Bulk benefits

Partnership and collective action creates new scope for livelihoods and innovation in agriculture, writes SaveAct executive director Anton Krone.

Over the past two years two NGOs (Farmer Support Group and SaveAct) working in partnership organised mostly women farmers in the Amazizi area of South Africa into Farmer Learner Groups and Savings and Credit Groups, to improve coping strategies, and enable people to expand livelihoods and innovate.

The two entry points, of improved farming and savings, made for the formation of small, robust institutions. With the focus on land-based livelihoods came the ever pressing need for larger lumps sums of money to buy inputs. Emerging farmers in South Africa struggle to access credit. In fact the only option available to most is the ‘loan sharks’, charging exorbitant rates to the poor. The group-managed savings groups offered alternative strategies for accessing credit whilst at the same time developing social capital to pursue in innovation. With the two entry points and the two NGOs working collaboratively, a more integrated vision emerged, resulting in actions complementary to innovation amongst the poor within the same villages.

People in these villages have a history of involvement in informal savings groups. Most of these were not operating transparently, with groups being dominated by one or two people. Joining the SaveAct promoted groups brought strong systems, group ownership and secure management of funds. Training in financial literacy and ready access to lumps sums brought for members a new sense of possibilities.

Through regular reflection on strategies, the idea of pooling savings and collectively negotiating for lower prices of a critical input took hold. Groups appointed representatives to negotiate with suppliers and to work with interested members to ensure that they could commit the funds and to organise the pooling of capital and purchase and delivery of inputs. FSG assisted participants to work out the type and volume of fertilizer per farmer. Three suppliers were approached for prices and delivery.

In the end, 29 farmers participated, and managed to buy USD3 550 worth of fertilizer. When the fertilizer was delivered there was much celebration. People throughout the community expressed great joy and many vowed to be part of a similar act in the next seasonal cycle. Fertilizer was delivered and successfully distributed according the specifications. Participants are looking forward to a bumper harvest of maize this season.

It is not the scale of this initiative that is significant. It is its replicability that stands out. The initiative is driven by farmers who are relying almost exclusively on their own resources and groups to take it forward. Its scaling out is not dependent on outside funds or technical expertise. If developed systematically, the same mechanism for buying can also be used for selling of produce and developing marketing strategies.

In future:

  • Group members are planning to increase their savings so that they are able to buy more inputs in 2010 (e.g. seeds, tractor hire, labour).
  • Even though fertilizer is more expensive they see a need to get all the inputs required for improved agricultural production.
  • Farmer and Savings & Credit Groups will be introduced to this practice through the forum.
  • Manufacturers of farming inputs will be approached to source favourable prices and bargains.
  • SCGs will explore rescheduling their share outs of capital to September to synchronise with the planting season.

Mr Dubazane remarked: “If we continue with this collaboration, we will be able to buy our own tractor through savings.”

Another participant, Mr Xaba said: “I am very sure that more farmers will be joining us next year and this initiative will grow bigger.”

This initiative is a good example of how partnerships can enable activities which would not have been readily achievable. Complementary skills and services (across agriculture and financial services) created the conditions for local initiative. The potential for scaling up and replicating this practice is high as more and more people recognise the importance of saving and building up lump sums which make it possible for people to plan and schedule the purchase of expensive items that would normally be beyond their reach.

– Anton Krone, SaveAct


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