SUFFiciENcy EcONOMy ANd GRASSROOtS DEvElOPMENt

Group 

2 

Sufficiency Economy and 

Grassroots Development


Grassroots Development 

Group 

2 

The Meaning of Sufficiency Economy 

International Conference 

Grassroots Development and Sufficiency Economy 

Linda A. Eggleston Nowakowski, PhD 

Greater Miami Valley Buy Local 

LAENowakowski@gmail.com



159 

Grassroots Development and Sufficiency Economy 

 

 

 

 

It is generally agreed that today we find ourselves in the midst of a worldwide 

economic crisis. Some will argue that the breadth of this crisis includes not only 

private and public financial crises but that it is exacerbated by crises in government, 

the environment, and the depletion of natural resources. 

I believe that the root of these problems is much deeper and more basic. 

 

Neoclassical (orthodox) economics 

The neoclassical interpretation of economics has shaped the world as we know 

it. This model sees the economy as a play of production and consumption, supply 

and demand, and profit and loss. It defines value in terms of monetary wealth and 

development as technological and economic. There is no consideration of needs as 

compared to wants and no value in the development of human spirituality, culture, or 

happiness. There is no balance in this model: bigger is better, more is better, 

technology rules. The result is an economic model in which success is dependent on 

constant growth. It is a view of life that is so ingrained that no one even questions 

the logic of it. If we live in a finite system like our world, how can we believe that 

economics can be working properly only if there is constant growth? How can we 

believe that the value of a person is in how much they make and how much they 

accumulate? Youth and physical beauty are of more value than wisdom and physical 

and mental health. The length of life is more important than the quality of life and 

the individual is prized over the community. 

 

Development 

In this system, development has become a goal rather than a path. The culture 

systematically converts wants into needs – you can suddenly NEED a product that 

didn’t exist six months ago. The value of countries is measured by their position on 

the economic development path: developed nations, developing nations, 

underdeveloped nations.

160 



In reality, development is a never ending path. It is broadly defined. 

Development encompasses personal physical, emotional, spiritual, intellectual, and 

social development. It includes community social and cultural development. And it 

should include technological as well as economic development. Western 

development is pretty much focused only on intellectual, technological, and 

economic development. The results of this are the cultivation of consumption and 

greed. This economic development has led to the deterioration of community 

society, broken social networks (including families, the community and the 

government) and a hunger for depth and connection. 

 

Sufficiency Economy Philosophy 

My understanding is that the development of the King’s Sufficiency Economy 

Philosophy was sparked, least in part, by E. F. Schumacher’s book, “Small is 

Beautiful” and his introduction of the concept of Buddhist economics. 

Buddhist economics has much more in common with Hindu, Islamic, and 

Christian economics than it does with neoclassical economics. It is a view of 

economics with a lens of spiritual wisdom. All of these views value the spiritual and 

social development of human beings over the economic development. They all 

value community over individuals and relationships over things. They all value 

moderation. Their view of development is much more integrated than how we 

currently understand development. In short, they are all morality based. 

The Sufficiency Economy Philosophy is nothing short of elegant. It is based 

on three components: 

• Moderation 

• Reasonableness 

• A self-immunity system: being able to cope with shocks from internal and 

external changes 

Two underlying conditions are necessary to achieve this sufficiency: 

• Knowledge: breadth and thoroughness in planning and carefulness in 

applying knowledge in implementation) 

• Morality: people need to have honesty and integrity while conducting their 

lives with perseverance, harmlessness and generosity 1 

1 

Office of the Royal Development Projects Board, http://www.rdpb.go.th/rdpb/Front/ 

SufficiencyEconomy.aspx?p=4, 11 September 2011



161 

As the King has clarified: 

This “sufficiency” means a “sufficiency economy.” It is satisfactory if 

each individual has enough to live on, but it is even better if the entire country 

has enough to live on. 

We in Thailand used to be sufficient. Now, it is free to be insufficient. 

Therefore, it is a policy to adopt a sufficiency economy so that everyone has 

enough to live on. Sufficiency means to lead a reasonably comfortable life, 

without excess or overindulgence in luxury, but having enough. 2 

His Majesty also explained that Sufficiency Economy differs from the English 

term “self-sufficiency”: 

Self-sufficiency means producing enough for one’s own need, without 

having to borrow anything from others, or as they say, standing on one’s own 

feet. But the Sufficiency Economy concept is much broader than that. 

Sufficiency is moderation. If one is moderate in one’s desires, one will take 

less advantage of others. 

If all nations hold this concept, without being extreme or insatiable in 

one’s desires, the world will be a happier place. 

Being moderate does not mean to be too strictly frugal; luxurious items 

are permissible, but one should not take advantage of others in the fulfillment 

of one’s desires. Moderation, in other words, living within one’s means, 

should dictate all actions. Act in moderation, speak in moderation - that is, be 

moderate in all activities. 

Therefore, sufficiency means moderation and reasonableness. 3 

The 2007 Human Development Report of the United Nations Development 

Program issued a warning “to avoid growth that is jobless, ruthless, voiceless, 

rootless, and futureless,” with a remark on the Sufficiency Economy principle and 

human development: 

In the light of the Sufficiency Economy approach, it’s time to add 

another to this list: mindless growth - where the path of growth adds nothing 

to the mental and spiritual capabilities of people. 4 

The report concludes that Sufficiency Economy is a valid approach to 

development: 

2 

The Government Public Relations Department, http://thailand.prd.go.th/ebook/ 

communication/part3.php?s=3, 11 September 2011 

3 

Ibid 

4 

United Nations Development Programs, Thailand Human Development Report 2007: 

Sufficiency Economy and Human Development, http://planipolis.iiep.unesco.org/upload/Thailand/ 

Thailand%20HDR.pdf , 11 September 2011

162 



The Sufficiency Economy offers a way to avoid mindless growth through 

application of a set of principles which can seem disarmingly simple, but 

which are rooted in observation of the real world, and underwritten by 

humanist theory. The appeal of the approach is that the principles are easy to 

grasp, but the daunting fact is that the application demands high standards of 

commitment and integrity. But then, if development were easy.... 5 

Implementation of this philosophy is the challenge. As has been amply 

demonstrated here in Thailand in a rural context, with access to arable land, an 

individual, a family, or even a community can agree together to adopt this 

philosophy and implement it into their lives with relative ease. 

In a different setting, for example in an urban setting, the challenge increases. 

Holding to moderation and reasonableness are achievable for an urban individual. 

Establishing a self-immunity system would seem to present a challenge. In living 

moderately, one can save financial resources but in a severe economic downturn or 

in the case of a crisis or natural disaster, it is not nearly so clear that one would be 

protected. Having a social network to help support each other is one way to address 

the safety net but requires an infrastructure to support building a community from a 

group of strangers where everyone comes from families far removed from the urban 

area. 

Having an education that provides a person with ownership of skills that can 

produce a livelihood is also important. This however also requires access to capital 

to enable formation of a business. 

Ultimately, the critical piece of the puzzle is individual understanding of 

moderation, reasonableness, and the personal traits of honesty, integrity, 

perseverance, harmlessness, and generosity. The current economic culture is not 

particularly supportive of many of those things. Corporate mentality tends to look at 

labor as a commodity. The stated goal is to maximize profit which is often 

accomplished by building artificial need and encouraging immoderation, taking 

from the environment with total disregard to sustainability, and discarding wastes 

into the environment with no regard to the damage caused. Rights and wrong take a 

back seat to maximization of profits. The encouragement of consumerism has 

resulted in the encouragement of over-extended credit as opposed to the 

encouragement of savings for both businesses and individuals. 

 

Sufficiency economy outside of Thailand 

The talk to this point has been centered on Thailand. Being American and 

living in Thailand as I studied the Sufficiency Economy philosophy, one of my 

concerns was how do the concepts apply in the the US where in 2000, over 79% of 

5 

Ibid



163 

all Americans lived in urban areas. In May 2011 the consumer debt in the US was 

$793 billion 6 or $2,583 per capita, man, woman, and child while total household 

debt rose to $13.4 trillion in 2011 ($43,647 per capita). 7 

How does one find moderation from this extreme? I would like to propose that 

the path to this involves scaling back and rebuilding supportive community where, 

one person at a time, we rediscover healthy values. 

As background, in 2008 there were 29.6 million businesses in the US and 

99.9% of those businesses are SMEs. 8 About 55% of all jobs in the private sector 

are in SMEs. 9 Over the last decade small business have generated between 60 and 

80% of net new jobs annually. 10 

In 2009 I studied eight businesses in the Denver, CO area and the business 

network that all but one are members of. All of these businesses qualified as SMEs 

(less than 500 employees). They ranged in size from no employees to 

approximately 350 employees. They were a mixture of manufacturing, service, 

retail, and education businesses. They were from brand new businesses to 

established businesses, the oldest of which was 18 years old. Save one, all were 

members of local networks affiliated with the Business Alliance for Local Living 

Economies (BALLE). BALLE is a national network of networks that support 

locally owned businesses (mainly SMEs) that are socially and environmentally 

responsible. These businesses all started with 1-3 owners. All of the businesses are 

driven by commitment to community both within the businesses and in the 

geography in which they were located. All of the businesses were guided by 

“making a living” rather than “making a killing.” Already we seen an appreciation 

of moderation. 

The organizational structure of these businesses was very flat as opposed to the 

more typical hierarchical structure. Not one of the business owners talked about 

employees; they talked about “associates” or “the people that work with me”. All of 

the people in the business contributed to the development of the business and the 

day-to-day operations. In the cases where the businesses are not employee owned, 

the knowledge, skills and opinions of the employees is actively sought and valued. 

In these cases, the ultimate decisions on company operations still fall to the owners 

who have financial interest in the company. However, the interest of the company is 

put ahead of and egoist ownership stance. The oldest of the businesses is an 

6 

CreditCards.com, http://www.creditcards.com/credit-card-news/credit-card-industry-factspersonal-debt-statistics-1276.php, 

11 September, 2011 

7 

The Wall Street Journal, http://online.wsj.com/article/SB100014240527487 

04823004576192602754071800.html, 11 March 2011, 11 September 2011 

8 

The US Small Business Administration, http://www.sba.gov/advocacy/7495/8425, 11 

September, 2011 

9 

National Federation of Independent Business, http://w.411sbfacts.com/speeches.html, 11 

September, 2011 

10 

Ibid

164 



employee owned company. At this company, employees are hired with an initial 

one-year probationary period. If, at the end of that year, they are going to be hired, 

they are given a bike to ride to work and they get to park at the front door of the 

building (fueled vehicles are parked at a distance from the building proportionate to 

the fuel used) and they become vested in the Employee Stock Ownership Program. 

Only one of the founding owners has any formal business training and she 

made an intentional choice to give up her MBA career to found a business that was 

less stressful and more related to her non-work life. All of the businesses pay a 

living wage. Unfortunately, like the majority of small businesses in the US, only 

one of the businesses (the largest) offers health care benefits. Employees are 

routinely cross-trained in the work required by the business to insure job coverage in 

unexpected situations and to allow for scheduling that accommodates people’s home 

lives. 

Most of the businesses studied were members of the Mile High Business 

Alliance (MHBA). MHBA is a member of the Business Alliance for Local Living 

Economies (BALLE). This organization is designed to provide intentional network 

weaving skills to the community. MHBA and other BALLE networks link like 

businesses to provide mentoring and peer-counseling as well as links to other 

businesses that might fit in a supply chain or be able to provide business-to-business 

services. Neighborhood businesses are linked to provide neighborhood based 

promotions. They help link these businesses to the people in their communities. 

These local networks not only provide crucial business links but also form a nucleus 

and provide leadership for local government action. 

BALLE was formed in 2001 as a network of networks to support the 

development of strong local living economies. The network was designed to have 

open communications in both directions at all levels. As the national network grew, 

maintaining this with a very small staff became difficult and by 2009 the national 

network was becoming less responsive to local networks and businesses and was 

losing its way. After the 2009 national conference in Denver, a number of the local 

networks approached the national board and voiced their dissatisfaction with the 

announced program direction. After listening to that, the board dismissed all of he 

staff and evaluated how they could get back on track as a support organization for 

grass-roots networks and businesses. 

 

Network Analysis 

We are all familiar with hierarchical networks. They are often represented as 

in Figure 1.

As the national network grew, maintaining this with a very small staff became difficult and by 2009 the 

national network was becoming less responsive to local networks and businesses and was losing its 

way. After the 2009 national conference in Denver, a number of the local networks approached the 

national board and voiced their dissatisfaction with the announced program direction. After listening to 

that, the board dismissed all of he staff and evaluated how they could The get Meaning back of on Sufficiency track Economy as a support 

165 

organization for grass-roots networks and businesses. 


Network Analysis 

We are all familiar with 

Figure 

hierarchical 

1: Typical 

networks. 

hierarchical 

They are 

network 

often represented 

representation 

as in Figure 1. 

Since I am going to be representing more complex networks, I would like to 

help you visualize this typical network in the same format I will be using. 

Figure 1: Typical hierarchical network representation 

Since I am going to be representing more complex networks, I would like to help you visualize this 

typical network in the same Figure format 2: Simplified I will be using. Hierarchical representation 

of the US Chamber of Commerce 

5 

Figure 2: Simplified Hierarchical representation of the US Chamber of Commerce 

 

These Figures show figure shows the same number of nodes as the final figure we will look at. None 

of these figures These represent Figures actual show network figure data. shows They the are same representational number of nodes only. as the final figure 

we will look at. None of these figures represent actual network data. They are 

When representational BALLE first formed only. the network that was formed can be represented as in Figure 3. Nodes are 

entities and edges are relationships. The strength of the relationship is represented by the thickness of 

the line. When BALLE first formed the network that was formed can be represented as 

in Figure 3. Nodes are entities and edges are relationships. The strength of the 

In this relationship configuration, is represented the strongest by relationships the thickness are of the on line. the periphery within the local networks. 

Interaction between the local networks was encouraged but the only real opportunity for that was at the 

annual national conference. Consequently, these relationships were the weakest. All relationships here 

were bi-directional. As the network grew, the relationship between the local networks and the national 

office were weakening and the direction of the communication was becoming more strongly unidirectional 

from the national office to the local networks. The local networks increasingly felt that they 

were not being heard and not being supported. The national network was collapsing into a hierarchical 

structure.

166 



In this configuration, the strongest relationships are on the periphery within the 

local networks. Interaction between the local networks was encouraged but the only 

real opportunity for that was at the annual national conference. Consequently, these 

relationships were the weakest. All relationships here were bi-directional. As the 

network grew, the relationship between the local networks and the national office 

were weakening and the direction of the communication was becoming more 

strongly uni-directional from the national office to the local networks. The local 

networks increasingly felt that they were not being heard and not being supported. 

The national network was collapsing into a hierarchical structure. 

Figure 3: Initial BALLE state 

Figure 3: Initial BALLE state 

With the reorganization in 2009-2010, the national office looked at the overall 

With the reorganization in 2009-2010, the national office looked at the overall network and identified 

network and identified four very strong and active local networks in each of four 

four very strong and active local networks in each of four geographical regions. These networks were 

approached geographical to see regions. if they felt These it would networks be possible were for approached their organizations to see if to they support felt acting it would as a regional 

hub be to possible facilitate for communication, their organizations provide additional to support networking acting as a and regional a programing hub to possibilities. facilitate All of 

them communication, agreed. The resulting provide network additional can be networking visualized as and in Figure a programing 4. possibilities. All 

of them agreed. The resulting network can be visualized as in Figure 4. 

The kind of relationship that has now matured in the BALLE networks is strong and dynamic. The 

businesses The and kind local of networks relationship have been that able has to now work matured together in the hubs BALLE to find networks common is needs such 

as preparing strong and to dynamic. talk to local The governments businesses and local and networks regional have economic been able development to work councils, 

educating together the in public the on hubs the to value find of common ethical local needs business such ownership, as preparing locating to talk capital to sources local for new 

and governments growing businesses, and local and and developing regional tools economic for measuring development environmental councils, and educating social impact. the The 

hubs public are in on much the better value positions of ethical to local be able business to identify ownership, best practices locating for both capital businesses sources and for networks. 

The national office now has much more time and resources to develop the materials for the businesses 

and networks minimizing any duplication of effort.



167 

new and growing businesses, and developing tools for measuring environmental and 

social impact. The hubs are in much better positions to be able to identify best 

practices for both businesses and networks. The national office now has much more 

time and resources to develop the materials for the businesses and networks 

minimizing any duplication of effort. 

Figure 5: BALLE current state 

Figure 5: BALLE current state 

One thing that is not seen on these charts is the even more extensive social 

One thing networks that is of not the seen entrepreneurs on these charts and their is the staffs even and more the impressive extensive social national networks network of to the 

entrepreneurs 

be found 

and their 

in the 

staffs 

BALLE 

and the 

board 

impressive 

and staff. 

national network to be found in the BALLE board and 

staff. 

There are numerous advantages of these kinds of social networks. These 

There are include numerous fostering advantages collaboration, of these providing kinds of support, social networks. providing mentoring These include and other fostering 

collaboration, 

educational 

providing 

opportunities, 

support, providing 

and opportunities 

mentoring 

for 

and 

sharing 

other 

resources. 

educational 

It is 

opportunities, 

important to 

and 

opportunities for sharing resources. It is important to note that leadership in hierarchical structures 

note that leadership in hierarchical structures tends to be controlling while in these 

tends to be controlling while in these kinds of networks, leadership is more enabling. By accessing 

more information kinds of and networks, knowledge leadership of what is is more actually enabling. happening, By accessing what is working, more information and what is needed, and 

leadership knowledge is able to maximize of what creativity is actually and happening, enable change what and is growth. working, and what is needed, 

leadership is able to maximize creativity and enable change and growth. 

Sustainability 

 

Sustainability means different things to different people. Sometimes when business people talk about 

sustainability they are only referring to the ability of a business to continue indefinitely. In stricter 

circles it is more precisely defined. Six generally accepted essential characteristics of sustainability are 

discussed below in how they relate to the Sufficiency Economy Philosophy and our research. 

Triple top-line value production 

Triple top-line (TTL) value production is more commonly referred to as triple bottom-line value 

production. This places a premium on creating value not only in financial accounting terms but also in

168 




Sustainability means different things to different people. Sometimes when 

business people talk about sustainability they are only referring to the ability of a 

business to continue indefinitely. In stricter circles it is more precisely defined. Six 

generally accepted essential characteristics of sustainability are discussed below in 

how they relate to the Sufficiency Economy Philosophy and our research. 

Triple top-line value production 

Triple top-line (TTL) value production is more commonly referred to as triple 

bottom-line value production. This places a premium on creating value not only in 

financial accounting terms but also in terms of social and environmental impact. 

The modification in the term to top-line production is to emphasize the importance 

of all three factors as opposed to the traditional bottom line figure. 

All of these companies are fully cognizant of the triple top-line and all are 

actively working toward increasing impact in all three areas. One company while 

building a financial bottom-line that has been strong enough to allow them to pay 

back the debt (to themselves) incurred in start-up, triple the number of employees, 

and double the size of their restaurant, have done this serving only organic foods, 

recycling all materials, and serving meals to low-income and no-income people six 

days a week. 

The TTL demonstrates a basic level of morality in a business. It more 

specifically displays reasonableness, harmlessness, and generosity. 

Nature-based knowledge and technology 

O n e o f t h e k e y t e n e t s o f B u d d h i s m i s t h e c o m p l e x c o n c e p t o f 

interconnectedness. This is reflected in the interconnection of nature. Nature based 

knowledge and technology starts with recognizing and understanding that we are a 

part of a single ecosystem. Like every other participant in this system, what we do 

impacts the whole system. This understanding should lead a reasonable person to a 

middle path of moderation rather than a path of over-consumption and overproduction 

of all things, over-extension debt, and over-use of the environment as a 

resource and a waste receptacle. 

Today’s business is overly competitive and aggressive. Studies have shown 

that aggression in animals is caused by a number of factors. An animal that is 

injured or whose life is threaten will become aggressive. 11 Other studies have been 

done to show that additionally aggression in humans is a result of competition. 12 

11 

Hind, R.A., Aggression in Animals, Proceedings of the Royal Society of Medicine, 1970 

February; 63(2): 162–163 

12 

Baron, Robert A., Richardson, Deborah R., Human Aggression 2nd Edition, p. 343, Springer, 

Plenum Press, New York, NY, 1997



169 

Understanding this can lead to the development of management techniques that 

decrease the competition, aggression and stress that comes with them. In 

interviewing both the owners and their associates in these businesses, they almost to 

a person noted that the lack of stress in the workplace is what made their work so 

enjoyable. 

Products of service and products of consumption 

The term products of service refers to technological products that are returned 

to the manufacturer in order to create a closed loop system where toxic materials are 

recycled into new products rather than being released into the environment. 

Products of consumption are biological products that are consumed and what 

remains will harmlessly fall back into the ecosystem. Modern business is everything 

that this is not. Resources are extracted in most immoderate fashion that is creating 

a system that is dangerously dependent on geographically based natural resources 

that are readily susceptible to disruptive actions. Waste materials are discarded into 

the environment with almost total disregard for even potential impact. This model is 

certainly not one that is set up to “cope with shocks from internal and external 

changes” but rather, is one that increases the risk of shock. 

Solar, wind, geothermal, and ocean energy 

The use of alternative energy sources that do not harm the environment in 

either extraction or emissions as primary energy sources is essential to 

sustainability. Some of the networks’ programs include providing information to 

businesses on how they can avail themselves of wind, solar and other alternative 

energy sources. Another thing that the networks do is keep businesses informed of 

opportunities in the development and and opportunities for funding in the 

development of alternative energy technologies. 

Western (and particularly U.S.) addiction to energy, particularly fossil fuel 

based energy, is not moderate, not reasonable, and far from providing a selfimmunity 

system. 

Continuous improvement process 

Providing for means of evaluating for constant improvement of a business 

whether through location of lower priced resources or new markets or ideas for 

improved process or quality is essential for sustainability. 

These networks we looked at provide constant information and knowledge 

sharing supportive of continuous improvement. They provide simple support 

networks to encourage entrepreneurs theough tough times, The top-down enabling 

leadership consolidates much of the time-consuming research and resource 

management allowing more time in the grass-roots development work for 

implementation and the evaluatiion required to direct change. This provides a kind 

of self-immunization safety net.

170 



Conclusions 

The elegance of the King’s Sufficiency Economy Philosophy is in its clear, 

clean, concise distillation and statement of the components and conditions required 

for an economy that is balanced and inclusive. It raises the value of living systems – 

people and the ecosystem (environment) – to be in balance with profits. The 

businesses following these practices are healthy, vibrant, exciting places for the 

entrepreneurs, their associates, and the communities they are in. By recognizing the 

value of the living systems, both people and the environment, and providing 

organization that enables people to be creative and valued, more balanced and 

innovative solutions can be discovered. Just as the saying “Many hands make light 

work” is true, I think we can add “More ideas makes for creative development.” 

My biggest concern is that the key to all of this is the second underlying 

condition in the King’s Sufficiency Economy Philosophy: “Morality: people need to 

have honesty and integrity while conducting their lives with perseverance, 

harmlessness and generosity.” This is a change that cannot be legislated. It is a 

change that must be inspired. It requires personal contact and sharing. It absolutely 

requires education in families, schools, and communities. This necessitates the 

rebuilding of close, supportive, grassroots communities where people are again 

accountable for their actions. In these close communities, that accountability is more 

natural as you are dealing with people that you care about. 

The kind of networks demonstrated by BALLE are enabling that kind of oneto-one 

grassroots development to happen in a nurturing environment that seems to 

be spreading the change.



171 

Grassroots Development and 

Sufficiency Economy 

The Meaning of Sufficiency 

Economy 

October 18-19, 2011 

Linda A. E. Nowakowski 

Preface 

• SMEs are defined in the US as businesses with 

less than 500 employees. 

• Census data show that in 2005, there were 

~25.8 million businesses in the US. 

• SMEs represent 99.9% of these businesses 

• 5.8 million firms had employees 

• More than half of all Americans work in these 

companies 

• Over the past decade, SMEs have generated 

60 – 80% of all new jobs. 

1

172 



Denver Research 

Locally owned small businesses: 

• Service 

• Retail 

• Manufacturing 

• Education 

Their business network 

Business Characteristics 

• All started with 1-3 owners 

• Brand new to ~15 years old 

• All were driven by commitment to community (in 

the businesses and in their location) 

• All were guided by "making a living" rather than 

"making a killing" 

2



173

174 



Hierarchical Networks 

Alternative way of looking at it 

4



175 

Original BALLE Network 

Current BALLE Network 

5

176 


International Conference



Group 

2 



Strengthening Sufficiency: 

Interdependent Selves Within Community Economies 

Juliana Essen, PhD, 

Soka University of America



179 

Strengthening Sufficiency: 

Interdependent Selves Within Community Economies 

 

 

 

 

This paper considers what makes Sufficiency Economy (SE) different from 

other development alternatives, notably those that stress sustainability and 

empowerment of communities. In particular, it compares SE to the Sustainable 

Livelihood Approach (SLA), a framework put forth by the British Department for 

International Development (DFID) in the late 1990s, when the SE model was 

similarly being formalized in Thailand. Both share common ground as holistic, 

people-centered development approaches that focus on sustainable livelihoods, 

though differences emerge due to their analytical versus philosophical 

characteristics. Both could also be improved in terms of community empowerment, 

best accomplished by a philosophical/ontological shift to interdependent selves and 

a practical/social shift to community economies. With its Buddhist nature and 

consideration of networks, SE is well positioned to make these shifts. 

 

Sufficiency Economy versus the Sustainable 

Livelihoods Approach 

In refining SE for application in the development field, particularly in rural 

development, it is instructive to compare it to a similar approach: SLA, which 

originated in Britain’s DFID but is now used worldwide by development 

organizations large and small. For those not familiar with SLA, it’s based on the 

ideas of development practitioners Robert Chambers and Gordon Conway (1992), 

who conceive of livelihoods as comprising people, their capabilities (what a person 

is capable of doing and being), and their means of living (including food, income, 

and assets). Chambers and Conway’s goals for developing livelihoods include 

enhancing capabilities, improving equity (equal distribution of assets, capabilities, 

and opportunities), and increasing sustainability. According to DFID’s guidance 

sheets, livelihoods are sustainable when they can recover from stress and shock, are 

not dependent on external support, maintain the long-term productivity of natural 

resources, and do not compromise the livelihoods of others. DFID adapted these 

ideas into an operational framework to help practitioners support livelihood 

activities with the ultimate aim of eliminating poverty in poorer countries.

180 



With their focus on sustainable livelihoods, both SLA and SE are holistic, 

people-centered development approaches. That means people—rather than resources 

or governments or economies—are at the heart of development activities, and 

priority is placed on people’s own goals and how best to realize them. They are 

holistic in that they are non-sectoral, applicable across geographic region and social 

group. They are also holistic in that they recognize multiple livelihood outcomes 

(such as becoming self-sufficient in food production, limiting labor migration, or 

recovering from a tsunami) as well as multiple, diversified livelihood strategies 

(such as market and subsistence activities, borrowing, social networking, changing 

consumption practices, technical innovation, and so on). This sort of development 

approach, endeavoring to enhance people’s multi-dimensional livelihoods, can have 

a direct and immediate impact on wellbeing. This is even more needed now that the 

development industry is turning its attention to good governance, climate change, 

and other macro issues, which, though certainly important, are not amenable to 

household- and community-level projects that can respond quickly when survival is 

at stake. 

These two models diverge, however, in terms of their core characteristics, and 

hence, their strengths. SLA is fundamentally an analytical framework. As such, it is 

a useful tool for understanding the nature and dynamics of sustainable livelihoods, 

especially how they are affected by their larger contexts. In particular, SLA delves 

deeply into the vulnerability context: the trends, shocks, and seasonality over which 

people have limited or no control. Shocks, such as natural disasters, civil conflict, 

crop failure, and other health or economic shocks can destroy assets, force people to 

abandon their homes, and otherwise leave them in dire circumstances. Trends are 

more predictable changes in population, resources, governance, health, technology, 

and so on. Trends may not always be negative—they may create favorable 

conditions and opportunities, but livelihoods must be flexible enough and have 

sufficient institutional support to be able to adapt to these changes. Finally, seasonal 

variation in prices, employment opportunities, food availability, and the like can be a 

tremendous source of hardship for those struggling to achieve livelihood security. 

SE draws attention to these dynamics with its condition of self-immunity; however, 

it could go much further in terms of urging analysis of specific contexts. 

Understanding these vulnerabilities as well as the resources necessary to address 

them is vital to ensuring wellbeing for individuals and society as a whole, and it is in 

this area that SLA excels. 

In contrast, SE is essentially a philosophical framework that finds its strength 

in the mental and moral conditions necessary to create sustainable livelihoods. All 

the analysis in the world will make no difference if individuals cannot commit to a 

change in thinking about what will bring true wellbeing. Dominating the global 

economy is the belief that a high material living standard indicates a high quality of 

life, and material possessions have quickly become global symbols of success. This 

trend is most evident in Bangkok, but it is also apparent in rural areas where TVs, 

cell phones, and other modern trappings are privileged over building materials, fish



181 

ponds, or other investments in the homestead that would increase self-sufficiency. In 

order to resist mainstream materialist values, individuals must cultivate internal 

fortitude to imagine and construct an alternative way of life. 

Divergent conceptions of development that challenge the hegemony of global 

capitalism may emerge from religious or cultural beliefs and ethics or the realities of 

alternative economies. Thai social critic Sulak Sivaraksa advocates “true 

development” from a Buddhist perspective: 

Development must aim at the reduction of craving, the avoidance of 

violence, and the development of spirit rather than of material things. . . . The 

goal of increasing the quality of life is understood differently. From the 

materialist standpoint, when there are more desires, there can be further 

development. From the Buddhist standpoint, when there are fewer desires, 

there can be further development. (1990:171) 

While not necessarily explicitly Buddhist, SE facilitates this attitude 

adjustment with its insistence on moderation and reasonableness, which can be 

interpreted from a Buddhist perspective. Moderation is the quintessential Buddhist 

notion of the Middle Way, the path of neither extreme asceticism nor extreme 

luxury. Two Thai concepts relating to moderate consumption were articulated during 

my research on the Santi Asoke Buddist Reform Movement (Essen 2005). The first 

is mak noi, “to be content with little,” though various Asoke members cautioned: 

“Use enough; don’t use little to the level that one is lacking—not a shortage” (Ah Oi 

personal communication) because “the Buddha taught to support life by a proper 

amount, not to be too needy and not too luxurious, but just right to be able to have 

happiness” (Ah Jaenjop personal communication). How much is enough must be 

found by each individual. Equally important is sandood, “to be satisfied with what 

one has.” This relates to the Buddha’s second Noble Truth that desire—in this case, 

wanting more than one already possesses—is the cause of suffering. According to 

one Asoke member, “Being content with what one has is important because if [what 

you have is] enough, you are richer, suddenly richer” (Ah Wichai personal 

communication). Without this feeling of satisfaction, a livelihood may be 

sustainable, but it cannot produce real wellbeing. 

Of course, moderation is not an exclusively Buddhist notion; it is found in 

economies all around the world that value frugality—economizing or minimizing 

the means to a certain end. For example, economic anthropologists Gudeman and 

Rivera (1990) observed in Columbia that in contrast with profit-driven capitalists, 

swidden agriculturalists aim to “sustain” rather than “gain.” Gudeman and Rivera 

theorize that subsistence-based economies strive to achieve a level of production 

sufficient for the continual reproduction of their system; anything left over (the 

surplus) is considered progress. The question remains: what should be done with that 

surplus to generate genuine and lasting wellbeing for individuals, society, and 

nature?

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That’s where SE’s condition of reasonableness comes into play. Reasonableness 

should not be confused with the narrow neoclassical economic conception of 

rationality. The enlightenment era “Economic Man” model based on the neoclassical 

theory of methodological individualism presents an atomistic individual using 

instrumental or means-to-ends rationality, calculating choices of comparable value 

to arrive at the optimal outcome: maximization of self-interests, whether for profit or 

some other form of satisfaction. SE’s reasonableness also has to do with making 

choices, but it more broadly involves analyzing reasons and potential actions and 

grasping the immediate and distant consequences of those actions. Reasonable 

choices are made possible by wisdom, embodying not only accumulated knowledge, 

but the insight to put it to judicious use, as well as integrity, meaning virtuous or 

ethical behavior including honesty, diligence, and non-exploitation. Thus, 

reasonableness informed by wisdom and integrity will help make decisions about 

how best to use surplus for the larger social good. 

Clearly SE’s philosophical approach provides individuals with the mental and 

moral orientations and skills that are needed to create deep and lasting change, and 

that will make it more successful than SLA in the long run. While both SLA and SE 

are laudable as alternative development approaches, SE can more easily learn from 

SLA to improve its analytical capability than can SLA adopt SE’s emphasis on 

internal development. Still, both can be improved in terms of community 

empowerment. 

 

Community Empowerment via Interdependence 

Community empowerment can be accomplished by stressing interdependence, 

which SE is well equipped to do given its Buddhist underpinnings and its promotion 

of networks. However, at this point, it seems that SE’s main concern is human 

development at the individual- and firm-level; only when these are stable does it 

advise branching out into networks or communities of specialized production and 

distribution units and other relevant cooperative entities such as savings 

cooperatives and seed banks. I propose that for more profound results at the 

community level, SE could be refined to emphasize interdependent selves from the 

outset and to conceive of socio-economic relationships not simply as networks but 

as community economies. 

The initial philosophical shift to interdependent selves draws on Buddhist 

ontology. It starts with the theory of conditionality or dependent origination (paticca 

samuppada), which describes a 12-link chain of dependently arising conditions 

(ignorance, volitional impulses, consciousness, body and mind, six sense bases, 

sense contact, feeling, craving, clinging, becoming, birth, and aging and death, 

which have despair as their by-product). There is no first cause, as each depends on 

the existence of another to come into being, and at the same time, each conditions 

the arising and existence of yet another. On a few occasions, the Buddha also



183 

declared that all things in the world arise continuously in this same way: conditioned 

by another and subject to the natural law of cause and effect. The gloss that 

Buddhists believe in the “interconnectedness of all life” stems from these more 

complex ideas. Thus no entity exists independently or permanently, not even the 

self. This belief stands in contrast with the Western assumption of an atomistic or 

isolated self, which forms the bedrock of mainstream neoclassical economic theory, 

which in turn informs our current global economy. 

An interdependent self has implications for self-interest. Since an individual’s 

actions are governed by the same law of causality that governs the rest of nature, 

they have consequences that arise in a non-linear fashion, possibly resulting in a 

karmic boomerang. Even without the Buddhist theory of being outlined above, we 

can easily observe such interdependence for ourselves. Take, for example, 

deforestation in Northern Thailand, which has come about due to a complex mix of 

both legal and illegal logging, encroachment by marginal farmers due to increased 

immigration and population growth, and the expansion of large-scale commercial 

agriculture (Hirsch 1996). Besides the primary economic and environmental effects 

of deforestation (such as loss of income from timber or NTFP and depletion of 

carbon sinks), there are further consequences: deforestation triggers erosion of fertile 

topsoil as well as drought, which in turn causes surface and groundwater to dry up. 

And since the majority of Thais who depend on an agricultural livelihood bear the 

brunt of these environmental costs, ecological deterioration causes the social divide 

to widen further. So clearly, it is in our “self” interests to take care of the 

environment and each other. As such, development decisions—whether they be for 

an individual, household, business, community, or nation—must factor in the 

possible effects on all spheres of human existence: individual, society and nature. 

This relationship is already suggested by the criterion of reasonableness as described 

above, but it could perhaps be more explicit. 

Just as an interdependent self results in an expanded self-interest, it similarly 

expands how we may conceive of self-reliance. In order to create sustainable 

livelihoods that foster wellbeing, we can and must rely on the people around us and 

our shared resources. This is of course already occurring across Thailand: family 

members contribute wages to their households, neighbors share labor at harvest 

time, women’s groups cooperate on income generating projects or organize savings 

clubs, villagers plant community wood lots on temple grounds, and so on. We can 

certainly see how individuals’, households’, and communities’ chances for survival, 

their self-immunity, and ultimately their well-being increase through such 

interdependent socio-economic relations. To better understand their complexities, 

and thus strengthen SE’s potential to contribute to community empowerment, we 

can turn to theoretical and practical discussions of community economies.

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Three Perspectives on Community Economies 

Since SE is fundamentally an alternative economic model, it seems more 

appropriate to glean ideas about community empowerment from literature on other 

alternative economies—in this case community economies—rather than from 

community development literature. This section considers three social science 

perspectives on community economies. The first and earliest is by Herman Daly and 

theologian John Cobb Jr., elaborated in their book For the Common Good: 

Redirecting the Economy toward Community, the Environment, and a Sustainable 

Future. Their approach reveals the fallacies in our current conception of economy, 

crafts an ethical alternative, and proposes policy applications for the United States. 

Next, economic anthropologist Stephen Gudeman looks at community economy 

from a different angle: his approach is to describe what he argues already exists, 

basing his theory on a rich ethnographic record. Finally, returning to ethics, feminist 

geographers JK Gibbson-Graham and their collective Community Economies 

Project aim to reimagine and recreate economies to value non-capitalocentric 

diversity and interdependence among other ethics. What is offered here are ideas for 

further consideration so as to strengthen SE as a community development approach. 

To establish conditions necessary for “economics for community”, Daly and 

Cobb call for a shift from individualism to “person-in-community” much like the 

idea of interdependence elaborated above. Regarding community, they state that the 

term “suggests people are bound up with one another, sharing, despite differences, a 

common identity” (1989:170). That is, community members self-identify as such 

based on their relationships with each other. Daly and Cobb specify three other 

requirements of community: 1) members must enjoy full participation in the 

community’s activities (especially decision making); 2) the community as a body 

must take responsibility for its membership as a whole; and 3) that responsibility 

includes respect for the diversity represented by individual members. They remark 

that community thus conceived is a matter of degree, but that economics for 

community favors development toward these ideals. 

In defining their economics for community model, Daly and Cobb take up 

Aristotle’s distinction between oikonomia and chrematistics. They understand 

chrematistics as “the branch of political economy relating to the manipulation of 

property and wealth so as to maximize short-term monetary exchange value to the 

owner” (138). They explain that the GDP is essentially a chrematistic model with the 

additional (erroneous) assumption that individual economic welfare is correlative 

with overall market growth. Oikonomia, by contrast, “is the management of the 

household so as to increase its use value to all members of the household over the 

long run.” Daly and Cobb continue, “If we expand the scope of the household to 

include the larger community of the land, of shared values, resources, biomes, 

institutions, language, and history, then we have a good definition of economics for 

community” (138). They state that oikonomia differs from chrematistics in three 

ways: 1) it takes the long-run rather than the short-run view; 2) it considers costs and



185 

benefits to the whole community (not just those involved in the immediate 

transaction); and 3) it focuses on concrete use value and the limited accumulation 

thereof, rather than on abstract exchange value and its impetus toward unlimited 

accumulation (139). For Daly and Cobb, community is sorely missing in Western 

conceptions of the economy as well as in the lives of people in the modern world. 

For economic anthropologist Stephen Gudeman, the community economy is 

right there before our eyes. Gudeman has theorized community economy as an everpresent 

economic realm existing in dialectic relation with the market realm: these 

may at times be separate or overlapping, complimentary or in tension, and we may 

sometimes emphasize one over the other or participate in these realms for different 

purposes. Where the market is abstract and impersonal, characterized by 

anonymous, short-term exchanges, the communal realm is local and specific, 

constituted by social relationships and contextually defined values. At a time when 

“the economy” has become synonymous with “the market,” Gudeman’s detailed 

exposition of the communal realm is a much needed reminder that real economies 

are much more diverse and varied and above all center on people. 

The core concept in Gudeman’s community economy model is the commons 

or base, a community’s shared interests such as physical resources and produced 

things that help sustain the members’ individual and collective livelihoods. The most 

common definition of a commons stops here, yet it also encompasses “ideational 

constructs such as knowledge, technology, laws, practices, skills, and customs” (7) 

as well as the cultural agreements and beliefs that shape or assign values to social 

relationships, transactions of goods and services, and accumulated wealth. The 

instrumental act of contributing to the base reproduces the group materially while at 

the same time reinforces commitment and identity as a community member; or more 

simply put: “the base makes the community as it is made” (36). According to 

Gudeman, the central acts in a community economy are creating, maintaining, and 

sharing the base, as opposed to market capitalism, where the focus is making and 

accumulating profits. 

Making and maintaining the base relies heavily on situated reason. Situated 

reason refers to knowledge that is produced through trial and error or innovation on 

the ground, which allows flexibility to find the most appropriate solutions and treats 

all individuals as potential agents. It is what Stephen Marglin (1990) terms techne 

(tactile practical knowledge), as opposed to episteme (abstract analytic knowledge), 

the latter of which is privileged in Western culture and dominates mainstream 

development activities. Beyond what is gleaned through tinkering, situated reason 

may also draw on a dynamic array of beliefs, values, and practices that encompass 

familiarity with the immediate environment; spiritual ideas about the relationship 

between humans, nature, and the supernatural; cultural practices of resource 

management and dispute resolution; and so on—the ideational constructs that make 

up part of the base itself. Finally, situated reason may be viewed as contextually 

dependent rationality. Take for example a woman on her way to market who refuses 

to sell her heavy load to a foreigner offering more than market value; she may be

186 



perceived as behaving irrationally until one considers that she places greater value 

on long-term social relationships with market trading partners than a one-time 

monetary gain. This concept certainly bears some relation to SE’s condition of 

reasonableness in terms of valuing the thought process that contributes to 

sustainable livelihoods, but it is more expansive. 

Sharing the base—specifically the tangible aspects but possibly also the 

intangible—proceeds according to contextually defined values and relations of 

power. Gudeman distinguishes between allotment, which is a way of partitioning 

permanent resources such as land, and apportionment, which has to do with 

divvying up material flows, such as harvests. Communal rules are generally 

established to dictate proper allotment and apportionment. For example, official 

property rights may be given according to local inheritance laws but usufruct may be 

granted under certain circumstances; other goods such as foodstuffs may be 

distributed amongst all in a community, or they may flow from all to one, as in a 

tributary to a leader, or from all to one, as in a feast hosted by a headman to 

redistribute wealth in the community. In this way, access to the base may be 

determined by social status, but forms of reallotment and reapportionment can 

equalize power differentials. Thus, in these central acts of creating, maintaining, and 

sharing the base, the core element is social relationships. 

What’s missing from Gudeman’s rich community economy model is ethics that 

would mediate these relationships to ensure wellbeing for all individuals, our society 

as a whole, and the environment that sustains us. Feminist geographers JK Gibson- 

Graham and fellow contributors to the Community Economies Project have been 

working to articulate such an approach. This project, coalescing the theoretical and 

practical work of academics and real communities, emerged from their shared belief 

that more socially just and environmentally sustainable economies are possible, and 

that anyone is capable of rethinking and remaking our economies in that direction. 

This project is a continuation of Gibson-Graham’s first book, The End of Capitalism 

(as we knew it), which deconstructed and critiqued the predominant view of 

capitalism as a unified, singular totality so powerful that it cannot be resisted or 

transformed and then argued for a cognitive transformation that would liberate the 

possibility of economic difference. With their present work (Postcapitalist Politics 

and “Community Economies”), Gibson-Graham aim to expound on how to 

reimagine and reconstruct our economic worlds. 

They begin by discussing how diverse our economic activities actually are, 

using an iceberg as a metaphor. The tip of the iceberg, what is visible above water, is 

what is usually considered to be the economy: wage labor, market exchange, and 

capitalist enterprise; meanwhile, what is beneath the water is less visible but far 

more vast: the multitudinous other methods of economic production, transaction, 

and distribution we all engage in every day. Gibbson-Graham and their colleagues 

have created lists to illustrate these alternatives. For example, instead of or in 

addition to traditional market exchange, individuals might practice fair trade, use 

alternative currencies, barter, give gifts, or hunt and gather. Instead of mainstream



187 

capitalist enterprises, we might do business with cooperatives, non-profits, green 

businesses, or socially responsible ones. And in terms of finance, we might forgo the 

big banks and deal with credit unions, cooperative or community banks, or 

microfinance institutions that keep money in the community and offer low-interest 

loans or sweat equity options. In revealing the entire body of the iceberg, JK 

Gibson-Graham and their colleagues disrupt capitalocentrism—which means 

defining all economic activities in terms of their relation to capitalism (e.g., 

compatible with, contained within, the same as, etc.), thereby paving the way for a 

potentially infinite array of economic practices, relations, and identities. 

Their conception of community economy follows from this economic plurality 

and adds the ethical element: 

The community economy is a normative representation of the diverse 

economy, one in which certain ethics are valued over others. In a community 

economy our interdependence with each other and with all earth others is 

recognized and respected as we negotiate: what is necessary to personal, 

social and ecological survival; how social surplus is appropriated and 

distributed; whether and how social surplus is to be produced and consumed; 

[and] how a commons is produced and sustained. (“Community Economies”) 

These authors and activists stop short of specifying which ethics should be 

valued. They aim instead to open up space for debating relevant ethics and exploring 

alternatives. They do, however, stress interdependence, with nature as central to our 

communal wellbeing. 

One last thought on community economies. It may seem from the descriptions 

above that a community economy suggests small scale. Certainly, in many ways it 

fits into calls by some to localize in response to the ravages of globalization. But a 

community economy could be regional, national, or even global. Members of a 

given community economy need not be in geographic proximity, though they should 

meet or be working toward Daly and Cobb’s four community criteria. Moreover, a 

community economy must recognize our embeddedness in larger contexts, even our 

inextricable connections with the global economy. Given the dynamics of social life, 

it’s not reasonable to envision a “return to tradition” in terms of organization (small 

communities) or facilely privilege “local” over “global,” particularly in terms of the 

knowledge, skills, and so on that make up the commons. In reality, people select 

from a wide variety of ideas and techniques available to them from global, regional, 

local, and historical sources. In the imaginative combination of these elements, 

something entirely new is fashioned.

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Conclusion 

The purpose of this discussion was to better understand SE’s strengths in 

development terms by comparing it to a widely used alternative development 

approach, SLA. Through that comparison, it became clear that SE has great potential 

for lasting change due to its emphasis on mental and moral development, though it 

could be enhanced by adopting SLA’s analytical approach, which would facilitate 

better understanding of how larger contexts affect livelihoods (and vice versa). SLA 

didn’t have much to offer to refine SE’s ability to build strong communities. For 

that, we turned to the concept of interdependence, which is already implicit in SE’s 

philosophy, and explored the very limited literature on community economies. These 

theories about what a community economy might be need further consideration to 

extract and hone relevant ideas and will require still further specification into a 

framework that can be applied for community development. With enthusiasm for SE 

mounting in communities across Thailand, these efforts to stren gthen SE will help 

ensure that it enhances wellbeing beyond the level of individual households and and 

SMEs, for the good of the society as a whole and the environment that sustains us.



189 

References 

Chambers, Robert and Gordon Conway. 1992. Sustainable Rural Livelihoods: 

Practical Concepts for the 21st Century. Sussex, England: Institute of 

Development Studies. 

Community Economies Project. 2009. http://www.communityeconomies.org. 

Accessed September 17, 2011. 

Daly, Herman and John Cobb, Jr. 1989. For the Common Good: Redirecting the 

Economy toward Community, the Environment, and a Sustainable Future. 

Boston: Beacon Press. 

Department for International Development. 1999. Sustainable Livelihoods Guidance 

Sheets. http://www.eldis.org/go/topics/dossiers/livelihoods-connect/whatare-livelihoods-approaches/training-and-learning-materials. 

Accessed 

August 12, 2010. 

Gudeman, Stephen. 2001. The Anthropology of Economy. Malden, MA: Blackwell 

Publishers. 

Gudeman, Stephen and Alberto Rivera. 1990. Conversations in Colombia: The 

Domestic Economy in Life and Text. Cambridge: Cambridge University 

Press. 

Hirsch, Philip, ed. 1996. Seeing Forests for Trees: Environment and 

Environmentalism in Thailand. Chiang Mai, Thailand: Silkworm Books. 

Essen, Juliana. 2010. Sufficiency Economy and Santi Asoke: Buddhist Economic 

Ethics for a Just and Sustainable World. Journal of Buddhist Ethics, 

Vol. 17. 

Essen, Juliana. 2005. “Right Development”: The Santi Asoke Buddhist Reform 

Movement of Thailand. Lanham, MD: Lexington Books. 

Gibson-Graham, 

JK. 2006. A Postcapitalist Politics. Minneapolis, MN: University of 

Minnesota Press. 

Gibson-Graham, JK. 1996. The End of Capitalism (as we knew it). Oxford: 

Blackwell Publishers. 

Marglin, Stephen. 1990. “Losing Touch: The Cultural Conditions of Worker 

Accommodation and Resistance.” In Dominating Knowledge: 

Development, Culture, and Resistance, edited by F. Apffel-Marglin and S. 

Marglin. Oxford: Clarendon Press. 

Sulak Sivaraksa. 1990. “True Development.” In Dharma Gaia: A Harvest of Essays 

in Buddhism and Ecology, edited by A. Badiner. Berkeley, Calif.: Parallax 

Press.

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United Nations Development Programme (UNDP). 2007. Thailand Human 

Development Report: Sufficiency Economy and Human Development. 

Bangkok: UNDP.



Group 

2 



The Thai Social Capital of the People in 

Inpaeng Network, Sakonnakhon Thailand 

Sutee Suksudaj 

Faculty of Dentistry, Thammasat University



193 

The Thai Social Capital of the People in 

Inpaeng Network, Sakonnakhon Thailand 

 

This article is a part of a Thesis ‘The Thai social capital as a social determinant of oral health’ 

submitted as a requirement for the degree of PhD in Dentistry Sutee Suksudaj, School of Dentistry, 

The University of Adelaide, Australia, May 2010 

 

 

 

 

 

 

Introduction 

Social capital as a concept for community development 

Social capital is a social concept mentioned by several classic theorists. This 

concept traces back to the 19th century of Marx’s analysis of social class and 

Durkheim’s study of anomie (Portes 1998). Pierre Bourdieu, James Coleman and 

Robert Putnam, could be considered the most influential contemporary scholars in 

the field of social capital. Robert Putnam’s acclaimed book “Bowling alone: the 

collapse and revival of American community”, provoked the general public and 

politicians awareness of this issue(Putnam 2000). The notion of social capital was 

mentioned several times in UK Prime Minister Tony Blair’s speeches from the years 

2000 to 2002(Roberts and Devine 2003). It has also been introduced as a significant 

social development strategy by the World Bank(Woolcock and Narayan 2000). 

Social capital sometimes has been depicted as a magic remedy to cure several 

social problems. It was studied beyond the sociology field into the fields of 

education, political science, business and public health. The studies found the 

association between social capital and school attrition, academic performance, crime 

rate, juvenile delinquency, political participation, organisation business benefit and 

health status(Macinko and Starfield 2001). 

In the Thai context, the notion of social capital was re-introduced as one of the 

strategies to cope with the aftermath of the 1997 financial crisis. Shivakumar et al. 

proposed that Thai social capital has been depleted as a result of modern 

development and the financial crisis(Shivakumar et al. 1998). In 1998, King 

BhumibolAdulyadej officially addressed the concept of “new theory on the 

sufficiency economy” as a model of self-reliance that could lead to economic-

194 



reliance and a sustainable future(อุดมพร อมรธรรม 2549). From then on, social capital 

along with other concepts in the same category such as self-reliance, sufficiency and 

moderation were heavily promoted as the national values by Thai governments. 

Recently, the Thai National Economic and Social Development Board recognised 

the concept of social capital as a scheme of country development in Thailand’s 10 th 

national economic and social development plan (this plan covered the country’s 

development strategies from 2007?2011). 

Definition of social capital 

There are several definitions of social capital. In the broadest sense, social 

capital is a type of asset. It was differentiated from two other well-known capitals: 

financial capital and human capital. While people’s financial capital was the amount 

in their bank account, and their human capital was what was in their head or their 

ability to perform the task, their social capital could be found in the structure of their 

relationships(Portes 1998). Leading scholars accepted that social capital could be 

both an individual asset and a community attribute. Bourdieu defined this notion as 

“the aggregate of the actual of potential resources which are linked to possession of 

a durable network of more or less institutionalized relationships of mutual 

acquaintance or recognition”(Bourdieu 1986). Coleman defined social capital 

through its function. Coleman’s social capital included the entities in the social 

structures that facilitate certain actions of person or the communities who belonged 

to those structures. More recently, Putnam’s definition of social capital as “the 

connections among individuals–social networks and the norms of reciprocity and 

trustworthiness that arise from them(Putnam 2000)”, was the most widely accepted. 

Used in a practical perspective, a simplified categorisation of social capital 

was proposed. Two perspectives of social capital: cognitive and structural (Bain et 

al. 1998, cited in De Silva 2005) were widely accepted(De Silva et al. 2005). The 

cognitive social capital, what people “feel”, referred to the individual’s 

characteristics such as trust and reciprocity, while the structural social capital could 

be found in what people “do” which referred to group participation and networking. 

Social capitaland Sufficiency Economy in Thai’s context 

The Thai National Economic and Social Development Board (NESDB) 

adjusted the definition of social definitions to fit Thai’s social context in their 10 th 

economic and social development plan (2007-2011)(สำนักงานคณะกรรมการพัฒนาเศรษฐกิจ 

และสังคมแห่งชาติ 2549). In Thai social context, social capital was the structure of the 

relationships of four elements: people, institution, culture and knowledge. The 

people element included their morality, their ability and wisdom, while the 

institution were family, religion, politics and administration, education, business and 

the media. The element of culture included the belief, faith, social norm; moreover, 

the historical buildings, sites and objects were also included in this group. Unlike the 

definitions given by Seeman(Seeman and Berkman 1988) and Schwarzer(Schwarzer



195 

and Leppin 1991), who considered social support to be the consequences of social 

networks, the Thai NESDB integrated social network and social support into their 

definition of social capital. The knowledge element consisted of the local 

wisdomand the new knowledge(สำนักงานคณะกรรมการพัฒนาเศรษฐกิจและสังคมแห่งชาติ 2548). 

The NESDB considered those four elements as Thai society’s assets and as the 

critical aspects for promoting desirable Thai lifestyle and economic growth. 

The NESDB’s definition integrates human capital and social capital in their 

definitions. Moreover, the level of reference clearly mentioned that Thai’s social 

capital could be considered at both an individual and community level. 

In order to clarify the terms, in this paper, “social capital” refers to the 

traditional meaning given by social theorists, and “Thai social capital” will indicate 

the meaning given by NESDB. 

The NESDB broad definition of Thai social capital went along very well with 

views of several Thai scholars on the discourse of Thai development. 

PongpisitWisetkul and ApichaiPanthasen suggested the notion of Buddhist 

Meritlism and Buddhist economics(พงษ์พิสิฏฐ์ วิเศษกุล. 2551; อภิชัย พันธเสน และคณะ 2549). 

Both of them applied the Thai Theravada Buddhist teachings and several concepts 

that were familiar by Thai lay people such as Punna, Dana and Sila (Thai: บุญ, ทาน, 

ศีล) to challenge the mainstream consumerist economic system. Seri Phongphit’s 

view of social capital was widely accepted. He differentiated money as distinct 

financial capital and he urged the people to focus more on natural resources capital, 

wisdom capital and social capital. Like NESDB, in some contexts, Seri included all 

non-monetary capital and categorised them as social capital. In his acclaimed “back 

to the roots” notion he proposed the promotion of social capital as a strategy to 

address Thai poverty. In this sense, social capital incorporated the inherited local 

wisdoms that were expressed in the culture, traditions, life style, value system and 

the fertility of the communities’ environmental system(เสรี พงศ์พิศ 2545; เสรี พงศ์พิศ 

2548a; เสรี พงศ์พิศ 2549). 

It could be claimed that the most well-known development philosophy in 

contemporary Thai society is the King BhumibolAdulyadej’s“Sufficiency Economy” 

(Thai: เศรษฐกิจพอเพียง). The core concept of this philosophy was translated from 

theeconomic and social development plan as: (Krongkaew 2005) 

“Sufficiency Economy is a philosophy that guides the livelihood and behavior 

of people at all levels, from the family to the community to the country, on matters 

concerning national development and administration. It calls for a “middle way” to 

be observed, especially in pursuing economic development in keeping with the 

world of globalization. Sufficiency means moderation and reasonableness, including 

the need to build a reasonable immune system against shocks from the outside or 

from the inside. Intelligence, attentiveness, and extreme care should be used to 

ensure that all plans and every step of their implementation are based on knowledge. 

At the same time we must build up the spiritual foundation of all people in the

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nation, especially state officials, scholars, and business people at all levels, so they 

are conscious of moral integrity and honesty and they strive for the appropriate 

wisdom to live life with forbearance, diligence, self-awareness, intelligence, and 

attentiveness. In this way we can hope to maintain balance and be ready to cope with 

rapid physical, social, environmental, and cultural changes from the outside world.” 

NithiEawsriwong, one of the most influential Thai social scientists, concluded 

the ultimate goal of Sufficiency Economy was to establish the security of the four 

life essences and sustainability (the four life essences included food, clothing, 

accommodation, and medicine). This ideology is also the social goal of other 

economic philosophies. However, while communism suggested that the security of 

four life essences could be established by the state, and capitalism assigned this task 

to the mechanism of the free market, the sufficiency economy required the 

cooperation among people, community and the state. Unlike the other perspectives 

that considered the sufficiency economy as mere agricultural technique or even a set 

of financial ethics, Nithi proposed sufficiency economy as a culture. He argued that 

the sufficiency economy is the opposite of individualism; it required the 

interconnectedness between people and their ecosystem. He asserted that strong 

social/community bonds, the social capital, was the key element for achieving the 

sufficiency economy (นิธิ เอียวศรีวงศ์ 2543). 

The Inpaeng network is another outstanding example of how Isaan people 

adjusted themselves in order to cope with the modern constraint. In short, Inpaeng is 

the name of a non-profit network that aims to promote a self-reliant lifestyle for 

people living around the Phuphan mountain range at the middle of the Isaan area. 

One of the Inpaeng’s main strategies was to utilise the unique Thai social capital 

acquired from the communities. This research study will explore Thai social capital 

according to Inpaeng context. 

Method 

This study observed social activities and interviewed some key informants 

between January and June 2008. Two groups of informants were acquired. The first 

group of informants wereInpaeng leaders who involved in Inpaeng network 

administration, training course, forest protection, community financial management 

and community business. Informants who were Inpaeng members with no 

administrative work were categorised into the second group. They were members 

who adopted the Inpaeng lifestyle. These informants were the living evidence 

confirming that living according to Inpaeng concept could be fruitful. All informants 

were informed about the research project before the interview took place and were 

asked verbally for the audio recording consent. Most of the observations and 

interviews took place in the Inpaengcentre, Kudbak district, Sakonnakhon province, 

seven hundred kilometers from Bangkok. The Inpaengcentre is the training venue 

and the administrative office of the Inpaeng network. Social events such as Inpaeng 

administrative meetings, staff meetings, informal meetings and network conferences 

also take place at the Inpaengcentre. However, some social events were observed



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outside the Inpaengcentre including shamanism traditional healing rituals, religious 

ceremonies, including cremation rituals and visits to Inpaeng members’ farms. 

 

Background of Inpaeng network 

History 

Inpaeng is the name of a social network and social movement that promotes 

sufficiency and an eco-friendly lifestyle among Thai rural small-scale farmers. It is 

one of a number of NGOs (non-government organisations) that promoted the 

c o n c e p t a v i d l y s i n c e t h e 4 D e c e m b e r 1 9 9 7 b i r t h d a y s p e e c h b y K i n g 

BhumibolAdulyadej, though NGOs had previously promoted this concept based on 

increased dignity through economic self-sufficiency (setthakitphor-phiang; Thai: 

เศรษฐกิจพอเพียง), or self-reliance (pheung-toneng; Thai: พึ่งพาตนเอง),and a new localism 

(thongthin-niyom; Thai: ท้องถิ่นนิยม) – specifically a localism discourse known as 

“community culture” (watthanathamchumchon; Thai: วัฒนธรรมชุมชน). 

Most of the network members live around the Phuphan mountain range (see 

map). This network has reinforced its concept of sufficient agricultural lifestyle to its 

members via seminar, training, dialoguing, and supplying resources. 

The name “Inpaeng” is a combination of two words “In” and “Paeng”. “In” is 

the name of a Hindu god “Indra”, the lord of heaven and “Paeng” means to 

establish. Therefore, Inpaeng implies the land or area that has been established by an 

Indic deity. The name was given in 1990, to this network, by MrBoasriSrisung: the 

chair of Thai-Isaan foundation. MrBoasri visited the network near the Phuphan 

mountain range and was very impressed by its fertility; the land is incredibly fertile 

as if it were created and blessed by lord Indra. 

The movement originated in 1986. MrThawatchaiKunwong, a young 

University graduate, was sponsored by the Village foundation to initiate a rural 

development project. He was assigned to study the lifestyle of the ethnic “Kaleang” 

(Thai: กะเลิง) in Kudbak and used ethnographic approaches in his data collection. 

Thawatchai observed and talked to local scholars, the elders and the local leaders 

and also took part in community ceremonies and activities. He found much local 

wisdom concerning plantation, herbal medicine and forest management that was 

ignored and labeled as outdated concepts by the government development scheme. 

After the sponsored money was used up, he created his own “back to the roots” 

campaign in the same Kudbak area. The campaign aimed to revive local wisdoms 

integrated with new ecological movement. Thawatchai set some community 

meetings to analyze the situation of the village. Looking back to the past, evaluating 

the present and foreseeing the future, they found that, by blindly following the 

government-recommended programs of cash crop plantations, the communities 

would finally collapse. It was concluded from the community meeting that in order

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to survive, they needed to change cash crop plantation into planting food crops to 

serve families needs. Meanwhile, the deforestation continues to be a very critical 

issue. In the villagers’ perspective, the forest is the main source of food and 

household commodities. They found that food gathering from the forest was getting 

harder to locate, and also the reduced rainfall as an indicator of the depleted forests. 

In order to address such problems, an active group of thirteen farmers was formed to 

take action according to the concept of sufficiency. After a while, they formed a 

more extensive network by introducing friends and relatives to Inpaeng ideas. In 

1988, they bought a piece of land and built Inpaengcentre as a place for the 

network’s activities. From that time onwards, more and more people were attracted 

to the idea of economic self-sufficiency. In 2009, Inpaeng members increased to 

almost 30,000 people located in four provinces around the Phuphan mountain range. 

Inpaeng’s concepts and missions 

As noted in the Inpaeng 2002-2003 annual report accompanied with some 

articles on Inpaeng network(เครือข่ายอินแปง 2005; รัตนา โตสกุล et al. 2548; เสรี พงศ์พิศ 

2545), the main concepts can be summarized as follows. 

Firstly, regarding the concept of reflection, members were asked to look back 

to the past, compare their quality of life to the present, and project the future 

situation. As a result of several conversations and meetings, it was seen that their 

quality of life at the present time was diminishing compared to the past and the trend 

looked like it would get worse in the future. In the near future, they predicted more 

serious droughts, lower product prices, more farm chemical use, more debts, worse 

physical health due to chemical exposure, and more family stress due to emigration 

for better jobs. 

Secondly, with respect to the concept of community strength, Inpaeng 

members were encouraged to explore their communities’ strengths. The strengths 

could be identified in several forms such as community norm, natural resources, 

community setting, local wisdom and the presence of local scholars. Inpaeng’s 

believed that by focusing on communities’ strengths, not on problems the members 

could design their sufficiency lifestyle better. 

Thirdly, with the concept of evidence-based decision making, community 

research skills were introduced to the members. Inpaeng networks encouraged their 

members to analyse their annual food intake and household consumption. Local 

research, exploring community food consumption, was carried out. They found that 

most of the food consumed in the community could be produced by the people in the 

community. Then they were encouraged to change from monoculture cash cropping 

such as cassava, sugarcane, or eucalyptus forests to the mixed, varied, integrated 

farming systems. This concept of evidence-based decision making can be considered 

as the counterpart of the “blind follower” concept. People generally make decisions, 

particularly farming decisions, following neighbors’ or government suggestions 

without adequate understanding to make their own decisions. For example, when 

cassava’s price is rising, everyone changes their paddy field to cassava planting or



199 

plants eucalyptus trees for short-term profit (selling to pulp factory) without 

realising the long-term negative effects on soil fertility. For several decades, cash 

cropping has been followed by small-scale farmers. The Inpaeng diverse integrated 

system provided an alternative to market dependence. Inpaeng argued that instead of 

selling cash crops and gaining money to buy food, planting food to serve family 

needs was more sensible. 

Finally, with regards to the concept of networking and next generation 

recruiting, the elderly were encouraged to share their learning experiences with the 

younger members. The knowledge transference, knowledge management and 

recruitment of new generation members ensured the sustainability of the network. 

Inpaeng’s missions are published in the same annual report. These missions, in 

other perspective, can be considered as the outcomes of the Inpaeng’s concepts. 

Inpaeng’s first mission is to create locally-appropriated, sustainable agricultural 

system; including household food security, organic plantation and the protection of 

the Phuphan mountain range forest from depletion. They hoped that by sustaining 

household food security, the Phuphan depletion due to the hunting-gathering would 

be reduced. The distribution of Inpaeng members around that Phuphan mountain 

range, marked by Tambon location (yellow pins), was illustrated in Figure 1 

Figure 1: The distribution of Inpaeng members by Tambon location 

(picture from Google map) 

9 

Figure 1: The distribution of Inpaeng members by Tambon location (picture from Google map)

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The second Inpaeng mission was to promote community entrepreneurship. 

Given that food security had been established, generally, forest-like plantations 

provided more than the family annual consumption. Food preservation and 

transformation were required to manage the excess. Marketing and financial 

management of the product should be implemented through community 

entrepreneurs. Local milling groups, organic fertiliser production, herbal medicine 

manufacturing and wild berry juice production were examples of the community 

entrepreneurship demonstrated through the Inpaengcentre. 

The third mission was to establish the community welfare system. To promote 

community welfare, saving or microfinance groups have been formed. Members of 

the saving group don’t need collateral to borrow money. The interest gained from 

lending is used for member’s benefits such as money for hospital admission and 

funeral funds. 

It is evident that these three missions were interconnected. When families 

established their food security, they were more likely to have excess production (first 

mission). The knowledge and technology were required to preserve, transform and 

manage excess production (second mission). Finally, a system was required for 

distributing the products to the market, for managing financial business and for 

strengthening community welfare (third mission). 

In conclusion, the Inpaeng network promotes self-reliance and sustainable 

integrated agricultural production, and in food security. Spiritually it promotes 

moderation, thoughtfulness/consideration, encourages ecological-friendliness and 

morality. 

 

The Social capital of the Inpaeng network 

The relationship between social capital and health can be reviewed from many 

studies(Kawachi et al. 1996; Kawachi et al. 1997; Kennedy et al. 1998). In recent 

years, concepts of social capital have been studied for the benefit of health 

promotion. Social capital can be defined as characteristics that reflect the 

connectedness of community members and neighborhood. These characteristics 

include social network, social norms, social engagement, social cohesion and trust 

(Kawachi and Kennedy 1997; Putnam 1995). Social capital can be inferred to all 

forms of social aggregation, bounding and bridging for the purpose of its members’ 

mutual benefit(Baum and Ziersch 2003). Social capital can be considered as a 

determinant of health and well being. Putnam argues that people who live in high 

social capital communities have lower risk for premature death and many major 

diseases including cancer and heart attacks compared to those who live in low-social 

capital communities(Putnam 2000). In the field of oral health, Watt suggests that 

social capital should be an important framework for oral health promotion(Watt 

2002). Some research shows the studies of social capital and oral health or oral 

health-related issues(Gilbert et al. 2003; Holtgrave and Crosby 2006).



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Seri Pongphit, a leading Thai scholar on community development, suggested 

that social capital was a significant element of community development(เสรี พงศ์พิศ 

2545; เสรี พงศ์พิศ 2548a; เสรี พงศ์พิศ 2548b). Survival, Sufficiency and Sustainability 

were three domains Seri proposed as the characteristics to address the poverty (เสรี 

พงศ์พิศ 2549). Based on those domains, this study adjusted these concepts and used 

them for the description of social capital in the context of Inpaeng’s experience. 

I have used these terms 

Survival, Sufficiency, Sustainability as Inpaeng’s social capital 

The contemporary world is seen as being driven by a high dependency on the 

market economy, especially for small farmers who depend on the cash crops price. 

Farmers are frequently caught in the debt cycle and ignoring local knowledge brings 

about inevitable poverty. In Seri’s definition, “survive” means surviving from 

financial threats, “sufficient” life means living and consuming in moderation, and 

“sustainable” means establishing a sustainable system of local economy and 

networking. Seri illustrated 3Ss as the foundation of “the pyramid of life”. These 3Ss 

domains, accompanied with the learning process and the managing process, formed 

a complete pyramid of life. Seri did not reject the role of money and power to solve 

the poverty problem, but he argued that money and power should be used as 

supporting factors, not the core, when constructing the pyramid of life. 

The following paragraphs illustrate the social phenomena observed from the 

Inpaeng network according to each domain. 

Survival 

The first domain of Thai rural social capital is Survival. Ability to survive from 

financial constraints was analyzed. According to the observations and interviews, 

“Inpaeng’s survival” concerned food security, social welfare (with health care 

accessibility) and the competency to produce major items for farmers’ lives. 

To survive financial constraints, Inpaeng established the perception of money 

and happiness in contrast to the mainstream capitalism perception that money is 

happiness. During the first to the third Thai economic development plan, the notion 

of “work is money, money is work, this is the way to happiness” was promoted as 

the Thai social value(นิธิ เอียวศรีวงศ์ ไม่ระบุปี). Rural people take loans to pay for nonperforming 

entities such as paying back another loan or for buying luxurious 

commodities. This could be considered as “a vicious cycle of debt”.Inpaeng’s notion 

of “wisdom leads money” reflected their view of money. They did not reject 

money’s significance but advocated wise management of money as more critical. 

Inpaeng supported the knowledge of money management and saving system, 

accompany with a self-reliance lifestyle, to help their members out of vicious debt 

cycle.

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As mentioned in the Inpaeng’s mission, food security, achieved by the forestlike 

plantation, is one of the most critical issues of the network. This study found 

several indicators required to build up the food security of a household. First of all, 

the procession of land is very important. On average, each Thai small scale farmer 

has 3 Rai (4,800 square metres) for the plantation (ไทยโพสต์ 2551). A lesson learned 

from the past indicated that it is not the amount, but the usage of the land that 

contributed to the “Survival”. Before adopting the Inpaeng concepts, many families 

expanded their land for cash crop plantations by mean of deforestation. They found 

that the more land one processed the more expenses were needed for every process 

of cash crop plantations from the beginning to the harvest. This did not always mean 

more profit. Besides, the adverse effects of deforestation cannot be underestimated. 

They witnessed extreme climate changes which had started from previous decades, 

less or delayed rain, more pests and drier soil. Theoretically, Inpaeng’s members 

allocated their land into cash crop areas, fishery pond areas, chicken coop or pig pen 

areas and forest-like plantation areas. Having various kinds of food to consume is 

the second indicator of food security. Local food is regarded as better food than the 

“idiot food” (Thai: อาหารปัญญาอ่อน) (market, industrialized, preservative added foods). 

According to the concept of traditional health, the best food that fit one’s physical 

needs can be gathered around the area where one was born (Thai: เกิดที่ไหน กินที่นั่น). 

In his back to the roots journey, Seri Pongphit found that local river fish, 

local vegetables and Namwha bananas are “his” food (Thai: กินปลาเป็นหลัก กินผักเป็นยา 

กล้วยน้ำว้าบำรุงกำลัง). 

Local foods around the Phuphan mountain range are innumerable; they range 

from local vegetables, several kinds of bamboo shoots and mushrooms to animals 

such as feral pigs and several species of insects. These local species plantations, 

some vegetables, mushrooms, insects can be harvested only at a specific time of the 

year. Local species plants requires less care compared to cash crops. The plants grow 

and survive with little or no chemical intervention (such as pesticides and 

herbicides). Therefore, consumers are less exposed to chemical agents. This idea of 

consuming organic products, or “clean food” in their words, very much concerns the 

rural people. Many Inpaeng members regard the availability of clean food as the 

main factor contributing to longevity. 

“In the generations of our great grandfather, people died because of old 

age. We hardly heard that great grannies suffered from diseases like diabetes 

or cancer. But look at our generation, people are suffering from diabetes and 

many of them died from cancer, I think that was because we have been 

exposed to chemical fertiliser, pesticide and herbicide too much. There was 

no chemical usage in previous generations. We are not only exposed to those 

chemicals as users, but we also eat them via market food and even food from 

our farms.” 

Or



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“Eating long (shelf) life food, shortens the consumer’s life. 

Eating short (shelf) life food, lengthens the consumer’s life.” 

In conclusion, food security means not only having sufficient food for family 

members to consume throughout the year, but it also requires that foods which are 

local, fresh, harvested according to the season, varied and uncontaminated with 

chemical. 

Apart from food security, the local welfare system was also found to be a 

critical issue that contributed to Survival. For city people, having welfare care when 

one is in old age could simply mean holding enough money to maintain quality of 

life. But for Inpaeng members, welfare could refer to both money and the abundance 

of their forest-like fields. They believe that the forest supports infinite benefits, so a 

family owning a forest is the best way to establish life welfare when getting old. The 

benefit gained by having a forest in one’s backyard is not limited to the owner’s 

sake. An Inpaeng member, whose field is a study site for new members, said that her 

greatest satisfaction is that she can share her products from the forest with her 

siblings, relatives and friends. The area acts like a free supermarket where everyone 

can come to pick food they want. When questioned whether it would take two 

decades in order to gain some benefits from the forest, it may not be worth investing 

in this activity, MrKamduang, one of the Esann scholars, said “Either you do it or 

not, the clock is always ticking. Twenty years will come to you.” 

A new way to celebrate a baby being born has been established among Inpaeng 

members. The parents would carefully select and plant several kinds of trees they 

considered which as the birthday gift to the new born. A baby boy of an Inpaeng 

staff, Mr K, was born during the study. Mr K collected 2,000 seedlings of various 

trees that could be used as food, building material and shade and planted those 

seedlings on his farm land to celebrate. He believes that this is the best investment 

for his son. The trees will grow as the boy grows up. This forest-like field area will 

supply plenty of food for the young boy. After twenty or thirty years, this boy will 

turn into a man and may want to get married; he can cut some hard wood trees in his 

field to build a new house for his future family. Then, if he keeps adding trees to the 

forest the benefits from selling products to others will be his best welfare when he is 

old and retired. 

Finally, the ability to produce household items was included in the “Survival” 

domain of social capital. An unpublished Inpaeng study found that one third of 

money spent by Inpaeng households concerns the costs of food and household 

groceries. Knowing that most raw materials for producing household groceries could 

be planted in the area, the Inpaeng network encouraged their members to plant 

several species of trees to produce juices and wine (e.g. local berry: “Kor” Thai: ค้อ, 

“Ngaew” Thai: แงว), snack (e.g. sticky rice, bananas), body care products (e.g. 

tamarinds for body lotions, “Anchan”Thai: อัญชัน for hair shampoo). Several training 

courses on making household products were held in the Inpaengcentre. More than 

sixty items of food, medicine and household items including body soap, hair

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shampoo, body cream, herbal medicine, mosquito repellant, herbal tea, snacks and 

clothing material can be produced using raw materials from the network. By using 

the local product, it can be expected that Inpaeng members can save a certain 

amount of money. 

In conclusion, several dimensions to describe the “survival” domain of social 

capital were investigated in the Inpaeng network. The competency to survive from 

financial threats, in that context, consists of having food security, establishing one’s 

welfare and the ability to produce household groceries. 

Sufficiency 

Sufficiency is the second domain of Inpaeng social capital, explored in this 

research. Sufficiency is the idea of promoting a balanced, moderate, wisdom-driven 

lifestyle. It is the counterpart of consumption based on greed and a money-driven 

way of life. The Inpaeng suggested that members change their points of view, aims 

of life, and values of living before changing their behaviour. An Inpaeng leader 

expressed the Inpaeng way of training their members as follows: 

“Plant the (ideas into the) man, before the trees.” 

Inpaeng members were given the big picture of how capitalism and 

consumerism leads to the collapse of communities. However, people cannot live in a 

primitive lifestyle that depends heavily on the fertility of soil and the abundance of 

natural resources. A new paradigm that appreciates the ancient wisdom of sharing, 

compassion and respect for Mother Nature, while adopting modern concepts of 

networking, empowering and resource managing is needed. 

The characteristics of the Sufficiency domain were explored in two aspects. 

The first aspect considered process in one’s mind. This aspect involved mindfulness 

and the five precepts of practicing. The outcome of those qualities of mind is 

expressed and explored in the second aspect which is the household financial 

management. 

Sufficiency, for the first aspect, is the consonant idea with the Buddhist 

sermons. The “unimpeachable path”, suggested in the Buddhist Canon, reveals three 

practices that will lead to a peaceful and useful stage of life. Those practices are 

1. control of the senses (Pali: Indriya-samvara, Thai: อินทรียสังวร) 2.moderation in 

eating (Pali: Bhojane-mattannuta, Thai: โภชเนมัตตัญญุตา) and 3. practice of wakefulness 

(Pali: Jagriyanuyoga, Thai: ชาคริยานุโยค)(พระพรหมคุณาภรณ์ (ป.อ.ปยุตโต)). In short, to 

develop the sufficient lifestyle, one should “know” and “control” desires. 

It can be claimed that the notion of mindfulness is common and well-known 

for Thai rural farmers, particularly around Inpaeng network area; Sakonnakhon. The 

area is known by the Thai Buddhists as “the cradle of the enlighten monks”. Tropical 

forests surround the province of Sakonnakhon were the areas that Venerable 

AjaanMun (1870-1949), the monk who established the ascetic forest monk tradition,



205 

wandered around to practice meditation a century ago. Hundreds of monasteries 

proceeding AjannMun’s Buddhist forest tradition, have been formed by his monk 

disciples all over this area. For this reason, it is not an overstatement to claim that 

people there know, with no need for further clarification, what mindfulness is. 

This study found that mindfulness is the fundamental quality of one’s mind to 

develop “Sufficiency”. Metaphorically, mindfulness is a gate keeper who watches 

over senses that pass six gates. Those gates are eyes, ears, nose, tongue, touch and 

mind. Mindful mind can separate the desires and physical needs apart. Consuming 

according to physical needs but not by desire, in the Buddhist point of view, is the 

wisdom-driven life. One’s level of mindfulness can be explored via money 

expenses. People with higher levels of mindfulness tend to buy things because of it 

is need, not by desires. Moreover, monitoring one’s expense list is believed to be the 

activity to gain the awareness of spending money. During the data collection, several 

government campaign programs promoting household expense recording were 

enacted. 

In order to adopt the Inpaeng concept efficiently, one needs a certain level of 

mindfulness or, in plain language, needs to have a strong-minded in order to 

overcome the money-driven lifestyle. The Inpaeng proposed the changing notion of 

“money as the core of everything” or “money leads wisdom” into “wisdom leads 

money”. They proposed the changing of “money as a goal of working” into 

“sufficiency and self-dependency as a goal of working”. 

During the data collection period, a project called “start jotting down to wipe 

out poverty” (Thai: พอเริ่มจด ก็เลิกจน), initiated by the Bank of Agriculture and 

Agricultural cooperatives (BAAC), was launched. BAAC promoted expense 

recording behavior to farmers’ families. Recording family expenses might be the 

best way to monitor and control money spending. The family financial record 

activity has been observed in Inpaeng communities. 

The Inpaeng network has provided its members with some reinforcing 

structures to have a sufficient life, in term of money management. Many community 

saving groups or local banks have been established in Inpaeng villages. Despite the 

offering of lower interest rate loans, the main objective of these saving groups is 

promoting a monthly household saving scheme. Members are encouraged to give 

their word of honor for saving a certain amount of money each month. Unlike a 

bank, these saving groups work as hosts for group meetings for monthly deposits, 

rather than for individual financial inquiries. Once a month, all members meet in 

community halls and deposit money into their account. This research found the 

meetings were a chance for saving group members to meet and exchange their 

stories of money management. It is the best chance to evaluate one’s financial 

situation by comparing to neighbours living in the same village, and generally, 

ranking in the same socio-economic status. The meetings are a chance to exchange 

and learn from each other. 

Participating in merit (Pali: puñña, Thai: บุญ)ceremonies (Thai: งานบุญ); can also

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be considered as activities that promote sufficiency. Punna ceremonies mean social 

events that call for the assistance of communities’ members in terms of labour, 

money and any other resources. According to Isaan tradition, the Twelve Traditions 

(Thai: ฮีตสิบสอง), the date of the full moon is the date for a Buddhist ceremony. The 

Twelve Traditions Punna ceremonies usually take place at local monasteries and are 

hosted by everyone in the village. Each month requires different food and objects or 

talisman to use in the ceremony. For example, rice-egg crackers are needed for the 

Punna ceremony of the second moon, the parade telling the story of a Bodhisattva (a 

compassionate higher being or Buddha-to-be) is needed for the fourth moon Punna 

ceremony and the big column of candle is made in the occasion of eighth moon 

Punna. Moreover, several Punna ceremonies apart from the Twelve Traditions, 

hosted by families, such as newborn cerebrations, weddings, ordinations and 

funerals could be observed. According to Isaan tradition, participating in Punna 

ceremonies is the expression of social cohesion. The one who misses several Punna 

ceremonies would be considered skeptical and could be disregarded from the 

community members. Therefore, Punna ceremonies can be considered as social 

events for its member to meet monks and practice Buddhist precepts, to confirm 

their community belonging, to share information and resources and to conserve 

traditional art and culture. 

While the economic aspect of the Survival domain explored the ability to 

produce commodities to save some money, the “Sufficiency” domain explored 

factors to ensure that the money is saved and spent mindfully. 

In conclusion, Sufficiency explored in the Inpaeng network is the ability to 

“think before spending and consuming”. To develop that ability, it involves the 

practice of mindfulness, the participation in religious ceremonies as chances to meet 

monks and chances to practice Buddhist precepts. Moreover, the locally appropriate 

financial organisation is also one of the factors to reinforce that ability. 


Unlike Survival and Sufficiency, the domain of Sustainability is not the 

characteristics of an individual or a household; it is the attribute of the aggregated 

units. Sustainability concerns the characteristics of participants’ communities and 

their perceptions of those communities. Sustainability involves social engagement, 

social trust, environmental issues, the local natural resource management, and the 

perception to the young generation. 

Explored in rural communities, social groups can be categorised into several 

groups according to the objectives of those groups such as recreation groups, 

volunteer groups, financial groups, saving groups, religious groups, occupational 

groups, and administrative groups. 

Inpaeng network presents a variety of activities for its members to subscribe. 

Its activities range from administrative groups of Inpaeng trainers, Inpaeng 

administrators and staff to volunteer groups, local radio DJ groups, bush fire



207 

prevention patrol groups, community ecologists groups to saving groups to 

occupation groups of seedling, herbal medicine, wine maker group, bio-diesel group 

and others. 

According to rural Isaan community context, the sense of social trust is 

expressed in the way their houses are set up. People who live in the same village 

know each other. Most of the houses are elevated one floor houses with an open 

ground area. The area is used as the multi-purpose space. It can be interchangeably 

utilised as a dining area, living space, greeting area, meeting hall or even as a 

children’s play ground. The rough fences around village houses are for preventing 

animals, such as cattle and stray dogs, not people, to enter the area. It is a common 

tradition to talk to strangers entering the village. After knowing each other, it is also 

very common to call the strangers for a dinner. This trust issue can be observed 

through the Inpaeng training courses. The accommodation area in Inpaengcentre can 

host up to thirty trainees. However, if there are more trainees who are participated in 

a 3-day training program, they would spend their nights in villagers’ houses around 

the centre. It can be assumed by the evidence above that the level of people trust in 

the area of study is high. 

Many Inpaeng leaders gain trust from the members. Although some of the 

Inpaeng leaders are also public authorities such as village headmen or Tambon 

headmen, but a large number of them are not. 

This study found that concern with the young generations is an important 

issue. These concerns can be categorised into two groups. Firstly, it is a worry about 

reckless behaviours of youngsters living in the villages. The issues of drunk driving, 

motorcycle racing, drugs, sexual misbehavior and gangs fighting in the young 

generation were concerned by the older adults. When asked what factors contributed 

to the violence in the village, many of the participants referred to “those 

youngsters”. Concerned by this issue, the Inpaeng network has some constructive 

programs established for the younger generations to keep them from those risk 

behaviours. 

The “Dekhak Tin” (Thai: เด็กฮักถิ่น)or “kids love homeland” program was 

initiated by the Inpaeng network. The program trained the local adolescents to 

understand the interconnectedness between the trainees and their ecosystem. A 

project showing that everything is intertwined with everything was introduced. 

A program called “Inpaeng community ecologists training” aimed to draw the 

young adult generation back from working as cheap labour in big cities, to 

sustainable, self-reliance farming in their hometown. 

The research field note below describes Inpaeng community ecologists are as 

follows:

208 



“…the Inpaeng elderly would like them (the community ecologists) to 

understand soil, sky, Mother Nature and seasons. They want their offspring to 

realise the power and the value of farmers. Self-reliant farmers are much 

better than unskilled labours in big cities.” 

Inpaeng’s community ecologists were trained in many courses to develop their 

self-reliance competencies such as building the earth house, Phuphan’s biodiversity, 

hill tribes’ local wisdom of forest management, Thai traditional medicine, herbal 

medicine, organic agriculture, team management, network management or even 

website programming. 

These training courses were generated or sponsored by Inpaeng administrators 

who encouraged the youngster to set their own program of self-reliance agriculture. 

The elders expected that those youngsters can skip through the pitfalls of failed 

agricultural patterns and learn from the experience of former generations. 

The initial outcome of this program is that the community ecologists hold their 

own projects that they can make a living of it. Then, the long-term objectives are to 

practice the self-reliant agriculture, to keep the Phuphan Mountain range forest from 

depletion, and finally to cool down the globe. 

Environment seems to be the key outcome of all Inpaeng activities. Inpaeng 

people know how to live with the forest. The most challenging mission of the 

network is to balance the two extreme attitudes about the forest. First group: 

considering the forest as an unlimited resource to exploit without concerning the 

effect of depletion. Another group thinks of the forest as strictly untouchable arenas 

conserved for the sake of the environment. This study found that Inpaeng concept 

did not fit in either two extremes. The issue that concerns the Inpaeng is the 

“interaction” between people and the forest. They wanted to use the forest without 

depleting it. In Inpaeng perspectives, the forests help people to gain the self-reliance 

competency. At the same time, the self-reliance lifestyle directly and indirectly 

generates less environment impact compare to the industrialized lifestyle. 

In conclusion, this component of the research found that Thai social capital has 

three components Survival, Sufficiency, and Sustainability (3Ss). These attributes 

were the combination of local wisdom and modern management. Promoting Thai 

social capital, or 3Ss, did not mean require that people live in the ancient way of life. 

It may seem that the “good old days” in Thai rural area was the ideal community to 

live in. However, according to the situations mentioned earlier in this chapter and in 

chapter 1, it is impossible to live “back to the past”. Rather, the concept of Thai 

social capital encouraged people to live “back to the roots”. To go “back to the 

roots”, people needed to analyse their lifestyle, their environment, their networks 

and others. In short, people needed to gain a deep understanding on their 

culture(Seri Phongpit et al. no publishing year), knowing the strengths, weaknesses, 

opportunities and threats and to utilize all forms of capital they had in order to 

“stand by their own roots” or to manage their own lifestyles wisely and realistically.



209 

Summary 

Inpaeng’s perception of life integrated the Buddhist teaching of 

interconnectedness and interdependence. Social capital, derived from Inpaeng’s 

experience, involved three domains: Survival, Sufficiency and Sustainability. Food 

security, social welfare, accessibility to various forms of health care and competency 

to produce major items for farmers’ lives were the elements for “Survival” from 

financial constrains. The lifestyle of living in moderation and with mindfulness, 

thinking thoroughly before consuming, and effective financial management were the 

characteristics of the “Sufficiency” lifestyle. Finally, “Sustainability” incorporated 

the social trust, social engagement, social support, the concern of environmental 

issues. This last domain integrated the traditional social capital concept accompanied 

with the specific Isaan’s context of ecological concerns.

210 



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Group 

2 



The Village Economy: Capitalist AND 

Sufficiency-based – A Northeastern Thai Case 

Charles Keyes 

Professor Emeritus of Anthropology and International Studies 

University of Washington



215 

The Village Economy: Capitalist AND 

Sufficiency-based – A Northeastern Thai Case 1 

 

 

 

INTRODUCTION 

The 1997 crash of the Thai baht and the subsequent economic crisis was, 

without question, a major watershed event in the economic history of modern 

Thailand. In his book, Thailand at the Margins: Internationalization of the State and 

the Transformation of Labour, Jim Glassman concluded that the economic crisis of 

1997 demonstrated that the Thai economy “having been ‘opened’ and integrated into 

the rhythms of global capital accumulation over the course of more than a century” 

had come to experience “volatility in virtually full force” (Glassman 2004: 203). 

This volatility has led to a heightened sense of insecurity especially for those who 

have limited resources to weather the radical shifts in prices, wages, or access to 

capital. In Thailand those with the greatest sense of insecurity are those from rural 

areas who depend on selling their agricultural products or finding wage labor in 

factories or other forms of work in urban areas. 

The consequences of the volatility of the economy were profoundly felt in 

Thailand in 1997. The economic crisis which took place left many urban people as 

well as villagers in quite dire straits. In his birthday speech in December 1997 King 

Bhumipol Adulyadej expressed his deep concern for the people of the country who 

were in trouble because of the crisis. 2 He proposed that if his subjects would 

practice a “sufficiency economy” (sêthakit phôphiang), “even fifty percent, 

but perhaps only twenty-five percent” the crisis could be made bearable. The King 

proposed that the people of the country should embrace practices which accentuated 

practices of cooperation and self-reliance to provide for their basic needs rather than 

depending on markets that were subject to the insecurities of the global capitalist 

economy. 

The King’s philosophy has antecedents in what had previously been known as 

“Buddhist economics.” This term was the title of a chapter in a book, Small Is 

Beautiful by the economist E.F. Schumacher. Schumacher (1973: 58) argued that 

1 

This paper was presented as a keynote address for the 10 th International Thai Studies 

Conference, Thammasat University, Bangkok, January 2008. The public presentation of the paper 

included many photos, but only a few are included here. The paper is still a work in progress and 

comments are very welcome. 

2 

An English translation of the King’s speech can be found on line at http://kanchanapisek.or.th/ 

speeches/1997/1204.en.html.

216 



there is a ‘Buddhist economics’ which contrasts with the ‘materialist economics’ of 

the post-Christian and Communist West. Where modern or materialist economics is 

centered on commodities and the product of labor, Buddhist economics is centered 

on work and the worker. “Modern economics ... tries to maximise human 

satisfactions by the optimal pattern of consumption, while [Buddhist economics] 

tries to maximise consumption by the optimal pattern of productive effort.” In the 

same vein, “while the materialist is mainly interested in goods, the Buddhist is 

mainly interested in liberation” (Schumacher 1973: 57) and production is the means 

to this end. Buddhist economics is best pursued within societies that emphasize selfsufficiency: 

“From the point of view of Buddhist economics, therefore, production 

from local resources for local need is the most rational way of economic life, while 

dependence on imports from afar and the consequent need to produce for export to 

unknown and distant peoples is highly uneconomic and justifiable only in 

exceptional cases and on a small scale” (Schumacher 1973: 59). 

Prior to King Bhumipol’s famous speech, other Thai had also strongly 

advocated the adoption of Buddhist economics. By far the most influential was the 

late Buddhad?sa Bhikkhu. In numerous sermons he provided an articulate defense of 

an ethic which would foster suppression of personal greed in favor of redistribution 

of wealth to alleviate suffering more generally 3 . The highly respected Buddhist 

ethicist, the Venerable Prayudh Payutto, also strongly advocated the type of 

Buddhist economics sketched out by Buddhad?sa (see Prayudh Payutto 1994). 

Some lay followers of Buddhad?sa have attempted to create community 

organizations dedicated to what Buddhadasa had termed dhammic socialism. In an 

essay on “Buddhism and Development: Is Small Beautiful?” Sulak Sivaraksa 

(1981), for example, looked positively for inspiration to both Buddhad?sa and 

Schumacher. Sulak argued that the premises of ‘development’ promoted by 

economists and politicians entail accentuating the very desires that Buddhism 

considers the major impediments to the attainment of Nibb?na. Professor Chatthip 

Nartsupha in many of his works has identified Buddhist economics with the 

economic practices of Thai rural communities (Chatthip Nartsupha 1981, 1984, 

1999, 2005). King Bhumipol gave authoritative backing, thus, to an economic 

philosophy that has long been advanced in Thailand as a Buddhist critique of the 

excesses of capitalist development. 

Such a critique has not, however, deterred any Thai government since the 

middle of the 19th century from promoting the integration of the Thai economy into 

a global capitalist system. As a result, there is almost no one in Thailand today – 

save perhaps for a few forest monks – who is not dependent on a global market for 

income and/or for acquiring many needed goods and services. Nonetheless, there are 

some for whom Buddhist ideals of tempering desire, moderation and communal selfhelp 

still influence their economic practice. 

3 

See Buddhadãsa (1986, 1989); Jackson (1988); Radical Conservatism and (1990).



217 

Such a stance is, I suspect, most manifest among people who live in or were 

born in rural communities. The rural population of the country is still largely 

concentrated in northeastern Thailand. I will in this paper argue that the economy of 

northeastern Thai villages is a product of practices that are primarily oriented 

towards a global capitalist system, but which are also tempered by Buddhist ideals. I 

will draw on research which I have carried out for more than four decades in a rural 

community in Mahasarakham province in the center of the northeastern region to 

demonstrate that villagers there have fully embraced capitalist development in 

seeking to improve their own lives and/or those of their children and descendants. At 

the same time, I will also show that their success in the capitalist economy has for 

many been a consequence of an ethic that is rooted in village Buddhism. I will show 

further how practices and institutions associated with village Buddhism provide a 

sense of sanctuary from the vicissitudes of volatile capitalist economic forces. The 

dialectical practices of Buddhist and capitalist economies found in rural northeastern 

Thai society contrasts, I suggest, with the untempered capitalist ethic that is 

particularly manifest among the Thai urban middle class. 

 

A NEARLY SELF-SUFFICIENT ISAN VILLAGE 

Ban Nông Tün: A Central Isan Village 

In 1963-64 Jane Keyes, my wife (who took most of the photos I will show), 

and I first undertook fieldwork in rural northeastern Thailand. We chose a village in 

what I term the Isan rural heartland – the provinces of Khon Kaen, southern Udorn, 

Kalasin, Mahasarakham, Roi-Et, Yasothon, western Ubon, northern Surin, Sisaket, 

and Buriram, Chaiyaphum and northern Khorat. In this region the vast majority of 

people have long based their livelihood on the cultivation of glutinous rice in rainfed 

fields. They traditionally supplemented their diet with fish caught in the Chi and 

Mun rivers, but few in this central Isan region, unlike villagers living near the 

Mekong, depended primarily on fishing for their living. They also differ from 

villagers in the more hilly areas of the region – Loei, eastern Kalasin, Sakon 

Nakhon, and parts of Nakhon Phanom and Mukdahan – where lowland wet-rice 

cultivation is more difficult. 

The people of the Isan heartland are predominantly Thai-Lao, that is, they are 

speakers of dialects closely related to those found in central and southern Laos and 

have long followed cultural traditions which are also the same as those found in 

these areas of Laos. They differ in culture and language from the peoples of southern 

Sisaket, Surin and Buriram whose primary languages are Khmer or Kui, another 

Mon-Khmer language as well as from the people of Khorat who speak dialects 

related to central Thai.

218 



Map of Northeastern Thailand (Khorat Plateau) 

Map showing Ban Nông Tün, Tambon Khwao, Muang District, Mahasar 

akham Province, 1963 

Ban Nông Tün, the village in Tambon Khwao, M?ang District, Mahasa 

rakham province we chose to live and carry out research in, is located in the center 

of the Isan heartland. We have had the opportunity to carry out restudies in the 

village in 1980-83 and again in 2005 and have visited the village many times in 

between and since. Our most recent visit was on December 25 th , 2007. 4 

A Small Rural World in the early 1960s 

In the early 1960s Ban Nông Tün was a rather remote, quiet rural community 

whose economy was nearly self-sufficient. 

Main street of Bãn Nông Tün, 1963 (photo by Charles Keyes) 

The primary social unit of the village was a household which usually consisted 

of a husband and wife and their unmarried children, but which, following local 

custom, could also include a son-in-law since men settled after marriage with their 

wives. Like all rural communities in Northeastern Thailand at the time, Ban Nông 

Tün was a village of children and young people.Families lived in houses built of loc 

ally-available materials, with the exception in many houses that used corrugatediron 

roofing. 

In our first household census, we found that there were 119 households with a 

total of 700 people, or an average of 5.9 people per household. Like rural people 

throughout the Northeast at this time, Ban Nông Tün villagers had experienced a 

significant increase in birth rates over the previous decades. For the decade prior to 

1920 the rate of population growth for the whole of northeastern Thailand was 

approximately 2.0% per annum; it rose to 2.7% per year for the period of the 1920s 

and increased again to 3.3% for the decade between 1930 and the 1940s, the rate 

declined to 2.9% and then rose again to 3.1% in the 1950s and 3.4% in the 1960s. 5 

Villagers lived a life defined primarily by relations between kinsmen for 

producing the basic necessities of life and between fellow villagers for addressing 

moral and religious concerns. In 1963-64, villagers in Ban Nông Tün were engaged 

in producing primarily for their own consumption. Rice was cultivated using labor 

intensive methods. Plowing and harrowing of fields was done using water buffaloes. 

4 

We have been assisted in our research after our initial study by several colleagues – Suriya 

Smutkupt, Paitoon Mikusol, and Bussarawan Teerawichitchainan – and want to acknowledge their 

significant contributions to our research. Most of all we want to thank people of Ban Nông Tün for t 

heir tolerance of two farang who in January 1963 decided to make themselves part of their lives. We 

are especially grateful to the late Ngao Khamwicha (1935-1991), his wife, Nuan, and his daughter, 

Watsana, and their families, who have welcomed us into their homes in the village. 

5 

Population figures used for calculating these percentages have been taken, in part, from 

Lefferts (1974:62)



219 

Rice seed was first planted in seed beds and then the stalks were pulled up to plant 

in the fields. Supplementary foods included some garden crops, bamboo shoots, 

other plants and insects collected from the forest. The most important protein in the 

diet came from fish which were either caught by men or raised in ponds. 

Women not only were co-workers in agriculture, but they assumed 

responsibility for converting raw food, especially rice, into cooked food for 

consumption. At the time most village women converted rice paddy through use of a 

mortar and pestle mill. The staple was glutinous rice which women steamed in the 

morning for consumption during the day and then prepared new rice again at night. 

Women in Bãn Nông Tün pounding rice using a mortar and pestle, 196 

3 (photo by Jane Keyes) 

The village was not only self-sufficient in foodstuffs, but almost all clothing 

and utensils were also produced by villagers. Women produced all clothing worn 

from silk and cotton raised in village fields. Men, in addition to their work in the 

fields and in fishing (and very limited hunting), devoted their energies primarily to 

producing utensils out of bamboo and rattan. Men were also responsible for building 

and repairing houses. 

Village houses were made out of wood from trees cut in the forest, woven 

bamboo, and atap. However, one of the few items purchased by villagers was 

corrugated iron roofing and the iron used for metal tools. 

In short, the economic characteristics of Ban Nông Tün, like those of most Isan 

villages in the 1960s, exemplified what would today be termed a sufficiency 

economy. These characteristics were closely interwoven with the religious 

characteristics of the village. 

A Moral Community 

The village was a ‘moral community’ united by common worship of village 

spirits at the ‘navel of the village’ (bübãn) and ancestral spirits (phî pûtã) who 

resided in their own forest on the edge of the village. Offerings were made annually 

at these shrines. 

More importantly, villagers were united in their support of the local wat or 

Buddhist temple-monastery. Almost every village male ordained as a monk at the 

age of 20 for at least 3 months and often for two ‘lents’ (phansã). Many boys also 

spent time as novices at the wat. The monks and novices were central for the 

observance of an annual cycle of rituals. 

Preparations for a ritual the wat (Buddhist temple-monastery), 1963 

(photo by Jane Keyes)

220 



The ritual cycle, together with the agricultural cycle, gave meaning to most 

villagers for most of their lives from their birth, through their adolescence, courting, 

and marriage and concluding with their ageing and deaths. There were also other 

influences on their lives that emanated from the Thai nation-state that the village had 

long since been incorporated into and the economy linked to markets that extended 

even beyond Thailand. 

 

VILLAGERS EMBRACE CAPITALISM 

The Village on the Eve of ‘Development’ 

The village in the early 1960s was not totally self-sufficient. Some cash was 

generated through the sale of rice, a few other agricultural and craft products and 

through some wage labor outside of the village. Nonetheless, total cash income per 

household in 1963 was only about 3,000 baht, then equivalent to US$150. Cash was 

used for such thing as metal tools, corrugated iron roofing, health care, and 

especially support of the wat and the monks and novices. 

The one significant village enterprise was blacksmithing. Until the mid-1960s 

there were at least four blacksmiths in the village. The main cash crops, while still 

bringing very small amounts of income to villagers, were khao cao, the dominant 

varietal of rice in Thailand but different from the glutinous rice consumed by 

villagers, tobacco, and kenaf, a jute-like fiber crop. Rice was raised in paddy land 

while tobacco and kenaf were raised on land that was too high for paddy cultivation. 

By the 1960s a new economic practice was becoming significant especially for 

village men – namely, non-agricultural work for extended periods especially in 

Bangkok. In a survey carried out in 1963 I found that about 30% of men over the 

age of 20 had spent some months or even years working in jobs in Bangkok. While 

most who engaged in migrant work in the 1960s remitted or saved little money, 

some became the first entrepreneurs of the village. One young man had earned 

enough from work for six years in a Chinese noodle factory in Bangkok to open the 

only shop and the only rice mill in the village. 

First shop and rice mill in Bãn Nông Tün, established by same man 

(photos by Jane Keyes) 

This young man had been able to save sufficient money for his investment 

during his six years work in a Sino-Thai noodle factory in Bangkok because he 

knew how to ot thon, to withstand desire for immediate gratification. His ability had 

been cultivated during his six years as a novice and a monk. In short, he embodied a 

Buddhist version of the Protestant Ethic 6 . This ability to ot thon was also 

6 

I developed this interpretation further in another paper (Keyes 1983); also see Keyes (1990 

and 1991b).



221 

characteristic of many women who learned to subordinate their own desires to help 

their parents and later their husbands and children. This ethic would enable both 

men and women to work to improve the conditions of their lives and those of their 

families as they took advantage of new opportunities created by an expanding Thai 

economy. 

For villagers to enter successfully into the capitalist economy of Thailand, they 

also needed basic literacy in standard Thai and basic numeracy. These skills they 

acquired from government-sponsored primary schooling. Ban Nông Tün, like most 

villages in northeastern Thailand, had had a government school since the mid-1930s 

and since the late 1940s almost every villager completed the four years of 

compulsory primary education. From schooling villagers learned to see themselves 

as ‘Thai’ even though culturally and linguistically they were ‘Lao’. This 

identification together with competence in standard Thai and in the fundamentals of 

arithmetic learned in school enabled many villagers to interact in a Thai-national 

dominated world (see Keyes 1991a). 

Village school in the grounds of the wat (Buddhist temple-monastery), 

1963 (photo by Jane Keyes) 

As the Thai economy expanded rapidly from the 1960s on, more and more 

villagers – including women – would follow their older siblings and parents to 

Bangkok and elsewhere to find work. 

Re-orientation of the Village toward ‘Development’ 

In the 1960s villagers wholeheartedly embraced a new orientation toward the 

world – namely ‘development’ (kãnphatthanã). This term and what has come to be 

called the ‘development era’ (samai phatthanã) in Thailand is usually associated 

with government policies introduced at the time when Field Marshal Sarit Thanarat 

was the country’s military dictator. There is no question but that some of the 

development programs introduced by the government over the next decades – 

especially road-building, rural electrification, and support for industrialization – 

greatly facilitated growth not only of the national economy but also the economy of 

rural northeastern Thailand. It was, nonetheless, actions taken by villagers 

themselves which brought the radical changes to rural lifestyles that they came to 

associate with ‘development’. 

One of the most profound changes in village life occurred when village women 

began to adopt birth control methods. They first did this in the 1970s when it was 

government policy to promote more births. By the mid-1980s few women were 

having more than two children. The dramatic change in population in the village can 

be seen in the following tables comparing population distributions in 1963, 1980 and 

2005.

222 


International Conference



223 

Village women came to understand that if they had too many children all will 

suffer. This fundamental Buddhist value became linked to the birth control practice 

adopted by nearly every family. By restricting family size they hoped to ensure that 

the children they had would have better lives because family resources could be 

better deployed so that their children would have sufficient support for their 

education and travel costs to Bangkok or elsewhere. 

Villagers also devoted increasing time and effort to expanding cash cropping. 

Throughout the 1970s and well into the 1980s they planted more land to such crops 

as kenaf, cassava, tobacco, and non-glutinous rice. As a consequence there was a 

significant reduction in Ban Nông Tün as throughout the Northeast in forested land. 

Some villagers also expanded pig and cattle production. By the mid-1990s, however, 

most villagers had concluded that cash-cropping and husbandry of animals for the 

market were not a good use of their time and energy because the profits were so 

small. As a result, they began to restrict their agricultural work to producing rice for 

home consumption.

224 



By the 1970s more and more villagers, including young women as well as 

young men, left the village for extended periods, or even forever, to find work in 

Bangkok or elsewhere. As Mary Beth Mills has shown in her study of young women 

factory workers who came from another village in Mahasarakham, these women 

were attracted not only by the possibility of adding to their family’s income but by 

the chance to emulate urban women in ‘becoming modern’ (than samai) (Mills 

1997). In villagers’ eyes, ‘development’ increasingly came to mean acquiring the 

material goods – clothing, household furnishings, motorbikes, radios, televisions, 

and even houses – that they associated with urban rather than rural life. They found 

that only by working outside the village could they acquire sufficient money to 

become ‘modern’ and ‘developed’. 

Although most village women still find work for extended periods in the 

vicinity of Bangkok, some today now can work in knitting and fish-net factories that 

were recently established in Mahasarakham province. 

Young woman from Ban Nông Tün working at a high tech knitting fac 

tory in Mahasarakham, 2005 (photo by Jane Keyes) 

In the 1970s men and a few women from rural northeastern Thailand began to 

be recruited for work outside of Thailand. Throughout the 1970s and the 1980s, such 

opportunities were primarily in Saudi Arabia, Iraq, the Emirates and other Gulf 

States. The first Gulf War led to a sharp reduction in job opportunities in the Middle 

East. However, even greater numbers of jobs became available in Taiwan and, to a 

lesser extent, Singapore and Japan (see Tsai 2001). Job opportunities in Taiwan



225 

have been particularly attractive to young men (between 18 and 45) from Ban Nôn 

g Tün. In 2005 26 men from the village had taken 2-3 year contracts to work in T 

aiwan. Another 34 men had already worked there. 

A young man in B?n Nông Tün just back from working three years at a 

factory in Taiwan with his wife, his mother-in law, and son, 2005. Note 

electric clothes washing machine purchased with money he had made. (photo 

by Charles Keyes) 

What is particularly noteworthy is that most migrants whether they work in 

Thailand or work abroad return to the village. If men or women leave before 

marriage, they may well end up marrying someone who is not from the village. 

Women who do so typically will bring their husbands to live with them in the 

village. Men (and some women) who leave after marriage see their work as essential 

providing support for their families. Their incomes as well as remittances sent back 

before they return makes it possible for their families to have suburban style homes 

and to have many consumer goods associated with the middle class. 

Photo on left shows the totality of household belongings of a woman in 

1963 who was the great grandmother of the boy on the right in the house in 

2005 of his aunt and uncle (photos by Jane Keyes) 

Monies earned outside the village are also now often used to invest in new 

local enterprises. These enterprises include convenience stores, small restaurants, 

vehicle repair shops, and pickups for transporting goods and people. At the most 

patronized convenience store the most popular item for sale were cellphone cards 

used primarily for villagers to stay in contact with relatives working elsewhere in 

Thailand or abroad. 

Some also invest in agriculture, purchasing small tractors or other equipment 

which is hired out. And some villagers invest in a traditional form of wealth – 

namely cattle – albeit in some cases of a newer and more expensive breed. Today, 

Ban Nông Tün, like most other villages in northeastern Thailand, is far from the near 

ly self-sufficient agricultural community we first observed in the early 1960s. 

The Village Remains a Moral World 

While those who are born in Ban Nông Tün may spend most of their liv 

es away from the village, most continue to retain a sense of membership in a moral 

community that is manifest in the village. The wat today contains entirely new 

structures compared to the early 1960s. Almost all the new structures have been 

financed through merit-making rituals organized by those working away from the 

village. Some men return to the village to ordain at the wat, while more become lay 

followers after they retire. 

The village today has two monastic establishments. In addition to the 

traditional wat, since the 1980s one or two forest monks have found a place to reside 

in either the forest associated with the phîpûtã, the tutelary spirit of the village, or in

226 



what was formerly the p?ch?, ‘haunted forest’ where cremations and burials took 

place. In the 1970s and early 1980s this latter forest had been significantly reduced 

as villagers had expanded cultivation of cash crops. It also had ceased to have its 

traditional function after a more modern crematorium was built in the grounds of the 

wat. 

In the late 1980s, however, a thudong, or ascetic monk, established a residence 

in the remaining part of the forest. This ‘forest wat’ has become the center for annual 

religious retreats. 

Villagers and others at an annual meditation retreat at the forest 

monastery in Bãn Nông Tün in January 2005 (photo by Charles Keyes) 

In cooperation with villagers and with the support of a faculty member from 

Mahasarakham University, the monk persuaded villagers to begin a reforestation 

project. This project entailed planting many different species of trees found in 

traditional forests. Today, the forest is thriving and still expanding, with some 

funding provided by villagers who work elsewhere. 

T h e f o r e s t m o n a s t i c r e t r e a t i n B ã n N ô n g T ü n h a s b e 

come the center for a reforestation project (photo by Charles Keyes) 

The two forest monks who have resided in the forest monastic settlement since 

it was founded exemplify the significance Buddhist values even for those who may 

lead very this-worldly lives. Both monks before ordaining had spent many years in 

the military, and one had had some success in business. Living in the forest has 

enabled both to spend most of their time in meditation and study of Buddhist 

teachings. They also lead meditation retreats for villagers, and once a year hold a 

two week long retreat which attracts people from many villages. 

While most visitors to the village would be first impressed by the new houses 

and the new enterprises, the forest monastery and the traditional wat stand as 

reminders that villagers do not only value capitalist development. They remain 

attached also to a different economy – one rooted in their Buddhist traditions. 

 

CONCLUSIONS 

Villagers are not nostalgic for the world their parents and grandparents lived in 

and which I had the opportunity to observe in the early 1960s. Although they still do 

produce the rice that is basic to their diet and many also raise some vegetables and 

fruits, they also like having more meat and a variety of foods which they purchase. 

A few women still make traditional textiles for use for rituals and other festive 

occasions, but all like being able to buy most of their clothes. They like living in 

houses made of purchased materials and built by laborers whom they hire. They 

very much appreciate having electricity and many electrical appliances which make 

their lives more comfortable and enjoyable. In short, they like to enjoy the same 

middle class style of life that most in Bangkok and other urban areas have.



227 

In order to have such lives, villagers also recognize that they are dependent on 

the government for certain essential services. Without government investment 

villagers would not be able to travel easily on good roads or have electricity. They 

look to the government to support medical facilities. They also look to government 

to provide increasingly better education which they understand is fundamental to 

finding better jobs outside the agricultural sector. 

Villagers in Ban Nông Tün in recent elections, like villagers throughout most 

of the Northeast, were strongly supportive of the Thai Rak Thai Party because they 

received increased support in government services during the period when the 

government was controlled by Thai Rak Thai. This support included the expanded 

health care program through the 30-baht scheme and subsidies for students pursuing 

education in better schools outside their local community. Several villagers in Ban 

Nông Tün have created what is essentially an ambulance service to take sick vill 

agers to the hospital in Mahasarakham and all villagers avail themselves on a regular 

basis of services provided by the government at the Mahasarakham hospital and the 

tambon clinic in nearby Ban Khwao. More students from Ban Nông Tün today go 

to schools in Mahasarakham town than go to the local village school. 

Villagers have also come to take for granted the services – such as garbage 

collection – provided by the Tambon Administrative Organization, a local 

government body which gained more powers and budget under Thai Rak Thai 

governments. One of the government services villagers came most to appreciate 

during the Thai Rak Thai period was the expanded loan program. The village million 

baht fund made it possible for many villagers to gain access to capital needed for 

investing in traveling abroad for work or for local enterprises. Villagers are 

concerned about the increasing debt they have, but so long as interest rates are low 

and they are able to make sufficient money to pay back what they borrow, they see 

loans in positive terms. 

In short, while much of the economic development experienced by people 

from the village over the past forty years has come about as a consequence of their 

own imitative, they have also come to depend on essential government services to 

make it possible for them to emulate the lifestyles of urban middle class people. 

Most do not, however, seek to do so by moving from the village permanently to live 

in urban areas. The reason lies in the fact that the village is not only a place of 

residence; it is also a moral world. 

On the basis of research over forty years in the same village in northeastern 

Thailand, I have found that villagers have unequivocally chosen three courses of 

action which Yoshihara Kunio (1995), in a comparison of the Thai and Korean 

economies, argued are basic to significant economic growth, that is, to capitalistic 

development. Villagers have chosen to work long hours both in the village and for 

long periods of time away from the village. They have shown themselves very 

willing to take significant risks, especially in choosing to migrate for work not only 

to other places in Thailand, but also abroad, especially to Taiwan. They have also

228 



shown their willingness to take risks by borrowing significantly for entrepreneurial 

investments. Finally, they have significantly increased their demand for more and 

better education. By these measures villagers would clearly appear to have embraced 

capitalist development. 

What is striking, however, is how many people from the village return to live 

after they have worked for extended periods away. They are drawn back by the 

social and religious practices that continue to be highly meaningful for them. These 

practices are strongly rooted in the Buddhist culture of those born and raised in the 

village. They are most manifest in the support provided by those living in the village 

or those paying return visits for the wat, the Buddhist temple-monastery as well as 

for the new forest monastery and in their cooperative participation in rituals held at 

these two places. Villagers also cooperate on managing government-provided loan 

funds, on a forest reclamation project established near the new forest monastery, and 

on maintaining basic services in the community. Cooperation is particularly evident 

in the relations between resident and non-resident members of the same families. 

Earnings from non-farm work are often remitted to the village family members not 

only to provide for basic needs but also to make possible development of local 

enterprises. In turn, food produced in the village and housing is often provided for 

those returning to the village for temporary or longer periods. 

My research supports my conclusion of two decades ago that the model of the 

economy provided by rural communities in northeastern Thailand is still one that 

combines both capitalist (rational choice) and sufficiency-based (moral choice) 

stances. In a previous paper I had shown that: “Although [Northeastern Thai] 

peasants seek through rational calculation to maximize the well being of themselves 

and their families, they are constrained in so doing by the particular politicaleconomic 

conditions within which they live and also by the particular world of 

meaning in which their actions make sense. This world is a moral universe in which 

individual desires, to employ Buddhist language, are to be brought under control by 

moral reflection on whether one’s actions cause suffering to others.” The economic 

life of villagers in northeastern Thailand is a product of this dialectic between their 

embracing of capitalism and their continued commitment to Buddhist morality. 

Perhaps others in Thailand could take a lesson from such villagers.



229 

References Cited 

Buddhadãsa Bhikkhu (Phutthathãt Phikkhu). 1970. In Samsãra Exists Nibbãna. tr. 

by Thawee Sribunruang. Bangkok: Sublime Mission. 

. 1986. Thammikasangkhomniyom/Dhammic Socialism, Donald K. Swearer, 

ed. and tr. (Bangkok: Munnithi Komonkhimthong,); 

Chatthip Nartsupha, and others. 1981. Setthasãt kap prawatsãt Thai (Economy and 

Thai History). Bangkok: S?ngsan, 2524 

. 1984. Sêtthakit Mûbãn Thai nai Adãt (The Thai Village Economy in the Past). 

Bangkok: Sãngsan, 2527. 

. 1999. The Thai Village Economy in the Past. Translated by Chris Baker and 

Pasuk Phongpaichit. Chiang Mai: Silkworm Books. 

. 2005. Naeokhit Setthakit Chumnchon (Perspective on Community Economy 

). Bangkok: Chulalongkorn University Bookstore. 

Glassman, Jim. 2004. Thailand at the Margins: Internationalization of the State and 

the Transformation of Labour. Oxford; New York: Oxford University Press. 

Jackson, Peter A. 1988. Buddhadasa – A Buddhist Thinker for the Modern World. 

Bangkok: Siam Society. 

Keyes, Charles F. 1983. “Economic Action and Buddhist Morality in a Thai Village, 

Journal of Asian Studies, 42.3:851-68. 

. 1990. “Buddhist Practical Morality in a Changing Agrarian World: A Case fr 

om Northeastern Thailand, in Attitudes toward Wealth and Poverty in 

Theravada Buddhism. Donald K. Swearer and Russell Sizemore, eds. 

Columbia, S.C.: University of South Carolina Press. Pp. 170-189. 

. 1991a. “The Proposed World of the School: Thai Villagers Entry into a Bure 

aucratic State System,” In Reshaping Local Worlds: Rural Education and 

Cultural Change in Southeast Asia. Charles F. Keyes, ed. New Haven: Yale 

University Southeast Asian Studies. Pp. 87-138. 

. 1991b. “Buddhist Detachment and Worldly Gain: The Economic 

Ethic of Northeastern Thai Villagers,” in Yü müang Thai: ruam botkhwãm 

thãng sangkhom pha pen kiat dãê Sãstrãcãn Sanê Cãmrik (“In Thailand: 

Collected Essays in Honor of Professor Saneh Chammarik). Chaiwat Satha- 

Anand, ed. Special issue of Ratthas?ts?n (Journal of Political Science, 

Thammasat University), 16.1-2:271-98. 

Lefferts, H. Leedom. 1974. “Ban Dong Phong: Land Tenure and Social Organization 

in a Northeastern Thai Community,” Unpublished Ph.D. Dissertation, 

Department of Anthropology, University of Colorado.

230 



Mills, Mary Beth. 1999. Thai Women in the Global Labor Force: Consuming 

Desires, Contested Selves. New Brunswick, N.J. and London: Routledge. 

Prayudh Payutto, Venerable. 1994. Buddhist Economics: A Middle Way for the 

Market Place by Ven. P.A. Payutto. Dhammavijaya and Bruce Evans, 

translators. 2nd rev. ed. Bangkok: Buddhadhamma Foundation. 

Schumacher, E.F. 1973. “Buddhist Economics,” in Small Is Beautiful. New York: 

Harper and Row, 1973. Pp. 53-62. (Originally published in Asia: A 

Handbook. Guy Wint, ed. London: Anthony Blond, Ltd., 1966). 

Sulak Sivaraksa. 1981. A Buddhist Vision for Renewing Society. Bangkok: Thai 

Watana Panich Co. Pp. 52-78. 

Tsay Ching-lung. 2001. “Labour Migration and Regional Changes in East Asia: 

Outflows of Thai Workers to Taiwan,” paper presented at the international 

workshop on “Labour Migration and Socio-economic Change in Southeast 

and East Asia,” Lund, Sweden. 

Yoshihara, Kunio. 1995. “Culture, Institutions, and Economic Growth: A 

Comparative Study of Korea and Thailand,” Tonan Ajia Kenkyu (Southeast 

Asian Studies) (Kyoto), 33.3: 97-144.



Group 

2 



Bunniyom Buddhist Economics of the Asoke Group 

Dr. Marja-Leena Heikkilã-Horn (Asst. Prof) 

Southeast Asian Studies Programme 

Mahidol University International College (MUIC)



233 

Bunniyom Buddhist Economics of the Asoke Group 

 

 

 

 

ABSTRACT 

The Asoke group has presented its own version of ‘sufficiency economy’, 

which can be studied in their rural centers in Thailand. The Asoke Buddhist group 

has well-established villages in several provinces in Thailand; Nakhon Pathom, 

Nakhon Racthasima, Nakhon Sawan, Chiang Mai, Sisaket and Ubon Ratchathani. 

Santi Asoke in Bangkok is mainly the administrative centre which coordinates 

between the various villages and activities. Besides the more established centres 

with monks, nuns, schools, rice fields, gardens and various other activities, there are 

new centres which are starting to practice same kind of activities albeit with smaller 

numbers of lay people. There is a new centre in Trang in the South and a small plot 

of land also in Phanggna, where Asoke practitioners are trying to start growing food. 

There are Asoke villages in Chaiyaphum, Loei and Chiang Rai. Altogether there are 

over twenty Asoke villages in Thailand. 

The Asoke villages have rice mills and after milling, the rice is usually sent to 

the Asoke shops and supermarkets in Bangkok and other towns. Same applies to the 

fruits and organically grown vegetables. The villages also produce herbal shampoos, 

detergents and medicine. All products in the shops are sold on very low prices as the 

group does not aim to make profit but aims to make spiritual merit. The economic 

system behind the Asoke activities in called bunniyom – meritism. Earning spiritual 

merit in the Buddhist sense is for Asoke people more important than making money 

and profit. With these principles the group goes entirely against capitalism, 

consumerism, globalisation and commercialisation of human life. During Thailand’s 

economic ‘boom’ years in the 1980s and 1990s, the Asoke group’s slogan was ‘Dare 

to be poor!”. 

Keywords: sufficiency economy, Buddhist economics, bunniyom, samma ajiva

234 



‘SUFFICIENCY ECONOMY’ IN THAILAND 

The Asian currency crisis in 1997 led H. M. the King of Thailand to denounce 

the export-oriented economy as the sole option for the peasants, and the King 

launched a concept on “sufficiency economy”, which encourages the peasants to 

produce food and other commodities first and foremost for themselves, secondly to 

the domestic market, and only thirdly to the export market. 

The concept “sufficiency economy” is, however, rather vague and unclear in 

the theoretical literature in economics. The UNDP Report (2007) gives a following 

definition: 

“Sufficiency in this sense should not be confused with self-sufficiency, 

turning inward, rejecting globalization, or retreating towards the mirage of a 

simpler world. Rather, this approach offers a way to cope with the 

unavoidable realities of the market and globalization in the contemporary 

world. The Sufficiency approach stresses that individuals need a certain 

measure of self-reliance to deal best with the market, and countries need a 

certain measure of self-reliance to deal with globalization. Sufficiency has the 

dual meaning of ‘not too little’ and ‘not too much.’” 1 

Despite the warnings, “sufficiency” often translates into “self-sufficiency” 

as seen in many references. 2 Such concepts as economic “sufficiency”, “selfsufficiency” 

and “self-reliance” are confusing and not well founded or well 

explained in the theoretical literature. There are very few examples of policies that 

would have been carried out in the name of “Sufficiency Economy”. For the last 

couple of centuries, ever since the popularization of the economic ideas of Adam 

Smith (1723-90) 3 , the world leaders have been divided into two camps, those who 

promote opening of the markets, borderless trade opportunities, low tariffs or no 

tariffs and to those who for various reasons have preferred to close their markets, 

limit the imports, set up high tariffs and resort to import substituting industries 

(ISI). Somewhere in this spectre also the “sufficiency economy” finds it ideological 

home. 

Another term often linked to “sufficiency”, “self-sufficiency” or “selfreliance” 

is “autarky”, which according to a dictionary definition is: “a selfsufficient 

economy with no external trade. The term is often used in economics to 

describe policies of decreasing reliance on external trade by tariffs and quotas”. 4 

The King’s speech inspired the official Thai establishment to promote 

sufficiency economy. The controversial Buddhist Asoke group, vilified by some 

1 

UNDP report “Sufficiency Economy and Human Development” 2007. 

2 

Shawn W. Crispin in Asia Times online October 5, 2006. 

3 

See his “An Inquiry into the Nature and Causes of the Wealth of Nations” from 1776, but 

reprinted several times and much quoted and misquoted by economists. 

4 

The New Penguin Encyclopedia 2003.



235 

parts of the establishment, had been practising and promoting sufficiency economy 

decades before the economic crisis in 1997. 5 

The most important element of the Asoke self-sufficiency ideas is to switch to 

organic agriculture from the chemical-intensive agriculture. Asoke group has also 

been promoting the idea of integrated agriculture, where different plants are mixed 

in a mutually beneficial way. Many of these Asoke policies can be traced back to the 

ideas of Buddhist Economics as presented by E.F. Schumacher in his path breaking 

article “Buddhist Economics” in the book “Small Is Beautiful” from 1973. 

 

BUDDHIST ASOKE MOVEMENT 

The Buddhist Asoke group has been somewhat of a pioneer in Thailand in 

practising self-sufficiency in the village community level. The group has been highly 

successful in its endeavour and has become a showcase to various Thai 

governments, particularly after the disastrous collapse of the “bubble economy” in 

1997, and after the famous speech by H.M. the King, in December 1997, supporting 

and encouraging the Thai society to become more self-sufficient. 

The Asoke is a Buddhist group, established by a Buddhist monk Bodhiraksa , 6 

who ordained in the state sangha forty years ago. He was not impressed with the 

practice of the mainstream Buddhist monks and ended up forming his own group of 

disciples. The group is strictly vegetarian, puts emphasis on the monastic vinaya 

rules, ordains women as Ten-Precept nuns (Sikkhamats), and presents sometimes 

very radical interpretations of Buddhist Pali concepts, thus annoying the state 

Buddhist monastic authorities, the Council of Elders (Mahatherasamakhom) and the 

traditionally rather lax and fun-loving Thai monks and lay Buddhists. 

Asoke group’s economic visions, however, have been met more positively. The 

group was founded in the 1970s, and the first Thai books and articles about the 

group, usually classified the Asoke group as “Utopian”. 7 

The group has several well-established Buddhist centres in various parts of 

Thailand: Bangkok, Nakhon Pathom, Nakhon Ratchasima, Sisaket, Ubon 

Ratchathani, Nakhon Sawan and Chiang Mai. Several new budding centres are 

5 

The Asoke group is perceived as extremely controversial in Thailand, partly due to the 

group’s strict vegetarianism and initial rejection of Buddha images. Recently, the group also joined 

the anti-Thaksin ‘yellow shirt’ demonstrations. See Heikkil?-Horn (2010). 

6 

In Thai he is known as: Samana Phothirak or Pho Than Phothirak. 

7 

Suwanna Satha-anand (1990) refers to the two articles written earlier in Thai by Sombat 

Chantronwong “The Pathom Asoke Community. A Study of Buddhist Utopia.”, and Prawet Wasi 

“Suan Mok, Thammakai, Santi Asok” both from 1988. Apinya Fuengfusakul used the same term as 

late as in 1993 in her article “Empire of Crystal and Utopian Commune: Two types of contemporary 

Theravada reform in Thailand”. Recent scholarship also regards the Asoke group relatively 

positively in terms of their live style; see Essen (2005) and Kanoksak (2008).

236 



waiting to blossom in Trang, Chaiyaphum, Nakhon Phanom, Udon Thani, Roi Et 

and Loei. 8 

The economy of Asoke centres is based on organic agriculture. They have 

bought or rented fields for rice cultivation and gardens for vegetables. Each centre 

usually also produces its own tofu, mushrooms and drinking water. Additionally the 

centres produce and sell herbal shampoos, detergents, mosquito repellants, herbal 

medicine and herbal teas. These products are sold to the public in cooperative shops 

on a very small profit. Yet this income enables the centres to invest in computers, 

vehicles, dental clinics, and leaves them enough with resources to run primary, 

secondary and vocational schools free of charge. In case of emergency, Asoke group 

can send a sick community member to a well-equipped modern hospital. 

Asoke group publishes several weekly and monthly magazines, which discuss 

both Buddhist and general topics from politics to traveling. The group publishes 

books, tapes and DVDs with the teaching and preaching of various Asoke monks. 9 

After the liberalisation of the private TV satellite channels, the Asoke has their own 

TV channel called For Mankind TV (FMTV). 

Buddhism as interpreted by the leader of the group, Bodhiraksa, is the greatest 

source of spiritual inspiration for the Asoke people. On the intellectual level, the 

influence of E. F. Schumacher’s chapter on “Buddhist Economics” of his book 

“Small Is Beautiful” is obvious. 

 

‘RIGHT LIVELIHOOD’ – SAMMA AJIVA 

The Noble Eightfold Path mentions as the fifth ‘step’ that a practising Buddhist 

should carefully choose his or her profession. There are certain professions and 

occupations, which are totally banned for a Buddhist, according to the teachings. 

A Buddhist should not trade in arms, drugs and other intoxicants. Neither should 

a Buddhist be involved in trafficking in human beings. Selling animals as well as 

selling meat is banned, as refraining from destroying any life is the first precept for a 

Buddhist to follow. The five improper occupations (Miccha Ajiva) include stealing, 

cheating, deceiving, working for a bad person and working only for a money. 

There are no recommendations which professions are advisable, but usually 

Buddhism emphasises the opposite virtues of killing and hating i.e. compassion, 

mercy and nurturing life. 

“To refrain from destroying life” is the first precept. The precepts have an 

opposite set of recommendations, where the first recommendation consequently 

8 

There were 25 registered Asoke villages in Thailand in July 2011. 

9 

A very popular Asoke monk is Than Chan, who has had his own TV and radio programmes. 

Many of his followers were not initially aware of the fact that he is from the controversial Santi 

Asoke group.



237 

emphasises nurturing and protecting all life. This has been taken as the guideline for 

many Thai Buddhist monks who, for instance, have been trying to protect the 

pristine forests together with the local communities against the illegal loggers and 

the military. 10 

Asoke implements this concept by nurturing and protecting all life: many a 

barren land plot has turned into a lush garden in the hands of Asoke practitioners. 

Northeastern Thailand, notorious for its droughts and unfriendly natural conditions, 

has been one of the central areas for Asoke’s agricultural experiments. Asoke group 

has, at the moment, three highly successful centres in the Northeast, Sima Asoke, 

Sisa Asoke and Ratchathani Asoke, all of which, have become showcases for the 

provincial and district authorities, and all of which are also involved in actively 

training local people in the art of natural agriculture, self-sufficiency and sustainable 

development. 

To become a farmer, is practically the choice number one of a “right 

livelihood” for an Asoke practitioner. The Asoke temples thank the farmers for their 

daily food in all the Asoke temples at the communal meal. This must be honey to the 

ears of the impoverished Thai peasants visiting the temples. Another alternative for 

an Asoke practitioner, in more urban surroundings, is to become at least a part-time 

gardener. 

The export-oriented cash-crop monoculture economy has not only 

impoverished the peasants of Thailand, but it has equally impoverished the soil. The 

peasants are up to their neck indebted to the money-lenders and landowners, who 

have recommended the use of expensive foreign fertilizers, pesticides and 

insecticides. These fertilizers have then run into the rivers and rice fields killing all 

life in those waters. In some areas the groundwater has been polluted. Therefore, the 

second respectable occupation, for a serious Asoke practitioner, is “natural 

fertilizer”. 

Pollution has become a serious problem both in urban and rural areas - not to 

mention the beach resorts. With the modern disposable junk-food culture, garbage is 

piling up all over the country. In all Asoke centres, garbage is carefully assorted in 

different boxes or sacks. The third “right occupation” is therefore garbage collector 

and assorter. Much of this garbage is reused either as composting it into fertilizers, 

or into micro-organisms, used for detergents. Old paper, bottles, broken glass and 

metal scrap are resold. Plastic bags are reused in the Asoke shops for packing in the 

goods for the customer. Garbage is burned and reproduced as cooking gas, for 

instance, in Pathom Asoke. 

Self-sufficiency is emphasised and all production at Asoke centres is primarily 

oriented to their own people, and only secondarily to the wider Thai community. 

There has been some demand for Thai herbal medicine abroad, for instance, in 

10 

One of the most famous cases was Phra Prachak Kuttachitto, a Buddhist monk in Buriram 

who tried to protect the forests. Eventually he had to flee for his life. Jim Taylor (1993).

238 



Japan, but so far this interest has been met with restraint. The Thai market itself is 

large enough for the Asoke products, and exports would also involve problems with 

expiry, preservatives, packing, customs, and trading partners in foreign countries. 

 

BUNNIYOM ASOKE BUDDHIST ECONOMICS 

Asoke centres do not purposely boycott foreign goods; neither do they 

participate in any “buy local” -campaigns in Thailand after 1997. Asoke people 

practise “spiritual boycott” against foreign brand names due to their emphasis on 

Buddhist frugality. Their avoidance of foreign goods springs from their general 

negative attitude to luxury goods and any kind of luxurious life. Foreign soft drinks 

are not favoured. Instead, Asoke people drink locally made fruit drinks such as 

passion fruit, guava, tamarind and other fruit juices. They usually produce their own 

soymilk. 

Modesty (maknoy sandot) is one of the key-concepts of the Asoke and all 

imported or even locally made candies and sweets are generally avoided. The Asoke 

monks and nuns are allowed to eat only one meal a day. When a person eats only 

one meal a day, it would be rather unwise to fill one’s stomach with food that has no 

nutritious benefits. Many Asoke lay people try to reduce the number of daily meals 

“from uncountable meals to countable meals” 11 , in fact, very few serious Asoke 

practitioners eat more than twice a day. 

All Asoke members refrain from smoking and drinking, which again reduces 

their consumption of any foreign imported goods. 

At the same time, Asoke people are rather flexible. It is by no means forbidden 

to use toothpaste or toothbrushes of foreign brand names. Same applies to higher 

technology – cars, computers, cameras, TVs and other electric appliances are usually 

of foreign origin. 

The early Asoke centers were usually without electricity, which was quite a 

shock to the visiting city-dwellers, and partly is behind the image, that the Asoke 

group is strict and conservative to the extreme. 12 Nowadays, however, all Asoke 

centres do have electricity. Usually they also have a TV in the meeting hall (sala), 

where the members gather in the evening to watch TV or videos for a couple of 

hours a day. 

Most of the centres also have computer rooms, often air-conditioned. Many 

private houses have electric fans, refrigerators and maybe even private TVs, 

particularly in the condominiums in the urban centre, in Santi Asoke. In the rural 

centres, the houses are built in traditional Thai style with open balconies and do not 

11 

Interview in Sisa Asoke with Khun Kaen Fa in October 2006. 

12 

Grant Olson presents some of the first observations on the Asoke group in his MA thesis 

“Sangha Reform in Thailand. Limitations, Liberation and the Middle Path” (Olson 1983:66-73).



239 

need artificial air-conditioning. 

The seventh precept in Buddhism encourages the practitioners to avoid all kind 

of entertainment, such as listening to music, watching films or singing songs. Many 

Asoke lay people try to follow the Eight Precepts, which is a sign of a more serious 

practitioner, whereas Five Precepts is regarded to be the general rule for all 

Buddhists. 

The Asoke people wake up between 3 to 4 am, which further discourages 

people from watching TV late into the night or indulging into other night 

entertainment. 

Concluding one can summarize that the Asoke group has its high ideals of 

modest living and living in self-chosen poverty, but the group is also rather flexible 

in accommodating the modernity of present-day Thailand. 

From 2001 to 2010, Asoke group trained Thai farmers in organic agriculture in 

the Asoke centres. The farmers were elected and sent by the Bank of Agriculture and 

Agricultural Cooperation (BAAC), which had chosen them among the most 

indebted farmers. The BAAC also paid the expenses caused to the Asoke centres 

from these training courses. 

The Bank of Agriculture and Agricultural Cooperation (BAAC) chose the 

participants for the training courses among the most-indebted farmers. The average 

debt of a farmer varied between 30,000 to 60,000 Thai baht. When the average 

income of a farmer is between 1,500 to 3,000 baht a month, the debt becomes 

unbearable. 13 

The training courses constituted of a rigorous five-day period of asceticism, 

where groups of peasants arrived in the Asoke centres, had to attend the early 

morning session at 3.30 am, eat vegetarian food, usually only two meals a day, and 

follow the Five Precepts. The farmers were divided into smaller groups, they were 

given daily tasks to participate in the different work bases, and they listened to series 

of long lectures on organic agriculture, household economics, basic healthcare, and 

Buddhist teachings. 

Asoke group has created an Organic Farming Network, which the trainees can 

join after having switched to organic farming. The Network tries to facilitate the 

marketing of organic products. The Network peasants can sell their products 

wherever they can find a market, but belonging to the Network, guarantees them the 

markets that the Asoke group can offer, which is the fresh market and Palang Bun 

supermarket at the Santi Asoke temple in Bangkok; and markets, shops and 

restaurants in Ratchathani Asoke, Sisa Asoke, Pathom Asoke and in Chiang Mai; 

and any of the other existing Asoke vegetarian shops and supermarkets in Thailand. 

13 

Based on my survey among the participants of the training courses in April 2002 in Sisa 

Asoke.

240 



At the training courses the trainees are also exposed to the Asoke Buddhist 

teachings, where the Noble Eightfold Path and the Five Precepts are discussed in 

detail. 

 

BUNNIYOM AND THE MICRO-CREDIT PROGRAMME 

Asoke group has developed its own Buddhist economic theory called 

bunniyom or “meritism” as an alternative to thunniyom i.e. capitalism. In capitalism, 

people are seen to use the following four criteria to measure success in life: material 

riches, worldly position, fame and mundane pleasures. Capitalists want big houses 

and more money, whereas those who follow the bunniyom-system are satisfied with 

small houses, and they do not need much money in order to be happy. Capitalists 

demand more clothes and decorations, whereas followers of bunniyom are satisfied 

with simplicity and modesty. The capitalists prefer to work less for more money, 

whereas the bunniyom group works more and takes less. The capitalists use high 

technology for their construction and at the same time destroy the ecological system, 

whereas bunniyom is not interested in big buildings and high technology. Bunniyom 

is hence also regarded as an environmentally friendly alternative. 14 

In the practical terms, the bunniyom shops in all Asoke centres try to follow 

the policy of meritism. One of its manifestations is that the goods have two prices 

labeled on them: the original price for which it was purchased and the new price 

which the shop is selling the goods for. The difference between the prices is 

extremely low. 

Bunniyom does not emphasise profit, but emphasises instead the spiritual merit 

gained when donating goods to the customers or when receiving as low profit as 

possible from the customers. The four guiding principles of bunniyom economy are 

- selling for low profit 

- changing for equal price 

- changing for lower price 

- giving for free. 

Private property is not glorified in Asoke, instead many resources are owned 

collectively by various foundations, associations or organisations, such as by 

Thamma Santi Foundation and Kong Thub Dharm (Dharma Army) Foundation. 

Asoke practitioners, who work outside the temple, regularly contribute to these 

foundations. The foundations then support the activities of the various organisations. 

The three companies, Palang Bun super market, Dae Chiwit retailer and Fah Aphai 

publishing and printing house are also financially supported by the foundations. The 

workers in those three companies receive a very low salary, whereas the workers in 

14 

For more details, see Heikkilã-Horn 1997: 123.



241 

the vegetarian restaurant, for instance, work for free. 15 To work is to practise and 

show ‘devotion’(siasala) to Lord Buddha. 

Money is pooled together in a central office (Satharana boki), from where 

different work bases can borrow money for their projects. Asoke group started their 

own private saving group (Sajja omsap), from where the individual members can 

borrow money for various purposes. The projects must be both viable and ethically 

sound. The money has to be paid back in a reasonable time, but with no interest. In 

other words, it is very similar to some informal credit unions and micro loan projects 

in other developing countries. 

Many centres have gasoline stations, which are leased from a local gasoline 

company. Many centres also have libraries, health care centres and dental clinics. 

Some centres have pharmacy shops, rice mills, and bookstores. 

The centres can borrow money from the outside institutions for their 

construction projects or for other purposes. Some centres have received money from 

the Cooperatives Promotion Department of the Ministry of Agriculture and 

Cooperatives, or from the Thai Traditional Medical Institute. It is equally possible to 

borrow from other Asoke centres or from the central office (Satharana boki) located 

in Santi Asoke. The other centre, where Asoke communities can borrow money is 

the Welfare Fund (Gongbun sawaddikhan). 

Ultimately bunniyom is regarded as a method to create strong local 

communities, which give a solid ground for the entire country to survive and avoid 

economic crises and to gain some level of national self-sufficiency. According to the 

Asoke ideology, freedom from materialism is the real freedom and freedom from 

greed leads to a peaceful society. Bunniyom is regarded as a practical and concrete 

way to decrease selfishness. 

To donate money to the Asoke temples or foundations is not solicited the way 

it s done for instance in Wat Dhammakaya and many other mainstream temples. 

Visitors who come for the first time to Asoke are not at all allowed to donate money. 

They must visit the temple at least seven times to show that they understand the 

teachings of the temple before they are allowed to donate. Working for the temple is 

valued higher than any material contribution, as work is regarded as spiritual 

practice. 

 

CONCLUDING REMARKS 

The Asoke group has become an important player in the wider discourse on 

alternative economic systems and Buddhist economics. The latest economic crisis 

may even increase the global interest in entirely new economic policies. In Thailand, 

the economic initiatives of the Asoke group have been positively received, but the 

15 

In 2011, the wages were 3,000 Thai baht per month.

242 



Buddhist teachings of the group are still regarded as controversial in many points. 

Their insistence on vegetarianism has been totally rejected by the mainstream Thai 

Buddhists. 

Asoke Buddhism emphasis the Noble Eightfold Path and particularly the 

‘Right Livelihood’ or ‘Right Occupation’ (samma ajiva). Asoke temples do not 

solicit money as donations, but encourage the practitioners to show devotion 

(siasala) by working for the temple. Asoke Buddhism has freed the laity from 

extensive cash donations. Asoke emphasis on modesty and diligence may further 

encourages the people to improve their economic situation. The Asoke slogan ‘Dare 

to be Poor’, however, seems to reject Weberian ideas of religion as a fuel for 

capitalism. The training courses for the indebted farmers introduced organic farming 

methods to them and may have contributed to reduction of debts and in an increase 

in profits, which the farmers may invest for the future of their children.



243 

REFERENCES 

Apinya Fuengfusakul (1993) Empire of Crystal and Utopian Commune: Two types 

of contemporary Theravada reform in Thailand. Sojourn Volume 8, 

Number 1, pp. 153-183. 

Essen, Juliana (2005) “Right Development”. The Santi Asoke Buddhist Reform 

Movement of Thailand. Lexington Books. Maryland. USA. 

Heikkil?-Horn, Marja-Leena (1997) Buddhism with Open Eyes. Belief and Practice 

of Santi Asoke. Fah Aphai, Bangkok. 

Heikkil?-Horn, Marja-Leena (2010) Santi Asoke Buddhism and the Occupation of 

Bangkok International Airport. ASEAS 1 (3) pp. 31-47. 

Insight into Santi Asoke (2002) Eds. Heikkil?-Horn, Marja-Leena & Rassamee 

Krisanamis. Fah Aphai. Bangkok. 

Kanoksak Kaewthep (2008) An “Imaginging” Community: The Case of Sisa Asoke 

in Sisaket Province. Imaginging Communities in Thailand. Ethnocgraphic 

Approaches. Ed. by Shigeharu Tanabe, pp. 59-82. Silkworm Books, Chiang 

Mai. 

Olson, Grant (1983) Sangha Reform in Thailand: Limitation, Liberation and the 

Middle Path. Chapter VII. The people of Asoke: Purity Through Strict 

Discipline and Vegetables. Unpublished MA-Thesis May 1983, University 

of Hawaii. 

Schumacher, E.F. (1973) Small is beautiful: a study of economics as if people 

mattered. London. 

Suwanna Satha-anand (1990) Religious Movements in Contemporary Thailand. 

Buddhist struggles for modern relevance. Asian Survey Vol. XXX, No 4, 

April 1990, pp. 395-408. 

Taylor, Jim L. (1993) Buddhist Revitalization, Modernization, and Social Change in 

Contemporary Thailand. Sojourn Vol. 8. No. 1. pp. 62-91.



Group 

2 



An Exploratory Research Study on 

the Economics of Deploying Integrated Local 

Alternative Energy Solutions as a Sufficiency Economy 

Concept of Sustainable Development at Community 

Grassroots Level 

Abhishek Syal 

Engineer, Corporate Research & Development, 

B.H.E.L., Hyderabad, India 

 

Poonam Syal 

Associate Professor, National Institute of Technical Teachers 

Training & Research, Chandigarh, India



247 

An Exploratory Research Study on 

the Economics of Deploying Integrated Local 

Alternative Energy Solutions as a Sufficiency Economy 

Concept of Sustainable Development at Community 

Grassroots Level 

 

 

 

 

 

 

 

Abstract 

The case study analyses various alternative and clean energy solutions that can 

be deployed to meet the local power demand. This is based on the application of one 

of the principles of establishing “Sufficiency Economy” – the deployment of 

“Appropriate Technology” as popularized by E. F. Schumacher. Depending on local 

conditions, climate and available natural resources, deployment of various 

combinations of alternative energy solutions can be commissioned. This local power 

generation through hybrid systems and chargeable back-up options would be more 

reliable as compared to dependency on any individual solution, and in the long term, 

also reduce the dependency of fossil fuels, which are largely imported. Moreover, 

the non-polluting nature of the alternative energy options discussed also promotes 

sustainable development at the community level, with increase of employment, 

community participation and human resource development, elimination of toxic and 

greenhouse emissions, preservation of forest cover, along with becoming 

economically sufficient and self-reliant. 

Keywords: sufficiency, local alternative energy solutions, break-even, social impact 

assessment, sustainability, sustainable development

248 



1. Introduction 

Energy is fast becoming a rare commodity. The situation in villages as 

compared to cities is even worse. In India, there are still more than eighty thousand 

villages yet to be electrified and the cost of extending the centralized grid to remote 

villages is extremely prohibitive. Moreover, excessive consumption of commercial 

fossil fuels are degrading our environment and ecology as we are experiencing the 

global warming due to greenhouse effect, ozone layer depletion etc. Under this 

scenario, renewable energy technologies like sun, wind, biomass etc. offer a clean 

and viable solution. 

With maturity in these technologies, they are increasingly being seen as a 

promising option to meet the present and future energy demands without adversely 

affecting the environment and arresting the degradation of ecology, thereby offering 

large scope in manufacturing, installing, servicing and providing consultancy 

regarding renewable energy based technologies, appliances and products. 

There is a dire need to build a strong domestic economy and improve 

competitiveness, based on a country’s potential resources and abilities, in order to 

gain the benefits of globalization and to minimize adverse impacts (Wibulswasdi et 

al 2010). India already imports around seventy percent of its oil requirements. 

Wibulswasdi et al (2010) also said that a proper supply-side management policy is 

also to be framed to help withstand the shocks and volatility arising from external 

factors, such as oil and commodities prices, exchange rates etc. With good risk 

management, we will be resilient and overcome these challenges. Second, 

promotion of alternative energy sources such as gasohol or bio-diesel will increase 

our national energy security and help protect our economy from increasingly volatile 

world energy prices. These self-immunities, once in place, will lead to an increase 

in the overall economic resilience of the country. (Wibulswasdi et al 2010) 

In particular case of generating electricity, it is estimated that the activity 

creates 11.4 billion tons of carbon emissions worldwide each year – nearly 40 

percent of all energy-related carbon emissions. Renewable sources could reduce 

those emissions (Cass 2011). 20 terawatt-hours were the global electricity generation 

in 2008; 68 percent of this electricity was produced by burning fossil fuels (Levitan 

2011). 

In order to address effectively these environmental matters, together with 

energy supply security concerns, radical changes in power generation, automotive 

engine, and fuel technologies will probably be required. Such changes must offer the 

potential for achieving negligible emissions of air pollutants and 

Greenhouse gases, and must diversify the energy sector away from its present 

heavy reliance on fossil fuels (and particularly gasoline in the transportation sector). 

A number of technologies, including those that are solar or hydrogen-based, offer 

the long term potential for an energy system that meets these criteria (Owen 2004).



249 

Distributed sources of energy, such as residential solar installations, will 

reduce the need for more centralized power plants by contributing power to the local 

grid (Cass 2011). Japan is testing other technologies to reduce urban energy demand 

by better integrating power and heating systems. It is spending a billion dollars in 

four cities in five years to develop and deploy technologies such as residential 

natural-gas fuel cells: the cells reduce the amount of power the grid must supply, 

while waste heat from the fuel cell is used to warm the house. When electricity and 

heat are both generated on-site in this way, a house requires less total energy than it 

would if warmed and powered separately. (Cass 2011) 

In India the annual global solar radiation is about 5 KWh/ sq m per day with 

about 2300-3200 sun-shine hours per year. Solar radiations represent the earth’s 

most abundant energy source. The perennial source of solar energy provides 

unlimited supply, has no negative impact on the environment. The solar photovoltaic 

(PV) modules convert solar radiation from the sun into electrical energy in the form 

of direct current (DC). Converting solar energy into electricity is the answer to the 

mounting power problems in the rural areas. Its suitability for decentralized 

applications and its environment-friendly nature make it an attractive option to 

supplement the energy supply from other sources. 1 KWp of SPV generates 3.5-4.5 

units (KWh) per day (DOT 2008). If we could install Solar Photovoltaic Cells much 

of the rural exchange power needs could be met, adequately cutting down harmful 

greenhouse gas emissions. 

Wind energy is another viable option. The Wind Turbine Generator is designed 

for optimal operation at wind speed of 10-14 m/s. The Turbine Generator starts at a 

cut-in speed of 3-3.5 m/s and generates power at speeds 4.5 m/s and above. In India, 

the best wind speed is available during monsoon from May to September and low 

wind speed during November to March. The annual national average wind speed 

considered is 5-6 m/s. Wherever average wind speed of 4.5 m/s. and above is 

available, it is also an attractive option to supplement the energy supply. Wind 

generators can even be installed on telecom tower at a height of 15-20 mt. with 

suitable modification in tower design, taking into account tower strength and EMI & 

EMC (DOT 2008). 1 KW WTG generates around 3 – 3.2 units (KWh) per day. 

Hybrid Wind-Solar System for the rural exchanges can make an ideal 

alternative in areas where wind velocity of 5-6 m/s is available. Solar-wind power 

generations are clear and non-polluting. Also they complement each other. During 

the period of bright sunlight, the solar energy is utilized for charging the batteries, 

creating enough energy reserve to be drawn during night, while the wind turbine 

produce most of the energy during monsoon when solar power generation is 

minimum. Thus the hybrid combination uses the best of both means and can provide 

quality, stable power supply for sustainable development in rural areas. These 

systems are specifically designed to draw 48 volts DC power output from the solar 

cells/ wind turbines and combine them to charge the storage batteries. The system 

does require availability of diesel generator, though for much reduced number of 

hour’s operation. It is also designed to give priority to solar and wind power so that 

operations of generators can be minimized to the extent possible

complement each other. During the period of bright sunlight, the solar energy is utilized for charging the 

batteries, The Meaning creating of Sufficiency enough Economy energy reserve to be drawn during night, while the wind turbine produce most 

250of the International energy during Conference monsoon when solar power generation is minimum. Thus the hybrid combination 

uses the best of both means and can provide quality, stable power supply for sustainable development in 

rural areas. These systems are specifically designed to draw 48 volts DC power output from the solar 

cells/ wind turbines and combine them to charge the storage batteries. The system does require 

availability of diesel generator, though for much reduced number of hour’s operation. It is also designed 

to give priority Figure to solar I: and Solar-Wind wind power Hybrid so that operations System of with generators Diesel can Generator be minimized and to the extent 

possible 

 

Battery Bank Back-up 

Figure I: Solar-Wind Hybrid System with Diesel Generator and Battery Bank Back-up 

Biomass hasn’t Biomass figured hasn’t much figured in research much studies in in research combination studies with in Solar combination PV-Wind Hybrid. with Solar Hence, it 

becomes PV-Wind imperative Hybrid. to assess Hence, various it becomes renewable imperative energy based to assess local various solutions renewable of alternative energy energy 

generating based electricity local solutions at the community of alternative level. Such energy solutions generating are moderate electricity in size at in the terms community of investment, 

operate and are managed on community level, and also promote sustainable development. The research 

level. Such solutions are moderate in size in terms of investment, operate and are 

paper analyses individually some of the local alternative electric energy generation solutions and 

compares managed them with on community an optimized proposed level, and model also which promote is a hybrid sustainable of the above development. solutions. The 

research paper analyses individually some of the local alternative electric energy 

2. Methodology generation solutions and compares them with an optimized proposed model which is 

a hybrid of the above solutions. 

A conceptual model consisting of hybrid of Solar PV, Wind and Biomass technologies along with 

electricity demand. Biodiesel generator backup has been proposed to meet the local electricity demands as 

an alternative to centralized conventional mega power generating projects’ scheme. Figure II illustrates 

the concept as a Sufficiency Economy Development Initiative. 

2. Methodology 

A conceptual model consisting of hybrid of Solar PV, Wind and Biomass 

technologies along with electricity demand. Biodiesel generator backup has been 

proposed to meet the local electricity demands as an alternative to centralized 

conventional mega power generating projects’ scheme. Figure II illustrates the 

concept as a Sufficiency Economy Development Initiative.



251 

Figure II: Proposed Solution for meeting Local Community Electricity Demand 

through Locally Available Renewable Energy Resources as a Sustainable 

Sufficiency Economy Development Alternative to Centralized Power Plants 

Solar 

Integrated 

Local 

Power 

Generation 

Bio-mass 

Wind 

Bio-diesel 

Generator 

Backup 

Figure II: Proposed Solution for meeting Local Community Electricity Demand through Locally 

Available To Renewable evaluate Energy the effectiveness Resources as a of Sustainable the concept Sufficiency of combining Economy technologies Development Alternative based 

on the local availability of renewable to Centralized energy Power resources, Plants we have carried out payback 

analysis of individual technologies if deployed alone to meet the local demand as 

To compared evaluate the to effectiveness payback of of the the optimal concept of proposed combining combination technologies based of the on hybrid the local alternative availability of 

renewable sustainable energy development resources, we have solution. carried out Power payback plants analysis are of most individual frequently technologies compared if deployed 

alone (Owen to meet 2004) the local on the demand basis as of compared their capital to payback cost of of the the plant, optimal its proposed annual operating combination and of the 

hybrid maintenance alternative sustainable costs and development fuel prices to solution. the annual Power production plants are most of frequently electricity compared to yield (Owen a 

2004) on the basis of their capital cost of the plant, its annual operating and maintenance costs and fuel 

value in Rupees per kWh as well as their revenues. 

prices to the annual production of electricity to yield a value in Rupees per kWh as well as their revenues. 

CERC Regulations and TERI Reports’ data was used to determine the average 

CERC Regulations and TERI Reports’ data was used to determine the average cost of electricity to 

residential cost of village electricity customers to residential for each utility village in FY customers 2009-2010. for We each scaled utility each utility in FY values 2009-2010. from 2010 to 

the We required scaled financial each utility year using values the state from average 2010 to percentage the required increase financial value year for the using required the state financial 

year average derived percentage from the CERC increase (2009). in This value data for has the been required utilized financial calculation year of revenue derived stream from of the these 

technologies CERC (2009). under suitable This data assumptions. has been utilized in calculation of revenue stream of these 

technologies under suitable assumptions.

252 



Table I: Calculation of Solar Renewable Energy Certificates (RECs) (CERC 2010) 

Table I: Calculation of Solar Renewable Energy Certificates (RECs) (CERC 2010)



253 

Table II: Calculation of Wind & Biomass RECs & Tariffs (CERC 2010) 

Table II: Calculation of Wind & Biomass RECs & Tariffs (CERC 2010)

254 



Table III: Benchmarks for determining the generation tariff from Wind 

(TERI 2006) 

Table III: Benchmarks for determining the generation tariff from Wind (TERI 2006) 

Table IV: Benchmarks for determining the generation tariff from bio-mass 

Table III: Benchmarks for determining (TERI the 2006) generation tariff from Wind (TERI 2006) 

Table IV: Benchmarks for determining the generation tariff from bio-mass (TERI 2006) 

Table IV: Benchmarks for determining the generation tariff from bio-mass (TERI 2006) 

For cost analysis, CERC 2010 report has been considered. The Tariff Period 

For cost analysis, CERC 2010 report has been considered. The Tariff Period for Renewable Energy power 

projects for Renewable except in case Energy of Small power hydro projects projects below except 5 MW, in case Solar of PV, Small and Solar hydro thermal projects power below projects 

is For considered 5 cost MW, analysis, Solar to be CERC PV, thirteen and 2010 Solar (13) report years thermal has been (CERC power considered. 2010). projects In The case Tariff is of considered Solar Period PV for and Renewable to be Solar thirteen thermal Energy (13) 

power 

projects years except the (CERC Tariff in case Period 2010). of Small is In taken case hydro to of be projects Solar twenty PV below five and years 5 MW, Solar (25) Solar thermal years. PV, (CERC and power Solar 2010) projects thermal Tariff power the period Tariff projects under 

these is considered Regulations to be is thirteen considered (13) years from (CERC the date 2010). of commercial In case of operation Solar PV of and the Solar renewable thermal energy power 

generating projects 

Period 

the 

is 

stations. Tariff 

taken 

Period 

to be 

is 

twenty 

taken to 

five 

be twenty 

years 

five 

(25) 

years 

years. 

(25) 

(CERC 

years. (CERC 

2010) Tariff 

2010) Tariff 

period 

period 

under 

under 

these these Regulations Regulations is considered is considered from the from date the of commercial date of commercial operation of operation the renewable of the energy 

generating renewable stations. energy generating stations.



255 

 

The capital cost for wind energy project includes Wind turbine generator 

including its auxiliaries, land cost, site development charges and other civil works, 

transportation charges, evacuation cost up to inter-connection point, financing 

charges and IDC. The capital cost for wind energy projects is Rs. 515 Lakhs/MW for 

FY 2009-10. 

Capacity Utilisation Factor (CUF) norms for this control period shall be as 

follows 

Table V: CUF in relation to Wind Power Density 

Annual Mean Wind Power Density (W/m2) 

CUF 

200-250 20% 

250-300 23% 

300-400 27% 

> 400 30% 

 

The annual mean wind power density is considered to be measured at 50 meter 

height. For the purpose of classification of wind energy project into particular wind 

zone class, the State-wise wind power density map (Wind Density Map of India in 

Figure XX) present in the report of DOT, 2008 is considered. 

Normative Operations and Maintenance (O&M) expenses for the first year of 

the Control Period (i.e. FY 2009-10) are Rs 6.50 Lakh per MW. Normative O&M 

expenses are escalated at the rate of 5.72% per annum over the tariff period. 

The norms for tariff determination specified hereunder are for biomass power 

projects based on Rankine cycle technology application using water cooled 

condenser. 

The normative capital cost for the biomass power projects is Rs.450Lakh/MW 

(FY 2009-10 during first year of Control Period). 

Threshold Plant Load Factor is as under: 

1. During Stabilisation: 60% 

2. During the remaining period of the first year (after stabilization): 70% 

3. From 2nd Year onwards: 80 % 

The stabilisation period is considered as 6 months (which is maximum limit 

allowed) from the date of commissioning of the project.

256 



Normative O&M expenses for the first year of the Control period (i.e. FY 

2009-10) are Rs. 20.25 Lakh per MW. Normative O&M expenses allowed at the 

commencement of the Control Period (i.e. FY 2009-10) is escalated at the rate of 

5.72% per annum. 

Fuel Mix: The biomass power plant is assumed to be designed in such a way 

that it uses different types of non-fossil fuels available within the vicinity of biomass 

power project such as crop residues, agro-industrial residues, forest residues etc. and 

other biomass fuels. The Biomass Power Generating Companies is simulated to 

ensure that the fuel management plan ensures adequate availability of fuel to meet 

the respective project capacity requirements. 

Biomass fuel price during first year of the Control Period (i.e. FY 2009-10) is 

presented in the Table VI below. Alternatively, for each subsequent year of the Tariff 

Period, the normative escalation factor of 5% per annum is taken into account. 

Table VI: Biomass Fuel Price in different States of India (CERC, 2010) 

State 

Andhra Pradesh 

Haryana 

Maharashtra 

Madhya Pradesh 

Punjab 

Rajasthan 

Tamil Nadu 

Uttar Pradesh 

Other States 

Biomass Price (Rs/MT) 

1301 

2168 

1801 

1299 

2092 

1822 

1823 

1518 

1797 

 

For Solar Photovoltaic (PV) power, the simulations are applicable for grid 

connected PV systems that directly convert solar energy into electricity and are 

based on the technologies such as crystalline silicon or thin film etc. as approved by 

Ministry of New and Renewable Energy, Govt. of India. 

The normative capital cost for setting up Solar Photovoltaic Power Project is 

Rs. 1700Lakh/MW for FY 2009-10. The Capacity utilisation factor for Solar PV 

project is nineteen to twenty percent. The O&M Expenses are Rs.9 Lakhs/MW for 

the 1st year of operation. Normative O&M expenses allowed at the commencement 

of the Control Period to be escalated at the rate of 5.72% per annum.



257 

A case study by Razak et al (2009) showed that reducing the excess electricity 

from 55% to 3% again reduces the Levelized Cost of Energy by about 50%. This 

implies that renewable energy options to be deployed must be meeting the local 

requirements according to their hourly demand load curves. Another alternative is to 

limit the load towards the dominant power supplier in the renewable energy hybrid 

system. This is to ensure that the initial capital and annualized cost to be at its 

minimum. Literature reports that in general, at places with higher wind speeds, it is 

more suited that wind to solar ratio be greater than one (around 1.43) (Habib et al 

1999). In some cases, it has gone as high as 4.5. Moreover, this ratio, generally 

greater than one, is very site specific and varies from site to site. Hence, on a general 

scale a ratio of 1.85 was arbitrarily chosen to take round figure values for the ease of 

simulation of payback analysis. 

The base case assumptions and calculations for simulation of payback analysis 

were as follows:- 

1. Windy regions include Tamil Nadu, Rajasthan, Andhra Pradesh, Karnataka 

and Gujarat according to the Wind Map of India (Figure XX) (DOT 2008). 

Hence, the analysis including biomass fuel price and electricity tariff for 

wind and biomass takes into account the prevailing prices in these regions 

only. 

2. Total requirement is calculated in kWh/day of a community, and that is 

assumed to be constant. To fulfill these energy requirements, individual 

models are developed with varying capacities according to their CUF/PLF 

and these are analyzed for their payback. 

3. Electricity tariffs for solar are constant at 18.44 Rs/kWh in all states for the 

first year of operation. 

4. Plant is assumed to have been built by starting of FY 2009-2010. Hence, its 

capital cost is considered to be same as normative cost for the FY 2009- 

2010. This is taken as Fixed cost component and is reflected in FY 0 in the 

simulation of various models to highlight its contribution. 

5. The minimum lifetime out of solar, wind and biomass is that of biomass – 

20 years (CERC 2010). 

6. The tariff period is valid for 13 years. Hence, payback analysis simulation 

has been carried out till 13 years. 

7. The average CUF or PLF of the plant varies with time to time. In general, 

we assume the efficiency increases slightly initially (as stabilization issues 

get resolved) and then decrease (as equipments wear out). 

8. Biodiesel generator and battery back-up costs and revenues aren’t included 

as they are considered to be same for the same capacity requirements. As 

their costs and revenues would remain same in all the cases

258 



9. The average rural population density according to the Census estimates 

indicates roughly around 1500 people/village. A village is further broken 

down into ten communities – each consisting of 150 people. According to 

EIA (2008), India has 50.5 W energy consumption per capita. This implies 

that average community requirements would be around 7.5 kW capacity. 

The peak demand is extrapolated to 10 kW for capacity purpose, which can 

be handled by bio-diesel generator backup in case of lesser generation. 

10. In a day, it was found that on an average 181.8 kWh ((50.5/1000) x 24 x 

150) was required. For simulation, we halved the value to 90.9 kWh for 

simulation, thus providing electricity for atleast 12 hours. The remainder 

could be supplied by biodiesel generator set and battery back-up. 

11. The plant starts its operation in FY 2009-2010. It is assumed to have been 

ready for start-up at the starting of the same fiscal year. 

12. For generating electricity from biogas, it was found that on an average 

1 cum (cubic meters) of biogas is produced by excreta of 35 people/day 

(Jha 2005). 

13. 1600 cum of biogas is produced by 20 tonnes of biomass waste. 

(MNRE 2006) 

14. 1 cum of biogas generates 4.7 kWh (NABARD 2007). 1 kWh is generated 

by 0.21 cum of biogas. 

15. The current delivery cost of Solar PV is Rs. 18.44 kWh. 

16. The current delivery cost of Wind is 4.5 Rs./kWh with 4.5% escalation. 

17. The current delivery cost of Biomass is 4.2 Rs./kWh with 1.2% escalation. 

18. The current cost of delivery for proposed hybrid system is considered to be 

same as that of the Solar Wind hybrid: 9 Rs./kWh (DST 2011) 

On the basis of the above assumptions, we have developed four scenarios for 

simulating payback and comparing the proposed model with individual 

technologies. We now calculate the Power Plant’s Capacity required meeting the 

local energy demand in each of these scenarios. 

Case I: All the Energy Demand is met by Local Solar PV Power Plant 

Installation 

Calculations: 

• 1 kWp of Solar PV generates 3.5 – 4.5 units (kWh)/day. (DOT 2008) 

• Average units generated / day = 4 kWh 

• Total requirement in our model = 90.9 kWh 

• => Capacity of Solar PV to be installed = 90.9/4 = 22.7 ~ 23 kW



259 

Case II: All the Energy Demand is met by Local Wind Power Plant 

Installation 

Calculations: 

• 1 KW WTG generates around 3 – 3.2 units (KWh) per day. (DOT 2008) 

• Average units generated / day = 3.1 kWh 

• Total requirement in our model = 90.9 kWh 

• => Capacity of Wind Turbine to be installed = 90.9/3.1 = 29.3 ~ 30 kWp 

Case III: All the Energy Demand is met by Local Biomass Power Plant 

Installation 

Calculations: 

• Human excreta of 150 users of community latrine will produce = 150/35 = 

4.3 cum biogas 

• 4.3 cum biogas will generate (1/0.21)*4.3 = 20.5 kWh 

• Capacity needed = 90.9 kWh. Demand Unmet = 90.9-20.5 = 70.4 kWh 

• 70.4 kWh is to be met by other bio-mass, which implies 14.8 cum of biogas 

• 14.8 cum of biogas implies (20/1600) = 185 kg of biomass. 

• 4 cum is generated by 10-12 heads (MNRE 2006). 14.8 cum of biogas will 

be generated by the excreta of 41 cattle heads. This may be possible. 

• Hence, mixed waste digester required. => 90.9/24 = 3.8 kW ~ 4 kWp 

capacity is required. 

Case IV: All the Energy Demand is met by the Proposed Local Alternative 

Energy Solution Hybrid Power Plant Installation 

 

 

Calculations: 

• 1.2 kWp of Biomass plant is taken, which can be managed with the 

population on 150 users and assuming additional agricultural / animal 

waste equivalent to that of 35 users. This will generate 24 kWh. 

• Required Units = 90.9 – 24 = 66.9 ~ 67 kWh. 

• The rest are generated by Wind of 13 kW and Solar of 7 kW capacity. 

• This implies Wind to Solar ratio as 1.85, which is greater than 1.

260 



3. Analysis & Results 

India consumed a total of 158 MToe of biomass in 2005, most of it by rural 

households. At least, three quarters of rural households (668 million people) use 

traditional biomass fuels, wood, animal dung or agricultural residues, for cooking 

and heating. In the reference scenario, biomass use is projected to grow, but more 

slowly than the past. It reaches 171 Mtoe in 2015 and 195 Mtoe in 2030. (this is 

producing pollution.) (PCRA 2009) Accordingly, un-utilized potential for biomass 

power generation is 4 GW. Hence, there is a lot of unutilized potential for harnessing 

biomass energy. 

The southern and western coastal areas of India are the ideal location for wind 

generators (DOT 2008). It can be implemented in rural areas in states like Tamil 

Nadu, Karnataka, Gujarat, Maharashtra, and Andhra Pradesh, where the annual 

average wind speed of 5-6 m/s is available, installation of hybrid solar-wind power 

system can be an attractive option to supplement the energy supply. 

Hence, for the proposed hybrid model, these analyses are best valid for the 

regions of Tamil Nadu, Rajasthan, Karnataka, Andhra Pradesh, and Gujarat as these 

are best regions according to the Wind Map of India (DOT 2008). The solar 

insolation map of India is also given below for reference in the above areas.



261 

Figure III: Wind Map of India (DOT 2008) 

Figure III: Wind Map of India (DOT 2008)

262 



Figure IV: Solar Insolation Diagram of India (DOT 2008) 

In the context of energy markets, an “externality adder” is simply the unit 

externality cost Figure added IV: to Solar the standard Insolation resource Diagram cost of India of energy (DOT 2008) to reflect the social 

cost of its use. For power generation, the externality adder would generally be 

specified in terms of Rs. per kWh (Rs./kWh) (Pearce 2002) 

In the context of energy markets, an “externality adder” is simply the unit externality cost added to the 

standard resource Peace cost (2002) of energy lists five to reflect uses the for social externality cost of adders: its use. For power generation, the externality 

adder would generally be specified in terms of Rs. per kWh (Rs./kWh) (Pearce 2002) 

i. For public or quasi-public ownership of sources of electric power 

Peace (2002) lists generation, five uses for the externality full social adders: cost of alternative technologies could be used to 

plan future capacity with preference being given to that with the lowest 

i. For social public cost. or Where quasi-public electric ownership power of generation sources of is electric privately power owned, generation, then the full 

social regulators cost of could alternative use the technologies full social could cost to be influence used to plan new future investment, capacity with 

preference perhaps through being an given effective to that environmental with the lowest tax.social 

cost. Where electric power



263 

ii. Environmental generation is privately adders owned, can be then used regulators estimate could use the the appropriate full social cost level to influence of 

environmental new investment, taxes. perhaps Although through an estimates effective environmental of environmental tax. adders have 

been derived for a number of applications, examples of their actual 

ii. Environmental adders can be used to estimate the appropriate level of environmental 

implementation 

taxes. Although 

are 

estimates 

few. 

of environmental adders have been derived for a number of 

applications, examples of their actual implementation are few. 

iii. Environmental adders could be used to adjust national accounts data to 

reflect depreciation of natural resources and damage to the environment 

iii. arising Environmental from economic adders could activity, be used yielding to adjust so-called national accounts “green” data national to reflect 

accounts. depreciation of natural resources and damage to the environment arising from economic 

activity, yielding so-called “green” national accounts. 

iv. Environmental adders could be used for “awareness raising”; i.e., to inform 

the public of the degree to which alternative energy sources have 

iv. Environmental adders could be used for “awareness raising”; i.e., to inform the public of 

externalities the degree to that which give alternative rise to energy economically sources have inefficient externalities allocation that give rise of to 

resources. economically inefficient allocation of resources. 

v. Environmental adders might assist in determining environmental policy 

v. priorities. Environmental adders might assist in determining environmental policy priorities. 

The weighted average sale price of traded electricity in India is given below to 

The understand weighted average the rising sale tariffs price of scenario. traded electricity in India is given below to understand the rising 

tariffs scenario. 

Figure V: Weighted average sale price of traded electricity (ABPS, 2009) 

Figure V: Weighted average sale price of traded electricity (ABPS, 2009) 

Our payback simulation analyses have utilized the current tariffs to calculate 

revenues. In the figures below, we present the results of the same.

264 



Our payback simulation analyses have utilized the current tariffs to calculate revenues. In the figures 

below, Case we – present I: All the results Energy of the same. Demand is met by Local Solar PV Power Plant 

Installation 

Case – I: All the Energy Demand is met by Local Solar PV Power Plant Installation 

Payback: 11.5 years 

Figure VI: Payback Analysis of Case - I 

Payback: 11.5 years 

Figure VI: Payback Analysis of Case - I



265 

Case II: All the Energy Demand is met by Local Wind Power Plant 

Installation 

Case II: All the Energy Demand is met by Local Wind Power Plant Installation 



Figure VII: Payback Analysis of Case - II 

Figure VII: Payback Analysis of Case - II

266 



Case III: All the Energy Demand is met by Local Biomass Power Plant 

Installation 

Case III: All the Energy Demand is met by Local Biomass Power Plant Installation 

Payback: 3.5 years 

Figure VIII: Payback Analysis of Case - III 


Figure VIII: Payback Analysis of Case - III



267 

Case IV: All the Energy Demand is met by the Proposed Bundled Local Alternative Energy 

Case IV: All the Energy Demand is met by the Proposed Bundled Local 

Solution Hybrid Power Plant Installation 

Alternative Energy Solution Hybrid Power Plant Installation 



Figure IX: Payback Analysis of Case - IV 

Figure IX: Payback Analysis of Case - IV 

The Payback Period is 8.5 years through proposed tariff as opposed to around 

9.5 years through simple additive of individual tariffs as shown in Figure X. The 

Simple Additive Combination represents individual power plants of having the same 

capacities as that in bundled solution. The electricity is sold at a fixed rate of Rs. 9/ 

kWh (Proposed Tariff) in the Bundled Hybrid, but in the Simple Additive 

Combination, the electricity is sold at the price of the individual tariffs – as if the 

electricity from Solar PV, Wind and Biomass has been produced and sold 

independently of each other, whereas the same amount of electricity produced and 

sold in an integrated power plant bundling these technologies together.

268 

The Payback Period is 8.5 years through proposed tariff as opposed to around 9.5 years through simple 

additive 

The Meaning 

of 

of 

individual 

Sufficiency Economy 

tariffs 

 

as shown in Figure X. The Simple Additive Combination represents 


individual power plants of having the same capacities as that in bundled solution. The electricity is sold at 

a fixed rate of Rs. 9/kWh (Proposed Tariff) in the Bundled Hybrid, but in the Simple Additive 

Combination, the electricity is sold at the price of the individual tariffs – as if the electricity from Solar 

PV, Wind and Biomass has been produced and sold independently of each other, whereas the same 

amount of electricity produced and sold in an integrated power plant bundling these technologies 

together. 

Figure X: Simulation of Payback Analyses: Bundled Local Hybrid Solution vs. 

Simple Combination of the Solutions of same capacities 

Figure X: Simulation of Payback Analyses: Bundled Local Hybrid Solution vs. Simple Combination of 

the Solutions of same capacities 

Hence, our payback analyses simulation shows that it is much more 

advantageous to the community level power generation by bundling optimal 

combination in proportion to the availability of the local bio-resources. This also 

Hence, our payback analyses simulation shows that it is much more advantageous to the community level 

ensures that no single resource is overstrained or solely depended upon. The most 

power generation by bundling optimal combination in proportion to the availability of the local bioresources. 

attractive This utilities also ensures tend that to be no significantly single resource smaller is overstrained than or the solely largest depended utility. upon. (Denholm The most 

attractive et al 2009) utilities – the tend case to be for significantly local (distributed) smaller than the power largest generation. utility. (Denholm This et al also 2009) proves – the case in 

for local (distributed) power generation. This also proves in favor of small hybrid solutions of alternative 

favor of small hybrid solutions of alternative energy. 

energy. 

Fixed Cost Analysis to compare solutions is also presented in the Table VII. 

Table VII: Fixed Cost Analysis according to Simulation Results 

Fixed Cost Analysis to compare solutions is also presented in the Table VII. 

Solution 

Total Fixed Cost (million INR) 

Solar 3.91 

Wind 1.55 

Biomass 0.18 

Hybrid 1.91 

Table VII: Fixed Cost Analysis according to Simulation Results 

Renewable energy technologies that are, by their very nature, intermittent would incur fuel costs to the 

extent that backup capacity was used in order to maintain the desired supply of peaking power to the grid. 

At low levels of renewable penetration additional system costs would be negligible compared with 

generation costs, since variability would still be within normal tolerance levels for the system as a whole. 

Thereafter, higher levels of penetration will involve additional cost, since additional generation or 

electricity storage capacity would be required to meet peak demand if, for example, wind were 

unavailable. As a consequence, at a purely financial level, the value of intermittent generation should be 

less than that of conventional generation by approximately these additional costs. Both coal and gas



269 

Renewable energy technologies that are, by their very nature, intermittent 

would incur fuel costs to the extent that backup capacity was used in order to 

maintain the desired supply of peaking power to the grid. At low levels of renewable 

penetration additional system costs would be negligible compared with generation 

costs, since variability would still be within normal tolerance levels for the system as 

a whole. Thereafter, higher levels of penetration will involve additional cost, since 

additional generation or electricity storage capacity would be required to meet peak 

demand if, for example, wind were unavailable. As a consequence, at a purely 

financial level, the value of intermittent generation should be less than that of 

conventional generation by approximately these additional costs. Both coal and gas 

exhibit a clear absolute cost advantage over the bulk of renewable technologies, 

although electricity generated by “best performance” wind power has recently 

approached similar cost levels. Back-up generation costs associated with the 

intermittency of renewables to ensure reliability of supply are not included. Thus, on 

purely financial grounds (inclusive of all forms of subsidy), renewable technologies 

would, in general, appear to be non-competitive. The cost “gap” has been narrowed 

significantly over the past two decades, a process that is expected to continue as 

reflected in projected cost levels for 2020. However, it is clear that significant policy 

actions to increase investment in research and development and to stimulate 

economies of scale in production and dissemination of renewables are required to 

meet environmental commitments on global climate change in any major way. 

(Owen 2004) A high rate of penetration by intermittent renewables without electric 

storage could be facilitated by emphasis on advanced gas turbine power generating 

systems. Such power generating systems (characterised by low capital cost, high 

thermodynamic efficiency, and the flexibility to vary the electrical output quickly in 

response to changes in the output of intermittent power generating systems) would 

make it possible to back up the intermittent renewables at low cost, with little need 

for electrical storage. Moreover, the rising price of electricity as shown in Figure V 

aids to the balance shifting towards renewable energy. 

Supporting the validity of our simulations, we consider the annual saving of 

fuel, the payback period for various systems ranges from around 4-9 years (Annex.- 

10) depending upon the capacity of the SPV/hybrid installation and the load (DOT 

2008). Apart from saving the operators the huge cost of supply and consumption of 

diesel in remote locations, switching to renewable energy would provide for 

sustained rural telecom services to target beneficiaries in a cost effective manner 

while also cutting down on harmful carbon emissions (DOT 2008). 

According to the DST under Solar Energy Research Initiative (SERI) supports 

activities aimed at improving efficiency of materials, devices, systems and subsystems 

including innovative R&D demonstration projects, process has been 

initiated to develop a solution for off-grid application with a target of providing 

power to a village at the cost of less than Rs.9 per kWh of delivered power (DST 

2011). Hence, our price for the bundled solution hybrid is valid.

270 



The social benefits of renewable energy, which favors renewable energy 

adoption, include: 

• Provide clean, green, reliable, pollution free, low emission and distributed 

technology power 

• Saves from high-running cost of generator and increasing diesel cost 

• The hybrid system gives quality power out-put of 48 volt DC to charge 

directly the storage battery. 

• The system can be designed for both off-grid and on-grid applications. 

• Efficient and easy installation, longer life 

• Low gestation period 

• Low operating & maintenance cost 

However, electricity, unlike fuel, cannot be stock-piled. For the most part, it 

must be created at almost the instant it is consumed. And much electrical energy 

goes to waste, as when wind farms are taken offline because they are producing 

more electricity than is needed. (Korosec 2011) Industrial and academic researchers 

are trying to solve these problems with new large-scale energy storage technologies. 

Notable contenders include scaled-up lithium-ion batteries and liquid metal 

batteries. To date, lithium batteries have been relatively expensive and short-lived. 

To try to overcome these drawbacks, startup Seeo is replacing the batteries’ usual 

liquid electrolyte with solid polymers. As well as lasting longer, solid polymers 

allow the batteries to store more energy. 

To account for the savings on kerosene or firewood burnt, we take the help of 

our literature survey to support this fact. A survey (Singh 2011) had been carried out 

in a cluster of 5 villages in Badlapur block of Jaunpur District of eastern Uttar 

Pradesh in 2004. The cluster of villages chosen comprises of five villages viz 

Rampur, Dhiva, Chowkvia, Khetaria, Bahra. These villages are under Tiyara tahsil. 

There are 529 household in the cluster. From the survey, the present energy 

consumption pattern in cooking, lighting, other domestic activities, agriculture and 

allied activities, rural industry and transport has been worked out. Total firewood 

equivalent consumption of biomass fuels per household as calculated by the survey 

is 2.14 Ton/Yr. 

The survey (Singh 2011) covered the willingness of the villages to adopt the 

renewable energy systems instead of traditional devices. The following numbers of 

renewable energy systems as given in table 4 are proposed to be implemented in a 

period of five years in different villages of the cluster. In order to assess the benefits 

of the recommended systems the table also provides the cost benefit analysis in 

terms of energy saving in fuel utilization and also in monetary terms taking the 

firewood cost as Rs.1500/ton, cost of diesel as Rs. 35/l and the cost of electricity as 

3.75/kWh. Total energy saving in terms of wood equivalent will be 456.921tones/yr



271 

where as energy savings in terms of electricity will be 38.35 MWh/yr. and diesel 

saving will be 1.87kl/yr. Total saving per annum will be Rs.0.8948 million. This 

saving will be realized when all the renewable energy systems and devices will be 

installed in the villages. 

Apart from this protection of environment, ensuring of villages energy 

security, employment generation and above all social costs of improving quality of 

life of the villagers are the added advantages of the recommended devices and 

technologies. 

Therefore, an emerging scientific consensus that a shift to small scale 

sustainable agriculture and localized food systems will address most, if not all the 

underlying causes of deteriorating agricultural productivity as well as the 

conservation of natural soil and water resources while saving the climate. To 

substantially improve living standards, access to modern energy is also crucial. 

Small agro-ecological farms are known to be highly productive (ISIS 2011), and are 

ideally served by new renewable energies that can be generated and used on site, and 

in off-grid situations most often encountered in developing countries. A model that 

explicitly integrates sustainable farming and renewable energies in a circular 

economy patterned after nature could compensate, in the best case scenario, for the 

carbon emissions and energy consumption of the entire nation while revitalising and 

stimulating local economies and employment opportunities. 

 

4. Limitations 

Electricity price is the biggest driver of breakeven cost, followed by finance 

factors, policy issues, and technical performance. (Denholm et al 2009) 

 

Caveats of our analysis include: 

• Focus of analysis is on overall trends and sensitivities, in order to evaluate 

the economic performance of an individual hybrid system a different/more 

detailed analysis would need to be carried out. 

• Breakeven period or Payback Period does not equal market potential or 

guarantee market adoption for rooftop PV, in other words, we do not 

present a depth of market analysis. 

Unlike fossil fuel technologies, the efficiency of renewable technologies is 

generally very site-specific. For example, it would be expected that photovoltaics in 

the UK would incur a higher cost per kWh than countries located at lower latitudes. 

(Owen 2004)

272 



5. Conclusion & Recommendation 

Sufficiency Economic Development emphasizes that development should 

progress step-by-step, starting from laying down a strong foundation; each step 

should be balanced and stable in order to realize sustainable development. 

The concept of a step-by-step development path can be summarized in His 

Majesty’s (of Thailand) idea of burst from within that is, to make people in the 

community strong and prepared before receiving development from outside. At 

least, they can be self-reliant in terms of basic necessities, having strong social and 

cultural capital and having enough knowledge to manage their resources in a 

sustainable way. (Wibulswasdi et al 2010) 

Figure XI: Results of Sufficiency Economic Development 

(Wibulswasdi et al 2010) 

Figure One aspect XI: Results that of fits Sufficiency into Sufficiency Economic Economic Development Development (Wibulswasdi et (SED) al 2010) model is 

the implementation of an alternative development strategy which adjust balance of 

One economic aspect that fits development into Sufficiency framework Economic - Development rural as well (SED) as industrial model is development; the implementation strong of an 

alternative communities; development quality strategy growth which with adjust appropriate balance of economic pace; emphasis development on public framework well-being - rural as 

well etc. as industrial development; strong communities; quality growth with appropriate pace; emphasis on 

public well-being etc. 

In this aspect, today there is an electricity energy shortage in rural areas. Rural 

In this Electrification aspect, today there (“RE”) is an electricity is viewed energy as the shortage key for in rural accelerating areas. Rural rural Electrification development (“RE”) is 

viewed as the key for accelerating rural development (Gazette of India 2006). Provision of electricity is 

(Gazette of India 2006). Provision of electricity is essential to cater for requirements 

essential to cater for requirements of agriculture and other important activities including small and 

medium of agriculture industries, khadi and and other village important industries, activities cold chains, including health small care, and and education medium and industries, information 

technology. khadi and village industries, cold chains, health care, and education and information 

technology. 

The challenge is to provide access to convenient fuels yet ensure that the energy services are affordable 

for the rural The poor. challenge There is a role is to for provide policy interventions access to and convenient government fuels support. yet ensure that the 

energy services are affordable for the rural poor. There is a role for policy 

To exploit the full potential of solar energy there is an immediate need for proper policies and spreading 

interventions and government support. 

awareness among people, promoting the use of solar applications. In the past decade the solar energy 

industry has 

To 

seen 

exploit 

a tremendous 

the full 

rise 

potential 

but there is 

of 

still 

solar 

a very 

energy 

long way 

there 

to go. 

is an immediate need for 

The issue proper here policies is to design and spreading subsidies/incentives awareness that among do not people, distort energy promoting markets. the The use focus of solar of this 

section applications. will be In the the residential past decade sector the on solar electricity energy supply industry for has lighting, seen residential a tremendous appliances, rise 

agricultural but there pumping is still and a very rural industry. long way to go. 

Developments The on issue cheap here solar is technology to design are subsidies/incentives considered as a potential that do alternative not distort that energy allows an 

electricity markets. infrastructure The focus comprising of this section of a network will be of on local-grid the residential clusters with sector distributed on electricity 

generation. 

supply 

That 

for 

could 

lighting, 

allow 

residential 

bypassing, 

appliances, 

or at least relieving 

agricultural 

the need 

pumping 

of installing 

and 

expensive, 

rural industry. 

and energy 

 

losses in transmission, long-distance centralized power delivery systems and yet, bring cheap electricity 

to the masses. 

India should adopt a policy of developing solar power as a dominant component of the renewable energy 

mix; the subcontinent has the ideal combination of both high solar insulation and a big potential rural 

consumer base density. Without compromising its economic growth potential, India can make renewable 

resources like solar the backbone of its economy.



273 

Developments on cheap solar technology are considered as a potential 

alternative that allows an electricity infrastructure comprising of a network of localgrid 

clusters with distributed electricity generation. That could allow bypassing, or at 

least relieving the need of installing expensive, and energy losses in transmission, 

long-distance centralized power delivery systems and yet, bring cheap electricity to 

the masses. 

India should adopt a policy of developing solar power as a dominant 

component of the renewable energy mix; the subcontinent has the ideal combination 

of both high solar insulation and a big potential rural consumer base density. 

Without compromising its economic growth potential, India can make renewable 

resources like solar the backbone of its economy. 

It has been estimated that there is a potential to install 19500 MW capacities 

through biomass conservation technologies like combustion, gasification, 

incineration and also bagasse based co- generation in sugar mills. So far only around 

380 MW of this potential has been tapped and there is wide scope for expanding the 

size of their use for the benefit of the majority of the rural population to meet their 

energy needs. 

Villagers should be educated not to cut trees or burn kerosene for meeting their 

fuel needs rather, biogas plants should be set up on large scale. 

Solar and bio-energy equipments (Singh 2011) should be advertised in all print 

and visual media along with their cost benefit analysis. These can be offered on 

installments as other consumer products. Private players should be involved into 

making and installing these equipments. 

The distributed energy farm can be located in remote rural regions, the local 

technologies will send power through new transmission lines, and variations in 

output will be communicated immediately to the utilities. These local technologies 

of producing green electricity will depend on the availability of local alternative to 

conventional energy sources, renewable energy resource. This will also ensure 

sustainable development and sufficiency economy on a community grassroots level.

274 



References 

Wibulswasdi C. et al, 2010, Sufficiency Economy Philosophy and Development, pp. 

4, 12 

Cass S., 2011. Smart meters must be backed up by new transmission infrastructure, 

Technology Review 114(1), pp. 65. 

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Cass S., 2011. Everything is the Grid, Technology Review 114(1), pp. 68-69. 

Korosec K., 2011. Better Storage, Technology Review 114(1), pp. 69. 

Cass S., 2011. Power Control, Technology Review 114(1), pp. 72-73. 

Denholm et al, 2009, Breakeven Cost for Residential Photovoltaics in the United 

States: Key Drivers and Sensitivities (weblink) NREL, DOE, USA ( ) 

[Accessed 15 th July, 2011) 

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Economics of Renewable Energy Technologies, The Energy Journal, 25(3), 

pp. 127-156. 

Pearce, D. 2002. “Energy Policy and Externalities: An Overview.” Paper presented 

at an IEA 

workshop on Energy Policy and Externalities: The Life Cycle Analysis Approach, 

Paris: OECD/IEA. 

Petroleum Conservation Research Association (PCRA), 2009. Practical Guide to 

Energy Conservation, pp. 13-14. 

Department of Science & Technology (DST), Ministry of Science & Technology, 

India, 2011, Annual Report 2009-2010, pp. 75-76. 

ISIS, 2011, Sustainable Agriculture and Off-Grid Renewable Energy, UNCTAD 

Trade and Environment Review 2011. 

DOT Committee on Renewable Energy, 2008, Hybrid Wind/Solar Power for Rural 

Telephony Green Solution to Power Problems, First Report of the 

Committee on Non-conventional Energy to Power Rural Telephony. 

TERI, 2006, Pricing of Power from Non-Conventional Sources, pp. 22-23, 25-27. 

The Gazette of India, 2006, Rural Electrification Policy. 

CERC, 2010, Explanatory Memorandum For Benchmark Capital Cost Norms for 

Solar PV Power Projects and Solar Thermal Power Projects, pp. 11-12. 

CERC, 2010, Order: Suo Moto, pp. 17, 25.



275 

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186(201)/2009-CERC 

Singh S. et al, 2011, Renewable Energy is A Solution of Fuel Scarcity at Rural and 

Decentralized Scale in India: A Case Study from State Uttar Pradesh, 

International Journal of Advanced Engineering & Application, pp. 179-186 

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Framework For Renewable Energy Certificate Mechanism for India, pp. 86 

Habib M. A. et al, 1999, Optimization procedure of a hybrid photovoltaic wind 

energy system, Energy 24(11), pp. 919-929 

Razak et al, 2009, Optimization of PV-Wind-Hydro-Diesel Hybrid System by 

Minimizing Excess Capacity, European Journal of Scientific Research 

25(4), pp. 663-671 

Jha P. K., 2005, Sustainable Technologies for On-site Human Waste and Wastewater 

Management: Sulabh Experience, Asian Development Bank, Manila 

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NABARD, 2007, http://www.nabard.org/modelbankprojects/biogas.asp [Accessed 

14th July, 2011] 

EIA, 2008, http://en.wikipedia.org/wiki/List_of_countries_by_electricity_ 

consumption [Accessed 16th July, 2011]



Group 

2 



Impact of Micro Credit on Women Empowerment – 

a Study in Mysore District, India 

Prof.M.Chowdegowda 

Dept.of Economics, Vijaya First Grade College 

Pandavapura, Mandya-District 

 

Dr.K.Sivachithappa 

Principal Investigator UGC Major Research Project, 

Dept.of Economics 

University of Mysore PG Centre, Mandya. INDIA



279 

Impact of Micro Credit on Women Empowerment – 

a Study in Mysore District, India 

 

 

 

 

 

 

 

Introduction 

The idea that eradication of poverty must be a central concern of public policy, 

has gained wide currency in current academic and public discourse on development. 

Time was when the focus used to be on the rate and pattern of growth, and on 

inequalities in distribution of income and wealth. Even as these continue to be 

important concerns, increasing attention is being given to the extent to which people 

in individual countries and the world at large are deprived of the minimum 

requirements for a long, healthy and fulfilling life. 

The idea is not new. In India it dates well back into pre-independence era - 

recall Naoroji’s book “Poverty and UN British Rule” and was prominent in the 

deliberations of the Congress Party. The National Planning Committee (NPC) report 

in fact spelt out in concrete terms the concept and content of minimum living 

standard. The 15th Indian Labour Conference (ILC) which deliberated on the basis 

for fixing fair wages also spelt out the constituents of a living wage. A committee on 

economic policy (headed by Nehru) appointed by the AICC suggested that assurance 

of a national minimum standard in respect of “all the essentials of physical and 

social well-being” to every family within a reasonable period of time” should be the 

practical goal of all schemes of development. 

The Constitutional provisions on the Directive Principles of State Policy, 

however it took a long time for government to define its developmental objectives 

and policies with reference to these principles. The first three Five-Year Plan 

documents saw sustained high rates of growth as the principal means to alleviate 

malnourishment, unemployment, illiteracy and other manifestations of poverty. 

There was much talk in political rhetoric and in policy pronouncements about 

reducing inequalities of income and wealth through land reforms, public ownership 

and control of key sectors, and progressive taxation. But with actual growth proving 

to be much slower than expected, and redistributive measures; proving to be

280 



ineffective, the appalling conditions in which the bulk of the population continued to 

live and the necessity to address their problems seriously came into sharp relief. The 

late Ram Manohar Lohia dramatized it by calling attention of parliament to the fact 

that more than half the population subsisted on less than 6 annas per head per day. 

In 1962, an unofficial seminar,’ in which several leading economists, political 

figures and social activists participated, gave a fresh impetus to the idea that 

planning should aim at ensuring a minimum standard of living to every one within a 

reasonable period. They suggested that the national minimum should include a timebound 

target of minimum income (Rs.20 per capita per month in rural areas and 

about Rs.25 in urban areas); expenditure on education and health to be provided by 

the state according to the Constitution2 transfers and social welfare expenditure to 

ensure minimum for the poorest 20 per cent of the population who are not likely, for 

various reasons, to benefit ^automatically from growth. 

Soon thereafter the implications of planning for this minimum living were 

worked out in a paper prepared by the perspective planning division of the Planning 

Commission and further elaborated entitled “Notes on Perspectives of Development 

India’s 1960-61 to 1975-76” [GOl, PC, 1964]. The latter was considered but not 

formally approved by the Planning Commission. In the event, for a variety of 

reasons (including Nehru’s death, the aftermath of military engagements with China 

and Pakistan, and the droughts) it was shelved. The Fourth Five-Year Plan did not 

even mentioned minimum living standards or basic needs. 

 

Rural Poverty and Development Policy 

The late 1960s witnessed a spurt of interest among economists in the study of 

poverty both at the conceptual and empirical levels. At the conceptual level, 

questions began to be raised about the validity of using per capita GDP or per capita 

consumption as a satisfactory measure of well-being. A strong case was made for a 

much broader concept of ‘quality of life’ which would include nutritional status 

agency and literacy. Attention was also focused on the possibility - h on the example 

of Kerala in India and Sri Lanka - that the quality of IT in the broader sense is not 

necessarily contingent on high level income. The factors - largely social and 

political - which made the’ possible have attracted much attention and discussion 

[United Nations 1975; Sen 1981; Bhalla 1988; Streeten and Burki 1978]. 

The findings of the Mahalanobis Committee [Gol, PC 1964, 19591 and 

Hazari’s study (1967), as is well known, found no reduction in inequalities in 

consumption, incomes or in concentration of economic power. A number of 

researchers took up empirical and theoretical studies focused on absolute poverty 

and strategies to eradicate it. Dandekar and Rath’s (1974) well known monograph 

‘Poverty in India’ argued for defining the poverty line on the basis of the minimum 

income required for nutritional diet and other essentials, provided estimates of the 

number of people who fell below this line, and outlined a strategy (based on a



281 

massive public works programme) to give them the needed additional incomes to 

reach the minimum. Around the same time a number of others discussed estimates of 

inequalities in income distribution, incidence of and trends in poverty, conceptual 

and measurement problems involved, and strategies for tackling poverty. 

This research highlighted significant differences in estimates of mean incomes 

and consumption, inequality indices and poverty incidence obtained from different 

sources. There was a major controversy over whether or not poverty incidence had 

declined during the 1960s. This stimulated serious investigation into theoretical 

aspects of concepts and measurements, the merits and weaknesses of different 

sources of relevant data, the interrelation between growth, distribution of assets and 

income, employment and poverty; and different strategies for rapid reduction of 

poverty. All these themes continue to figure prominently in the ever growing 

literature on this subject both nationally and internationally. The discussions have of 

course become more detailed, technically more refined and wider in scope. 

By the early 1970s, development economists, both within the country and 

abroad as well as in international agencies, had veered round to the view that overall 

growth, while necessary, would not by itself be able to take care of the needs of the 

poor. The pace of growth is unlikely to be uniform across regions; all segments of 

the economy and sections of the population are not integrated into the wider 

economy; and large sections are not equipped (for a variety of reasons) to take 

advantage of the opportunities arising from growth. Therefore programmes for 

‘direct tike the World Bank. 

This perception did not long remain a matter of academic interest. In India, the 

set back to the economy during the late 1960s, (slow growth, back in investment, 

inflation), heightened apprehensions of increased inequalities, growing 

unemployment and worsening of poverty. It Happened to coincide with the struggle 

for political power in the Congress Party. ‘Radical’ measures, (like bank 

nationalization abolition of privy purses) ostensibly meant to contain the rich, were 

tried but they were limited in scope and did not mean much to the poor. In this 

juncture, Indira Gandhi sought to broaden her political base by adopting the ‘Garibi 

Hatao’ slogan and launching a number of poverty alleviation schemes. 

Apart from a Minimum Needs Programme, a number of other initiatives - 

notably special schemes for small and marginal farmers (later replaced by Integrated 

Rural Development, IRDP for short), rural employment schemes, mid-day meals for 

school children, and subsidized public distribution of food and other essential 

commodities - were launched. Some were new; others essentially were refurbished 

versions of older schemes. That they did not remain slogans, but were backed by 

substantial financial allocations made them politically credible. That it struck a 

positive chord among the people is evident from the resounding electoral success of 

Congress Party under Indira Gandhi’s leadership. 

For the first time, assurance of basic minimum needs found an explicit and 

prominent place in the Fifth Plan. The concept included not only an assurance of

282 



purchasing power sufficient to procure a collection of basic items of consumption 

deemed to constitute ‘basic’ or ‘minimum’ collection, but also elementary education 

for all children up to 14 years of age; minimum public health facilities integrated 

with family planning and nutrition for children; protected water supply; amenities 

for landless labour and slum improvement in larger towns; and rural roads and rural 

electrification. 

The idea of direct, targeted poverty alleviation programmes quickly took root 

and gained widespread acceptance across the entire political spectrum. 

Governments, at the centre and in the states, have since viewed with each other in 

increasing allocations and devising new schemes (or the same schemes under 

different names) under this rubric. Along with the number and variety of schemes, 

financial allocations have also increased progressively. Motivations were of course 

not as high minded as the slogans made out. In this juncture, the evolution of 

microfinance plays a significant role. 

Microfinance, which includes micro savings, is gradually emerging as one of 

the most effective strategies to alleviate poverty. It can effectively generate 

employment and sustain the income of the households by giving them opportunities 

of work. Although micro credit institutions are effective weapons in the war against 

rural poverty they alone cannot neutralise non physical symptoms of poverty which 

deprive the poor of a full social existence. 

Since 1970s, developing countries, including India, have increasingly focused 

on micro credit to facilitate the access of poor households to financial services like 

credit, savings, insurance etc. As the rural population in India, forming about twothird 

of her total population is still dependent on agriculture, there is a crying need 

for timely and adequate availability of funds for agricultural and rural finance is a 

must for improving the lot and income of the poor. 

 

Some Facts Related to Demand-Supply of 

Micro-Finance 

There is a vast unmet gap in the provisions of financial services to the poor. A 

very little segment of the poor people is being served by the formal financial system 

for micro-credit. Majority of the poor population depends on informal financial 

system for their credit needs. Let us look at some facts. 

According to the World Development Report (2000), 1.8 billion people 

live in extreme poverty, subsisting on less than US $ 1 a day and almost half of the 

world population (2.8 billion) live on less than US $ 2 a day. South Asia is the home 

to half of the world’s poor families. In African countries, women account for more 

than 60 per cent of the agriculture labour force and contribute up to the 80 per cent 

of the total food production, yet receive less than 10 per cent of the credit provided 

to small farmers.



283 

In India, various estimates put the requirements of micro credit at Rs. 150 

billion to Rs. 500 billion per year. As against these estimates, bank advances to 

weaker section aggregated about Rs. 100 billion per year and SHGs are estimated 

to provide about 1 billion per year. About 36 per cent of the rural households are 

outside the fold of institutional credit. 

The post-nationalization period in the banking sector, circa 1969, witnessed a 

substantial amount of resources being earmarked towards meeting the credit needs 

of the poor. There were several objectives for the bank nationalization strategy 

including expanding the outreach of financial services to neglected sectors (Singh, 

2005). As a result of this strategy, the banking network underwent an expansion 

phase without comparable in the world. Credit came to be recognized as a remedy 

for many of the ills of the poverty. There spawned several pro-poor financial 

services, support by both the State and Central governments, which included credit 

packages and programs customized to the perceived needs of the poor. While the 

objectives were laudable and substantial progress was achieved, credit flow to the 

poor, and especially to poor women, remained low. This led to initiatives that were 

institution driven that attempted to converge the existing strengths of rural banking 

infrastructure and leverage this to better serve the poor. The pioneering efforts at this 

were made by National Bank for Agriculture and Rural Development (NABARD), 

which was given the tasks of framing appropriate policy for rural credit, provision of 

technical assistance backed liquidity support to banks, supervision of rural credit 

institutions and other development initiatives. 

In the early 1980s, the GOI launched the Integrated Rural Development 

Program (IRDP), a large poverty alleviation credit program, which provided 

government subsidized credit through banks to the poor. It was aimed that the poor 

would be able to use the inexpensive credit to finance themselves over the poverty 

line. Also during this time, NABARD conducted a series of research studies 

independently and in association with MYRADA, a leading non-governmental 

organization (NGO) from Southern India, which showed that despite having a wide 

network of rural bank branches servicing the rural poor, a very large number of the 

poorest of the poor continued to remain outside the fold of the formal banking 

system. These studies also showed that the existing banking policies, systems and 

procedures, and deposit and loan products were perhaps not well suited to meet the 

most immediate needs of the poor. It also appeared that what the poor really needed 

was better access to these services and products, rather than cheap subsidized credit. 

Against this background, a need was felt for alternative policies, systems and 

procedures, savings and loan products, other complementary services, and new 

delivery mechanisms, which would fulfill the requirements of the poorest, especially 

of the women members of such households. The emphasis therefore was on 

improving the access of the poor to microfinance rather than just micro-credit. 

To answer the need for microfinance from the poor, the past 25 years has seen 

a variety of microfinance programs promoted by the government and NGOs. Some 

of these programs have failed and the learning experience from them have been used

284 



to develop more effective ways of providing financial services. These programs vary 

from regional rural banks with a social mandate to MFIs. In 1999, the GOI merged 

various credit programs together, refined them and launched a new programme 

called Swarnajayanti Gram Swarozagar Yojana (SGSY). The mandate of SGSY is to 

continue to provide subsidized credit to the poor through the banking sector to 

generate self-employment through a self-help group approach and the program has 

grown to an enormous size. 

 

Statement of the Problem 

In spite of the massive scale of government intervention towards rural 

development in India, rural India continues to be reeling under poverty and related 

problems. Not withstanding the phenomenal progress seen in the rural credit 

structure in terms of volume of credit extended, concessionality, coverage of weaker 

sections including scheduled castes and tribes, almost all institutions constituting the 

formal part of the rural credit system, suffer from several shortcomings like; (a) Gap 

between the concern of the policy makers and the quality of the effort (b) Defects in 

policy design (c) Infirmities in implementation (d) Loans to the poor wee considered 

as a part of social sector lending and not commercial (e) It was felt that poor were 

not borrowers but beneficiaries (f) An attitude of ‘carefully disguised cynicism 

towards the poor’ and (g) An attitude of ‘poor are not bankable’. 

This possibly has been due to the absence of the people’s participation in the 

development programmes and also due to the gap in mutual understanding about 

perspectives of the supply side (the government, planners and the bureaucracy) on 

the one hand and the demand side (the rural poor) on the other. This gap is felt to be 

filled by the microfinance activity through the Self Help Group approach for 

sustainable rural development. 

The significant feature of the Self Help Groups (SHGs) is that they provide 

credit to the poor at unsubsidized interest rates besides having relatively low default 

rates on these loans. SHGs reduce transaction costs of financial institutions that do 

business with the poor and that of the SHGs themselves. They reduce the cost of 

financial institutions by acting as intermediary organisations or by providing social 

collateral that substitute for costly loan appraisals and supervisions. SHG approach 

has made considerable impact on the development of rural economy in terms of 

increasing savings of the poor, providing access to credit for the poor at reasonable 

rates of interest by establishing linkages with the formal financial institutions, 

improving the production levels and income levels, increasing food security and 

standard of living, improving asset creation and enhancing income generation 

activities, augmenting environment sustainability and contributing for the much 

needed women empowerment. With the enthusiastic roles played by the NGOs, the 

banks, the public and the governments, over a period of one and a half decade, the 

SHG approach has transformed into a movement in the rural areas.



285 

In this context, it is desirable to generate information and analyse to what 

extent micro credit and Self Help Groups have been able to reduce poverty and 

vulnerability by; increasing capital / asset formation at the household level, 

improving household and enterprise incomes, enhancing the capacity of individuals 

and households to manage risk, increasing enterprise activity within households, 

expanding employment opportunities for the poor in non-farm enterprises, 

empowering women and improving the accessibility of other financial services at 

the community level. 

 

Objectives of the Study 

 

The specific objectives of the study are as follows; 

• To examine the existing institutional credit facilities and strategies in 

Karnataka. 

• To study the extent of influence and support of micro finance institutions in 

implementing microfinance programmes for upliftment of the poor 

especially women. 

• To study the employment activities of Self-Help Groups under micro credit 

programmes in Mysore district. 

• To offer suggestive measures to strengthen micro-credit programmes in the 

state of Karnataka in general and in Mysore district in particular in order to 

uplift the community. 

Methodology of the Study 

The study is based on both primary and secondary sources of data. The 

primary data has been collected from the field study in Mysore district. A structured 

questionnaire has been used as an instrument to collect the data. The data collected 

has been classified based on homogeneous factors and tabulated to enable it for 

statistical analysis. 

The samples have been selected by giving due weightage to the beneficiaries 

of the micro credit programme in Mysore district. For the primary information 410 

respondents have been selected from SHGs on simple random sampling basis. The 

data has been collected up to 2008-09.

286 



Results and Discussion 

The occupation status of the respondents reveal that, out of 401 members 

agricultural 

study aim at 

labours 

organizing 

with/ 

the 

without 

poor people. 

animal 

Initially 

husbandry 

the groups 

activities 

which 

form 

emerged 

the single 

naturally 

largest 

majority consisted (81.79%). of members It who is also came found forward that voluntarily. 92% of the members Invariably are the Hindus poorest followed people 

by 

were 

6.48% 

diffident 

of Christians. 

and unwilling 

The 

to 

NGOs 

join 

involved 

the groups. 

in the 

But 

formation 

on seeing 

of 

the 

groups 

successful 

of the 

present study aim at organizing the poor people. Initially the groups which emerged 

naturally experience consisted of the other of members the who poor came agreed forward to form groups. voluntarily. Keeping Invariably the criteria the 

poorest of family people income were of Rs.11,000/- diffident and as the unwilling cut off to point, join it the is groups. found that But 54.11% on seeing of the the 

successful experience of the other members the poor agreed to form groups. 

total members are below the poverty line. The poorest with annual income below 

Keeping the criteria of family income of Rs.11,000/- as the cut off point, it is found 

that Rs.6,000/- 54.11% are of found the total more members among are the below group the members poverty of line. MYRADA The poorest (21.05%). with 

annual Vikasana income (18%) below and Pragathi Rs.6,000/- (17.78%). are found Economic more among status of the group group members members the of 

MYRADA (21.05%). Vikasana (18%) and Pragathi (17.78%). Economic status of 

group results members are presented the results in the table are presented - 1. in the table - 1. 

Table – 1 Economic Status of Group Members 

Table – 1 

Sl. No. Poor Economic Status Average of Group Members High Total 

Sl. No. 1. Poor 40 Average 49 High 11 Total 100 

1. 40 49 11 100 

2. 2. 8585 5 5 5 5 95 95 

3. 92 64 50 206 

3. 

217 

92 

118 

64 

66 

50 206 

401 

 

(54.11) 

217 (54.11) 

(29.43) 

118 (29.43) 

(16.46) 

66 (16.46) 401 

Note: Figures within parenthesis indicate percentage. 


 

High 

16% 

Average 

29% 

Poor 

55% 

Poor Average High 

Therefore it is concluded that poverty level of the members influence the 

membership of SHGs. 

Therefore it is concluded that poverty level of the members influence the 

membership of SHGs.



287 

Literacy Level of the Groups 

An attempt has been made to classify the 18 groups into literate, functionally 

literate groups and illiterate groups. An illiterate group is defined as one where none 

of the members have received any sort of education. Functionally literate group is 

defined as one in which upto 50% of the members have received primary education. 

A literate group is defined as one where more than 50% of the members have 

received primary education. 

Table – 2 Literacy Level of the Groups 

Sl. No. 

Literate groups 

Functionally 

literate groups 

Illiterate groups 

Total 

1. 1 1 - 2 

2. - 2 - 2 

3. - 1 1 2 

4. - 1 1 2 

5. - 2 - 2 

6. - 1 1 2 

7 - 1 1 2 

8. - 1 1 2 

9. - 1 1 2 

1 11 6 18 

(5.56) (61.11%) (33.33) (100.00) 

Source: Field Survey. 


 

It is found that 1/3 of groups are totally illiterates. But many of the illiterate 

members have made impressive progress in developing basic literacy and numeracy 

after joining the group. It is revealed that 32.42% of the illiterates have learnt to sign 

and 37.40% of them put only thumb impression. Within one or two years, it is 

expected that no thumb impressions will be found in the registers. Problem of 

illiteracy exists certainly but it is not insurmountable. The simple numeracy skills 

which are necessary for record – keeping can be acquired during the period of the 

group development.

288 



Literacy Level of Members and Maintenance of 

Records. 

The groups maintain about eight to thirteen separate records. Leaders/ 

members of Executive Council are trained in book – keeping. The quality of the 

records of 18 groups under study has been classified based on three parameters. 

1. Maintenance of most basic records – attendance registers, savings and loan 

registers, minutes of meeting, general ledger, individual passbook, cash 

book, cash receipt, records on village resource mobilization etc. 

2. Member satisfaction and confidence in the authenticity of accounts 

maintained by the group. 

3. Accounts written by the members themselves/ or engagement of outsiders 

for monthly payment. 

4. Prompt and regular updating of entries. 

Based on these parameters, it is found that record maintenance is good in all 

the groups without exception. There is also transparency in maintenance of records. 

In the case of 1/3 of the groups under study, members themselves maintain and 

update the records. In the rest, an accountant is appointed on monthly honorarium. 

 

Attendance of Meeting 

Date, time and place for all kinds of meetings of SHGs are pre – determined. 

During the initial stages of formation of SHGs the NGOs themselves conducted the 

meetings on behalf of the SHGs. When the groups become matured enough to 

conduct the meetings, the promoting agencies gradually withdrew and just observed 

the proceedings. Two types of meetings are generally conducted by each SHG – 

meeting for money transaction and monthly meeting to discuss common issues 

pertaining to group. Participation of members in meetings is made compulsory. If a 

member does not attend the meeting despite being intimated, the member will be 

fined. The amount of fine varies from group to group (from Rs.2 to 5). All the 

groups record minutes of the meetings.



289 

Table – 3 Average Attendance of Meeting 

Sl. No. 

Particulars 

1. SHGs – promoted 

by NGOs of H.D.Kote Taluk 


by NGOs of K.R.Nagar Taluk 


by NGOs of Mysore Taluk 

Percentage of attendance 

>80 70 – 80

290 



The sample study reveals that about 65% of the respondents have been the 

members of SHGs for 4 years followed by 28% of the respondents being the 

members of groups for 5 years. It is also found that about 56% of the members have 

accumulated savings ranging from Rs.1000 – 2000 per member and 22% of the 

members have accumulated more than Rs.2000. Usually the members contribute 

their savings before 15th of every month in the monthly meeting. But a few 

members are irregular in their contribution due to various reasons like inability to 

attend the meeting, irregular wage – income and unforeseen household expenses. 

But saving members constitute 100% in the sample study. 

Table – 4 Regularity of Savings 

Sl. No. Particulars Regular Irregular Total 


by NGOs of H.D.Kote Taluk 


by NGOs of K.R.Nagar Taluk 


by NGOs of Mysore Taluk 

Total 

Note: Figures given parenthesis indicate percentages. 

 

Irregular 

19% 

82 

(82.00) 

78 

(82.11) 

166 

(80.58) 

326 

(81.30) 

18 

(18.00) 

17 

(17.89) 

40 

(19.42) 

75 

(18.70) 

100 

(100.00) 

95 

(100.00) 

206 

(100.00) 

401 

(100.00) 

Regular 

81% 

Since the calculated value 21.35 is more than the table value 5.99 at 5% level 

Since the calculated value 21.35 is more than the table value 5.99 at 5% level 

and 9.21 at 1% level) the hypothesis is rejected. It is concluded that membership of 

and 9.21 at 1% level) the hypothesis is rejected. It is concluded that membership of 

SHGs is is associated with regular savings by by the the group group members. 

 

Number of Times Borrowed 

One of the yardsticks for the measurement of success/ failure of credit 

schemes is the booster or supplementary loan assistance sanctioned and disbursed by 

the SHGs on the satisfactory performance of the borrowers in respect of earlier loans. 

The group repeats loan assistance only to those borrowers who use the loan amount 

for the prescribed purpose and repay the installment in time and submit acceptable



291 

Number of Times Borrowed 

One of the yardsticks for the measurement of success/ failure of credit schemes 

is the booster or supplementary loan assistance sanctioned and disbursed by the 

SHGs on the satisfactory performance of the borrowers in respect of earlier loans. 

The group repeats loan assistance only to those borrowers who use the loan amount 

for the prescribed purpose and repay the installment in time and submit acceptable 

proposal for further loans. In a village called Annur, H.D.Kote Taluk, 8 members of 

the group promoted by MYRADA have got loan consecutively for 5 times and they 

have promptly repaid it. In a village called Doddakoppalu, K.R.Nagar Taluk, 60% 

of the members of group promoted by PRAGATHI have got loan 8 to 10 times. 

The credit cycle trains the group in the management of a financial system. It 

forces them to establish group norms for lending, repayment and trains the group to 

take decision where choices have to be made on who should get priority in credit. As 

personal stake is higher due to ownership of funds, it brings into the system a greater 

sense of diligence and accountability. Both group pressure and ownership of funds 

are the reasons for a strong repayment culture. 

During the the year year 2009-10, out of of 401 401 respondents, 226 women (56.36%) 

obtained loan for income generating purpose and the rest 175 obtained loan for 

obtained 

consumption 

loan 

and 

for 

other 

income 

unproductive 

generating 

purposes. 

purpose and the rest 175 obtained loan for 

consumption and other unproductive purposes. 

Table – 5 Purpose of Loan 

Production Consumption 

Sl. No. 

Particulars Table – 5 

Total 

purpose purpose 

Purpose of Loan 

1. SHGs –NGOs of H.D.Kote Taluk 68 32 100 

Sl. 

Production Consumption 

Particulars 

Total 

No. 2. SHGs – NGOs of K.R.Nagar Taluk purpose 53 purpose 42 95 

1. SHGs –NGOs of H.D.Kote Taluk 68 32 100 

2. 3. SHGs SHGs – –NGOs of K.R.Nagar Mysore Taluk Taluk 105 53 101 42 206 95 

3. SHGs –NGOs of Mysore Taluk 105 

226 

101 

175 

206 

401 

Total 

(56.36) 

226 

(43.64) 

175 

(100.00) 

401 

Total 

(56.36) (43.64) (100.00) 


 

Consumption purpose 

44% 

Production purpose 

56% 

It is observed that the poor members of groups under study have benefited 

more in terms of improvement in asset, loans for meeting emergency needs etc. 

Members of ‘non poor’ category have realized benefits more in terms of improvement 

in asset followed by redemption of debt and other purposes.

292 



It is observed that the poor members of groups under study have benefited 

more in terms of improvement in asset, loans for meeting emergency needs etc. 

Members of ‘non poor ’ category have realized benefits more in terms of 

improvement in asset followed by redemption of debt and other purposes. 

Regarding the tangible result 48.13% of the women in the study area have 

created income yielding asset. They are able to improve the economic conditions of 

the family by creating assets like goat, sheep, poultry, milch animal, coir making 

machines, leather stitching machines etc. The details can be had from the following 

table. 

Table – 6 Benefits to Members 

Sl. No. Category Poor members Others Total 

1. Improvement in asset 78 

(35.94) 

115 

(62.50) 

193 

(48.13) 

2. Improvement in food intake 91 

(41.94) 

- 91 

3. Improvement in education 13 

(5.99) 

4. Redemption of debt 17 

(7.84) 

5. Loans for meeting emergency needs 18 

(8.29) 

21 

(11.41) 

39 

(21.20) 

9 

(4.89) 

34 

(8.48) 

56 

(13.97) 

27 

(6.73) 

Total 

217 

(100.00) 

184 

(100.00) 

401 

(100.00) 


Note: Figures within parenthesis indicate percentages. 

 

Perusal of Table – 6 reveals that in the case of poor members 35.94% of the 

members have created assets as against 62.5% in the case of ‘non – poor’ members. 

Apart from asset creation, the loan have also been used for education of children, 

redemption of old – debt and for meeting emergency needs like medical expenses, 

marriage expenses, social function, cloth purchase, purchase of household articles, 

funeral expenses, redeeming of gold jewels, payment of electricity bills, etc. It is 

found that while 48.13% of the total loans were utilized for production purposes and 

the rest 51.47% for consumption purposes. For consumption purposes that amount 

of loan ranged from Rs.150 to 1,200 while the production loans ranged from 

Rs.1,800 to 8,000/-.



293 

Impact of Microfinance-Plus Services 

Poverty has many dimensions and can be related to individuals, households, 

communities, regions and countries. It encompasses many areas, such as food 

insecurity, malnutrition, illiteracy, ill health, and the lack of entitlements and 

empowerment. The improvement (combating against poverty) in these aspects of 

life will lead to welfare of the household. A positive impact of microfinance may 

be a better education or nutritional status (human capital); accumulation of 

productive and consumptive assets (Physical capital); female empowerment, 

development and network with the local organizations, spatial mobility of the 

women, etc. (social capital). The economic impact of microfinance-plus services on 

the member households was assessed through the changes in economic variables 

like – household income, employment, assets, housing conditions and household 

expenditures, etc. 

Table – 7 Impact of SHG Loan on Employment Status 

Sl. 

No. 

Particulars 

SHGs – 

NGOs 

H.D.Kote 

SHGs – 

NGOs of 

K.R.Nagar 

SHGs – 

NGOs 

Mysore 

Total 

1. Unemployment to self 

– employment 

2. Wage employment to 

self – employment 

3. Expansion in 

employment 

4. No Change in 

employment position 

13 14 24 51 

(12.72) 

14 15 11 40 

(9.98) 

33 20 57 100 

(27.42) 

40 46 114 200 

(49.88) 

Total 100 95 206 

401 

(100.00) 

Source: Field data 

Note: Figures given in parenthesis indicate percentage.

294 

3. Expansion in 

employment 

4. No Change in 

employment position 



33 20 57 

40 46 114 

Total 100 95 206 

Source: Field data 

Note: Figures given in parenthesis indicate percentage. 

100 

(27.42) 

200 

(49.88) 

401 

(100.00) 

120 

100 

80 

60 

40 

20 

0 

Unemployment to self – 

employment 

Wage employment to self – 

employment 

Expansion in employment 

No Change in employment 

position 

SHGs – NGOs H.D.Kote SHGs – NGOs of K.R.Nagar SHGs – NGOs Mysore 

Change in Household Employment and Income: An integrated approach of 

Change in Household Employment and Income: An integrated approach of 

microfinance could be be to to engage in hybrid programmes – microfinance-plusapproach, 

where the microfinance intermediary itself itself or or a a collaborating organism 

offers financial services in combination with other complementary services, such as 

offers financial services in combination with other complementary services, such as 

training in enterprise management, education in health and nutrition. This approach 

training would allow in enterprise the vulnerable management, poor microfinance education in health clientele and to nutrition. expand This their approach economic 

would 

basis or 

allow 

income). 

the vulnerable poor microfinance clientele to expand their economic 

basis or income). 

Change in Household Assets 

The studies showed that the participation in microfinance programme led to 

18 

improvement in financial assets, enterprise assets, household physical assets, human 

assets, social assets, etc. The introduction of compulsory or voluntary savings in 

microfinance leads to higher rates of savings (Barnes, 2001). The cross county study 

on impact of microfinance on acquisition of durable assets found that extremely 

poor households acquired household accessories like, stove, refrigerator, electronics 

appliances, modes of transport, etc. (ibid). In India, Chen and Snodgrass (2001) 

find a positive impact on spending for home improvement among all 

borrowers. Borrowers with multiple sequential loans spend significantly more 

on housing improvements, appliances and transport equipment’s than the nonmembers 

of microfinance programme (Barnes, 2001). 

The microfinance programme has created and nurtured the habit of thrift and 

savings in the members. There were only 6.3 and 1.9 per cent of the microfinance 

members in H.D.Kote and K.R.Nagar who were saving prior to joining the 

microfinance. However, in the post microfinance all the members are having 

compulsory savings accounts. The mean savings were Rs. 1593 and Rs.1110 per



295 

annum in H.D.Kote and K.R.Nagar, respectively. Another key financial asset was 

the insurance premium of the household members. In the sample, 8.2 and 7.5 per 

cent of the members in H.D.Kote and K.R.Nagar had the insurance cover (policy) 

before their memberships in microfinance programme. However, in the post 

microfinance programme, 100 and 43.4 per cent of the members in H.D.Kote and 

K.R.Nagar were having the insurance coverage. 

Table - 8 Number of Households Possessing Various Types of Physical Assets 

Number of Households 

Types of Physical 

assets 

H.D.Kote K.R.Nagar Total (N=401) 

Yes No Yes No Yes No 

Land 98 (61.6) 61 (38.4) 64 (40.3) 95 (59.7) 162 (50.9) 156 (49.1) 

Livestock 94 (59.1) 65 (40.9) 79 (49.7) 80 (50.3) 173 (54.4) 145 (45.6) 

Electronics 139 (87.4) 20 (12.6) 85 (53.5) 74 (46.5) 224 (70.4) 94 (29.6) 

Vehicles 19 (12.0) 140 (80.0) 4 (2.5) 155 (97.5) 23 (7.2) 295 (92.8) 

Tools and Equipments 10 (6.3) 149 (93.7) 5 (3.1) 154 (96.9) 15 (4.7) 303 (95.3) 

Others 

(gold, petty shop) 

84 (52.8) 75 (47.2) 40 (25.2) 119 (74.8) 124 (39) 194 (61) 

Note: Figures in parenthesis denote percentage to the total number of households 

Source: Primary Survey. 

 

Major Findings of the Study 

Based on the analysis and discussion the following findings have been drawn. 

1. The occupation status of the respondents reveal that, out of 401 members 

agricultural labours with/ without animal husbandry activities form the 

single largest majority (81.79%). It is also found that 92% of the members 

are Hindus followed by 6.48% of Christians. 

2. Initially the groups which emerged naturally consisted of members who 

came forward voluntarily. Invariably the poorest people were diffident and 

unwilling to join the groups. But on seeing the successful experience of the 

other members the poor agreed to form groups. Keeping the criteria of 

family income of Rs.11,000/- as the cut off point, it is found that 54.11% of 

the total members are below the poverty line. The poorest with annual 

income below Rs.6,000/- are found more among the group members of 

MYRADA (21.05%). Vikasana (18%) and Pragathi (17.78%).

296 



 

3. It is found that 1/3 of groups are totally illiterates. But many of the 

illiterate members have made impressive progress in developing basic 

literacy and numeracy after joining the group. It is revealed that 32.42% of 

the illiterates have learnt to sign and 37.40% of them put only thumb 

impression. Within one or two years, it is expected that no thumb 

impressions will be found in the registers. Problem of illiteracy exists 

certainly but it is not insurmountable. 

4. Two types of meetings are generally conducted by each SHG – meeting for 

money transaction and monthly meeting to discuss common issues 

pertaining to group. Participation of members in meetings is made 

compulsory. If a member does not attend the meeting despite being 

intimated, the member will be fined. The amount of fine varies from group 

to group (from Rs.2 to 5). All the groups record minutes of the meetings. 

5. The sample study reveals (vide table 5.9) that about 65% of the respondents 

have been the members of SHGs for 4 years followed by 28% of the 

respondents being the members of groups for 5 years. It is also found that 

about 56% of the members have accumulated savings ranging from 

Rs.1000 – 2000 per member and 22% of the members have accumulated 

more than Rs.2000. Usually the members contribute their savings before 

15th of every month in the monthly meeting. But a few members are 

irregular in their contribution due to various reasons like inability to attend 

the meeting, irregular wage – income and unforeseen household expenses. 

But saving members constitute 100% in the sample study. 

6. The sample study reveals that about 65% of the respondents have been the 

members of SHGs for 4 years followed by 28% of the respondents being 

the members of groups for 5 years. It is also found that about 56% of the 

members have accumulated savings ranging from Rs.1000 – 2000 per 

member and 22% of the members have accumulated more than Rs.2000. 

Usually the members contribute their savings before 15th of every month in 

the monthly meeting. But a few members are irregular in their contribution 

due to various reasons like inability to attend the meeting, irregular wage – 

income and unforeseen household expenses. But saving members 

constitute 100% in the sample study. 

Suggestions 

In the light of our findings and observations some suggestions are made 

about effective functioning of financial institutions/micro-credit institutions in 

the development of the weaker sections of the society. The suggestions are 

listed as follows:



297 

Microfinance sector of India is unmatched because of both its large size and 

diversity of institutions operating in the field. Having crossed the stage of formative 

years more under an informal framework the microfinance sector is now looking 

forward to a conducive and an appropriate regulatory environment to grow further. 

Since SHGs are mostly unregistered local groups, lack of legal framework does 

deter many grass root bankers from the concept as a major methodology for 

continuous lending. There is a need for establishing an apex Organisation with some 

required statutory powers for microfinance at the national level, which should work 

for advocacy of microfinance and also for networking among NGOs banks and 

governments. 

Microfinance programs are costly because of the small size of their loans and 

because banks cannot operate them with their traditional mechanisms and overhead 

structures. Strategies must be devised to minimize processing costs, increase staff 

productivity, and rapidly expand the scale of micro enterprise portfolios. Incentives 

to staff for improving their performance in SHG-bank linkage banking need to 

devised in order to encourage linkage banking without compromising on the quality 

of linkage. Also, incentives to SHGs for encouraging them to maintain good group 

health need to be devised. 

There are five generic recommendations, keeping in view the various 

challenges. 

1. Establish a Global/ Commonwealth Gender Innovation Challenge 

Fund 

It is critical to establish a Global/ Commonwealth Gender Innovation 

Challenge Fund to help the microfinance industry and private sector innovate and 

develop models, methodologies, products, processes, procedures and performance 

measures for financial intermediation. This should be specially tailored to the needs 

of low-income women in several contexts. It is suggested that this fund be 

established with contributions from respective governments, multilateral and 

bilateral donors and other stakeholders. The Commonwealth Secretariat would be 

uniquely placed to be the global coordinator. 

2. Create an enabling environment for supporting financing for gender 

equality 

The second recommendation is primarily for governments and central 

bankers/ regulators and addresses the salient aspects pertaining to the creation of an 

enabling environment. These are: 

• Ensuring a minimum number of women directors in MFIs and 

intermediaries; 

• Establishing an integrated and comprehensive database on microfinance 

and gender;

298 



• Sensitising central bankers and regulators on the special needs of lowincome 

women and related technology; 

• Encouraging standards for gender in regulatory reporting of 

performance. 

3. Support Demonstration Pilots on Financing for Gender Equality 

Governments and donors could initiate action pilots to test out new models, 

new methodologies and new products like micro-pensions, alternative savings 

products, technology-based delivery systems (including SMS banking and use of e- 

money – see the huge success of Vodafone with the poor in Africa), special products 

for women, flexible versus fixed repayment, individual lending models, cash flowbased 

financing, etc. These could be supported through the Global Challenge Fund 

as well as locally supported, in the country, by national governments and donors. 

Pilots could include: 

• Special financial products for women; 

• Delivery of risk management products tailored to the special needs of 

low-income women; 

• Transactions cost reducing technology pilots; 

• Encouraging public-private partnerships to overcome market 

imperfections; 

• Enabling livelihood financing for women through larger loans/ 

individual lending.



299 

REFERENCES 

Bell, Clive (1990) “Interactions between Institutional and Informal Credit Agencies 

in Rural India”, World Bank economic Review, 4,3, 297-327. 

Besley, Timothy (1994) “How Do Market Failures Justify Interventions in Rural 

Credit Markets?”, World Bank Research Observer, 9,1, 27-47. 

Daley Harris.S (2006) State of the Microcredit Summit Report, 2006, Washington 

DC, Microcredit Summit Campaign. 

Dunford, Christopher (2006) Evidences of Microfinance’s Contribution to achieving 

the Millennium Development Goals, Paper presented at the Global 

Microcredit Summit, Halifax, Canada, November, 12-15, 2006. 

Goldberg, Nathan (2005) Measuring the Impact of Microfinance: Taking Stock of 

What We Know, Grameen Foundation, USA. 

Hermes Niels and Robert Lensink (2007) “The Empirics of Microfinance: What Do 

We Know?”, Economic Journal, 117-517, F1 – F10. 

Morduch, Jonathan (1999) “The Microfinance Promise”, Journal of Economic 

Literature, 37, 4, 1569-1614. 

Bhole.L.M and Bhavani.R.V (1995) Structuring Rural Credit System – Issues and an 

alternatives, Man and Development, September, p.48. 

Kirsch, Ottfried C., Benjacor and L.Sehujmann (1980) The Role of Self Help 

Groups in Rural Development. Publication of the Research Centre for 

International Agrarian Development, Verlag Breitenbach. 

Panjatan Drioadisuryo, D.M. Rosltan and Kathleen Clod (1999) “Gender, selfemployment 

and Micro-credit Programmes” Quarterly Review of 

Economics and Finance, Vol.39. 

Rais Ahmed (2009) Micro Finance and Women Empowerment, Mittal Publications, 

New Delhi.



Group 

2 



“Tha Kham”: Tambon Administration Organization 

of Learning Toward Self Sufficiency Economy Model 

Phennapha Chandeang 

Lecturer, Department of Public Administration, 

Faculty of Humanities & Social Science, Songkhla Rajabhat University



303 

“Tha Kham”: Tambon Administration Organization 

of Learning Toward Self Sufficiency Economy Model 

 

 

 

 

 

 

 

 

Abstract 

This paper presents a case study of a Tambon Administration Organization 

(TAO), which has adopted the self sufficiency economy philosophy of His Majesty 

the King IX. The sub-district organization aims to foster local community 

implementation of the sufficiency economy strategy. Tha Kham Tambon 

Administration Organization is thus a local unit contributing to the national scheme 

termed “Learning Tambon Administration Organization of Self Sufficiency 

Economy Philosophy”; consequently, it is in line with the sufficiency economy 

principle enshrined in the constitution on the TAO level. TAOs are local government 

units established with the objective of Good Governance. The achievements of Tha 

Kham Tambon Administration Organization in this regard have been highlighted by 

Good Governance awards (Best Practices of Good Governance) since B.E.2547, 

2548. Its first initiatives consisted in a local savings group and a Tambon Health 

Center Scheme Project; eventually, Tha Kham Tambon Administration Organization 

has become an example of a sustainable model of community development 

according to Sufficiency Economy principles. At the same time, this local 

organization and its activities serve as a model for sub-district organizations 

elsewhere. The success of Tha Kham Tambon Administration Organization can be 

seen it its achievements in strengthening social capital, which apart from human 

asset capital also includes institutional capital, cultural capital & local wisdom. The 

objective of this paper is to analyze the four forms of social capital in the sub-district 

in order to explain the reason for the achievements of Tha Kham Tambon 

Administration Organization and its adoption of Self Directed Learning: SDL is a 

globally accepted concept used for local administration organizations as the above. 

Keywords: Tambon Administration Organization, Self Sufficiency Economy, Social 

Capital, Self Directed Learning: SDL

304 



Introduction 

Tha Kham sub-district is a small area, approximately 33.92 kilometer square or 

21,200 Rai, located in Haad Yai district, Songkhla province and consists of 8 

villages. The TAO’s local development initiative is well-known thanks to the vision 

of Mr. Sinthop Intharat, the governor of TAO Tha Kham, who has become a famed 

local administrative executive official. (Supitcha Chantapa, B.E.2554: 1) The 

initiative originated with TAO Tha Kham being one of 101 sub-districts selected as a 

pilot project for the Sufficiency Economy community model. This project was 

initiated in B.E. 2542. The community scheme was funded by UNDP and carried out 

by the village fund association and the department of agricultural extension of the 

Ministry of Agriculture. This community scheme was carried out in collaboration 

with the community leadership, local people, and TAO Tha Kham, which collected 

and disseminated the data. The objective was to develop a “Learning Community”. 

The main focus was on the development of human capabilities before material 

development. 

Eventually, the upgrading of human capital constituting the initial development 

efforts yielded fruitful results. In the 3-year plan B.E.2553-2555 the development 

efforts shifted to participative administration, empowerment, public health, moral 

society, and use of natural resources according to the philosophy of sufficiency 

economy. The TAO governor intended to implement practical steps in line with the 

philosophy to foster economic development. For instance, the locals had acquired 

the knowledge from the agricultural officer to prevent pest from destroying their 

produce, which increased productivity and earnings. This knowledge was refined 

through a synergy of efforts: the community has developed so-called “occupational 

groups” each specializing on a specific activity, such as breeding techniques, 

production of bio-fertilizer. These activities were assisted by the agricultural officer. 

The Thai agricultural officer moreover helped with settin the price for agricultural 

output, the establishment of a local community rice mill, the manufacturing of biofertilizer, 

and community plantation. Funds were provided by the village bank, the 

local savings group, and the local social welfare fund group. Eco-tourism activities 

considering the local ecological conditions have been developed as well. 

 

Development Strategy of Self Sufficiency 

Economy Philosophy of Tambon Administration 

Organization of Tha Kham 

The TAO Tha Kham has laid down its commitment to develop according to 

Sufficiency Economy principles in its 3-year project scheme (B.E.2553-2555). 

It includes the following activities and objectives:



305 

 

1. Formation of occupational groups including the following activities: 

1.1 Raising fish, animal breeding, organic agriculture. The knowledge about 

these techniques should be disseminated and serve to increase output 

and revenue, as well as strengthen the community in the long term. 

1.2 Provision of seeds, animals, material/durables to accommodate each 

occupation. 

1.3 A campaign for crop and animal protection by eliminating pests and 

vermin. 

1.4 Financial support from the state or from the private sector for activities 

that yield public benefit. The objective is to support the ongoing 

activities of different groups. 

1.5 Establishing 3 agricultural demonstration plots: These would serve as 

demonstration sites to disseminate agricultural techniques to the public. 

1.6 Promotion of organic farming in order to make the community rely less 

on chemical substances. 

1.7 Organize an “agriculture day” for the sub-district of Tha Kham in order 

to promote the occupation groups and to foster exchange among these 

different groups (synergy). 

1.8 Improvement of the technology dissemination center of sub-district Tha 

Kham in order to make use of it as an agricultural information center 

and a training site for the people. 

2. Supporting & empowering of community enterprise to upgrade the 

management skills of the local community. 

3. Promote saving and simultaneously decrease expenses. 

3.1 Make a household accounting list so as to track income revenue and 

expense. 

4. Training seminar and examination in order to create community resilience. 

Social Capital of Tha Kham Tambon Community 

This above strategy illustrates the commitment of Tha Kham sub-district to 

develop according to Suffiiciency Economy principles. It thus has become a model 

project for the whole kingdom. Tha Kham owes its success to the development of 

social capital, which is understood of consisting in human capital, institution capital, 

cultural capital, and local wisdom. In the following section the author will examine 

each item.

306 



1. Definition of Social Capital 

Pierre Bourdieu (1985 cited from Portes A. 1998: 1-24) was the first person to 

have systematically analyzed the concept of social capital. Bourdieu has developed 

the concept of social capital and cultural capital in the period between 1970 and 

1980. He distinguished these forms of capital from economic capital (money, 

property, and what Marx termed “productive capital”). Cultural capital encompasses 

the commodities of culture including arts, knowledge and educational qualifications. 

Bourdieu defines social capital as having the following contents: 

(1) Social Capital is a source that defines the relationship between group 

members and social networks. 

(2) Social capital has the characteristics of symbolic capital. 

(3) Social capital can be transformed into economic capital. 

Coleman (1988: 95-120) has explained social capital as being a function of 

relations among humans geared to certain expectations based on trust. Social capital 

based on trustful relationships can lead to higher individual benefits than in relations 

that do not involve trust. Social capital is facilitated in cultures with shared values 

among members. Coleman specifies social capital further as follows: 

(1) Embedded relationship enhanced with commitment and anticipation of the 

actions of others; trust and confidence in each other; mutual access to 

information channels; upholding social norms and (tacitly) agreed upon 

concrete punishment measures. 

(2) Social structures define relationships facilitating networking and a suitable 

organizational culture. 

2. Elements of Social Capital according to NESDB 

The Advisory Council of the National Economic & Social Development Board 

(B.E.2548: pp.12-15) has recommended the classification of social capital into 

4 dimensions as follows: 

(1) Human capital, which generally means people, including social leaders, 

village scholars, and volunteers, who can be characterized by the will to 

volunteer, can be trusted, are generous, recognize the interconnectedness 

among all people, have a generous spirit and adhere to ethical values. 

Ethics includes discipline, integrity and social awareness; moreover people 

understand the general interest of society as a whole, including patriotism. 

People should be of good health and know how to protect themselves. TAO 

Tha Kham focused on the development of human capital, emphasizing 

quality of life in the development of the community economy; the 

empowerment of the community thus went hand in hand with the 

strengthening of social capital through the establishment of village saving



307 

funds, community welfare services provided for births, for retirement, cases 

of sickness and death, and hospital fees. Furthermore, the social welfare 

fund of Tha Kham community decreased household expenditure, since 

payments remained with the fund until people needed to cover the above 

expenses. in addition, TAO Tha Kham Tambon has made remarkable 

improvements in providing medical service through its Public Health 

Center for 3 Tambons. . 

(2) Institutional capital, from the family unit as the basic social institution up to 

political institutions, has an indispensable role of supporting and 

developing communities and the society to be strong and harmonious. 

- Educational institutions have the role to not only convey technical 

knowledge, but also contribute to the morality and ethical development 

of society. TAO Tha Kham for example, has created a center for the 

young, which combines these objectives, integrating modern knowledge 

with local wisdom. The young receive moral training, partly from the 

community elders. The aim is also to restore community traditions, and 

acquire new knowledge to decrease poverty through self-reliance, which 

is done through the “Life University” of Tha Kham. Knowledge 

exchange and networking among communities is taking place at the 

University of Klong Prea villagers, district of Cha Na, Songkla 

province. The Computer Center for the Youth is meant to further the 

learning and potential of the young generation. 

- Mass Media institution has a high influence on our behavior and values. 

In Tha Kham media channels were directed towards increasing 

capabilities and matters of interest for village households. A community 

radio was established. 

(3) Cultural capital or intellectual capital is about value systems, ethics, 

discipline, public awareness, Thai culture, and local wisdom. In Thailand 

there is a high diversity of social norms, beliefs and faiths, traditions etc; 

this heritage is a source of pride, and efforts to preserve and sustain these 

cultural traits should be undertaken. This is for the benefit of individuals, 

families, communities and society at large. Moreover, these cultural traits 

serve as examples and guiding principles of a balanced co-existence 

between people and nature. In the case of Tha Kham such efforts of 

conservation and maintenance serves to strengthen the community. Such 

traditions in Tha Kham include the upholding of Buddhist days and Muslim 

traditions, ordination of novices, full moon festivals that bring the whole 

community together, Songkhran festival etc. 

(4) Local wisdom, including local arts and knowledge as inherited from 

ancestors. These are collective values handed down since centuries. This 

diverse knowledge helps to pursue the sustainable coexistence of people 

and nature. Until today, this knowledge can still serve as a guide for

308 



practice, modified to the requirements of the modern age. Local wisdom in 

Tha Kham is preserved through specialists on local herbs, and local 

doctors. 

In Tha Kham sub-district community knowledge is combined with efforts at 

SLD and life-long learning. Thus, people should be enabled to implement this 

knowledge, maintain critical thinking, and work with the community in a changing 

world; thus become a “learning community”. In the following section the author will 

explore the meaning of self-directed learning. 

 

The Self Directed Learning Framework 

Based on the works of Knowles (1975), Skeger (1977), Griffin (1983), and 

Brookfield (1984) self-directed learning can be summarized as motivated by the 

curiosity of the learner, he/she acquires knowledge by himself/herself according to 

own needs and adapting the knowledge to one’s own circumstances. In Thailand the 

concept has been taken up by Somkid Itsarawat (B.E.2538) and Chairit Phosuwan 

(B.E.2541). 

In the case of Tha Kham, self directed learning takes place by involving the 

local people. A scheme for the young was supported by Siam Commercial Company 

Association, Commercial Siam Thai Bank Ltd., (Plc.); the aim was to increase the 

capabilities of young people including recourse to local knowledge. The SLD 

framework was used for the schemes discussed above, as well as in creating and 

upgrading OTOP products, such as herbal soap, as well as in the management of 

supplying rubber to factories. 

 

Tha Kham Community Government 

The above activities have been matched with the creation of an organizational 

structure, a “community government”, headed by the governor, Mr. Sinthop Intharat. 

This administrative structure was meant to foster the participation and agency of 

local villagers. Villager associations took over functions that reflect ministries on the 

national level, such as finance. This “ministry” is responsible for community 

savings, budgetary policy and social welfare. Another ministry is responsible for 

Agricultural Affairs. 

The Tambon administration was divided into 7 ministries as the diagram below 

shows.

8 



309 

Ministry of Fund 

& Community 

Welfare 

Ministry of 

Health 

Administration 

Community 

Congress 

(Advisor) 

Ministry of 

Education, 

Religion & 

Culture 

Community 

Government of 

Tha Kham 

Tambon 

Learning for 

Child & Juvenile 

Youth 

Ministry of Natural 

Resource & 

Environment 

Management, and 

Substitute Energy 

Ministry of 

Communication 

& Information 

Ministry of 

Volunteer 

Simulation Model of Government toward Tha Kham Tambon Administration Organization 2 

Simulation Model of Government toward Tha 

(1) Ministry of Funds & Community Welfare provides financial assistance 

Kham Tambon Administration Organization 1 to 

villagers. Responsibilities include: 

-Provisions in cases of deaths. 

-Grassroots bank, community savings schemes. 

(2)- Ministry Provisions of Health in cases Administration of deaths. 

- Grassroots -Association bank, of community Aged people savings schemes. 

(2) Ministry -Association of Health of Administration Human relationships 

- Association 

-Association 

of Aged 

of Tha 

people 

Kham Entertainment 

 

-Scheme plan against obesity 

(1) Ministry of Funds & Community Welfare provides financial assistance to 

villagers. Responsibilities include: 

- Association of Human relationships 

2 1 

Phennapha Chandeang and Bunika Chanked. (B.E.2553). Material of Learning Lesson and 

Phennapha Chandeang and Bunika Chanked. (B.E.2553). Material of Learning Lesson and Curriculum Course 

Curriculum Course Operation. “Scheme of Word Study Learning and Curriculum Course. “Scheme 

Plan Operation. of Learning “Scheme Center of Word of Study Community Learning and Being Curriculum Administration, Course. “Scheme Tha Plan Kham of Learning Tambon Center Administration of 

Organization, Community Being Haad Administration, Yai district, Tha Songkla Kham Tambon province. Administration Organization, Haad Yai district, Songkla 

province.

310 



- Association of Tha Kham Entertainment 

- Scheme plan against obesity 

- Medical Care center 3 Tambons (Thoung Tha Nam, Thoung Yai, Tha 

Kham, Nam Noi) 

- Health group (Aerobic Dancing, Norabic and local dancing) 

- Family project 

(3) Ministry of Education, Religion and Culture 

- Center of Morality Training and Culture (School for Monks, 

Wachiratham, Wat Kou Prak) 

- Council of Tha Kham Culture 

- Center of Small Child Juvenile Development 

- Scheme Project of Life University (Encouragement of Supplementary 

Professional Career, preserved fish, salt fish and bean cultivation) 

(4) Ministry of Natural Resource & Environment Management, and Substitute 

Energy Source 

- Garbage Bank 

- Small but Beautiful garbage project 

- Association of Substitute Energy, Solvent oil cleaning dishes, Biological 

oil, and Coconut oil. 

(5) Ministry of Learning for the Young 

- Group of Local Preservation Association 

- Center of Family Development 

- Youth Council Congress 

(6) Ministry of Communication & Information 

- Community Radio 

- Center of Community Radio 

- Voice by Wire to each Village 

- Tha Kham Tambon Administration Organization of Journal 

(7) Ministry of Volunteers 

- Blooding Smoothing & Spiritual Being 

- Administration of Volunteer Controlling



311 

Conclusion 

TAO Tha Kham is a successful case of Sufficiency Economy implementation, 

in which the governor played a big role. In addition to this leadership, the agency of 

all stakeholders has been mobilized in the course of many meetings throughout the 

above projects. Alongside the involvement of the locals, the TAO administration 

actively sought the assistance of external partners. The outcome is a project 

committed to Sufficiency Economy philosophy and good governance developing 

through self-directed learning by the villagers.

312 



References 

Brookfield, S.D. 1984. “Self-Directed Adult Learning: A Critical Paradigm”, Adult 

Education Quarterly. 35(2): 59-71. 

Chairit, Phoosuwan. B.E.2541. Research Paper Report entitle with Readiness of 

Learning toward Self Directed learning of Learner from Some 

Classification Type Adult Education Activity. Bangkok: Area of Adult 

Education System, Kasetsart University. 

Coleman. 1988. Social Capital in the Creation of Human Capital. American journal 

of Sociology 94 (Supplement 1988). p.95-120. 

Committee of National Economic & Social Development. B.E.2548. Social Capital 

Statement of People. Bangkok: no of the place Publication. 

Griffin, C. 1983. Curriculum Theory in Adult Lifelong Education. London: Crom 

Helm. 

Knowles, M.S. 1975. Self-Directed Learning: A Guide for Learner and Teacher. New 

York: Association Press. 

Office bureau of commission toward National Economic & Social Development 

B.E.2548. Social Capital for People. Bangkok.: no of the place Publication. 

Phennapa, Chandeang & Bunnika, Chanked. B.E.2553. Material Paper of Learning 

toward Lesson & Curriculum Course Syllabus of “Decode of Scheme 

Lesson Study & Curriculum Course Operation”. Scheme of Learning 

Center of Health Being Condition from Tha Kham Tambon Administration 

Organization, Had Yai district, Song Kla province and extension toward 

local administration organization network. no of the place Publication. 

Portes A. 1995. The Economic Society of Immigration: Essays on Networks, 

Ethnicity and Entrepreneurships. New York: Russell Sage Foundation. 

Region News. B.E.2553. Tha Kham Tambon Administration Organization with Neo 

Role & Function “Pay Attention of Teenager Youth” in http:// 

www.regionnews.org/local/724-2010-08-21-11-28-40.html. access when 

August 15th, B.E. 2554. 

Skager, R. 1977. Curriculum Evaluation for Lifelong Education. Toronto: Pergamon 

Press. 

Som Kit, Itsarawat. B.E.2538. Research Paper Report entitle with Characteristic 

Aspect of Self Directed Learning from Thai People. Bangkok: Faculty of 

Social Science and Humanity, Mahidol University.



313 

Supit, Chan Ta Pa. B.E.2554. Tha Kham: Self Sufficiency Economy Philosophy 

Principle Turned into Tha Kham Tambon of Learning by Self Sufficiency 

Economy Adoption underneath Tambon Model compared with State 

Simulation” access from http://76.nationchannel.com/playvideo.php?id= 

8067 retrieved with August 11th, B.E.2554. 

Tha Kham Tambon Administration Organization.no the Year of Publication. 

Development Scheme Plan Initiative 3 Year Terms of Tha Kham Tambon 

Administration Organization. (B.E.2553-2555). 

Warawut, Romarttanapan.B.E.2548. Social Capital. Bangkok: Scheme Initiative 

Plan of Learning Empowerment for Community.



Group 

2 



Sufficiency Economy Practices in Hill Area of India: 

Case of Uttarakhand 

Divesh Kumar, Research Scholar, 

Department of Management Studies, 

Indian Institute of Technology, Roorkee 

 

Ishwar Kumar, Research Scholar, 



 

Zillur Rahman, Associate Professor, 



 

Praveen Goyal, Research Scholar, 


Indian Institute of Technology, Roorkee



317 

Sufficiency Economy Practices in Hill Area of India: 

Case of Uttarakhand 

 

 

 

 

 

 

 

Abstract 

Uttarakhand is a state which has witnessed big difference in the development 

of its plain and hill region. People of hill region were suffering from lack of various 

facilities like education, employment, health facilities, credit facilities and skill 

development. Due to which migration of male population has increased to other 

areas in the search of livelihood. Burden of female has increased due to dual 

responsibility of house and field. For putting halt on the migration government and 

local communities has launched various schemes like Joint Forest Management, 

NREGA, National Rural health Mission, Right to Education and others. This paper 

analyzed the impact of these schemes on the tendency of migration of local male 

population. The role of these schemes in creating self sufficiency of the region has 

been analyzed with the help of questionnaire survey. The study limitation and future 

scope has been proposed in the end of study. 

 

Introduction 

Uttarakhand is a Province of India formed on November 9, 1999. The state’s 

vision is to include both human and economic development (Dewan and Bahadur, 

2005), and economic development should be supported with environmental 

conservation. Most of its part is distributed over Himalaya hills and divided in to 

two parts Garhwal and Kumaon. Uttarakhand covers an area of 53 485 km2, of 

which about 68% is nominally under forest cover (Sati, 2005). It consists of 13 

districts namely, Chamoli, Pauri, Tehri, Uttarkashi, Dehradun, Haridwar and 

Rudraprayag in the Garhwal region and Nainital, Almora, Pithoragarh, Udham 

Singh Nagar, Champawat and Bageshwar in the Kumaon region.

318 



According According to the 2001 to the Census 2001 of Census India, of the India, density the of density population of population averaged 158 averaged persons 158 per 

km2 persons with per decadal km2 population with decadal growth population rates of growth 24.2% rates and 19.2%, of 24.2% during and 1981–1991, 19.2%, during and 

1981–1991, and 1991–2001, respectively (Census of India, 2001). This state poses 

1991–2001, respectively (Census of India, 2001). This state poses special problems 

special problems associated with limited land available to support the population. 

associated The villages with limited in the present land available study to are support located the in population. this area. The While villages the in economy the present is 

study predominantly are located in subsistence this area. While agriculture, the economy only about is predominantly 16% of the subsistence land available agriculture, for 

cultivation and almost all of this relies on rain as the only source of water (Sreedhar, 

only about 16% of the land is available for cultivation and almost all of this relies on rain as 

2005; Bisht et al., 2006). Pressure on land has been increasing, to bring new areas 

the under only cultivation source of water by cutting (Sreedhar, forest, 2005; and to Bisht search et for al., alternative 2006). Pressure income on opportunities 

land has been 

increasing, within the to region bring new or by areas migrating under cultivation to new areas. by cutting forest, and to search for alternative 

income Since opportunities is known within as the the region hill state or by and migrating its formation to new areas. was also motivated by the 

Since hill peoples, it is known four as of the its hill district state and have its most formation of its was region also as motivated plain (Nainital, by the hill Haridwar, peoples, 

Dehradun and Udham Singh Nagar). Study by Kar (2007) shows that the higher 

four of its district have most of its region as plain (Nainital, Haridwar, Dehradun and Udham 

growth rate of the state in the initial years has helped the state to transform itself, but 

Singh most Nagar). of the growth Study by has Kar been (2007) restricted shows that to the plains, higher growth while rate the hill of the areas state have in the grown initial 

years slowly has due helped to structural the state to problems. transform itself, The difference but most of in the infrastructure growth has been development restricted to the in 

plain and hill regions creates many problems. The development has been mainly in 

plains, while the hill areas have grown slowly due to structural problems. The difference in 

the plain districts of the state and not the hills, which have remained cut off from the 

infrastructure rest of the country. development Thus, in there plain is and a need hill regions to modify creates or reschedule many problems. the current The development schemes 

has according been mainly to the in hill the districts plain districts of the of state. the state and not the hills, which have remained cut 

off from the rest of the country. Fig Thus, 1 Map there of is Uttarakhand 

a need to modify or reschedule the current 

schemes according to the hill districts of the state. 

Source: www.mapofindia.com 

Fig 1 Map of Uttarakhand, (Source: www.mapofindia.com)



319 

Problems in Uttarakhand 

There is big difference in term of development between plain and hill region. 

This difference is basically due to the structure and complexity of the hill region. 

Kar (2007) also highlighted the importance of equitable growth focusing on GDP 

growth and distribution of growth to all sections of the population and geographical 

regions of the country Most of the peoples in hill regions are dependent upon the 

agriculture and related professions (Negi, 2007). However the land ownership is in 

very small segments and other related facilities are very limited like irrigation. For 

conserving the ecological balance of this region people have constraints to use 

modern intensive inputs to increase the yield. Due to this reason, Uttarakhand is 

widely affected by the trend of leaving family behind by male members for the 

earning livelihood. Due to which most of the responsibilities comes on the female 

counterpart. Family size and structure determine the farming operations with much 

of the work being done by women (Rais, 2009). Females use to work nearly 16-17 

hours in a day in field and house. Migration of males towards the plain region 

affects the self sufficiency of the region. The state faced the challenges to retain its 

people by providing the option for livelihood. Many activities related to the 

agriculture have its own constraints and problems. Wood carvers, whose handiwork 

can be seen in the traditional houses, have disappeared over years, nomadic sheep 

and goat herders are slowly dying out and now wool has to be brought from 

Ludhiana; weavers find it difficult to compete with machine-made goods; and 

agriculture is back-breaking work that does not yield enough for subsistence (Silori, 

2001). The new jobs and opportunities are concentrated in a few urban areas that are 

administrative centres. These jobs often need knowledge, skills, and capital that are 

difficult for a local person to obtain. Shekhar (2007) found some of the constraints 

and problems related to various agriculture based activities. In this study he has also 

proposed some corrective actions, so that employment can be generated for the local 

peoples. Table 1 illustrate the activities, problems/constraints and corrective actions 

to be taken: 

These problems are to be addressed either by government or the local 

communities. After observing these difficulties government proposed various 

programs like Joint Forest Management (JFM), Van Panchayats, Self Help Groups, 

Credit systems, Training with the help of NGOs, NREGA (National rural 

employment guarantee act) and others. This paper will discussed about these 

schemes and its impact on the local livelihood and self sufficiency.

320 



Activity Problems/Constraint Suggested Corrective Actio 

Dairy Farming Feed/Fodder, Table animal 1(Source: health Shekhar, Provision 2007) of health-care facilities 

Papad-making Availability of finance, Credit provision through rural banks, 

Activity Problems/Constraint Suggested Corrective Actio 

marketing facilities 

SHGs and thrift groups, collective 

Dairy Farming Feed/Fodder, animal health Provision of health-care facilities 

marketing through co-operatives 

Papad-making 

Mushroom 

cultivation 

Bee-keeping 

Mushroom 

cultivation 

Quilt-making 

Bee-keeping 

Availability of finance, marketing Credit provision through rural banks, 

Technical guidance and Provision of training and developing 

facilities 

SHGs and thrift groups, collective 


marketing marketing through co-operatives 

Technical guidance and Provision of training and developing 

Technical guidance and marketing Provision of training and developing 


marketing marketing 

Inadequate payment by Ensure timely and adequate payment, 

Technical guidance and marketing Provision of training and developing 

contractors, health facilities problems 

provision of marketing health care 

Petty Quilt-making business Availability Inadequate payment of finance by contractors, Credit Ensure provision timely through and adequate rural banks, payment, 

health problems 

provision of health care 

development of SHGs and thrift groups 

Petty business Availability of finance Credit provision through rural banks, 

development of SHGs and thrift groups 

Table 1(Source: Shekhar, 2007) 

 

This study This will study be focused will be upon focused the following upon the factors following (Fig 2) factors which are (Fig mainly 2) which responsible are mainly 

for responsible the migration for of the local migration peoples to of other local area peoples for the to livelihood. other area for the livelihood. 

 

Less employment 

opportunities 

Fig. 2: Factors Responsible for Migration of Village Males 

Less credit facilities 

Lack of skills 

Migration to other 

places 

Less basic 

infrastructure 

facilities as 

education 

Fig. 2: Factors Responsible for Migration of Village Males



321 

Sufficiency Practices in Uttarakhand 

Bisht (2006) found that in order to provide employment and raise socioeconomic 

standards of local and poor people, Uttarakhand state has to sustain its 

forestry and ecological areas. Uttarakhand is known for its natural beauty, it have 

many places as world heritage. It is the first state which formed Tourism 

Development Board by legislation. Many policies have been introduced to develop 

agriculture and agriculture base system for making the path to the growth. 

Government is promoting organic farming in the state and promoting Uttarakhnd as 

a organic state. Government providing seeds to the farmers which are suitable for 

the hill agriculture and which are also good in the yield. There are enormous 

opportunities lies in the state as the multi-cropping system combined with animal 

husbandry through cattle rearing, poultry, fishing, bee keeping, etc (Shekhar, 2007). 

The processing of fruits and vegetables, vocational training for youths, and banking 

and insurance in the service sector can provide livelihood security and support. 

Development of all these areas along with infrastructure development and better 

education facilities can be a direction for sustainable development of the hill regions 

for better quality of life to the inhabitants and to help halt migration from villages. 

Agricultural productivity and movement from a traditional to a modern system are 

crucial for growth and development of the state and districts 

Following practices has been adopted by the people and government of 

Uttarakhand to develop a sufficiency economy. 

1) Joint Forest Management Program (JFM) 

Uttarakhand is known for its bio diversity and natural habitats, so the 

government is very keen to preserve it. For this, government developed Joint forest 

management program. JFM is a concept for protecting and developing forest by the 

partnership between fringe forest user groups and forest department on the basis of 

mutual role and responsibilities. The root objective is to protect forest with the help 

of peoples. This concept is emerging as a sustainable forestry in the forest regime, 

which includes adaptation to the changes in the need and want of the people and 

their capabilities to protect the forest, as they are closely related to the forest. JFM 

includes rehabilitation of degraded forest areas with the help of forest committees 

and peoples organizations. It also provides a source of livelihood to the local 

peoples. 

Many approaches have been integrated in the JFM like: 

a) Village resource development 

b) Micro-watershed development 

c) water and soil conservation 

d) Rural infrastructure development

322 



JFM emerged as a tool for improving the socio-economic status of the forest 

dependent communities. This concept work with dual benefits, first it provide 

livelihood to the local people and halt the migration and second, it removes the 

pressure from the forest and help in the protection and development of forest. 

Uttarakhand is at second place in term of number of villages which have taken up 

joint forest management in India. 

2) Van Panchayats 

In 2001, after the formation of the state of Uttarakhand, the Van Panchayat 

Rules were further amended to provide a greater role to the Forest Department in the 

functioning of the Van Panchayats. The main functions of Van Panchayats are as 

follows: 

a) To develop and protect forests by preventing indiscriminate felling of trees 

and to fell only those trees that are marked by the forest department and are 

useful for silviculture. 

b) To ensure that there is no encroachment on Van Panchayati land and no 

violation of rules under the Kumaon and Sodic Land Act of 1948 and that 

no land is encroached on for agricultural practices without prior 

permission. 

c) To construct and fix boundary pillars and to maintain them. 

d) To carry out the directives of the Sub-Divisional Magistrate in developing 

and protecting forests. 

e) To distribute its produce amongst right holders in an equitable manner. 20 

per cent of the area of the forest must be closed for grazing every year. 

The Van Panchayats manage forest lands under their control and members are 

entitled to rights; earlier, landless villagers had also been given the rights of users. 

The Forest Department provides necessary technical help in the management of 

panchayati forests. The share of forest panchayat income is about 80 per cent of the 

total produce. So far, 5.45 lakh ha land has been brought under Van Panchayats for 

which an amount of Rs. 732.04 lakh has been created as part of the Van Panchayat 

Fund. The total funds available for each Van Panchayat works out to Rs. 6,065.45 or 

Rs. 13.43 per ha which appears to be highly (State Focus Paper, 2007-08, 

NABARD). 

3) Education 

Crucial for social development is the development of women, youth and 

children of the society. It is important to address women’s development and raise 

awareness through education; the development of youths should focus on further 

training, providing employment opportunities, and making then self-reliant. They 

should be able to get both self-employment and wage employment. Children are the



323 

future of the state and thus their education must be emphasised. This will also help 

reduce and eradicate poverty in a phased planned manner. Various programs like 

RIGHT TO EDUCATION, Prodh Shiksha Kendra for aged persons has been 

launched to increase the literacy rate in the India. 

4) National Rural Health Mission (NRHM) 

It was launched in April 2005 (in the Tenth Plan) for a period of seven years 

(2005-12) with a view to bringing about dramatic improvement in the health system 

and the health status of people in the country. Beside this government has launched 

various schemes like free medicine for TB and other diseases, free vaccination for 

the polio and other diseases. Government also provide monetary reward to the ladies 

who are willing to do delivery of child in the hospital or primary health care situated 

in the village. 

5) NREGA (National Rural Employment Guarantee Act) 

This scheme was launched by government of India with the vision of 

providing at least 100 day employment in the local area in order to put a halt on the 

migration. This scheme has been seen as a successful. 

6) Nurseries 

Decentralised nurseries have been encouraged in many villages to raise good 

quality saplings. Apart from reducing carriage costs the more important objective is 

to encourage people and institutions to raise their own plants to meet their own 

requirements and to be self-reliant in the long run. Decentralised nurseries are in the 

forefront of providing information regarding the time and techniques of seed 

collection and nursery techniques of many tree species. There are currently 

15 nurseries in the villages. 

These schemes deal with the factors responsible for the migration of the local 

peoples (Fig 1). In order to know the impact of these schemes a survey has been 

conducted. Survey has been conducted in the villeges of the Almorah (Lilam, 

Bogdyar, Rilgiri, and Burphu). 

Question on the following factors has been asked to know the real impact of 

these schems discussed above. 

1) Education 

2) health 

3) employment, 

4) credit facilities 

5) skill development

324 



Research Methodology 

Four villages has been selected which are near to the Himalayan region. These 

villages come under Nanda Devi Biosphere Reserve (NDBR), which is a UNESCO 

World Heritage Site. Nanda Devi Biosphere Reserve (NDBR) in 1988 as a 

mechanism to protect cultural and biological diversity especially in parts of the 

Valley that is within the buffer zone of the Biosphere (Hoon, 1996). These villages 

are supposed to be having high intensity of execution of these government schemes 

in the hill region. Total 100 sample size has been selected 25 from each village. 

Percentage method has been used in for interpretation of the findings. 

Analysis 

Questions (responses are in percentage) 

Government schemes has increased education level 

in nearby area 

Highly 

agree 

(5) 

Agree 

(4) 

Neutral 

(3) 

Disagree 

(2) 

Highly 

disagree 

(1) 

8 33 19 27 3 

I know the importance of the education 53 47 0 0 0 

Satisfied with the infrastructure of the education 

facility 

Government schemes increased awareness towards 

education 

I prefer to go to other places for the primary 

education 

I prefer to go to the other places for the higher 

education 

2 27 36 25 10 

17 46 26 11 0 

0 2 0 16 82 

43 37 20 0 0 

Education help in earning livelihood 43 33 26 0 0 

Health facility is available in village 100 0 0 0 0 

Health facility is available in nearby area 100 0 0 0 0 

I prefer to go to other areas for the normal health 

check up 

I prefer to go to the other area for the critical health 

check up 

Local health facilities are enough to do regular 

medical check up 

I prefer to go to hospital/ primary health centre for 

the child delivery 

Government doing very good for the health of 

peoples 

4 7 0 47 42 

39 41 13 7 0 

4 7 0 47 42 

41 57 2 0 0 

2 28 34 33 2



325 

Questions (responses are in percentage) 

Highly 

agree 

(5) 

Agree 

(4) 

Neutral 

(3) 

Disagree 

(2) 

Highly 

disagree 

(1) 

Government provide earning opportunity by JFM 49 43 0 8 0 

Van panchayats are good for the socio-economic 

development of the local peoples 

Van panchayats are good for the ecological 

conservations 

Peoples are happy to work with the government to 

protect forest 

JFM and van panchayats are providing good 

opportunities for the livelihood 

These schemes has decreased migration to the 

other places 

100 day employment is enough for me to work in 

own area 

76 24 0 0 0 

76 24 0 0 0 

79 21 0 0 0 

49 43 0 8 0 

49 43 6 2 0 

40 31 22 7 0 

Payment is very good in NREGA 17 37 21 17 8 

There is no fraud in the payment 14 19 57 2 8 

There is bank branch in nearby area 100 0 0 0 0 

Post office are also providing loans at cheaper 

interest rate 

100 0 0 0 0 

Government has launched schemes of loans 100 0 0 0 0 

Government schemes are cheaper 32 47 20 0 0 

Government is providing good support for the local 

business 

52 47 0 0 0 

These schemes are generating local employment 100 0 0 0 0 

Credit facilities by government has decreased 

migration by creating local employment 

33 46 20 0 0 

Government providing good quality seeds on credit 100 0 0 0 0 

Insurance of crop and livestock is available in my 

village 

Government is providing education about the new 

ways of agriculture 

Training has been provided for the agriculture 

based businesses 

100 0 0 0 0 

49 33 15 3 0 

49 33 15 3 0 

Government use to purchase our products 39 41 0 17 3 

These questions have been asked from the villagers. This questionnaire has 

been given to them in the Hindi language.

326 



Findings 

in these regions. Other facilities likfe health and education are good for the lower level, as 

Most of the villagers are happy with the government schemes and agree on the 

people 

fact that 

look 

these 

for higher 

schemes 

education 

have decreased 

or the critical 

the migration 

medical checkups 

of local people 

they prefer 

to other 

to go 

areas. 

to the 

in other Since these places. regions. for the This higher Other is education facilities acceptable likfe and as critical health is and very health education expensive checkups, are and people good unpractical for use the to lower go to level, other develop as 

people multispeciality 

area like look district for hospital higher centre. 

or education universities 

Most of or the the in 

factors 

each critical village. 

are medical towards 

Other checkups factor 

the agree-side. 

which they prefer has 

Government 

positive to go impact to the 

schemes have highest impact on the factor of employement generations. Schems like 

other on NREGA, halting places. migration This is 

JFM are is looking credit acceptable facilities. as it 

to be doing Government is very expensive 

fine in these schemes regions. of and providing unpractical 

Other facilities loans to at develop 

likfe cheaper 

multispeciality rates health and assisting and education hospital them or financially universities are good is for in also each the very village. lower effective. level, Other Most factor as people of which the persons look has positive for are higher strongly impact 

on 

education 

halting migration 

or the critical 

is medical checkups 

Government 

they prefer 

schemes 

to go 

of 

to 

providing 

the other 

loans 

places. 

at cheaper 

This 

agree and agree the credit facilities. 

is acceptable as it is very expensive and unpractical to develop multispeciality 

rates The hospital various and assisting or findings universities them has been financially shown each village. is in also the graph. very Other effective. factor which Most of has the positive persons impact are strongly 

agree halting and agree migration the is credit credit facilities. 

Government schemes of providing loans at 

cheaper rates and assisting them financially is also very effective. Most of the 

The various findings has been shown in the graph. 

persons are strongly agree and agree on the credit facilities. 

The various findings has been shown in the graph. 

 

Response Response in Percentage in Percentage 

50.00 

40.00 

50.00 30.00 

40.00 20.00 

30.00 10.00 

20.00 

10.00 

Highly 

agree 

Education Impact 

Education Impact 

Agree Neutral Disagree 

Highly 

disagree 

Education Impact 0.00 45.67 35.67 10.00 7.67 1.00 

Highly 

Highly 


agree 

disagree 

Education Impact 45.67 35.67 10.00 7.67 1.00 

Response Response in Percentage in Percentage 

50.00 

40.00 

50.00 30.00 

40.00 20.00 

30.00 10.00 

20.00 

10.00 

Highly 

agree 

Health Facility 

Health Facility 


Highly 

disagree 

Health Facility 0.00 45.67 35.67 10.00 7.67 1.00 

Highly 

Highly 


agree 

disagree 

Health Facility 45.67 35.67 10.00 7.67 1.00



327 

Response in Percentage 

50.00 

45.00 

40.00 

35.00 

30.00 

25.00 

20.00 

15.00 

10.00 

5.00 

0.00 

Local Employment 

Highly 

agree 


Highly 

disagree 

Local Employment 45.67 35.67 10.00 7.67 1.00 

Credit Facility 


50.00 

45.00 

40.00 

35.00 

30.00 

25.00 

20.00 

15.00 

10.00 

5.00 

0.00 

Highly 

agree 


Highly 

disagree 

Credit Facility 45.67 35.67 10.00 7.67 1.00 


50.00 

45.00 

40.00 

35.00 

30.00 

25.00 

20.00 

15.00 

10.00 

5.00 

0.00 

Highly 

agree 

Skill Development 


Highly 

disagree 

Skill development 45.67 35.67 10.00 7.67 1.00

328 



Conclusion 

Government schemes for halting migration have impact on it. These 

government schemes are creating self sufficiency in the local economy. Now local 

peoples are willing to stay in their places and with their families. This also decreased 

the burden of the females in the hill region of Uttarakhand, as male are not 

migrating. Practices like conservation of local eco-system with the help of local 

people, providing opportunity of employment, providing good education and health 

facilities are seems to be necessary for self sufficiency of any reason. Credit 

facilities has provided a new path for the entrepreneurs and generating local 

employments. This study has used very simple and direct question about the impact 

of the government and local community schemes, further work can be done with 

asking some indirect question to reveal the best results. More area can be covered in 

the future study.



329 

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