Problems
Of course, after four years only, all problems have not been
solved and, sometimes, the approach used only met with partial
success. The problems which still exist are a challenge for
future activities.
Thus, the actual decision making process deviates considerably
from the ideal of rules and regulations. While the Board of
Directors
is supposed to be the policy and decision making body, in
practice,
the absolute authority of the General Manager is unchallenged.
The
gap in general education, technical training and actual information
between the members of the Board and the General Manager is
so
wide that decision making consists in fact of suggestions
of the General Manager and, after discussion, these are approved
by the Board. In the history of the FA, there was only one
case when the Board argued with the General Manager while,
otherwise, it always agreed to his suggestions. This was on
the desirability of making profit and contrary to the General
Manager’s suggestion who had capital formation in mind
the Board decided to have more services instead of profit.
Although the General Manager is, in fact, making the policy
of the FA, he still needs the approval of the Board and to
obtain it, be has to explain his ideas and convince the members
of the Board. The fact that he is required to justify his
ideas shows how different his position is from that of a "ruler"
of the institution. On the other hand, it has to be taken
into account that there is no tradition in decision making
on such matters in the rural society and this requires a learning
process on the part of the Board members. It is evident that
this is taking place since, according to the General Managers
experience, today, he is much more questioned than in former
times on different aspects of his suggestions. Anyhow, there
certainly is scope for leadership training and similar measures.
Here again, the situation is very similar in all FAs. Examples
of the Board making their own suggestions are limited to a
few requests in the social field: payment of 25$ out of FA
funds in the case of members death and payment of a subsidy
on textbooks for their children. But, usually, the General
Managers still run the FAS and the more qualified one is the
more unquestioned his decisions are. His activity and competence
determine the development of the FA.
Another field where the optimum has not yet been reached
is the communication between the FA and its members. The current
setup has no institutionalized line of communication but only
irregular and accidental spills of information. The General
Manager and his staff are mostly busy at the headquarters,
dealing with the economic activities and doing the office
routine work. Official meetings fur members are few and unit
meetings are so loaded with other subjects that the possibility
of getting to know the problems and needs of the members is
very restricted. The Board of Directors probably consists
of too few people and is perhaps not representative enough
to allow the staff to become aware of the problems of the
average member. Even unit chiefs have no regular meetings
so far.
In this field, a new policy seems to be necessary to institutionalize
and improve the generally limited communication between members
and decision makers and staff. The current system hardly leads
the members to understand the FA as the farmers' own organization,
but rather as a service from above. The limited credit recovery
in some FAs is perhaps consequence of this attitude.
To a certain extent, this becomes topical because of the
shortcomings in the extension work. The potential time for
extension work is limited because the staff concentrates its
attention an economic activities which provide income to the
FA. As extension work has no measurable effect at short term,
even the desire for a good record in the annual reports leads
to a tendency to give preference to commercial activities
rather than to extension work. Quito often, the staff does
not know what to advice the farmers except the use of inputs.
This, however, is dealt with in conjunction with the sales
activities. Extension work limited to advice, sales and some
meetings, however, does not put the staff in touch with members
often enough.
It seems that all extension activities lack a basic policy
and concept yet and the elaboration of a master plan on FA
extension work which would include an outline of the fields
of extension, extension methods, etc. is very urgent. The
current activities give the impression that the approach used
is that of trial and error. The General Managers independence
in his work, however beneficial it proved to be in other fields,
is perhaps not possible in the case of extension. The staff
is trained in doing extension work, but to expect it to elaborate
extension strategy is probably asking too much. Here, guidance
from the State FAs and the Department of Agriculture might
be necessary.
The different staff problems constitute another related factor,
All JAAs are graduates of Schools of Agriculture and have
the same training in general agriculture. Only recently, a
certain specialization has been introduced towards the end
of this training. Although this training is valuable for the
Chief of the extension section, others still lack training
in business management to be able to fulfill their obligations
and this becomes more acute as business expands.
Some general managers expressed their feeling that the lack
of training in business managemen on their part and that of
their staff hinders the economic activities and said that
they hesitate to undertake larger projects because of the
risk involved if no business specialist is available.
The low salary of the JAAs, which is below the market value
of persons with such training, is also important and only
the fact that many have to work for a certain period for the
government after having been awarded government scholarships
prevents them from leaving their posts. The feeling that they
are underpaid makes them reluctant to work overtime or in
the evenings and this again affects extension work more than
other activities. Needless to say that the working capacity
and the scope of activities are reduced because of the incomplete
staff.
Of crucial importance for the scope of activities and, thus,
for its future is the Capital formation of the FA. The still
limited working capital does not only limit the credit activities
but is more important in marketing. Lack of funds prevents
the marketing of more crops and marketing an merchandise instead
of consignment basis, which would meet the requirements of
farmers to a much higher degree. The tendency of Board members
to distribute profits is a burden in the struggle for enlarging
the capital stock of the FA.
General managers realize the importance of capital formation
and the more active are trying to increase the capital stock
in different ways. One of the possibilities is that members
buy more shares and save more, but this is limited because
of their poverty. As the supply business increases, profits
increase too. Therefore, FAs try to deliver to non-members
as well, sometimes at the same price as to members. The lorries
proved to be a good income producer, especially if they are
used in the most profitable way. The most successful way of
accumulating capital was by producing seedlings on contract
and by performing service functions for other agencies. For
instance, a FA accepted a tender to deliver fertilizers worth
500,000$ from the state capital to the single farmers' associations
in the stale and made a profit of 6,000$ within three months.
While income and capital. stock can thus be increased, the
staff is taken up at the cost of extension and other servile
activities.
The question of capital formation is crucial, not only as
regards the possible activities of the single FA hut also
as regards expenses of the whole FA organization for the government.
Successful as it is with its intensive approach, the system
is very expensive and government has to carry not only the
expenses for the initial building, but for the salary of the
staff as well. In order to be freed at least from pant of
these expenses, FAs have to be made so profitable that, they
can pay their staff’s salaries out of their own income.
This is only possible with a large turnover in the economic
activities which again require a sizeable capital stock as
working capital. The FA organization has, so to speak, a built-in
pressure to extend activities and the government has to assist
as much as possible because only large scale business can
ultimately free it from the expenses. Large-scale business,
which the government can support by policy measures, requires
highly trained staff, especially in business management. One
of the problems is that not all areas offer equal chances
for large scale business. While in tree crop areas there are
many possibilities, the prospects are few in areas with rice
as monoculture a factor which may eventually call for a reappraisal
of the current rice policy.
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