Grain warehouse, Jinga. Credit, Agriculture for Impact.

Grain warehouse, Jinga. Credit, Agriculture for Impact.

Institutions are a set of rules that structure social interactions and incentives.[1] They can either drive or hinder an enabling environment. Strong institutions encourage participation in policy processes, build local capacity and establish a culture of learning. In contrast, weak institutions result in inadequate budgets, poor accountability systems, low technical capacity and limited investment and infrastructure.[2] Far too often institutions serve the needs of the well-off and powerful in society, even if ostensibly intended to serve poor communities.

There is an important distinction between formal and informal institutions. The formal are those that have legal recognition, the latter are those based on custom, tradition and social values. Formal institutions provide the framework within which farmers and agribusinesses operate. The policies of a government, such as its industrial policy or levels of investment in infrastructure, will impact on agriculture, as will how effectively disputes over land rights are mediated.

A rural school in Mali. Credit, A. Vitale, Oxfam.

A rural school in Mali. Credit, A. Vitale, Oxfam.

In contrast informal institutions are often based on local culture and customs. They tend to be more easily accessible to poorer smallholder farmers and more responsive to their needs. Local informal institutions are dynamic in nature and are part of a process of negotiation rather than a fixed entity.[3] A defining feature of poverty is exclusion from social networks and institutions. Strengthening social institutions can therefore be a driving force for poverty reduction.[4] Indeed, the sustainability of agricultural development projects in some cases has been clearly attributed to local institution building and participation.[5]

However, ideally good or strong institutional frameworks include a balance or complementarity between formal and informal institutions, working together on such issues as the enforcement of property rights, the stimulation of agricultural investment and providing limitations on the activities of powerful groups. Local institutions therefore are integral to building social capital within otherwise excluded or impoverished communities.

Contribution to Sustainable Intensification

Local informal institutions have a central role to play in the sustainable and equitable management of ‎natural resources including agricultural land, forests and water. Informal institutions such as customary land tenure systems, social customs, norms, and networks are crucial for regulating how natural resources are accessed and managed. Formal institutions may be more sustainable because of their legal foundation, yet may not meet the needs of poorer marginalised communities. However such communities can reduce their poverty on a more sustainable basis by drawing on and strengthening their local informal institutions.[6] By building social capital and drawing upon enhanced trust and cooperation they can better manage watersheds, restore degraded soils and regenerate forests.

Benefits and limitations

Knowledge transfer

The role of informal institutions becomes more important when collective action and the diffusion of knowledge and innovation is required. In a study of agricultural extension services in Mali,[7] the degree of pre-existing social cohesion in a particular community was the single most important factor in determining the success of any intervention. The social cohesion in these organisations led to greater diffusion of technical knowledge, creating the conditions for social change.

Natural resource management

Regions in rural Kenya face a number of issues such as soil erosion, access to inputs, credit and insurance. However, a number of these barriers can be at least partly overcome by collective action. Communities with a high degree of ‎social capital may find it easier to solve collective problems than those with less.[8]

The participation of the poor in local self-governing institutions also helps to build a sense of collective identity. The irrigation systems managed by farmers versus those that were managed by external agencies achieved higher levels of performance with respect to the physical condition of the system and agricultural productivity. Focusing primarily on physical capital (tangible assets that are created by humans and used in production) and disregarding social capital was found to lead to a reduction in productivity.[9]

Poverty reduction

A defining feature of poverty is exclusion from social networks and institutions.[10] In contrast, higher levels of ‎social capital can lead to improved economic performance, increased trust leading to reduced transaction costs, and increased innovation.[11] Although strong institutions are pivotal for sustainable agricultural development, it is not clear how external agencies are currently translating this rhetoric into practice. In some cases the strengthening of community organisations and local institutions leads to enhanced social cohesion,[12] but in other instances, social capital remains unchanged despite efforts to strengthen it.[13] Where interventions do take place, it is important that they support and work with existing institutions, both informal and formal. For example, the World Bank’s first Fadama project Northern Nigeria, undermined established resource management rules when agricultural land encroached into traditional herder routes.

References
  1. [1] Knight, J 1992, ‘Institutions and Social Conflict’ The Journal of Politics vol. 56, no. 1, pp. 296-298.
  2. [2] Pinto, Y, Poulton, C, Frankenberger, T & Ajay, O 2014, African Agriculture: Drivers of Success for CAADP Implementation: Synthesis Report, Firetail, London.
  3. [3] Ahlerup, P, Olsson, O, & Yanagizawa, D 2009, ‘Social capital vs institutions in the growth process’ European Journal of Political Economy, vol. 25 no.1, pp. 1-14.
  4. [4] Nyangena, W, & Sterner, T 2008, ‘Social Capital and Institutions in Rural Kenya: Is Machakos Unique?’ Environment for Development Discussion Paper Series Available from: <http://www.efdinitiative.org/publications/social-capital-and-institutions-rural-kenya-machakos-unique> [9 July 2015].
  5. [5] Pretty, J, & Ward, H 2001, ‘Social capital and the environment’ World development, vol. 29 no. 2, pp. 209-227.
  6. [6] Food and Agriculture Organisation of the United Nations (FAO) 2011, Save and grow: A policymaker’s guide to the sustainable intensification of smallholder crop production, FAO, Rome.
  7. [7] Reid, C & Salmen, L F 2000, Understanding Social Capital: Agricultural Extension in Mali: Trust and Social Cohesion, Social Capital Initiative Working Paper no. 22, The World Bank Social Development Family, Washington, DC.
  8. [8] Nyangena, W, & Sterner, T 2008, ‘Social Capital and Institutions in Rural Kenya: Is Machakos Unique?’ Environment for Development Discussion Paper Series Available from: <http://www.efdinitiative.org/publications/social-capital-and-institutions-rural-kenya-machakos-unique> [9 July 2015].
  9. [9] Ostrom, E. (2002, April). How farmer managed irrigation systems build social capital to outperform agency managed systems that rely primarily on physical capital. In Farmer managed irrigation systems in the changed context, Proceedings of the Second International Seminar held on (pp. 18-19).
  10. [10] Nyangena, W, & Sterner, T 2008, ‘Social Capital and Institutions in Rural Kenya: Is Machakos Unique?’ Environment for Development Discussion Paper Series Available from: <http://www.efdinitiative.org/publications/social-capital-and-institutions-rural-kenya-machakos-unique> [9 July 2015].
  11. [11] Knowles, S 2006, Is social capital part of the institutions continuum and is it a deep determinant of development? Centre for Research in Economic Development and International Trade, University of Nottingham, Nottingham.
  12. [12] Reid, C & Salmen, L F 2000, Understanding Social Capital: Agricultural Extension in Mali: Trust and Social Cohesion, Social Capital Initiative Working Paper no. 22, The World Bank Social Development Family, Washington, DC.
  13. [13] Nyangena, W, & Sterner, T 2008, ‘Social Capital and Institutions in Rural Kenya: Is Machakos Unique?’ Environment for Development Discussion Paper Series Available from: <http://www.efdinitiative.org/publications/social-capital-and-institutions-rural-kenya-machakos-unique> [9 July 2015].

Case Studies

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Case study 1: Private incentives with degraded land, Echmare, Ethiopia
Harvest Eucalyptus (Eucalyptus L.) trees, Ethiopia

Harvest Eucalyptus (Eucalyptus L.) trees, Ethiopia

The villagers of Echmare, Ethiopia voluntarily allocated degraded land to community members for the purpose of private ‎tree planting. A small plot of wasteland, around 20m2, was assigned to everyone in the community under the condition that their rights would be revoked if they did not properly manage the land. [1] The land was still communal property, but individuals were responsible for planting trees and looking after their assigned plot. Personal responsibility resulted in each tree receiving proper care, and 90% of trees survived to maturity, compared to as few as 10% surviving on similar, but communally managed, woodlots in the area. Farmers with privately managed plots were more likely than those with communal plots to plant more seedlings, water their plots more frequently, invest more time in weeding the plots, clear stones and build stone bunds around the plots.[2]

Since the project was started in 1992 new plots of degraded hillside land have been allocated each year and households are able to harvest mature eucalyptus worth US$5 – US$8 per tree. Each household manages approximately 100 trees on their plots, representing a substantial increase in household income as well as better access to wood for fuel and construction material.[3] The success led to the local government adopting a new directive to encourage other villages to allocate unused hillsides for similar uses, including tree planting, production of forage, horticulture and bee keeping.

References
  1. [1] Pender, J, Place, F & Ehui, S 1999, ‘Strategies for Sustainable Agricultural Development in the East African Highlands’ Environment and Production Technology Division Discussion Paper No. 41, International Food and Policy Research Institute, Washington, DC.
  2. [2] Jagger, P, Pender, J & Gebremedhim, B 2003, ‘Woodlot Devolution in Northern Ethiopia: Opportunitites for Empowerment, Smallholder Income Diversification, and Sustainable Land Management’ Environment and Production Technology Division Discussion Paper No. 107, International Food and Policy Research Institute, Washington, DC.
  3. [3] Pender, J, Place, F & Ehui, S 1999, ‘Strategies for Sustainable Agricultural Development in the East African Highlands’ Environment and Production Technology Division Discussion Paper No. 41, International Food and Policy Research Institute, Washington, DC.
Case study 2: Gal Oya irrigation project, Sri Lanka
Painted Storks, Gal Oya, Sri Lanka. Credit, F. Veronesi.

Painted Storks, Gal Oya, Sri Lanka. Credit, F. Veronesi.

The Gal Oya irrigation project is located in a region that suffered from high levels of ethnic violence. In 1980, Sri Lanka’s Gal Oya irrigation scheme had the reputation of “the most difficult and disorganized irrigation scheme in the country.”[1] The main reservoir was only 25% full, leading to crop failures and the fear that water conflict may arise. Experts from Cornell University, the United States Agency for International Development (USAID), and Colombo’s Agrarian Research and Training Institute determined that the system was faltering just as much from social as it was from physical deterioration. Water allocation suffered from a lack of transparency and grievances lodged about water shortages went unresolved.[2]

Senanayake Samudhraya reservoir. Credit, Rapa123.

Senanayake Samudhraya reservoir. Credit, Rapa123.

Cooperative farmer organizations were created that would reinvigorate the channels downstream. Farmers were encouraged to become organized at the field-level into field channel groups (FCGs) of 10 to 20 farmers per channel. These were organized at the next level up into ‘distributary canal organizations (DCOs), made up from representatives elected by consensus from the FCGs who received water from the same canal. Above this were area councils for each branch canal, then a project committee for the main Gal Oya canal, each level similarly represented by farmers chosen by consensus at each level.

Within weeks of implementing this new approach, 90% of farmers in the pilot area covering more than 2,000 hectares were voluntarily undertaking the programme, which they had helped to develop themselves. They cleared channels, some of which had not been cleared for 15 – 20 years, rotated water deliveries so that tail enders would get a fair share, and saved water when possible to donate to farmers downstream, which involved cooperation between two ethnic groups, the upstream Sinhalese and the downstream Tamil farmers.[3]

References
  1. [1] Uphoff, N & Wijayaratna, CM 2000, Demonstrated benefits from social capital: the productivity of farmer organisations in Cal Oya, Sri Lanka’ World Development vol. 28, no. 11, pp. 1875-1890.
  2. [2] Uphoff, N & Wijayaratna, CM 2000, Demonstrated benefits from social capital: the productivity of farmer organisations in Cal Oya, Sri Lanka’ World Development vol. 28, no. 11, pp. 1875-1890.
  3. [3] Uphoff, N & Wijayaratna, CM 2000, Demonstrated benefits from social capital: the productivity of farmer organisations in Cal Oya, Sri Lanka’ World Development vol. 28, no. 11, pp. 1875-1890.
Case study 3: Social impacts of watershed regeneration in Sukhomajri, North India

common land and overgrazing in India. Credit_ICARDAA project in Sukhomajri, North India provides irrigation water from a small run-off pond in exchange for better environmental management. Landless families used the pond’s catchment area for grazing which led to soil erosion and siltation. By 1975, 65% of the pond was filled with silt.[1]

The Ford Foundation and Central Soil and Water Conservation Research and Training Institute (CSWCRTI) provided support to construct dams and establish soil conservation practices, such as ‎planting Khair (Acacia catechu) and Shisham (Dalbergia sissoo) trees and building trenches. Villagers also proposed that landless families receive rights to irrigation water in exchange for eliminating grazing in that area. Forest areas were covered with grass within 10 to 15 years and grass production more than doubled in the same period from 3.82 t/ha to 7.72 t/ha. A Water Users Association was established in 1982, charged with collecting fees for water usage (Rs.16 per hour, or US$0.25) and looking after the land management practices.

Acacia catechu, India. Credit, D. Valke.

Acacia catechu, India. Credit, D. Valke.

Sukhomajri was the first village in India to have tax levied on the income it earns from the ecological regeneration of its degraded watershed. The village saw improvements in its economy, and as a result of better irrigation, yields of wheat increased by more than 50% from 1977 – 1986 and from 0.68 t/ha to 1.43 t/ha between 1975 and 2008. The number of trees increased from 64 per hectare in 1980 to 415 per hectare in 1992. As the village prospered, women joined together to help each other financially. They obtained loans from the Water Users Association at a 2% interest rate to start a business or address other needs.

However, problems arose as a result of the success of the project. As the land generated more wealth individuals from the higher-caste neighbouring village of Dhamala sought rights over the improved land, leading to prolonged struggles between farmers from Sukhomajri, Dhamala and the Forest Department.  Although Sukomajri regenerated the forest, the Forest Department has refused to give more than 25% of timber generated to the community. Furthermore, the Forest Department divided the regenerated forest with Dhamala, creating a sense of injustice in Sukhomajri and heightened social tension between the villages.[2]

References
  1. [1] The World Bank 2005, Agricultural Investment Sourcebook. The World Bank, Washington, DC.
  2. [2] Agarwal, A & Narain, S 2000, ‘Redressing Ecological Poverty through Participatory Democracy: Case Studies from India’ Working Paper Series, no. 36, Political Economy Research Institute (PERI), University of Massachusetts, Amharst.

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