves equally (Rs. 5000) per member. The amount according to their need(proposed activity) will always differ from each member but fairness is maintained through this equal division. Only internal loaning is done among members on the basis of priority. In the case of external loans/grants, this fairness in distribution is always maintained by SHG. So, Priority in lending is a nice theoretical concept. How do a rural manager can change 20 years of what the common wisdom has taught them?

Validation and Grading of SHGs

SHGs were formed under Mission Shakti in Odisha. Odisha government started a validation and grading exercise to know SHG status in December 2012. The validation process aimed at confirming the existing status of SHGs, whereas the Gradation Process assessed their eligibility for receiving Revolving Funds.

Validation

In an ideal world, the Branch Manager/ Representative of the Bank, B.D.O/Representative from the block, and C.D.P.O/Representative from ICDS should visit the field and complete the process. This may take from 5-10 days depending on the size of the district. This doesn't happen in the real world where AWW sits with the President/Secretary of SHG for the complete assessment.

DRDA and ICDS Balangir have a record of 11097 SHG existing in the district but validation led to only 7846 functioning groups. Hence, we can easily imagine with these figures, the difference between SHGs claimed and existing can run in lakhs. Defunct and far SHGs form a major part of the numbers claimed by the government.

Grading

Grade I and II with A, B, and C as three categories of the SHG was the grading format. The format with various criteria is uploaded on Scribd. SHGs having 70% BPL members and passed the Grade-I test and categorized as “A” or “B” i.e. Scoring more than 60% marks during Grading will only be eligible for Revolving Fund in order of merit as per their scores. The Graded SHGs are assisted under NRLM, as this fund will aim to address the immediate production and consumption needs of members of the SHGs as well as encourage internal lending practices among the members.

In the intensive Block under NRLM, Revolving Fund(RF) of 10,000 or 15,000 depending on whether they had already received any prior assistance under any other government scheme. The SHGs who have qualified grade I test but have not availed of any financial assistance will be provided with a revolving fund of ₹.15,000/- in two tranches. In the first tranche ₹.5000/- will be provided and on successful utilization of this amount ₹.10,000/- will be provided to the group directly in 2nd tranche at least after 3 months of receiving 1st tranche. This fund will become a part of their group corpus. The group members can borrow from the group corpus to meet their various needs as decided in the group. However, the groups who have already availed of such financial assistance under Mission Shakti or any Govt. program will not be eligible for 1st tranche and receive only 10,000. I insisted on attaching Xerox copies of my BPL card and Bank Passbook SHG while working at Bhanjanagar block in Ganjam district. Hence, it created transparency and gave validity to the no. of BPL members by any SHG.

Conclusion

RF/PPIF is distributed in a campaigning mela organized at each block to sensitize the groups about NRLM. Generally, it is more show of the good work done by the government. In an ideal world, SHG assessment (or rating) should not just be limited to current performance but could also assess credit absorption and repayment capacity. That requires qualitative information to look for problems faced by each group. It is assumed by the government that the SHGs that are found ineligible would be provided hand-holding support, to improve their credibility for future assistance. However, there was no staff at the field level to do this tedious job. Record keeping at the group level has emerged as a very weak aspect of SHG functioning.

The main problem is that we don't have data on the Life cycle of a SHG. We are unable to understand how many groups are defunct or discontinued so we don’t know the mortality rate of the group. So, the government has no answer to these two questions: What groups work, and what works with groups?

e-NRLM

It is very essential for monitoring and evaluation to have solid data. There are thousands of functioning SHGs in the country. NRLM has taken step for transparency through data collection about SHG. MIS of NRLM is hugely important for tracking effectiveness of programs that would serve in a long way to establishing accountability at each level.

ICDS is already working with SHG movement in Odisha with Mission Shakti since 2003. Through validation and gradation of SHG in December 2012, Panchayati Raj Department was able to verify total number of SHG in the Odisha. Still, there was no concrete record of name of all SHG members. Name of President and Secretary can only be obtained through all given data. I formed a template as required for MIS and termed this E-NRLM format. Our OLM team at Bhanjanagar and Surada block of Ganjam district used Aagan Wadi Workers (AWWs) for collecting data about SHG.

Data collection exercise is a tough thing in India. Education of the most of the AWWs varies mostly from class 7-12 range. They are overloaded with core responsibilities and other auxiliary works. Other hurdles in data capture is Demand of Information in English Language. This is a huge problem at all India level as the necessary level of English is not achieved by  AWWs, GRS or any other extension staff. If we collect data in the regional language, it will be very tough for translating them in English for data operator sitting at block level. One more precaution should be taken while collecting data at rural level. Agriculture season shouldn't be selected for the exercise as women members are busy in all activities. That will add burden to AWWs and make process more tedious.

Gathered information is static in nature. We need to re-validate all old SHGs each year for any change in members, amount of savings and bank linkage history. There is need to colled basic information also need about new SHGs formed each year. There will be upcoming need to update BPL(Below Poverty Line) data related to SHGs in near future. Currently, 1997 BPL census data is used in Odisha for any scheme. 2011 BPL data will be soon made public and must be incorporated soon.  Why this is important ? Each government schemes has guidelines to select beneficiary mostly on the basis of either SC/ST or BPL card per household. Hence, a more transparent way will emerge with the help of this MIS.With each opening of bank branches (public and private) in the locality, they should be readily integrated in MIS data.

In a review meeting, we were battered by a senior officer for not taking ownership of the mission in data collection exercise. This task was not possible without having a single field staff dedicated for NRLM at our disposal till December 2013. And, nobody remembers all big talks of convergence of various government agencies! I was working at Balangir district where few villages/GPs name were missing from MIS. We readily took help from MGNREGS MIS software. Now, that is a fine example of convergence. We are collecting BPL card number instead of just writing yes or no in BPL column for e-nrlm. That is ensuring much transparency in the system. It is plan to do this data collection exercise each year conjoint with re-assessment schedule of all SHG. That will ensure much light on proper SHG health.

Social investment is not being done just be formation of SHG and quality is not being maintained as government is only chasing numbers. Our huge ignorance of how good or bad SHG works is barrier to their development. MIS is a tool that will be give quantitative answers. There is still need of huge qualitative data to explain the numbers. NRLM need rigorous and reliable information of impact assessment studies, social audit, panel studies etc. Open data-Base is a new kind of 'public good' that can be generated through this mission. With this huge amount of publicly available data disseminated to policymakers, industry, bankers, researchers, Academia, students and others can give more understanding social reality.

Producer Groups - Practical Experiences

"I learned very early the difference between knowing the name of something and knowing something."- Richard Feynman; That is why, despite knowing the theoretical concepts on the Producer Groups, there were some practical lessons gained in the field. I had worked with Producer Groups farming Groundnut, Onion, & Pulses (even one group was doing business of NTFP) at Balanagir district, Odisha. I was guided under the able supervision of Kamalendu Paul, Zonal Manager, ORMAS (Orissa Rural Development and Marketing Society). The document Community Enterprise System Manual prepared by Prof. Amar KJR Nayak came helpful during work.

All producer groups were having women members only. No producer group has been registered under any act till now. However, credit was given to them based on mutual trust between the government and Producer Groups. The legal process will be initiated soon. We were also unable to do protect farmers under the crop insurance scheme till this year. Organizing the unorganized was already done by Paul Sir before I arrived at the district. Without the help of local persons, this was not possible. The sign of government (even its vehicle) is a sign of trust in rural areas. That fast-paced our work even by Indian standards in establishing trust with the community. Our companies have usually dumped their substandard products and Chit Fund company had run away with the money of rural people. This historical tendency of companies has made business in rural areas difficult.

 

Practical Experiences:

1) 40-60 is the optimal size of the group. It is necessary for cohesion within and management of the group. Since they are small-scale, it is generally preferred that they are not much dispersed. There is an executive committee and further sub-committees in the Producer group. But, most of the members don't know the power, roles, and responsibilities of this committee. Since NRLM is a new scheme, we have to remind each time about the objective and scope of the mission to the members.

2) Producer groups were more successful in the remote areas of the district. The sense of cooperation is more seen in these regions in comparison to the relatively rich parts of the district. It is a small sample for me to draw conclusions but the poor are more honest and cooperative in nature.

3) For any business, 'budget' is the ultimate tool with which to monitor and keep an eye on the business. The lack of education becomes a major hindrance in the preparation of the annual action plans and budgets. It was easy to make them understand procurement procedures (like inviting more than one quotation) and the necessity of documentation. Since most of the women are part of SHG, they have a basic idea about documenting the meetings and cash book.

4) LSP (Livelihood Support Person) is appointed for their help in marketing linkages and proper documentation. Producer Group is more considered for a good price while the government is more strict on documentation part. An honorarium of LSP is merely 2000 -3000 rs currently. That may appear low but as per my opinion, is sufficient if billed on RS 50 per hour of interaction. Work of LSP is maximum during the post-harvesting season.

5) I have attained lectures, read articles, and even studies courses on leadership. Cooperative Leadership is not just about good communication skills, democracy – it's about sound decision-making by utilizing the capacity of the group. A producer group like any other group is leader-oriented. The trivia is that an exterior person like LSP should enable but should never drive the Producer Group strategy. Since I have been working with women producers and male LSP, this scenario may occur in the future. A leader should be groomed inside the group. Even on the proxy of gender diversity, there was only a single woman among all appointed LSPs.

6) Another difficulty that the producer group or cooperative societies encounter relates to storage facilities. Most of the surplus produce in an area is assembled and sold at the mandi. Infrastructure support is a must for the producer group. Most of the farmers even if organized for the production purpose are reluctant to store for a long time to meet their immediate consumptive need. A low-cost storage facility for multipurpose use at each GP/ village for each producer group is a good solution to the problem. It may appear cheap and effective under Panchayat but the chances of either personal usage by PRI members or no maintenance are more in it.

7) The transport arrangement to market a small volume of produce is not facilitating and rural transport cost is much higher than the urban transport cost. Hence, by combining the total produce, we were able to bring businessmen to the doorstep of farmers.

8) Line departments like Agriculture Department and its extension services support have been minimal till now. Convergence is always missing in between government departments! We are hoping for their help during the training session of producers. The fund supplied for training purposes by the government will be used in the future. The caveat of guidelines in utilizing training funds: Only half of the group will get the training. A sure way of creating a rift between members. It is better to spend less on training per member but to impart training to everyone in the group.

9) There was not much inclusion of banks till now. Without any corpus fund provided as a grant, it was difficult for a bank to provide the loan amount. And, Banks heavily discourage and delay SHG/PG  members making transactions to the respective branches. That is a big issue with multiple perspectives to be debated later.

10) Agri Produce Market is not very quality conscious, but price-sensitive to a certain extent. The credit supplied to PG is used for holding the collective produce for one or two months. In the meantime, there is a definite rise in the prices of produce. We have experience of selling Pulses for a profit of more than Rs 10 per kg by holding the stick for a period of one month.

Failure of Cooperative societies should never be forgotten in the Indian context while pitching support for such groups. Cooperative societies were not harmed much by politics but by the interference of the bureaucracy. Lack of serious attention to value-added agriculture and rural MSMEs is a big task to be handled in the future. How do we make agriculture sustainable and economically viable? That is the big question.

Initiative Taken:

Previously, only office bearers and LSP words were taken for granted in meeting at district-level meetings. Producer Group registers were the only way of checking regular meetings and updates during field visits. I have collected the maximum available mobile phone numbers of members. Hence, I can actually monitor live, whether PG meeting is happening or not from district headquarter through random calls to any member.

- A DPR (Detailed Project Report)was approved by OLM (Odisha Livelihood Mission) last year. There was no provision of a baseline survey. I tried to capture data about household socio-economic conditions so that impact assessment can be made in the coming years.

Producer Groups - Theoretical Concept

"Where the poor participate as subjects and not as objects of the development process, it is possible to generate growth, human development, and equity, not as mutually exclusive trade-offs but as complementary elements in the same process." --- Meeting the challenge, Report of the Independent South Asian Commission on Poverty Alleviation, 1992.

The problem with the modern outlook of business education is to view rural/urban citizens as target consumers. Instead, if we enable them as producers, that will surely boost the economy and well-being of our producers. Most of the producers are caught in the vicious circle of poverty and even fully dependent on the monsoon for a good harvest. The government has reworked its strategy of helping marginal and small producers in breaking out of the cycle of poverty by organizing them into producer groups. The concept of Producer Group has been lifted from the cooperative societies. This concept is based on voluntary cooperation as the rural ecosystem has limited resources and infrastructure.

Why Producer Group? The main aim of the producer group is to stop the practice of ‘distress selling’. I will give three reasons for pitching Producer Groups. 1) Creditworthiness is directly related to income, farm size, age of farmers, and level of formal education of farmers. Hence, the marginal farmer is always caught with a lack of credit. 2) Marginal farmers as rural producers always suffer from an imbalance of bargaining power in market transactions. 3) Small farmers always dispose their produce at the nearest mandi at a through-away price. The size of the market for agri-related commodities is always good but highly price volatile in India. I have written more on this topic: Market Failure and Primary Producers.

A producer Group generally consists of 30 to 150 producers [depending upon nature of the Livelihood Activity] involved in a common activity. Producers groups should be formed preferably at the village level or at the GP level for tribal areas where the size of the village is very small. Producers Group may be registered under the Self Help Cooperative Act, 2001 of the Government of Odisha (Depending on the state) or The Companies Act of India in the future. As per new NRLM guidelines, a minimum of 50% of the total members should be from the BPL category. That is a good strategy for poor and vulnerable households.

There will be service charges taken from the members for purchase and maintenance of common assets like mattresses, Chairs, Lock, Box and Weighing machines. There will be the engagement of a professional resource person called LSP (Livelihood Support Person). LSP will help them in procurement, processing, value addition, and market linkages. However, the cost of LSP will be borne by the government for initial two years depending on the honorarium decided by the Producer group. There is a provision of financial (Loan for working capital @7 % & Grant for capacity building through training) for producer group.

Generally, Indian farmers have a highly unorganized and individual approach to cultivation. Organizing the unorganized through mobilizing the whole community is the most time taking part of the formation of the Producer Group. The first step within business planning is to identify the business opportunity. This is decided by members Producer group itself only. Ensuring regular meetings and interaction from a government official is a way to sustain the producer group. With enhanced collective bargaining power, Producer groups are obtaining good prices for their produce in the market. Still, there are many practical difficulties in the whole approach. That will be taken later in a new blog post.

100 Days @ Balangir

I joined OLM office as YP at Balangir on 27th May 2013. I completed 100 working days today. Let me redirect reader to details of the place where I am working : Balangir District. Balangir/Bolanagir lies in KBK (Koraput Blangir Kalahandi) region and is considered as one of the country's 250 most backward districts. KBK itself has attracted the attention of policy makers, development planners and the poverty critics due to its persistent underdevelopment from last few decades. As per my observation, this place is working with slow/numb administrative activity supported by overt political agitation.

There is no resource block under OLM (Odisha Livelihood Mission) strategy for this financial year 2013-2014 in Balangir. Hence, I have to solely work with ORMAS (Orissa Rural Development and Marketing Society). Motto of ORMAS is simple- Creating competence and values in rural Orissa. ORMAS was constituted to facilitate for a sustainable livelihood of the rural poor by working with SHG clusters. It is very common that government schemes concentrated on the input supply than outputs marketing ; They always look credit, production and market aspect as separate entities. The intervention strategy of ORMAS has been on capacity building, initiation of Micro Enterprises, micro credit linkage and facilitating sales through different channels. Currently, I have been monitoring and learning through interactions about these clusters. I term them as “islands of goodness” amid terrain of poverty.

Understanding of how public systems work at district and state levels is my first priority. I don't want to get caught up in the details of one grand scheme, losing sight of the whole picture. I have been attending few district level meeting and also trying to know at-least the name of various schemes of central and state government. That itself is a huge task.

While it is considered that the most unproductive activity in an IT company (other than negotiating a higher salary with HR) is making powerpoint presentations! No such work is given to me here. I am also not used as a data operator. That is good. I cherish my mentor for this. I do not expect full-time attention of busy mentor but surely office staff help me with various government formalities when required. I try to utilize time by reading reports and news in office. I also count plenty of time wasted/enjoyed in facebook also.

Development of a region or person is a slow process. I have been given full freedom to learn maximum from field visits. Traveling to field never appear hectic to me and a few relaxed days are always there in the office. The words of Marcel Proust, "The real voyage of discovery consists not in seeking new landscapes, but in having new eyes."  are sounding more true than ever. Each day at field gives me new insight about this place. It becomes very inspirational to see few individuals who are successfully fighting the battle for better future. Yet, scenes of extreme poverty and illiteracy breaks the heart.

I am an early adapter but still found it tough to adjust to the climate and culture of this place. I have started to understand Odiya but speaking this language is still not my cup of tea. Sometimes frustration and lethargy creeps in the work schedule but it takes time and resources to build a knowledge base. As they always say, Rome wasn't built in a day !

"Young Professional" @ Odisha Livelihood Mission

"No man is a fool who gives up what he cannot keep to gain what he cannot lose." - Jim Elliot

I personally identify and like to attach with the cause of the underdogs in general. There is a dilemma involved with this choice because by descent, upbringing, education and needs; I am a person belonging to middle class society. I am fond of middle−class comforts (like 3rd AC train compartments),a bit of liberal values and even risk free career aspirations. And now, I have undertaken a job in the OLM (Odisha Livelihood Mission) as a "young professional" (a word designated by World Bank for their fresh joiner) so that my work can directly have a positive impact on the people. I had made a new path in the career by abandoning engineering to work in the rural areas for a brief time. The line that boosted my career jump was- If gamblers start worrying about the odds, they would never gamble.

Our generation has an old mindset of scarcity (money) and risk aversion (career switch). Age is never an issue if you have an enthusiastic spirit. 27 is such an age where I stand on the end of bachelor life chasing wild dreams. I have chosen to change course radically and to start completely all over again from scratch. I am happy that my new job will not be to make people buy things they don't want and don't need.

There was a bit of randomness in allotting work initially but induction training happened at Bhubaneswar office. New joiners will be sent to rural areas for exposure to the organization work style through the trainee-ship segment. I am going to Balasore district for immersion visit of 21 days accompanies with two other new fellows like me. Field experience is not only about preservation as about fortification of the knowledge gained at college.

People travel to the far and remote part of alienated regions. They are just only "guided tourists", who return from turbulent societies only to talk about wonderful scenery and wildlife, instead of the people who live their daily lives in the pain and laughter in those foreign lands. Identity of the people leaving in such a desolated region cannot be reduced to a mere geographical space. It is much more than that: it comprises of the emotional−psychological and historical landscapes. I am not any morally superior or far better than them but only going one level more from being a "development tourist" only this time.

Going off the topic, i am too happy to support and share vision of Jairam Ramesh who publicly proclaimed - Unlearn the garbage taught in professional schools.