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Can social capital help Indian smallholder farmers? Analysis of its impact on rural development, agricultural efficiency, production and risk.
- 2. 1 2 3 4 5 Results, Contributions and Limitations Methodology Social Capital: case study of rural India Problem Statement, Objectives and Hypothesis Conclusions and Further Research Presentation Contents2
- 3. 3 1 2 3 4 5 Problem Statement ECONOMIC SOCIAL ENVIRONMENTAL Environmental Degradation Social exclusion Challenges faced by SMALLHOLDER FARMERS IN DEVELOPING WORLD Production constraints Unsustainable farming practices Free-riding of privatized natural resources Climate change 85% of farms worldwide 75% world’s hungry and undernourished Gender & minorities Cultural restrictions Land rights/extension Lack of access to resources Low productivity Low profit and investment
- 4. 4 Hypothesis FARMER RURAL SOCIETY ENVIRONMENT Natural Capital Preservation Collective empowerment Improve Performance Bottom-up innovation Sustainable use through Collective Responsibility Sustainable, zero-cost & locally based Building of grassroots institutions Empowerment of disadvantaged groups Higher Productivity, Efficiency Reduced Vulnerability How can Social Capital help? 1 2 Hypothesis Hypothesis 1 2 3 4 5
- 5. 5 250 semi-structured interviews to smallholder cotton farmers in 9 villages in Wardha District Support of Wardha’s Agricultural College Household survey, a rapid rural appraisal and stakeholder workshops used for data collection Data: farm production, farmers’ constraints and farmers’ Social Capital Study Location Agronomic Environment Social Analysis Empirical Research 1 2 3 4 5
- 6. 6 1 2 3 4 5 MEAN STD MIN MAX 24% GENDER Percentage of farmers interviewed are women 20% REPRESENTATIVENESS 250 farmers in 9 villages 100-150 farm households 30 farmers interviewed 68% COTTON Percentage of cotton on total cultivated area. Farm income: 80% of household income 55% IRRIGATION Percentage of irrigated lands: bore-dug wells YIELD (Qtl) 14.9 8.1 1.5 50 LAND (acre) 2.91 1.04 1.00 5.00 SEEDS (Rs.) 5,481 3,205 930 32,790 FERTILIZER (Rs.) 6,561 5,266 0.00 40,750 PESTICIDE (Rs.) 2,431 2,149 0.00 15,000 LABOUR (Rs.) 19,017 10,849 0.00 72,000 NET INCOME (Rs./Qtl) 1,401 968,5 -649 3450 EDUCATION (years) 7.6 4.4 0 15 AGE (years) 46.3 13.5 20 98 Sample Characteristics
- 7. 7 What is Social Capital? and how to measure it? Social Capital PRODUCTION INFORMATION TRUST MUTUALITY Likert scale: 0 to 10 25 Survey Questions 1 2 3 4 5 Social Capital = “networks, norms, and trust, that facilitate coordination and cooperation for mutual benefit“ (Putnam, 1993) “Integrated Questionnaire for the measurement of Social Capital”
- 8. 8 Average Social Capital score: 4,8 6,5 TM 2,1 6,5 6,2 CP IS Trust & Mutuality Information Sharing Collective Production Collective Production Joint input acquisition and marketing produce, share of labour force, collective soil & water conservation Information Sharing Capacity of farmers to generate, find and share valuable technical information Trust & Mutuality Inter-caste collaboration, mutual support and volunteership/cooperation in community activities Principal component Analysis ? ! Social Capital What is Social Capital? and how we measured it? 1 2 3 4 5
- 9. Research Scheme9 Social Capital Efficiency Analysis Risk Analysis Descriptive Analysis Research contribution Community & Local Rural Development 1 1 2 3 4 5
- 10. 10 Farmers’ production constraints Social exclusion in resources access Social Capital characteristics Descriptive Data Analysis Descriptive Analysis Socio-economic Analysis -------------- --Multiple Linear Regression -------------- Factor Analysis 1 2 3 4 5 METHODOLOGY Networks, institutions and shared rules
- 11. 11 Analyse the effects of social capital on farm productivity and riskiness (Just and Pope, 1979) Analyse the contribution of social capital to farm productive efficiency (Battese and Coelli, 1992) q = 𝒇 𝒙 𝟏, 𝒙 𝟐, … 𝒙 𝑵 + 𝒗 − 𝒖 Deterministic component noise 𝑦=𝑓 (𝑥, 𝛼)+𝑔 (𝑥, 𝛽) 𝜀 Output Level Variability of Output Inefficiency Efficiency Analysis Social Capital as input variable Maximum Likelihood SAS, Frontier, STATA Stochastic frontier production function Just & Pope production function Quantitative Data Analysis Risk Analysis Social CapitalSocial Capital METHODOLOGY 1 2 3 4 5
- 13. 13 RESULTS Efficiency Analysis Input Elasticity Std Seed 2.226 *** 0.244 Labour 1.083 *** 0.108 Fertilizer 0.583 *** 0.103 Land 0.277 *** 0.107 Pesticide 0.097 *** 0.024 Education 0.012 ** 0.003 CP 0.037 *** 0.002 IS -0.00056 0.001 TM 0.0024 0.002 Input Elasticity Std CP -0.077 *** 0.023 IS -1.024 *** 0.318 TM -0.565 ** 0.237 Education -0.090 ** 0.039 Female dummy -0.044 0.180 Social (CP + IS + TM) x Education 0.008 ** 0.002 Social (CP + IS + TM) x Age 0.001** 0.000 Elasticity of inputs Stochastic frontier production function Elasticity estimates Elasticity of inputs Technical Inefficiency Model ? ! ? ! Social Capital raises productive efficiency of LESS EDUCATED and LESS EXPERIENCED/YOUNGER FARMERS.Tested for Exogeneity and Multicollinearity 1 2 3 4 5
- 14. 14 **. Correlation is significant at the 0.01 level and * at the 0.05 level. Spearman’s correlation RESULTS 0,135* Farmer Education 0,282** -0.221** Productivity Qtl/acre Expenses Cost /Qtl Collective Production 0,371** Information Sharing 0,458* 0,321** Trust & Mutuality 0,568** ? ! 0,207**0,210** -0,852 ** -0,277 **-0,145 0.554** Social Capital 0,426** -0.566** Efficiency Land/Qtl -0.566** Seed/Qtl -0.581** Fertil/Qtl -0.414** Pestic/Qtl -0.316** Labor/Qtl -0.779** Inputs Efficiency Analysis Correlation Scores 1 2 3 4 5
- 15. Risk Analysis15 01 02 Social Capital is “Productivity-increasing” Social Capital is “Risk-Increasing” RESULTS 1 2 3 4 5
- 16. Social Capital is “productivity-increasing” 16 “ Frequency distribution of farm’s produce shows the positive impact of Social Capital on productivity levels “ Mean 4.1 Variance 4.8 SOCIAL CAPITAL below the median 01 1,75%15,23% 5,42%3,4% Productivity distribution is wider and flatter Numberoffarmers Qtl per acre Greater ranges and higher variability of scores Higher Social Capital owns potentials for higher returns SOCIAL CAPITAL above the median Mean 4.9 Variance 5.8 Numberoffarmers Qtl per acre 1 2 3 4 5
- 17. Numberoffarmers Social Capital is “risk-increasing” “Risk-increasing effect of social capital reflects an impact on the upside risk, responding to the probability of gaining something rather than losing“ 70,55%29,45% Mean 3.8 Variance 36.1 17 SOCIAL CAPITAL below the median Greater variability of output Numberoffarmers Much greater probability of obtaining higher results than expected Higher level of Upside Risk SOCIAL CAPITAL above the median Mean 14.7 Variance 45.5 02 93,24%6,76% 1 2 3 4 5
- 18. 18 Summary of Results Especially “Collective Production” Especially “Information Sharing” Augmenting “positive risk” of achieving better results than expected 01 PRODUCTIVITY INCREASING 02 EFFICIENCY INCREASING 03 UPSIDE RISK INCREASING 1 2 3 4 5 Can Social Capital be a Rural Development Tool? Farmers’ social capital as a policy resource for community development in the rural areas
- 19. 19 Sahaj Krishi – Grassroots Agric. Project 1 2 3 4 5 INNOVATIVE PROD. TECHNIQUES 2011 20.000 Indian farmers participating (830 centers in Maharashtra) 2015 Techniques researched and applied by ICAR (Indian Council for Agricultural Research) Ancient knowledge of yoga and farmers’ connection to natural environment - holistic approach to agriculture TRUST & MUTUALITY INFO SHARING COLLECTIVE ACTION Project started by few Maharashtran farmers2005
- 20. 20 Social capital and Rural Development Policy 1 2 3 4 5 Policy: Provide COMMUNITY RESOURCES and improve MARKET EFFICIENCY Farmer organizations farmers‘ integration markets & value chains Farmers’ COLLECTIVE PRODUCTION Policy: FARM INNOVATION and KNOWLEDGE EXCHANGES Farmers – Researchers Extension services Bottom-up innovation & problem-solving pools of local expertise Farmers’ INFORMATION SHARING Policy: CROSS-CUTTING TIES and COLLECTIVE ACTION HETEROGENEOUS NETWORKS Virtuous circle: : higher trust, cooperation, civic engagement & collective well-being Farmers’ TRUST and MUTUALITY
- 21. 21 Limitations and drawbacks of Social Capital Social Capital is a RESOURCE which is not easy to CREATE Once created, there is NO ASSURANCE it will last long Non-monetary COSTS in building an infrastructure of trust, reciprocity and civic engagement RISKY to TRUST ON OTHERS, SHARE one's own information and knowledge Not “one-size fits all” strategy for Policy: participative, bottom-up, user-led Drawbacks of PARTICIPATORY DESIGN: complex and time-consuming Advantages? 1 2 3 4 5
- 22. 22 FARMER FARMING COMMUNITY RURAL SOCIETY SUSTAINABLE AGRICULTURE: Empowered communities Environmentally accountable societies Participative governments Sustainable supply chains Reduce transaction costs Increase access to market and resources BENEFITS OF A STRONG SOCIAL CAPITAL Improve individual performance Reduce vulnerability 1 2 3 4 5 CONCLUSIONS
- 23. CONCLUSIONS 23 ECONOMIC SOCIAL ENVIRONMENTAL Sustainable, zero-cost & locally based BENEFITS of investing in SOCIAL CAPITAL RESOURCES 1 2 3 4 5
- 24. Directions for further research on Social Capital24 Smallholders’ Performance Replicate in other settings, countries and cultures. Cross section /Time series data Measure effects of social capital on the efficiency of whole local system Identify institutional bodies supporting Social Capital building & monitor their long-term results Measure positive externalities of social capital stock on environmental impact of agriculture 24 1 2 3 4 5 Rural Development Policy Environmental Sustainability
- 25. Resulting Academic Papers25 Under first and second round review Non-parametric Efficiency Analysis Serra, T. and E. Poli, 2015. Shadow prices of social capital in rural India, a nonparametric approach. European Journal of Operational Research 240 (3): 892-903. Indian Smallholders Rural Development Poli, E.; Serra Devesa, T. and J.M. Gil Roig, 2013. Potential and constraints of employing agricultural biotechnology as a development tool: GMO cultivation and Indian smallholder farmers. Revista Española de Estudios Agrosociales y Pesqueros, 235: 33-59. Parametric Efficiency Analysis Poli, E. and T., Serra, 2015. Social capital and farmers’ production risk in developing countries, the case of india. (Oxford Development Studies) Risk Analysis Socio-economic Analysis Poli, E. , Serra, T., and A. Sharma, 2015. The role of social capital in improving technical efficiency of Indian agriculture. (Journal of Development Research) Poli, E., and Gil M.J, 2015. Social capital in Indian smallholder agriculture: empirical analysis of its potentials for rural development. (Journal of South Asian Development) 1 2 3 4 5
- 26. THANK YOU 26 “Agriculture can be fruitful only through co-operation” “Mahatma” Gandhi
- 27. 27 Institut de Sosteniblitat Elena Poli
Editor's Notes
- For the QUALITATIVE ANALYSIS we used a number of analytical tools (such as Multiple Linear Regression, Factor Analysis and Socio-Economic Analysis). The first objective was to investigate in-depth which are the constrictions faced by sample farmers in productive activities (in this regard we found that their main constraint is high production costs). Then we investigated social/cultural exclusion of some categories of farmers (expecially women farmers) te, in accessing resources, credit, information and markets. Another important objective of the Qualitative Analysis is to understand the characteristics of Social Capital in this area: to understand what type of networks, what type of informal institutions and shared rules exist in this area as basis for Social Capital.
- Then we come to the QUANTITATIVE DATA ANALYSIS. THE COMMON FEATURE OF BOTH THE EFFICIENCY AND RISK ANALYSIS is that SOCIAL CAPITAL is INTRODUCED AS AN INPUT VARIABLE IN THE PRODUCTION FUNCTION. Demographic characteristics such as education and age
- “Sahaj Krishi” is a grassroots agricultural project started by few Maharashtran farmers in 2005. These farmers developed INNOVATIVE PROD TECHNIQUES based yoga to IMPROVE FARM PRODUCTIVITY and FARMERS’ WELLBEING. In few years time PROJECT expanded to reach 20.000 farmers all over India, 830 centers Maharasthra. Its TECHNIQUES so SUCCESSFULL, that are now RESEARCHED and APPLIED by ICAR. This is a GREAT EXAMPLE of BOTTOM-UP INNOVATION and PARTICIPATIVE TECHNOLOGY DEVELOPMENT, solutions that RESPOND TO THE NEEDS AND VALUES OF THE COMMUNITIES INVOLVED. In this model we FIND all the KEY ELEMENTS we had identified in our research on SOCIAL CAPITAL: collective production, information sharing ( bottom-up farm innovation ), trust and mutuality ( inter-caste, inter-group collaboration --- farmers participating across all caste/gender/religious groups). WE EXTRAPOLATED THEORY FROM REALITY of our sample FARMERS and then from another route, WE CONFIRMED THIS THEORY IN REALITY of a SUCCESSFUL PROJECT “Sahaj Krishi” is a very interesting grassroots agricultural project which was initiated by just few Maharashtrian farmers in 2005. These farmers developed some very INNOVATIVE AGRICULTURAL TECHNIQUES to IMPROVE FARM PRODUCTIVITY and FARMERS’ WELLBEING. They are proposing a fully new way of approaching agriculture, just the opposite of individual oriented, industrial agriculture. Their techniques do not employ any type of chemicals, but their use the Indian ancient knowledge of yoga and farmers’ connection to the natural environment and to their fellow farmers to improve productivity, proposing a very HOLISTIC APPROACH to agriculture and its sustainability. In few years time, by 2011, this PROJECT expanded to reach 20.000 farmers all over India, having 830 centres Maharashtra. Its TECHNIQUES are so SUCCESSFULL, that are now RESEARCHED and APPLIED by ICAR (Indian countil for agricultural research). This is a GREAT EXAMPLE of BOTTOM-UP INNOVATION and PARTICIPATIVE TECHNOLOGY DEVELOPMENT, solutions that RESPOND TO THE NEEDS AND VALUES OF THE COMMUNITIES INVOLVED. In this model we FIND all the KEY ELEMENTS we had identified in our research on SOCIAL CAPITAL: collective production, information sharing ( bottom-up farm innovation ), trust and mutuality ( inter-caste, inter-group collaboration --- farmers participating across all caste/gender/religious groups). Analysing this project was very interesting because we could confirm that the social capital categories that we identified are actually the key elements to make an actual grassroots project succeed in this area. Secondly, it also helped us to see how these different aspects of social capital interact with higher levels of governance to provide collective benefits. From this we could extrapolate recommendations for policy, as we can see from the next slide.
- By analysing the case of SAHAJ KRISHI, we examined which benefits these 3 Social Capital aspects can bring to the whole rural community and discuss how policy can use their potential to achieve higher development goals. IS: Recognizing the role of these actors to co-create, collectively, knowledge for new sustainable practices. TM: Generalised trust and reciprocity among the farming community tend to be self- reinforcing and engender a virtuous circle of high levels of.. Focus on INTER-CASTE, INTER-GROUP collaboration. Open economic opportunities...less powerful /excluded groups. SO WE HAVE SEEN SOCIAL CAPITAL HAS A GREAT POTENTIAL, BUT WHAT ARE ITS LIMITATIONS AND DRAWBACKS ?
- Social Capital as a development tool has a number of limitations and drawbacks. Social Capital is a RESOURCE which is not easy to CREATE. It is difficult to build trust, confidence, cooperation among human beings. In the PROCESS of CREATING SOCIAL CAPITAL, there is not a “one-size fits all” solution. POLICY MAKERS need to tailor strategies on the specific needs and characteristics of every social reality. So there are drawbacks but the advantages are much more.
- A strong SOCIAL CAPITAL benefits FARMERS as individuals, as group and as society 3. Greater stock of SOCIAL CAPITAL and COLLECTIVE ACTION bring benefits to the whole rural society. A STRONG SOCIAL CAPITAL IS THE BASIS TO CREATE empowered communities, environmentally accountable societies, participative governemtns and sustainable supply chains. If these 4 elements can act in synergy for mutual benefits, this could be an actual KEY for ACHIEVING SUSTAINABILITY IN AGRICULTURE.
- Hence, the positive effects of investing in Social Capital Resources (which are sustainable, zero-cost and locally-based) can be perceived at the ECONOMIC, SOCIAL and ENVIRONMENTAL LEVEL. […] By collaborating, by trusting and by sharing my own INDIVIDUAL EFFICIENCY LEVEL augments. And that I have much higher probability of achieving higher results than I expected. This is like a safety net against vulnerability and shocks.
- BASED ON THE FINDINGS AND THE LIMITATIONS OF THIS STUDY, HERE ARE SOME POSSIBLE EXTENSIONS OF THIS WORK : 1) Replic… 2) We found that Social Capital not only exert a positive impact on the performance of the individual farmers, but it also bring positive contributions on the efficiency of the whole agricultural system. So it would be interesting TO EXTEND THE SCOPE OF THIS RESEARCH TO ACTUALLY MEASURE THIS EFFECT. 2) In terms of POLICY, we proposed a number of recommendations, but it would useful to IDENTIFY WHICH…3) MEASURE the POSITIVE EXTERNALITIES of SOCIAL CAPITAL STOCK on the ENVIRONMENTAL IMPACT of AGRICULTURE. WHICH ARE THE ENVIRONMENTAL BENEFITS OF FARMERS’ SOCIAL CAPITAL.