2014 - Year of Farmer Producer Organizations (FPOs)

I always remember the words of Chinese Premier Deng Xiaoping - "It doesn't matter whether the cat is black or white, as long as it catches mice." So, now NGOs and the government are finally coming to the phase of acceptance of market forces in the development sector. The cooperative movement is already a failure except for a few notable examples. The government has never managed to manage any scheme efficiently. The government is partnering with various professional organizations for setting up a new institution in the country - Farmers Producer Company (FPC) / Farmer Producer Organizations (FPO). The legal framework is ready under the Companies Act. According to this new law, only farmer–producers can be members of the FPC and the farmer members themselves will manage this company. It takes care of the flaws in the cooperative societies but has also borrowed the strengths of the corporate companies.

FPO/FPC will be dominating future debates on livelihood and its success depends on the implementation and design of the program. Pieces of evidence will come for pros and cons of such initiative, no matter how reliable, have to be interpreted. Interpretations can differ and do differ, and such differences account for an explanation. That is a future full of possibilities. I will be updating this space related to FPO. The chart will give an overview of the FPO structure and purpose. It is a bit late to post here but the Calendar year 2014 is declared as the “Year of Farmer Producer Organizations (FPOs)”.

Annual General Meeting of UAPCL

Udaipur Agro Producer Company Limited, UAPCL, is a social-enterprise company focused on strengthening the livelihoods of the community. The organization was registered on June 29, 2010. The company’s main concentration is building the surrounding community through direct collaboration. The company is comprised of 1635 members. Each member is a local farmer mostly small and marginal who owns a share of the company.

UAPCL Annual General Meeting

Share Certificate Distribution

ACCESS Team with UAPCL Board of Directors

ACCESS Development Services is working in the area of livelihood with FPOs (Farmer Producer Orgainzation). Here is a glimpse of Annual General Meeting organized by one such - UAPCL attended by 700 members. Here we see smallholder farmers not as marginal recipients of charity instead as customer entrepreneurs. I will be updating more on FPOs in this space.

Consultant Job

Let me start with a joke: I have a MBA degree and wanna be consultant in future! Does any development organization need consultant ? Yes, they do. Analyst and Consultant form a core area of jobs created in the knowledge economy. Whereas a leader can win people over in an instant due to oration and vision, an analyst can do same with the technical wizardry. But the most over-hyped and over-mocked job belongs to consultant.  Consultants are not brought on to be unbiased. They are hired to confirm a particular bias. There is a popular one line gag on consultant - "If you are not a part of the solution, there's good money to be made in prolonging the problem."

There is always a lot of conferences and consultations on ‘labour rights’ that continue to be held at five star hotels — which for one are known to underpay their employees — without a hint of irony. It may seem wrong, pragmatic, or indecisive and confused? Take your pick. A consultant must focus on collecting data and analyzing the results but always look to field for the ground movements.

Complete package of Engineering and MBA is gradually becoming a shortcut route of becoming a consultant in India. The advantages of a MBA degree isn't really only classroom learning – a degree is easily achievable and online courses available if one wants, it's hidden in network effects and networking opportunities: government, private companies, civil society, and donor agencies. Our classmates are going to form major career networks moving forward. One may say the same for most fields.  I always take words of Henry Mintzberg with bitter pill - "The trouble with ‘management’ education is that it is business education, and leaves a distorted impression of management” & “Not much will to manage, but plenty of zest for business”. ( Managers Not MBAs: A hard look at the soft practice of managing and management development)

I haven't taken MBA degree for fast tracking progress of salary, but to seek a clear relation on public policy and rural India. I want to live as decent human being who engage himself and others substantially in an inclusive development. I don't want to be limited in a AC room as consultant, waiting to speak to field staff who would have nothing but contempt in seeing a waste of financial resource as sunk cost in me. Someone once told me a mantra- "What is difficult in field training will make life easy in a consultant job." I do hope to become a better consultant one day myself.

The Volunteer

It's fine to have people working in development sector with degrees from the elite colleges. But even if they are good at statistics and analysis, they cannot be decision-makers without a grassroots experience. Problem with today’s education is that it doesn't have any relationship to the real world.Images get reinforced over time with newspaper, media and cinema. Innocent Villagers, Shrewd Businessmen, Corrupt bureaucracy and Selfish Political leaders become stereotype. Such perception breaks with each intersection and performance in the field.

Living in the village with no other business but to follow native life in the present day of social media buzz and 24*7 connectivity seems bizarre. But one sees the traditions, ceremonies and transactions over and over again. What it leaves one with temporary chaos in the beginning. In addition to fostering mutual understanding, perpetually curiosity and occasionally confused volunteer start to see the way of living of a community. A long stint of month or more can create less-domineering, nonjudgmental volunteers who are not obsessed with the pursuit of the emotional highs (and photo ops) of the altruism they put effort for. It makes volunteer adapt to the culture, to be flexible, relevant and realistic. Even the long times doesn't alter you so much as the people you meet along the way shape you.

True development cannot be heralded without market, intellectual, cultural and scholarly liberalization. The very best mainstream economists/scientists were the radical youths who questioned authority when they were students. An exposure visit can give limited understanding but volunteerism/internship grooms a different aspect of personality. Our rural side has survived without services of elite rich throughout ages. They will survive but a youth needs mixed dose of idealism, activism and academic expertise. The volunteer takes more than what it gives. Giving back can be very good for career. Most of the volunteer/interns end up as consultants in international aid and lending agencies. The opportunity cost seems high in short run but benefits individual and people around.

Some people volunteer because they want mentoring while other for the sake of different experience. Even volunteer experiences work for different people from frustrating to fascinating, depending on their goals and organization policy. Too often, volunteers are thought of as a “nice to have” rather than a “necessary” resource, and facilitating agency / NGO's apply little or no rigor to evaluate their impact. They are not paid due to budget constraint and then termed as priceless instead of unpaid . Communities can mold the young as future change agents and social entrepreneurs.

There are bigger question involved in the business of volunteerism. Is voluntarism ultimately about the fulfillment of the volunteers themselves, not necessarily what they bring to the local communities they visit ? Does an intervention of a volunteer make the cure worse than disease ? Are volunteers/interns unpaid contract labors of NGOs?  An article in Onion ( 6-Day Visit To Rural African Village Completely Changes Woman’s Facebook Profile Picture) mocks volunteers with a hard hitting sense of humor. There is also a  good article showing the narcissistic side of global volunteerism. The articles are full of sarcasm but looking on the positive side, it reminded me of a line by Professor Peter Hayes: "Live somewhere else, on the terms of the people who live there, for six months. It will change your life."

Cash Transfer Scheme

Government is so agile to implement e-governance solutions for improving its tax collection system, but prefers neolithic methods for cash disbursal decisive and purposeful governance.  The government’s budget is a mess. Subsidies have been overdone and not properly targeted. In the current year, total subsidies will be over 2.8 trillion rupees. Instead of making the direct cash transfer, all of the welfare scheme has been turned into a giant procurement exercise. That is why, Reserve Bank of India governor Raghuram Rajan made a strong pitch for direct cash transfers to the poor, saying this would help reduce corruption by breaking the "cycle of dependence".

A cash transfer is a development project stripped of any active management costs, and its performance tracks the success or failure of the individual recipient. Cash Transfers are examples of certain transfer payments include welfare (financial aid), social security, and government making subsidies for certain businesses (firms)  into the bank accounts of beneficiaries, cutting out intermediaries. Cash Transfers: Sorting Through the Hype puts a balanced light on the whole exercise.

There are pros and cons attached with Cash transfers. The popular myth that “the poor people don't know what is good for them”. That, in my opinion, is derogatory. We should stop worrying that the poor are going to spend (or “waste”) their transfer income on alcohol and tobacco. They aren’t. They might buy some chocolate, though. A proper study can has been done : Do the Poor Waste Transfers on Booze and Cigarettes? No. The cash transfer is taking away discretion of government officials on taxpayers money spent in the name of welfare. Financial cost of social justice and and their concerns that the poor can't be taken without economic freedom. See more at Whose money is it anyway? to understand another side of the debate on welfare state and individual freedom.

There are two major school of thoughts under Direct Cash Transfer (DCT) - CCT and UCT.  Unconditional Cash Transfer (UCTs) consist of cash grants with means testing to ensure funds go to the intended recipients, but without extra requirements on recipient behavior. The downside of unconditional cash transfer (UCT) is in distributing money without increasing the productivity and skills of labour force in rural india. But we can see the partial benefit of Economic Freedom associated with the “distributor of welfare funds”  through cash transfer. The economic freedom to utilize funds in an unique and distinct way by each beneficiary is an important aspect of building better markets.

CCT always have strings attached of a certain criteria to be fulfilled.  The advocates of CCT pitch for skill transfer with money as sustainable economic growth cannot be created by simply distributing money or as some economists like to put it by “dropping money from a helicopter”. Both CCTs and UCTs require the beneficiaries to be linked to bank and can access financial services. But there are reports that the government’s much-hyped Direct Benefit Transfer programme has hit a roadblock. In the current situation, the current electronic system and incentives are structured, the agent has not been incentivized to offer financial services.

Only government can offer reach to the poor that is effective nature of state. while market will always go for person with better information and resources for efficiency. The social transfers together with the wages and pensions form the Government- to -person (G2P) payments. Could this ecosystem of government-to-person (G2P) payments enable or lead to financial inclusion? Even working one year  in the field of development, the blatant  truth is, I don't have solid clue of what the poor need. Sometimes its cash, sometimes skills. As per me,  DCT can serve both purpose as a seed capital in a business for enterprising individual or as a social safety net of whole family.