EXPLORING THE EFFECTS OF EXPLORING THE EFFECTS OF FARMER GROUP PARTICIPATION FARMER GROUP PARTICIPATION

ON RURAL LIVELIHOODSON RURAL LIVELIHOODS

David M. Amudavi David M. Amudavi (PhD. Candidate)(PhD. Candidate)

Department of EducationDepartment of EducationCornell University Cornell University Ithaca, New YorkIthaca, New York

Presentation for thePresentation for the  SAGA PROJECT POLICY CONFERENCESAGA PROJECT POLICY CONFERENCE

““Empowering the Rural Poor and Reducing Their Risk and Vulnerability”Empowering the Rural Poor and Reducing Their Risk and Vulnerability”February 10th , 2005, Grand Regency HotelFebruary 10th , 2005, Grand Regency Hotel

Nairobi, KenyaNairobi, Kenya

Sudden interest in the use of rural Sudden interest in the use of rural community groups (RCGs) & community groups (RCGs) & organizations as a mode of organizations as a mode of reaching the resource-limited reaching the resource-limited farmers and their potential for farmers and their potential for scaling up extension outreachscaling up extension outreach

IntroductionIntroduction

Do groups matter in supporting household welfare?Do groups matter in supporting household welfare?

Group ParticipationGroup ParticipationCommunity/Local GroupsCommunity/Local Groups• Community groups formed endogenously within a community Community groups formed endogenously within a community

of their own accord based on their own identified needs- E.g., of their own accord based on their own identified needs- E.g., women groups, self-help groups, youth groups, social groups, women groups, self-help groups, youth groups, social groups, etc.etc.

• Limited networks with external social actorsLimited networks with external social actors• Less linkage-dependent Less linkage-dependent Supra GroupsSupra Groups• Formed exogenously by or in cooperation with external Formed exogenously by or in cooperation with external

agencies (e.g., government, NGOs, private businesses) in agencies (e.g., government, NGOs, private businesses) in response to some anticipated resource flow between external response to some anticipated resource flow between external entities and the community- e.g. cooperatives, farmer entities and the community- e.g. cooperatives, farmer associations (DGAK)associations (DGAK)

• Possess networks of contacts outside a community/villagePossess networks of contacts outside a community/village• Linkage-dependent to some degree.Linkage-dependent to some degree. Group participationGroup participation

Involvement by individuals in specific organized informal or Involvement by individuals in specific organized informal or formal organizations for purposes of realizing not only formal organizations for purposes of realizing not only utilitarian rational self-interests, but also for attaining utilitarian rational self-interests, but also for attaining mutually collective interests. mutually collective interests.

Efficacy of Community GroupsEfficacy of Community Groups• Promote economic well-being and offer Promote economic well-being and offer

buffers against natural and policy buffers against natural and policy shocks, e.g., SAPsshocks, e.g., SAPs

• Facilitate low cost access to informationFacilitate low cost access to information• Stimulate adoption of technology, Stimulate adoption of technology,

practices, innovationspractices, innovations• Enhance contract enforcementEnhance contract enforcement• Facilitate labor sharing at critical timesFacilitate labor sharing at critical times• Important in cooperative marketing, Important in cooperative marketing,

input supply, or savings and creditinput supply, or savings and credit • Enhance one’s opportunity to locate the Enhance one’s opportunity to locate the

information, resources and influence information, resources and influence necessary to advance economic welfarenecessary to advance economic welfare

Purpose of the StudyPurpose of the Study

Concerns establishing whether Concerns establishing whether group participation group participation substantially substantially influences household welfare/well-influences household welfare/well-being and whether this varies by being and whether this varies by group typegroup type and by the extent of and by the extent of group mediation of group mediation of access to access to servicesservices

Research ObjectivesResearch Objectivesa)a) Identify the socio-economic Identify the socio-economic

factors that have a major factors that have a major influence on economic welfare.influence on economic welfare.

b)b) Investigate the effect of Investigate the effect of participation in different types of participation in different types of groups on economic welfare.groups on economic welfare.

c)c) Explore the effect of services Explore the effect of services accessed through different accessed through different groups on economic welfare.groups on economic welfare.

Study SitesVihiga inWestern Province

Baringo inRift ValleyProvince

Embu inEasternProvince

Rainfall:Rainfall: 300-1200300-1200Altitude: 300-2100Altitude: 300-2100

Rainfall:Rainfall: 1800-20001800-2000(mm)(mm)Altitude: 1300-1500Altitude: 1300-1500(m)(m)Pop Density: 850Pop Density: 850(persons/km(persons/km22))

Rainfall:Rainfall: 640-2000640-2000

Altitude: 760-2070Altitude: 760-2070

Pop Density: 330Pop Density: 330

Pop Density: 26Pop Density: 26

DataDataHousehold Data (Survey)Household Data (Survey)• Household socio-demographic variablesHousehold socio-demographic variables• Crop production & types and numbers Crop production & types and numbers

of livestockof livestock• Participation in community-based Participation in community-based

institutionsinstitutions• Collective action and trustCollective action and trustData on Community GroupsData on Community Groups (Focus groups)(Focus groups)• Group formation & group sizeGroup formation & group size• Group orientation: functions and Group orientation: functions and

benefitsbenefits• Group heterogeneity and synergies Group heterogeneity and synergies • Group sustenance/stabilityGroup sustenance/stability

Dimensions of Well-beingDimensions of Well-being

Well-beingHealthy/

SustainableEnvironment

Increased Income/LivelihoodSecurity

Increased Nutritional

Status

Decreased Mortality

Decreased Morbidity

Improved Women’s

Lives

Control on Fertility

Increased Household

Assets

Economic Well-being MeasuresEconomic Well-being MeasuresAsset index:Asset index: Computed from Computed from ownership of assets via principal ownership of assets via principal components analysis, as an components analysis, as an alternative diagnostic measure to alternative diagnostic measure to income. Based on information on income. Based on information on key household items and the key household items and the condition of respondents’ condition of respondents’ dwellings.dwellings.

Annual income:Annual income: Computed from Computed from crop and livestock activities, non-crop and livestock activities, non-farm activities and formal sector farm activities and formal sector employment.employment.

Household CharacteristicsHousehold CharacteristicsVariableVariable BaringoBaringo VihigaVihiga EmbuEmbuMale-headed (%)Male-headed (%)Female-headed Female-headed

83.8 83.8 16.2 16.2

83.1 83.1 6.9 6.9

82.5 82.5 17.517.5

Primary Educ (%)Primary Educ (%)Secondary Educ Secondary Educ Tertiary EducTertiary Educ

43.043.036.1 36.1 20.9 20.9

33.8 33.8 53.1 53.1 13.1 13.1

30.0 30.0 53.8 53.8 16.3 16.3

Age of head of hh Age of head of hh (yrs)(yrs)

45.045.0 51.051.0 52.052.0

Household size Household size 7.07.0 7.87.8 6.56.5Total Liv. Units Total Liv. Units 3.7 3.7 1.41.4 1.0 1.0 Income (Kshs)Income (Kshs) 70,92570,925 86,74086,740 125,561125,561Land size (ha)Land size (ha) 1.921.92 0.750.75 1.521.52Title deedTitle deed 33.733.7 39.939.9 63.563.5Credit (%)Credit (%) 43.143.1 61.2561.25 48.848.8

Group Participation Patterns Group Participation Patterns

Group Group TypeType

FrequenFrequencycy

BarinBaringogo%%

VihigVihigaa%%

EmbEmbuu%%

OveraOverallll%%

CommunCommunity ity GroupsGroups

00 29.429.4 20.620.6 18.818.8 22.922.91-31-3 70.770.7 76.976.9 75.075.0 74.274.2 44 00 2.52.5 6.46.4 2.92.9

Chi-square = 73.5, df = 12, p <0.001, phi = 0.391Chi-square = 73.5, df = 12, p <0.001, phi = 0.391

SupraSupraGroupsGroups

00 6060 8.88.8 9.49.4 26.026.01-31-3 4040 88.888.8 80.180.1 69.669.6 44 0.00.0 2.52.5 10.710.7 4.44.4

Chi-square = 283.78, df = 14, p <0.001, phi = 0.769Chi-square = 283.78, df = 14, p <0.001, phi = 0.769

Trend in Group Participation between Trend in Group Participation between 2000-20032000-2003

Current participation

Increased

Remained constant

Decreased

Missing

Number of Households

80

60

40

20

0

District

Baringo

Vihiga

Embu

76

35

49

73

4442

25

75

56

4

Factor Loading Patterns for High Group Factor Loading Patterns for High Group ParticipationParticipation

Variable Variable Factor PatternFactor Pattern

11 22 33 44

Collective action in public goodsCollective action in public goods .709 .709 00 00 00

Education-enlightenment Education-enlightenment .681 .681 00 00 00

Improves supply of social capital Improves supply of social capital .677 .677 00 00 00

Problem solving and social Problem solving and social support support

.676 .676 00 00 00

Enhance social norms for social Enhance social norms for social control control

.563 .563 00 00 00

Generate cash flows - savings, Generate cash flows - savings, loans etc loans etc

00 .610 .610 00 00

Improve standards of living Improve standards of living 00 .607 .607 00 00

Enhance efficiency on farm Enhance efficiency on farm 00 .533 .533 00 00

Enhance income generating Enhance income generating activities activities

00 .477 .477 00 00

Enhance welfare development Enhance welfare development 00 .795 .795 00

Acquire productive assets Acquire productive assets 00 .648 .648 00

Gain access to markets Gain access to markets 00 00 .795 .795

Reduce poverty Reduce poverty 00 00 .760 .760

Variance explained Variance explained (54.9%) (54.9%)

19.2 19.2 12.5 12.5 12.0 12.0 11.2 11.2

Factor Loading Patterns for Low Group Factor Loading Patterns for Low Group ParticipationParticipation

Variable Variable Factor PatternFactor Pattern

11 22 33 44 55

Poor management Poor management .733 .733 00 00 00 00MisunderstandingsMisunderstandings .745 .745 00 00 00 00Lack of accountability Lack of accountability .715 .715 00 00 00 00Poor arrangement and logistics Poor arrangement and logistics .503 .503 00 00 00 00Discouragement Discouragement .528 .528 00 00 00 00Lack of financial resources Lack of financial resources 00 .702 .702 00 00 00High share contributions High share contributions 00 .752 .752 00 00 00Lack of active membership Lack of active membership 00 .518 .518 00 00 00Dependency on external support Dependency on external support 00 00 .573.573 00 00Lack of commitment -domestic Lack of commitment -domestic chores chores

00 00 .556.556 00 00

Heterogeneity of members Heterogeneity of members 00 00 .804.804 00 00Groups not helpful – seek AIG Groups not helpful – seek AIG activities activities

00 00 00 .728.728 00

Lack of clear goals and objectives Lack of clear goals and objectives 00 00 00 .672.672 00Lack of self-expression/voice Lack of self-expression/voice 00 00 00 00 .650.650 Variance Variance explained (57.6%)explained (57.6%)

16.916.9 12.412.4 10.710.7 9.99.9 7.77.7

Comparisons of Mean Service AccessComparisons of Mean Service Access

DependeDependentntVariableVariable

(I)(I)DistricDistric

ttMeanMean

(J)(J)DistricDistric

ttMeanMean

MeanMeanDiff (I-Diff (I-

J)J)Service Service Access by Access by CommuniCommunity Groupsty Groups

VihigaVihiga 3.733.73 BaringBaringoo

1.431.43 2.30*2.30*

EmbuEmbu 6.086.08 BaringBaringoo

1.421.42 4.66*4.66*

EmbuEmbu 6.086.08 VihigaVihiga 3.723.72 2.36*2.36*Service Service Access byAccess bySupra Supra GroupsGroups

VihigaVihiga 3.363.36 BaringBaringoo

1.261.26 2.09*2.09*

EmbuEmbu 9.189.18 BaringBaringoo

1.261.26 7.92*7.92*

EmbuEmbu 9.189.18 VihigaVihiga 3.363.36 5.82*5.82*

* The mean difference is significant at the .05 level

Effects of Groups on Welfare Effects of Groups on Welfare

So does the density of group So does the density of group memberships and of services access memberships and of services access through groups measurably affect through groups measurably affect household welfare? household welfare?

This hypothesis was tested by using This hypothesis was tested by using multivariate regression analyses multivariate regression analyses with Asset Index and Log of income with Asset Index and Log of income as dependent (response) variables. as dependent (response) variables.

Coefficients of Group Participation on Coefficients of Group Participation on Well-beingWell-being

VariableVariable Asset Asset IndexIndex

Log Log IncomeIncome

Memberships in Memberships in Community GroupsCommunity Groups

0.0460.046 0.0600.060

Memberships in Memberships in Supra GroupsSupra Groups

0.124***0.124*** 0.203***0.203***

Service access by Service access by Community GroupsCommunity Groups

0.0130.013 0.0020.002

Service access by Service access by Supra GroupsSupra Groups

0.022***0.022*** 0.0120.012

Vihiga District Vihiga District (Dummy)(Dummy)

0.0310.031 0.404***0.404***

Embu District Embu District (Dummy)(Dummy)

0.491***0.491*** 0.423***0.423***Statistically significant levels: * p < 0.10; ** p < .05; *** p < .01

Group Effects On Well-being Group Effects On Well-being cont’dcont’d• Household resource endowments – level of Household resource endowments – level of

educationeducation, size of , size of livestocklivestock, and size of , and size of landland with secure with secure land tenureland tenure – have the – have the expected, significant, positive effects on the expected, significant, positive effects on the household asset index and on income. household asset index and on income.

• Significant positive effects associated with Significant positive effects associated with youngyoung, , male-headed householdsmale-headed households and and residenceresidence in Embu or Vihiga in Embu or Vihiga

• Density Density of participation inof participation in supra groups supra groups significantly and positively affects both significantly and positively affects both measures of household welfare.measures of household welfare.

• Supra groups may raise the aggregate or Supra groups may raise the aggregate or average income in an area, but average income in an area, but simultaneously simultaneously depress the relative depress the relative economic statuseconomic status of certain segments of the of certain segments of the population in the community, particularly population in the community, particularly the poor the poor

ConclusionsConclusions• Group participation matters in economic Group participation matters in economic

welfare. Social capital manifest in group welfare. Social capital manifest in group participation matters materially to participation matters materially to household welfare measures. household welfare measures.

• Levels of group participation and Levels of group participation and associated access to services differ associated access to services differ significantly across households and significantly across households and districts. districts.

• Human, physical and natural capital Human, physical and natural capital holdings and gender are critical factors holdings and gender are critical factors explaining variation in household wealth.explaining variation in household wealth.

Conclusion cont’dConclusion cont’d• The fact that supra group-mediated The fact that supra group-mediated

services access has additional positive services access has additional positive effects on household wealth also effects on household wealth also indicates that indicates that supra groupssupra groups offering a offering a greater range of servicesgreater range of services are are associated with the highest levels of associated with the highest levels of economic welfareeconomic welfare in the communities in the communities studied. studied.

• The significant effects of supra groups The significant effects of supra groups on economic welfare suggests the need on economic welfare suggests the need to expand their to expand their organizationalorganizational and and resource capacityresource capacity to benefit to benefit more more rural peoplerural people by enabling more asset by enabling more asset accumulation and higher asset accumulation and higher asset productivity, thereby stimulating productivity, thereby stimulating income growthincome growth..

Policy ImplicationsPolicy Implications• Being realistic when considering the capacity of groups Being realistic when considering the capacity of groups

to undertake significant functions and responsibilities.to undertake significant functions and responsibilities.• Checking the formation and development of more Checking the formation and development of more

groups against their capacity to leverage key services groups against their capacity to leverage key services such as farm inputs, information, accessing markets such as farm inputs, information, accessing markets and financial services. and financial services.

• Increasing the services accessible through extant Increasing the services accessible through extant groups may be a more desirable course than fostering groups may be a more desirable course than fostering the emergence of new groups. the emergence of new groups.

• Addressing the stark disparity across communities and Addressing the stark disparity across communities and districts in group participation rates and in the districts in group participation rates and in the services available through community and supra services available through community and supra groups requires attention.groups requires attention.

AcknowledgmentsAcknowledgments• The Rockefeller Foundation for financial The Rockefeller Foundation for financial

support of the entire programsupport of the entire program• Cornell University for the education and Cornell University for the education and

trainingtraining• SAGA ProjectSAGA Project• The Farmers – who participated in the study The Farmers – who participated in the study • Key Informants of agencies in the three Key Informants of agencies in the three

districts- MOA, KARI, and other Government districts- MOA, KARI, and other Government Departments, NGOs, CBOs Departments, NGOs, CBOs

• Colleagues and many othersColleagues and many others

Thank you for listening. Thank you for listening. Comments are welcome.Comments are welcome.

da54@cornell.eduda54@cornell.edu

Regression Coefficients of Endowment Factors Regression Coefficients of Endowment Factors on Well-beingon Well-being

VariableVariable Asset Asset IndexIndex

Log Log IncomeIncome

ConstantConstant -1.156***-1.156*** 9.635***9.635***Gender of head of Gender of head of hhdhhd

0.347***0.347*** 0.363***0.363***

Age of head of Age of head of hhdhhd

-0.006**-0.006** -0.017***-0.017***

Secondary Secondary EducationEducation

0.267***0.267*** 0.348***0.348***

Tertiary Tertiary Education Education

0.781***0.781*** 0.0.938***0.0.938***

Size of householdSize of household -0.016-0.016 0.0150.015Family in off-farm Family in off-farm jobsjobs

0.056**0.056** 0.139**0.139**

Land size (ha)Land size (ha) 0.108***0.108*** 0.137***0.137***Land Tenure Land Tenure (Title)(Title)

0.413***0.413*** 0.140***0.140***

Total Livestock Total Livestock UnitsUnits

0.041***0.041*** 0.052***0.052***

Statistically significant levels: * p < 0.10; ** p < .05; *** p < .01

Benefits of ParticipationBenefits of Participation

Participation in groups can offer several Participation in groups can offer several resource/benefits: resource/benefits: • MaterialMaterial (increase in consumption, income (increase in consumption, income

or assets), or assets), • SocialSocial (services such as schools, health (services such as schools, health

clinics, water systems, improved and better clinics, water systems, improved and better roads), and roads), and

• PersonalPersonal benefits such as self-esteem. benefits such as self-esteem.

The distribution of service access was The distribution of service access was estimated by summing up all possible services estimated by summing up all possible services obtained from each type of group. obtained from each type of group.