CIRDAPThe Centre on Integrated Rural Development for Asia and the Pacific (CIRDAP) is a regional, intergovernmental and autonomous institution. It was established in 1979 at the initiative of the countries of the Asia-Pacific region and the Food and Agriculture Organisation (FAO) of the United Nations with support from other UN organisations and donor countries/agencies. The member countries of CIRDAP are Afghanistan, Bangladesh (host state), India, Indonesia, Iran, Lao PDR, Malaysia, Myanmar, Nepal, Pakistan, Philippines, Sri Lanka, Thailand and Vietnam. The main objectives of the Centre are to: (i) assist national action, (ii) promote regional cooperation, and (iii) act as a servicing institution for its member countries for promotion of integrated rural development through research, action research, training and information dissemination. Amelioration of rural poverty in the Asia-Pacific region has been the prime concern of CIRDAP. The programme priorities of CIRDAP are set under four Areas of Concern: 1) Agrarian development; 2) Institutional/infrastructural development; 3) Resource development including human resources; and 4) Employment. Within these areas of concern, the thematic areas identified for the Third Six-Year Plan (2002-2007) are: Poverty alleviation through participatory approaches with emphasis on social sector development (e.g. health, education and nutrition); Employment generation through microcredit support, infrastructure development and local resource mobilisation; GO-NGO collaboration; Gender issues; Governance issues; and Environmental concerns for sustainable rural development. Operating through designated Contact Ministries and Link Institutions in member countries, CIRDAP promotes technical cooperation among nations of the region. It plays a supplementary and reinforcing role in supporting and furthering the effectiveness of integrated rural development programmes in the Asia-Pacific region.

EDITORIAL BOARD

Chairperson Editor Members

Durga P. Paudyal K.A.S. Dayananda T. Abdullah, Development Consultant Q.K. Ahmad, Bangladesh Unnayan Parishad Momtaz Uddin Ahmed, Dhaka University Mohammed Farashuddin, East West University B. Sudhakar Rao, CIRDAP S.M. Saifuddin

Editorial Assistant

ISSN 1018-5291

Asia-Pacific Journal of Rural DevelopmentVOLUME XVII JULY 2007 NUMBER 1

CENTRE ON INTEGRATED RURAL DEVELOPMENT FOR ASIA AND THE PACIFIC

ASIA-PACIFIC JOURNAL OF RURAL DEVELOPMENTVolume XVII, July 2007, Number 1 ISSN 1018-5291 CIRDAP 2007

The views expressed in this publication are those of the author(s) and do not necessarily reflect those of CIRDAP

Published twice a year

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Published by Durga P. Paudyal, Director General, on behalf of Centre on Integrated Rural Development for Asia and the Pacific (CIRDAP) Chameli House, 17 Topkhana Road, GPO Box 2883 Dhaka-1000, Bangladesh

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Asia-Pacific Journal of Rural DevelopmentVolume XVII, July 2007, No. 1

CONTENTSArticles An Overview of Rural Development in Asia Durga P. Paudyal Factors Influencing Mobile Services Adoption in Rural India Abhay Jain and B.S. Hundal Adoption and Diffusion of Integrated Pest Management Technology: A Case of Irrigated Rice Farm in Jogjakarta Province, Indonesia Joko Mariyono Exploring Predictive Strengths of Stochastic Pavement Deterioration Models: A Case Study of Thailands Highway Network Satirasetthavee Dussadee and Herabat Pannapa Socio-Economic Study of Gender Role in Farm Production in Nasarawa State of Nigeria S.A. Rahman, H. Ibrahim and H. Ibrahim Economic Evaluation of Rice-Prawn Gher Farming System on Soil Fertility for Modern Variety of Rice Production in Bangladesh Basanta Kumar Barmon, Takumi Kondo and Fumio Osanami Soil Hydraulic Characterisation under Different Cropping Patterns in Sloping Agricultural Lands in Sri Lanka A.A. Rivas, R.S. Clemente, S.L. Ranamukhaarachchi, A. Das Gupta, M.A. Zoebisch, S. Thevachandran and M.S.D.L. De Silva Practitioners Papers Good Governance and HRD: Case Studies of User Managed Safe Drinking Water and Health Projects in India P. Durgaprasad and P. Sivaram Land-use Suitability Evaluation Criteria for Precision Agriculture Adoption in a Moderately Yielding Soya bean Cropping Area in Thailand Kishore C. Swain and H.P.W. Jayasuriya Index 95 Page 1

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Asia-Pacific Journal of Rural Development Vol. XVII, No. 1, July 2007

An Overview of Rural Development in AsiaDurga P. Paudyal*

AbstractThe rural economy, including agriculture, has remained the mainstay in the countries of Asia-Pacific region, in terms of both contribution to the national GDP and labour absorption. Over the past few decades, there has been spectacular economic progress in several CMCs. However, despite being a priority agenda of the national governments as well as the main destination of international aid donors over the past few decades, the achievements of rural development and poverty alleviation programmes have been lopsided, and meaningful headway are yet to make in several countries. In this background, this paper attempts to examine the present state of rural development in CMCs of AsiaPacific region and suggests some new roles of national, regional and international agencies for promoting sustainable rural development and achieving MDGs.

1.0 Introduction Most countries of Asia-Pacific region are predominantly rural and agrarian, characterised by unequal distribution of productive resources, high incidence of poverty, widespread unemployment and under-employment, household and regional income inequality. Hence, rural development encompassing growth and development of agriculture and nonagriculture sector continues to be the priority agenda of the national development strategies in these countries. In Asian countries, the concept of rural development encompasses economic and social development, and aims at widening the opportunities for gainful employment to the poorer section of the society. This is rightly so, because food security, lack of employment and income-generating opportunities are among the most important causes of poverty in the region. 2.0 IRD Concept The concept of rural development (RD) went through a long process of evolution since 1950s, in tandem with the significant changes of development strategies nationally and internationally. Table 1 shows the trend of major development paradigms and poverty reduction-strategies since 1950s. It is seen that in 1970s integrated rural development, popularly known as IRD, was launched to address the failure of a single sectoral approach of 1960s. The main thrust of IRD approach was to develop an effective delivery mechanism through integration of different rural development related sectors. Several Asian countries initiated rural development programmes of various kinds and adopted various approaches in planning and implementation. South Asian countries like Bangladesh, India, Nepal and Pakistan initiated RD-related programmes and activities in the name of IRD, while South-East Asian nations labelled it under different names such as Integrated Agriculture Development Programme (IADP) in Malaysia, Integrated Area*

Director General of CIRDAP, Dhaka, Bangladesh. E-mail: dg@cirdap.org

1

Development (IAD) in the Philippines and IAD in Thailand. IRD in Vietnam had the main thrust on agricultural production. In Indonesia RD programmes aimed at integration with national development goals along with improvement in the living standard and the quality of life of the rural population. During the initial period, most countries opted for a strategy of self-reliant growth by mobilising resources for basic physical and social infrastructure, through planned development approach. In their endeavours for self-reliance and for elimination of poverty, the Asian countries accorded high priority to agriculture development through seed-fertiliser-irrigation technology. At that time the active role of the national governments was to develop physical and institutional infrastructure, and to evolve and promote land augmenting or yield increasing technologies. These contributed to strengthening the supply-side factors in rural areas, especially those largely beyond the scope of the individual farmers and the private sector. By the early 1970s, it was realised that increase in production was accompanied by growing income inequalities. The production gains were in the favourable areas and to progressive farmers. The emphasis on output expansion accompanied by effective measures for reducing income inequity emerged as a major policy issue. The package approach clearly did not result in a broad-based rural development nor did attack the growing problem of rural poverty. Hence, new approaches like target groups, basic minimum needs, etc. came into prominence later. On the whole, the IRD concept could not gain the expected momentum, mainly due to the poor performance by the national governments and IRD institutions. In the contemporary administrative set-up with traditional values and norms and compartmentalised sectoral working modalities, there is no wonder that the IRD model, with multi-disciplinary approach and multi-sectoral operation, could not be successful to improve the quality of life in the rural areas. During 1980s, self-reliance and participatory endogenous development dominated RD efforts, and during the 1990s, poverty reduction and broad based economic growth with higher budgetary support for basic services and social sectors have been emphasised, in which human capital formation, improvement of quality of life through income and employment and market-based approaches have dominated the policy. In most countries, labour intensive growth and improved social services were considered to offer a powerful and viable route to poverty reduction. The table also illustrates a constant shift of poverty alleviation strategies from supply side to demand-driven interventions and the innovations attempted to create wealth, social capital and markets for those at the bottom of the pyramid. Such strategies have acquired a new sense of urgency to derive policy and programme support from the beneficiaries. For example co-operative development in 60s and IRD programmes in 70s focussed mainly on the supply side while the poverty alleviation approach in 80s, social mobilisation and microcredit in 90s and the Millennium Development Goals (MDGs) since 2000 have emphasised the activation and institutionalisation of the demand side to make sustainable impact on the people themselves. This transition makes CIRDAP Member Countries (CMCs) to review their own policies and institutional infrastructure at national as well as regional levels to suit the changing circumstances.

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Table 1: Development Paradigms and Poverty-Reduction StrategiesPeriod 1950s 1960s 1970s 1980s 1990s 2000s Dominant development paradigm Growth through industrialisation Agricultural intensification, human capital development Redistribution with growth Structural adjustments, private sector led development Human development, broadbased growth Market-led-globalisation, broad based growth, millennium development goal Poverty-reduction strategies Community development Decentralisation, Co-operatives, Rural Development Basic needs, integrated rural development Growth, human resources development, safety nets, NGO involvement Microfinance, NGO/INGO, civil society, private sector, targeted programmes and safety nets. Microfinance, NGO/INGO, civil society, private sector, MDGs

The past development experiences in the Asian countries suggest the need to go beyond the economic perspective, to take explicit account of the socio-cultural concerns and to focus more on poverty at the grassroots level and to ensure meeting their demands. Moreover, the continuing high incidence of rural poverty in the countries reflects the need to further intensify the efforts at poverty reduction in the years to come. The prevention of environmental degradation and achievement of other social objectives are also closely linked to success in reducing poverty. This calls for further emphasis on increasing agricultural growth, encouraging non-farm activities and accelerating the diversification and growth of the economy particularly in the rural areas. It is also important that investment in human capital should increase significantly in order to improve the skills of the labour force and enable them to work with the new generation of technologies. This would require institution building, reallocating public expenditures to priority sectors and ensuring involvement of non-government organisations (NGOs) and private sector in rural development and poverty alleviation. 2.1 Development experience of Asia-Pacific region The Asian and Pacific region attained unprecedented economic growth over the past decades, which is also expected to continue in the coming years, despite some setback in the mid-1990s. There have been some interesting patterns of development across the countries, territories and communities across the region. Firstly, it is observed that some countries in the region have made spectacular progress, while others lagged behind. The economic growth rates and per capita income, which are often counted as determining factors for measuring stages of development, have been faster in some countries than ever before. Despite the social and political conflicts in several countries causing economic declines and extensive damage to infrastructure and productive capacity, the growth of the economies of several Asian countries, except Afghanistan, Nepal etc., have been impressive. Among the low income countries, India and Vietnam achieved considerable GDP growth rates of 6 per cent or more during the first half of the 2000s.

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Bangladesh and Sri Lanka recorded a growth of above 5 per cent during the same period (Table 2). Moreover, the information provided in Table 2 indicates that the annual variation in growth rates in these countries has been much lower, and the trend is upward. The Indian economy, which faced severe balance-of-payments crisis during 1990s, recovered its growth momentum after the economic reforms initiated since 1991. The GDP growth accelerated to over 8 per cent in 2005. Economic growth in Pakistan averaged 6.1 per cent per year during 1981-1990 which, however, accelerated to 5 per cent in 2003. In Sri Lanka, the growth rate increased from an average of 4.3 per cent in 1981-1990 to 5.5 per cent in 2003 again revived to the previous position in the early period of 2005. As a result of this varied growth, there has been huge divergence of income levels and other important indicators of socio-economic progress. Besides diversity and uniqueness at the national levels among countries, the region has experienced remarkable diversity of economic growth and social progress also within the countries. For example, the per capita GDP is US$4,187 in Malaysia during 2003 compared to US$237 in Nepal (Table 4). Between these two extremes, wide differences exist among the remaining CMCs. In terms of GDP per capita criterion adopted by the World Bank for classifying countries, eight CMCs Afghanistan, Bangladesh, India, Lao PDR, Myanmar, Nepal, Pakistan and Vietnam are classified as low-income countries having per capita GNI of US$825 or less; five countries Indonesia, Iran, Philippines, Sri Lanka and Thailand belong to the lower-middle income category (income range US$826-3255) while Malaysia is included in the upper-middle income category (income range US$3256-10065). However, it must be noted that macroeconomic data such as GDP growth rate and per capita are somewhat deceptive and hiding many social malaises in CMCs. In the recent years, as shown in Table 3, that the remittance of the migrant workers has been a new source of capital in the form of hard currency. Indeed, in some countries such as Nepal and Sri Lanka, the remittance provided a cushion to prevent economic breakdown during the difficult time of internal conflict. However, due to weak economic structures of the countries such as Sri Lanka, Philippines, Pakistan, Bangladesh etc. the excessive dependence on foreign remittances from expatriate workers rather than on FDI make them vulnerable at macro- and micro-level. The subsistence agriculture based household economy has been too dependent on remittance when the able household members are migrant workers. Similarly, one cannot undermine the psychological trauma of their dependents back home in the difficult geo-political situations, such as in Iraq, Lebanon etc. The social cost of such remittances is another important hidden malaise. Nearly 800,000 Sri Lankan workers are working in the Middle-East and about 500,000 of them are house maids. Although they earn around US$150 per month and the countrys (population 20 million) economy is heavily dependent on their remittances, the country has to bear a heavy social cost due to the lack of job security and welfare package at home and in the workplace. There is rampant family breakdown, alcoholism, neglect and abuse of children. Needless to say that almost all the workers come from the lowest strata of the society.

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Table 2: Recent Economic Performance: Annual GDP Growth Rate at Constant PricesPercentage per annum Country Low-income Afghanistan Bangladesh India Lao PDR Myanmar Nepal Pakistan Vietnam Middle-income Indonesia Iran Philippines Sri Lanka Thailand Upper-middle income Malaysia data not available. Source: The World Bank, World Development Indicators 2004, 2006; Asian Productivity Organisation, Asia-Pacific Productivity Data and Analysis, 2003; Asian Development Bank, Asian Development Outlook, 2002.

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

Per capita GNI (US$) 2005 190 440 620 390 220 250 600 540 1140 1170 1010 2490

4.9 7.3 7.1 5.7 5.1 9.5 8.1 3.7 4.7 5.5 9.2

4.6 7.8 6.9 6.4 5.0 6.6 9.3 7.7 6.6 5.9 3.8 5.9

5.4 4.8 6.9 5.7 3.3 1.7 8.2 4.5 3.4 5.2 6.3 -1.4

5.2 6.5 3.0 5.8 4.5 3.5 5.8 -13.1 3.6 -.0.6 4.7 -10.5

4.9 6.1 6.1 6.1 4.2 3.3 4.8 1.7 8.3 4.3 4.5 4.5

5.9 4.4 8.3 4.7 3.9 4.5 6.8 5.1 5.8 6.0 4.7 4.7

5.3 5.6 5.8 -0.5 2.2 6.9 3.4 5.4 3.2 -1.5 1.9

4.4 4.3 5.8 3.5 3.0 6.2 3.7 6.7 4.0 5.3

5.3 6.8 6.1 5.0 5.0 6.8 4.1 6.2 5.5 6.4

6.3 6.9 6.4 5.1 5.6 6.1 5.4 6.2

5.4 8.5 7.8 5.9 5.9 5.1 5.3 4.5

9.8

10.0

7.3

-7.4

10.9

6.2

0.5

4.1

4.6

7.1

5.0

4520

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Table 3: Movement of People in the CMCsCountry 1990-95 Afghanistan Bangladesh India Indonesia Iran Lao PDR Malaysia Myanmar Nepal Pakistan Philippines Sri Lanka Thailand Vietnam 3313 -260 -1407 -725 -1512 -10 230 -126 -101 -2611 -900 -182 -88 -270 Net migration (thousands) 1995-2000 -397 -300 -1400 -900 -456 -7 390 60 -99 -41 -900 -160 -88 -200 % change -111 15 -0.5 24 -70 -30 70 -147 -2 -98 0 -12 0 -26 1990 779 2384 166 1200 11 325 6 0 2006 1465 401 973 Workers remittance received ($ millions) 2004 3584 21727 1866 1032 1 987 118 823 3945 11634 1590 1622 3200 % change 360 811 1024 -15 -91 204 1867 97 694 296 67

data not available. Note: Net migration refers to the annual number of immigrants less the annual number of emigrants. Source: The World Bank, World Development Indicators 2006.

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Table 4: Trends in per Capita Income and Human DevelopmentCountry 1980 GDP per capita (1987 $) 1990 1995 2003 Changes over 1980 (%) 161.0 61.6 177.9 20.9* 148.0 60.1 114.2 45.7 189.0 221.0 -21.0 1980 Human Development Index (HDI) value 1992 1995 2000 2003 Changes over 1980 (%) 122.22 103.38 66.75 29.12 15.87 62.36 151.67 83.62 36.05 41.37

Bangladesh India Indonesia Iran Lao PDR Malaysia Myanmar Nepal Pakistan Philippines Sri Lanka Thailand Vietnam

144 262 349 1688 148 259 679 328 718

179 374 537 310 2301 182 350 628 438 1291 610

202 425 720 2066 363 3108 206 381 630 512 1843 816

376 564 970 375 4187 237 555 989 948 2305 482

0.234 0.296 0.418 0.570 0.687 0.356 0.209 0.287 0.557 0.552 0.551

0.309 0.382 0.586 0.650 0.794 0.406 0.289 0.393 0.621 0.665 0.798

0.371 0.451 0.679 0.694 0.465 0.834 0.481 0.351 0.453 0.677 0.716 0.838 0.560

0.506 0.577 0.680 0.721 0.522 0.790 0.499 0.695

0.520 0.602 0.697 0.736 0.545 0.796 0.578 0.526 0.527 0.751 0.779 0.704

data not available; * with respect to 1990 Source: UNDP, Human Development Report 1998, 2005.

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Table 5: Inequality in CIRDAP Member CountriesCountry Real GDP per capita (PPP$) Rural Bangladesh India Indonesia Lao PDR Malaysia Myanmar Nepal Pakistan Philippines Sri Lanka Thailand VietnamNote:

Adult literacy rate ( %) Rural Urban National 36.7 45.0 78.8 50.6 75.0 81.4 25.6 28.0 92.5 88.1 90.8 92.5 44.1 70.9 92.7 79.1 90.7 88.2 42.9 56.0 96.3 97.6 98.6 98.2 38.1 52.0 83.8 56.6 83.5 83.1 27.5 37.8 94.6 90.2 93.8 93.7

Life expectancy at birth Rural Urban National 56.1 59.0 60.0 49.5 68.2 58.5 54.0 60.1 64.6 70.0 66.9 63.8 59.0 68.5 71.2 62.4 74.1 59.9 71.3 67.8 69.7 81.4 73.6 76.2 56.9 61.6 64.0 52.2 71.4 58.9 55.9 62.8 67.4 72.5 69.5 66.4

Access to safe water ( %) Rural 96.0 79.0 54.0 41.0 56.0 50.0 60.0 69.0 80.0 52.0 88.0 30.0 Urban National 99.0 85.0 79.0 60.0 96.0 78.0 88.0 82.0 92.0 88.0 94.0 70.0 97.0 81.0 62.0 44.0 78.0 60.0 63.0 74.0 84.0 57.0 89.0 43.0

Access to hygienic sanitation (%) Rural 44.0 14.0 40.0 16.0 88.6 36.0 12.0 22.0 63.0 62.0 95.0 17.0 Urban National 79.0 70.0 73.0 98.0 98.6 56.0 58.0 77.0 89.0 68.0 98.0 47.0 48.0 29.0 51.0 28.0 94.0 43.0 18.0 47.0 75.0 63.0 96.0 24.0

Urban National 2,444 2,435 5,568 5,600 11,926 1,478 2,287 3,030 3,649 5,590 15,286 1,917 1,382 1,422 3,971 2,571 9,572 1,130 1,145 2,209 2,762 3,408 7,742 1,236

1,133 1,047 3,073 1,766 6,808 1,014 1,004 1,767 1,678 2,793 2,959 1,055

Data for this table were used from the Human Development Report 1995 and manipulated in some cases where segregated data for rural and urban areas were not available. Source: CIRDAP, Rural Development Report 1999.

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Secondly, the present state of development in the countries of Asia-Pacific region reflects the uneven socio-economic impact across countries as well as between the rural and urban areas. Impressive gains have been achieved in many countries, but these have not been shared equitably by different socio-economic groups or by geographic regions. Table 5 shows that the average per capita rural income of Bangladesh, India, Lao PDR, Nepal, Philippines, Sri Lanka and Thailand, is less than half of urban income. The literacy rate in rural areas is only half of that in urban areas in Pakistan. Similarly, glaring disparities exist in terms of access to basic facilities between rural and urban areas in most countries. The figures suggest that, even with similar levels of national achievements, the rural urban disparities that exist in the CMCs differ both in nature and magnitude. Such diversity in the development experience, both among and within countries, reflects that the poor and the vulnerable groups particularly in the rural areas have been receiving disproportionately smaller shares of the benefits of development while often bearing the major burden of the associated costs. On institutional part, area specific problems and potentials required decentralised framework with a participatory mode, while institutional strengthening and empowerment and participation of the rural people continue to remain formidable challenges towards achieving equitable and sustained rural development. Despite several models of decentralisation practised in Asian countries, effective policy with local capacity building is yet to emerge. A concerted public policy action through both macrosupport and microintervention is required to tackle numerous structural and institutional barriers impeding rural development. This involves the crucially important task of mainstreaming rural development and poverty alleviation efforts into the overall national development policies. This is evident in higher incidence of poverty in the rural areas and the growing rate of rural-urban migration to seek economic opportunities. Thirdly, on the demographic front, CMCs accounted about 2.02 billion population in 2003, about 32 per cent of the world total, which is projected to increase to 2.53 billion by 2020. Due to the rapid urbanisation process, the urban population in the CMCs is projected to increase from a total of 0.8 billion in 2003 to around 1.13 billion in 2020, representing significant increase of the urban population. It means that nearly 80 per cent of the estimated increase of the total population in the CMCs during 2003-2020 will have to be absorbed mostly in the urban areas. Such a significant increase in the level of urbanisation is likely to be accounted for by high rates of rural-urban migration and reclassification of selected rural areas as urban in addition to natural increase in urban population. As a result the share of rural population may decline from 58 per cent in 2003 to 55 per cent by 2020. There is also an interesting trend in working-age-population. Current estimates show that the youth population (>18) is going to rise to around 40 per cent by 2005, meaning job creation to be on the top of the agenda in non-farm/service activities, as the educated youths generally avoid farm-based income/employment and other traditional activities. With adequate emphasis on investment in health, education, skill up-gradation and other areas to develop the human capital, an accelerated pace of rural development can be generated and sustained. The demographic transition can thus be used to accelerate the pace of economic development through creating an enabling

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economic and policy environment to ensure functioning labour markets and expanding productive employment opportunities. Finally, there are increasing evidences across the countries that ethnic and indigenous communities and tribal groups are marginalised in the development process. The Human Development Report 2004 of UNDP has emphasised on this issue with hard facts and glaring examples. Similarly, the issues and concerns of women, children and elderly citizens are well documented but not adequately addressed. Hence, there is a need to go beyond the economic perspective, to take explicit account of the socio-cultural concerns and focus more on poverty at the grassroots level. It is seen in a number of countries that unequal distribution of resources, opportunities and participation across communities and geographic regions leads to social tension and conflict, which is a threat to national and international security and prosperity. 2.2 International level The World Conference on Agrarian Reform and Rural Development (WCARRD) 1979 adopted a broad-based strategy for national progress based on growth with equity and participation. It emphasised the redistribution of economic and political power, fuller integration of rural areas into national development efforts, expanded opportunities of employment and income for rural people and development of farmers associations, cooperatives and other forms of voluntary, autonomous, democratic organisations of primary producers and rural workers. In order to implement the broad principle, it laid down several plan of action in the areas of access to land, water and other natural resources; peoples participation; integration of women in rural development; access to inputs, markets and services; development of non-farm rural activities; education, training and extension and a number of international policies for agrarian reform and rural development. This comprehensive package was aimed at achieving sustainable and pro-poor rural development, especially through ensuring access to land and other natural resources as the later provide the mainstay of the majority of the rural poor. As a part of the strategy for implementation of WACARRD, the role of the regional level inter-government organisation was envisioned, and accordingly, CIRDAP was established under the aegis of FAO in 1979. The objectives of the Centre were laid down as to assist national action, promote regional cooperation and act as a servicing institution for its member countries for rural development through research, action research, training and documentation and information dissemination. Presently, it has 14 member countries namely, Afghanistan, Bangladesh, India, Indonesia, Iran, Lao PDR, Malaysia, Myanmar, Nepal, Pakistan, Philippines, Sri Lanka, Thailand, and Vietnam. As the second milestone of the WCARRD, the International Conference of Agrarian Reform and Rural Development (ICARRD) was jointly organised by FAO and the Government of Brazil with the slogan A Vision for the Future from 7 to 10 March 2006 in Porto Alegre, Brazil. FAO invited CIRDAP to present an overview paper on the current trends and emerging issues in rural development in the Asia-Pacific region. CIRDAP overview paper briefly reviewed the current trend of socio-economic development of Asia-Pacific region. The paper identified emerging issues of agrarian reform and rural development and suggested a closer linkage in order to benefit from the

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interdependent nature of these two sectors for sustainable development. The full paper can be downloaded from www.cirdap.org.sg. The Conference extended unanimous support to the view that agrarian reform (AR) and rural development (RD) are crucial and inter-dependent for meeting the World Food Summit targets and the MDGs, relating to poverty and hunger. The members emphasised that great disparities continue to exist in ownership and access to land and other natural resources and that the concentration of land ownership is increasing. The members recognised that achieving successful agrarian reforms and rural development is very challenging, with some members reporting success and many identifying the difficulties. This reflects the great diversity of circumstances and experiences in designing and implementing agrarian reforms and rural development policies. It was unanimously agreed that the agrarian reforms and rural development agenda have a great deal yet to achieve and that new visions and political will are crucial to deliver secure and equitable access to land and other natural resources and ensure sustainable rural development. The Conference appreciated the role of regional organisations that were originally established to support follow-up to WCARRD (e.g. CIRDAP, CIRD-Africa and others) and that lessons be drawn to contribute to realistic and appropriate follow-up for ICARRD. Members recommended that technical support should be provided to strengthen these regional organisations, in order to enable them to generate comprehensive knowledge at both national and regional levels, to facilitate interministerial and intersectoral coordination on rural issues at the national level, and facilitate policy dialogue, cooperation, exchange of good practices, and monitoring at the regional level. 3.0 Future Challenges As discussed above, economic development does not necessarily ensure human development, equitable distribution of resources and sustainable natural resources management, among others. Hence, in order to achieve broad based economic growth and development, there has been a strong suggestion to take area-specific comparative advantage through strong local governance structure and process, which can be instrumental for mobilising local resources, ensuring peoples participation in the rural development activities and enabling several institutions such as NGOs, microfinance institutions and private sector to function at the local level. This may be one way of, what Amartya Sen advocates, maintaining a balance between economic development and democratisation. Moreover, in the changing context of market-led globalisation, several South-East Asian countries have taken rural development for product development and linkage with market for rural products. Hence, in order to make meaningful progress in rural development and poverty alleviation, the following forward looking measures are suggested: 3.1 Decentralised development The decentralisation policy is advocated to deal with the heterogeneity in geographic location, climate and area specific comparative advantage; presence of various ethnic communities with their own language, culture and skills; and variation of the level in

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development across territories. Traditionally, designing and implementing rural development programmes have been carried out at the national level, deriving from the national level periodic plans prepared by the central level planning bodies. However, exclusive reliance on centralised planning for rural development is criticised on three grounds viz. efficiency, equity and participation. On the efficiency ground it is said that identification of local problems, location of projects and mobilisation of local resources cannot be done at the central level. On the equity aspect, the decision-makers of the central level most likely represent the interest of the dominant elite classes than the rural poor. Finally, on the participation issue, the identification and mobilisation of local resources and their deployment in accordance with the popular need require direct participation of the beneficiaries. Such participation will also ensure ownership of the project among the beneficiaries. Therefore, involving local governing bodies in rural development process through decentralisation is widely advocated. Several policy packages of decentralisation measures are applied with appropriate combination, such as delegation of authority from higher offices to their field office; deconcentration of national-level offices at provincial, district and sub-district levels and authorities delegated to function as the executive branches; devolution of decision-making authorities by law to lower level representative bodies such as provincial and district councils; and privatisation of public sector industries, product development, marketing etc. where government cannot perform efficiently. Recently, several types of NGOs and civil societies have emerged to complement the government especially in the areas of social mobilisation, microfinance, awareness building and advocacy. Another important area of decentralised development is building local capacity/ capability. Because in many developing countries, the policymakers tend to assume that policy implementation is a simple and routine administrative and technical process. Accordingly, there is usually a tendency to give inadequate attention to implementation aspects while designing policies and programmes. The following are some of the gaps that undermine the local capacity/capability in management of rural development process: Authority gap: in many cases the lower-level offices are given authority to propose projects but important decisions such as allocation of resources or deployment of manpower are retained at the higher level. Hence, local-level offices do not take any initiative at their own risk. Manpower gap: rural institutions are mostly understaffed with inadequate trained manpower and insufficient incentives to retain them in the rural areas. Resources gap: unless the political leadership is committed to rural development, it does not attract attention of the policymakers for greater allocation of resources. Similarly, local resources can be mobilised mainly in kind i.e. local materials and labour contribution. Hence, there is always a resource gap for rural development programme. Management capacity: in the dispersed and remote geographic setting coordination among various actors and stakeholders, sequencing of activities and

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time management for rural development are always a big challenge, which is in sharp contrast with the low level of management capability of local level institutions. 3.2 Larger projects/investments for poverty alleviation Rural development and poverty alleviation cannot just be seen as a welfare programme. If the rural poverty is to be addressed effectively, larger investment would be required to create economic activities and employment opportunities. Malaysia is a good example where rural development was accompanied by massive investment in land development, infrastructure development, plantation and rural industrialisation. Similar analogy can be drawn in the South Asian region. The following map shows that in South Asia, in spite of the endowment of fertile soil, water resources and long history of civilisation, the majority of the poor people are disproportionately concentrated in the Himalayan region and Ganga-Brahmaputra basin: Nepal, Bhutan, north-east India and Bangladesh. Map: Concentration of Poor People in South Asia

In order to generate economic activities, employment opportunities and income, thereby addressing poverty in a meaningful way, development of the Himalayan water resources holds a great promise for the entire region. There are possibilities for generating vast amount of renewable and clean hydro-energy along with controlled water for irrigation and drinking water from the Himalayan rivers. There is enough demand for the products of the water sector and several projects are available with some degrees of feasibility studies with promising results. Hence, large investments for mega size multi-purpose water resources projects might hold the key for generating multiplier effect in the economy of the entire region. Similarly, several countries in the Middle-East and Africa have rich natural resources, such as oil, natural gas, gold, diamond etc., but very poor record in human development, food security and natural resource management. Hence, these countries can allocate sizable resources for area specific development programme, in which rural people can13

take economic advantage. Such priority investment would be the key for sustainable rural development and poverty alleviation. 3.3 Knowledge management for RD policy development and implementation The RD and PA programmes are implemented by several agencies of government, donors, INGOs, NGOs, civil societies and private sectors. Hence, besides the coordination gap among implementing agencies, there is a real problem of disaggregating macrolevel policy into several sectoral programmes with microlevel action plans and, again, aggregating the achievements and issues at macrolevel. Diagram: Schematic Diagram of RD Policy Research and DevelopmentCabinet

Sectoral Ministries

Ministry of Local Government

Deconcentrated Field Officers

Policy Research and Training Institutions

Provincial Council

Field Extension Agents

District Council

Private Sector

Microfinancial Institutions

NGOs

Civil Societies

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Similarly, in order to synergise the services of NGOs, civil societies, microfinance institutions and private sectors at the local level, there is a need for a facilitating, coordinating and regulating mechanism at the local level. With such mechanism these institutions can make good contribution to social mobilisation, self-employment generation, product development and marketing of products. Therefore a research and training institution would play a vital role in developing roles of different institutions, monitoring the implementation process at all level, training of field-level functionaries, and arranging periodic review meetings involving all ministries and field level functionaries. Such arrangements may fill the knowledge gap, minimise the coordination gap and enhance the implementation capability of the institutions, as demonstrated in the diagram. 3.4 Role of international bodies and donors to address global issues In the new context of globalisation, knowledge, ideas and know-how are the potential sources of economic growth and development, along with the application of new technologies. The global knowledge network is transforming the demands and the ways one thinks and works. It calls for integration, in a different connotation, to integrate the content, context, and infrastructure in order to harness the potentials of the countries, to instil important value for success, to find a viable mechanism to raise capacity and the productivity of people to cope with and better address the diverse demands and needs of the countries. It requires the capabilities to address markets from local to global, changing the technological environment, adding value to information, product and services offered by the organisation while opening wide access of information to a very large audience throughout the world. In order to make the globalisation useful to all, the international bodies/donors have a vital role to play. However, some of the recent international reports show disturbing findings. Firstly, the FAO report on The State of Food Insecurity in the World 2006 found that the World Food Summit 1996 had set a target to halve the hunger by 2015, on which no progress has been achieved 10 years down the line. Compared with 1990-92, the number of undernourished people in the developing countries has declined by a meagre 3 million in 2005 a number within the bounds of the statistical error. Secondly, the Global Employment Trend for Youth 2006 of ILO found that the number of unemployed youth (15-24 years of age) has risen sharply over the past decades, leaving about one third of the worlds young people without jobs. This shows the inability of economic growth to create enough productive employment opportunities for the worlds young population. Thirdly, the UK government-commissioned report on The Economics of Climate Change found the looming environmental catastrophe within a foreseeable future. The author, the former World Bank chief economist Sir Nicholas Stern said that the world must be prepared to pay now to prevent economic fallout in the near future which could be on the scale of the Great Depression of the 1930s. Finally, a recent study on the Impact of Biodiversity Loss on Ocean Ecosystem Services, found that if the global trend for over-fishing and pollution continues, the fish and sea-

15

food could disappear by 2048, which will threaten human food supplies and the environment. These hard facts illustrate the failures of the market-led globalisation framework to generate sustainable results at several fronts such as food security, employment generation, human development and sustainable natural resource management. In this context, the role of the international organisations needs to be redefined to focus more on mitigating the adverse effects of the market-led globalisation and help those who are left behind by the market forces. Similarly, international bodies can play an effective role in sustainable management of common natural resources.

ReferencesFAO. 2006. The State of Food Insecurity in the World 2006. Rome: FAO. ILO. 2006. Global Employment Trends for Youths. Geneva: ILO. Paudyal D.P.2006. From the Peasant Charter to the ICARRD: An Overview of the Current Trends and Emerging Issues in Rural Development in the Asia-Pacific Region. Asia-Pacific Journal of Rural Development, Vol. XVI, No.1. Stern Review. On the Economics of Climate Change. A study commissioned by the Government of UK. Sen, A.K. 2000. Development as Freedom. Oxford University Press. Worm, Boris et al. 2006. Impact of Biodiversity Loss on Ocean Ecosystem Services. Science 3, Vol. 314, No. 5800. Pp. 787-790.

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Asia-Pacific Journal of Rural Development Vol. XVII, No. 1, July 2007

Factors Influencing Mobile Services Adoption in Rural IndiaAbhay Jain* and B.S. Hundal**

AbstractDespite several attempts over the last few years, telecom infrastructure in rural areas is lagging behind the expected levels. There has been a phenomenal spurt in the growth of tele-density in the country, with the evolution of new wireless technologies, but the gap between the urban and rural tele-density has been increasing. Various policy initiatives are on the way to reduce this widening gap, which in turn, leaves the impression of tremendous potential for growth in the rural areas. To make the adoption and diffusion growth possible, the companies are constantly facing certain challenges in tackling rural market viz., understanding rural consumers, reaching products and services to remote rural locations and communicating with vastly heterogeneous rural audience. While mobile phone usage in rural areas is rather an unexamined genre in academic literature, this explanatory study investigates the factors influencing the rural consumer buying behaviour towards mobile phone and making choice of service providers prevailing in mobile phone markets. The data have been collected from the rural regions of Punjab, India during July to December 2005 and include 1357 respondents who have adopted mobile phones. The study concludes that rural people extremely desire the facilities and knowledge along with latest technology to make choice about mobile sets and service provider.

1.0 Introduction Over the past few years, mobile phone adoption has generated a significant amount of hype and interest and especially in India where wireless industry is the fastest growing market in the Asia-Pacific region with a compounded annual growth rate (CAGR) of 4042 per cent. But, at the same time, Indian telecom infrastructure in rural areas is lagging behind the expected levels and consequently, the gap between the urban and rural teledensity has been increasing. The urban tele-density has surged to 31.1 per cent while the rural tele-density has gone up by an abysmal 1.94 per cent (Ringing Data, Financial Express 2005). Two major reasons for this are the perceived lack of profitability of rural telecommunication and the lack of appropriate policies and strategies to provide Universal Access. Experiments like Hindustan Levers project Shakti, ITC e-chaupal to n-Longues etc. are an attempt at wiring up Rural India. Though the efficient policy development at the*

**

Lecturer, Department of Commerce and Business Management, Guru Nanak Dev. University, Amritsar, Punjab, India. E-mail: abjain22@yahoo.com Reader, Department of Commerce and Business Management, Guru Nanak Dev. University, Amritsar, Punjab, India. E-mail: bikramhundal61@yahoo.co.in

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government/corporate level is required, at the same time we cannot neglect the actual conditions at the ground level for the effective penetration of mobile market in rural areas. Although it is evident that the large players in the telecommunication business constantly conduct market research, the problem is that the results obtained are usually kept inside company walls, and therefore consumer behaviour in mobile phone industry is an unexamined genre in academic literature. Corporations which have understood the psyche of rural consumers and markets have notched up successes. 2.0 Review of Studies Pakola et al. (2004) surveyed 397 Finnish consumer-purchasing motives on one hand and factors affecting operator choice on the other. The result indicate that while price and properties were the most influential factors affecting the purchase of a new mobile phone, price, audibility and friends operators were regarded as the most important in the choice of the mobile phone operator. The paper concludes with a discussion of contributions and proposes ideas for future studies in the un-researched area. Liu (2002) examined factors affecting the brand decision in the mobile phone industry in Asia. It was concluded that the choice of cellular phone is characterised by two distinct attitudes to brands: attitude towards the mobile phone brand on one hand and attitude towards the network on the other. While price and regularity of service were found to dominate choices between network providers, choices between mobile phone brands were affected by new features such as memory capacity and SMS-options, more than size. The trends will actually be not towards smaller phones but towards phones with better capability and large screens. Riquelme (2001) conducted an experiment with 94 customers to identify the amount of self-knowledge consumers have while choosing mobile phone brand. The study was built upon six key attributes (telephone features, connection fee, access cost, mobile-to-mobile phone rates, call rates and free calls) related to mobile phone purchasing. The research shows that consumer with prior experience about a product can predict their choices relatively well but consumers tended to overestimate the importance of features, call rates and free calls and underestimate the importance of a monthly access fee, mobile-tomobile rates and connection fees. Kesti and Ristola (2003) investigated consumer intentions to use different mobile services. To this end mobile services had been tested in a real, interactive situation by voluntary test users. This paper also considered the needs people see themselves having in the mobile commerce context in the future. The field trials focus was on testing mobile services and technology in an actual end user environment. The main findings of the study indicated that the perceptions users got from testing mobile services affect their intention to use those kinds or similar services in the future. The results also indicated that there are significant differences while examining two kinds of groups; low-interest users and high-interest users. The test users regarded the guidance services as the most important, followed by mobile ads and communication services. Furthermore, there were statistically significant differences in means between different types of users and their evaluation of the three services groups.

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3.0 Need of the Study The review of the literature on marketing reveals that the studies on consumer behaviour in rural areas should be given more consideration now. Faced with the prospect of growth in the mobile phone user base hitting a saturation point in big cities, Indian mobile service providers are gearing up to delve deeper into under-penetrated rural areas. The behaviour pattern of rural consumers is starkly different from region to region (Pareek 1999). For marketers to understand, it becomes imperative for them to visit and survey the prospective market. Visiting slums can provide the much needed experience as it has a unique consumption pattern. The village or region from where migration has taken place defines the identity. This is one reason a blanket air market strategy is not good but evaluation of consumption pattern will give insights in rural habits. Often the actual scenario in rural area is different from the brands assumption. The rural market is full of contrasts and complexities. Actual groundwork is the only way to know the rural psyche. 3.1 Objectives of the study This paper attempts to identify the factors affecting the choice of mobile phone on one hand and factors affecting the choice of an operator among the rural people. A statistical approach Factor Analysis has been used for the study. 3.2 Methodology The study is based on primary data collected from the adopters of mobile phones in rural areas of Punjab State with the help of well-drafted pre-tested structured questionnaire in Punjabi (regional language) and English. The universe of the study consists of the 1357 consumers who have mobile phones from the villages of 141 blocks of 17 districts of Punjab State. For the collection of primary data, Rural Punjab has been concentrated. Gupta (1979) emphasises that specific area studies have the advantage of overcoming the regional differences in natural and geographical endowment. The respondents being the adopters of mobile phones are selected by following the non-probabilistic convenience sampling techniques as it is appropriate for exploratory studies. It will not be out of place to mention here two things: firstly, in convenience sampling, respondents (who were seen using/have possession of mobile phones) are selected because they happen to be in the right place at the right time, and secondly, convenience-sampling technique is not recommended for descriptive or casual research but they can be used in exploratory research for generating ideas (Malhotra 2005). Questions inquiring the choice of a mobile phone and the operator were implemented with 18 statements, respondents had to put importance rate on seven-point Likert Scales. Rural consumer purchasing behaviour concerning the choice of a mobile phone as well as operator are not well known in theory, i.e. no commonly accepted knowledge of the factors influencing consumers decision making exists. Therefore, the results obtained have some limitations and should be considered tentative. 4.0 Data Analysis Previous studies on mobile services as well as theories of consumer behaviour have shown demographics to be a factor influencing the adoption of technology-based product and services (Agarwal and Prasad 1999).19

Table 1: Demographic Characteristics of Sampled RespondentsNumber of respondents Gender: Male Female Age (years): Under 20 20-40 40-60 60 and above Occupation: Farmers Microentrepreneurs Employed/salaried Professionals Students and others Income: < Rs.10,000 10,000 20,000 >20,000 Education: Below Metric Higher Secondary Graduation Post-Graduation Any others 801 556 92 846 403 16 652 348 142 128 87 429 715 213 637 256 178 102 184 Percentage 59.02 40.98 6.78 62.34 29.70 1.18 48.05 25.64 10.46 9.43 6.42 31.61 52.69 15.70 46.94 18.87 13.11 7.52 13.56

The demographic characteristics of the respondents depict that the majority of users (62.34%) belong to 20-40 age group, followed by 40-60 age group (29.70%). This reveals that the adopters of mobile services are relatively young. It is further revealed that farmers comprised the maximum proportion (48.05%) followed by microentrepreneurs (25.64%), and service class (10.46%). It reveals that mobile phone is beneficial for the rural people, who are engaged in agricultural and small businesses. As far as the income level of the respondents is concerned, most of the respondents (52.69%) belong to Rs.10,000-20,000 income group, followed by less than Rs.10,000 income group (31.61%). The Table 1 also shows that most of the respondents (46.94%) are below metric, followed by higher secondary (18.87%) and graduates (13.11%). This signifies that education level also plays a dominant role in the adoption and expansion of mobile services in rural areas. 5.0 Factor Analysis Explanatory factor analysis is used in order to identify underlying constructs and investigate relationships among key survey interval-scaled questions regarding the factors affecting the choice of mobile phone and mobile service provider from 1357 rural

20

respondents. To test the suitability of the data for factor analysis, the following steps have been taken: i. The correlation matrices are computed and examined. It reveals that there are enough correlations to go ahead with factor analysis.

ii. Anti-image correlations were computed. These showed that partial correlations were low, indicating that true factors existed in the data. iii. Kaiser-Meyer-Olkin Measure of Sampling Adequacy (MSA) for individual variables is studied from the diagonal of partial correlation matrix. It is found to be sufficiently high for all the variables. The measure can be interpreted with the following guidelines: 0.90 or above, marvellous; 0.80 or above, meritorious; 0.70 or above, middling; 0.60 or above, mediocre; 0.50 or above, miserable; and below 0.50, unacceptable (Hair et al. 1995). iv. To test the sampling adequacy, Kaiser-Meyer-Olkin Measure of sampling adequacy is computed which is found to be 0.711 for mobile phone choice and 0.694 in choice of mobile service provider. It is indicated that the sample is good enough for sampling. v. The overall significance of correlation matrices is tested with Bartlett Test of Sphericity for choice of mobile phone (approx. chi-square = 1238.151 significant at 0.0000) and for choice of mobile service provider (approximately chi-square = 1132.164 significant at 0.000) provided as well as support for the validity of the factor analysis of the data set.

Hence all these five standards indicate that the data are suitable for factor analysis. There are two basic methods that the analyst can use to obtain factor solutions namely, Common Factor Analysis and Principal Component Analysis. Common Factor Analysis technique uses an estimate of common variance among the original variables to generate the factor solution. Because of this, number of factors will always be less than the number of original variables. So, choosing the number of factors to be kept for further analysis is more problematic while using common factor analysis. However, the Principal Component Analysis technique overcomes this limitation. This method provides a unique solution, so that the original data can be reconstructed from the results. It looks at the total variance among the variables and the solution so generated should include as many factors as there are variables. So, Principal Component Analysis is always recommended when the researchers primary concern is to determine the minimum number of factors that will account for maximum variance in the data for use in the subsequent multivariate analysis. In the present study Principal Component Analysis has been used (also referred as R-factor analysis). The number of factors to be extracted becomes an important issue in the absence of any set criterion. The four possible criteria are: (i) in a priori criterion, the analyst already knows how many factors to extract and accordingly instructs the computer; (ii) in latent root criterion, only those factors which have latent roots greater than one are considered significant; (iii) in percentage of variance criterion, the cumulative percentage of variance extracted by successive factors is considered; (iv) in Scree Test criterion, at least one21

factor more than latent root criterion is usually extracted. It is used to identify the optimum number of factors that can be extracted before the amount of unique variance begins to dominate the common variance structure. In the present study exploratory efforts were made with all of the above methods. Initially, Latent Root was used as guideline and then the Scree Test was used. In all the attempts percentage of the variance explained was also taken into consideration. Further an interpretation and assessment of the structure matrix was made in each case. Thus, several factor solutions with different number of factors were examined before a satisfactory solution was reached. An important step in Factor Analysis is the rotation of factors. With the rotation of factor matrix, it becomes simple and easier to interpret by making the loadings for each factor either large or small, not in between. For rotation, either orthogonal or oblique method can be employed. In Orthogonal Rotation Method, the axes are maintained at 90 degrees so that the resulting factors are uncorrelated. In Oblique Rotation method, the axes are rotated, but the 90-degree angle between them is not maintained, this makes the method more flexible. However, analytical procedure for oblique rotations is still controversial. Within orthogonal method, either Varimax or Quatrimax method can be employed. Varimax method simplifies the columns in a matrix whereas Quatrimax method stresses simplifying the rows. Further, it was assumed that no correlation exists among factors, so orthogonal rotation along with the Varimax method of rotation of factors were used in order to have more clarity in factor solution. Varimax rotation is probably the most popular Orthogonal Rotation procedure. The Varimax criterion maximises the sum of the variances of the squared loadings within each column of the loading matrix. This tends to produce some high loadings and some loadings near zero, which is one of the aspects of simple structure. Moreover, this is an orthogonal method of rotation that minimises the number of variables with high loadings on a factor, thereby enhancing the interpretability of the factors (Malhotra 2005). So, in view of the above analysis, Varimax method of rotation of factors was used. 5.1 Criteria for the significance of factor loadings In interpreting factors, a decision must be made regarding which factor loadings are worth considering. A factor loading represents the correlation between an original variable and its factor. The criterion given by J. Hair where factor loading based on sample size is taken as basis for decision about significant factor loading is adopted. For sample 1357 respondents, a factor loading of 0.40 has been considered significant. After a factor solution has been obtained, in which all variables have a significant loading on a factor, then it is attempted to assign some more meaning to the pattern of factor loadings. Variables with higher loadings are considered more important and have greater influence on the name or label selected to represent a factor. Hence, all the underlined variables were examined for a particular factor and placed greater emphasis on those variables with higher loadings to assign a name or label to a factor that accurately reflected the variables loading on that factor. The names or label is not derived or assigned by the factor analysis computer programme; rather, the label is intuitively developed by the factor analyst based on its appropriateness for representing the22

underlying dimension to a particular factor. All the factors have been given appropriate names on the basis of variables represented in each case. The names of factors, the statement, the label and factor loading have been summarised in Tables 3 and 5. 5.2 Factors affecting the choice of mobile phone There were only four factors each having Eigen value exceeding one for mobile-banking drivers. The Eigen values for 4 factors were 6.514, 4.248, 2.162 and 1.112 respectively. The percentage of total variance is used as an index to determine how well the total factor solutions accounts for what the variables together represent. The index for the present solution accounts for 78.882 per cent of the total variations for the choice of mobile phone. It is a pretty good extraction to economise on the number of choice factors (from 18 to 4 underlying factors), while losing only 21.118 per cent information content for choice variables. The percentage of variance explained by factor 1 to 4 is 36.171 per cent, 21.911 per cent, 12.652 per cent and 8.148 per cent respectively. Large communalities indicate that a large number of variance has been accounted for by the factor solution. Varimax rotated factor analytic results for mobile-banking stimulators are shown in Table 2. Table 2: Principal Component Analysis with Varimax RotationStatement numbers S1 S2 S3 S4 S5 S6 S7 S8 S9 S10 S11 S12 S13 S14 S15 S16 S17 S18 Eigen values Percentage of variation Cumulative percentage of variation F1 0.545 -0.355 0.684 0.456 0.112 0.752 0.602 0.128 -0.342 -0.085 0.738 0.302 0.472 -0.075 0.067 -0.215 -0.698 0.110 6.514 36.171 36.171 F2 0.815 0.243 0.383 -0.177 0.467 0.101 0.765 0.416 -0.659 0.406 0.423 -0.219 0.475 0.737 -0.091 0.194 0.071 0.343 4.248 21.911 58.082 F3 0.447 0.795 0.471 0.512 0.817 -0.220 0.517 -0.248 0.419 0.345 0.043 -0.684 0.028 0.293 0.672 -0.651 0.393 0.046 2.162 12.652 70.734 F4 -0.163 0.269 0.266 0.874 0.521 -0.428 0.425 0.621 0.116 0.745 0.157 0.224 -0.710 0.156 0.302 0.107 0.100 -0.846 1.112 8.148 78.882 Communalities 0.729 0.736 0.825 0.846 0.922 0.728 0.745 0.824 0.689 0.752 0.732 0.861 0.754 0.816 0.750 0.828 0.731 0.768

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Table 2 shows that after 4 factors are extracted and retained, the communality is 0.729 for variable 1, 0.736 for variable 2 and so on. It means that approximately 72 per cent of the variance of variable 1 is being captured by our 4 extracted factors together. The proportion of variance in any one of the original variables, which is being captured by the extracted factor, is known as communality (Nargundkar 2002). Table 3: Naming of the FactorsFactor number F1 Name of dimension Convenience and assistance Label S6 S11 S17 S3 F2 Price consciousness S1 S7 S14 S9 F3 Brand choice S5 S2 S12 S15 S16 F4 Influential persons S4 S18 S10 S13 S8 Statements I prefer the mobile phone, which is easily available in my area. I always take into account the service centres of mobile phone in my area. Demo/knowledge of the functions of the mobile phone is not necessary for me. I like the mobile phone with regional language. I often find myself checking prices. I always stick to guarantee/warrantee to be provided. I usually purchase where instalment/easy loan facility is provided for the purchase of mobile phone. Attracting schemes with the mobile phone dont change my choice of purchasing. I like the latest technologies enabled set. Image of the mobile phone is very important while purchasing. I dont consider the external look of the mobile phone while purchasing. Audibility of the mobile phone. Properties in the mobile phone. My neighbours usage influences my purchase decision. I always take my own decision while choosing a mobile phone. My friends/relatives recommended me. Advertisement/media influenced me more to buy the mobile phone. Dealer recommended me to buy a particular mobile phone. Factor loading 0.752 0.738 -0.698 0.684 0.815 0.765 0.737 -0.659 0.817 0.795 -0.684 0.672 -0.651 0.874 -0.846 0.745 -0.710 0.621

In the Table 3, the respondents considered convenience and assistance as the first dominating factor. In this factor the role of manufacturer played a significant role in affecting the choice of mobile phone. The rural respondents preferred the mobile phones that were easily available, suit their environment and they have proper knowledge regarding how to operate and use the mobile phone. The second significant factor was the24

price consciousness. It indicated that the rural respondents check the price while purchasing and stick to the guarantee and warrantee. Since most of the rural respondents had low income, they often particularised the loan facility and the sale promotion schemesassociated with the mobile phones. Brand Choice name had been given to the third important factor. It specified the taste and awareness level of the rural respondents, how they cope with the new technology and features. Rural respondents took into their consideration the latest technology, image of the company, fascinating outlook and the prevailing features, which helped them in choosing a particular mobile phone. The last factor, which could be assumed as the closest choice affecting factor surrounding the rural respondents, had been the influential persons. The rural people had been found more influenced by the neighbours usage. It is pertinent to mention here that own decision and media has been regarded here as the negligible impact on the choice of buying a mobile phone. The rural respondents have been seen more relying upon the external pressure than own choice. 5.3 Factors affecting the choice of service provider The choice of service provider was affected primary by facilitating factor. Network coverage, quality of services, easy availability of connection and bill payment centres Table 4: Principal Component Analysis with Varimax RotationStatement numbers S1 S2 S3 S4 S5 S6 S7 S8 S9 S10 S11 S12 S13 S14 S15 S16 S17 S18 Eigen values Percentage of variation Cumulative percentage of variation F1 0.882 0.483 0.596 -0.406 -0.075 -0.119 -0.613 -0.188 0.347 0.727 0.294 -0.016 -0.075 0.026 -0.124 -0.088 0.756 0.418 4.668 31.162 31.162 F2 0.206 -0.028 0.742 -0.224 0.107 0.009 -0.017 0.092 -0.115 0.032 0.066 0.051 0.674 0.302 -0.178 0.121 0.327 -0.705 3.160 13.947 45.109 F3 0.403 0.691 0.277 0.465 -0.124 0.571 -0.428 0.594 0.247 -0.173 0.624 0.365 0.465 0.169 0.413 -0.016 0.028 0.189 2.686 12.729 57.838 F4 0.675 0.011 0.088 0.619 0.162 0.042 0.325 -0.219 0.594 0.081 -0.095 -0.055 0.277 -0.153 -0.551 -0.224 -0.017 -0.120 2.198 6.917 64.755 F5 0.277 -0.037 0.267 0.345 -0.585 -0.079 0.178 0.384 0.408 0.057 0.207 -0.691 0.088 0.756 0.335 0.714 -0.417 0.187 1.998 5.187 69.942 Communalities 0.865 0.771 0.781 0.792 0.871 0.894 0.799 0.828 0.874 0.742 0.762 0.791 0.845 0.864 0.774 0.764 0.878 0.815

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Table 5: Naming of FactorsFactor number F1 Name of dimension Facilitating factor Label S1 S17 S10 S7 F2 Effectiveness S3 S18 S13 F3 Dexterity S2 S11 S8 S6 F4 Relative advantage S4 S9 S15 Statements I would like to have a service provider who has wide network coverage. Quality of services is an important variable while opting for mobile service provider. I always prefer easy availability of connection in my area. I do not bother about the convenience of bill payment centres. I feel proud in adopting service provider having good Image. I dont consider other peoples satisfaction experience about the service provider. I like to try the service provider who provides more value-added services. Customer care availability helps me a lot in adopting a mobile service provider. Proper guidance and knowledge provided by service provider has advantage over other service providers in the market. Dealer recommended me to have a specific mobile service provider. I would like to have less paper formalities. I am attracted towards the number of free calls/messages given by service provider. Low rental and low charges for calls/messages motivate me to adopt service provider. I dont take into account the variety of plans and attracting schemes provided by service provider. My neighbours/fellow has the connection of service provider. Friends/family recommended me. It is my own decision to have specific service provider. Advertisement/media influences me most to have a specific service provider. Factor loading 0.882 0.756

0.727 -0.613 0.742 -0.705

0.674 0.691 0.624

0.594 0.571 0.619 0.594 -0.551

F5

Influential person

S14 S16 S12 S5

0.756 0.714 -0.691 -0.585

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had affected their choice relatively much. The service provider has to concentrate much on this facilitating factor in order to grab the market. Effectiveness had been regarded as the second most important factor. The respondents had been seen enquiring from others regarding the satisfaction level from their service providers. Besides, image of the service provider and value-added services provided had great impact on the decision regarding choice of service provider. Dexterity was the third significant factor. The skilfulness of the service provider viz. customer care facility, guidance, dealer recommendation and less paper formalities had been considered valuable for them and affected the respondent significantly. The next factor had been named as relative advantageous. It is the general phenomenon that people are always attracted towards the things having low price, high quality and variety. The same thing had been perceived. Free calls/message facility, low rental, variety of plans had attracted the respondents towards them. Influential person factor had been regarded as the least important factor affecting the choice of service provider. Neighbours choice had affected the respondents choice much. 6.0 Conclusion and Implication Rural telecommunication has been a significant area on which the government has been giving sustained emphasis to bring down the widening gap between urban and rural teledensity. Several measures have been taken and many others are in queue to make rural telecom more accessible. In order to understand the impact of these measures and policies, it seems to be more appropriate to know first what actually rural consumer perceives. This exploratory study was particularly an attempt to increase the in-depth understanding of rural consumer regarding mobile phone market. The study was an attempt to throw a flood of light on the much-unexamined area regarding the choice of mobile phone and service provider in rural India. The main results of the study indicate that consumer education is an integral part of rural marketing strategy. In the study, most of the respondents had the education level below metric; this might be the reason that the rural respondents were not much influenced by media/advertising. Even, due to the lack of knowledge and education, they were unable to make use of their own mind and have to depend upon others. So, apart from formal media like newspaper, television, radio, cinema and direct mail, rural-specific promotion methods like demonstrations, puppet shows, house-to-house campaigns, processions, rural melas, dance programmes etc. would be more useful in attracting the attention of rural consumer. While making the choice of mobile phone, rural consumer put more emphasis on the convenience and assistance, price, features and influential person. Though the rural consumers were having low income and knowledge, they preferred to step into the shoes of modernity such as new technology enabled, advance features in mobile set etc. with proper guidance. It must be taken into account that they wanted to make the optimum utilisation of their hard-earned money. While making the choice regarding the service provider, they stressed facilities provided, effectiveness, dexterity, relative advantage and influential person. The rural consumer perceived that service providers more capable which provide more quality facilities at low price along with rural financing. Despite the fact that the results of the study are tentative, the findings add to the existing rare literature on consumer behaviour in Indian rural mobile market. The results endowed27

with interesting aspects of mobile phone choice on one side by giving the fact that rural consumer inclined towards the convenience and proper guidance/knowledge services, and on the other side by arguing that choice of service provider was mostly affected by the facilitating and effectiveness factor. Currently, India is one of the most assertively competed markets, and the competition is driven by low-price rentals and free valueadded facilities. In addition to extending the understanding of consumer behaviour in mobile services context, the research presented also has practical implications for managers and policy makers who have to make strategies and decision in order to cater to this hitherto unexplored new technology-based service market.

ReferencesAgarwal, R., and J. Prasad. 1999. Are Individual Differences Germane to the Acceptance of New Information Technologies? Decision Science, Vol.30 (2). Pp. 361-391. Gupta, K.P. 1979. Alternatives in Developing Framework of Research. ICSSR Newsletter, 10 (April-September). Hair, J.F., Ralph E. A., Ronald L. T., and William C.B. 1995. Multivariate Data Analysis. 4th Edition. New Jersey: Prentice-Hall. Kesti, M., and A. Ristola. 2003. Tracking consumer Intention to use Mobile Services: Empirical Evidence from a field trial in Finland. Accessed on November 2005 available at http://www.rotuaari.net/ downloads/publication-10.pdf. Liu, C.M. 2002. The effects of promotional activities on brand decision in the cellular Telephone industry. The Journal of Product and Brand Management, 11(1). Pp. 42-51. Malhotra, N.K.2005.Marketing Research:An Applied Orientation. P.568. Pearson Edu.(India Branch). New Delhi. Nargundkar, R. 2002. Marketing Research: Text and Cases. New Delhi: Tata McGraw Hill Publishing Co. Pakola, J., M. Pietila, and R. Svento. 2003. An Investigation of consumer behaviour in mobile phone markets in Finland. Proceedings of 32nd EMAC Conference, Track: New Technologies and E-marketing. Accessed on November 2005 available at www.oasis.oulu.fi/publications/jem-05-hk.pdf. Pareek, V. 1999. Stop. Look. Go. Advertising and Marketing, Vol. 3. P. 58. Riqulme, H. 2001. Do consumers know what they want? Journal of Consumer Marketing 18(5). Pp. 437-448. Ringing Data : Dust off Rural Telecom Review Policy. Financial Express, Dec.26, 2005. Accessed on January 05, 2006 from http://www.financialexpress.com/fe_full_story.php?content_id=112558

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Asia-Pacific Journal of Rural Development Vol. XVII, No. 1, July 2007

Adoption and Diffusion of Integrated Pest Management Technology: A Case of Irrigated Rice Farm in Jogjakarta Province, IndonesiaJoko Mariyono*

AbstractThe institutionalisation of IPM technology in Indonesia relies on farmer-to-farmer diffusion. The study aims to analyse the adoption and diffusion of the technology at farm level. Data come from a farm survey conducted in three consecutive seasons of 2000/2001. Two villages in Moyudan sub-district of Jogjakarta Province, where a chronic pest infestation exists, are chosen. Sixty rice farmers have been interviewed. The study shows IPM technology has been adopted by both IPM-participating and non-IPM participating farmers. There is an indication of IPM knowledge diffusion occurred in the area of study where every farmer faces the same problems of severe pest infestations.

1.0 Introduction Integrated pest management (IPM) technology, a package of practices that utilises natural predators and careful timing of right doses, is one of the most important measures to cut the use of pesticides. The technology has been introduced in Indonesia to cope with problems resulting from the unwise use of pesticides during the 1970s and 1980s. It is not surprising evidence that the application of pesticides during the periods has increased substantially along with incredible amount of subsidies (Irham and Mariyono 2002). This was considered one of the key successes in the intensification programme in Indonesia, that is, the substantial increase in rice production because of the increase in crop yield through intensive use of inputs including chemical pesticides. But, most of the researchers still believe that without indiscriminate use of pesticides, increases in application of pesticides lead to a number of consequences such as elimination of natural enemies, pesticide-resistant pests, and frequent pest outbreaks (Barbier 1989; Matteson 2000). In addition, pesticides also impacted on human health (Kishi et al. 1995; Pawukir and Mariyono 2002) and the environmental contamination (Bond 1996). 1.1 IPM programme and dissemination of IPM technology The Indonesian Government was implementing the IPM programme with support of the UN's Food and Agriculture Organisation (FAO) since May, 1989 for dissemination of

*

Ph.D candidate in Economics at The Australian National University, Canberra, Australia. Email: joko.mariyono@anu.edu.au

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IPM technology among rice-based farmers through a pilot project. The programme provides an ideal case to contrast extension for sustainable agriculture with that supporting high external input agriculture. IPM is being introduced into a farming system, irrigated rice, in which the Green Revolution has been successful during the past twenty years (Rolling and van de Fliert 1994: 98). This programme was realisation of a Presidential Decree (INPRES 3/86), three years before, which banned 57 brands of pesticides from rice cultivation, and declared IPM the national pest control policy. A policy measure progressively reduced the subsidy on pesticides, which was previously 85 per cent, to zero in 1990 (Untung 1996). These policy measures created a favourable climate for the implementation of Indonesia's National IPM Programme. It is the first phase (1989-1992) of large-scale attempt to systematically introduce sustainable agricultural practices as a national, public sector effort. During the first phase, it had trained around 200,000 farmers intensively through a number of training packages, namely the farmers field school (FFS). Locations of FFS were purposively selected with criteria of easy accessibility and the presence of active farmer groups. Farmers participating in the school were also purposively selected for the programme. More prosperous and better informed farmers in the villages were selected and encouraged to be participants of the field school. The second phase (1993-1999) was sponsored by the World Bank. Since 1994, the pilot FFS activities had been taken over by the National IPM Training Project funded by the World Bank (World Bank 1993). The project promoted IPM and improved crop cultivation of rice and other food and horticultural crops. More regions had been covered and more actors had been involved. However, the target was not to reach all Indonesian farmers. The strategy of the programme was to train a fraction of farmer community, instead of providing training to all farmers in the community. Thus, the spread of IPM knowledge relied on farmer-to-farmer diffusion. During implementation of second phase of the project, villages were still subjectively selected with the same criteria by the project management in collaboration with agricultural services officials both in provincial and district levels. With the assistance from agricultural office at sub-district level and farmer group leaders, farmers were also purposively selected with certain criteria, for instance: rice farmer, literacy, and ability to actively discuss. 1.2 Farmers field school The heart of IPM programme in Indonesia is FFS, a process of learning by doing. Practically, the programme enhances human capital (Ekowarso 1997). The World Bank, along with a number of development agencies promoted FFS since it is a more effective method to extend science-based knowledge and practices (Feder et al. 2004a; 2004b). Farmers field school applies a participatory approach to provide assistances for farmers to develop their capability on analytical skill, critical thinking and creativity such that farmers can make better decision. In short, the objective of FFS is to enhance human resource development, in which farmers become experts of IPM in their paddy fields. Farmers are expected to be able to conduct observations, to analyse agro-ecosystems, to

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make decisions, and to implement pest control strategies based on the results of their field observations. Farmers will obtain those capabilities from participating FFS. In reality, IPM involves not only pest control but also other aspects of farming such as balanced and efficient fertilising, efficient use of water, crop rotation and soil conservation. The following IPM principles are central to the FFS: growing healthy crops; conserving and utilising natural enemies; carrying out regular field observations; and developing farmers as IPM experts in their own field (Untung 1996). A unit of FFS consists of a training group of 25 farmers, selected either from one farmer group, or across such groups within one village. To encourage woman participation, it is expected that 30 per cent of participants are woman farmers (Kingsley and Siwi 1997). FFS starts with a ballot box pre-test of knowledge and ends with a post-test. Several weeks before planting, there are pre-preparation meetings to organise identification of communities that fulfil the criteria for establishing FFS; and identification of suitable participants. Observation, analysis and action FFS for rice hold 12 times of weekly meetings throughout one planting season of rice (around three months). The first meeting begins two to three weeks after transplanting. This is to enable observations of all critical stages of growth and development of crop. FFS uses a framework of an agro-ecosystem analysis. The agro-ecosystem analysis is based on about 1000m2 of rice field that is divided into two plots: IPM plot and another plot based on locally conventional management of which the application of pesticides eliminates natural enemies of insect pests. The key processes and elements above have to be fulfilled to enable that FFS runs adequately, and that FFS needs timely and sufficient material and financial supports. As cited by Agro-Chemical Report (2002), a unit cost of FFS in 1996-97 fiscal years was, on average, US$599. It constituted honorarium of the facilitator, preparation and coordination expenses, facilitators transport, materials, refreshments, compensation of land used for field trial, stipends for participants, and field day or ceremonial of closing FFS. 1.3 Statement of problems During the first few years of the IPM Programme, pesticide use dropped by approximately 50 per cent and yields increased by around ten per cent (Pincus 1991). Despite this impressive success, work of Irham (2001; 2002) shows that the programme has diminished pesticide use and increased productivity and the household incomes of different socio-economic groups. These confirm the fact cited by Useem et al. (1992) and Untung (1996) that Indonesian IPM programme has been successful in reducing pesticide use and escalating rice production. Winarto (1995) gives the impression of supporting the success of IPM programme by showing process of transfer IPM knowledge at farmer level. Studies by Paiman (1998), Kuswara (1998) and Susianto et al. (1998) highlight some cases of successful IPM implementation in some sub-districts. In wider scale, Irham (2002: 75) sums up the impact study of Indonesian IPM programme conducted by SEARCA in 1999 that at least the farmers can maintain the current yield with lower cost of pesticide. In the Agro-Chemical Report (2002), it is stated that Indonesia has been one

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of the leaders in the use of IPM in Asia. Since 1989, a national IPM programme has helped farmers in Indonesia to reduce their dependence on pesticides and increase their harvests. It has also dramatically reduced the incidence of pesticide-related illnesses and environmental pollution. However, the successful implementation of IPM technology in Indonesia has been questioned by Feder et al. (2004a) finding that the IPM training has failed to deliver IPM technology since there is no difference between the farmers participating in the training and the ones not participating in, in terms of growth in rice yield and reduction in pesticide use. Another study by Feder et al. (2004b) shows that the diffusion of IPM knowledge among farmers is also not the case, and there is no evidence that the expected environmental and health benefits of the programme are significant. This is understandable because non-IPM participating farmers may face different problems from IPM-participating farmers. The expectation on adoption of the technology by Indonesian farmers is questionable since the target of IPM programme was not to reach all Indonesian farmers. As previously mentioned that the strategy of the programme was to train a fraction of farmer communities, and the spread of IPM knowledge relies on farmer-tofarmer diffusion. This study aims to analyse the adoption and diffusion of IPM technology in rice farming. The entry point of introducing IPM technology is plant protection. Farmers facing serious problems of pest infestation are expected to be responsive to adopting the technology. Once the technology has been adopted by some farmers, other farmers having the same problems will adopt the technology. In other words, there is fast diffusion of the technology among farmers. 2.0 Material and Methods 2.1 Source of data and location Data come from a farm survey conducted in three consecutive seasons of 2000/2001 in two villages. Sixty rice farmers are purposively selected in the survey, out of which thirty have been graduated from FFS. Moyudan sub-district of Jogjakarta Province was selected as the study area The region constitutes one of the rice production centres in Java where IPM programme has been promoted intensively by local and national government. Every year, a number of FFSs have been set up following the introduction of the IPM programme. Importantly, this sub-district is considered an area of endemic pest infestations of rice. This is because this area has a technical irrigation system allowing farmers to cultivate rice throughout a year. Being an endemic area of pest infestations, it is expected to stimulate the adoption of IPM technology by IPM-graduate farmers, and enable diffusion of the technology by non-graduate farmers neighbouring the graduates. 2.2 Underlying theory A production function explained in the microeconomic theory is used as fundamental analysis. Related to the introduction of new technology, the production function is mathematically expressed as:32

Y = F (X, L, T , S )

(1)

where Y is output, X is vector of inputs, L is land, T represents different technology and S represents different states of nature. In Asian developing countries, it has been pointed out by Hayami and Ruttan (1985) that agricultural production technology exhibits constant returns to scale. This means that output will be multiplied by a factor if all inputs and land are multiplied by the same factor, such that:

Y =