The organized membership of an agricultural cooperative is a logical and self-evident group for the introduction of new and improved agricultural practices. Those individuals who are willing to participate in the demands of cooperative management and membership are generally those persons who are receptive to new ideas and are willing to seek out new opportunities for self-advancement. Additionally, those same women and men are likely to share their knowledge and demonstrate their learning to others in their communities. Cooperative members are provided with hands-on training and technical assistance in a variety of sustainable agricultural techniques and environmental conservation methods such as:
- Vegetable gardening
- Soil and water conservation
- Ecosystems and environmental protection
- Grafting techniques
- Irrigation techniques
- Tree nurseries (As part of the agricultural training program, small nurseries are set up at each cooperative to promote reforestation and make trees readily available to cooperative members.)
Agricultural activities, particularly activities that promote soil conservation and environmental protection are critical to preserving and restoring Haiti. Deforestation and intensive farming have caused dramatic ecological shifts in many areas of Haiti. Rains and hurricanes are unpredictable, making it difficult for farmers to plant. Because the land is deforested and bare, heavy rains cause erosion problems and wash away topsoil, particularly in the areas of high elevation. Intensive farming and erosion have caused soil to lose fertility and productive capability, with dire consequences for a community heavily dependent upon agriculture.
The intensive deforestation has resulted in water not being absorbed into the ground to replenish the underground springs and reservoirs. Floods and mudslides in the community are common as unabsorbed rainwater sweeps down the hillsides after only two or three days of rain.
The agricultural development program aims to influence farmer behaviour and coordinate environmental protection efforts. Through trainings on the ecosystem, agricultural and conservation techniques, and Open Space discussions of what actions to take to promote soil and water conservation, farmers learn to use local resources including plants and trees to conserve soil and water resources, and in turn to increase agricultural productivity in their gardens.
Credit, for urban Canadians, often means student loans, mortgages, and car payments. Canadian farmers would find it nearly impossible to manage their farms profitably without credit. FIDA/pcH offers this basic necessity to Haitian farmers. While a $60 US loan to a farmer in rural Haiti may seem small in comparison, it enables him to significantly expand his farm while maintaining his self-respect and freedom. By not giving a handout, we are making a statement of faith in him as co-operative member, as business owner and as a person. We are acting on the belief that he has the will and the ability to succeed. Reasonably priced credit also means freedom: a loan at 10-12% can be paid off, while a loan at 600% means a lifetime of indebtedness. Reasonable interest rates beget economic growth; inflated interest rates beget a lifetime of economic disability.
Capital credit is loaned directly to the cooperatives to enable them to purchase the harvest from their members. Each lending cycle is mutually determined by pcH and the respective cooperative depending on the specific growing season of the crop being financed (usually about nine months). The purchased crop is then stored in the cooperatives’ silo. This affords the cooperative the ability to “speculate”, selling the harvest when the market price is high in concert with the planting season of other regions. Cooperatives require capital credit twice yearly, in accordance with the two main harvest seasons. Capital credit loans consist of about $3 000-$5 000 CAD on average, with an interest rate of 10% per annum. The silo is the economic engine of the agricultural cooperative. The seed and grains that the cooperatives intend to stock (beans, corn, sorghum) are staple foods in the community. While at harvest time the local markets are flooded with the current crop, by selling later in the season the cooperatives can take advantage of higher market prices. Selling good quality seeds and off-season grain locally means that community members can have their consumption needs met locally instead of travelling long distances to buy the necessary seed and grain for their households. Previous stockage projects carried out in the communities have generated a profit of $20 CAD per 100 lbs of grain.
Agricultural credit is a form of credit that is dispersed to the cooperative at time of planting. The cooperative, in turn, provides small loans to its membership. Cooperative members who meet the criteria receive the loan at an affordable interest rate (yet slightly higher than what they loan from pcH) with the proviso that the principal be repaid in full. Members use the credit to purchase seeds and hire labour needed for preparing the fields, planting, and harvesting. Groups of men form a “konbit” (hired labourers who travel from farm to farm) to prepare the average two hectares of land with only a pick and hoe. The interest earned remains within the cooperative to cover loan defaults and to reinvest in the cooperative. The cooperative is required to repay the capital after each crop cycle in order to be eligible for further loan capital.
- can borrow up to five times the amount of their shares in the cooperative (the value of each share is determined at the Annual General Meetings of each cooperative)
- must have access to land and reside in the community of the cooperative (this deters those who have no other vested interest than to profit themselves with no other community participation)
- must practice soil conservation and environmental techniques such as composting and tree planting (which contributes to the general welfare of the land and greater community)
- must agree to pay a penalty if loan repayment is late
- must sign a contract which encourages participation in literacy and training sessions (this emphasizes dignity and ownership)
Training and developing the capacity of members to manage their cooperatives is an essential part of our credit program. Many of the cooperative members and leaders have only recently become literate through previous projects in the communities. Intensive training is a critical investment in sustainability and in ensuring that communities have the capacity to fully participate in their own economic development.
To ensure a resource of knowledge within the communities, FIDA/pcH introduces the role of Cooperative Development Agents (Ajan Developman Koperativ) or ADEVKOS. These positions are hired from within the community. The ADEVKOS provide technical assistance to cooperative members in their fields: providing follow-up to training sessions, creating demonstration gardens and providing support to cooperative members as needed. ADEVKOs receive orientation, training in community motivation and technical agricultural trainings on the same topics as cooperative members.
While the agricultural and capital credit program provides benefits to both men and women, women in particular benefit because it offers them a means to gain education and opportunities to take leadership in the community. Previous FIDA/pcH projects, that have included literacy, cooperative development and agricultural training, have found that, when given the chance to gain some education and training, women and men become much more confident in sharing their opinions, speaking their minds and making collective decisions in community meetings.
All members benefit financially through annual returns in proportion to their economic involvement in the cooperative. Rate of return in lending is subject to all the risks that face agricultural activities in Haiti. That is, droughts, floods, hurricanes and other natural disasters that impact harvests and could impede the success of agricultural credit and grain stockage projects. However, even in the event that a failed harvest may prevent a cooperative from being able to purchase local members’ grain, cooperatives may have access to capital credit to buy grain from other unaffected communities to carry out grain stockage activities and continue to generate revenue for the cooperatives.
There is always the risk that credit funds may be mismanaged in the cooperatives. Consistent monitoring paired with clear procedures and regulations for leaders and members, as well as trainings for leaders mitigate this risk. As stipulated in the rules of international cooperative, each cooperative has a surveillance committee which acts to hold the administration accountable to the membership. Safes for storing cash are purchased for the cooperatives to prevent cash theft.
The clear benefits that credit offers to the community are the potential to attract many new members to the cooperatives. Past projects have demonstrated that access to credit, along with literacy, are the primary motivators for farmers to join the cooperatives. However, a sudden influx of new members may overwhelm the capacity of available resources. This risk is mitigated in the cooperatives by developing clear policies and procedures for membership as well as for determining access to credit.
Fear, mistrust and an undue accord to powerful leaders provide significant challenges. It can take years for cooperative members to overcome their own insecurity and mistrust of community leaders. A successful credit program is a testament to a new balance of power that enables formerly illiterate peasants to experience a radical change in their lives.
Transparency and accountability from the cooperatives and their members is a responsibility and an expectation. Accountability in a loan program ensures that the loan is not viewed as a hand-out … poisoning the community and creating a dangerous cycle of dependency.
Before receiving credit, a cooperative must comply with the principles and rules that govern the international cooperative community. Each cooperative must:
- be registered, or be in the process of registering with Haiti’s national cooperative council (CNC)
- have held a General Assembly with democratic elections in the past year
- be a member in good standing with FIDA/pcH particularly with respect to repayment on previous loans
- submit a small business plan which demonstrates their ability to repay the loan
- sign a contract with agreed upon terms
The approval of a request is a moment of great joy for everyone. We rejoice that we are able to have funds to lend. We are proud that these once illiterate peasants have met the rigorous criteria that have been set for them. And they, in turn, are thrilled to have their ability acknowledged.
“The greatest gift of respect is the gift of credit. You are affirming that I am worthy human being. You are not making me a beggar. You are restoring my dignity. This is the greatest gift of all.”