Management advisory services for farmers
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CTA. 1997. Management advisory services for farmers. Spore 71. CTA, Wageningen, The Netherlands.
Permanent link to this item: http://hdl.handle.net/10568/48847
The capacity of farmers and other rural people to innovate is often limited by lack of relevant information. Rural people need training and services that reflect and serve the diversity of their real needs, which state-controlled extension and other...
The capacity of farmers and other rural people to innovate is often limited by lack of relevant information. Rural people need training and services that reflect and serve the diversity of their real needs, which state-controlled extension and other agencies often ignored in the past. Modern management consultancy is thus adapted to the real problems of the rural areas of developing countries. It can offer flexible and proven advice and some farmer organizations are already beginning to adopt these techniques and even to recruit their own advisers. The two main problems still inhibiting further development are the relative scarcity of people capable of providing good management advice and the cost of paying for it. Farmers must make a permanent improvement in management practices if they are to adapt to the demands of the market economy and improve profitability. Innovation is a necessity but farmers are more inclined to innovate if they perceive chances of making rapid profits without undue risk. Classic centralized extension systems have more often failed than succeeded because they have provided only technical advice without consideration of management or economic matters. The introduction of consultation with farmers, and especially the Training and Visit (T&V) system, has not been really successful because it gives insufficient emphasis to the innovative talents of those who are so central to, the development process (see Spore 68: Extension services: servant or master.). Improving the decision-making ability of farmers In spite of differences in methodology and the adaptability of management advice to the very different situation in developing countries, there is little disagreement among consultants, scientists and extension agents on the main objective. This is to improve farmers' capacities for making decisions and thus the ability to control their own businesses. Not all farmers are likely to use management techniques. A monograph produced by Inter-Réseaux (an organization based in France which provides a link between African development networks) describes several conditions that are helpful or even necessary if management advice is to, be successful and if farmers are to make active use of it and enjoy its benefits. These include the need for farmers to be literate and to have basic numeracy skills. There must also be integration in the monetary economy over and above basic subsistence production. Thinking that management advice is a panacea would be a serious mistake. It is clear, for example, that farmers who have large investments in irrigation or plantation crops are more likely to seek management advice than are subsistence producers. Willing participation is the basic premise for management advice under whatever form it has been tested and put into practice in several West African countries including Côte d'Ivoire, Mali, Burkina Faso and Benin. Two complementary systems can be identified that depend on the technical and economic levels of farms. Advice to commercial agriculture The first system is directed at farmers already involved in commercial production. This is adapted from the European situation and looks directly at the financial analysis of enterprises. It is based on the systematic collection of the data needed to establish a 'balance sheet'; stocks in hand and their flows; fixed assets, credits and debts. Home consumption of farm products is also taken into account. The farmer keeps two sets of data that are the essential basis for the advice provided. In one set all financial inflows and outflows are recorded. In the other, all labour inputs and activities are scrupulously noted. The management adviser checks these data and their accuracy and analyses them on a continuous basis. In addition to the overall results provided by a classic analysis the exercise also reveals several factors relating both to the management and, especially, the work devoted to each activity and their real gross margins. This type of advice can only be on an individual basis and an advisor can therefore work with only a small number of farms. However, it allows the good and bad practices of each farm to be identified and helps farmers to make informed technical and economic choices in respect of area cultivated, the inputs used or the introduction of new crops, especially in relation to market opportunities and the likely availability of external resources such as labour or capital. In view of its cost, the returns to this type of financial management advice are marginal in developing countries today. Nonetheless, such advice has been provided for about 15 years to 60 farmers in Côte d'Ivoire by the Farm Management Centre (Centre de gestion des exploitations agricoles, CGRA) located at Bouaké. The Farm Management Centre of the Agricultural Faculty of the University of Benin also provides advice to farmer associations. Advice to family subsistence farms Technical and economic advice has been provided to small farms, which are in the vast majority in the ACP countries, in Mali since the early 1980s and is now being introduced in Burkina Faso. Although carried out with groups of 8-10 voluntarily participating men or women farmers in a village, the advice is still personal. It is less sophisticated with respect to financial advice than the system used for commercial farms but it allows smallholders to analyse their own situation with the management adviser as motivator and trainer. Half-day sessions take place every two weeks. The main activity is the updating of the standard record books which allows the group work to be organized. The farm structure, such as family composition and the amount of equipment, show little variation over time but checking of field activities requires more attention and more explanation by the adviser. This leads to more abstract ideas being discussed. Farmers often have difficulty in understanding these especially in the early stages, such as yield or the amount of fertilizer needed. Practical questions emerge which the participants then discuss and compare among themselves. Some examples are: what is the best sowing date for each crop? What type of land preparation is needed? And, how can a work programme be established? The third part of the work on the record books relating to technical and financial results allows a direct relationship to be established between field operators and gross margins for each activity. This kind of analysis often provokes lively debate among participants, who are able to compare various practices or evaluate the possibilities for different types of crops in relation to the real production costs and the local market price. These discussions take place around a blackboard and provide a forum for debate on the management and profitability of farms representative of the group. Every farmer can thus measure the relevance of his or her own actions in comparison with those of other group members. Identification of various constraints leads to the definition of a series of actions which each farmer uses according to their own needs. If, for example, a group identifies erosion as a problem the adviser may arrange field visits to other villages where hedges have been planted to overcome the problem. Following these visits the group, or part of it, may then set up a nursery for hedging plants and the adviser will help, as far as possible, in procuring plastic sleeves and seeds. But lie will only do this if such a need is identified by the group. In contrast to the T&V extension system, which by design and necessity is limited to technological interventions, management advice touches on all the management possibilities of putting technology interventions into practice, on the provision of inputs and on the frequent lack of commercial market channels. In contrast to large companies and development projects the management adviser provides neither inputs nor credit to his clients but will, if necessary, help to manage investment and look into the possibilities of obtaining credit. Management advice is not intrusive and helps farmers to identify and solve problems by themselves. This is in line with the observations made by Gunter Dresrüsse* during the CTA seminar on Priority information themes for ACP agriculture held at Wageningen, The Netherlands, in October 1996. He said: 'Development must start at the bottom: it must make people capable of forging their own identity and of creating their own institutions. Governments do not require advice in order to understand the needs of agriculture and the transfer of techniques to farmers via regional institutions and structures. It is farmers themselves who are in need of information and advice direct from their own organizations.' Who advises and who pays? Whatever the relevance of a method of working, it is of value only to those who use it. Effective advice presupposes full confidence between the two parties. Because management consultancy leads to the publication of farmer income and because all relevant data is kept in the ledgers, farmers must be assured of the impartiality of their adviser. In Mali, for example, where management advice was tested and provided as an extension tool by the National Textile Company (Company Maliénne de développement textile CMDT) and the Institute of Rural Economy (Institut d'économie rurale, IER) with the help of the Royal Tropical Institute of the Netherlands (KIT), the advisers are employees of the cotton company. How independent and impartial can their advice be if the choice between cotton and maize is debated during a group meeting? Is it possible for civil servants to become important advisers with a commitment to, develop farmer capacity when, throughout their careers, they have done nothing but direct farmers? In the cotton zone of western Burkina Faso a management advisory system was first tested in the villages by the Regional Centre for the Promotion of Agriculture (Centre regional de promotion agricole, CRPA) using contracted advisers and scientists of the National Agricultural Research Institute (Institut national de la recherché agricole, INERA) supported by a team from the French Centre international de coopération en recherché pour le développement (CIRAD). Once the method seemed sufficiently adapted to serve local needs, a quantum change in scale was made with about 40 CRPA extension workers being mobilized to, provide advice in their villages. An assessment of the results very quickly showed that less than one third of these had qualities needed for understanding, analysing and synthesising farm management data. In the absence of private consultants, for which there is not yet a demand by small-scale producers, recruitment of advisers by farmers' associations is the alternative that is most frequently suggested. In Burkina Faso, unions of village groups are setting up a scheme to employ 10 advisers selected for their competence and motivation. Each will be responsible for 30 villages and this will result in one third of Burkina's cotton belt being covered independently of the regional agricultural development centres. The unions do not, however, have the necessary financial resources: the farmers themselves do not have the money, or are not yet willing, to pay for the full costs of the service; these are high because of the frequent visits needed. Current financing, at least in part, is thus of a `project' nature and therefore only short term. The situation is much more favourable in Benin where unions of village groups and regional unions see a rise in commercial cotton production, which brings in consistent and regular high incomes. In total, some 1200 million CFA francs each year are managed collectively and independently by farmrs' organizations which have already employed advisers at the sub prefect level. Each adviser is responsible for 30-40 villages and manages the supply of inputs, which were previously provided by Development Boards and the extension services. Having taken on the responsibility for this basic priority the unions are now looking at the possibility of broadening their service capacity especially in the areas of crop protection and the supply of management advice. An analysis of the development of the rural areas in Europe, and particularly in France, by Inter-Réseaux shows that 'though the initiative undeniably came from the farmers, the setting-up and expansion of management centres was also encouraged by the public services, as is clearly demonstrated by the subsidies they provided.' Is it possible that it can be otherwise in today's developing countries? [caption to illustration] Working in the classroom on balance sheets and, on the blackboard, learning how to manage farms economically [caption to illustration] Following problem identification by farmers, agricultural advisers organize visits to others villages where similar difficulties have already been overcome *Gunter Dresrüsse is Head of the Agriculture, Forestry and Emergency Aid for Refugees Division of the German Development Agency GTZ.