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GLOBAL ECONOMY & DEVELOPMENT WORKING PAPER 47 | JANUARY 2012 Global Economy and Development at BROOKINGS CAN PRODUCER ASSOCIATIONS MAKE AGRICULTURE SUSTAINABLE? EVIDENCE FROM FARMER DEVELOPMENT CENTERS IN INDIA Raj M. Desai Shareen Joshi Global Economy and Development at BROOKINGS Raj M. Desai is an associate professor of interna- tional development at the Edmund A. Walsh School of Foreign Service and Department of Government at Georgetown University; and a nonresident senior fellow with the Global Economy and Development program at Brookings. Shareen Joshi is a visiting assistant professor at the Edmund A. Walsh School of Foreign Service and Department of Government at Georgetown University. Authors’ Note: This evaluation was funded by a grant from the Tecovas Foundation, whose fi nancial support is gratefully acknowl- edged. The authors thank the directors and staff of the Self-Employed Women’s Association and the Global Fairness Initiative for their partnership and assistance in facilitating this evaluation. Surveys for this study were conducted by IMRB’s Social Research Institute, New Delhi. All errors and omissions are the authors’ own. CONTENTS Abstract . .1 Introduction . 2 Towards Bottom-Up Rural Development in India . 6 Agricultural Extension in India . 6 The Self-Employed Women’s Association . 7 “Women Farmers with Global Potential” . 7 Data, Methodology, and Results . 8 Sample Selection and Survey Methods . 8 Specifi cation and Methods . 11 Results . 15 Income . 15 Consumption, Expenditures, and Credit Access . .17 Farm Productivity and Employment . 20 Outputs and Market Links . 23 Coping with Risk . 27 Heterogeneity of Impact . 27 Replicability and Scalability . 31 Conclusions . 33 Appendix . 34 References . 36 Endnotes . 39 CAN PRODUCER ASSOCIATIONSMAKE AGRICULTURE SUSTAINABLE? EVIDENCE FROM FARMER DEVELOPMENT CENTERS IN INDIA Raj M. Desai Shareen Joshi ABSTRACT non-farm work. There is also evidence that the program’s impact varied depending on the participants’ his paper evaluates the impact of the Self- socio-economic background. The poorest members TEmployed Women’s Association’s (SEWA) farmer experienced higher farm and non-farm incomes, in- development center (FDC) initiative across fi ve farm- creased food consumption, improved household and ing districts in Gujarat, India. The initiative provided a farm productivity, more self-employment opportuni- mix of training, information provisions, access to farm- ties, a greater likelihood of opening a bank account, ing inputs, risk mitigation, and output. Controlling for higher crop harvests, and greater food security. These a range of individual-specifi c, household, and village- estimates suggest that the major comparative advan- level factors, we fi nd that SEWA membership primarily tage of FDCs lies in improving access to credit and in raised awareness of available opportunities among its expanding access to useful information. participants, linked women to the fi nancial sector and to diversified employment opportunities, including CAN PRODUCER ASSOCIATIONS MAKE AGRICULTURE SUSTAINABLE? 1 INTRODUCTION Moore 1983). Barriers to access in land translate into barriers to accessing credit, since most formal he problems in farming in developing countries sector loans require land titles. Female farmers also Tare numerous and well-known: drought vulnera- face other impediments such as cultural indifference, bility, soil degeneration, a lack of fi nancial instruments regulatory barriers, as well as higher bribe taxes from (credit and insurance), high transaction costs imposed officials than their male counterparts (World Bank by intermediaries, the inaccessibility of reliable inputs, 2001). As a result, most women’s agricultural work and a lack of market opportunities. Over the past de- is informal, done under conditions of high insecurity cade, agriculture in India has undergone what one in relation to a lack of contract and benefi ts, and the state-level commission terms a period of “generalized availability of a large supply of surplus labor (Unni and rural distress,” producing high levels of rural unem- Rani 2003). ployment, forced migration, and declines in per capita calorie consumption among the poor (Commission on Second, most government investments in agricul- Farmers’ Welfare 2005; Suri 2006). Indian agricultural-support programs—such as agricultural exten- ture—characterized historically by much greater vola- sion—have typically excluded women and have almost tility than the general economy (Figure 1)—has also exclusively been targeted at men (Danida 2002; Raabe been adversely affected in recent years by declining 2008). Third, the lack of collective-action mechanisms productivity, greater import competition, and rising available to women in rural areas relative to men has prices for fertilizer, seed, and pesticides. Although the limited female access and representation in local deci- percent of agricultural employment in the labor force sion-making, and has contributed to the self-exclusion has been declining, most of that decline has been due of women from a variety of participatory schemes and to the loss of cultivators (Figure 2). other community-based development programs that might mitigate the results of rural gender bias. Adjustment costs in the Indian rural economy have fallen disproportionately on tenant farmers and rural In recent years, several non-governmental organiza- day or “casual” laborers, and in particular, on female tions have attempted to address these issues and pro- farmers.1 Women constitute only one-third of the vide support to female farmers. “Membership-based Indian workforce, but three-quarters of these eco- organizations” have emerged to provide women with nomically active women are engaged in agriculture organizational resources that increase coordination, (compared to 53 percent of men), as either workers in improve their capacity for management of collective household farms owned or tenanted by their families, goods (e.g., property, irrigation schemes), and support or as wage earners, and almost all of these agricul- their participation in village affairs and local politics.2 tural workers are the informal sector. Moreover, Indian In rural communities, producer associations have mo- women face a range of disadvantages that are exac- bilized and organized female farmers, provided them erbated by the pressures of rising input costs, cuts with diverse services that include access to informa- in agricultural subsidies and risks of weather shocks. tion and training, assistance in organizing inputs, First, they encounter steeper entry barriers than men marketing support, provision of credits, as well as in in agriculture. Patriarchal inheritance codes restrict enhancing the bargaining power of farmers for secur- women’s property rights over agricultural land, par- ing better contracts and prices. The general basis for ticularly in North India (Agarwal 1994b; Dyson and 2 GLOBAL ECONOMY AND DEVELOPMENT PROGRAM Figure 1: Agriculture and Economic Growth in India, 1960 – 2010 0.06 0.04 0.02 0 1960 1970 1980 1990 2000 2010 Log difference Log -0.02 Agriculture -0.04 GDP -0.06 Source: World Bank, World Development Indicators. Note: Log differences in agricultural value added and GDP are calculated from annual constant-dollar amounts. Figure 2: Structure of Agricultural Employment in India, 1951 – 2001 90 80 Rural population 70 60 50 Percent 40 Laborers 30 Cultivators 20 10 0 1951 1961 1971 1981 1991 2001 Source: Census of India, various years. Notes: Laborers and cultivators are in percentages of total workers; rural population is in percent of total population. CAN PRODUCER ASSOCIATIONS MAKE AGRICULTURE SUSTAINABLE? 3 the proliferation of producer associations is the view signifi cant experience in the development of producer that local farmers’ possess informational advantages associations and other membership-based organiza- regarding their own farming needs and placing them tions for the rural poor in India. at the center of decision-making leads to greater ef- fi ciency, greater equity and lower transactions costs We aim to evaluate the impact of the WFGP program (Bank 2008; Chen et al. 2007) at the individual level, considering both economic and non-economic outcomes. We examine results of SEWA Governments and multilateral development institu- membership on income, employment, empowerment, tions have increasingly promoted producer associa- consumption, income, and assets of women in these tions.3 It is expected that collective action by farmers communities. We draw on a survey of approximately increases participation, improves agricultural produc- 1,500 women in 42 villages in fi ve rural districts in tivity, establishes better connectivity with markets, Gujarat conducted in 2010 over several months follow- and increases their bargaining power in securing in- ing the monsoon, divided between members of SEWA puts and selling outputs. In the long run, this contrib- and non-members. Although villages were selected utes to both growth and poverty alleviation. Recent randomly for SEWA treatment, individual women were research however, demonstrates that this approach not. To control for problems of individual selection, has its challenges. Evidence from Sub-Saharan Africa then, we rely on propensity score matching on observ- and South Asia suggests that local producer asso- ables to ensure balance between SEWA members and ciations’ informational advantages may be nullifi ed by non-members. problems ranging from local elite capture, exclusion

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