From poverty to power - Oxfam-Québec
From poverty to power - Oxfam-Québec From poverty to power - Oxfam-Québec
3 POVERTY AND WEALTH LIVING OFF THE LANDformally register. As a consequence, many POs remain as unregistered,informal organisations, which limits their legal safeguards and theirability to raise loans. 60As a new generation of bottom-up POs takes root, that legacy ofsuspicion is being overcome. In the northern Albanian village of Kiri,where villagers gather wild mountain herbs to sell for cash, the legacyof forced collectivisation under communism made people initiallyreluctant to form a co-operative. So they set up a Herb Associationwhich helped them improve the quality of their product, find newbuyers, and increase household incomes by 40 per cent. Oxfam hasseen farmers, governments, and aid donors embrace such initiatives incountries as diverse as Mali, Honduras, and India. A significant proportionof new POs are commercially oriented and concentrated inhigh-value product markets, often for export. Relatively few operatesuccessfully in domestic staple food markets, where prices are too lowand transactions too small to cover the costs of organisation, both infinance and time. 61 BOX 3.3THE SWEET TASTE OF SUCCESS IN COLOMBIAIn 2002, a group of private sugar mills applied for a licence tobuild a large panela mill in the impoverished Patía region ofnorthern Colombia. Panela is a brown sugarloaf made fromsugarcane, which is used as a low-cost, nutritious sweetener.The step up from small, family-run units to industrial productionpromised to create jobs and improve cost and quality for consumers.Just the sort of investment to pull people out of poverty,economists said, as the urban market was largely untapped.The impoverished farmers who made their meagre living frompanela did not see it that way, fearing they would be pushed outof even an expanded market. Some Rural Development Ministryofficials concurred, adding that a single factory could manipulateprices to both farmers and consumers. Moreover, when the initialtax breaks ran out, the factory might close down, leaving everyoneworse off.The small producers formed an informal association andlaunched a campaign to persuade the government to reject the135
FROM POVERTY TO POWERplanned mill. Panela production is the main source of income forthe rural population, they argued, and an industrial mill wouldprovide jobs for only a handful of the hundreds of poor farmersand their families who might lose their livelihoods. Furthermore,the profits would accrue to owners who never showed their facesin Patía.The campaign succeeded in blocking the project – fortunatelywithout violence. The investors shrugged their shoulders andtook their money elsewhere, but the experience had changed thefarmers. They had discovered not only that many more peoplewere willing to buy their panela, but also that they could makemore money by selling directly to wholesalers. Most importantly,they had discovered the power of organisation.Flushed with victory, in 2004 a group of them established theirown trading organisation, which after initial difficulties was ableto raise the price paid to producers by over 40 per cent. Theassociation plans to further increase producers’ income bytapping the more lucrative organic market.The panela producers’ experience exemplifies the challenge andpromise of achieving economic development in a way thatenhances, rather than undermines, small farmers’ power inmarkets and the need for farmers to organise if they are toinfluence the structure and rules governing the markets in whichthey operate.Source: C. Penrose-Buckley (2007) Producer Organisations: A Guide to DevelopingCollective Rural Enterprises, Oxford: Oxfam GB.Marketing is the core activity of most POs, whether they are fullblownco-operatives or looser associations. In addition, POs helpfarmers obtain cheaper credit and negotiate better prices for inputssuch as fertilisers and seeds. Some POs arrange or acquire processingfacilities and transport to markets (especially important in remoteareas), and provide the kind of training and technical assistance neededto move into higher-value products and to guarantee the higher-qualitystandards needed to break into more lucrative markets.136
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FROM POVERTY TO POWERplanned mill. Panela production is the main source of income forthe rural population, they argued, and an industrial mill wouldprovide jobs for only a handful of the hundreds of poor farmersand their families who might lose their livelihoods. Furthermore,the profits would accrue <strong>to</strong> owners who never showed their facesin Patía.The campaign succeeded in blocking the project – fortunatelywithout violence. The inves<strong>to</strong>rs shrugged their shoulders and<strong>to</strong>ok their money elsewhere, but the experience had changed thefarmers. They had discovered not only that many more peoplewere willing <strong>to</strong> buy their panela, but also that they could makemore money by selling directly <strong>to</strong> wholesalers. Most importantly,they had discovered the <strong>power</strong> of organisation.Flushed with vic<strong>to</strong>ry, in 2004 a group of them established theirown trading organisation, which after initial difficulties was able<strong>to</strong> raise the price paid <strong>to</strong> producers by over 40 per cent. Theassociation plans <strong>to</strong> further increase producers’ income bytapping the more lucrative organic market.The panela producers’ experience exemplifies the challenge andpromise of achieving economic development in a way thatenhances, rather than undermines, small farmers’ <strong>power</strong> inmarkets and the need for farmers <strong>to</strong> organise if they are <strong>to</strong>influence the structure and rules governing the markets in whichthey operate.Source: C. Penrose-Buckley (2007) Producer Organisations: A Guide <strong>to</strong> DevelopingCollective Rural Enterprises, Oxford: <strong>Oxfam</strong> GB.Marketing is the core activity of most POs, whether they are fullblownco-operatives or looser associations. In addition, POs helpfarmers obtain cheaper credit and negotiate better prices for inputssuch as fertilisers and seeds. Some POs arrange or acquire processingfacilities and transport <strong>to</strong> markets (especially important in remoteareas), and provide the kind of training and technical assistance needed<strong>to</strong> move in<strong>to</strong> higher-value products and <strong>to</strong> guarantee the higher-qualitystandards needed <strong>to</strong> break in<strong>to</strong> more lucrative markets.136
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