Work woes

Since I haven’t written anything of interest to anyone lately (those ranty, stream of consciousness posts are more for myself than anything else), I thought I would do a brief job update post. Not that I have much else in my life recently. Other than reading news and blogs and books. Plus, as much trouble as it is, I actually enjoy my work.

Recap: the scheme I work with is basically trying to link small scale (minimum and mostly 1 acre) farmers to loan and selling services. So we partner with two large companies – a huge, multinational bank and a huge, multinational agriculture commodity trading company. The bank provides the loans for agriculture inputs (fertilizer, seeds etc), we bulk buy the inputs for lower prices (and to hopefully prevent the farmers from misusing the money), deliver it to the farmers, the farmers plant and grow, and finally the trading company buys all the outputs. The farmers repay their loan through selling to the trading company. My organization is the facilitator/mediator. If the scheme were working perfectly, we don’t even need to be in the picture. But since it’s just starting up, we run around trying to nag all the partners to do what they’ve agreed to do. Our current biggest problem is just like the sub-prime mortgage crisis – the farmers aren’t repaying their loans. The whole scheme falls apart. There are, of course, many, many valid and non-valid reasons…all of them headaches.

So recent problems:

1. Fertilizer thieves

There are basically two kinds. First, the group leaders give the members less than they applied for as a loan and sell the rest for personal profit. So much for the ‘”African” community spirit’ that is often touted in development literature. This is allowed to happen, with farmers fearing to complain, because there is such a large culture of ‘kickbacks.’ It’s natural that the leaders take their cut. I would too if I were in power. If we didn’t let the leader take their cut, there would be future benefits because you’ll be kicked out of the group. Some of the farmers in a particularly problematic group actually started complaining. The next morning, the group leader had called a meeting. By the afternoon, every single one of the farmers changed their complaints. This even happens at a higher level. The factory I work at gets business from a certain UN agency. Apparently for every contract awarded, said agency officials would come and ask for ‘a little something.’ Of course, the factory has to pay, or else no future business.

Second, the individual farmers that face cash flow problems and decide to sell their inputs. Problem predicted, but still hard to understand. One farmer sold his inputs to buy a mattress. Others to pay school fees for their children. There is no concept that this is a business loan, to be used to grow your business, so that you can buy 10 mattresses at the end of the season. No, cash flow is such a huge problem in these communities that anything that can give immediate cash is much prized. (Hm, does that mean money here has a larger discount value than back home? Or maybe I’m just mixing up my finance concepts.) Fundamentally, I don’t think the farmers understand the value of the agriculture inputs. They don’t understand how much it is worth at market price because they applied for the loan in aggregate (and to say the truth, we haven’t been very good at communicating exactly how much the loan is. Part of the problem is that our field advisors are afraid to say how much it actually is, I think.), so they don’t hesitate to sell the inputs at a much lower price to solve their cash flow problems. They also don’t understand that these inputs (improved seeds and fertilizer) will actually increase their yields by 6 or 7 times. There’s huge value in investing in your agri-business. But they’ve never seen that before and for farmers, seeing is believing.

So because of all this, I’ve spent a significant part of my time here chasing after fertilizer thieves. Confiscating fertilizer in markets (and nearly getting mobbed by the crowd – people are angry when you prevent them from making handsome profits), following the police around for investigations (much more boring than you think), and just generally being concerned about the safety of our field advisors (because they are the targets when people don’t get their illegal profits).

2. Farmers (and people in general) keeping problems a secret until they are on the verge of being discovered.

3. Training our own staff in changing mindsets. No more NGO give-aways.

4. And I can go on, but let me explain 2 and 3 next time.