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Giving Seed to Farmers?

3 May, 2008 in 1. RMAP News, Australia, Cambodia, Crops by Maylee Thavat | 18 comments

As some of you that inhabit our small dungeon like corridor may have heard, I’m currently writing (and moaning about writing) a case study chapter on an AusAID funded project in Cambodia, called the Agricultural Quality Improvement Project. This project set up four seed companies in four adjacent poor provinces in south east Cambodia to try and find a way to systematically distribute ‘improved’ rice seed from another Australian funded rice research project to farmers. Although it aimed to boost rice farming productivity, the challenge for this project was to ensure a steady and systematic supply of good quality seed to farmers. It thus choose to establish private seed companies as its main vehicle of distribution and sold seed at relatively high prices. Seed prices were high because as a bilateral aid project, given from Australia to Cambodia, the seed companies were built with high priced equipment and modern management systems. 

It would come as no surprise to most readers that my research found that seed sales to farmers were mostly limited to wealthier farmers, whilst poorer farmers carried on growing their own seed or sourcing seed through seed exchanges with friends and family. The wealthier farmers then set about selling second-generation rice seed to slightly less poor farmers, at higher prices than they could sell as paddy rice but lower than seed company prices. They therefore undercut the seed company sales. The systematic distribution of seed through the private sector therefore systematically benefited wealthier, more commercialised farmers who became seed farmers. The benefits of this seed trickled down to less wealthy farmers who bought second-generation seed and generally excluded poorer ones.

That this would be the outcome of a private company in a largely subsistence country is not at all surprising.

What is surprising is that despite not meeting the project’s larger goal of “poverty alleviation” per se this pattern of distribution was acknowledged with shrugged shoulders of resignation by most who worked on the project. Nonetheless, AusAID’s Independent Completion Report noted that the project still spent too much time grappling with the social objectives of the project overall instead of sharpening the commercial objectives of establishing functioning rice seed companies. According to this report, the project should however be lauded for providing a public good to Cambodia through private companies. How could this project be celebrated as a success when it clearly was not achieving its stated aims and largely bypassed “subsistence” farmers?

The other major channel of seed sales for the “companies” were to government officials and NGOs who then gave the seed as part of rural relief packages to farmers in stress, often due to drought or flood. It seems that selling seed to NGOs and government officials who then gave seed to poor farmers counted in project’s books as providing a “public good” and “helping farmers”. The reliance on Cambodia’s large “aid sector” to distribute seed and fulfil the project’s poverty alleviation goals seems to me a rather round about way of supporting farmers, and did little for farmers who, even in favourable weather conditions, only barely managed to produce enough to eat. Yet even though high seed prices barred many farmers from purchasing the seed, farmer sales and not institutional sales were seen as key to ensuring the long term economic sustainability of the companies and project.

Perversely, when AusAID sought to reinforce the economic sustainability of these seed companies, to ensure that project funding would not be sustained after five years, it set high sales targets for the seed companies to ensure their “economic viability”. Sales targets that could only be met through increasing sales to large institutional buyers. In a desperate scramble to meet these targets the newly appointed Khmer CEO paid a small commission to a provincial governor who had placed a large seed order to hand out seed to farmers in his province. When AusAID found out an inquiry was launched and the newly appointed Cambodian CEO was fired. Apparently sales of seed from a donor produced seed company to NGOs and government to give gifts of seed to farmers is good; gifts of cash to Khmer officials to ensure that they buy seed and give seed to farmers from a donor produced seed company is not. Is this just a double standard? After all plenty of Australian aid contractors make money out of implementing Australia’s aid programs. It seems odd that Australia could really take the moral high ground on making money out of “gift giving” when it only recently changed its “tied aid” practices and still de facto perpetuates them. Perhaps what may be important here is the sequence in which gifts and commodities change hands? This sequence obviously has some baring on the interpretive difference between allegations of corruption and claims to poverty alleviation.

My research focused mainly on farmer seed sales, who bought the seed and who didn’t. I didn’t investigate much into the “institutional” seed sales made by the companies to NGOs and government and the impact of “giving seed” to farmers.Given that emphasis was placed on the NGOs and government officials that bought seed and gave it to farmers as a key claim to the poverty allieviation impact of the project, a lingering question I have in my head is: does the gift of seed really help?

Apparently not, according to a new article published in The Journal of Development Studies called “Moving Towards More Effective Seed Aid” (Volume 44, Issue 4 April 2008 , pages 586 - 612).The study details that even during extreme states of crisis, whether economic, political or environmental informal seed systems are extremely resilient and, more often than not, widespread seed handouts only serve to undermine local seed markets and exchange systems. The assumption that even after extreme drought or warfare, seed is not available, is generally wrong, according to the authors. The problem is however that even if seed is available, poor farmers may not have the ability, either financially or socially to access it. In post-crisis agricultural recovery the authors found that seed handouts only play a minor role in the total seed used for cultivation, and that under or after conditions of crisis farmers will adapt production and varieties accordingly. The problem in the countries studied by the researchers showed a lack of access to seed through formal and/or informal channels as the problem as opposed to lack of seed per se. They also found that where seed was routinely given to farmers, these “gifts” undermined the ability of farmers to grow and procure their own seed sources. 

So, it seems that both modes of distribution by the AQIP project, whether through farmer seed sales or through institutional sales which gave seed to farmers did not address the fundamental issue facing poor farmers, their inability to access seed whether through formal or informal seed channels. Perhaps what the project should have done was work with farmers to improve their capacity to produce and/ or procure seed, either through gifts, exchange or purchase. However, this approach may have precluded the need for highly visible “gifts” of high tech seed companies, given from Australia to Cambodia, and perhaps impeded the cultivation of Australia’s strategic foreign relations with the Cambodian government and its apparently “corrupt” officials.

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7 May, 2008 at 1:16 pm

Grahame Hunter

Hi Maylee,
Interesting piece.
Just a couple of points to note:
Seed prices were not high because of the high priced equipment and management systems. This was part of the aid grant. Some accused Aus of “subsidising the seed industry in Cambodia” such as it is.

Seed prices were and are high because of costs of production. You should note that this season the Board (and it is now a private Cambodia company with its own Board and management) increased seed price to up to 2,800r/kg (depending on variety). This is to accommodate the increased cost of production arising from fuel, fertiliser and competing grain prices.

On the question of who buys good seed. It is the better informed farmer. Even”farmer seed” which is actually grain, has a cost. And that grain has a germination rate of about 40%. Good seed is guaranteed at 85%. Farmers sow grain seed at 80-120kg/ha. They sow good seed at 30. So do the maths. If grain is worth 900 r/kg and they plant 100kg then it costs 90,000 riel. If seed is worth 2,400 r/kg and they plant 30kg it cost 72,000. So they are actually better off with good seed. On top of this the 60kg of grain seed that didnt germinate is actually buried food they could have eaten.

And thats not all - the good seed yields about 500-1000 kg/ha more.

Sure it was a big change for farmers, who traditionally saved grain for next year seed, to now go and buy seed. But it is happening and each year that seed company doubles its sales and the farmer sales are overtaking the institutional. It now underpins an emerging rice industry in Cambodia and for once, poor rice farmers have a chance to make some money.

7 May, 2008 at 3:47 pm

Maylee Thavat

Hi Grahame

Thanks for your comments. I really appreciate the feedback and I think I will use the blog forum more to explore these issues and elicit further feedback.

Agreed, there was nothing wrong with the seed per se. The seed is great and there is no question that it is benefiting some farmers. I think however the issue is not over whether or not the seed is good. It clearly is great, high quality well produced seed.

The issues that I am highlighting is that technology cannot be see outside of its social, economic and political contexts.

In this case what is questionable about the project is method of distribution as a means to poverty alleviation. The stated goal of AusAID and the project. In my view, private sector distribution is an extremely blunt tool for poverty alleviation.

My next case study, that I shall possibly blog about is on one NGO who purchased seed from the seed companies. They sold the seed to farmers too. They didn’t hand out seed as some may have expected. So I think the idea that NGOs were possibly fulfilling the needs of the “left behind” is slightly presumptuous especially in a place like Cambodia where everyone in the aid sector seems to be aiming for private sector orientation and cost recovery.

Yes, I realise that all seed has a cost to it, but what level of cost is certainly an important factor for who benefits and who doesn’t. And, I’m sure that you’re more aware, that even though the farmers that buy the AQIP seed reap larger yields, the cost of seed comes at beginning of the season when farmers are traditionally more resource scarce. The pattern of household scarcity and surplus throughout the year in Cambodia also bars many from reaping increased yields. For those farmers that can afford the initial outlay I’m sure the pay off is fantastic. But again, I’m not sure where this leaves “subsistence farmers” who by definition only manage to grow enough for their own consumption.

I’m not surprised that the cost of seed has increased further, I’m sure that the increase has been proportional to the rising price of rice worldwide and is probably less of a concern for more commercialised farmers who are probably getting higher prices for their surpluses.

I’m interested in exploring this idea of “formal” seed versus “informal” seed more at some point. I heard, when I was in Cambodia, of some farmers who were not associated with the project who had very high quality, high germinating seed.

What are your thoughts on the informal seed market as an alternate source of seed for less well off farmers?

I found this documentary, “Bisa Dèwèk - We can do it ourselves” by Dr. Yunita Winarto (that was recently shown here at RMAP) an interesting intro to thinking about these issues.

I’m glad to hear that more farmers are buying the seed. That is indeed a good sign. It would be nice to see AusAID target more assistance to poorer farmers to help them into the virtuous cycle of seed purchasing and higher yields that you describe, perhaps as the authors of “Moving towards more effective seed aid” suggest using vouchers or even cash. Then I believe the claims to poverty alleviation and creation of a public good could be in some way substantiated.

Finally may I ask whether the increased seed sales are of modern or traditional variety?

I’m interested to know as to whether there is the classic split between commercial farming and subsistence farming that been observed in many other rice growing communities in Southeast Asia. It certainly seemed to be occurring in Prey Veng when we were there.

Hope you’re well

Maylee

7 May, 2008 at 4:03 pm

Pieter Ypma

No more emotive issue in Asia than rice. While if you really want to make money as a farmer you should produce vegetables

Pieter

7 May, 2008 at 4:20 pm

Maylee Thavat

yes, well that will be the topic of another forthcoming thesis chapter, I’ve got rice seed, organic rice, vegetables and chili sauce. Nearly a complete meal.

so I’m glad you’re all coming out on the blogsphere ‘woodwork’ (so to speak) to comment and critique

As I read recently in Mosse’s book “Cultivating Development” objectivity, especially in the social sciences and especially in the area of development, is about facilitating the highest possible numbers of objections from the highest possible number of objectors

so I’ll be glad to hear from you all when the time comes

hope you’re well too Pieter

Maylee

7 May, 2008 at 5:51 pm

sophie dowling

Hi Maylee - I enjoyed your blog about this ‘misbehaving’ project (as Mosse might say) - it reminded me how similar the murky, political worlds of program evaluation and social impact assessment are. There is a school of thought that says if you want a program shut down, get it evaluated - so rarely do any programs or policies meet stated objectives or glossy guiding principals. But more commonly, ‘independent’ evaluation reports are commissioned - like SIA - to support a foregone conclusion, with limited terms of reference, ex-ante or when there are no funds or willing humans left to implement recommendations. Not surprisingly they either disappear into irrelevance, are selectively quoted or never see the light of day.
Sophie

7 May, 2008 at 7:51 pm

Pieter Ypma

Speaking as a woodworm I am really curious about the next course.

I hope you are well as wel and look forward to the next installment

Pieter

8 May, 2008 at 12:41 am

Grahame Hunter

Increased seed sales have been coming from the high yielding varieties. That is because they are the varieties grown for cash. The traditional varieties have been the food crop. But all that is turning on its head in the last two years and this year the old trends and habits are being blown out of the water. The aromatics, which could be considered tradionals and grown in the food crop system are paying $0.5/kg for paddy. This is unheard of and causing a run on the aromatic seeds (and is the highest priced seed). I am seeing farmers are replacing their food crop with the aromatic, selling at a premium and buying their food. This is still an exception rather than the rule but I see it as becoming the norm in 2-3 years.

So is there are classic split? Maybe there was but its blurring.

I am not sure where you get the idea that NGOs fulfill the needs of the left behind. Maybe some are. I am now part of a local NGO and we are seeing poor farmers with very small land areas, buying into the commercial rice trade. We are facilitating this. What we are finding is the issue is not about farmers buying good seed (and fertiliser, fuel for their pump or insecticide for plant protection). Its about having the cash for the initial outlay - as you say. What we are offering, and other NGOs are doing the same, is credit for the inputs that they can repay at harvest. So its not about having an alternate source for poor farmers, its about giving them access to, and participation in, the commercial market

This is an attractive proposition for them. Suddenly, buying seed is not an issue. After all who can or wants to become a seed farmer. Its like who wants to bake bread when we can buy a fresh loaf every day from a baker. Some will always say the home bake is better but the majority will buy from the baker.

8 May, 2008 at 11:54 am

Matthew Allen

Hi Maylee

Great post. Sounds like a fascinating chapter in the thesis.

It strikes me that another aspect of your rice seed story is that by benefiting only the wealthier farmers, the outcome will be not only a failure to relieve poverty, but also a furthering of the gap between rich and poor farmers. One imagines that such increased inequality could have all sorts of negative social consequences.

At least in this case the seeds can be saved, though perhaps the introduction of so-called ’suicide’ seeds will be the next step. It seems that Cambodia is one of the only countries in the region where these hybrids seeds have not yet been introduced?

http://www.grain.org/seedling/?id=510

Finally a question. Do the ‘improved’ seeds on your case study require higher inputs of fertiliser and pesticides as is the case in the seeds examined in Dr Winarto’s documentary about rice farmers in Indonesia (mentioned in your last comment)?

8 May, 2008 at 2:07 pm

Pieter Ypma

I think we are starting to compare apples with oranges. Basically the general assumption here is that subsistence producers are poor and commercial producers are rich. While basically they are coexisting in different economies.

With the increasing demand for cash related services the commercial side of the economy is expanding therefore the production system is changing from one which is primarily focused on internal resource mobilization to one which is aimed at optimizing external resource mobilization.

There are different levels of poverty in both systems but we see a migration of the subsistence system into the commercial system

At the same time the criterion used to evaluate the success of the production system changes and the market enforces quality criteria on the crop which previously although maybe present were much less explicit.

The ability to respond to these changes very much determines what will be a successful farmer in the commercial situation. I am always really worried about this because I think too many projects and NGO’s consider agriculture a default occupation something you do when you don’t have another occupation and therefore do not focus enough on quality.

In the current Cambodian context with unreliable extension services a rapidly expanding urban middle class and two of the world’s major agricultural exporters next door the option to develop local seed farmers into a competing seed industry I think has left us.

To answer Matthew Allen’s question these are not hybrid varieties but open pollinated varieties like all varieties they do better with fertilizer application however significant yield increases were observed when comparing traditional varieties with the AQIP varieties. At the same level of fertilizer application. This actually constituted the social dimension of the project as the producers then has the ability to harvest seed and use it for the next crop or sell it good for the farmers but not very good business for the seed company.

So where is the balance? If the object is to provide higher quality inputs to producers through an embedded extension model then whom do you target ensuring that the profitability is sufficient to deliver these social benefits.

9 May, 2008 at 2:03 pm

Maylee Thavat

Grahame

The run on fragrants is interesting, I noticed that some farmers in Prey Veng were getting a premium for these varieties even back in 2005. Tapping into the organic fragrant market will be an issue dealt with in my next chapter. I think the problem here is probably to do with labour and suitable land as many farmers complained to me that fragrant varieties generally require more work because they are all medium varieties. So do the price premiums make up for the additional labour? Probably not in the case of my organic rice chapter. But that’s a story for another time.

The idea that NGOs were picking up the slack, was expressed to me several times by several different people both working on and associated with the project. As I’m still wading through the masses of project reports I can’t say to what degree this was formally acknowledged, but it was certainly the impression given to me informally by more than one person qualified to speak on the matter.

Anyway, it sounds like you are doing some very interesting and worthwhile work. My interest in value chain interventions has led to me believe that if farmers are going to be assisted then their position vis a vis the existing value chain must be strengthened. A lot of the literature from Global Commodity Chain analysis emphasises both the structure of the trade chain as well as the power relationships existing between different actors in a supply chain. Strangely however, I’ve noticed that when aid agencies come to do value chain work there is a very real tendency to just try and link all their own projects up in a chain, focusing on the sustainability of their projects rather than the sustainability of farmers per se. I think it is a real shame and it will be interesting to see if AusAID heads down that path with its new program.

Pieter
Is there really a migration from subsistence to commercial orientation or does your work in development mean that you are “sampling on the dependent variable”? Meaning do you tend to see this migration more because those are the farmers you tend to work with more?

I ask this because South East Asia has long been noted by numerous observers and scholars as “bucking the trend” if you will in traditional patterns of agrarian transition from agriculture to industrialisation. This is the case in many countries even the more economically developed ones, Thailand and Malaysia included, where subsistence and commercial farming coexist and are to some degree mutually dependent. I think any intervention in agriculture in these societies probably needs to be more sensitive to this. Perhaps subsistence and commercial farming are not diametrically opposed but rather part of a mixed economy including, formal and informal markets, gifts and commodities?

9 May, 2008 at 6:18 pm

Pieter Ypma

How do you put urbanization in this context?

9 May, 2008 at 8:56 pm

Grahame Hunter

The global rice market pays about $250/tonne more for the aromatics. The local paddy market pays about 300 r/kg. But you have to be careful because the supply and demand is not always synchronised for the aromatic and non-aromatic.

Re labour for the aromatics V’s non-aromatics - I agree that the organic production is likely to have labour problems. We do not promote organic but rather Good Agriculture Practice. Not just because of labour but there is just not enough organic matter.

I ran little check on 50 farms in Takeo last year, comparing how much time they spent in traditional practice against time spent producing an aromatic using GAP. They actually spent more time in traditional practice. We attributed this to the good practice of using good seed, water management, fertiliser and pest control actually saves labour.

Re suitable land. You are right. The aromatics are suited to the more sandy soils on the middle terrace. But that is not a constraint. All agriculture has a land suitability classification.

On the value chain. As I see it there is no value chain. Its more a supply chain with everybody exploiting whoever they can. And the farmer is not always the looser. That certainly needs to change if Cambodia is to become a recognised producer with a vable rice industry and there are some signs it is happening. This recent explosion in prices is doing more for the Cambodian rice industry than any development project has ever hoped to do, let alone actually accomplish.

12 May, 2008 at 10:32 pm

Cambodia

To read more about Cambodia, visit the website : http://www.netvibes.com/cambodia

21 May, 2008 at 10:11 pm

Maylee Thavat

Hi and sorry for the late reply. I’ve still been mulling over this chapter and how to write it up formally as well as present it.

Pieter, I’m not sure what you mean about how to put urbanisation in this context? Do you mean McGee’s concept of Extended Metropolitan Regions? I certainly noticed this in Cambodia, especially in Pursat. There was one village I visited there, quite close to the provincial centre where many younger people worked either in Phnom Penh or in the provincial centre as government workers and part of the money earned was put towards rice production by their parents who lived in a peri-urban area and who used high cost inputs to grow rice at a loss. Urban wages were therefore subsidising rice production at a loss. Subsistence production was probably what led the younger generation to migrate in the first place, and sell their labour at rates that was low enough to attract global capital to employ them in garment factories. Although I’ve heard it said that subsistence production subsidises urban wages, the reverse is also true. If Cambodia wants to stay competitive as a source of cheap labour in garment manufacturing, it needs subsistence production to keep wages low. Subsistence production is also useful in protecting against global price shocks. Perhaps this is why children fund this loss making activity of their parents? Giving them a little bit of money to loss it on rice production is better than giving them lots of money to feed themselves in an economy that has few other employment options for older people.

I think Grahame’s comments on people spending more time on growing traditional rice rather than higher price fetching aromatics is interesting. From the AQIP research we did it seemed that farmers engaged in low return traditional production fell more into the level of middle income farmers, while the poorer ones were just continually producing IR66 to just try and get enough to eat. It seemed to me, and still does, that traditional rice production is the pursuit of middle class farmers in Cambodia, if there is such a thing.

Grahame, could you please answer some quick questions so I can make sure my facts are right?

1. If the majority of sales to farmers from the seed companies were in modern varieties? Were the majority of sales to NGOs and government of traditional varieties or aromatics or modern? I’ve been looking for information on seed sales by variety and to whom but I can’t find any at this stage. How many varieties in total were sold 12 to 14?

2. Also when I did research most farmers retained their own traditional seed but swapped seed for IR66. Why is this? Is this to do with the seed dormancy of traditional varieties or is it to do with fungal infection tendencies of IR66. I’ve been scanning some papers on seed but I’m no agronomist.

21 May, 2008 at 11:09 pm

Maylee Thavat

3. Oh, and how many times could the seed be used before it just behaved as normal unimproved seed? Three or four times?