CHAPTER 6. Small Farmer Group Activities and their Effectiveness

Group Membership
Group Activities: Emphasis on Cultivation
The Group Fund: the Importance of Informal Loans
Participation in activities initiated by the project
The Role of the Village Board
Benefits derived from being member of a small farmer group

Group Membership

Table 40 in the Annex gives the status of group membership per division. This Table indicates that Naula has a higher percentage of actual group members than Dambulla, with Rattota having the lowest percentage. In general, as mentioned above, the project has put more effort in Naula and Dambulla divisions than in Rattota, whereas the project apparently started at a later stage in Rattota. There is however, a variation in percentage of actual membership between the different village clusters.

Table 14, documents that status of group membership as per March 1989, by gender of the group. In sum, 70% of the members stated that they are still member of a small farmer group, with a higher percentage of members of mixed groups still being a member, followed by members of male groups and female groups subsequently, this is visualized in Table 41. in the Annex. Though 29.6% of the respondents ceased to be a group member, unexpectedly only one ex-member (a male) mentioned that the reason for not being a member any more was the unstable security situation in the project area during the 1989 period characterized by sporadic violence and suppression by the Sri Lanka army. A major reason was that the group itself had become inactive (25% for female and mixed groups and 45% for male groups). 25% of the female and mixed group ex-members indicated that the most important reason was that they moved to another village when they married. All other reasons where mostly personal and varied from lack of time or interest or problems among group members. In some cases it is thus possible that the group is still active but that the respondent has dropped out, or that the respondent is still member but of an inactive group.

Table 14. Status Group Membership by Gender SFG as per March 1990

Gender Group	Female		Male		Mixed		Total
	No.	%	No.	%	No.	%	No.	%
Respondent is still group member	41	63.1	33	75.0	19	82.6	93	70.4
Respondent is not a group member anymore	24	36.9	11	25.00	4	17.4	39	29.6
Total	65	100.0	44	100.0	23	100.0	132	100.0

n = all respondents
Source: Resource-Base Survey, 1990.

Group Activities: Emphasis on Cultivation

The survey was held at a time (March 1990) when the security situation prevailing in the project area was not very favourable for initiating group activities. Under the State Emergency Regulation it was not allowed that a group of more than five adults would meet in public. However, when one compares the number of groups that had activities during yala season 1989 with the number of groups that had activities during maha 1989-90 season, which was the worst period, there was only a 10% drop in activities for all groups together. A larger drop occured for female groups (about 20%) than for male groups (about 7%) and mixed groups (about 9%). Thus, although men were during that period in the more sensitive group in terms of security, more female groups did not have activities. (See Tables 41 and 42 in the Annex).

Although 70% of the respondents stated that they were group members by March 1990, during yala 1989, 61% of the groups actually had group activities (with an equal division among the different gender groups). During 1989-90 maha season, the number of groups with group activities dropped to 48% (with 43% for female groups, 52 % for male groups and 56% for mixed groups). The main reason mentioned was that groups had become inactive (69% for all groups during yala and 66% during maha), with the security situation as reason on a lower place (17% during yala and 30% during maha). There is no significant difference in reasons between the gender of the groups for not having activities.

Tables 43 and 44 identify the group activities that were reported during yala 1989 and maha 1989-90. A relatively equal distribution occurs for both seasons. During maha there was a higher score on the demonstration plots, mainly at the expense of labour pooling during cultivation and group cultivation, because the project has, during that period, launched a programmeme on improved dry crop varieties (maize, millet, beans, and some vegetables), to be cultivated group wise, whereby the seeds were provided by the project. It is significant that cultivation is as important, if not more important, for women and mixed group members as for male group members.

Furthermore, these tables clearly reveal that savings activities by the members of male groups is neglible, in contrast to the members of female groups and to some extent of mixed groups. The savings activities mentioned by the female members usually concern seettu or rotating savings and credit pools. This "informal" savings and credit activity may vary in many respects: it can be a money or a specific good (such as rice or plates) seettu, the amount donated per occasion can vary, as well as the time interval for donation, and the management of the fund. This activity is thus apart from the maintenance of a group fund.

Social activities are more often mentioned by male groups as part of the group activities. Other, activities not pertaining to the actual cultivation process are of limited importance, including activities related to cultivation such as the purchase of inputs, post-harvesting of crops, and marketing of agricultural produce, and non-cultivation activities such as small industries or livestock. A small informal evaluation exercise done by the project during yala 1989 revealed that none of the groups were involved in any sort of rural enterprise including agro-processing.

About half of the group members stated that their group has planned future activities, with a relatively equal distribution among the gender groups. The major emphasis is again on cultivation, including labour pooling, and demonstration plots. A second important planned future activity is "to obtain loans" (15%). (See Tables 45 and 46 in the Annex). Again the most important reason mentioned why group did not (yet) plan on future activities is that groups have become inactive (83%). Nobody mentioned the security situation as a reason for not planning future group activities.

The Group Fund: the Importance of Informal Loans

One of the most important group activities promoted by the project is the generation and maintenance of a group fund. Members were motivated to make weekly or bi-weekly donations to the group fund, at the occasion that a group meeting is held. The range of regular member contribution to the fund, at the time of the survey, was between about Rs 1 to Rs 5. Apart from the regular contribution, group members are motivated to engage in group activities to augment the group fund. About 40% of the group members reported to have participated in group activities during the past three years that resulted in an increase in their group fund. Often the income benefits accruing from such a group activity are partly divided among the group members and part is donated to the group fund. The most important group activity in this context is again group cultivation (55% for all groups together), with savings activities, especially among female groups (31%) in a second place. (See Table 47 in the Annex).

The group fund is often used as collateral in obtaining bank loans (as a deposit), to fund other group activities or to relend to members as small short-term loans, etc. Group fund assets can be classified as follows: 1) funds held by the members (usually the treasurer) in cash ('fund in hand'); 2) funds loaned out to group members informally; 3) funds deposited in a savings account in a bank; and 4) as goods (mostly rice) which are kept by the group.

Nearly all those surveyed, whether still a group member or not, or whether active members or not, stated that their (original) group maintains a group fund, with high percentages for male and mixed groups (97.7% and 95.7% respectively) and a lower percentage for female groups (81.5%). (See Table 48 in the Annex). However, only 49% of the members made a contribution to the group fund in 1990, and 16% made their last contribution in 1988.

Tables 15.1-4 give the distribution of the groups funds for the different gender groups.

An obvious feature in these tables is that on the average about 35% of the group members of groups that maintain a group fund do not know what amount of money or value is kept in one or more categories of the group fund. However, in the cases that the group member is aware of the amounts kept in the group fund, the total amount is high: 32% of the groups maintain a fund of over Rs 2,000 and 45% of over Rs 1,000. The male groups maintain larger group funds than the female groups.

All groups surveyed, excluding non-respondents, keep the money or goods divided in the different categories. Male groups, especially, seem to use a large part of the fund for informal loans among group members. For female groups, however, this may be compensated by their seettu activities, outside the group fund.

Table 15.1 Distribution of the Group Fund for Female Groups

n =53

Categories of the group fund	Fund in Hand		Fund Loaned Internal		Fund in Bank		Value of Goods		Total
	No.	%	No.	%	No.	%	No.	%	No.	%
Amount
less than Rs200	10	18.9	11	20.8	16	30.2	30	56.6	1	1.9
Rs 200 - Rs 499	9	17.0	7	13.2	5	9.4	0	0.0	4	7.5
Rs 500 - Rs 999	8	15.1	8	15.1	4	7.6	1	1.9	3	5.7
Rs1000 - Rs1999	5	9.4	2	3.8	8	15.0	0	0.0	9	17.0
Rs2000 and more	1	1.9	5	9.4	4	7.6	0	0.0	15	28.3
Does not know	20	37.7	20	37.7	16	30.2	20	37.7	20	37.7
No response	0	0.0	0	0.0	0	0.0	2	3.8	1	1.9
Total	53	100.0	53	100.0	53	100.0	53	100.0	53	100.0

n = all female members of groups that maintain a group fund.
Source: Resource-Base Survey, 1990.

Table 15.2 Distribution of the Group Fund for Male Groups

n = 43

Categories of the group fund	Fund in Hand		Fund Loaned Internal		Fund in Bank		Value of Goods		Total
	No.	%	No.	%	No.	%	No.	%	No.	%
Amount
less than Rs200	12	27.9	4	9.3	14	32.6	18	41.9	2	4.7
Rs 200 - Rs 499	5	11.6	3	7.0	4	9.3	1	2.3	0	0.0
Rs 500 - Rs 999	5	11.6	9	20.9	6	13.9	0	0.0	3	7.0
Rs1000 - Rs1999	5	11.6	8	18.6	3	7.0	5	11.6	4	9.3
Rs2000 and more	4	9.4	5	11.6	3	7.0	3	7.0	17	39.5
Does not know	12	27.9	14	32.6	13	30.2	16	37.2	20	39.5
No response	0	0.0	0	0.0	0	0.0	0	0.0	0	0.0
Total	43	100.0	53	100.0	53	100.0	53	100.0	53	100.0

n = all male members of groups that maintain a group fund.
Source: Resource-Base Survey, 1990.

n = 22

Categories of the group fund	Fund in Hand		Fund Loaned Internal		Fund in Bank		Value of Goods		Total
	No.	%	No.	%	No.	%	No.	%	No.	%
Amount
less than Rs200	6	27.3	7	31.8	8	36.4	12	54.6	4	18.2
Rs 200 - Rs 499	4	18.2	5	22.7	1	4.5	0	0.0	1	4.5
Rs 500 - Rs 999	2	9.1	1	4.5	1	4.5	0	0.0	1	4.5
Rs1000 - Rs1999	1	4.5	1	4.5	1	4.5	0	0.0	2	9.1
Rs2000 and more	1	4.5	2	9.1	3	13.6	1	4.5	6	27.3
Does not know	7	31.8	5	22.8	7	31.8	7	31.8	7	31.8
No response	1	4.5	1	4.5	1	4.5	2	9.1	1	4.5
Total	22	100.0	22	100.0	22	100.0	22	100.0	22	100.0

n = all members of mixed groups that maintain a group fund.
Source: Resource-Base Survey, 1990.

n = 118

Categories of the group fund	Fund in Hand		Fund Loaned Internal		Fund in Bank		Value of Goods		Total
	No.	%	No.	%	No.	%	No.	%	No.	%
Amount
less than Rs200	28	23.7	22	18.6	38	32.2	60	50.9	7	5.9
Rs 200 - Rs 499	18	15.3	15	12.7	10	8.5	1	0.9	5	4.2
Rs 500 - Rs 999	15	12.7	18	15.3	11	9.3	1	0.9	7	5.9
Rs1000 - Rs1999	11	9.3	11	9.3	12	10.2	5	4.2	15	12.7
Rs2000 and more	6	5.1	12	10.2	10	8.5	4	3.4	38	32.2
Does not know	39	33.1	39	33.1	36	30.5	43	36.4	44	37.3
No response	1	0.9	1	0.9	1	0.9	4	3.4	2	1.7
Total	118	100.0	118	100.0	118	100.0	118	100.0	118	100.0

n = all members of groups that maintain a group fund.
Source: Resource-Base Survey, 1990.

28.0% of the members reported that contributions to the Village Board fund were made from the group fund. The mixed groups are the best contributors with 30.4%, followed by the female groups (27.7%) and the male groups (18.8%).

Table 16. Purposes of the Group Fund by Gender of the Group

Gender of the Group	Female n=53		Male n=43		Mixed n=22		Total n=118
	No.	%	No.	%	No.	%	No.	%
Purposes of the group fund
Internal loans to members	45	84.9	38	88.4	15	68.2	98	83.1
Admin. costs of the group	7	13.2	4	9.3	5	22.7	16	13.6
Contributions to the Village Board	18	34.0	8	18.6	7	31.8	33	28.0
Expenses during meeting/group activities	6	11.3	5	11.6	2	9.1	13	11.0
Purchase inputs/consumer goods	15	28.3	15	34.9	5	22.7	35	29.7
Death donations	0	0.0	0	0.0	2	9.1	2	1.7
Built a meeting hall	1	1.9	0	0.0	1	4.5	2	1.7
Group farming/demo. plots	0	0.0	3	7.0	0	0.0	3	2.5
Marketing agr. products	0	0.0	1	2.3	0	0.0	1	0.9
Common group activities	1	1.9	0	0.0	0	0.0	1	0.9
Not used for any purpose	2	3.8	1	2.3	1	4.5	4	3.4
Does not know	1	1.9	1	2.3	0	0.0	2	1.7
No response	1	1.9	1	2.3	0	0.0	2	1.7

n = all group members who reported that their group maintains a group fund.
Multiple response
Source: Resource-Base Survey, 1990.

Given the importance of the groups issuing informal loans to group members and the relatively high incidence of default on such loans, this may be a major reason why some groups have become inactive. It will be impossible, as well as unwanted, for the project to regulate this activity. However, the group organizers should be well aware of this, and could assist the groups in making decisions for sustaining a fair and profitable use of the group fund for informal loans. Thus not so much assistance in the form of training in accounting, since many of the group members are literate and do know the basic principles of accounting, but more in the form of advice 'on the job', if desired by the group members.

Participation in activities initiated by the project

Training

59.1% of the respondents reported that they received one or more trainings through the project, with a maximum of four trainings per person among 9.1% of the respondents. There does not seem to be a gender bias in training received. However, it is not clear whether all trainings referred to by the respondents were indeed organized by the project, such as training in beekeeping, mushroom cultivation, sewing, flower and brick making and minor export crops cultivation. Also the definition of training is not very clear, since many of the trainings were held in the respondents own village (61.3%) and could be more an extension activity than a training course. Again, the largest part of the training concerns cultivation (68.8%) and were given by the Department of Agriculture (47.5%), with training in group issues on a second place (27.5%). (See Tables 51 and 52 in the Annex).

When asked what kind of training the respondent would like to receive to augment their income, cultivation was most frequently mentioned (60.6%), followed by handicrafts/industries and animal husbandry (each 22.0%). (See Table 53 in the Annex).

Savings and Credit

As mentioned in Chapter 4, according to the respondents, a large part of the institutional loans were obtained with the assistance of the project, this was the case for 82.3% of the female members and 69.3% of the male members. (See Table 27 in the Annex). In sum, 24.2% of all group members obtained a loan in 1989 with the assistance of the project, including 18.9% of the female members and 31.0% of the male members.

Given the larger percentage of female group members (i.e., 56% and 44% male group members), there is still a male bias in the provision of credit to group members. This is especially important because the credit facilities provided by the project are for many women the only source of formal credit, whereas male group members often appear to have more sources for formal and informal credit supply. That credit supply is indeed the most important benefit attributed by female group members, indicates the interest women have in obtaining loans. 46.6% of the female members regard obtaining loans as one of the most important (potential) benefits of the project, compared to 22.2% of the male members. This is indicated in Table 17. at the end of this chapter.

Limited capacity to generate savings among group members is not a sustainable argument against loan supply, because about 41 % of all female group members maintain a savings account of over Rs100 in a bank and about 57% of all male group members. See Tables 23.1 and 23.2 in the Annex. In addition, female members appear to be active in informal group savings and credit activities (seettu).

Elections

Rotating leadership is one of the unique features of the PPP approach in Sri Lanka. Groups are requested to have elections each half year, where the full board, officially comprising of a President, a Secretary and a Treasurer, are replaced by new persons. Indeed, 77.3 % of the members stated that they had been a board member at least once. There seems to be more rotation of board membership among male and mixed groups than among female groups: provided that group sizes are about the same for the different gender of the groups, about 20% more members of male and mixed groups have been board member for a least one period. (See Table 54 in the Annex). When one divides the board membership of mixed groups by gender, there does not seem to be much evidence of male members dominating the board in mixed groups.

The small farmer group, due to its frequent elections, seems to enhance that persons were elected as board member who had not earlier been a board member in any other village level society. Out of the 107 persons who never fulfilled an office post in a society they are at present member of (including the persons who are not member of any other society) apart from the small farmer group, 57.9% were one or more times elected as board member of a small farmer group.

Half of the groups stated having their last board election during 1989 or 1990, with more recent elections being held among members of mixed groups (73.9%) than of members of female groups (46.2%) or male groups (43.2%) during that period. A fairly high percentage of respondents (29.6%) did not remember when the last board election has been held. (See Table 55 in the Annex).

The Role of the Village Board

77.3% of group members reported that they were aware of the existence of the Village Board, with a relatively equal distribution among the gender groups. Of the persons aware of the Village Board, 57.8% (i.e., 44.7% of all group members) felt that the Village Board had been of assistance. Relatively more members of male groups felt that the Village Board had been of assistance. The major field of assistance mentioned was organizing training (42.4%).

Especially members of female groups stressed this activity (52.0%). However, what the members actually mean by this activity is not clear, because training courses were normally organized by project staff. Perhaps the Village Board played an important role in selecting the participants. Other main fields of assistance mentioned are the supply of agricultural inputs and implements (28.8%), assisting, giving advice and solving problems of the groups (28.8%) and organizing savings and loan activities (20.3%). Table 56 in the Annex shows the fields of assistance provided by the village board by the gender of the group.

The group members who were aware of the existence of the village board, were also asked to state what they felt the duties of the village board should be. See Table 57. in the Annex. As a duty, organizing training did not receive a high priority (22.0%). Instead, the highest value was attributed to assisting, giving advice and solving problems of the groups (50.9%). 27.1% of the group members (i.e., 12.1% of all group members) felt that the Village Board should organize savings and loan activities. With a view on the withdrawal of the Group Organizers from the village clusters in Naula, Dambulla and Rattota divisions in the near future, the project attributes a key role to the village boards in organizing the savings and loan activities. It is doubtful whether, at least at the time of the survey, the majority of the group members has confidence that the village board could assume such a key role.

As shown in Table 16 of this chapter, contributions to the Village Board Fund were reported to be made by 28.0% of the members of groups who maintain a group fund (i.e., 25.0% of all group members). Although, compared with the other groups, fewer members of female groups felt that the village board provided any assistance, relatively more members of female and mixed groups contributed to the Village Board Fund than members of male groups (34.0%, 31,8% and 19% respectively). A reason behind this might be that female members have more expectations of the village board, as they have, compared to male members, less access to external sources, such as institutional credit.

Benefits derived from being member of a small farmer group

When asked whether the project was beneficial, 78% of the group members said yes. The percentages for female and male members are nearly equal. However, it is difficult to assess how reliable these figures are, sine this survey was done by project staff. Table 17 shows the benefits that members attribute to being small farmer group member. For female members obtaining loans was the most important benefit, i.e., stated by 36.5% of all female members. Since 19% of the females actually did receive a bank loan with the help of the project during 1989, this is probably partly a benefit that they hope to obtain in the future. As shown before, for them the project is one of the few possibilities to gain access to institutional loans. For male members, labour pooling was the most frequently mentioned benefit, i.e., 48.1% of all male members. It is significant that a large part of the benefits mentioned by the members, are related to their own capacity to increase their agricultural or other resources, such as obtaining loans, labour pooling and savings activities. A relatively smaller part refers to obtaining external benefits, such as subsidies, agricultural inputs and land.

Furthermore, 28.0% of all members felt that group membership was beneficial for obtaining more personal knowledge and recognition. Although, 59.1 % of the members had stated that they had participated in one or more training courses organized by the project, training was not valued as one of the most important benefits. Only few members made the direct link between group membership and the opportunity to augment their income.

Table 17. Benefits Derived From Being Small Farmer Group Member by Gender

Gender	Female n=58		Male n=45		Total n=103
	No.	%	No.	%	No.	%
Benefits
Obtaining loans	27	46.6	10	22.2	37	35.9
Labour pooling	23	39.7	26	57.8	49	47.6
Personal knowledge/ Education Awareness/ Recognition	19	32.8	18	40.0	37	35.9
Training general/Education Accounting	10	17.2	10	22.2	20	19.4
Training in cultivation or Foodprocessing	7	12.1	15	33.3	22	21.4
Obtaining Agr. Inputs	6	10.4	14	31.1	20	19.4
Cultivation General	2	3.5	4	8.9	6	5.8
Savings Activities	13	22.4	3	6.7	16	15.5
Animal Husbandry	2	3.5	1	2.2	3	2.9
Knowledge about Government or 'Outside' Services	10	17.2	4	8.9	14	13.6
Group Efforts (General/ House/Wells)	7	12.1	11	24.4	18	17.5
Subsidies/Obtaining Goods at Lower Prices	5	8.6	3	6.7	8	7.8
Obtaining Land	1	1.7	1	2.2	2	1.9
Income Opportunity	5	8.6	4	8.9	9	8.7

n = all members who considered it beneficial to be a member of a small farmer group
Multiple Response
Source: Resource-Base Survey, 1990.