Wageningen University - Department of Social Sciences
MSc Thesis Rural Development Sociology
Social exclusion of ethnic minority farmers in Nepalese co-operatives
June 2008
MAKS 21 Yoga Prasad Kharel
RDS- 80430 Supervisor: Prof. Leontine E. Visser
Wageningen University - Department of Social Sciences
MSc Thesis Rural Development Sociology
Social exclusion of ethnic minority farmers in Nepalese co-operatives
June 2008
MAKS 21 Yoga Prasad Kharel
RDS- 80430 Supervisor: Prof. Leontine E. Visser
2 ACKNOWLEDGEMENT
I would like to express my gratitude to the institutions and people who helped me directly or indirectly during my field work and Wageningen University. Without their help, encouragement, inspiration and cooperation this thesis and degree would have been impossible to complete.
I sincerely thank the Netherlands Fellowship Programme (NUFFIC) for awarding me the scholarships in pursing the study. I would also like to thank the Ministry of Agriculture and Co-operatives of Nepal for providing leave during the study period.
I really acknowledge my supervisor Prof. Dr. Leontine E. Visser for her guidance, advice, devotion and critical and constructive comments from the proposal writing to the completion of this thesis. Because of her proper guidance I could be able to come up with this achievement with pleasure and confidence. Special thanks to Mrs. Martha Bloemberg and Mrs. Marleen Nooij, Study Advisor of MAKS who provided academic and homely environment in Wageningen.
Several individuals and organizations helped me to carry out my field research in Nepal; their assistance is very significant for this thesis. I am grateful to Mr. Chandrakant Devkota, Chief of DADO, Chitwan for providing space to execute my research. I would like to thank Dr. Suroj Pokhrel for his guidance on HH survey is highly appreciative. I can not forget to Krishna Sharma, Binod, Bhojraj, Kamala and others staffs of DADO, Chitwan providing information and giving kindly environment. Thank you very much Balaram Luitel, Information Officer of DDC, Chitwan to provide me map and relevant documents of district.
My heartfelt thanks go to members and non-members of ethnic minority people who welcomed me at their door and provided me with their valuable time during interviews and other observation periods. I am grateful to Mr. Purna Dutta Bhusal, President of GFVFPCA providing me plenty of information of GFVFPCA, district and central level. Especially, I am indebted to Mr. Uddav Timilsina (Manager of GFVFPCA) and Mr. Bishnu Neupane (Junior Technician of ASC, Khairahani) were really apprehensive to my work and a successful accomplishment of field data collection and providing information of the co-operative and Chainpur VDC.
It is my great pleasure to thank my dear classmates, Nabin Sharma, Kalash Ram Chaudhary, Bandana Aryal and Sugandha Gurung, for their respective support, encouragement and inspiration for academic activities as well as giving homely environment by socio-cultural evening during the MSc course in Wageningen. Narayan Gyawali, Hom Gartaula, Bisnu Hari Devkota and Pashupati Koirala especially deserve my deep appreciation for helping to provide me with productive comments, creative ideas and encouraging achieving this degree. Thanks to Ram Basnet, Pradip Gautam, Modise and Zenebe to support me the final touch of thesis writing.
I would like to thank to the Nepali community in Wageningen for organizing many programmes which were always refreshing me. I count myself lucky to be with “MAKS21 people” in WUR. I really enjoyed your company! The excellent personal relationship we have enjoyed from the very beginning has been the bedrock for me finishing the programme. I hope our relationship will become even more intense in the years to come.
I would like to thank my mother, family members and my cordial neighbours. I would like to express my heartfelt thanks to them not only because they encouraged me but they always supported me to come this far.
Finally, my beloved wife Babita; for your love, understanding, encouragement and trust in me. My special thanks go to you and your love, support and dedication helped me to complete this piece of work in time. Thank you my dear, I was always missing you and our kid ‘Ashim’ in this beautiful country Holland. Thanks to Ashim, you really encourage me on my higher study. I never forgot your memorable wording. You are my great son.
Thank God! I am going to be gradated from Wageningen University, The Netherlands it was my dream when I was in final year of Bachelor’s Degree.
Once again, thanks you all! k'gM ;a}df wGoafb! Oprecht bedankt en tot ziens!
23 June 2008 Yoga Prasad Kharel WUR, Wageningen, The Netherlands [email protected]
3 ACRONYMS
ADB/N = Agricultural Development Bank of Nepal AGDP = Agricultural Gross Domestic Products APO = Asian Productivity Organization APP = Agricultural Perspective Plan APROSC = Agricultural Projects Services Centre ASC = Agricultural Service Centre CBS = Central Bureau of Statistics CCTC = Central Co-operative Training Centre CFVFCF = Central Fresh Vegetables and Fruits Co-operative Federation CTDO = Co-operative Training and Division Office DADO = District Agriculture Development Office DAO = District Administration Office DoA = Department of Agriculture DCO = Division Co-operative Office DCU = District Co-operative Union DDC = District Development Committee DFVFPCU = District Fresh Vegetable and Fruits Producers’ Co-operative Union DoC = Department of Co-operatives DVFTU = District Vegetable and Fruit Traders’ Union EC = Executive Committee FFS = Farmers Field School GDP = Gross Domestic Products GFVFPCA = Gramin Fresh Vegetable and Fruit Producers’ Co-operative Association GO(s) = Government Organization(s) GoN = Government of Nepal ha = Hectare HH(s) = Household(s) IAAS = Institute of Agriculture and Animal Science ICA = International Co-operative Alliance IPM = Integrated Pest Management JMA = John Mellor Associates kg = Kilogram km = Kilometre MAKS = Management of Agro-ecological Knowledge and Social change MoAC = Ministry of Agriculture and Co-operatives MSc = Master of Science msl = mean sea level NCCN = Nepal Chamber of Commerce - Narayangarh NCDB = National Co-operative Development Board NRs = Nepalese Rupees (Nepali Currency) SWOT = Strengths, Weaknesses, Opportunities, Threats TV = Television VDC(s) = Village Development Committee(s)
4 ABSTRACT
This thesis aims to contribute to the understanding of the issue of social inclusion and exclusion on the basis of farmers’ perceptions and understanding of co-operatives and particularly the GFVFPCA. The co-operative called Gramin Fresh Vegetables and Fruits Producers’ Co-operative Association (GFVFPCA) was established in 2002 in Nepal. The research was carried out as an anthropological study of the co-operative and investigates the interaction and negotiation processes of daily activities. The research is based on fieldwork that I conducted in Nepal in mid August to mid December 2007 for my MSc thesis. The objective of the research is to explore and analyze the social inclusion constraints of the ethnic minority farmers at Chainpur Village Development Committee of Chitwan district in Nepal by investigating the access, perception, attitude and understanding of non-members of ethnic minorities towards the co-operative, co- operative members and government agencies; and vice-versa.
This is an explanatory research where ethnography has been applied as the major research method, which focuses on a case study, supplemented with literature study, and qualitative and simple quantitative data generation and analysis. With the help of access theory I was able to explore the social inclusion and exclusion processes of ethnic minorities in the co-operative and its marketing activities; to get acquainted with how and why non-members of ethnic minorities are still socially excluded; and how and why some of them are members of the co-operative. Ultimately the policy implementation of government agencies and stakeholders and their shortcomings is addressed, and how they affect social inclusion issues regarding the co-operative.
The thesis clearly shows that some ethnic minorities are structurally excluded from government agencies and the co-operative; but also that some ethnic minority farmers exclude themselves by their own perceptions and attitudes towards the co-operative that are influenced by negative experiences of other co-operatives, discrimination in service charge of the co-operative market; distribution of resource sharing (bonus); access to the road and transportation, and the lack of interest of commercial farmers. Yet, other members of ethnic minorities are close to the co-operative due to positive impacts of socioeconomic and politico-cultural development.
Finally, this research concludes that both poor and rich farmers are excluded from the co-operative. The poor are excluded due to the structural criteria of the co-operative whereas the rich farmers exclude themselves out of self interest. So, the co-operative has a majority of medium-income ethnic minority farmers. Based on the comparison of the members and non-members of the co-operative, it was found that members had access to social participation, extension activities, practical skills, technical information, and had more access to government agencies and other stakeholders and had a better marketing status compared to non-members of ethnic minorities.
5 Content
ACKNOWLEDGEMENT...... 3 ACRONYMS ...... 4 ABSTRACT ...... 5
1 INTRODUCTION...... 8 1.1 What and Why this Study...... 8 1.2 Problems, Challenges and Limitations of the study ...... 10 1.3 Brief country profile and overview of the research area...... 10 1.3.1 Overview of Country: Nepal ...... 10 1.3.2 A brief note on Chitwan District...... 13 1.3.3 A brief note on Chainpur VDC...... 15 1.4 Structure of the thesis ...... 17
2 THE RESEARCH SET UP...... 18 2.1 Background ...... 18 2.2 Research Problem and Objectives...... 20 2.3 Conceptual Framework ...... 21 2.3.1 Co-operative and Co-operative marketing ...... 21 2.3.2 Social exclusion and inclusion...... 23 2.3.3 A theory of Access ...... 24 2.4 Research Questions...... 25 2.5 Research Methodology ...... 25 2.5.1 Research Area ...... 26 2.5.2 Data generation...... 28 2.5.3 Unit of analysis...... 30 2.5.4 Data analysis and presentation...... 30
3 CO-OPERATIVES AND GOVERNMENT POLICY ...... 31 3.1 Concept...... 31 3.1.1 Categories of co-operative organizations...... 34 3.1.2 Types of agricultural co-operatives ...... 34 3.2 History in Nepal...... 36 3.2.1 Co-operative movement in Country...... 36 3.2.2 Co-operative in Chitwan district...... 40 3.3 Government policy in Nepal ...... 41 3.3.1 Criteria for co-operative registration...... 44 3.4 GFVFPCA development as a process ...... 45 3.5 Co-operative marketing system in GFVFPCA...... 47 3.6 Leadership and management of GFVFPCA ...... 50 3.6.1 Relationship between GFVFPCA and its agencies...... 54 3.7 Problems and challenges of co-operative marketing system...... 55 3.8 SWOT analysis for social inclusion of GFVFPCA ...... 57 3.9 Summary...... 58
4 ISSUES ON SOCIAL EXCLUSION AND INCLUSION ...... 59 4.1 Social stratification in Nepal ...... 59 4.1.1 Caste system in Nepal ...... 59 4.1.2 Minority people in Nepal...... 60 4.1.3 Ethnic people in Nepal ...... 60 4.1.4 Indigenous people in Nepal...... 61
6 4.2 Socioeconomic characteristics of ethnic minorities...... 63 4.3 Issues on social exclusion of ethnic minorities in GFVFPCA...... 64 4.3.1 Access to co-operative and its membership...... 64 4.3.2 Access to co-operative marketing ...... 69 4.3.3 Access to market and market information...... 70 4.3.4 Access to road and transportation...... 72 4.3.5 Access to technology and extension services...... 73 4.3.6 Access to government agencies and stakeholders...... 74 4.3.7 Attitude towards co-operatives...... 75 4.3.8 Perception towards co-operatives...... 77 4.4 Effects of Social inclusion to ethnic minorities ...... 77 4.4.1 Social impact of co-operatives ...... 78 4.4.2 Economic impact of co-operatives ...... 79 4.4.3 Political impact of co-operatives...... 80 4.4.4 Cultural impact of co-operatives...... 82 4.5 SWOT analysis of ethnic minority farmers on GFVFPCA ...... 82 4.5.1 SWOT Analysis of members of GFVFPCA ...... 82 4.5.2 SWOT Analysis of non-members of GFVFPCA...... 83 4.6 Summary...... 83
5 CONCLUSION...... 84
REFERENCES...... 87
ANNEXES...... 91
7 1 INTRODUCTION
1.1 What and Why this Study This thesis contributes to the agricultural co-operatives and government agencies by looking at the issues of social exclusion of the ethnic minorities1 in the process of socioeconomic and politico-cultural development. The key component of the research is to look into the social inclusion constraints of ethnic minority farmers in co-operatives. How and from whom ethnic minorities are included and excluded from the co-operative. This is shown through the case study of practices for the co-operative and government agencies. The study is based on the fieldwork conducted from mid August to mid December 2007 in Chainpur Village Development Committee (VDC) of Chitwan district, a rural area in Nepal and the organization is Gramin Fresh Vegetables and Fruits Producers’ Co-operative Association (GFVFPCA); this co-operative has been established in 2002.
Agriculture is the primary source of the economy in Nepal, vegetables plays a vital role in rural livelihood (MoAC 2005). Agriculture contributes to 33.82 percent of the national Gross Domestic Product (GDP), supported by 65.7 percent labour forces (male 60.2 percent and female 72.8 percent) (MoAC 2007). Government has launched a 20 years strategic plan called Agricultural Perspective Plan (APP) since 1995 to bring about accelerated growth in agricultural sector. APP has specified the vegetable as one of the important high value crops. However, farmers are surrounded by the problems of frequent shortage of inputs, inaccessibility to credit and weak extension services as well as lack of markets and guaranted prices for their produce (APROSC and JMC 1995). To face these challenges, co-operatives have been recognized as the most appropriate organizations especially at the grassroots level to safeguard and promote the interests of farmers.
Since 2002, co-operatives are involved in vegetable marketing to solve problems in Chitwan district because farmers had a compulsion to go to the regional market at Narayangarh, which is the central point of the district and the country as well. In that situation, the supply of vegetables was high in Narayangarh market therefore the price of the commodities was apparently less. Due to this fact, District Agriculture Development Office (DADO) in Chitwan initiated to solve the marketing problems by organizing a workshop in the district. The workshop seemed to be a good initiative since many leaders from the vegetable production co-operatives attended. These leaders believed that the co-operative was the right way out of the marketing problems of vegetables. They also formed eight fresh vegetables and fruits producers’ associations in different areas of Chitwan. Since then, farmers collect vegetables in collection centre of the co- operative where traders come and buy at reasonable price. Members of the co-operative are getting good price of their produce but most of the non-members still do not have
1 In Nepal, there is so-called Matwali/Janajati, called ethnic minorities. The Matwali/Janajati consists of Gurung and Newar which is privileged groups than Magar, Tamang, Rai, Limbu, Chepang, and so on. However, in my research, the ethnic minorities consist of ethnic/Janajati groups (Magar and Newar), Indigenous group (Tharu) and untouchable castes (Dalit i.e. Damai, Kami and Sarki). See section 4.1 for details.
8 those advantages. Co-operatives manage the favourable environment for traders to get fresh vegetables from their colletion centre. Farmers also do not have sufficient time and money to go to Narayangarh and also farmers are assured that they can get good price for their products in the co-operative. The current situation shows that the numbers of minority members in the co-operative is still low (25 out of 129) and on the other hand, the members who are affiliated to co-operative are dominated by higher caste and less presence of ethnic minorities. In principle, co-operative is only for poor, marginalized and ethnic minorities (DoC 2007) but in practice there is less number of ethnic minorities affiliated to co-operatives. In fact, research shows the opposite: poor, marginalized and ethnic minorities farmers are excluded from such kind of agricultural co-operatives.
These changing approaches and intervention of co-operatives in rural areas affect the rural marginalized farmers. The objective of the co-operative is to provide support to the poor, marginalized and ethnic minorities to deliberate different income generating activities like co-operative marketing, support knowledge and skills of vegetable farming and other activities through training, excursion, workshop and meetings with the help of government agencies and stakeholders. GFVFPCA was established with 25 members but in the current study I found that the co-operative membership has only 129 (32 percent of 405 farmers) over 6 years of its existence. Why co-operative is not working properly? Why farmers do not want to become members? Why most of the ethnic minorities are still out of the co-operative? What are the reasons for social exclusion of these ethnic minorities or is the co-operative in real sense not for poor, marginalized and ethnic minorities? If yes then why are they excluded from the co-operative, because during 6 years of the co-operative existence only 25 ethnic minorities are members. From this figure there are still 105 ethnic minorities are not represented in the co- operative. Therefore, as an agricultural extension worker, this lack of representation for minority groups motivated me to do my research in these areas in trying to establish why if co-operatives are really for the poor, marginalized and ethnic minorities, why then this unbalanced representation still exists and also, as a student of MSc in MAKS2 programme I became more curious about the emerging field of anthropology; that’s why, I choose this area which will help me in my future work and career.
Keeping all of these in mind, this research intends to provide an understanding of social inclusion and exclusion issues of ethnic minorities from such organizations in rural areas; its intensions and realities acting upon the socially inclusion and exclusion issues to the poor, marginalized and minorities in anthropological point of view. As mentioned earlier, the emerging field of social exclusion and increasing importance of the co-operative vegetable marketing in rural areas were the driving force to conduct this research in the co-operative at Chainpur.
This is not a mere analysis of social inclusion and exclusion of ethnic minorities; neither it is a plain ethnographic analysis on the implementation of the co-operative in rural areas, but used ethnographer observations and interviews techniques to investigate the access,
2 Management of Agro-ecological Knowledge and Social Change
9 perception, attitude and understanding of non-members of ethnic minorities towards the co-operative, co-operative members and government agencies; and vice-versa.
1.2 Problems, Challenges and Limitations of the study During this study some field level challenges and problems that are mostly common to all researchers were experienced and some of them are specific to me in this research. I had some problems to gain in-depth knowledge from untouchable castes, but during the field work I became familiar to all of them and able to bring out the information from them because I gave them knowledge and skills about vegetable farming and the concept of the co-operative and co-operative marketing. My 12 years experience on agricultural extension in rural communities of the country and in different geographic locations with complex caste system helped to gain the required information.
Timing of interviews was largely dependent on the mood of respondents. I generally took time at least 2 or 3 days before interviewing them but when I reached their home sometimes, respondents were not there. It was little embarrassed because some distances were as far as 18 Km from where I used to live. In some cases I would attempt 2 or 3 times to the same respondents and this took longer times than intended. Frequent shortage of petroleum products was another major problem during my field work in Nepal due to fuel shortage for my motorcycle and frequent strikes and protests. But I managed because I did my internship in the same district.
Because of my identity as a government extension worker, the non-members of the co- operative would not easily accept me on my first appearance when I introduced myself to them the reason being that we did not know each other previously. So, some of them did not want to talk with me because government extension worker never rendered any services to them before. Mr. Mangara said “Government officials only come to our sites when they need us, but when we need them, they never there for us”. So this was my problem from the non-members of the co-operative. But it felt easy to work with the members because the GFVFPCA was formed when I was Chief of Agricultural Service Centre3 (ASC), Khairahani of Chitwan, therefore some of them knew me. They are also getting extension services from government agencies.
Even though the problems, challenges and limitations mentioned above influenced the research and the researcher’s conducts, they never led to problems which could not be solved. Notwithstanding one should keep these limitations in mind when interpreting the results presented in the following chapters.
1.3 Brief country profile and overview of the research area
1.3.1 Overview of Country: Nepal Nepal, the land of Mt. Everest and the birth place of Lord Buddha, is a small land locked agricultural country, and lies in between India and China. Ecologically, Nepal has large
3 Agriculture Service Centre (ASC) is a branch of District Agriculture Development Office; it has mandated to deliberate agricultural extension services to its domain areas.
10 geo-climatic variations ranging form tropical to the alpine climate. The country has been divided into three regions, namely Mountain, Hill and Terai4 region, running east to west with a non-uniform width of north to south. Mountain region covers mountainous areas of the country ranging between 4899 to 8848 metres (Mt. Everest) above mean sea level and lies in the north (CBS 2007). The Hill region is located in between the Mountain and Terai regions. This region has a fertile valley and basins such as Kathmandu; capital city of the country. The southern region of the country is Terai. It has low flat land as well as dense forest. The total area of the country is 147181 square kilometres Hill ecological region shares approximately 42 percent of the total land area; Mountain region reported the second largest land area of about 36 percent while Terai region occupies the smallest area of 23 percent of the total (CBS 2006a).
Administratively, the country is divided into 5 development regions: Eastern, Central, Western, Mid-western and Far-western development regions. The country is further divided into 75 administrative districts that cut across ecological regions. The Mountain region constitutes 16 districts, 39 districts in the middle comprise the Hill region and 20 districts compose the Terai region (CBS 2007). VDCs and Municipalities are the smallest administrative units of the country. Each VDC is comprised of 9 wards. Wards in a Municipality range 10 to 35. Currently, there are 3919 VDCs and 58 Municipalities in the country. The VDCs are usually the rural areas whereas municipalities are urban areas of the country.
The population census 2001 recorded a total population count of 23,151,423 persons; where male are 11,563,921 (49.95 percent) and female population is 11,587,502 (50.05 percent). About 48.43 percent of the total population was found in Terai region and 44.28 percent was in Hill region and Mountain region recorded a population of only 7.29 percent or 1.688 million people (CBS 2007). While Terai region had the least territorial area, it had the highest density of population of 330 persons per square kilometre in 2001; against the average population density of the country 157 persons per square kilometre. The population density in the Mountain and Hill regions are 32 and 167 persons per square kilometre, respectively (CBS 2006). The geometric growth of the population of Nepal had at an average annual rate of 2.27 percent per annum between 1991 and 2001 (CBS 2006). More than one-third i.e. 34.7 percent of the total population was found in the Central region and only 9.5 percent were in Far-western region; where Eastern had 23.1 percent, Western had 19.7 percent and Mid-western had 13 percent of the total population.
According to Population Census, 2001, population by caste/ethnic groups are consists of Chetri 15.8 percent, Brahmin 12.74 percent, Janajati 25.02 percent (Magar 7.14 percent, Tamang 5.64 percent, Newar 5.48 percent, Rai 2.79 percent, Gurung 2.39 percent, Limbu 1.58 percent), indigenous groups (Tharu) 6.75 percent, untouchable caste 10.7 percent (Kami 3.94 percent, Damai/Doli 1.72 percent, Sarki 1.40 percent, Teli 1.34 percent, Chamar+Harijan+Ram 1.19 percent, Koiri 1.11 percent), Muslim 4.27 percent, Yadhav 3.94 percent, Thakuri 1.47 percent and others 19.31 percent (CBS 2007).
4 Terai is flat land of the country, it is in southern part of Nepal
11 Map 1: Maps of Nepal showing the Research Area
The District Map: Chitwan Research Area: Chainpur VDC
Source: DDC 2007 (Map from DDC, information Centre, Chitwan, Nepal)
The total number of households (HHs) in Nepal in 2001 was 4,253,220. Hill ecological region had the highest number of 1.982 million HHs comprising 46.6 percent of the total followed closely by Terai region with 1.95 million HHs, which was 45.9 percent of the total; and Mountain region had the lowest number with only 310 thousand or 7.5 percent of total HHs in the country (CBS 2006).
Agriculture Census of Nepal 2001/02, an agricultural holding was defined as an economic unit of agricultural production under a single management comprising all
12 livestock and all land used wholly or partly for agricultural production purposes. In Nepal, it is not uncommon that an agricultural holding is equivalent to a farm HH. There were 3.3641 million agricultural holdings identified from the Population Census 2001. These holdings were found in the following ecological regions: Hill ecological region had a total of 1.5864 million agricultural holdings equivalent to 47.1 percent of the total holdings in the country; Terai region accounted for 1.4795 million agricultural holdings which consisted of 43.9 percent of the total; and, Mountain region had 298.2 thousand agricultural holdings consisting of only 8.8 percent of the total holdings in Nepal (CBS 2006a). Among 5 development regions, Central region had a total of 1.098 million agricultural holdings, which is almost one-third of the total holdings in the country; the second largest region is Eastern with about 850 thousand which is about one-fourth of all holdings in Nepal and Far-western region had the least, which was about 10.8 percent of the total agricultural holdings (Ibid.). In a span of ten years, the number of agricultural holdings increased by 22.8 percent, an average annual increase of 2.25 percent which is almost same rate of increase in the population (CBS 2006a, CBS 2007).
The development figures place this country in the list of least developed country in the world; the preliminary estimate of per capita GDP at current prices stands at NRs.27209 i.e. US$ 383 for 2006/07 (CBS 2007). The economic growth has been very slow. The annual growth rate of GDP at producers’ price is 2.50 percent in the year 2006/07. “Nearly one third of the population i.e. 31.8 percent live below poverty line as per the Nepal Living Standards Survey 2003/04 and the Ginni Coefficient, which indicates inequality between the poor and rich is 41.4” (CBS 2007).
1.3.2 A brief note on Chitwan District This section deals with the general overview of Chitwan district.
General overview Chitwan district is located at the central part of country. It is a heart of the country. Headquarter of Chitwan district is Bharatpur. Before 1950s, Chitwan was known as a place of black water “Kala Pani”, due to highly vulnerable place for malaria infestation. After the initiation of the malaria eradication program in 1956 (2013 BS), the area gradually became popular as a favorite place for residence (Piya 2001). Due to advantages of location and fast growing infrastructure development, Chitwan valley has been the main destination for migrants especially from surrounding hill districts. This district is renowned for its natural resources such as dense tropical forest and many species of wild fauna. The Char Kose Jhadi, the forest, was once very famous for its denseness. The Chitwan National Park stretching over an area of 932 square kilometres provides a habitat for large numbers of wild animals such as One-horned Rhino, Wild Elephant, Tiger and many other species. Narayani - the third largest river in the country - crosses the Nepali border into India via Chitwan, which is the habitat of many aquatic fauna species. In the regional context, it is one of the 19 districts of the Central Development Region and one among the 20 Terai districts in terms of ecological zones. Due to enriched soil fertility and flat cultivatable land, Chitwan is very popular for Mustard/Tori (Brassica campestris) and Paddy/Rice (Oryza sativa) all over the country.
13 The major production areas of vegetables in Chitwan valley are Chainpur, Khairahani, Bhandara, Birendranagar, Ratnanagar, Mangalpur, Gunjanagar, Sukranagar, Jagatpur VDCs. Among them, Chainpur VDC is one of the highly potential commercial vegetable growing areas in the district; this is promoting the growth of this area.
Geo-physical condition Geographically, the district has been expanded from 27º 21′ to 27º 46′ north latitude and 83º 35′ to 84º 48′ east longitude. The district is politically divided into 36 VDCs and 2 municipalities. Based on population density, it is divided into 5 constituencies and 16 illaka (units). The total area covered by the district is 2218 square kilometre
Agro-climatically, the district is diversified spreading over 305 to 1945 metre above mean sea level (msl). So, all types of climate are prevalent in Chitwan. The annual rainfall in Chitwan district was recorded as 2338.5 mm in the period of June 2005 to June 2006. The temperature in Chitwan district varies between maximum of 35.08ºC at May 2006 and minimum 8.04ºC at January 2006 (DADO 2006).
Socioeconomic condition Chitwan is inhabited by various types of ethno-cultural groups from all over the country. This is why it is also called 76th district of the country. Tharu, Darai and Kumal are the native people (Indigenous groups) of this district. All other people came to this area in the latter when infrastructure facilities extended and made it a better place for living. The hilly region of this district is mainly dominated by Gurung, Tamang and Magar tribe. Some of the hilly patches of the district are being dwelled by Chepang (Praja) community. Chitwan has an overwhelming majority of people with Nepali as their mother tongue. Hindus and Buddhists together make up for 99.13 percent of the total population consisting of 82.75 percent Hindus and 15.48 percent Buddhist (DADO 2006). In Chitwan district, there are different types of ethnic groups which are Brahmin 29.51 percent, Chetri 11.49 percent, ethnic/Janajati 30.34 percent, Indigenous 16.45 percent, Untouchable caste 8.4 percent and Others 3.8 percent persons of total population of the district (DDC 2007, DDC 2007a, DDC 2007b).
A population of 472048 was recorded in Population Census 2001 where male are 49.51 percent and female 50.49 percent. The total HHs of this district is 92863; the population density has 213 persons per square kilometre; population growth rate is 2.86 percent and urban population are 26.93 percent and rural population has 73.07 (DADO 2006).
Table 1.1 Population distributions by sex in Chitwan district Year Households Av. HH size Male Female Total 1991 65147 5.44 175656 178832 354488 2001 92863 5.08 235084 236964 472048 Source: CBS 2001 in DADO 2006
Agricultural status Chitwan district has total land area 266191 ha, of which, 17.62 percent is cultivated land, forest area is 53.50 percent, fallow land 16.68 percent, grazing area is 7.09 percent and
14 other area is 5.11 percent (DADO 2006). Most of the winter vegetables are grown in the upland (bari land) using the ground water irrigation.
Chitwan district is typically represented by its diverse agro-climatic variation. So the cropping system adopted is also very diverse according to its physio-climate (Piya 2001). The farming system is influenced by various factors like climate, income status, cultural differences, and so many other economic and non-economic factors. In Chitwan valley, the type of land, availability of irrigation facilities, seeds and the market play important roles in making decisions on crop selection. Paddy, Maize, and Wheat as cereals and Mustard, Sesame, Potato, Vegetables as cash crops are the mainly grown in Chitwan valley. Among vegetables Cauliflower, Cabbage, Brinjal, Cucurbits, Tomato, Okra, Capsicum and Radish are mostly grown.
1.3.3 A brief note on Chainpur VDC Chainpur VDC is located at 16 km east of Bharatpur municipality; headquarter of the Chitwan district. It situated between Birendranagar and Khairahani VDCs are in the east; Pithuwa and Jutpani VDCs in the west; Shaktikhor and Siddhi VDCs are in north; and Ratnanagar municipality is in the South. The East-west highway passes by southern part of this VDC. So, northern part is more rural than southern part of VDC.
Area and population Administratively, Chainpur VDC is divided into 9 wards. The office of the VDC is located in the ward number 3. The total area of Chainpur is 1538 ha. According to Population Census 2001, it consists of 2802 HHs and total population of 14511 where the male is 48.78 percent and female is 51.22 percent (DDC 2007).
People Chainpur is the village of mixed migrants and indigenous people. Indigenous people are 10.63 percent and the untouchable castes are 8.81 percent out of total population (DDC 2007a, DDC 2007b). Indigenous people consists of Tharu, Darai, Chepang, Kumal, Majhi and Bote and untouchable caste consists Kami, Sarki, Damai, Chamar, Gaine and Sunar in this VDC. In addition to Brahmins, Chetries and Janajati: Newar, Magar, Gurung, Tamang, are major ethnic groups.
Climate Agro-climatically, Chainpur VDC is diversified spreading over 350 to 455 metre above mean sea level (msl). So, climate is same all wards of the VDC. The annual rainfall in was recorded as 2338.5 mm in the period of June 2005 to June 2006. The temperature varies from 8.04ºC at January 2006 to 35.08ºC at May 2006 (DDC 2007).
Economy and infrastructure development The major source of economy is agriculture. Most of the farmers are engaged in cereals, vegetables, beekeeping, and livestock like cattle, buffalo, goat and poultry. Because of attached highway, mostly farmers are gradually becoming commercial in vegetable farming, beekeeping and livestock i.e. cattle and poultry.
15
Plate 1: Vegetable farming and livestock production are the major sources of livelihood in Chainpur VDC (Photo: Field work, 2007)
In terms of physical infrastructure development of this VDC, there are one office of VDC, one collection centre of vegetable, 5 collection centres of milk, 7 big poultry firms, 3 secondary and 9 primary level school, one post office, one health post and one forest user groups (DDC 2007).
There are 2 km black-topped road and road network by graveled and earthen roads in all wards of this VDC. During the rainy season ward number 3 to 9 experiences over flooding by Ladari stream but conditions in other seasons are good. Nowadays telephone services have improved. Irrigation system is surface irrigation in the northern part of VDC and tube-well irrigation by electric motor in southern part of VDC.
Vegetable farming This VDC is renowned for commercial vegetable production of Chitwan district. The history of vegetable production is not very old in this village. Farmers of this VDC started the vegetable farming 18-20 years ago. Tube-well irrigation by electric motors is the main source of irrigation for vegetable farming. The proliferation of vegetable farming in the
16 area has been very quick as it is mostly backed up by facilities of road network to different wholesale markets of the country. Also formation of a co-operative named GFVFPCA which helps to collect the vegetables of the farmers and sell to the traders in the collection center of the co-operative.
1.4 Structure of the thesis This thesis is organized into five chapters. The first chapter provides background information on the study; a synopsis of the social inclusion and exclusion issues of ethnic minorities over time, relevance and urgency of studying the co-operative and its activities and my motivation and orientation towards such issues. It also presented some problems I have encountered, challenges I had to deal with and the possible limitations of the study; then described short overviews of country, district and the research VDC.
Chapter two describes the conceptualization of research for the thesis, which includes the conceptual framework and methodology along with the research problem and objectives of the research. I have elaborated some concepts relevant for this research like co-operative, co-operative marketing, social exclusion, social inclusion and the theory of access.
Chapter three draws a picture of the co-operative and its activities which influences the ethnic minority farmers for social inclusion and exclusion. First, I give some concepts of co-operatives and then, it is restricted to the members and non-members ethnic minorities of GFVFPCA. Taking the co-operative concept and its implications to the poor, marginalized and ethnic minorities, it is a way and means of social inclusion to the rural farmers. I also try to analyze the problems and challenges of the co-operative and Strengths, Weaknesses, Opportunities, Threats (SWOT) analysis of the co-operative which helps to analyze the ethnographic study.
Chapter four is the pivotal part of the thesis. This chapter focuses on the social exclusion and inclusion issues of ethnic minorities to the co-operative on individual level. I also elaborate who is ethnic minorities. The society of Nepal has a complex social stratification and it helps to add the analysis of social inclusion and exclusion issues. I present Sahara case and Sajha5 case in Nepal that will help to the real situation of self exclusion of ethnic minorities and try to elaborate the issues on structural exclusion of ethnic minorities from the co-operative. However, some ethnic minority members of the co-operative are socially included, so I describe the social inclusion issues to the ethnic minorities and finally, I analyze members and non-members situations by SWOT analysis.
In the chapter five, I synthesize the issues of social exclusion and inclusion of ethnic minority farmers in the co-operative under study, thereby drawn the issues described in chapter three and four based on my conceptual framework and research questions. I also mention some suggestions for future intervention.
5 Sajha is a Nepali term of ‘co-operative’. Government managed co-operative is called Sajha.
17 2 THE RESEARCH SET UP
2.1 Background The practice of vegetable cultivation in Nepal can be traced back to antiquity and cultivation practices of vegetables were traditionally done. Nowadays, farmers are adopting new technologies. Especially Terai and mid-hill areas are highly promising in seasonal and off-seasonal vegetable farming. Due to climatic diversity of the country there is no need for off-season farming however farmers are adopting technologies of off-season farming for high profit. So, vegetable farming becomes the major source of income in rural areas of Nepal.
Government of Nepal (GoN) has launched a 20 years’ strategic plan, Agricultural Perspective Plan (APP) 1995 to bring about accelerated growth in agriculture sector and income generation. APP targets to raise Agricultural Gross Domestic Products (AGDP) growth from 2.96 percent in 1992-1995 to 4.88 percent by 2011-2015. Similarly, the APP has targeted the growth rate of horticulture GDP to 5.5 percent per annum and growth rate of vegetable GDP in particular to 5.42 percent per annum by the year 2014/2015 (APROSC and JMC 1995). The vegetable crop has categorized as one of the important high value and income generating crops in APP.
The market assurance is a prime factor that has a significant role on production of any agricultural commodities. Farmers residing in nearby market and along the highway corridors are diversifying their farming practices with due consideration of market opportunities (MoAC 2005). These indicate the market oriented production is essential for profitable farming. However, most farmers are individually selling their vegetables through the involvement of middlemen in the nearby markets and are suffering from large commission of middlemen. Farmers of Chitwan district are paying big volume of commission, 7 percent commission of total value of the products, while selling their products to nearby market, Narayangarh. Besides, good networking of middlemen (brokers) and weak governance create complexities to the farmers in selling their farm products of the market.
The government had strategically started to emphasize on marketing aspects like marketing network and marketing channel, construction of infrastructure, marketing policy from seventh five-year plan (1985/86-1989/90). The eighth five-year plan (1991/92-1996/97), for the first time, has well acknowledged the importance of marketing aspects in overall growth of agricultural sector and progressively increased in the emphasis on marketing and processing research since ninth five-years plan (1996/97- 2001/02). GoN at present has concentrated on improving marketing infrastructure in important cities of the country. Similarly, some initiations have been taken on marketing information dissemination from government as well as non-government sector. Therefore, vegetable production in Nepal shows an increasing trend (Annex 2.1).
Government has developed policy for few years back to support farmers’ groups not only to focus on vegetable production but also to mobilize in the marketing (MoAC 2005)
18 which leads to organizing groups of farmers in the form of co-operative. In 2006, 359 co- operatives had registered in Chitwan district consisting 12 agricultural co-operatives and 14 fresh vegetable and fruits producers’ co-operatives (CTDO 2006). The fresh vegetables and fruits producers’ co-operatives focus on co-operative marketing of vegetables. GFVFPCA is one of them; it has different activities but major activity is the co-operative marketing of vegetables.
Agricultural co-operatives are formal and legal institutions. Mostly agricultural co- operatives are established based on “group” or “farmers’ group” at grass-roots level. By principle, consist of certain numbers of people who (i) interact and socially aware of one another, (ii) having same objectives and (iii) perceive themselves to be in a group to achieve definite goals and objectives. Government Organizations (GOs) DADO and ASC are extensively working by making farmers’ groups in field level and such groups will be registered, generally after 5 to 10 years, in Co-operative Training and Division Office (CTDO) or Division Co-operative Office (DCO) as co-operatives based on their performances and activities. GFVFPCA established as a farmers’ group in 1995 and after 7 years’ follow up and support programmes of DADO and ASC, registered as a co- operative in CTDO in Chitwan on 2002.
Major policy developed by GoN, hardware, software and orgware is provided to the farmers groups and agricultural co-operatives through extension agencies DADO and ASC but farmers who are not affiliated with farmers groups or agricultural co-operatives; they only get software from the extension workers (Leeuwis 2004, DADO 2006). Hardware includes materials, inputs, irrigation scheme, agricultural equipments, construction of a collection centre along with weighing machines/equipments; software includes training, knowledge and skills of technologies; and orgware includes support through organization and make a farmers’ group strengthen to become a self-sustained co-operative (DADO, 2006). Due to this, GFVFPCA is getting financial assistance to construct collection centres, office facilities, irrigation schemes and also getting new technologies of vegetable farming through demonstration, improved seed-kit, excursion, training and so on. Ultimately, these services are for members of the co-operative. Due to these reasons, GoN promotes farmers for becoming a member of groups or co- operatives because extension agencies have to disseminate the technologies through groups and co-operatives with limited resources.
Agricultural co-operatives aim to minimize farmers’ problems with limited resources of the government and maximize the benefits by promoting the sustainable use of resource use through utilizing members’ own resources. GFVFPCA was introduced socioeconomic and politico-cultural activities for the development in Chainpur VDC. Most of the farmers of that locality are participating in vegetable production and marketing and other income generating programmes such as training, demonstration and excursion in vegetable farming, construction of irrigation schemes, and awareness in the co-operative and co-operative marketing in Chainpur areas.
Complex social stratification of the country especially caste system has bulged the social inclusion which is mostly predominated in agricultural and non-agricultural sectors also.
19 These issues also exist in agricultural co-operatives. Government has developed policies to mitigate those issues by launching special developmental activities to minority people. Accordingly, in co-operative sector the government has to focus on inclusion of ethnic minorities because most of the ethnic minorities are socio-economically, politically and culturally deprived. Regarding this issue, the GFVFPCA stimulated their ethnic minority members to achieve socioeconomic and politico-cultural development. GFVFPCA has total 129 members whereas 25 are from ethnic minorities (recorded in GFVFPCA). Among 25 ethnic minorities, Magar and Newar are from ethnic/Janajati groups; Tharu from indigenous groups and Damai, Kami and Sarki from untouchable castes. Still 105 ethnic minority farmers are less benefited from GFVFPCA. Despite they are involved in vegetable production and marketing but they are individually selling their vegetables in the regional market.
2.2 Research Problem and Objectives In Chitwan district, the DADO formed 337 farmers groups; DADO claims that all those groups are active (DADO 2006). 23 vegetable farmers’ groups and 14 co-operatives are objectively working in vegetable production and marketing and 11 co-operatives and 15 farmers’ groups exist in Chainpur VDC; where GFVFPCA is one of the agricultural co- operatives6 (DADO 2006, CTDO 2007) consisting of 129 members. GFVFPCA consists of different ethnic farmers whereas 25 ethnic minority members and 105 ethnic minority farmers are still non-members but they are doing commercial vegetable farming in Chainpur. That’s why it clearly shows that non-members of ethnic minority groups are more than the members.
General problems of ethnic minority farmers are: not access to government agencies and stakeholders; not know the governmental policies and procedures to get services from them. The specific problems are lack of co-operative knowledge, lack of technologies on vegetable farming, lack of market information, and lack of infrastructure like irrigation and transportation facilities. In addition, farmers are surrounded with the problems of frequent shortage of inputs, lack of quality inputs, inaccessibility to credit facilities and irregularities in extension services as well as the lack of secure markets and price for their products. Farmers are also suffering from the frequent strikes due to political instability. As consequences, they can not sell their products timely and ultimately vegetables are damaged due to high perishable goods. These are contributing factors for ethnic minorities in socially exclusion. Hence, especially ethnic minority non- members of the co-operative have less chance to solve these problems. If these situations are not addressed, the ethnic minorities farmers are socially excluded resulting increased poverty and “socioeconomic class struggle” in long-run.
DADO tries to address through farmers’ groups and agricultural co-operatives but it is less effective due to lack of resources. Major source of livelihood is agriculture in Chainpur and most of the farmers are engaged in vegetable farming. But marketing is the main problem for this region. The intervention of the co-operative is able to solve the problems to some extent but it has limited to co-operatives members only. This research is set up to explore the social inclusion and exclusion issues of ethnic minorities in the co-operative and its marketing implementation activities. This is simply possible by the explanatory analysis on access, perception and attitude towards non-members ethnic minorities of the co-operative and then to get acquainted with reasons for social inclusion
6 Agricultural co-operative: I especially focused on Fresh Vegetables and Fruits Producers’ Co-operative Associations registered in CTDO, Chitwan.
20 and exclusion of ethnic minorities in the co-operative. Ultimately implementation process of government agencies and stakeholders and their shortcomings affect social inclusion issues on the co-operative.
The aim of the research is to analyze the constraints of the social inclusion of the ethnic minority farmers. The research investigates in-depth study on co-operative and its daily activities in the co-operative marketing during the interaction and negotiation process among Executive Committee (EC), manager, traders and farmers (members and non- members) by anthropological approach. So, the research objective is to explore and analyze the social inclusion constraints of the ethnic minority farmers at Chainpur VDC of Chitwan district in Nepal by investigating the access, perception, attitude and understanding of non-members of ethnic minorities towards the co-operative, co- operative members and government agencies; and vice-versa. The specific objectives of the research are:
• To analyze the social inclusion and exclusion issues on co-operative; • To investigate the access, perception and attitude of member and non-member of ethnic minorities towards co-operative, government agencies and stakeholders.
2.3 Conceptual Framework It is always useful to get insights into the concepts to describe and analyze the data. In the important practical implication of theory of access is illustrated through this research in order to analyze complication of daily activities in co-operative and its marketing with respect to social inclusion and exclusion issues of ethnic minorities. This research is based on theory of access followed by using concept of co-operative and co-operative marketing, social exclusion and social inclusion that are explained briefly below.
2.3.1 Co-operative and Co-operative marketing Co-operative Legal definitions of a co-operative may vary depending upon sources, but most agree that a true co-operative is one that (1) provides service at cost, (2) is democratically controlled by its member- patrons, and (3) limits returns on equity capital (McBride 1986).
A co-operative is a user-owned and user-controlled business that distributes benefits on the basis of use. A detail account of co-operative is described in section 3.1. A co- operative is defined by the International Co-operative Alliance (ICA)'s Statement, 1995 on the co-operative identity as “an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise”. And also the value of co- operative is: “based on the values of self-help, self-responsibility, democracy, equality, equity and solidarity. In the tradition of their founders, co-operative members believe in the ethical values of honesty, openness, social responsibility and caring for others” (ICA 1995). The co-operative principles are guidelines by which co-operatives put their values into practice.
21 More specifically, it is distinguished from other businesses by three concepts or principles: First, the user-owner principle: persons who own and finance the co-operative are those that use it. Second, the user-control principle: control of the co-operative is by those who use the co-operative. Third, the user-benefits principle: benefits of the co- operative are distributed to its users on the basis of their use (Cobia 1989). The research analyzes using these entire concepts.
A co-operative is a voluntarily organized business, operating at cost, which is owned, capitalized and controlled by its members, sharing risks and benefits proportional to their participation. Co-operatives are the most important institutions in the agricultural transformation process (Andreou 1980). GFVFPCA has vegetable marketing system which plays a role on social transformation. The members of the co-operative are getting more information about technologies, knowledge and skills on the vegetable production and marketing by the government organizations and also supporting from their co- operative. But non-members of the co-operative are excluded in these opportunities. Co-operatives are often seen as institutions that facilitate the technical and economic transition of the traditional agricultural sector to modern one and that help create a protective environment for the rural poor, the small farmers and tenants (Ibid.). This co- operative is the junction of different ideas, knowledge and skills which everybody can interact to each other. Vegetable marketing and co-operation, individually and in combination, are often advocated as agents in the improvement of rural development (Sargent and Sey 1986). Hence, co-operatives are only the solution for socioeconomic development of rural farmers.
Co-operative marketing Co-operative is a kind of local organization that pool members’ economic resources for their benefit, for example marketing associations, credit unions, consumer societies, or producer co-operatives (Uphoff 1986). Uphoff (1986) mentions two kinds of co-operative as services are directly involved in agricultural production: Input supply co-operatives and marketing co-operatives. Marketing co-operatives try to provide more favourable prices for members by grading, processing and/or transporting products in common, or by storing and selling when the price is most advantageous. They are found frequently around the world, giving incentives to members to use new technology and increase production because of more favourable returns to labour (Ibid.). The research focuses on the marketing co-operatives. The co-operative members produce vegetable and they collect their production in the collection centre and traders take their products from collection centre at reasonable price.
Agricultural co-operatives are basically competition-enhancing. In so far as the co- operatives act as countervailing power they reduce the impact of monopoly powers on farmers. The effect of this will be that price competition among farmers is mitigated. On the other hand, co-operatives will introduce demand-driven quality differentiation by which farmers compete. Provided that a co-operative has open membership and adheres to the business-at-cost principle, all produce that may ever be produced reaches the market, and so, not even a market-dominating co-operative can abuse any market power. Thereby the consumers can enjoy low market prices due to large volumes produced. If the entry barriers are reasonably low, farmers will establish co-operative firms in order to prevent existing investor-owned firms from exploiting market power. As
22 the initiatives to establish co-operatives origin from the grassroots, the markets tend to function better (Bekkum and Dijk 1997, Schitthuis and Bekkum 2000).
The basic principles of a co-operative should be discussed and thoroughly understood by those who are looking for possible solutions to their problems and considering a co- operative as a possible method of solving their marketing problems (McBride 1986). A farmers’ managed marketing co-operative is an association of business firms who have pooled their marketing activities in an attempt to make needed services available to themselves (Ibid.). The co-operative under study GFVFPCA has 129 members interact with each other for market information sharing and technology transfer.
Major discussion of this study revolves around the marketing problems also including with other technical and theoretical aspects. It suggests that at least two areas, management and financing, co-operatives are distinctly different from other business forms. This difference lies in the roles played by the members and is essentially the effectiveness of the performance that determines whether the co-operative will, in fact, serve the purpose for which it was established (Ibid.).
2.3.2 Social exclusion and inclusion This research is using the concept of social exclusion and inclusion. Social exclusion relates to the alienation or disenfranchisement of certain people within a society. It is often connected to a person's social class, educational status and living standards and how these might affect their access to various opportunities. There are different social, economical, educational, political and cultural diversities found in GFVFPCA’s ethnic minorities but they are working together on the co-operative and their co-operative marketing.
“An individual is socially excluded if (a) he or she is geographically resident in a society, (b) he or she cannot participate in the normal activities of citizens in that society, and (c) he or she would like to so participate, but is prevented from doing so by factors beyond his or her control” (Burchardt and Piachaud 1999:229 in Grand 2003:2). I look into the co-operative in these issues as well.
Within the co-operative, there are different types of participating in members and some of them are also in EC. They handle the co-operative and have some power of decision making. They also distribute of resources and benefits among them. Social exclusion is defined as a multi-dimensional process, in which various forms of exclusion are combined: participation in decision making and political processes, access to employment and material resources, and integration into common cultural processes. When combined these various forms of exclusion, they create acute forms of exclusion that find a spatial manifestation in particular neighbourhood (Madanipour et al. 1998).
Social inclusion, its converse, is affirmative action to change the circumstances and habits that lead to (or have led to) social exclusion. Social inclusion is a process which ensures that those at risk of poverty and social exclusion gain the opportunities and resources necessary to participate fully in economic, social and cultural life and to enjoy
23 a standard of living and well-being that is considered normal in the society in which they live. It ensures that they have greater participation in decision making which affects their lives and access to their fundamental rights.
Social inclusion is a strategy to combat social exclusion, but it is not making reparations or amends for past wrongs as in “Affirmative Action”. It is the coordinated response to the very complex system of problems that are known as social exclusion. The notion of social inclusion can vary according to the type of strategies adopted by organisations. The strategies of GFVFPCA are providing co-operative marketing facilities, building marketing infrastructure for co-operative, technology transfer and conduction of several income generating programmes.
2.3.3 A theory of Access This research is based on theory of access. Access as the ability to benefit from things: including material objects, persons, institutions, and symbols (Ribot and Peluso 2003). By focusing on ability rather than rights as in property theory, this formulation brings attention to wider social relationships that can constrain or enable people to benefit from resources without focusing on property relations alone (Ibid.). The co-operative is own resource of members because this is the place where they collect their vegetable products and sell it in reasonable price. So, the co-operative is an institute to get more benefits. The concept of access, in this context, aims to facilitate grounded analyses of who will be benefits from things and through which processes they are able to get benefits. Access retains and empirical “… focus on the issues of who does (and who does not) get out what, in what ways, and when (that is, in what circumstances)” (Neale 1998 in Ribot and Peluso 2003:48).
Access analysis also helps us understand why some people or institutions benefit from resources, and whether or not they have rights to them (Ribot and Peluso 2003). Access is all possible means by which a person is able to get benefit and property generally evokes some kind of socially recognized and supported claims or rights - whether that acknowledgment is by law, custom, or convention (Ibid.). Hence, access analysis requires attention to property as well as to illicit actions, relations or production, entitlement relations, and the histories of all of these (Ibid.).
The political-economic framework outlined, “access analysis involves 1) identifying and mapping the flow of the particular benefit of interest; 2) identifying the mechanisms by which different actors are involved, gain control, and maintain the benefit flow and its distribution; and 3) an analysis of the power relations underlying the mechanism of access involved in instances where benefits are derived” (Ibid.).
In this research the working mechanisms of the co-operative and roles of EC, members and non-members of the co-operative are a major part. So the following points are more significant for research to study. The working set of categories that shape access processes and relations guide efforts to map the mechanisms. The first of these categories is right-based access (which is sanctioned by law, custom or convention), including illegal access (or theft- when benefits are obtained through illegal mechanisms) and additional factor is structural and relational access mechanisms (Ibid.). These
24 mediate or operate parallel to rights-based and illegal access mechanisms, thus shaping how benefits are gained, controlled and maintained. They include technology, capital, markets, labour, knowledge, authority, identities and social relations (Ibid.).
2.4 Research Questions The general research questions that will help to reach the objective of this research are as below:
1. What are the major constraints to become a member of the co-operative for ethnic minorities? 2. What are the ethnic minorities’ perceptions and understandings on co-operative marketing and government access? 3. What are the ethnic minorities’ perceptions and understandings of the functioning of government agencies? 4. What are affirmative actions of the co-operative members’ to ethnic minorities?
Specific Research Questions The specific research questions that will answer the general research questions above are:
1. What are the structural criteria for co-operative membership and how do they work in practice? 2. Why do the members of ethnic minorities exclude themselves from the co- operative membership? 3. How is the co-operative operating and giving what market facilities do the co- operative members have? 4. How do ethnic minority members and non-members of the co-operative perceive the existing processes of co-operative marketing? 5. What are the possibilities for co-operative members to understand and perceive the financial transaction between the executive committee and the traders? 6. Why do the co-operative marketing members not want to include non-member ethnic minority persons as a member? 7. What advantages and disadvantages does the alternative (niche/lower priced) market have for non-members of the co-operative?
2.5 Research Methodology In this research, the basic approach is case study (Southwold 2002). Yin (1984) had revealed the various types of case studies such as explanatory (further divided into two descriptive and explanatory). According to Yin (1984) case study is an empirical inquiry that investigated a contemporary phenomenon within its real-life context through multiple sources of evidence. For case studies, multiple methods are used to get in-depth information for qualitative analysis. Why and how questions will get more explanatory bases support the real context of events. So, I have been given explanatory
25 ethnographic study of the ethnic minorities to form a case study which helps to provide practical knowledge on social inclusion issues to the co-operative and line agencies.
At the beginning of my field work, I went to the co-operative and met with the co- operative’s EC, manager, elite people and then, ASC Chief and DADO Chief to find out the in-depth nature of the research areas and socioeconomic characteristics of ethnic minorities, though I have worked in that locality 4 years back but people’s behaviour and attitude change with time. Therefore I was familiar with the area both geographically and thematically, but not form ethnographic viewpoint.
During the interviews, I had no problems to deal with members of the co-operative because they knew about me from the manager and President. However, two of the respondents from non-members were not able to respond to me. One of the respondents was busy on field work, whereas, the other did not want to talk with me for the reason of me being an extension worker of government. That person was not happy with the extension workers because they never visited the area. As such, though there was some difficulty in the beginning, I was able to convince them as well as collect information from them in the end.
During my field work, I introduced myself to members and non-members of ethnic minorities. Manager of the co-operative helped to facilitate for familiarizing with members and Chief of ASC with non-members. I was able to collect in-depth information from them without hesitation. Due to this, they were able to share their experiences and events freely. I also interacted with them about technologies of vegetables and about the co-operative. During the interview, I advised my respondents about new technologies that I had knowledge of, and this made me easy to familiarize with them. At the end of interviews, most of them had questions about the co-operative, and technologies of vegetable production and marketing. I told them what I knew. So, this way, I was able to familiarize with them, and this helped me to collect all required information of this research within the given time period.
During the field work, I had some difficulty due to the political instability in the country. At the time, government was in interim and facing incoming the constitutional election (now completed) which was a historical event for all Nepalese because that election was not only developed for constitution but also was issues of monarchy. Most of the Nepalese people hoped that constitutional election will make “Republic” Nepal. So I faced political instability like strike and at same time, I could not fill petrol in my vehicle, and therefore, I could not go for field work on time. I also faced load shedding up to 8 hours per day, which meant that I could not do work after fieldwork in the night. Doing my internship in the same district helped me to manage my fieldwork.
2.5.1 Research Area The study area is located 16 km far from district headquarter, Bharatpur, at east of Chitwan district. The detailed account of research area (physical, geographical, political,
26 social, and demographic description) presented in section 1.3. The following map shows the geographic location of the area.
Map 2: Left: Chitwan district map shows research area and market place of farmers and right: Chainpur VDC map is research area
Chainpur VDC
Research Area
Source: Information centre, DDC, 2007
Legend Vegetable production area (Research Area: Chainpur VDC) Local Market (Khairahani: it is near to collection centre i.e. 2 km far) Collection Centre (Chainpur-1, Jyamire) Regional Market (Narayangarh: it is near to headquarter i.e. Bharatpur)
The study focused to identify the situations to explore the co-operative marketing implementation in rural areas in Chitwan district and also explored how some of the ethnic minorities are socially excluded on the co-operative. Therefore, GFVFPCA and Chainpur VDC were selected for the case study of this research because of the fact that: 1. The area has more productive agricultural lands, and most of the families engaged in vegetable farming. This area was developed in pocket package programme of DADO, so it is more potential for commercial vegetable farming aw well. 2. GFVFPCA is an innovative co-operative in Chitwan district for co-operative marketing and the affiliations of ethnic minorities are higher than others. 3. Collection centre is nearby east-west highway. 4. Members and some of non-members of ethnic minorities are also taking facility of the co-operative marketing and most of non-members do not take this facility, so I was able to collect more information from three categories of respondents. 5. The area is accessible for data and information collection.
Hence, it was most effective study area for this research to explore the constraints of social inclusion issues on ethnic minorities than others co-operatives in district.
27 2.5.2 Data generation Primary and secondary sources of data were generated for this research. The secondary data were collected from published literature available from libraries of IAAS7, DoA8, DoC9 in Nepal and in the Netherlands and internet as well as published and unpublished reports of GFVFPCA, ASC, DADO, CTDO and DoC. Primary empirical information is used by two techniques i.e. participant observation and interviews for my research which are briefly described in following sections. The main body of the research is based on the qualitative information and some quantitative data were also collected during the field work. The qualitative data were collected with the help of participant observation, informal and semi-structured interviews while the quantitative data were supplement by structured interviews (HHs survey).
Observation data were collected as a field note in bullet form and described it in text form as dairies and observation notes. Likewise, the interview data were written as rough notes on the spot and described later on. Other secondary information was gathered from different relevant organizations especially GFVFPCA, ASC, DADO, CTDO and DoC and elite people, members and non-members of ethnic minorities of the co-operative in the form of texts.
Participant Observation Barnard (1995) suggests, “When you want to know what people actually do, however, there is no substitute for watching them or studying the traces their behaviour leaves behind” (Barnard 1995:310). In this study, I observed the multiple sites and also mentioned discourses on it. The multiple sites were meetings of EC, DADO, ASC office, collection centre and regional market. I performed to observe the co-operative and co- operative marketing management system. I also observed the bargaining of traders and farmers in price of vegetables and I also observed dealing with EC, manager, traders and members and non-members who were selling their vegetables in co-operative. I did 7 participant observations apart from taking daily notes on purposive observation. The main purpose of participant observation was to get insight on their every day activities of the co-operative marketing with some informal talks. I attended 3 meetings with EC of GFVFPCA, 2 times with members and 2 times with non-members of ethnic minority farmers. I closely observed members and non-members activities in their farms, house, and collection centre of the co-operative and also in regional market. I observed the timing of their movement. In the regional market, what did they do like how to deal with middlemen and how to sell and how much they get? I also asked directly and/or indirectly the advantages and disadvantages of regional market and marketing strategies made by non-members of ethnic minorities.
Interviews Better understanding of the culture can be realized through observation coupled with the interviews. Spradley (1979:5) says, “Culture is learnt through inference made from what people say, the way people act, and the artifacts people use” (in Southwold 2002).
7 IAAS means Institute of Agriculture and Animal Sciences is under a Tribhuvan University of Nepal. 8 DoA means Department of Agriculture, is under the Ministry of Agriculture and Co-operatives of Nepal. 9 DoC means Department of Co-operatives, is under the Ministry of Agriculture and Co-operatives of Nepal.
28 Therefore, this study organizes 3 types of interview techniques viz. informal, semi- structured and structured. I did 12 informal interviews, 8 semi-structural and 50 structural (HH survey) interviews which I mentioned here.
A total of 12 informal interviews were carried out with the members of co-operative, non- members of co-operative, key informants of co-operative and ex-extension worker and extension worker of ASC, DADO and CTDO. The purpose of informal interviews was mainly focused on the understanding of their views on the issues on social inclusion and exclusion in co-operative and co-operative marketing. In-depth informal interviews were carried out from members, non-members and members of EC of co-operative to get insight on their views about the co-operative and co-operative marketing activities particularly ongoing events.
Similarly, 8 semi-interviews were carried out from different categories of respondents out of which 2 from members of co-operative, 2 from non-members of co-operative, 2 from key informants and 2 from DADO and ASC staffs. The discussion matters were the social inclusion and exclusion issues, reasons of ethnic minority non-members not being interested to be a member of the co-operative, co-operative’s rule and regulations, government policy towards co-operatives and others social arenas. Due to this, I came to know in-depth information about constraints of social inclusion of ethnic minorities in the co-operative.
Simultaneously, I conducted a household survey for 50 vegetable farmers who are involved in vegetable marketing whereas 25 households of members and 25 households of non-members of ethnic groups of the co-operative. Out of 25 non-members, fortunately selected 9 households of non-members sold their vegetables in the co- operative while other 16 households sold their vegetables in regional market (Narayangarh). From this, I was able to get deep information about the mentioned issues and was also able to collect some quantitative socioeconomic information as well.
In the first order, the sampling technique used was purposive as the major research strategy is case study where purposive sampling is considered to be a good one and my population was already defined with DADO’s Chief and President of GFVFPCA. Barnard explains, “Purposive sampling is also used in the selection of a few cases for intensive study” (1995:96). The second order sampling was carried out using purposive and simple random sampling technique. I did purposive sampling for members and simple random sampling for non-members of the co-operative. I took whole populations (25 farmers) of the ethnic minorities from members of the co-operative and took simple random sampling from non-members of the co-operative. List of members were provided by GFVFPCA and list of non-members were provided by ASC, Khairahani. Sampling frame of members are 25 (100 percent) ethnic minorities and sampling frame of non- members are 130; out of this 25 randomly selected. The members and non-members of ethnic minorities are involving in vegetable production and marketing, they considered in a sampling frame. Following table 2.1 shows the details of my involvement in the data collection process.
29 Table 2.1 Summary of field activities during data collection Activities Group Members of Non- Key inform- Line Total meeting co-operative members of ants agencies and co-operative stakeholders Participation 3 2 2 7 Observation Informal 2226 12 interviews Semi- 2222 8 structural interviews HH Survey 25 25 50 interviews Total 3 31 31 4 8 77
2.5.3 Unit of analysis Because of the multiple level features of my study, I have different units of analysis. To get insight about their views individual ethnic minority farmers, for example members and non-members, GFVFPCA’s EC members and manager, traders, DADO and ASC staffs were considered as the unit of analysis. But in order to get qualitative and quantitative data on the co-operative and co-operative marketing, I used the household as unit of analysis.
2.5.4 Data analysis and presentation The data collected are organized in the following two chapters; co-operatives and government policy, which are considered as the foundation of the co-operative, co- operative marketing issues and government policy to the co-operative; and followed by describing the members who are included and those are who are excluded. Further, I explore in-depth the social inclusion and exclusion issues in the co-operative and co- operative marketing.
To make more consistent and rigid presentation three main components (Punch 2005); data reduction, data display, drawing and writing conclusions were applied for data analysis in this qualitative research. Epistemological insights for data analysis were taken from the concepts that I have described in the conceptual framework of this research. For the quantitative analysis I use statistical software; excel. Qualitative analysis is presented in the form of texts and the quantitative are in the forms of texts, tables, charts and so on.
30 3 CO-OPERATIVES AND GOVERNMENT POLICY
3.1 Concept Co-operative is a unity of each other for living together, thinking together and working together. In general concept, the co-operative is living, thinking and working together but in technical concept it is a business skill. There are so many ideologies to define the term of co-operative. In accordance to social scientists defined: ‘escape from the social oppression’ and economists defined ‘freedom from middlemen exploitation’ but in conclusion, co-operative has same meaning if there are many versions (Thakuri 2008).
The term co-operative consists of two words ‘Co’, which means together and ‘Operate’, to do something. Therefore the term co-operative means ‘working together’. In another version co-operative is to achieve the certain objectives of economic and social development by unity of collective production and service of business. Co-operative is a business from and to their members to achieve common economic and social needs. Co-operative is a form of business enterprises, or community organization, incorporated in service to its members and users, in order to meet their common economic, social and cultural needs and aspirations. Co-operative is jointly-owned and democratically controlled by its members and users on the basis of one member, one vote10. Co- operatives follow democratic, participatory and transparent decision-making processes and organizational structures so that their members and users (owners, workers and consumers) may be directly responsible for benefiting themselves and the society in general11. A co-operative is defined by the ICA’s statement, 1995 on the co-operative identity as:
“an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise”.
Co-operative can conduct as business because there is the members individually do not need to invest of big volume of capital, no need of complex technical skills and administrative management and also, less effort for the starting of their co-operative business. The co-operative is appropriate medium of business of people who have small amount of money to invest where they can establish small business by production of their own goods and services. Co-operative meets the common economical and socio- cultural needs and aspirations of members, that’s why co-operative projects are set up primarily for small, marginalized and organized people.
Co-operatives are based on the social value of self-help, mutual help, self-responsibility, democracy, equality, equity and solidarity. Co-operative members also believe in the ethical values of honesty, owners, social responsibility and caring for others. ICA, 1995’s announced official statement on Manchester conference the value of co-operative is:
10 http://www.ncfnepal.com.np, accessed on 11/04/’08 11 http://www.ncfnepal.com.np, accessed on 11/04/’08
31 “based on the values of self-help, self-responsibility, democracy, equality, equity and solidarity. In the tradition of their founders, co-operative members believe in the ethical values of honesty, openness, social responsibility and caring for others.”
The co-operative principles are guidelines by which co-operatives put their values into practice. The co-operative principles and values are revised into three times: 1937, 1966 and 1995. The development process of co-operative in the world is described as from 18th century.
Some scientists Robert Owen, William King, Rochdale Pioneer, Franz Schulz, F. W. Raiffeison are pioneers of the co-operative. They are reached to let-out from the economic inequity for self-dependence through co-operative. Robert Owen (1771–1858) is considered the father of the co-operative movement. Although Owen inspired the co- operative movement, others - such as Dr William King (1786–1865) - took his ideas and made them more workable and practical. Co-operatives started as small grassroots organisations in Western Europe, North America and Japan in the middle of the 19th century; however, it is the Rochdale Pioneers that is regarded as the prototype of the modern co-operative society and the founders of the co-operative movement12.
The Rochdale Society of Equitable Pioneers (photo plate 2) was a group of 28 artisans and weavers at cotton mills in Rochdale, England, that was established in 1844. As the mechanization of the industrial revolution was forcing more and more skilled workers into poverty and these trade men decided to band together to open their own store selling food items they could not otherwise afford and, with lessons from prior failed attempts at co-operation in mind, they designed the now famous Rochdale Principles.
Plate 2: The Rochdale Society of Equitable Pioneers (Photo: http://www.ncfnepal.com.np , Accessed on 31March 2008)
12 http://www.ica.coop/coop/index.html, accessed on 11/04/’08
32
Box 1: The principles of co-operatives - ICA, 1995
1st Principle: Voluntary and Open Membership Co-operatives are voluntary organisations, open to all persons able to use their services and willing to accept the responsibilities of membership, without gender, social, racial, political or religious discrimination.
2nd Principle: Democratic Member Control Co-operatives are democratic organisations controlled by their members, who actively participate in setting their policies and making decisions. Men and women serving as elected representatives are accountable to the membership. In primary co-operatives members have equal voting rights (one member, one vote) and co-operatives at other levels are also organised in a democratic manner.
3rd Principle: Member Economic Participation Members contribute equitably to, and democratically control, the capital of their co-operative. At least part of that capital is usually the common property of the co-operative. Members usually receive limited compensation, if any, on capital subscribed as a condition of membership. Members allocate surpluses for any or all of the following purposes: developing their co- operative, possibly by setting up reserves, part of which at least would be indivisible; benefiting members in proportion to their transactions with the co-operative; and supporting other activities approved by the membership.
4th Principle: Autonomy and Independence Co-operatives are autonomous, self-help organisations controlled by their members. If they enter to agreements with other organisations, including governments, or raise capital from external sources, they do so on terms that ensure democratic control by their members and maintain their co-operative autonomy.
5th Principle: Education, Training and Information Co-operatives provide education and training for their members, elected representatives, managers, and employees so they can contribute effectively to the development of their co- operatives. They inform the general public - particularly young people and opinion leaders - about the nature and benefits of co-operation.
6th Principle: Co-operation among Co-operatives Co-operatives serve their members most effectively and strengthen the co-operative movement by working together through local, national, regional and international structures.
7th Principle: Concern for Community Co-operatives work for the sustainable development of their communities through policies approved by their members. Source: http://www.ica.coop/coop/index.html, International Co-operative Alliance, website: Accessed on 11 April 2008.
33 The principles that underpinned their way of doing business are still accepted today as the foundations upon which all co-operatives operate. These principles have been revised and updated, but remain essentially the same as those practiced in 1844 (ICA 1995).
The co-operative principles and values review modernised the idea of co-operation, maintained its relevance and provide an up-to-date test of whether an organisation qualified to call itself a co-operative. The definition of a co-operative as established in the 1995 and co-operative principles (Box 1) has been included in a number of policy documents including the United Nations guidelines, the International Labour Organisation Recommendation 193 on the promotion of co-operatives, the European Co- operative Statute and a number of national laws (Ibid.).
3.1.1 Categories of co-operative organizations Thakuri (2008) described five categories of co-operative organizations in Nepal which are: 1. Production oriented: It includes agriculture and non-agricultural production areas. Dairy, poultry, vegetable, fruits, cereals, apiculture, aquaculture, coffee, tea, ginger, wooden materials, handicraft, non-timber forest products, press and publication and transportation are main areas in this type. 2. Service oriented: It includes transportation, press, tourism, saving and credit, beauty parlor and so on. 3. Business oriented: Buying and selling of materials, import-export, and consumer store are involved in this category. 4. Processing industry oriented: Dhaka production, furniture, noodles, rice mill, sauce production, dairy processing, and indigenous paper are include in this category. 5. Job oriented: Labour organization and common mutual work are include in this category.
3.1.2 Types of agricultural co-operatives Various kinds of co-operatives can be associated in agricultural co-operatives. In the co- operative the resources that members can pool in co-operatives for economic gain are: money, labour, purchasing power and products (Uphoff 1986). Uphoff (1986) described these are associated with the following kinds of co-operatives: 1) Savings and Credit co-operatives: Credit unions or savings and loan co- operatives pay interest on members’ saving and provide loans to members. This kind of co-operatives is important for agriculture where banking institutions, moneylenders and extractive are not or less presence in rural areas. 2) Labour co-operatives: These are not as common as formal co-operatives. There is informal ones find in rural areas of Nepal. 3) Consumer co-operatives: It is also called Sajha (co-operative) that can lower prices groups purchasing of commodities or services. Two kinds of co-operatives can be classified separately, when the goods or services are directly involved in agricultural production:
34 a) Input supply co-operatives: The purpose of these co-operatives is to get timely in lower priced or better quality agricultural inputs. b) Marketing co-operatives: These try to provide more favourable prices for members by collection of products and selling on the spot to the trader or they are involving in grading, processing and/or transporting products in common, or by storing and selling when the price is most advantageous. They are giving incentives to members to use new technology and increase production because of more favourable returns to labour.
The input supply and marketing co-operatives are the most common co-operatives for agricultural development in Nepal. Actually, GFVFPCA is a production oriented co- operative organization. Co-operative marketing is one activity among many other activities like training, excursion, infrastructure development, income generating activities. Vegetable co-operative marketing is the major activity of this co-operative where the marginalized people can get more benefit than the commercial farmers.
Plate 3: Non-member of co-operative is grading vegetable before to sell in co-operative (Photo: Field work, 2007)
Interviewed with Bhim Kumari Ale, non-member of the co-operative, who is representing the minority people (Janajati), what are you getting from this co-operative? What do this co-operative do for you? She replied: I have only 17 Katta13 lands which has not much economic value because it is upland, so I am poor. I have not much sources of livelihood except vegetable production. I do cereals in the summer and rainy seasons that help food for 9 months to my family and in winter I have been cultivating vegetables since 8 years. I earned average NRs14 20,000 per annum from vegetables. I am able to earn to
13 1 Katta=1/30 ha (i.e.30 Katta = 1ha) 14 NRs. 1 = US$ 0.6385 = Euro 0.9945 (3 April 2008)
35 this money when I get an opportunity to sell my products in the co-operative. Before that, I was able to get approximately NRs 5000 because I had a problem of marketing. Now I can sell easily in the co-operative. I do not have to lose my time and money for transportation because this co-operative is near to my house. Even I can sell small amount of vegetables which is not possible in regional market for me. Prior to establish this co-operative, I had to go early in the morning at 2-3 am at regional market to sell vegetables which was very difficult to me because I have 3 kids and they are studying. When I went to regional market and every time I loosed 6-7 hours for marketing. During that period, sometimes my kids had gone school without taking meal because of problems of marketing. Nowadays I am so happy; I do not have to lose my time. Usually I go to co-operative at 3 pm and come back at 3:30 to 4 pm which is negligible. I am saving my time and money. These days, I am using my extra time to kids for education, health and sanitation and also use in farm activities. Therefore, now days our family is so happy only because of the co-operative and we are surviving by the co-operative.
Therefore, it is proved that GFVFPCA is production oriented co-operative organization and it holds co-operative marketing types of agricultural marketing as described by Upoff (1986).
3.2 History in Nepal
3.2.1 Co-operative movement in Country
The history of co-operative in Nepal is described briefly and mentioned major events in following section.
Traditional co-operation Nepal has a long-standing history of co-operatives. There had been some strong traditional system which was community based groups and co-operatives. These groups and co-operatives were based on kinship, ethnic and religious bonds. Noteworthy, the Dhikuki related to saving and credit associations, the grain saving systems called Dharma-bhakari that related to protect social welfare activities and natural calamities. Labour/wage saving and exchange system called Parma, Gumba related to cultural protection in Buddhism and Guthi bonded the people which related to a forum for working together in different socio-cultural practices. By this 21st century, Dharma- bhakari, as a system, is rarely visible, but others are still functioning in Nepalese society (Mali 2005).
All these traditional co-operation were because of there was no access of different governmental organization which help to people for their socioeconomic support. At that time the social capital was their key factor for existing in society. Social capital refers to connections among individuals - social networks and the norms of reciprocity and trustworthiness that arise from them (Putnam 2000). Social capital is the ability to secure resources by virtue of membership in social networks or larger social structures (Shortall 2004). Dharma-bhakari, Dhikuti, Parma, Gumba, Guthi are the media of social network.
36 Each individual of these systems are bond with the norms of reciprocity and trustworthiness.
Dharma-bhakari was actually storage for famine i.e. collection of food like rice, maize and wheat in certain place of the community. It was limited within kinship, ethnic, religious and/or community level for social welfare and natural calamities. It was especially for poor, help-less and economically deprived people for getting marriages, birth ceremony, death ceremony, others religious ceremonies and natural calamities like fired in house, land sliding and flooding in house, hail-storm in the crops . But this time, government and non-government support on this sector and people also aware of these activities. People save the money for their future planning like marriage and other activities and also, people are adopting new technologies getting high productivity. That’s why Dharma-bhakari is not seen in these days.
Dhukuti is the collection of money of individual. It is also limit within kinship, ethnic, religious and/or community level. Each individual save certain money as monthly basis. Every month is opened for getting money. Who need the money; s/he can get money from Dhukuti. If more than one people want to take at a time, they can get accordingly as written by Dhukuti rules. Rules are different from place to place and group to group.
Parma still exists in our community. It is basically labour exchange. It is found in only rural areas where people have depended on agriculture. So people of rural areas are economically poor and have seasonal works. Most of the people can not hire labour. So they recognize this system.
Gumba basically exists in the Buddhism culture. It is like socially embedded to each other for the cultural promotion and they support to each other for their society.
Guthi is related a form of organization where people gathered to work for society. This is basically motivated for doing social works. So still this system exists in our community and it is also belongs to kinship, ethnic and/or religious.
Parma, Dhikuti and agricultural production-oriented small informal groups are found in non-members whereas formal groups “co-operative” is found in the members. GFVFPCA is one of the examples of Chainpur VDC. These traditional co-operations build up for social networks. Social networks and norms of reciprocity can facilitate co-operation for mutual benefit. When economic and political dealing is embedded in dense networks of social interaction, incentives for opportunism and malfeasance are reduced (Putnam 2000). Therefore, these systems still exist in community level; promoting in rural areas because they have less access on governmental such types of services.
Early co-operative movement The period of 1950 to 1960, the first democracy was established in the country. DoC, 2008 mentioned that the co-operative programme that adhere the globally recognized co-operative principles and values started in Nepal, since 1957 April 02 (2013 Chaitra 20 BS) through the establishment of 13 credit co-operatives in the Rapti Valley of Chitwan
37 district. During that time the first establishment of co-operative is Bakhan Co-operative Organization, Chitwan in Nepalese history. The objective of the co-operative societies (registered under an Executive Order of the Government, as there was no Co-operative Act at that time), was to provide agricultural credit to flood-stricken people resettled in the Rapti valley (DoC 2008). Following the successful delivery of the agricultural credit by these co-operatives, the co-operative societies were promoted in other parts of the country.
To regulate these co-operative societies, the first Co-operative Act was promulgated in 1959 (CTC 2007). These co-operative societies started multiple activities such as supplying agriculture inputs. This shift in activities changed the nature of these societies from single purpose to multipurpose societies. However they continued providing agricultural credit to their members (Thakuri 2008). During the First Plan Period (1956/57-1960/61) of Nepal 378 co-operatives were organized (Shrestha 1996)
Co-operative movement from 1960s to 1990s The period of 1960 to 1990, the Panchayat15 system was launched in the country. The Second Three-Year Plan (1962/63-1964/65) recognized the need for implementing co- operative development. Accordingly, Co-operative Organization Regulation, 1961 was developed in 1961 by using the right from the Co-operative Act, 1959. To ensure that the co-operatives have sufficient capital to invest, a Co-operative Bank was established in 1963.
During the period of Third Five-Years Plan (1965/66-1969/70), the Land Reform Savings Corporation was established in 1966 to handle the compulsory savings collected under the land reform program and to extend credit facilities to these farm families directly and also through ward/village committees (Thakuri 2008). The Co-operative Bank, which could finance only co-operatives, was in 1968 converted into Agricultural Development Bank (ADB/N) with broader scope of extending credit to co-operatives, individuals and corporate bodies engaged in agricultural activities and agro-based enterprises (CTC 2007). This Third Plan the total number of co-operatives increased to 1489 covering 56 out of 75 districts of the country (Shrestha 1996).
The Fourth Plan (1970/71-1974/75) therefore laid emphasis on qualitative growth of co- operative. In 1970/71 a co-operative revitalization programme was launched. Under this programme, in 1970s, the management of co-operatives was handed over to ADB/N (DoC 2008). In 1973 Land Reform Savings Corporation was merged into ADB/N (Mali 2005). During this period there came a wave of amalgamation, merger and dissolution, ultimately bringing down the total number of co-operative to 251.
In the period of Fifth Plan (1975/76-1979/80), a new programme popularly known as the Sajha (co-operative) programme was launched in 1976. The major objectives of this programmes were: a) to increase production and income of the farmers through
15 Panchayat was a party less political system in Nepal. It existed between 1960 to1990 AD. This period is commonly known as Panchayat era or Panchayat regime.
38 improved system of farming by making available the institutional loans to rural small farmers and groups of small occupations at the village level and by supplying the agricultural inputs; and b) to mobilize the rural savings and to provide marketing services of consumer goods and farmers’ produce. The management of the co-operative societies was withdrawn from the ADB/N in 1978 and handed over to the respective board of directors of co-operatives (Shrestha 1996).
In the Sixth Plan (1980/81-1984/85) period; a new Co-operative Societies Act of 1984 was enacted and further emphasis was given to co-operative training and education. During this period “Intensive Sajha Programme” was launched in the year 1981. At the end of Sixth Plan, the agricultural co-operatives including 33 district level unions, reached 719.
During the Seventh Plan (1985/86-1989/90), the development process on the co- operative, there was formed Co-operative Organization Act, 1985, and to support this Act a Co-operative Organization Regulation, 1987 is formed (DoC 2008). At the end of Seventh Plan period there were 830 agricultural co-operatives societies in 72 districts and 33 district level co-operative union in 33 districts (Shrestha 1996).
Status of the movement after 1990 After 1990, again democracy has been established in the country. A new Co-operative Act was promulgated in 1992. Then, Co-operative Act, 1992 and its Regulation, 1993 provided a liberal and democratic framework for co-operative societies (GoN 1992, GoN 1993). Before 1990s government used to set a target for registering co-operative societies. This usually restricted the public initiative to promote co-operatives. Hence growth was almost negligible. But with the new act and liberal environment, where government did not restrict co-operatives from being registered, co-operators were free to promote them. Hence, a mushroom growth was recorded during 1990s (Mali 2005). Before 1990s the information on the number of members, shared capital, basic transactions were available through DoC. But from 1990s the information available is limited within the number of societies and the Unions and Federations.
The Co-operative Act, 1992 and its Regulation, 1993 provided a liberal to record for co- operative institutions in the DoC and its district level organizations (GoN 1992 GoN 1993). Now there are 40 government organizations and their 594 employees they are facilitating co-operative organizations. They are vertical relation between DoC-1 which is directly under the MoAC; Central Co-operative Training Centre (CCTC)-1; CTDO-5 and DCO-33 (DoC 2008). The organization chart of MoAC and DoC are shown in Annex 3.1.
There is also horizontal relation between MoAC, National Co-operative Development Board (NCDB), National Co-operative Bank, National Co-operative Union and Sectoral Co-operative Union. The governmental policy level organization called NCDB helps to develop Co-operative Act, rule and regulations for GoN. A National Co-operative Bank gives loan to co-operatives as cheaper interest rate for productive works. A National Co- operative Union and 5 Sectoral Central Co-operative Union (Saving and credit, Dairy, Vegetable and Fruit, Coffee and Consumer) are the central level co-operative of people.
39 There are 49 District Co-operative Federation and 83 Sectoral District Co-operative Federations in Nepal (DoC 2008). The horizontal and vertical linkages between central to grass-root co-operative associations are as follows.
Flow chart of vertical and horizontal relation between different co-operative organizations
Central Co-operative Federation Sectoral Central Co-operative Federation
District Co-operative Union Sectoral District Co-operative Union
Primarily Co-operative Associations Sectoral Primarily Co-operative Associations
There are 9720 primary level co-operatives that are working at the grassroots levels of Nepalese society where 3392 Saving and Credit Co-operatives, 2532 Multipurpose, 1564 Dairy Production, 1218 Agriculture, 226 Electricity, 215 Small Farmers, 103 Consumer, 84 Science and Technology, 66 Coffee, 30 Health, 24 Herbal Plants, 22 tea and 244 are miscellaneous (DoC 2008).
3.2.2 Co-operative in Chitwan district First co-operative was established on 1957 in Chitwan district of Nepal. So, Chitwan district is the pioneer district in co-operatives sector of Nepal. Chitwan is a centrally located district and has good networking of roads, communication, education facilities, health services, marketing and banking. Therefore, the sectoral co-operatives are rapidly emerging rapidly in Chitwan because of easily access to all over the country. According to CTDO of Chitwan, there are 123 dairy co-operatives, 106 saving and credit co- operatives, 93 multipurpose co-operatives, 14 vegetable and fruit co-operatives, 12 agricultural and 11 others. The financial transaction is NRs. 168.57 million in a year. Details of co-operatives of Chitwan district are listed in table 3.1.
Table 3.1: Number of co-operative and composition of member and their shares
SN Types of co-operative Quantity Member Share capital
Women Men Total (NRs ’000)
1 Dairy 123 1853 7687 9540 6557
2 Saving and credit 106 5546 11524 17070 34257
3 Multipurpose 93 3295 12541 15836 14267
4 Fresh vegetable and fruit 14 87 341 428 58
5 Agriculture 12 67 205 272 42
6 Others 11 337 394 731 89
Total 359 11185 32692 43877 55271 Source: Introduction of co-operative activities of Chitwan, 2007, CTDO, Chitwan, Nepal
40 Besides co-operatives, Chitwan district has also several sectoral organisations which support the co-operative institutions and to their members. The District Co-operative Union is represented of primarily co-operative associations. District Saving and Credit Union is the umbrella structure of all saving and credit associations. Similarly, there are district level umbrella structures in different sectors like Dairy co-operative is District Dairy Production Co-operative Union; and District Fresh Vegetable and Fruit Producers’ Co-operative Union (DFVFPCU) with 11 EC members, however shares of DFVFPCU has not still decided because it is newly formed (CTDO 2007).
Structurally, the primary level to central level co-operatives has vertical relations while the general co-operatives to sectoral co-operatives have horizontal relations. Administratively, higher level organizations always supervise, monitor and inspect to the junior levels. Primary level organizations and district level organizations are supervised by district level governmental organization CTDO or DCO. The central level co- operatives are supervised by DoC. The regular inspection is conducted by governmental organizations which are basically mandated to the DoC and branch offices CTDO/DCO. So, all types of irregularities transparency and non-functionality are monitored by governmental organizations. DoC maintains check and balance to whole co-operative organizations (see section 3.3). Besides DoC, CTDO and DCO provide technical and managerial support to co-operative organizations. There are also mutual understanding, relations and supporting from its own higher level to lower level of co-operatives.
3.3 Government policy in Nepal
In the past, before restoration of democracy in 1990, instead of promoting democratic culture, efforts were directed towards developing co-operatives under government control and direction, contrary to the spirit of co-operation. Especially, during the Fifth Five Year Plan (1975/76-1979/80), when the compulsory savings amount was converted into co-operative shares, a situation of mandatory membership emerged. It led to the increased dominance of rich and powerful people. The co-operative programmes lacked effective monitoring and guidance. Against this background, it had been imperative, in view of its necessity and importance, to promote the co-operative movement democratically in accordance with its fundamental ideals, principles and values by extricating it form the bewildered state of past (Shrestha 1996). One of the important developments after restoration of democracy has been the formulation of the Co- operative Act 1992 under the spirit of co-operative principles, values and norms. The preamble of the Act states “whereas it is expedient to provide for the formation and operation of various types of co-operative societies and unions for the social and economical development of the country’s farmers, artisans, people possessing inadequate capital and low-income group workers, landless and unemployed people or social workers or general consumers on the basis of mutual co-operation and co- operative principles…” (GoN 1992, GoN 1993).
In the Tenth Five-Year Plan (2002-2007) co-operative development policy and programme have been launched with the following objectives (NPC 2002/03):
41 1. To extend support to accelerate the social and economic development of especially the deprived class of people of the rural areas through the promotion and development of democratic co-operative societies/unions on people’s own initiatives, with their participation and according to their needs and aspirations; 2. To extend support to national economy by augmenting the local economic activities.
The plan has laid down co-operative development policies as follows: 1. Mobilizing the co-operative movement as a self-inspired voluntary and autonomous movement of the people, assistance will be extended to the development of democratic and socioeconomic organizations. 2. For the healthy advancement of co-operative movement and economic activities, the co-operative spirit will be infused among the people through membership awareness and publicity. 3. Assistance will be provided for the establishment of an integrated, strong and effective co-operative system through maximum participation of the local people in economic activities with mobilization of small capital and skills scattered particularly in the rural sector. Priority will be accorded to women’s participation in such co-operative system. 4. Formation of necessary co-operative societies/unions at the local, central, as well as nation levels will be encouraged in such a manner that co-operatives adopt fully democratic system in their management and maintain transparency in their business transactions. 5. The first priority will be given to co-operatives for collaboration in programme implementation or business operation to be undertaken by any government or non-government agencies. 6. The co-operatives will be engaged in the supply of means of production, sale and purchase of produced commodities, and various other activities oriented towards agricultural production and industrial enterprise. They will be increasingly involved in planning, publicity and programme implementation processes from the central to the district and village levels.
The co-operative movement is being supported by the government in line with the above-mentioned policies as well as through various programmes. Accordingly, the development of physical infrastructures to the co-operative sector like warehouses, cold storage, local wholesale marketing and collection centres and processing industries help develop the economic activities in agriculture and other sectors. However, to improve access to facilities focus is being placed on sectors which do not affect private sector’s ability to enter into competition and on programmer directly supporting rural poverty alleviation.
NCDB is the national body that helps government to formulate the co-operative policies, has the following functions, duties and powers, to: 1. Formulate needful national level policies for the promotion and development of co-operative unions and societies and to recommend to GoN for their implementation;
42 2. Assist GoN in the formulation of policies and plans concerning co-operative development and implement those policies or get them implemented; 3. Conduct necessary research studies in the areas of co-operative development; 4. Establish a Co-operative Development Fund with the objective of providing loans and grants to co-operative unions and societies in an easy manners and to provide funds through that fund to co-operatives for development- oriented activities; 5. Invest in the share capital of co-operative unions, and societies; and 6. Provide technical support for the appropriate arrangement of the implementation of programmes related to the development of co-operative unions or societies and also for their promotion and protection.
The board of EC of the NCDB is chaired by Honorable Minister for Agriculture and Co- operatives and consists of 23 members. Co-chairperson of the committee is nominated by GoN, ex-officio members are 10, elected from among the chairpersons of central co- operative unions are 2, nominated by GoN from among co-operators or social workers are 5, from among women co-operative leaders one and from expert two. A person nominated by GoN is the member-secretary. Here, we can see, the real co-operators consist only 3 to 8 people represented the grass-root co-operatives in the policy level. They are 2 from elected from among the chairpersons of central co-operative unions, 5 are nominated by GoN from among co-operators or social workers and 1 is from among women co-operative leaders. Most of the policies are formulated to the grass-root level co-operatives. This figure shows that there is lacking the representation of real co- operators from the grass-root level in the policy level and ultimately, governmental organizations also excluded the representation of women, ethnic minorities and disadvantages groups in policy level.
With above developments the co-operative movement has an opportunity to grow and expand. National Co-operative Federation is another national organization. There are members from the Central Co-operative Federations, District Co-operative Unions and Sectoral District Unions. This organization also helps to guide the policy of co-operative, create a pressure to conduct the co-operative development works for government, to help co-operators’ commercial development, to educate and train co-operators for co- operative developments. In an overall it supports to the district and primarily level organizations for co-operative development.
In addition, there is a government organization DoC (Annex 3.1) which helps the promotion of co-operative movement through various functions as provided for in the Co- operative Act as well as by running the CCTC. Accordingly following some specific functions provided for co-operative movement through DoC. 1. Registration of society or union and issue a certificate of registration; 2. Approve bylaws under Co-operative Act and the rules framed out by a society or union to regulate its affairs; 3. Amalgamate or divide the concerned society or union; 4. Inspection of a society or union;
43 5. Operate the promotional activities coordinating administrative functions of society or union and approve the nomination of registered auditor for audit of accounts of the concerned society or union; 6. Dissolution and cancellation of registration of society or union; 7. Appointment of liquidator; and 8. Training and education through CCTC launching various programmes.
3.3.1 Criteria for co-operative registration According to the Co-operative Act, 1992 and its Regulation, 1993 of Nepal, the basic structural criteria for eligibility to register co-operatives (GoN 1992, GoN 1993) are as follows: 1. The total members in one co-operative should have at least 25 members. 2. The members are living within the specified common bond. It means that the members should be within the specific geographic and administrative space. 3. The member should complete age of 16. 4. The member should not be mentally depressed. 5. The member should be free from any illegal activities. 6. Each member must purchase at least one share of the co-operative. 7. The members have to develop “written laws” which is followed by each member. Each member agrees to obey that written laws and regulations. 8. The members should develop an action plan for the year. 9. Before legal registration, the decision of the preliminary meeting of the individual members should submit in CTDO or DCO. 10. The co-operative should present their financial statement. 11. Each member must have Nepalese citizenship certificate. As far as concern in citizenship, few Nepali people still do not have their own citizenship because they do not have easy access in the government office. Citizenship in Nepal is gendered, in the sense that women and men have different and unequal access to it; and citizenship is awarded on blood rights - that is, only father pass citizenship to their sons and daughters (Laczo 2003). The citizenship provider, District Administration Office (DAO), needs the proof of documents of whether he/she is Nepali or not. The major documents are blood relationship certificate with father or marriage certificate of husband and father or husband must have Nepali citizenship before the son, daughter or wife wants to gain. Those documents who can not submit they do not gain citizenship. There are several minor obstacles to gain citizenship like people do not have access to DAO especially for people residing in the remote area and poor or landless people. Ethnic minority groups may face particular problems in gaining citizenship (Ibid.). The ethnic minority people are living in different part of Nepal like Madhesi, Tharu and untouchable caste of Terai and Chepang, Kumal, Majhi, Raute and untouchable caste of Mid-hills and Mongolian of High-hills. Ethnic minority groups excluded from benefits providing by government due to citizenship like to become a member of such co-operative. Therefore, the citizenship issue is big issues for Nepalese society and politics (Ibid.).
44 The co-operatives have to register under the Co-operative Act of Nepal at DoC. Although, the Registrar of the DoC is responsible to register this types of co-operatives he has delegated the authority to the District Co-operative Officer. Then, co-operative becomes a legal organization.
3.4 GFVFPCA development as a process Brecker in Erasmus, 1994:34 notes that it is “a mistaken belief that co-operatives, if given an equal chance, will in general grow at a more or less even pace (like a slowly rising plateau); rather… no two co-operatives are the same and… they grow at different paces, require different levels of inputs, and reach “take off” at different times”.
Co-operative development is a process involving different stages. Regarding this, he argues that “much harm has, and will continue to be done, to the co-operative movement by those who refuse to recognize the realities of categories and transitional stages in the development of co-operatives” (Ibid: 35). Brecker also notes that conceptualizing co- operative development as a process involving stages has key implications for the kinds of services to be provided for co-operatives at different stages of development. He identifies four such stages (Box 2): the pre-co-operative stage; the non-viable or start-up stage; the potentially viable stage and the fully-fledged co-operative stage.
GFVFPCA is one of the progressive agricultural co-operative in Chitwan in terms of service providing to their members. It is supporting different income generating activities and services to members. Non-members are also getting services of co-operative marketing. In comparison to the stages of the Brecker, this GFVFPCA lies in the second stage i.e. the non-viable or start-up stage. The characteristics of each stage are presented in Box 2 and this co-operative just passed the first stage. The members of GFVFPCA know the fundamental knowledge about co-operative. Mostly co-operative members got basic training in co-operative ideology and practice, and got some technical training on vegetable production and marketing. The co-operative got a financial aid from DADO to establish a collection centre for market promotion and also getting aid from Chainpur VDC for conducting the co-operative. Due to the technical knowledge and skills on vegetable production and marketing, the members are able to produce vegetables in commercial scale.
The impact of first stage activities, the co-operative progress some how in development process. Now, this time GFVFPCA and its members are feeling lack of management skills and still infrastructure and other resources in the form of assets and reserves. In this research, President of GFVFPCA Mr. Purna Bhusal found as a progressive farmers and also leader. He has more management skills and also in a position of President of district and central co-operative union. The other members of EC have a less knowledge and most of the general members have lack of knowledge about co-operative. A whole package of management and technical knowledge and skills should provide to the EC and general members to achieve goals and objectives of the co-operative.
45
Box 2: Stages of co-operatives
a. The pre-co-operative stage A pre-co-operative stage indicates the early stages of fundamental knowledge about co-operative, basic cohesion and still primarily individual producers. Therefore they are only capable small scale of co-operative production. Brecker argues that a) pre-co-operatives require very basic training in co- operative ideology and practice; b) such enterprises also require basic skills training and skills provision; c) financially, such enterprises require aid and soft loans with which to slowly begin to expand their production.
Furthermore, in this early stage of co-operative development often lead to shift from individual/family production to collective/co-operative production (Ibid: 35). Such enterprises, he argues, should be serviced by agencies that channel donor aid towards nurturing pre-co-operatives. He emphasizes that this should be done in ways that do not breed dependency and undermine viability.
b. The non-viable stage Brecker in Erasmus, 1994:36 defines ‘start-up’ co-operatives known as enterprises in the non-viable stage of development. Commonly, these co-operatives consists insufficient management skills and materials resources in the form of assets and reserves. In addition, they have not yet “sufficiently consolidated their production structures”. Therefore these types of co-operatives are characterized by subsistence levels of income. Such enterprises are “not yet capable of generating a surplus sufficient to both sustain members and reinvest in expanded production and/or are they capable or adequate planning towards this end”.
For Brecker, non-viable co-operatives require more support from pre-co-operatives. Such co- operatives, he argues, require assistance in (a) sustaining their members during economic crises; (b) skills training and (c) establishing credit-worthiness. He further argues that providing such assistance is a delicate to assist them in the transition from subsistence to market production.
c. The potentially-viable stage According to Brecker in Erasmus, 1994:36, development of this stage co-operatives have to overcome the basic weakness than first two stages of co-operatives. He argues that potentially- viable co-operatives are more capable of planning towards producing a surplus because these enterprises have “established a minimum level of management capability” and of organizational and production structures required to achieve sufficient surplus form planned productive activity.
In this stage, such enterprises are actively engaged in production for the market. The major problems facing potentially viable co-operatives are related to enterprises growth and discrimination from conventional financial institutions. The author further argues that co-operatives at this stage of development need more specialized training and more sophisticated management skills. These needs call for specialized services and support structures which are able to assist such co- operatives in making their crucial transition into completely viable, fully-fledged co-operative enterprises.
d. The fully-fledged co-operative stage This stage of co-operatives is economically competitive enterprises. They are equipped with technical and administrative managerial skills and having a good planning for sustainable. Such enterprises have well established. Viable co-operatives are organizationally well-developed enterprises with an established support network for contributing to economically viable and efficient productive activity. Viable co-operatives have secured a regional in the market and are able to sell their products at competitive prices. Such enterprises are profitable and economically viable in the long-term.
In this stage of co-operative, members have a co-operative consciousness; clear understanding of both the primary economic goals and functions of their enterprise, and of the goal of democratization. Furthermore, Brecker argues that members proceed to engage in constant evaluation of the fulfillment of these goals in relation to the continued growth of the enterprise and the changing needs of its membership.
Source: Erasmus, Z. 1994. Co-operative Development as Process; PhD Dissertation, NICCOS, The Netherlands.
46 As observed in field work, the co-operative and members have to do a lot of work for getting fully-fledged stages. Each member must sacrifice to develop the co-operative. The co-operative members should aware about ‘if co-operative organization is success, ultimately members get such success for their sustainable socioeconomic development’.
The question is about the sustainability of the co-operative. GFVFPCA has to pass different stages of development process for sustainability. The GFVFPCA should conscious about Brecker’s stages of co-operative to get final stage for sustainability.
3.5 Co-operative marketing system in GFVFPCA The GFVFPCA is officially registered in CTDO on 17 February 2002. It is located in Chainpur VDC, Ward Number 1, Jyamire village of Chitwan district. Initially this co- operative comprised of 15 members only, with no representation from ethnic minority groups. The latest record of 2006/07, indicates that membership stands at 129 with only 25 members from ethnic minorities. The GFVFPCA has different activities in this fiscal year 2007/08 and also proposed an action plan for next fiscal year 2008/09. In this fiscal year they already did the technical training on Farmers Field School (FFS), post-harvest storage, excursion, workshops, co-operative irrigation system and other income generating programmes. They still have programme to build the office of GFVFPCA in own land. They got little financial assistance from DADO, Chitwan. According to President of GFVFPCA, they inaugurate office building on their general assembly of 2007/08. They have proposed the technical and managerial training, awareness programmes, excursion, income generating programmes, infrastructural development and irrigation schemes for next fiscal year 2008/09.
Out of those programmes, co-operative vegetable marketing is one of the major activities of the co-operative. The co-operative has its own collection centre which is nearby east- west highway. The co-operative has own one shed and a small room which is being used as an office. One manager is already serving in the co-operative and 2-3 assistants will be hired at the pick period of transaction, especially in winter season. According to the manager Mr. Udhav Timilsina, during the previous year the quantity of vegetables collected was 1 to 50 tons per day, however this is generally dependant upon the season. During dry period and rainy seasons, average transaction was 1 ton per day while about 50 tons in winter season. Generally most farmers grow vegetables in large scale during the winter season (DADO 2006).
The collection of vegetables starts from 12 noon to 6 pm everyday and sometimes 8 pm, if transaction is high. Farmers can deliver vegetables to the co-operative irrespective of whether they are members of the co-operative or not but charges are different. Traders pay fixed prices for vegetables, these prices are noted down in the notice board of the co-operative, and sometimes EC and/or manager fix the minimum price of vegetables in consultation with traders (photo plate 4).
Traders are mainly from the Narayangarh, Pokhara and Kathmandu who know the price of the vegetables in the regional and central market. The co-operative’s EC, manager
47 and most of the knowledgeable members are getting market information through different sources like telephone, friends who went to the regional market earlier and they also get information from radio and television broadcasting. Sometimes the knowledgeable members go directly to the EC and manager to oppose the latest market information. We can see in photo plate 4 there is fixing of vegetable prices and negotiations between traders and the manager. Manager writes down the prices of vegetables for that particular day.
Plate 4: Traders and manager are discussing to fix the price of vegetables and manager write- down the price of vegetable in market information board (Photo: Field work, 2007)
Farmers collect and weigh their vegetables in the co-operative and manager gives a token to farmers. The date, name of farmers, vegetables delivered and volume of vegetables are written in the token. Traders give the total money to the manager and after sometimes the manager will give the money to the farmers after deducting the service charge. The service charge amounts to 1 percent for co-operative members and 2 percent for non-members. I enquired about the service charge of vegetable to the manager and he clarified: This is the written law of our co-operative. Whoever is a member can get every benefit from the co-operative but those who are not members of the co-operative can only get this marketing facility with extra 1 percent service charge than members”. Asked why this discrimination, he added; “co-operative is member- centered, member-controlled and member-benefit, so that members should get more facility. Members paid entrance fee and each member buy 5 shares. Due to the member of the co-operative they get more facilities like training, excursion, irrigation system, income generating programmes, co-operative marketing, but non-members are getting marketing facility by paying extra one percent service charges.
Traders will sometimes give different prices because they sell vegetables in different destinations like Pokhara, Kathmandu. In this situation, all farmers give their vegetables to a trader who writes down a high price. About giving more prices than other traders, one Mr. Ram responded by saying: I am a trader and I want to get more margins from
48 selling these vegetables. So I take to Pokhara market because yesterday, there was higher price of vegetable than Kathmandu market. That is why I give higher prices to farmers. I have to go early in Pokhara because if I reach early in the morning then I can get higher price. If I reach late, then local production came in the Pokhara market, at that time I did not get good price. So I have to collect vegetables so fast and go to Pokhara.
GFVFPCA is the best platform for the traders and also to the farmers. The members and non-members of the co-operative have easy access to collect and sell their vegetables. The farmers also collect and sell their vegetables in this co-operative because they can easily sell their vegetables in a reasonable price in short time. Sometimes the farmers bargain and negotiate the price of vegetables with traders if farmers have vegetables of good quality and also when there is less supply and high demand in the market. I was enthusiastic to know this case and I asked Mr. Buddhi Bahadur Mahato the co-operative member in collection centre, why should you collect and sell your vegetables in the co- operative? He answered: I am cultivating vegetables in 8 Katta land like Cucurbits, Brinjal, Bean, Radish Okra and others also. I bring all my vegetables in the co-operative because the traders also come here. Traders write their rate of vegetables, sometimes minimum rate fixed by EC and/or manager. I bargain with the traders because I always bring good quality and graded vegetables and also I am a regular customer of Ram Prasad (trader), so he gives me a good price. The co-operative is a best place for us because we do not need more bargaining to the traders and we can sell easily our vegetables, in most cases this marketing activity takes only 30 minutes and this gives me enough chance to be home early. This co-operative saves our time and marketing costs. I am using that spare time in the field for vegetable cultivation and also to be with my family.
The traders come to the collection centre of the co-operative because they got ample amount of fresh vegetables with reasonable price. The traders transport vegetables to the wholesale markets in Kathmandu and Pokhara because they get good margins and because they get fresh and good quality vegetables. After the informal discussion at day time with the farmer Buddhi, then I asked trader Mr. Ram Prasad Shah in the evening, why should you collect vegetables from this co-operative because you have alternative of regional market (Narayangarh) and where do you sell this vegetables and why? He replied: I can easily get different types of fresh vegetables from this co-operative, get the good quantity that I need and since I give a reasonable price to farmers and they deliver fresh vegetables. I sell these vegetables in Pokhara and Kathmandu regional and central market because I can get a good price due to freshness, good quality and quantity of vegetables. This co-operative has easy way of accessing transportation facility because collection centre is near the highway and, I do not expect extra transportation cost than the Narayangarh market. On the other side, if I cannot get fresh vegetables in Narayangarh market I have to pay more money per unit price because I should buy vegetables from the middlemen not directly from the farmers/producers. If I buy from the middlemen of the regional market, then I should bear extra money because I should pay commission to them. Here I am free from middlemen. I can save money too which I should pay to middlemen in Narayangarh. Due to these reasons, I prefer to come here and collect the vegetables personally.
49 The process of marketing starts with the traders buying fresh vegetables from the farmers. The traders then sell the vegetables either in Pokhara or to wholesalers in Kathmandu where they can get more margins. Then, the wholesalers sell to the retailers, who then sell the products to the consumers. This is an example of a short marketing channel. In the case of regional market (Narayangarh), the middlemen collect/buy vegetables from the producers and sell them to the wholesalers of the region and sometimes to next party. Then wholesalers of Narayangarh market then sell to the wholesalers of Pokhara and/or Kathmandu, from where the goods are passed down to the retailers and then to the consumers. This is a longer marketing channel as compared to the co-operative marketing system. According to the marketing policy, if marketing channel is long, then consumers have to pay more and producers get lower per unit price and vice-versa.
The marketing channel in the co-operative is: Producer Traders Wholesalers (central market) Retailers Consumers
The mostly marketing channel in regional market, Narayangarh is: Produce Middlemen Wholesalers (regional market) Wholesalers (central market) Retailers Consumers
Above marketing channel, the co-operative marketing channel is shorter than regional market. Stakeholders (producers to consumers) get good margin in the shorter channel. Therefore, producers and traders get more margins and also consumers can get at cheaper price in shorter channel than the longer channel. So traders came in the co- operative. That’s why GFVFPCA is the junction of the traders and farmers where both parties get a benefit. In this co-operative the farmers are dependent to traders and traders are to farmers. It means this co-operative marketing system will be sustainable.
3.6 Leadership and management of GFVFPCA When a co-operative is set up, there are two things they have to do. Firstly, it is necessary to set up a committee of people who are going to be responsible for running a co-operative. Secondly, a set of rules and regulations (which, when set up an association, is called a constitution) have to formulate for operational activities.
According to GFVFPCA’s bylaws (2002), there is one main committee i.e. EC, one is Audit Committee and others are sub-committees. These committees are performed for steering the co-operative by good leadership and management to achieve the co- operative’s goals and objectives. The EC is a small number of people i.e. 9 people who represent the co-operative, and are responsible in operational activities, decisions making, and securing their aims and objectives. The EC meets regularly to discuss the organizational activities and division of organizational tasks. The EC is responsible, by law, for running the co-operative and making sure it achieves what it sets out to do; this is very important. If something goes wrong, or loose money, then the EC could be held personally liable. So it is a good idea to form their EC consisting of skillful personals in several aspects of management like finance, administration, publicity and so on.
50 Individual members may take on roles, such as President, Vice-president, secretary or member but remember although EC as a whole are legally responsible. The roles and responsibilities of EC are described in Box 3.
GFVFPCA’s EC consists of one President, one Vice-president, one secretary and six Executive Members. There are also other sub-committees with one coordinator and two members. These sub-committees support EC for organizational activities as well as also have authorities to control corruption of EC. EC is fully accountable towards General Assembly of each and every decision is taken by EC. EC should approve their previous decisions in General Assembly.
All the members together constitute the General Assembly which is the supreme organ of the co-operative. General Assembly elects all the important administrative committee i.e. EC and boards of the co-operative like, the EC, Audit and Inspection Board, as well as the Advisory Committee of the co-operative through secret ballot. So, General Assembly is the more powerful body in the co-operative which is not found in private business or any others organizations. Every members of co-operative is a voter of General Assembly and they have equal power called “one member - one vote”. Its roles and responsibilities are mentioned in Box 3.
The overall power of decision-making consists with its members on General Assembly but President is the vital post of the co-operative and s/he has more responsibilities to manage the co-operative. The roles and responsibilities of each member of EC have described (Box 4) in the GFVFPCA’s bylaws (2002).
There is also an Audit Committee, usually consisting of 3 elected members whose basic function is to keep a watch on the day-to-day working of the EC. It takes part in all the meetings of the EC and various work teams to keep itself acquainted with their working. It is this body which is supposed to take immediate action against all types of corruption in the co-operative. Thus, it has special power to ask the EC to convene emergency sessions of the General Assembly. More importantly, it can report directly to higher government bodies i.e. CTDO outside the co-operative. Essentially designed to act as a “watch-dog”, the mandate of the Audit Committee is usually for 3 years and its members can not concurrently hold positions in the EC or other committees on which it is supposed to keep a watch.
Therefore, the overall supreme organ of the co-operative is General Assembly and EC has administrative power in decision making process to achieve the co-operative goals and objectives. Audit Committee is the ‘watch-dog’ of the overall programmes and budgets and other sub-committees are to support for promotion of the co-operative. EC, Audit Committee and Sub-committees are fully accountable towards the General Assembly.
51
Box 3: Main roles and responsibilities of General Assembly and EC of GFVFPCA
Main roles and responsibilities of General Assembly • To elect and approve of resignation of EC • To discuss over the decisions are taken by EC and annual progress report on programmes and budgets, audit reports and others general and economic activities reports tabled by EC and approved with or without correction. • To discuss over the proposed programmes and budget tabled by EC and approved with or without correction and directed to launch that programmes and budgets. • To distribute the saving money according to its constitution and approved that. • To decide the maximum limitation of credit/loan and debit transaction. • To change its own regulations stand with Co-operative Act and Regulation. • To admit the audit with fixed the remuneration. • To discuss and decision with the agenda tabled by the President. • To approve and reformulate the regulations of financial administration and bureaucracy administration. • To discuss over the report of monitoring and supervision by the superior organization and taking a decision on that. • Approved the resignation of President. • Guide to the EC. • To maintain the decision of assembly with signature of President. • To do, if the co-operative will dismiss, united or divided; it must be as accordance to the co-operative rule and regulations.
Main roles and responsibilities of Executive Committee • Ensuring that the co-operative meets its objectives as set out in the constitution, and that it acts in the interests of the co-operative’s beneficiaries, • Ensuring that the co-operative has enough resources to carry out its work, and that all resources and assets are well-managed and used to meet its objectives, • Regularly attending EC meetings, and take decisions working jointly with other members of the EC, • Keeping up with the co-operative’s activities, and providing proper reports to members and supporters; particularly annual reports and accounts, • Ensuring that all the rules in the constitution are followed (e.g. elections, changing the constitution), • Ensuring that the co-operative meets all its legal responsibilities: such as equal opportunities, easy access for marketing, and market information. • Recruit the staff(s) as the needed for the co-operative, • Assign the roles and responsibilities to the formation of Sub-ordinate committee and staffs and also, monitor, supervise and evaluate to them, • Table the proposed programmes and budget for approval in assembly, • Conduct the approved programmes and budgets , • Conduct regular administrative and managerial works, • Maintain good relations to their respective governments agencies and stakeholders, • Deals their activities with their agencies, • Ensuring that premises and equipment are maintained and insured.
Source: The bylaws of GFVFPCA 2002
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Box 4: The main role and responsibility of President, Vice-president, Secretary and Members of GFVFPCA
President • Chair of all meetings and assembly, • Implementation of annual programmes, budgets and decisions approved by general assembly, • Monitoring and supervision with their staffs as mentioned in constitution, • Act the different works to achieve the co-operative ultimate goals and objectives, • Call the regular meetings of EC and assembly, • Conduct bank account, • Approved the resignation of Vice-president, Secretary and EC members. • Hire and fire of the staffs with the decision of EC, • Devolution the authority to Vice-president and/or other executive members and/or staffs, • Take an accountability of whole administrative and managerial activities, • Cast vote for decision if others members have equal in decision, • Overall planning and coordination of the EC and members of co-operative, • Act if any additional duty assigned by EC regarding organizational and executive matters,
Vice-president • Hold and exercise the powers of president in the event of president’s absence or disability, • Assist the president in carrying out his/her responsibilities, • Proper use of authority given by president, • Undertakes responsibility as required.
Secretary • The meeting will notify every one of the time, venue and date of the meeting and with an agenda, • Records and distributes minutes of executive meetings, • Circular letters as required, • Worked as directed by president, • Do regular administrative works, • Communication of information to and fro, • Watch the office and well manage of the co-operative, • Keep in safety place of official documents, • Maintain up to date books, income and expense reports and make available to members’ at all reasonable times, but remember that final responsibility for financial matters always rests with the EC as a whole. • Perform any other duties assigned by executive committee.
Members of the EC • All executive committee members required to perform any duties assign by Executive Committee, • Do best to achieve the goals and objectives of the co-operative. • General members of the co-operative • Must attend all assembly meeting and participate all decision making process of the co- operative, • Cast vote if needed, • Generate ideas for programs and support all programs with assistance where needed and attendance at events, • Attend Executive meetings, applicable subcommittee meetings, and wherever possible, programs.
Source: The bylaws of GFVFPCA 2002
53
Plate 5: The President of GFVFPCA, DFVFPCU16 and CFVFCF17 Mr. Purna Dutta Bhusal is addressing the challenges and problems of the co-operatives to the Minister of MoAC Mr. Chabilal Biswakarma (left to second); also with the Regional Agriculture Director of Regional Agriculture Directorate Mr. Bijay Kumar Mallik (left to first) and also to the Chief of DADO Mr. Chandrakant Devkota (left to third). Others are participants of the different line agencies. (Photo: DADO, 2007)
3.6.1 Relationship between GFVFPCA and its agencies Underlying all these tasks is the role of the EC of the co-operative, consciously motivating people (members and staffs) and coordinating their activities to achieve determined objectives. Management tasks are performed in relation to specific activities or a combination of activities and within a determined policy framework and a given socio-eco-politico-cultural environment (Gupta and Gaikwad 1982:30).
The GFVFPCA’s EC plays their roles in support of their members, staffs, stakeholders and line agencies. Obviously, this co-operative is member-ownership, member-controlled and member-benefited. This co-operative launched different types of awareness, income and management activities such as technical and management training, co-operative marketing, excursion. During field observation, it is found that the co-operative and its EC involved in the benefit for members by providing technical and managerial support.
As concern the relation with the trader and EC was also good. This co-operative has main activity collect the vegetables from farmers in collection centre and the traders came to buy those vegetables. Farmers have to pay certain administrative cost to co- operative by the service. In this observation, the EC and traders have good relations in
16 DFVFPCU= District Fresh Vegetable and Fruits Producers’ Co-operative Union
17 CFVFCF= Central Fresh Vegetables and Fruits Co-operative Federation
54 terms of the co-operative vegetable marketing. If GFVFPCA’s members in fact want to get higher price of their products, either they must promote traders of Pokhara or the co- operative itself must work on marketing. The market at Pokhara has more price than other markets.
The relation with the line agencies has well. District Development Committee (DDC), DADO, CTDO, Bharatpur Municipality are major governmental agencies and directly support in technical and managerial backstopping for this co-operative and Nepal Chamber of Commerce of Narayangarh (NCCN), DFVFPCU, DCU, District Vegetable and Fruit Traders’ Union (DVFTU) are supporting to promote vegetable production and marketing. In stead of good relation, there are losing opportunities from those agencies. Financial assistance, vegetable business promotion programmes, technical support, training and awareness programmes, exposure programmes, build up infrastructures are chance to get but the co-operative’s EC and other members should be pressurized to those agencies, which I visualized in my field works.
In conclusion, the co-operative groups are groups whose members commit themselves to the common purposes of maximizing their own and each other’s success. Its distinguishing characteristics are a compelling purpose to maximize all members’ productivity and achievement, holding themselves and each other accountable for contributing their share of the work to achieve the groupies goals, promoting each other’s success by sharing resources and proving each other support and encouragement, using social skills to coordinate their efforts and achieve their goals, and analyzing how effectively they are achieving their goals and working together (Thakuri 2008). The result is that the sum of the whole is greater than the potential of the individual members.
3.7 Problems and challenges of co-operative marketing system There are broad problems and challenges of co-operative marketing system in Nepal. The same conditions are also in Chitwan as well.
Common conditions There are weak conditions of co-operative marketing system in Nepal. Some of them are: lack of infrastructures like transportation, electricity, communication; lack of market and market information; lack of capital, technology and technicians; lack of processing activities, production and diversification of products; and lack of information flow about promotion and value of products (CTC 2006, DoC 2008).
Conditions of the co-operative organization and its members There are some conditions which have in the co-operative itself and its members. The members do not have same form of land distribution and ownership of members. Any specific organization does not have any specific products in favour of market development, diversity of production and products between same professional members. Each member has different objectives and has many professions and also has a lack of promotion and development of entrepreneurship. Their production activities are subsistence type. Organizations do not have long-term and short-term strategy for
55 sustainable development. Lack of leadership in development of the market oriented professionalism. Organizational structure regarding bureaucracy management, capital mobilization, information management is the main problems existing in the co-operative marketing system (Shrestha 1996, CTC 2006, DoC 2008).
Search for new Some co-operatives have been involving to promote their products in market since few years even they had some problems. They process their products and supply in competence market. Some co-operatives are success in this system to reach farm gate to competence market. But most of the co-operatives have lack of professional staffs and technicians, lack of capital, lack of infrastructures, lack of market management skills and lack of information system. So they could not make themselves as an entrepreneurship (Shrestha 1996, CTC 2006, DoC 2008).
Necessity of leading Primary level of co-operative like GFVFPCA needs to build the capacity to compete in open competitive market. The district level and central level of co-operatives should lead to cooperate and coordinate in these aspects to their primary level co-operative. So these higher level co-operative organizations should support to the lower level in economical, technical and market management; these are their responsibilities as a hierarchy (Shrestha 1996, CTC 2006, DoC 2008).
New challenges This 21st century is the age of globalization. It creates more complicated in the marketing of the products. Every client wants to new and good quality of the products in cheaper prices. Clients are aware from different sources like radio, TV, internet and other media. Markets are being competent, so the primary level co-operatives can not go away from these problems. That’s why every co-operative needs to aware the production of their products as per client need and interest. They should develop their organizations by improving knowledge and skills of staffs and technicians, adopting new technologies, developing good networking of market information, building the capacity to struggle in the globalization market economy and also developing socio-political circumstances. These are new challenges for co-operative organizations (Shrestha 1996, APO 1996, CTC 2006, DoC 2008).
The specific problems of the GFVFPCA are found, as: Marketing promotion Lack of infrastructures, market and market information, capital, technology and technicians, processing activities and diversification of products and lack of information flow about promotion and value of products are the main problems found in GFVFPCA.
Professionalism Lack of promotion and development of entrepreneurship, each member has subsistence production activities; and the organizations do not have long-term and short-term strategy for sustainable, lack of leadership to develop the market oriented professionalism to their members.
56
Leadership Lack of leadership is another problem of the co-operative. President Mr. Purna is active in comparison with others.
Management The management is the major shortcoming of the co-operative. Lack of knowledge and skills in the co-operative, poor orientation to members, adopting new technologies, and management skills of members have major problems of the co-operative for promotion of the co-operative and its members.
3.8 SWOT analysis for social inclusion of GFVFPCA The major problems and challenges of the GFVFPCA are also similar as above and also I interpret SWOT analysis of GFVFPCA that I found in my research.
Strengths • Strong entrepreneurial orientation in the co-operatives • Collection centre is nearby the highway and each farmers have access to transportation • Good road network from collection centre to overall in Nepal • Significant opportunities to sell vegetables and get high margin. • Activities of commercial farming due to the co-operative marketing system and adapted to working abilities of farmers with minorities groups • Pooling resource is the co-operative vegetable marketing for ethnic minorities • Democracy in decision-making • Solidarity Weaknesses • Poor orientation on the co-operative education • Inefficient, non-professional management • Lack of infrastructure development • Weak communication on market information • Illiteracy among members; especially ethnic minorities • Obsolete or inadequate equipments • Inadequate human resources in terms of their education and motivation (lack of the co-operative education among the members of the co-operatives) • Lack of short planning and absence of long-term planning of the co-operative for sustainable Opportunities • Accessibility of services to the poor, ethnic minority and other members but accessing the co-operative marketing service to the non-members also. • Adoption of new technologies • Technical and logistic support of governmental organizations • Extend the commercial vegetable areas and can increase the productivity of the vegetables • Availability of traders/middlemen in their own co-operative.
57 • Having fresh vegetables and its diversity • Modernization and development of agricultural sector as an important strategic orientation (like Five years plan and 20 years Agricultural Perspective Plan) of the state • Awareness present in certain minorities and disadvantaged groups on the advantages of employment through the co-operatives • President of the co-operative is also the President of district and central level co- operative union. This is the most opportunity to get facilities from external donor agencies because of his leadership. • Favourable taxation conditions Threats • Obsolete law; it should be reviewed • Prejudices, negative attitude towards the co-operatives due to the experiences from the saving and credit co-operative in context of Chitwan and also Nepal. • Ineffective popularization of the concept of co-operatives • Lack of quality control of inputs • Depend upon governmental organizations, no capitalize their own resources • Unstable market • Less transparency (corruption)
3.9 Summary This chapter has shown that the concept of co-operatives and history of co-operatives which made clear about the principles, norms and values of the co-operative. Co- operative is a democratic organization, so it is called “by the people, for the people and to the people”. But we looked in the rural ethnic minorities we could not get the concept of the co-operative. Therefore, there is needed to disseminate the knowledge for rural ethnic minorities for social inclusion.
Co-operative movement in Nepal happened since 1957 but still it is in developing stage. Government policy of Nepal has developed some rules and regulations of the co- operative and also developed structural criteria for registering the co-operative organizations. That made difficult for registration of their co-operative because rural people do not have easy access and also they could not meet those criteria.
GFVFPCA has a major activity is co-operative marketing. The co-operative marketing helps to the rural farmers for selling their vegetables in the collection centre but there are some discrimination of service charge and resource sharing for members and non- members of co-operative. Finally, there is tried to find out the SWOT analysis of the co- operative. So how people are institutionally excluded is shown in this chapter and the next chapter turns to how ethnic minority farmers are excluded from the co-operative or they want to self excluded and also describe who are excluded and who are excluded and why? It tries to find out the social inclusion and exclusion issues of the ethnic minorities in GFVFPCA.
58 4 ISSUES ON SOCIAL EXCLUSION AND INCLUSION
4.1 Social stratification in Nepal Nepal has a complex caste system and it consists of different ethnic, minority and indigenous groups18 (Dixit 2002).
4.1.1 Caste system in Nepal The Nepalese caste system is a complex and ancient system that has resulted a social stratification among the societies of Nepal. The caste system defines social classes by a number of hierarchical endogamous groups often termed as Jat. However, in Nepal people sometimes erroneously use word Caste to mean their race or ethnicity. The ethnic groups (physically Mongoloid, e.g. Gurung, Magar, Rai) are a different race from Hill Indo-Aryans (Khas), who are themselves distinct from Plains Indo-Aryans (Madhesis).
The king Prithvi Narayan Shah had unified Nepal some 240 years ago and garlanded the diverse social structure by saying that “Nepal is a garden of four caste and 36 races”. However, the regal code Muluki Ain (1854 AD) was written by ex. Prime Minister Jang Bahadur Rana after his return from his European tour. The Muluki Ain (1854) was a written version of social code that had been in practice for several centuries in Nepal. There is a fixed hierarchy between higher caste positions and lower. The lower caste positions are always oppressed by the higher. The civil code (1853/54) legalized Nepalese community into two castes `the caste whose water is allowed to remain pure' and `the caste whose water is defiled'. The second caste needed sprinkling of water at some places, while it did not require it at other places’.
Caste categories diverged from the four Varnas of the classical Vedic model (Hindu Varna System); they are Brahmin (wearer of holy chord), Chetri, Vysya and Shudra. Brahmin and Chetri and some of Vysya are touchable castes and some of Vysya and Shudra are untouchable castes followed by Muluki Ain’s codification. The above mentioned categories imply that Brahmin remains in the highest hierarchy in the Nepali caste system followed by Chetri, Vysya/Matwali (Non-enslavable alcohol-drinkers) and enslavable alcohol drinkers, touchable caste and lastly untouchable caste i.e. Shudra (Damai, Kami, Sarki, etc.).
Nepal is a country that practices diverse ethnicity, versatility in cultures and almost all the major religions of the world. National laws prohibit discrimination based on religion, sex, ethnicity, and so on. Article 11.2 of the Constitution states that 'No discrimination shall be made against any citizen in the application of general laws on grounds of religion (dharma), race (varna), sex (linga), caste (jat), tribe (jati), or ideological conviction (vaidrik) or any of these'. Paragraph 3 of the same article goes further, stipulating that
18 Hindu ideology of Nepal is discriminatory to two particular social groups in Nepal. These are the indigenous people (Janajati), on the basis of culture, and the low castes (Dalit), on the basis of untouchability. But in my research I divided indigenous into two categories:
ethnic/Janajati and indigenous (Tharu); and untouchable caste or low caste or Dalit has same meaning.
59 the state should not practice discrimination among its citizens (Laczo, 2003). Since 1950, after revolution for democracy, some social discrimination started breaking down and in present situation, it turned into open access for untouchable caste in public places but even this change could not abolish the concept of untouchables. According to Act 11(4) of the new constitution of Nepal (1990), however, discrimination against untouchables is made punishable. The civil code has also been amended accordingly. In Nepal, the caste system is being slowly eradicated by education and empowerment.
4.1.2 Minority people in Nepal A minority or subordinate group is a sociological group that does not constitute a politically dominant plurality of the total population of a given society. A sociological minority is not necessarily a numerical minority - it may include any group that is disadvantaged with respect to a dominant group in terms of social status, education, employment, wealth and political power. To avoid confusion, some writers prefer the terms "subordinate group" and "dominant group" rather than "minority" and "majority". Furthermore, a subordinate group whose members have significantly less control or power over their lives than members of a dominant or majority group. Not limited to mathematical minority: for example women, ethnic people, indigenous people and untouchable caste in Nepal. In addition, a group that experiences a narrowing of opportunities (success, education, wealth,) that is disproportionately low compared to their numbers in the society. There are so many examples the minorities people do not get to privilege different benefits.
There are some characteristics of minority groups which are: distinguishing physical or cultural traits, e.g. language; unequal treatment and less power over their lives; involuntary membership in the group (no personal choice); awareness of subordination and strong sense of group solidarity; and high in-group marriage.
There are different types of minority groups which are racial, ethnic, gender and religious groups. The racial groups are classified according to obvious physical characteristics, e.g. Brahmin (Aryan) and Matwali (Mongoloid); however, ethnic groups are differentiated on the basis of culture such as language (Matwali, Tharu) Gender groups: males are a social majority and women are minority; and religious groups who have a religion other than the dominant faith like Hinduism, Buddhism, Islamic.
4.1.3 Ethnic people in Nepal ‘An ethnic group or ethnicity is a group of human beings whose members identify with each other, usually on the basis of a presumed common genealogy or ancestry. Ethnic identity is also marked by the recognition from others of a group's distinctiveness and by common cultural, linguistic, religious, behavioral or biological traits’. According to the international meeting on the Challenges of Measuring an Ethnic World (1992), "Ethnicity is a fundamental factor in human life: it is a phenomenon inherent in human experience".
Max Weber proposed a definition of ethnic group, that became accepted by many sociologists; those human groups that entertain a subjective belief in their common
60 descent because of similarities of physical type or of customs or both, or because of memories of colonization and migration; this belief must be important for group formation; furthermore it does not matter whether an objective blood relationship exists.
From a broader perspective, the concept of ethnic groups relates to language, culture and territory; studies of ethnicity have focused on self-identification, ethnic consciousness and solidarity. An ethnic group is a recognizably distinct group of people embedded in a larger society (Urban and Sherzer 1992 in Gonzalez (N.D.):21).
In Nepal, there is so-called Matwali/Janajati, are recognized as one of the ethnic people. The Matwali/Janajati consists of Gurung and Newar are more privileged than Magar, Tamang, Rai, Limbu, Chepang, and others. But for the purpose of this study, the ethnic minorities consist of Janajati (Magar and Newar), Indigenous people (Tharu) and untouchable castes (Damai, Kami and Sarki).
4.1.4 Indigenous people in Nepal The term "ethnic group" is often used loosely, and in a similar fashion to "indigenous people". That’s why the definition of "indigenous people" is not always clear. The term indigenous people can be used to describe any ethnic group who inhabit the geographic region for a prolonged period and are predecessors of the group which have the earliest historical connection. Some formal contemporary definitions which have been offered and widely accepted for certain purposes are described below.
A definition as used by the International Labour Organisation19 (Convention No. 169, concerning the working rights of Indigenous and Tribal Peoples, 1989) applies to: both tribal peoples whose social, cultural and economic conditions distinguish them from other sections of the national community and whose status is regulated wholly or partially by their own customs or traditions or by special laws or regulations, and to peoples who are regarded as indigenous on account of their descent from the populations which inhabit the country at the time of conquest or colonization.
A description of Indigenous Peoples given by the World Bank (2003)20 reads as follows:
Indigenous Peoples can be identified in particular geographical areas by the presence in varying degrees of the following characteristics: a) Close attachment to ancestral territories and to the natural resources in these areas; b) Self-identification and identification by others as members of a distinct cultural group; c) An indigenous language, often different from the national language; d) Presence of customary social and political institutions; and e) Primarily subsistence-oriented production.
19 ILO (1989). http://www.ilo.org/global/lang--en/index.htm. International Labour Organisation, Convention No. 169, concerning the working rights of Indigenous and Tribal Peoples (Accessed on 5 May 2008) 20 http://lnweb18.worldbank.org/oed/oeddoclib.nsf/a7a8a58cc87a6e2885256f1900755ae2/acee14f0e07cd8f 385256d0b0073946a/ $FILE/ IP_evaluation_phase_2.pdf (Accessed on 6 May 2008)
61 The common characteristics of the indigenous peoples have common geographic origins; race; language; religion and faith; traditions, values, and symbols; literature, music, and folklore; nutrition; social and political organizations; an internal sense of distinctiveness; an external perception of distinctiveness; and shared territory and systems of production (Snipp, 1989 in Gonzalez (N.D.):22).
Accordingly, studied area; Chainpur as well as Chitwan district have also such caste system and consist of many ethnic, minority and indigenous groups. According to the population census 2001, total population of the Nepal is 23,151,423 whereas Chitwan district has 472,048 inhabitants and Chainpur VDC has 14,511 inhabitants. Figure 4.1 represents the percentages of ethnic, indigenous and untouchable peoples of Nepal, Chitwan and Chainpur respectively.
Figure 4.1: the percentages of ethnic, indigenous and untouchable peoples of Nepal, Chitwan and Chainpur
35
30
25
20 Nepal Chitwan 15 Chainpur 10
5 Percentage of population of Percentage
0 Ethnic people Indigenous people Untouchable people Representaion of groups
Source: DADO 2006, DDC 2007 and CBS 2008
In the Chainpur VDC, the Brahmin, Chetri, Janajati, Indigenous and untouchable castes are living closely together but they have their own religions and rituals. But professionally, most of the people are engaged in agriculture and livestock. The majority of the people grow cereals and some of them are engaged in vegetable growing and bee-keeping. The rate of adopting vegetable farming is increasing day by day because they have easy access to market and know-how of the technology of vegetable farming from different sources.
In this study, three types of ethnic minorities were considered as research units. They are ethnic or Janajati groups (Newar and Magar), indigenous groups (Tharu) and untouchable caste groups (Damai, Kami and Sarki). Some of them are adopting new technologies from extension agencies and some of them are adopted by leader (innovative) farmers. The minority farmers have access to markets; some of them sell their vegetables in co-operative markets and some of them sell in regional market i.e. in Narayangarh. People who are involved in the group of extension offices i.e. DADO and ASC; they can get the extension services because MoAC has implemented the pocket package strategy through farmers’ groups (DADO 2006). So, GFVFPCA is also one of
62 the groups of DADO, the members of this group are getting material and non-material services from the DADO. GFVFPCA has its own co-operative marketing system where the members are selling their vegetables facilities are discussed in section 4.3.
4.2 Socioeconomic characteristics of ethnic minorities The average age of the respondents is 40 years. The average age of members is 41 whereas non-members are 39. The average family size of indigenous members is 6.3, Janajati is 5.5 and Untouchable member is 5.5 whereas 6.9, 5 and 7 are the non- members of average family size respectively (Annex 4.1).
About 16 percent of the members (N=25) are illiterate, 28 percent are in primary level (1- 5 class), 40 percent are in secondary level (6-10 class) and 16 percent are in college level (> 11 class) whereas non-members of co-operative (N=25) is 64 percent in primary level and 36 percent in secondary level. The average education status of the non- members is lower than the member of co-operative (Annex 4.1).
Most of the farmers are dependent vegetable farming and then, priorities are cereals, wage labour and remittance. The average annual income of members (Annex 4.1) from vegetables is NRs. 23,000; Cereals NRs. 9,000; livestock NRs. 7,000 and wage labour and remittance NRs. 67,000 whereas average annual income of non-members (Annex 4.1) from vegetables is NRs. 16,000; Cereals NRs. 10,000; livestock NRs. 5,000 and wage labour and remittance NRs. 42,000 from the findings, it is clear that the income of the members is higher than non-members. The income from vegetables by members is used in the labour migration out of the country. So, vegetable farming is not just only their base of their livelihood but also a reliable source for further investment. Before establishment of the co-operative, the members and non-members were dependent upon cereals and now they changed their cropping pattern. They prefer vegetable farming with the adoption of new technologies of than cereals production. They are able to buy rice (most preferred for meal) and other food by selling the vegetables. Due to this, they do not have to struggle for food security and malnutrition problems.
The average land of indigenous members of the co-operative is 25 Katta, Janajati has 20 Katta and the average land holding of untouchables is 7 Katta whereas indigenous non- members have average 30 Katta, Janajati has 13 Katta and untouchables have 3 Katta (Annex 4.1). Untouchable caste of non-members can not enter into the co-operative because their average land holding is below 3 Katta. According to structural criteria of the GFVFPCA, there should be at least 5 Katta land for commercial vegetable farming and also to become a member of the co-operative. Due to this respondents from untouchable groups are excluded by the co-operative.
About 19 percent (N=129) minority members (ethnic, indigenous, untouchables) of the co-operative and 36 percent (N=25) of minority non-members use the market facility provided by the co-operative. Rests (Tharu non-members) use the open market at the Narayanghat and also in local market at Khairahani.
63 4.3 Issues on social exclusion of ethnic minorities in GFVFPCA
4.3.1 Access to co-operative and its membership Farmers’ groups Since long ago, there are formal and informal groups in rural areas. Formal groups are formed by different governmental organizations and informal groups are formed within spatially, fulfilling their defined goals and objectives which are not recognized by governmental agencies. The formal groups are co-operatives, water users’ association, forest users’ associations and farmers’ groups. Non-formal groups are Ama (mothers’) groups, religious groups, social works’ groups, community welfare groups.
DADO has formed 337 farmers’ groups of which 106 are under Khairahani ASC. There are 11 co-operatives and 15 farmers groups in Chainpur VDC (DADO 2006, CTDO 2007). The farmers’ group is pre-co-operative group because the DADO facilitated these farmers’ groups to mobilize and sensitize for agricultural development. After 5 or 10 years, the farmers groups were capable to take over record keeping, conduct saving and credit and income generating programmes, leadership and management skills. Then, they became eligible to register in co-operative at CTDO, which is legalized by governmental organizations.
When DADO or ASC formed a farmers group, the extension worker goes to farmer’s house or sometimes leader farmer(s) will come to extension worker to form a farmers’ group. During this process, the contact person of extension worker or leader farmer may exclude some of potential members because members of the groups will be represented with their circle. Exclusion of farmers begins right from here. Farmers who do not have access to the extension worker or leader of farmers will be excluded from such types of group formation, and ultimately excluded from the co-operatives.
As already mentioned, GFVFPCA was registered in 1995 with 15 people at ASC Khairani. Some of the leaders who initiated this group were from so called high caste (for example Mr. Purna Datta Bhusal, Rajendra Rijal, Nawaraj Bhusal, etc.) group. They contacted the extension worker and ultimately the group was formed as “Gramin Farmers’ Group, Chainpur-1, Chitwan”. At that time 15 people became a member of that group. During year 2002, that farmers group was enlarged with 25 members; upgraded and registered in CTDO as a co-operative under the name “Gramin Fresh Vegetables and Fruits Producers’ Co-operative Association (GFVFPCA), Chainpur-1, Chitwan”. At that time, those who were becoming members were close to one of the leader because he wanted to retain his possession as a president in the co-operative. According to co- operative’s principle number 1: voluntary and open membership (see section 3.1), the people can enter easily into the co-operative and are also free to go out at any time. But the principles, norms and values of co-operative are not known to all ethnic minorities; they became a member through a personal contact with one of the leaders. During formal and informal interview with minority members, all (100 percent) ethnic minorities said that they participated in the co-operative after getting orientation from one of the leader. Where as when discussed with non-members; they reflected that they have no
64 orientation and they also have no access towards the information on co-operative principles, norms and values and also do not know the GFVFPCA’s rules, regulations and so on. This provides an indication towards lack of co-operative knowledge and information dissemination among the non-members group. Lack of knowledge; personal interest; and access to the leader (political and power influence) are the key factors that keeps minority excluded from the co-operative.
Structural criteria of co-operative Co-operative Act 1992 and its Regulation 1993 clearly indicate the structural criteria (see section 3.4.1) for membership of co-operative. So according to rules and regulations of the co-operative law, people who want to become a member of the co-operative s/he should meet those criteria. Along this, bylaw of GFVFPCA has incorporated extra provisions (Box 5) to become a member. Those provisions are: people should be administratively within the Chainpur VDC, each person should pay NRs. 50 for entry fee and buy 5 shares (1 share = NRs. 100), people should have at least 5 Katta land for commercial vegetable farming and s/he should apply to the EC 6 months in advance to get membership. However, the admission of a member has to be sanctioned by the General Assembly of co-operative members at the proposal of the EC. The applicant must be personally present during this procedure.
Box 5: Additional structural criteria of GFVFPCA • Farmers must cultivate at least 5 Katta (0.17 ha) land for commercial vegetable farming. • Farmers must sell their products in the co-operative. • Farmers must pay entry fee NRs 50 and must buy 5 shares (1 Share = NRs 100). • Farmers must be a Chainpur VDC resident. • Farmers must obey rules and regulations of the co-operative. • Farmers must have same objectives, interest and achieving the goals of the co- operative. • Farmers must not involve in any criminal activities
Source: The bylaws of GFVFPCA 2002
Bound by Land Mr. Rajan Pariyar from an untouchable caste in an interview objected the rules of co- operative because he wanted to become a member but he had only 2 Katta land. He said: I have only 2 Katta land and I am doing vegetable farming on that land the year around. I sell my vegetables with the co-operative every time. I get marketing facility but I have to pay 2 percent of service charge which is costly for poor people like me. So I want to be a member of the co-operative but I have only 2 Katta land. The rule is not supportive for those farmers who have less land than that mentioned in rule. So, if it continues I will never get the membership of the co-operative. Therefore, the co- operative should change these rules for inclusion of potential members who are poor but are interested to become a member.
65 Not only Rajan but also non-member respondents’ from untouchable castes have less than 5 Katta land. Due to this land limitation, those untouchable people are excluded from co-operative.
Purchase of Share In an interview with another ethnic person, Mrs. Nirmala Rana, objected about the rules of co-operative. She is economically poor with five family members and her annual income is approximately NRs. 27,000 which is insufficient for her family livelihood, but she wanted to become a member of co-operative. She said: We are poor. Our income is low and we are surviving our daily life by vegetable farming and wage labour. I can not pay the entry fee (NRs 50) and also I can not buy 5 shares (NRs 500) at a time. I want to pay in installment basis. That’s why co-operative should reform those rules and they should include economically and socially marginalized people like our family.
The poor family can not pay NRs. 550 at once to become a member of GFVFPCA, because they have problems of many mouths to feed. For this reason, Mrs. Nirmala is double marginalized and excluded by caste and gender.
Information flow of membership Mr. Tilak Darai from an indigenous group in the interview objected the rules of co- operative. He wanted to become a member of the co-operative but he did not know the opening notice for application for new membership. Nobody told to him about the membership criteria and he said that not only he but none of his villagers knew about the membership of that co-operative. He said: I want to become a member but I do not know the actual opening date and duration of membership. Nobody knows in our community because nobody goes to the co-operative and nobody comes from the co-operative in our community to tell about the membership and co-operative.
All non-member respondents do not know how can they get membership of GFVFPCA. Therefore, the complicated rules and regulations of co-operative law and bylaws keep marginalized people excluded, and help further marginalized economically and socially.
Knowledge about co-operative Researcher carried out formal and informal interview with members and non-members on their knowledge about co-operative. 100 percent of them do not know the co- operative’s principles, norms and values and 92 percent of them do not know their co- operative’s objectives, laws, rules and regulations. Indeed, non-members know nothing about co-operative but members and quite few of non-members know about what co- operative does.
This is due to the lack of co-operative’s initiation to motivate the people for membership. In my observation, the president does not want to discuss about the co-operative and also does not provide a chance to non-member for membership if they are not in favour of him. The reason is to secure his presidentship as long as he can. In fact, the president of this co-operative is also the president of district and central union of fresh vegetables and fruits producers’ associations. He does not give much time to GFVFPCA.
66 Table 4.1 Respondents’ knowledge on co-operative (n=50) Social Members of co-operative Non- members of co-operative factor (n=25) (n=25) Knowledge about Co-operative Do not know the principle, norms, value 100% 100% Do not know co-operative 92% 100% objectives, rules and so on Know what co-operative does 100% 36% Source: Field research, 2007
However, the main responsibility of the co-operative knowledge is taken by CTDO; unfortunately, there are only 13 employees to handle whole district of 92,863 households. Chitwan district already had 359 different co-operatives; they have more workload (DADO 2006, CTDO 2007). CTDO gives awareness, management and leadership trainings to the co-operative members, EC and manager but it is limited and do not cover whole district. So they can not educate to every household because they have no human and economic resources. On the other hand, the DADO and ASC are somehow responsible to give information about co-operative. Indeed, same case of CTDO is in the DADO and ASC, when discussed about the ASC of Khairahani. There are 79 co-operatives and 106 are farmers groups in 9 VDCs with 19,669 households but there are only 3 employees (Ibid.). Therefore, they could not deliberate good agricultural extension service and knowledge about the co-operative to farmers. When I asked about these limitations to the DADO’s Chief, Extension Officers, CTDO’s Chief and his assistant and also with ASC Chief, Khairahani, they answered “it is not possible”.
Resource sharing In Co-operative Act 1992 at Chapter 6 in 27.1; Co-operative Regulation 1993 at Chapter 19.1, 19.2, 19.3 and 20 (GoN 1992, GoN 1993) and GFVFPCA’s bylaw 2001 at Chapter 39 it is clearly indicated about the resource distribution and sharing (GFVFPCA 2002). 25 percent of the total profit of the whole year is allocated for reserved fund, the remaining 75 percent of the profit should divide into 15 percent for bonus fund for members, 65 percent for security fund, 5 percent for staff bonus fund, 5 percent for co- operative education fund, 5 percent for co-operative development fund and remaining 5 percent should be allocated to loss gained fund. So, it is clearly indicated that only 11.25 percent of the total profit will return to members as a bonus. But in the case of GFVFPCA, this bonus money is also used in co-operative marketing, infrastructure development and other income generating activities. I found that 92 percent of the ethnic minority members do not know these rules and regulations of the distribution of resources. While I shared this with one of the interviewee from one untouchable caste member he showed his furiousness and also become angry about the issue of resource allocation. He claimed that the EC is not transparent about the whole accounting system.
On the other hand, commercial farmers thought that if they become a member of co- operative they only get 11.25 percent as a bonus but if they sell their products in the market then they can get a 100 percent margin which is theirs. One can take that money
67 him/herself and does not need to distribute that margin to others. That’s why commercial farmers do not want to become a member because of resource sharing system of the co- operative.
Time availability and marketing cost When discussed about the commercial farmers among non-members, they want to be free because they do not want to spend time on taking a position in the co-operative. They also do not prefer to become a member of the co-operative because they have to spend a lot of time. They want to spend more time in their farm. This is the case commercial non-members do not want to become a member of co-operatives.
In an informal discussion with EC of GFVFPCA who spent a lot of time to co-operative, why do you spend your time to co-operative as a volunteer? All EC members had same answer: They got social status; everybody respects them, linkage to traders, stakeholders and line agencies, access to stakeholders and line agencies. It is quite interesting to know about the experience of the president from the co-operative. Excerpts of interview are presented in Box 6.
Box 6: Experiences of Mr. Purna Dutta Bhusal on co-operatives
After 20 years’ of teaching experiences in English, I started a dairy co-operative on 1992 February 05 in Chainpur that was first dairy co-operative in Chitwan. I involved in different activities on dairy. I established and strengthened district and central level of dairy co-operative union. I did so many activities for supporting to dairy farmers. So, everybody knows me that I am a pioneer of dairy co-operative in Chitwan district. Then I established a vegetables farmers’ group in Chainpur on 1995s a farmers’ group. Then I formed this farmers’ group into co-operative on 2002. I inspired to form a vegetable co- operative from Chief of ASC, Mr. Yoga Prasad Kharel, when he presented the analytical paper on price information of vegetables in different markets of Nepal at DADO’s workshop. At that time, we (the innovator of vegetable farmers) were taken a workshop in DADO then, we agreed to establish vegetables’ co-operatives in own areas. After a couple of months, we registered 8 vegetables’ co-operative in Chitwan district under my leadership. Then we formed district federation of vegetables’ co-operative on 2002 and now we have a central union. I am a President of GFVFPCA, district federation and central union as well. So I involved in different hierarchy of this sectoral co-operative which is lead by me because these organizations are formed by my initiation and other co-operative representatives promoted me. So my co- operatives’ friends give responsibilities to lead and manage all. Due to the experience on dairy and vegetable co-operative, I know the co-operative law and regulations and I can talk with policy makers to support for grass-root farmers. I have access from village level to central. I become able to address to farmers’ problems in village level to central level and I have easy access on dealing with minister because of the post of central union.
Due to the social respect and to establish my career, I am involving voluntarily in this sector. So I am proud to be a follower of co-operative.
68 Member of co-operative from Chainpur-2, Mr. Raj Kumar Chaudhary has own experiences towards co-operative and his vision on the co-operative is: I became a member of this co-operative on 2062/8/12 B.S. (27/11/2005). Before becoming a member of co-operative, I had to go early in the morning (2-3 am) by local bus in Narayangarh market to sell vegetables. I had a problem for marketing at that time. I could not get good price if I could not contact with middlemen. If I was able to contact the middleman I could sell fast and get a reasonable price but I should pay commission to him. I should pay to him 7 percent of commission of total value of vegetables and he also graded my vegetables and he deducted 3 to 5 Kg out of the 100 Kg bag because there was some damage due to transportation. So in an aggregate I spent 10-13 percent of my money of total value of vegetables for marketing. Besides that I should pay for myself two-way bus fare and one-way fare of vegetable bags. I ate each time my breakfast in Narayangarh market because I have to stay over there about 6 to 10 hours. In totality I spent a lot of money and time for vegetable marketing when I went Narayangarh. After becoming a member of this co-operative, I usually go to 3 PM and I will be back after 1 hour for selling vegetables in co-operative. The means of transportation is bicycle and sometimes rickshaw when vegetables are in high volume. The traders are in the collection centre and they put the price on the vegetables. There is no need of commission and there is no damage problem but I should pay only 1 percent of service charge to co-operative. Ultimately that service charge is useful for our benefit also. Here I want to say that I save time and money when I sell vegetables in co-operative. Now, I am a student of 12-class. In those days, when I needed to sell my vegetables in Narayangarh market, I could not join college after 10-class (School Leaving Certificate) because college starts in the morning and at that time I had to go to sell my vegetables in Narayangarh. But now things are changed, I go to the co-operative market in the evening and during morning I go for my study. So I am happy to be a member of this co- operative. Therefore, the co-operative is better than others.
4.3.2 Access to co-operative marketing One of the major activities of GFVFPCA is co-operative marketing. This co-operative marketing helps farmers to sell their vegetables. Farmers are getting a reasonable price. The co-operative has developed rules such as service charge for getting this facility. The member should pay 1 percent and non-member should pay 2 percent of total value of their vegetables to the co-operative as a service charge. See details of co-operative marketing system in GFVFPCA in section 3.5.
When asked about the co-operative marketing system in GFVFPCA to the non-member Mr. Krishna Sunari. He answered: I am not a member of that co-operative but I always carry my vegetables in co-operative because there is good market facility. I do not loose more than 1 hour for selling. But I object the service charge; we have to pay 100 percent more service charges being a non-member of that co-operative. The members have to pay 1 percent of total value of vegetables whereas we have to pay 2 percent. So this is discrimination to us. It should be minimized and/or they (EC) should include us in the co- operative. They never told us to become a member of co-operative.
69 Variety of vegetables to be collected The traders take all the vegetables except than tomato, cauliflower and cabbage from the collection centre of GFVFPCA because transportation problems; tomato’s crates/baskets were not available, and cauliflower and cabbage were high volume and low margins, so traders did not want to take those 3 types of vegetables. But most of the non-members of indigenous groups usually produce tomato, cauliflower and cabbage, so they could not sell their products in the co-operative. So, due to vegetable they produce, they are excluded from the co-operative. However, majority members are cultivating other than these vegetables because they know what traders want to take from the co- operative.
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Plate 6: The marketing activities on GFVFPCA’s collection centre 1) Weighing the vegetables 2) loading the packed vegetable in truck nearby highway 3) Truck is loaded and going to central market Kathmandu (Photo: Field work, 2007).
4.3.3 Access to market and market information Narayangarh market is a regional market hub of farmers for selling vegetables. There are other two local markets called Tandi and Khairahani but these are small markets. Narayangarh is 16 Km far from Chainpur whereas Tandi is 3 Km and Khairahani is 2 Km. The members and non-members of the co-operative have access to the co-operative market which is nearby of their farms. Most of the non-members do not know the co- operative and its functioning in market system, and they do not want to risk bringing their vegetables to the co-operative’s market facility. They perceive there is risk of not getting a buyer in the co-operative’s market facility. Some of non-members do not know even how much price they have to get and also have no access to means of transportation at the day and evening time. They never visit the co-operative so they felt these types of risks.
When asked about market facility and functioning of the co-operative, one non-member from indigenous group of Chainpur-3, Mrs. Motimaya Darai responded that: I do not know what the co-operative does? As I heard there is less presence of traders and there may be a problem of vegetable selling. One another thing is if I want to sell there then I have a problem of transportation. I do not have my own transportation means. But I can easily go to Narayangarh market because everyday the local bus comes here in the 2-3
70 am morning and I go to market to sell my vegetables and there is no risk of not getting a buyer over there. I can sell easily whether the price is low or high. Sometimes I get high price and sometimes low price but I can sell easily. Therefore, I feel more comfortable to go Narayangarh market than to the co-operative.
Plate 7: Non-members’ market place and its view 1) The regional market i.e. Narayangarh and 2) Vegetables shop on Narayangarh (Photo: Field work, 2007)
Narayangarh has a good road network for whole country. This place is a centre of the country. The vegetables are collected from neighbouring districts as well and sometimes Indian vegetables are imported by merchants of Narayangarh. So, the price of the Narayangarh market is more fluctuating and low per unit price than other regional and central markets (AEC, 2007)21. The farmers who sell their vegetables in the Narayangarh market, they go blindly because they do not know the price of each vegetable of that day but some of them know the price of previous day. But in the co-operative, the farmers know the price beforehand because they have different sources: a) the traders list down the price of vegetable on the notice board of co-operative; b) most of the farmers know the price of Narayangarh market because some of other farmers told them and also co- operative members also relay on the market information to the farmers; c) farmers can compare the price of vegetables in different places like co-operative, Narayangarh and Kathmandu. Radio Nepal and Nepal Televisions (TV) and other radio and TV broadcast the price of vegetables in different places comparing the price of yesterday and today’s morning; d) the EC and other members can disseminate the market price to the other farmers. However, all members from co-operative can bargain and get benefited by getting the tentative price information of vegetables of that day beforehand and they can decide to whom to sell the products in markets, compared to non-members who sell their product to Narayangarh without knowing price information beforehand often getting less.
The members and non-members of co-operative can get market price information but the farmers who sell their vegetables in the Narayangarh may not be able to get price
21 http://www.aec-fncci.org/Publication/. (Accessed on 13 May 2008)
71 information. The market information on co-operative more reliable than the Narayangarh because the transaction is done in Narayangarh at the morning and co-operative is in the evening. Therefore, the co-operative’s ethnic minority members (N=25) and ethnic minority non-members (N=9), who sell their vegetables in the co-operative, total 68 percent (N=50) get comparatively better price than Narayangarh because they get updated market price information before their transaction. These price information linkages strengthened their bargaining power to determine prices at the farm gates.
4.3.4 Access to road and transportation Chainpur VDC has two streams named Ladari and Bindabasini Kholas. In the rainy season, the ward numbers 4 and 5 and some areas of 3, 6, 7, 8 and 9 are affected by streams for vegetable transportation. So, people of the ward numbers 3 to 9 do not have easy to access to the co-operative in rainy season. At that time, they used to go local market called Khairahani which is near to their farm. The co-operative is situated in ward number 1, Jyamire nearby east-west highway which is easily accessed by the ward number 1, 2 and some areas of 3, 6 7, 8 and 9 in whole year.
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Plate 8: The means of transportation is rickshaw, mostly co-operative members used it (Photo: Field work, 2007)
Most roads are graveled and some of are dirt roads in Chainpur VDC, so in the rainy season farmers have problems for transportation to bring their vegetables to the co- operative. However, farmers preferred to take their vegetables to the regional market. During other season, the local bus arrives in their place early in the morning around 2 to 3 am and they got that bus for selling their vegetables in regional market and they came back after 6 to 10 hours depending upon market situation. Co-operative marketing opens from 12 noon to 6 PM, so at that time, the means of transportation is only bicycle and rickshaw. Bicycles and rickshaws are even difficult to transport in the rainy season a cross the Ladari stream. They do not get other means of transportation at day to evening time. That’s why; non-members are excluded due to the lack of means of transportation throughout the year.
From the survey, it has been found that about 64 percent (N=25) non-member respondents do not have access to the co-operative because of road and transportation during rainy season and only 36 percent (N=25) has easy access to the co-operative.
72 Who have access to road and transportation, sell their vegetables in the co-operative and others go to local and Narayangarh market.
4.3.5 Access to technology and extension services The DADO’s service centers at the field level provide production-oriented and market- oriented extension services to the farmers. DADO is a governmental agricultural extension office who has a mandate to technologies dissemination to the farmers at field level (DADO 2006). DADO has 4 branch offices; each branch is called Agriculture Service Centre (ASC). Each ASC has 3 to 4 extension workers depending upon workload (DADO 2006). Chainpur VDC and GFVFPCA are under the Khairahani ASC. There are three extension workers. The mandate of ASC is to dissemination new technologies to the farmers through a group approach providing hardware, software and orgware (Leeuwis 2004, DADO 2006). Policy of government is support to people who are involved in farmers’ groups formed by DADO and agricultural co-operatives formed by CTDO. The groups and co-operatives are getting but individual people can get only technical knowledge if they approach to the government agencies like ASC or DADO or CTDO. That’s why the GFVFPCA and its members are getting such facilities by ASC, DADO and CTDO but non-members do not get these services. Hardware includes materials, inputs, irrigation scheme, agricultural equipments, construction of a collection centre along with weighing machines/equipments; software includes training, knowledge and skills of technologies; and orgware includes support through organization and make a farmers’ group strengthen to become a self-sustained co-operative (DADO, 2006).
One of the members of GFVFPCA Mr. Laxman Chaudhary says about the technology and extension services: when I became a member of this co-operative I received different type of trainings like co-operative’s sensitization, agriculture and vegetable production and marketing; our 16 indigenous group of members got a co-operative irrigation scheme from DADO, that cost was NRs. 0.2 million; a collection centre was built by financial assistance from DADO, DDC and VDC and now we are planning to build our own office and collection centre on our own land. Besides these, we are getting different demonstrations of agricultural extension packages, intra and inter- district excursions, knowledge, skills and management training by DADO and CTDO. I can get easily extension services from DADO and ASC. So, we are highly benefited from the co- operative services which we could not get before. This is only because of becoming a member of co-operative.
To receive an opinion about the services from non member group, I interviewed non- member of indigenous group Mr. Ramji Darai about the technology and extension services; he said: I do not know who is working as an extension worker in this area and what s/he is doing. Even I do not know where the ASC and DADO is. I can get some information from my neighbours and sometimes with the agro- centre22. That’s why we are depending upon neighbours and agro-centre. I do not get any support from extension offices.
22 Agro-centre is a private business where farmers get input supply for agricultural productions. Usually agro-centre is called agro-vet. Agro-vet means input supply of the agriculture and livestock in same shop.
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Due to this, all members (N=25) are close to the extension workers and they are getting technologies, but non-members (N=25) are not. So, non-members are excluded in technical inputs from the government agencies due to government policy.
4.3.6 Access to government agencies and stakeholders Large numbers of agencies and stakeholders are involved in agricultural activities especially vegetable production and marketing. DADO and ASC are directly involved in the technology transfer for improvement of production and productivity of the crops. CTDO provides knowledge and management skills to the co-operative. Traders and middlemen are involved in the marketing. Vegetable growing farmers interact with each other and they are sharing their knowledge as farmer-to-farmer extension (Dongol 2001). The research station and education are also providing some new technologies to the farmers through extension offices and their extension workers (Dongol 2001).
Plate 9: President of GFVFPCA showing the existing conditions of field of vegetable to IAAS, Asst. Prof. Mr. Yubak Dhwoj GC (Entomologist) and German Researcher (Photo: Field work, 2007)
Plate 10: Extension workers Mr. Bishnu Neupane is talking with adopting technology and marketing of vegetables with farmers Mr. Krishna Sunari (Photo: Field work, 2007).
74 The members have direct links with all agencies and stakeholders through their co- operative, but non-members have only contact with traders and middlemen of the regional market and sometimes with governmental agencies. It has been observed in the field a good networking of different line agencies like DADO, ASC, CTDO, DDC, VDC, Agro-centre, traders, farmers-to-farmers with the co-operative and its members. But in individual cases, there is not such networking of different agencies. Non-members are mostly involved with traders, middlemen, agro-centres and farmers-to-farmers activities. Due to this reason, the non-members are excluded from such services of different stakeholders and line agencies.
4.3.7 Attitude towards co-operatives The respondents were asked questions to measure their knowledge and attitude towards co-operatives (Annex 4.2). Some of the questions were: What do you think about co- operative? How would you define a co-operative? What a kind of organization is it? How does it work? What does it do?
What co-operative is? A summary of findings indicates that 12 percent of the ethnic minority members (N=25) of GFVFPCA do not know about co-operatives, 68 percent know that the objective of the co-operative is to help its members and 20 percent know this objective and also who owns a co-operative whereas 64 percent of the minority non-members (N=25) of GFVFPCA do not understand co-operatives and 36 percent know the co-operative is facilitating vegetable market by providing the facility (Table 4.2).
Table 4.2 Respondents’ knowledge on co-operative (n=50) Social Members of co-operative Non- members of co-operative factor (n=25) (n=25) What Co-operative is Know the Co-operative activities and owns a co- operative 20% 0% Know the objective is to help to 68% 0% its member Know co-operative is doing co- - 36% operative marketing Do not know 12% 64% Source: Field research, 2007
About 20 percent of members answered that the co-operative is owned by its members and has the objective to help its members. Some of them did not give any further details of how the co-operative works, and they did not mention any co-operative principle and only one of them answered about co-operative practices or principles. Repeatedly mentioned fact was that co-operatives give out a dividend and/or that the profits are returned to the members. None of the non-members could answer what actually a co- operative is? A typical answer in this group was: ‘It’s a group of people working together for a common goal. A vote of the members elects the EC. Decisions are carried out by EC. It provides co-operative marketing and other services for socioeconomic development of its members.’
75 As already been discussed some issues in section 4.3.1; Information about the co- operative is major issue that causes the exclusion of the non-members from the co- operative. Still most of the members do not know the co-operative principles, norms, values and law and regulations either. That’s why GFVFPCA has a question about its sustainability.
Issues on trust towards co-operative Two members and all non-members of the co-operative answered that they had no idea about what a co-operative is. 12 percent of non-members (N=25) thought that a co- operative is just like collection centre and 56 percent of non-members thought that a co- operative is a profit making organisation just like any other business organization or shops. The majority of this group did not mention who owned the co-operative. No one mentioned any clear advantage of belonging to a co-operative, but all respondent from the non-members had negative things to say about it.
Typical answers were: ‘An organization, I do not believe in them and want to stay free and not get involved with anything like that’; ‘Do not belong to any co-operative’; ‘Co- operative is a fraud organization like Sahara Co-operative in Chitwan’. Look at Sahara Case in Box No 7. From the Sahara case, majority of the non-members do not want to become a member because of bad impression towards co-operatives.
Box 7: The Case of Sahara Saving and Credit Co-operative in Chitwan District
One non-member respondent of minority group told me the details of Sahara co-operative, and I describe them here briefly. The Sahara Saving and Credit Co-operative was located in Bharatpur, Chitwan. The objective of that co-operative was to provide loan at low interest rate to clients and collect the money by providing higher interest rate from public than other co- operatives and banks. That co-operative had not only saving and credit programme but it had launched school, development programmes and income generating programmes in rural areas. Due to that, Sahara was famous in Chitwan. People thought that Sahara was a more strengthened and sustainable co-operative in Chitwan. So they deposited their money in that co-operative because of getting a higher interest rate. After few years, the founder of that co- operative took around NRs 10 million (Approximately 0.1 million Euro) and fled to USA. Nobody knew that founder was fraud and absconding. All investors of that co-operative lost their money. The case is running in court but it’s their bad experience and gives a co-operative bad image so nobody wants to become a member of such co-operative. Non-members do not know that GFVFPCA activities and rules are different or better, so they are not interested because they think it might be the same as Sahara case.
One non-member of Chainpur-3 from indigenous groups Mr. Mangara Darai, did not trust the co-operative and traders because he was suffering from credit and he got his money back after one and half years. He said that: During my first day in co-operative, I carried Okra vegetables. I gave my vegetables with credit to the trader. After that, he never came to the co-operative. Not only me, there were others farmers also suffering from this case. We requested to co-operative’s EC to pay back our money; they tried and also our
76 friends searched that trader. Finally, after one and half year we got money on installment basis but we have struggled to get that money. So I never trust traders then, I never have been in co-operative after that. I also told to my neighbours about my case. Now we never trust traders, so we prefer Narayangarh market than to go to the co-operative.
The non-members of indigenous groups feel that co-operative is not a good place for vegetable marketing to them because of credit business. This is more problematic for small farmers who have limited resources for their livelihood. These small farmers are fully dependent on vegetables, cereals and livestock for their livelihood. They grow products, sell and again grow. The benefit from the cycle is for their living. Selling products in credit hampers this cycle.
Getting better price The largest group, 68 percent of members (N=25) and 44 percent of non-members (N=25) answered that co-operative is an organization with the goal of giving its clients better prices from collection centre. However, they did not mention that members own the co-operative. Some typical answers from this group were: ‘An organization holds prices up of vegetables by knowing the market information’; and ‘They help you to be able to sell easily vegetable products’.
4.3.8 Perception towards co-operatives After 1990, democracy has been established in the country. A new Co-operative Act was promulgated in 1992. The Co-operative Act, 1992 and its Regulation, 1993 provided a liberal and democratic framework for co-operative societies (GoN 1992, GoN 1993). Before 1990s government formed a concept of co-operative named in “Sajha”. The concept of Sajha (see section 3.2.1) to uplift the socioeconomic development of the poor people but it was purely managed by government. Due to weak management, managers had low accountability with their members. Lack of transparency was the major factors to abolish those government managed co-operative. Those Sajha did not support to the poor farmers but they were established like feudal and oppressive. Impressed by Sahara case, the ethnic minority non-members in co-operative area perceive these state-co- operatives as bad, and they think that GFVFPCA is also like Sahara and Sajha. Still they do not know this co-operative is farmers managed and s/he also owns the co-operative. One of the reasons for this is because of lack of co-operative knowledge at grass-root level. 56 percent of the respondents (N=50) perceive that these co-operative are fraud. So, they did not want to become a member of co-operative.
4.4 Effects of Social inclusion to ethnic minorities Co-operatives are member-centred organizations where the target is only to obtain benefit for their members. In the light of limited local experience of co-operative organization, debates in the late 1980s and early 1990s were concerned with the possibilities and limitations of co-operatives as partial solutions to unemployment and vehicles of social transformation (Lupton 1991 in Erasmus, 1994:1). GFVFPCA makes the small and marginal farmers to get organized and simplify their path for their
77 socioeconomic and politico-cultural development. It changes the rural development process by sustainable socioeconomic development and social transformation. That’s why rural marginalized people can also benefit by supplying goods and services (in this case vegetable) to the urban people. They can benefit by getting organized in a community owned enterprises as co-operatives through the co-operative norms, values and principles.
4.4.1 Social impact of co-operatives The driver for farmers to organize themselves is the collective action, rather than individual action, provides a better opportunity to gain a suitable response to their needs (Bosc et al. 2003 in Wennink and Heemskerk 2007:36). Therefore, objectively the GFVFPCA is also formed of small marginalized farmers from various ethnic groups for obtaining better socioeconomic development. The ties within an ethnic group (‘bonding social capital’ of co-operative) may be enhanced beyond a given group and may include other farmer groups or co-operatives (‘bridging social capital’ of unions, federations) to develop collective action at other levels (i.e. primarily, district or central) or in other areas (inter-intra district). Finally, GFVFPCA may develop their relationships with government authorities DADO, ASC, as well as public CTDO, VDC, DDC and private agencies district and central level co-operatives, in order to influence decision-making towards the well- being of their members (‘linking social capital’).
Figure 4.2 presents the different forms of social capital. This is considered a crucial asset in improving the livelihood system and hence to overcome social exclusion, since norms within an organization may still hamper certain groups (such as ethnic minority groups) from accessing services (Bosc et al. 2003 in Wennink et al. 2007:36).
Figure 4.2 Bonding, bridging and linking social capital
GFVFPCA’s Linking National/Central level activities and co-operative union stakeholders Bridging
GFVFPCA’s Linking District level co- activities and operative stakeholders federations, traders
Bridging
GFVFPCA’s activities and Linking Primary level stakeholders co-operatives Bonding
From the Figure 4.2, bonding social capital of GFVFPCA is strong between vegetable producer groups and exploring and realizing marketing opportunities. The rules of GFVFPCA state that it must spend 15 percent of total profit to social work, so it motivates to each member. Bridging social capital is relatively strong in the organization of a platform of traders and farmers in collection centre for vegetable marketing, and
78 coordinated with district and central co-operative organizations for addressing their voice. But GFVFPCA has still lack of adequate facilities. Linking social capital is relatively strong because GFVFPCA has strong coordination with public and private organizations in different levels which helps to promote the GFVFPCA’s activities and ultimately, to improve livelihoods of its members.
Along social capital, the members of GFVFPCA are involved in different social activities. These are building the irrigation scheme, building the office and collection centre, taking different management and technical training, excursion on different places, training on health, education, environment awareness. Those activities improved their social status and knowledge like awareness of ethnic minorities, awareness of population and family planning, use of proper management and utilization of natural resources. People become more consciousness on health, children education, sharing of ideas and ultimately, working in group approach. This awareness makes the ethnic minority farmers interested to access service provided by organizations i.e. GFVFPCA and other line agencies and stakeholders.
4.4.2 Economic impact of co-operatives Members and non-members respondents are taken from vegetable farmers and they all were ethnic minorities. The members are mainly depending on vegetables and non- members are more producing cereals than vegetables. The average annual income of ethnic groups (Table 4.3), members from indigenous earn NRs. 116,000, Janajati earn NRs. 143,000 and untouchable caste earns NRs. 60,000 whereas non-members earn NRs. 111,000, NRs. 80,000 and NRs. 27,000 respectively. The comparison shows that the annual income of non-members is lower than of members of the co-operative. This is due to the fact that the members are fully dependent on commercial vegetable farming for a stable high price but non-members are dependent on mixed farming like cereals, vegetables and livestock with uncertain price. Ellis (2000) defined livelihood is: “Rural livelihood diversification is defined as the process by which rural households construct an increasingly diverse portfolio of activities and assets in order to survive and to improve their standard of living” (2000:15). But the result shows that co-operative members are fully dependent on the commercial vegetable farming and they improve their standard of living whereas non-members are dependent on diversified farm activities.
Table 4.3 Annual average income of respondents (n=50) Members of co-operative (n=25) Non- members of co-operative (n=25) Economic factor indigenous Janajati untouchable Total indigenous Janajati untouchable Total Av. Income (NRs.' 000) Av. Income 116 143 60 319 111 80 27 218 Source: Field research, 2007
It was observed that average annual income of members and non-members varies due to internal and external factors. Internal factors of members are self-motivation in vegetable farming, know-how of vegetable farming and capacity to develop commercial
79 scale of vegetable production; and external factors are market access and facility, extension services and support from co-operative. But non-members have less availability of these access and facilities. Due to that, there is variation of income per household in ethnic minorities. The members invest the income from vegetables for labour migration out of country. As a result they also receive income from remittances. So their income is higher than income of non-members.
The GFVFPCA provides countervailing force and create efficiency in supply chain of the ethnic minority members (N=25). Along this, access to market, getting market information, enhanced bargaining power and knowledge of alternative markets, reduced transaction/marketing costs are major economic advantages of ethnic minority members.
Plate 11: Interview with non-member Bisnu Pariyar (untouchable caste) and interacting about co-operative and vegetable production technology (Photo: Field work, 2007).
Co-operative is restructuring the rural economy by diversifying agricultural production and promotion on income generating non-farm and off-farm labour activities of members. The members of co-operative, individual household increase their income, maintaining the physical facilities in house and develop the saving habit. Ultimately, the living standard is improved. This affects their capacity to face economic shocks, business perspectives and practices and farming perspectives and practices.
The economic impact is directly related on social impact which has been mentioned in section 4.4.1. The result of income increase, the people are getting self awareness in health, education, population and family planning, management and utilization of natural resources and adopting new technologies on vegetable farming.
4.4.3 Political impact of co-operatives A co-operative gives people a means to organize for effective political action. They can meet to develop priorities and strategies. They can send representatives to meet with
80 legislators and regulators. These persons will have more influence because they will be speaking for many, not just for themselves.
The co-operative empowered ethnic minorities in bargaining power; in marketing; leadership in management; institution development; capacity and capability on technologies adoption. The GFVFPCA consists of 3 (one in executive member, one in account committee and one in training sub-committee) from ethnic minorities; they represent whole ethnic minority farmer members of the co-operative. They talked to the problems of ethnic minorities in co-operative and they give a pressure to address on the sustainable socioeconomic development of the ethnic minorities. They rise in the meeting of EC to conduct the income generating activities and develop basic infrastructure for vegetable farming and marketing. Due to this, they got an irrigation scheme named Bahera Co-operative Irrigation Project, Chainpur-1, Chitwan; FFS on vegetable (Integrated Pest Management (IPM) in potato), training on co-operative and vegetable production and marketing and excursion. The co-operative is also working on social activities like awarding fellowship to children education, health sanitation programmes.
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4
5 3 6
Plate 12: The different activities are conducted by GFVFPCA, Chainpur: 1) Awarding fellowship to children education, 2) FFS on vegetable (IPM in potato), 3) Irrigation scheme, 4) Commercial vegetable farming, 5) Cultural ceremony, 6) Health and sanitation programme, and 7) Participant on excursion by DADO (Photo: Field work, 2007).
While responding to activities of the co-operative Mr. Laxman Chaudhary, member of EC of GFVFPCA said: I am a representative of all ethnic minorities of our co-operative. I give a pressure to EC and General Assembly to conduct different income generating activities especially for ethnic minorities. Then we got irrigation scheme, training and excursion for vegetable production and marketing, management skills, FFS on vegetables, etc. These activities deal with different stakeholders and line agencies. We ourselves increased our bargaining power, leadership in management, institutional development and adoption of technologies by participating in the negotiating meetings in the co-operative.
81
It was observed that the GFVFPCA is dealing with their members in different socioeconomic activities and major achievement of the co-operative is to empower the ethnic minorities. So GFVFPCA is sustaining with increased ethnic minorities in power.
4.4.4 Cultural impact of co-operatives About 15 percent of the total profit of co-operative should be invested on social cultural activities in village level activities. The ethnic minority farmers got more income after they established a co-operative. Some part of income they can spend on cultural and ritual ceremonies which strengthen their social values. Before establishment of co-operative, they celebrated just for maintaining cultural norms and values but now they celebrate their cultural norms and values with joy at higher standard.
I interviewed a member of the ethnic minority about the cultural activities, he said: Now we have some income from vegetables because we can sell easily our vegetables in co- operative even in a small amount. So we are improving our economic standard somehow and therefore, we are able to spend money in occasionally happened cultural ceremony. We spend a little more than before on our cultural ceremony because of better income.
Due to better income, the ethnic minority farmers develop capacity to participate in traditional ceremonies with more joy.
4.5 SWOT analysis of ethnic minority farmers on GFVFPCA
4.5.1 SWOT Analysis of members of GFVFPCA Strengths • Having a co-operative with good leadership • Involved in production and marketing of high value crops throughout the year • GFVFPCA involved in innovation for market access • Consolidated marketing management mechanism. • Small grass-roots membership (trust and affinity) • Participation in community development • Empower to the ethnic minorities
Weakness • Lack of strong market information flow mechanism • Lack of marketing skills • Lack of dissemination of decision taken by EC to the all members • Lack of transparency of programmes and budgets • Lack of knowledge of co-operative
Opportunities • Lobbying at district and central level co-operative union • Link with different line agencies i.e. research and extension at all level • President himself represents at district and central level union as a leader
82 Threats • Lack of credit facilities • Lack of sufficient income generating programs • Lack of availability of good quality of inputs
4.5.2 SWOT Analysis of non-members of GFVFPCA Strengths • All ethnic minority farmers involved in vegetable production and marketing • Support by each other (farmer-to-farmer technology transfer) • Transportation facility in farm gate Weakness • Lack of new technologies • Lack of involvement in co-operative marketing • Seasonal cultivation practices i.e. vegetables grow only in winter, not in other seasons because of transportation facility and flood on Ladari stream in rainy. Opportunities • Have a regional and local market • Having informal group in community • Farm gate is nearby highway Threats • Lack of formal group on vegetable production and marketing • Each year same crops are grown (possibility of attacking disease/pest and suffering from unstable market price) • Lack of contact with research and extension agencies • Lack of availability of good quality of inputs
4.6 Summary This chapter has shown that Nepal has a complex caste system and ethnic minorities are often excluded to be organized in an organization. The case of GFVFPCA reflected that due to less accessibility to information; decision making; poverty; and marginalization the ethnic non members are deprived of participating and benefits sharing in a village based organisation. It was found that most of the ethnic minorities do not have access to the co-operative and its activities. GFVFPCA has developed additional structural criteria to become a member of the co-operative which is often discouraging for minorities. It is also an example of social exclusion. There are other examples of exclusion of ethnic minority farmers like lack of knowledge of co-operative, lack of information for membership and so on. However, there is also self exclusions like commercial big farmers do not want to become a member, they want to be a free. From the case it was found that ethnic minorities have significant positive impact over social, economical, political and cultural aspects of their lives if they are included in such a community based institution. The members of the co-operative increased their income from the co-operative because they can sell small amount of vegetables in collection centre. Ultimately, members improved their living standard being a socially included in co-operative.
83 5 CONCLUSION
This thesis provides an account of the social inclusion and exclusion issues of ethnic minority farmers in Nepal. Based on a case study of the Gramin Fresh Vegetables and Fruits Producers’ Co-operative Association (GFVFPCA); effort has been made to understand these issues on farmers’ perception and understanding towards the co- operative. Making use of access theory this research identifies the different practices of social inclusion and exclusion of ethnic minorities in the GFVFPCA co-operative and its activities. The members and non-members of ethnic minorities’ views are based on their accessibility to the co-operative and its activities. Their attitude and perception towards the co-operative and government agencies provide them with a certain frame to think of the way forward to become a member of the co-operative for the betterment of their livelihood, especially when there is an availability of co-operative marketing facility on their front door.
This is an ethnographic case study on Nepalese co-operatives and GFVFPCA in particular. By using interviews and observations it describes how and why farmers are involved as co-operative members and also why non-members are excluded or exclude themselves from becoming a member of the co-operative. The case itself focuses on co- operative marketing and interactions between farmers, traders, EC and manager in the co-operative that ultimately affect the decision to become a member of the co-operative.
Certain structural criteria are developed by the Nepalese government in the Co-operative Act 1992 and Co-operative Regulation 1993 to allow for registering the co-operative in co-operative office. This makes it difficult to register a co-operative, especially for rural people who do not have easy access to government services. GFVFPCA has developed additional structural criteria which resulted in the exclusion of members of the untouchable castes. The major hindering criteria are the number of Katta of vegetable cultivation land and the payment of an entry fee and shares of the co-operative. So the Government and GFVFPCA directly or indirectly exclude the ethnic minorities to become a member of the co-operative because they can not comply with these rules. Therefore, the rules and regulations should be reformulated for inclusion of poor, marginalized and ethnic minority farmers.
Another result shows that ethnic minority farmers do not have sufficient knowledge of the co-operative. They do not know the principles, norms and values of co-operatives and also they do not know the bylaws of the GFVFPCA. Some of non-members want to become a member of the co-operative even though they do not get the information of the opening time for membership. There is a provision that non-members should give application form to the EC 6 months in advance to get membership. All these complex reasons make that ethnic minorities are excluded from the co-operative membership.
From the examples in this thesis it becomes clear that ethnic minorities are structurally excluded from government agencies and the GFVFPCA, on the one hand, on other hand, some ethnic minority farmers exclude themselves by their own perceptions and
84 attitudes towards the co-operative that are influenced by negative experiences or rumors like the Sahara and Sajha examples. That’s why they mistrust co-operatives. The discrimination in service charge of the co-operative market; distribution of resource sharing (bonus); access to the road and transportation, the lack of interest of commercial farmers are the major factors for minority farmers to self exclusion. Therefore, CTDO, DADO and GFVFPCA should create more awareness and knowledge of co-operatives to ethnic minorities to support them to become a member.
It is the government’s extension policy in the agricultural sector to disseminate the technologies and extension services from DADO through a group approach. Members of groups or co-operatives get material and non-material extension services from DADO and they have easy access to the government agencies, but non-members only get extension services. This is a crucial issue for excluding of the individual farmer by government agencies. So either the government should make farmers groups and agricultural co-operatives in rural areas to incorporate the ethnic minorities or they should give extension services to all.
There are several advantages of being a member. Using the co-operative marketing facility of the co-operative, the members get more benefit from a reasonable price of their products, they save time and marketing costs, they have less risk of market uncertainty, they have access to the information flow of the market price and so on, whereas non-members do not have these advantages. The co-operative gives more benefit to the farmers but they still feel the need to strengthen to the co-operative by improving the quality of the service of the co-operative in marketing like expansion of the collection centre, having their own transportation facility, develop the market information and market net-working, construct storage facility and supply of quality inputs facilities and so on. Beside these constraints, the co-operative distributes 11.25 percent of its total income to the members and the remaining 88.75 percent is used for social work and income generating programmes which directly benefit the members of the co-operative.
During interviews with members, it is evident that the financial transaction in the co- operative and co-operative marketing is fair and transparent, and that the EC and manager are clean (not corrupt) which shows that the GFVFPCA co-operative has indeed supported its members and institutional development.
The issues of social inclusion were identified through different consultative meetings, observations and interviews with the members of the co-operative. The EC members are highly motivated to gain social prestige and everybody respected them. Within the co- operative, the members are very much part of society by different activities like providing the information on the vegetable price, technology transfer, symbolic capital, social integration, exchange of labour in different activities and ceremonies, and so on.
As a general phenomenon, social exclusion is an expression of social disintegration and of individual detachment from the social order (Saraceno 1997 in Berman and Phillips 2000). But in our case, the members of ethnic minorities do not feel any discrimination and disintegration between members of the co-operative and themselves. They have
85 links with members of co-operatives at the district as well as at national level because the President of this co-operative is also the President of the organization at district and national level. Thus, the assertion is confirmed by my findings that: “the right consciousness is not sufficient for participation, workers’ control, and self-management; instead, a general level of competence among participants in combination with the right consciousness is necessary for effective co-operation” (Szell 1989 in Erasmus 1994:191). So the co-operative and its members are socially close to others. They have links with same level associations and their members, bridging between the district and national level organizations and bonding with the different governmental agencies and stakeholders.
After the establishment of GFVFPCA, the members have increased their annual income more than non-members - ethnic minority farmers – even where the land size is almost the same. The research shows that the average annual income of a member is NRs. 106,000 whereas a non-member has NRs. 73,000 which is a big difference for the ethnic minorities in rural areas. Due to the increased income they have improved their living standard. Being a member of the co-operative, the members receive various types of technical and management training from government agencies and they are able to empower too. By joining forces of farmers can create stronger bargaining positions; they create a countervailing power. This is due to the political empowerment of the ethnic minorities (25 out of 129 members) whereas non-members ethnic minorities have less bargaining power. Women of non-members tend to follow the men to the Narayangarh market, but members do not need to go there because the minimum price is already fixed by the co-operative. Due to this economic advantage, the ethnic minority farmers who are included in the co-operative are able to spend more money for different cultural ceremonies than the non-members. This again creates social-cultural status differences.
Finally, this research shows that both poor and rich farmers are excluded from the co- operative. The poor are excluded due to the structural criteria of the co-operative whereas the rich farmers exclude themselves out of self interest. So, the co-operative has a majority of medium-income farmers. Based on the comparison of the members and non-members of the co-operative, it was found that members had access to social participation, extension activities, practical skills, technical information, and had more access to government agencies and other stakeholders, had a better marketing opportunity compared to non-members. Accordingly, they got a higher price per unit of the vegetables in the co-operative.
These results show that the co-operative can indeed solve a lot of problems and barriers, and provide more facilities for its members. Therefore, it is strongly recommended that those farmers who are not members of the co-operative join in local organizations such as GFVFPCA to have more access to the facilities essential for the increase of social, economic, political and cultural development. That is why social inclusion in local organisations could be the solution to reduce the poverty in the Nepalese complex caste system. However, before generalization these results, further study should be done in the fields of gender and comparison with other agricultural co-operatives in different areas of Nepal.
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90 ANNEXES Annex 2.1 Area, production and productivity of vegetables in Nepal Year Area (ha.) Production (Mt.) Productivity (Kg/ha) 1991/92 140500 1127884 8028 1992/93 140500 1179000 8391 1993/94 140500 1197496 8523 1994/95 140500 1211507 8623 1995/96 144368 1327298 9194 1996/97 146503 1357435 9266 1997/98 149979 1449472 9664 1998/99 140177 1342567 9578 1999/2000 149030 1489665 9996 2000/01 157162 1652979 10518 2001/02 161048 1738086 10792 2002/03 165988 1799973 10844 2003/04 172586 1890100 10952 2004/05 180823 2065193 11421 2005/06 189832 2190100 11537 2006/07 191922 2298689 11977 Source: Statistical Information on Nepalese Agriculture, 2006/07, MoAC, Nepal
Area, production and productivity of vegetables in Chitwan district Year Area (ha.) Production (Mt.) Productivity (Kg/ha) 2001/02 2850 40815 1432 2002/03 2865 41325 1442 2003/04 2885 41833 1450 2004/05 1585 41840 1450 2005/06 5730 84140 1460 Source: Annual Progress Report, 2006, District Agriculture Development Office, Chitwan
Area, production and productivity of summer/rainy vegetables in Chitwan district Year Area (ha.) Production (Mt.) Productivity (Kg/ha) 2001/02 1560 23400 1500 2002/03 1570 23842 1500 2003/04 1580 27700 1500 2004/05 1580 23520 1580 2005/06 3669 37144 1012 Source: Annual Progress Report, 2006, District Agriculture Development Office, Chitwan
Area, production and productivity of winter vegetables in Chitwan district Year Area (ha.) Production (Mt.) Productivity (Kg/ha) 2001/02 1290 17415 1350 2002/03 1295 17483 1350 2003/04 1305 18270 1400 2004/05 1305 18270 1400 2005/06 3061 46996 1535 Source: Annual Progress Report, 2006, District Agriculture Development Office, Chitwan
91 Annex 3.1
List of Fresh Vegetable and Fruits Producers’ Co-operatives in Chitwan District SN Name of Co- Address Registration Established on Share Numbers of Share Number operative Number amount members of board (NRs.23) member (EC) Female Male Total 1. District Union Bharatpur-10 273/059/2/13 2002/05/27 3300 n.a. n.a. n.a. 7
2 Janajagrit Bhandara-1 2/176/162/ 2000/05/17 79500 40 225 265 11 Hariyali 057/2/4 3. Puspanjali Ratnanagar-3 257/058/11/3 2002/02/15 50000 13 146 151 9 4. Gramin Chainpur-1 258/058/11/5 2002/02/17 42650 7 84 91 9 5. Ratnanagar Ratnanagar- 1 260/058/11/8 2002/02/20 22100 19 73 92 9 6. Gyaneshwor Mangalpur- 5 265/058/12/6 2002/03/19 3600 11 25 36 9 7. Amrit Sukranagar- 2 269/058/12/19 2002/04/01 3300 1 40 41 9 8. Shivajyoti Gunjanagar- 4 271/058/12/25 2002/04/07 3900 14 19 33 9 9. Kerunga Jagatpur-7 526/062/12/23 2006/04/05 52510 13 50 63 5 10. Sadabahar Gunjanagar- 5 577/063/2/25 2006/06/08 2600 n.a. n.a. n.a. 7 11. Panchakanya Ratnanagar-13 620/063/5/8 2006/08/24 2700 n.a. n.a. n.a. 9 12. Nawajyoti Birendranagar- 3 625/063/5/25 2006/09/10 5700 n.a. n.a. n.a. 5 13. Neureni Shaktikhor- 9 638/063/6/8 2006/09/24 2800 24 91 115 9 14. Narayangarh Bharatpur- 4 723/064/3/10 2007/06/24 2700 n.a. n.a. n.a. n.a. Source: Annual Progress Report, 2007, CTDO, Chitwan.
Note: NRs. = Nepalese Rupees, n.a. = Not available Transaction of GFVFPCA is NRs. 11216423 at fiscal year 2006/07.
23 NRs. 1 = US$ 0.6385 = Euro 0.9945 (3 April 2008)
92 Annex 3.2
Chart 1: Organizational chart of Ministry of Agriculture and Co-operatives
Source: http://www.moac.gov.np/home/index.php, 23 April 2008 and DoC, 2008
Chart 2: Organizational chart of Department of Co-operative
Government of Nepal Ministry of Agriculture and Co-operatives Department of Co-operatives
Central Co-operatives Training Centre (1)
Co-operatives Training and Division Office (5) Division Co-operatives Office (33)
District Co-operative Federations District Co-operative Federations
Preliminary Co-operative Associations Preliminary Co-operative Associations
Source: http://www.moac.gov.np/home/index.php, 23 April 2008 and DoC, 2008
93 Annex 4.1
Socioeconomic information of members and non-members of GFVFPCA Members of co-operative Non- members of co-operative
Socioeconomic factor indigenous Janajati untouchable Total indigenous Janajati untouchable Total Age 0-14 yrs age 36 - 3 39 16 11 5 32 15-40 yrs age 62 7 6 75 70 20 11 101 40-60 yrs age 29 4 2 35 17 4 5 26 > 60 yrs age 5 - - 5 - - - Total 132 11 11 154 103 35 21 159 Av. Family size 6.3 5.5 5.5 6.9 5 7 Education Illiteracy 33 1 4 38 6 2 5 13 Primary level 32 3 - 35 33 16 14 63 Secondary level 50 2 7 59 51 17 1 69 College level 17 5 - 22 13 - - 13 Total 132 11 11 154 103 35 20 158 Gender Male 62 6 4 72 48 13 9 70 Female 70 5 7 82 55 22 10 87 Total 132 11 11 154 103 35 19 157 Land holding 0-5 katta - - - - 5 (1) 3 (3) 5-15 katta 1024 (625) 15 (1) 14 (2) 10 (4) 10 (3) - 15-30 katta 23 (9) 25 (1) - 28 (8) 24 (2) - > 30 katta 43 (6) - - 53 (5) - - Av. Land size (katta) 25 20 7 30 13 3 Land holding system owned 2026 (2127) 20 (2) 11 (2) 25 (17) 10 (6) 3 (3) leased 14 (6) - 5 (1) 23 (3) 12 (2) - share 12 (2) - - 5 (4) - - Food security 0-3 months ------3-6 months - - - - - Cereals 6-9 months - - - - Cereals 9-12 months Cereals28 Cereals Cereals - - - > 1 yr (Surplus) Cereals+ Cereals+ Cereals+ Cereals+ Cereals+ Vegetable Vegetable29 Vegetable Vegetable Vegetable Vegetable
Av. Income (NRs.' 000) Cereals 11 14 3 28 20 9 - 29 Vegetables 25 20 23 68 25 10 12 47 Livestock 7 9 4 20 6 6 3 15 others 73 100 30 203 60 55 12 127 Av. Income 116 143 60 319 111 80 27 218 Source: Field research, 2007
24 Average land hold (in Katta) 25 Total number of people 26 Average land hold (in Katta) 27 Total number of people
28 The option of food security is only cereals on indicate period 29 The option of food security is cereals and vegetables as in surplus condition
94 Annex 4.2
Brief information and analysis of respondents (n=50) Members of co-operative (n=25) Non- members of co-operative (n=25) Socioeconomic factor indigenous Janajati untouchable Total indigenous Janajati untouchable Total Age Av. Age 41 39 Av. Family size 6.3 5.5 5.5 6.9 5 7 Education Illiteracy 16% Primary level 28% 64% Secondary level 40% 36% College level 16% Total 100% 100% Gender Male 46.7% 44.6% Female 53.3% 55.4% Total No. 154 157 Land holding Av. Land size (Katta) 25 20 7 30 13 3 Affiliation on group Co-operative 100% Informal group 64% 64% No affiliation in any group 24% 12% 36% Use of market Co-operative 100% 24% 12% 36% Niche market 64% 64% Knowledge about Co-operative Principle, norms, value + Objectives 20% Objectives 68% 44% Do not know 12% 56% Road and transportation Access 100% 24% 12% 36%
No access 64% 64% Technology and extension services Access 100% 24% 12% 36% No access 64% 64% Government agencies & stakeholders Access on both 100% Access only stakeholders 100% Av. Income (NRs.' 000) Av. Income 116 143 60 319 111 80 27 218 Source: Field research, 2007
95