A Resource Book For Livelihood Promotion

k o o B e c r A Resou for
Livelihood Promotion
Third Edition
Sankar Datta Vijay Mahajan Gitali Thakur
There is no copyright on this Resource Book. Anybody anywhere can use this book or part thereof for promoting the livelihood of the poor. First Edition: August 2001
Second Edition: April 2004 (Revised and Enlarged)
Second Reprint Edition: August 2005
Third Edition: November 2009
Price: Rs. 600/- (Including a CD)
Available at: Deans Ofce, The Livelihood School, BASIX, 3rd Floor Surabhi Arcade Bank Street, Koti, Hyderabad- 1, Ph: 040- 3051 2500-01, E-mail: ho@thelivelihoodschool.org Website: www.thelivelihoodschool.in
Editing and Designing: New Concept Information Systems Pvt Ltd Tel: 91-40-2341 4986 E-mail: hyderabad@newconceptinfosys.com
Contents
Acknowledgements Abbreviations Glossary Preface Module 1: An Introduction to Livelihoods 1. Introduction to Livelihoods 2. Collaborative Polygon 3. Types of Livelihood Interventions 4. Understanding Income of a Household 5. Livelihood Promotion Organisations (LPOs) v vi x xiii 1 3 11 13 27 35 37 39
Module 2: Promoting Livelihoods- Some Examples and Models An Overview of Common Livelihood Promotion Models and the Nine Cases Case Study 1 A Holistic Programme for Tribal Development: Learnings from the DHRUVA Experience Case Study 2 Watershed Plus-Adding Value to a Watershed Programme: the AKRSP (I) Experience Case Study 3 Livelihood Interventions among Marine Fishermen: The SIFFS Experience Case Study 4 BASIXs Intervention in the Milk Sub-sector Case Study 5 Promoting Community Managed Irrigation Systems: The PRADAN Experience in the Eastern Plateau Region Case Study 6 SEWA Union: Organising Women Bidi-Rollers
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74 86
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Contents
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Case Study 7 NIDAN: Voicing the Livelihood Issues of Street Vendors Case Study 8 Cluster Development Project of Chanderi Case Study 9 Bandhan-An Organisation of Hope for the Poor Case Notes
115 128 147 180 187 189 191 194 197 208 211 213 215 245 249 259 274 278 280 291 295
Module 3: Framework for Analysing Livelihood Intervention Choices 1. The Livelihood Intervention FrameworkAn Introduction 2. Understanding the Internal Context of Intervention 3. The External Context 4. Making Livelihood Intervention Design Choices 5. Some Important Frameworks used for Livelihood Promotion
Annexure I : Comparative Analysis of the Legal Provisions for Various Organisational Forms in India Module 4: Designing a Livelihood Intervention Annexure I : If I were to Conduct a Village Study...Dr. Deep Joshi
Uncovering Suitable Livelihood Opportunities for an Intervention Annexure II : Participatory Methodologies for Resource Analysis at the Village-level Annexure III : Household Survey Annexure IV : Village Level Information Annexure V : Market Survey Annexure VI : Sub-sector Analysis Notes 1. Environmental Issues for a Range of Livelihood Activities 2. Supporting Small Enterprises
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A Resource Book for Livelihood Promotion
Acknowledgements
The Third Edition of the Resource Book. The Second Edition of this Resource Book was well-received and extensively used during the last few years. Not only did The Livelihood School use it, but several other institutions, started using this Resource Book; or different parts of it, for their teaching programmes. The Telugu version of the same has been made available by APMAS. As we increasingly used the Resource Book, we became aware of more areas that needed improvement. It was in this context, that the faculty members took upon themselves the demanding task of incorporating some of these improvements to bring out this third edition. We would, therefore, like to thank all the participants of various programmes, the Corporate Human Resource team of BASIX, who used this Resource Book for induction and trainings, and the faculty members of various institutions, who used this Resource Book as their teaching aid. All of them examined the book critically and gave us constructive feedback that helped bring about these improvements. Besides this, we would also like to acknowledge all the authors and the editors for providing time and data in order to re-write or update the case studies. I would also like to thank all the members of The Livelihood School, who enriched this edition, with their detailed comments and feedback, and also with their support in editing and revising the chapters of this book especially Suresh C. Sharma, Srinivas Surisetti, Nabarun Sengupta, Barna Baibhaba Panda and Nirmala. We also wish to place on record our thanks to Sudha Nair for the painstaking editorial work.
Sankar Datta Dean, The Livelihood School October 2009
Acknowledgement
Abbreviations
AI AKRSP (I) AMUL : Articial Insemination : Aga Khan Rural Support Programme (India) : Anand Milk Union Limited, formed in 1946 and based in Anand, Gujarat, is a dairy cooperative movement. It is also a brand managed by an apex cooperative organisation, Gujarat Co-operative Milk Marketing Federation Ltd. (GCMMF) : AP Dairy Development Co-operative Federation : Association for Sarva Seva Farms, which works with very poor landless people, mostly belonging to the scheduled castes, scheduled tribes and minorities, who received some land as a gift under Bhoodan : Bhartiya Agro-Industries Foundation set up by the late Manibhai Desai, a follower of Gandhiji during the Freedom Movement, in Pune in 1975 : Bulk Cooling Unit : Bulk Milk Cooling Units : Bihar Plateau Development Project : Bunkar Vikas Sansthan, or Organisation for Development of Weavers, at Chanderi : Council for Advancement of Peoples Action and Rural Technology, formed in India 1986, as a nodal agency for catalysing and coordinating the emerging partnership between voluntary organisations and the Government for sustainable development of rural areas : Community Based Organisation : Cluster Development Agent : Chanderi Development Foundation : Credit Management Group : Catholic Relief Services : Dharampur Utthn Vahini : Drought Prone Area Programme : District Poverty Initiatives Programme, sponsored by the World Bank and being run in the states of Andhra Pradesh, Madhya Pradesh and Rajasthan : Diversied Portfolio of Subsistence Livelihoods : Damodar Valley Corporation, established in 1948 by Government of West Bengal : European Commission : Entrepreneurship Development Institute of India (EDI), an acknowledged institute engaged in entrepreneurship education : Employment Guarantee Scheme promoted by the Maharashtra government
APDDCF ASSEFA
BAIF BCU BMCUs BPDP BVS CAPART
CBO CDA CDF CMG CRS DHRUVA DPAP DPIP
DPSL DVC EC EDII EGS
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EMIs : Equated (or Equal) Monthly Instalments EPF : Employees Provident Fund EPFO : Employees Provident Fund Organisation EV : Extension Volunteer FIs : Financial Institutions FWS : Fishermen Welfare Society GI Certication : Geographical Indicators Certication GoAP : Government of Andhra Pradesh GoI : Government of India GRAM : Gramabyudaya Mandali GSDP : Gross State Domestic Product GTZ : German Technical Cooperation, a world wide development initiative of Federal Republic of Germany GVM : Gram Vikas Mandal HSVN : Hast Shilp Vikas Nigam ICCO : Interchurch Organisation for Development Co-operation ICRISAT : International Crops Research Institute for the Semi-Arid Tropics, headquartered at Patancheru near the city of Hyderabad, in Andhra Pradesh, is a non-prot, non-political, international organization for science-based agricultural development. Established in 1972, it is one of 15 Centers supported by the Consultative Group on International Agricultural Research (CGIAR) IDE : International Development Enterprise IKP : Indira Kranti Pratham IPM : Integrated Pest Management- techniques for protection of plants, crops from pests without relying too much on pesticides that harm the environment IRDP : Integrated Rural Development Programme - former name of SGSY ISS : Input Supply Scheme ITDG : Intermediate Technology Development Group, of UK JFM : Joint Forest Management KribhCo : Krishak Bharati Cooperative Ltd., a multi-state cooperative society engaged in manufacture of urea and other fertilisers KVIC : Khadi and Village Industries Commission- the largest livelihood promotion effort based on Gandhian thinking, set up in the 1950s LAMPs : Large Agricultural Multi-purpose Cooperatives lpd : Litres per day LPO or LPA : Livelihood Promotion Organisation or Livelihood Promotion Agency MACS : Mutually-Aided Cooperative Societies MCA : Milk Collection Agents MCPs : Milk Chilling Plants MEADOW : Meadow Rural Enterprises Private Limited, owned by young working women, established in the year 1998 by MYRADA (collaboration with TITAN) at Hosur MED : Micro Enterprise Development
Abbreviations
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MESO
: Micro Economic Socio Organization Programmes implemented for Tribal Development MEV : Master Extension Volunteer MFIs : Micro-Finance Institutions MFP : Minor Forest Produce MIS : Management Information System MMS : Mahila Mandal Samakhya MPCS : Milk Producers Cooperative Societies MRAE : Ministry of Rural Areas and Employment MSMEs : Micro, Small & Medium Enterprises MYRADA : Mysore Resettlement and Development Agency NABARD : National Bank for Agriculture and Rural Development NASVI : National Association of Street Vendors of India NBA : Narmada Bachao Andolan (Save Narmada Movement) launched by Ms Medha Patkar NBFC : Non-Banking Finance Company NDDB : National Dairy Development Board set up in 1969 to replicate the Anand model of co-operative milk marketing across the entire country NECC : National Egg Co-ordination Committee NFWF : National Fish Workers Forum NGO : Non-Governmental Organisation NIC : National Industrial Classication NMDC : National Minority Development Commission NREGA : The National Rural Employment Guarantee Act (2005), launched by the GoI with the aim of enhancing the livelihood security of people in rural areas, by guaranteeing 100 days of wage employment in a nancial year to needy rural households in India NRM : Natural Resource Management NTFP : Non-timber Forest Produce NWDB : National Watershed Development Board OASS : Old Age Security Savings OBM : Out-Board Motor ONGC : Oil and Natural Gas Commission PF : Provident Fund PFC : Provident Fund Commissioner PILs : Public Interest Litigations PMC : Patna Municipal Corporation PO : Peoples Organisation PRA Technique : Participatory Methodologies for Resource Analysis Technique PRADAN : Professional Assistance for Development Action PVC : Poly-Vinyl Chloride - a type of plastic commonly used today RBI : Reserve Bank of India- Indias central Bank RC : Resource Centre. A governments handloom Resource Centre (RC) that provides technical and information support to weavers at Chanderi RGVN : Rashtriya Gramin Vikas Nidhi
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RMK
: Rashtriya Mahila Kosh-The National Credit Fund for Women, is the most prominent national level micro-nance apex organisation providing micro-nance services for women in India. It was set up in March 1993 in New Delhi, as an independent registered society by the Department of Women & Child Development in Government of Indias Ministry of Human Resource Development RRBs : Regional Rural Banks RSVY : Rashtriya Gramin Vikas Yojna SERP : Society for Elimination of Rural Poverty SEWA : Self-Employed Womens Association SHG : Self-Help Group- An informal group of 15-20 people, generally women, from an afnity group, formed with a common objective of mutual development. Usually in the Indian context, most SHGs are organised around credit SIDBI : Small Industries Development Bank of India SIFFS : South Indian Federation of Fishermen Societies SMEs : Small & Medium Enterprises SNF : Solids Not Fat SRTT : Sir Ratan Tata Trust - is one of the oldest philanthropic institutions in India, and has played a pioneering role in changing the traditional ideas of charity and introducing the concept of philanthropy SRI : System of Rice Intensication STC : State Textile Corporation SVY : Sahabhagi Vikas Yojana SGSY : Swarnajayanti Gram Swarozgar Yojana, the largest development scheme launched in India in 1997, by the GoI SWC : Soil and Water Conservation SWOT Analysis : Analysis of Strength-Weaknesses- Opportunities and Threats to any organisation or institution T&Cs : Thrift and Credit Co-operatives TASS : Technical Assistance and Support Services TLA : Textile Labour Association TWC : Tribal Welfare Commission established by Govt of Jharkhand UNDP : United Nations Development Programme UNICEF : United Nations Childrens Fund, created by the United Nations General Assembly on December 11, 1946 works for childrens rights, their survival, development and protection UNIDO : United Nation Industrial Development Organisation VAPCOL : Vasundhara Agri-Horti Producer Company Limited VHGs : Village Health Guides WASMO : Water and Sanitation Management Organisation WEIGO : Women in Informal Employment: Globalizing and Organizing WTO : World Trade Organisation WUA : Water Users Association
Abbreviations
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Glossary
3-E or EEE Exploring External Environment, an Exercise used at the Third Stage of the Design of a Livelihood Intervention 3M Methodology : Stands for Micro-Planning, Micro-Markets, Micro-Finance- A methodology developed by Marketing and Research Team (MART), New Delhi Agarbatti : Incense sticks Amla : Indian goose-berry known to be a rich source of vitamin C Ayojan Samiti : Planning and organising committee that takes collective decisions and actions on issues related to wadi programmes in Gujarat BASIX : A micronance and livelihood institution established in 1996, and head quartered at Hyderabad, Andhra Pradesh Bazaar Samiti : Market Committee Bhoodan : Literally meaning Donation, or Gifting of Land- a voluntary land reform movement launched by the eminent Gandhian, Acharya Vinoba Bhave as an experiment in voluntary social justice, for redistribution of excess land among the poor and landless in 1951 Bidi or Beedi : An indigenous cigarilo, rolled in a tendu leaf Block : An administrative unit, generally comprising of 500 villages Chipko Movement : Literally meaning stick or hug, movement launched by Shri Chandi Prasad Bhatt in Uttaranchal, organising villagers to protect their forests from felling by contractors, by hugging trees Chullahs : Wood stoves used in villages. Also refers to any stove, in Hindi and some N. Indian languages Crore : 10 million Dal : Lentil Dhandha Samiti : Trade Committee Dharnas : Protest rallies District Rural Development : An autonomous agency set up by the Government of India Agency (DRDA) in every district of the country, with the mandate of steering rural development activities in the districts. Grainages : Tassar silk cocoon production units. Grainages are places where larval eggs are stored, before they are placed on the leaves of trees for their growth to the stage of pupae Gram Panchayat : Village Council (sometimes also referred to as Panchayat) or local (village level) government structure :
Isabgol
Psyllium, used to make a mild laxative, popular by the local name Isabgol Haat : Weekly village market Hafta : Bribe, in Hindi Holi : A major, colourful Indian festival celebrated with colours and water during spring Jal kunds : Water storage pits, or sources Joint Liability Group : A group of 5-6 borrowers who mutually guarantee each others loans Kattumaram : Country shing crafts- especially from the southernmost parts of India. The word catamaran, in English, is derived from this word Kharif Crop : A crop grown during the rainy season, where it is sown in June/July Khadi : Hand spun, hand woven cloth made in Indian villages that was popularised by Gandhiji during the Freedom Movement Lakh : Indian unit of measure, referring to a hundred thousand Mahila Manch : Womens Forum Mahila Sinchai Sanchalan : Womens Water Users Association Samiti Mahila Vikas Mandal (MVM) : Womens Development Council Mahua : A name of a forest tree, the nectar from whose owers are used by tribals and villagers to make a heady drink Mandal : Sub-divison of a district. Districts are divided into mandals for ease of administration Mandis : Village markets Melas : Fairs held in villages, towns on festivals or special occasions Mojdi : Traditional footwear, from Rajasthan, Gujarat and parts of north India OXFAM : Oxfam International was formed in 1995 by a group of independent non-governmental organisations. Their aim was to work together for greater impact on the international stage to reduce poverty and injustice. The name Oxfam comes from the Oxford Committee for Famine Relief, founded in Britain in 1942 Panchayati Raj : Local Self-Government Paani Samiti : A CBO for planning, implementing, maintenance and ownership of community assets that supply drinking water Pratinidhi Mandal : Literally, Representatives Group or Committee. In case of SEWA this group forms the Trade Council Quintal : Unit of weight equal to 100 kgs
Glossary
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Rabi crop Sarpanch Shandies Shramdan Taluka Tassar Tendu patta Wadi
: : : : : : : :
A crop grown during winter season, where it is sown in December/January Village chief Local weekly markets (also see Haat) Voluntary contribution of labour A subdivision of a district; a group of several villages organised for revenue purposes A non-mulberry silk, used for making textiles Leaves of the tendu tree- normally used to roll beedis. (Patta - leaf in Hindi) In Gujarati means a small orchard covering one to two acres
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Preface
Why This Resource Book? Development practitioners, academics and policy-makers recognize that the biggest challenge facing the developing world today is promotion and support of a large number of livelihoods. Towards achieving this task, many government and non-government agencies came forward. However, one major lacuna is the lack of proper documentation of experiences, which, if available, could help in designing livelihood intervention strategies. In response to the need for documenting past experience and learning in livelihood promotion, Indian Grameen Services, a BASIX Group company from Hyderabad, in collaboration with the New Economics Foundation, London took a research project documenting many livelihood support or promotion experiences in 2001. The Ford Foundation, New Delhi, funded this research. A resource book was developed after reviewing the experiences of twenty-ve different livelihood interventions. In the last two years, several training programs were held using this resource book. A variety of professionals, livelihood program managers from NGOs, funding agencies, trainers involved in training livelihood practitioners, participated in these programs. BASIX continued its livelihood interventions in Andhra Pradesh, Jharkhand, Karnataka, Maharashtra and Madhya Pradesh, which were enriched by this research. It continued to update the cases documented earlier, incorporating recent experiences of these agencies. In addition, it also reviewed the experiences of nine other livelihood interventions, which had not been included in the earlier research. The insights BASIX gained from these training experiences, its own livelihood intervention and experiences of other livelihood intervention agencies, further helped rene this resource book. However, in spite of the research and its experience, this resource book does not claim to be a prescription for promoting livelihoods in an area. It is only an aid for building the capacity of people involved in making strategic choices in their organizations about livelihood interventions. It opens up different perspectives on livelihood interventions; offers a wide range of choices to a livelihood intervention practitioner; makes her or him aware of the different implications of such choices; provides tools and techniques to identify livelihood opportunities and interventions while not recommending any specic technique.
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The various frameworks and formats used in the resource book are therefore only indicative, designed to help the practitioner to think, and think systematically. They also help the practitioner to systematically investigate livelihood opportunities and identify interventions. However, a practitioner will not nd specic recommendations on how to promote livelihoods in his or her context. The individuals will have to explore these, drawing from the insights and techniques described in this resource book.
How to Use This Resource Book

This resource book is designed as an aid to a learning process facilitated by a week-long workshop. This learning process can be summarized as follows: Learn certain broad concepts and theories that are fundamental to understand livelihood promotion issues and to delve deeper Appreciate different approaches to promote, or support livelihoods Understand the process of livelihood intervention and the choices it offers Acquire knowledge of tools and techniques to help identify livelihood opportunities and intervention strategies. The following four modules of this resource book help the reader through the four stages of the learning process.
Module 1 helps understand what is meant by livelihoods

The rst module introduces some of the basic concepts and theories that are fundamental to livelihood promotion processes. This also helps one appreciate some of the choices of scaling up, or when building a self-reliant local economy. It provides a brief summary of how the thinking on livelihoods evolved over time and its managerial implications. At the end of this module, participants are expected to: Get an overview of possible directions of livelihood promotion efforts Get an introduction to some of the principles that help assess choices.
Module 2 helps understand how livelihoods can be promoted

Promoting Livelihoods: Some Examples and Models, helps appreciate different approaches in promoting or supporting livelihoods. There are nine case studies in this module, each illustrating a very different approach to livelihood interventions. These cases can be read by the workshop participants and discussed in small groups, focusing on some of the questions suggested in the Case Notes. We have classied the cases on the lines of commonly adopted approaches to livelihood promotion (Please refer the chapter An overview of Common Livelihood Promotion Models and the Nine Cases). An introduction to the cases in the background of such classication and a brief concept note on each of these approaches is added. These notes outline the methodology adopted for each intervention and some of the implications of the intervention.
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These can help in facilitating the discussions and in providing background information to each case study. At the end of this module, participants are expected to: Acquire a broad perspective on different models of livelihood promotion Understand the process of livelihood support adopted by different intervention agencies Appreciate that livelihoods can be promoted or supported in many different ways. There is no one way of going about promoting livelihoods Additional case studies are provided on the CD accompanying this resource book.
Module 3 gives a framework

Framework for Analyzing Livelihood Intervention Choices, helps in understanding the process of livelihood intervention and the choices that it offers. This module provides a framework for analyzing various design elements of a livelihood intervention. It also sets out some of the choices available to an intervention agency on design parameters. The participants can discuss this framework, modifying or adding to the choices to adapt the framework to the local context. The participants can also go back to the cases discussed in Module 2, to re-examine the choices made by the intervention agencies, and discuss why those choices were made. Comparing two cases using the framework helps enhance participants understanding. At the end of this module the participants are expected to: Understand the various elements involved in the design of livelihood interventions Analyze choices available in livelihood promotion and how these choices can be assessed systematically; and Be aware of the choices that are open to them when they return to their own organizations.
Module 4 familiarizes readers with some tools and techniques

Uncovering Suitable Livelihood Opportunities for an Intervention, outlines a process (including specic tools and techniques) that can help participants plan an appropriate livelihood intervention in their area. This module outlines three stages for analyzing livelihood opportunities: Stage I: Observing and Understanding the Local Economy Stage II: Selecting Livelihood Activities Suitable for the Poor in the Area Stage III: Deciding on the Intervention
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Working through these three stages, participants can narrow down choices, which are open to them in livelihood promotion and identify a specic course of action to help support the livelihood of a large number of people. Practical application of the concepts from this module in the eld will help readers in learning the most. Participants must synthesize the information collected at different stages described in this module to draw up a livelihood intervention strategy. This is a critical part of the exercise. At the end of this module participants are expected to: Become familiar with the process of analyzing livelihood opportunities in their area Build up competence in analyzing and synthesizing the information generated during the eldwork exercise. Additional Resources are included in a CD-Rom, which accompanies the manual. These include various tools and formats, gathered from different organizations while developing this resource book. These can be of immense use to a livelihood practitioner. Throughout the book, the text refers to these resources.
Expected Learning from this Resource Book

Workshops, conducted by veteran practitioners have been using this resource book regularly. It has been a great source of learning even to them. Some lessons and learning experiences culled from these workshops are presented below: Promoting and supporting livelihoods, goes well beyond income-generating activities. Livelihood interventions must enhance the dignity of the people, not just their income. Livelihood interventions could have different objectives like, creating assets, reducing risk or uctuations in income, and enhancing the control of producers in their economic context. Livelihood interventions may need to focus attention on the local economy or the community and not only on individual households. Poor households are less likely to prosper when the local economy is weak. Livelihood intervention design needs to be built around choices, and not constraints. Often agencies complain that an intervention was not successful due to a range of constraints. This resource book suggests that, these constraints should be identied and considered up front. According to the book, the agency has a wide range of choices to tackle or it has to work around these constraints, or choose an alternative intervention altogether. Livelihood intervention design must keep people at the center. Analysis, which fails to do this, may distort the objectives of the intervention. Building the capacities of the people,
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not only through productivity enhancement, but also by ensuring they can properly manage their institutions, plays a critical role. The scale of impact is important; it can be achieved through either scale of operations or replication. When you think of scale at the beginning, you may come up with very different design choices for your intervention. Developing modular designs of intervention and systems help achieving any signicant scale of impact. It is useful to plan, even if it means making provisions for strategic choices over time as the intervention develops. The process of assessing local resources in partnership with local stakeholders is vital for making a sustainable impact on the livelihoods of local people. Livelihood interventions often require a wide variety of services. The intervening organization must remain sensitive to emerging needs, as the needs change as a result of the changing economy, or due to the intervention itself. The same institution may not cater to all needs. Different stakeholders may bring in different competencies. Involving a number of agencies, including the Government, is necessary, if the intervention is to have any signicant impact in the lives of the people. The collective of the people need not carry out all activities. There are some parts of the activity, which are better done individually. It is important to distinguish, which part of the activity should be done by individuals, which part by collectives and which part by other entrepreneurs, while designing a livelihood intervention. It is important to check your recommendations with the priorities of the local communities. You must also understand the various facets of their livelihood system. Taking into account the environmental sustainability of a livelihood intervention is a critical if often overlooked, element. We need to make systematic efforts to identify the right choices, as livelihood interventions involve real-life action, real people and their lives. They are not laboratories where experiments can be conducted impassively. We hope that a workshop conducted with this resource book will help the reader discover similar or other insights that will help them intervene more effectively when promoting livelihoods in their area. Our development professional will take you through the pages of the resource book; keep you smiling, and make this an enjoyable learning experience. Good Luck!
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Module 1
An Introduction to Livelihoods
1. Introduction to Livelihoods
1.1 What is Livelihood?
In every day language, livelihood refers to the means of living. Asking someone How do you earn your livelihood? appears to be the same as asking, What do you do for a living? since making a living is largely about generating income. However livelihood goes beyond generating income. Livelihood is a set of economic activities: Involving self-employment and/or wage-employment Carried out by using ones endowments (human and material) That generate adequate resources (cash and non-cash) That help cope with the risks and shocks Carried out for meeting the requirements of self and the household That are usually carried out repeatedly, and as such, become a way of life. Ideally, a livelihood should keep a person meaningfully occupied, in a sustainable manner, and with dignity. A livelihood is much more than employment. In fact employment is one of the various livelihood activities in which people are engaged. Less than 10 percent of rural workers in India are employed on a regular basis. Poor rural households engage in more than one activity for their livelihoods.
According to the estimates of the Planning Commission, in the current decade, in order to ensure full employment within the next ten years, more than 10 million new livelihoods will have to be generated every year! Less than 10 percent of rural workers in India are employed on a regular basis. Poor rural households engage in more than one activity for their livelihoods.
1.2 Why Promote Livelihoods?

Today livelihood is a major challenge in India, as millions of new livelihood opportunities need to be created and supported to keep pace with a large number of people joining the workforce, modernizing technologies replacing labour, globalizing market and limited resource base. In the changing socio economic conditions, the livelihoods of the poor are at risk. With the vast size of the population, and with most of them in the working age group, the greatest challenge that the nation faces in the coming decades is nding suitable mechanisms to provide livelihood opportunities to those entering the work force. Given the magnitude of the problem, and the dearth of resources for livelihood promotion, the task of promoting livelihoods for the poor becomes all the more urgent.
The primary reason to promote livelihoods is the belief that all human beings have the basic right to equal opportunity. Poor people do not have either life choices, or opportunities. Ensuring that a poor household has a stable livelihood will substantially increase its income, and over a period of time, asset ownership, self-esteem and social participation. The second reason for livelihood promotion is to promote economic growth. Livelihood activities are all economic. So when a livelihood is ensured there is more economic activity, leading to more production and a strong economy. This also leads to a third set of reason for promoting livelihoods of the poor. People at the bottom of the pyramid, comprising nearly 4 billion out of the 6 billion people in the world, do not have the purchasing power to buy even the bare necessities of life food, clothing and shelter. But as livelihood promotion ensures steadier incomes, they become customers of many goods and services, which then promote economic growth. The fourth reason for promoting livelihoods is to ensure social and political stability. When people are hungry, there is a greater likelihood of them resorting to violence, or crime, when other livelihood options are closed to them. Thus, we see that there are arguments that are idealistic, utilitarian and ones based on plain self-interest, for promoting livelihood. But whatever be the reason, we need to worry about how to promote livelihoods.
1.3 What is Livelihood Intervention?

Livelihood interventions are the conscious efforts by an agency or an organisation to promote and support livelihood opportunities for a large number of people (other than those directly or indirectly employed by them). The Government of India is one of the largest agencies involved in such livelihood promotion efforts and in implementation of social safety net programmes. However, the cooperative sector, the corporate sector and the NGO sector have also contributed to promote livelihoods. Some examples include: Government programme for development of irrigation. India has added over 40 million hectares of irrigation since independence- the largest in human history. This has generated or stabilised the livelihoods of millions of people. In agriculture, the predominant livelihood interventions covered irrigation through large dams and canal systems till the 1960s, followed by the introduction of the high yielding
varieties during the Green Revolution, impacting the livelihoods of over 40 million farmers and a similar number of landless labourers. Government programmes such as the erstwhile Integrated Rural Development Programme (IRDP), refashioned as the Swarna Jayanti Grameen Swarozgar Yojana (SGSY), to promote self-employment among the poor through acquisition of income generating assets, with the help of a bank loan and a government subsidy. Special government programmes, run in some states, to promote both wage employment, such as the Employment Guarantee Scheme (EGS) of Maharashtra, and to promote self-employment through highly subsidised asset acquisition, such as the World Bank sponsored District Poverty Initiatives Programme (DPIP) in AP, MP and Rajasthan. Programmes run by sectoral institutions such as the National Dairy Development Board, the Central Silk Board, the Coir Board, the National Horticultural Board, and the Development Commissioners for Handloom and Handicrafts. Programmes run by non-governmental agencies such as by SEWA, BAIF, MYRADA, AKRSP, PRADAN, RGVN and BASIX, for promoting livelihoods in different regions and sectors. Information on some of them is presented in Chapter 2. The Self Employed Womens Association (SEWA), which works with over 750,000 selfemployed women of low-income households. Bhartiya Agro-Industries Foundations (BAIF) programme supporting one million livelihoods comprises activities such as cattle cross-breeding, pasture development, horticulture, etc. Venkateswara Hatcheries intervention to develop the poultry sector, culminating in the National Egg Coordination Council, which serves over 200,000 poultry producers. The efforts of agri-business companies or co-operatives to sell inputs, such as the Indian Farmers Fertiliser Cooperative (IFFCO) selling inputs through the network of primary agricultural cooperative societies, and Tata Chemicals Kisan Kendras selling fertilisers and offering extension services have also inuenced the livelihoods of large numbers, although they cannot be strictly called a livelihood intervention. Other companies work to strengthen their supply chain such as the ITC Agri Business Division, which runs the e-choupal network for procurement of commodities such as soybean, prawns and coffee; Hindustan Levers erstwhile milk procurement and processing business at Etah; and that of Nestle at Verka in Punjab; and the Rallis India projects for contract farming of wheat and rice, and by Pepsi for tomatoes and potato, also have had a signicant impact on the livelihoods of the rural people. The National Rural Employment Guarantee Act (NREGA) 2005 has been implemented in almost all the states, and aims at enhancing the livelihood security of people in
rural areas by guaranteeing 100 days of wage employment in a nancial year to a rural household. While the NREGA has the objective of creating durable assets and strengthening the livelihood resource base, opinion on the NREGA is divided. Some consider NREGA as a source of livelihood through wage employment and creation of community assets, while others consider it as a social safety net programme.
1.4 Evolution of Livelihood Promotion Efforts in India

1.4.1 Early Efforts Human and Institutional Development Thinking on livelihood promotion has evolved a great deal since the early days, with contributions from people like Rabindranath Tagore, conceiver of the Sriniketan Experiment, Spencer Hatch of YMCA Martandam project, Fr. Brayane of the Gurgaon Project and Albert Meyer of the Etawah project, who initiated livelihood promotion in their own ways.
Rabindranath Tagore started the Sriniketan experiment in 1914 in Bengal with the purpose of transforming villages through the introduction of improved agriculture through new technologies, new breeds of cows, poultry and village crafts in 17 villages of surrounding Sriniketan with a total population of 7,000. This experiment was successful in increasing price of the produce as well. The Gurgaon project was implemented during the early 1920s by the then District Collector Mr. Frank Brayne, as part of the Governments initiative for increasing production. The main focus of this experiment was to educate farmers on the use of tools and technology, improved seed varieties, improving soil fertility and better animal varieties. The YMCA experiment was initiated in 1921 by Spencer Hatch in Martandam, a village near Thiruvananthapuram. He aimed at not only bringing about physical and economic change, but also cultural and spiritual enrichment through utilisation of available resources, self help and cooperation among the village folk, involving all the people and reaching the poorest in 100 villages. The activities included promotion of cottage industries, literacy programmes, training of workers and establishment of cooperatives. Innovative and scientic methods were used for poultry farming, bee-keeping, cattle care, weaving etc. The Etawah Pilot Project was started by Albert Mayer, an American engineer and town planner in 1948, in the Etawah district of Uttar Pradesh, with the ultimate goal of comprehensive modernisation of villages through self-help and peoples participation. It aimed at revitalisation of 100 villages through village level workers trained to provide technical assistance, adult education and community organisation to enhance agriculture production. Mahatma Gandhi, one of the early livelihood thinkers of 20th century with a deep concern both for the poor and for sustainability, had a holistic vision of livelihoods. As members of a mutually supportive community, Gandhiji suggested that people get involved in development of local economies by promoting inter-dependent activities, eventually leading to Gram
Swaraj. The All India Village Industries Association (AIVIA) was set up in Wardha, in 1935. The major focus of this initiative was village reorganisation and reconstruction through revival of village industries. During this period, the emphasis was on building human capital and imparting knowledge. It was thought that people were not getting good remuneration because they lacked the knowhow to carry out their work better. To address this gap, efforts were made to impart knowledge. Even in the years after independence, government policies and strategies were based on similar principles. Many educational institutes and research organisations were started during the rst ve year plan. The Community Development Programme of the Government of India was also designed on these lines. The second ve year plan attempted to institutionalise this through various programmes like Training and Visit programme. However, the limitations of this approach became apparent by late 1940s when they realised that just the know-how was not enough, a variety of services to enhance livelihoods were also necessary. Therefore, an alternative strategy was evolved, which tried to integrate various services for a sector- wheat, paddy, milk or soybean, by building market linkages, technology transfer, building physical and social infrastructure etc, and all of this was sought to be brought under one fold.
1.4.2 Integrated Sectoral Strategies The rst two decades, after independence, rightly focused on development and stabilisation of agriculture through irrigation, where the emphasis on building a strong infrastructure was coupled with importing knowhow of irrigated agriculture supplemented by input supply. The large number of irrigation development projects set up by various state governments such as the Western Yamuna Canal system in western Uttar Pradesh; the Bhakra Nangal dam and canal system in Punjab; the Indira Gandhi Canal and the Chambal dams in Rajasthan; the Nagarjuna Sagar and Sriram Sagar projects in Andhra Pradesh and the Tungabhadra and Krishna dams in Karnataka, stabilised and enhanced incomes and generated wage employment for landless farmers.
Under Technology Mission for Integrated Development of Horticulture in North Eastern States, horticulture hubs are being established to provide state-of-the-art infrastructure for hi-tech horticulture in identied clusters in north eastern states. The idea was to facilitate induction of latest technology, hands-on demonstration based on principles of commercial horticulture in a people-public- private partnership mode, to focus on low volume high value crops. The hubs act as single window service centres for training and demonstration, collection as well as a technology clearing house, grading and packing centre, a forward link for farmers and backward link for the private sector.
Some examples of livelihood interventions based on integrated sectoral strategies covering the entire value chain are, endeavours like KVIC, NDDB and the Green Revolution, which emerged during the 50s and 60s. The Khadi and Village Industries Commission was the largest livelihood promotion effort based on Gandhian thinking. Set up in the 1950s, KVIC is an example of integrated sectoral livelihood intervention. It can also be called the rst large government intervention in the non-agricultural sector. The KVIC selected nearly 20 activities, from gur (jaggery) making to khadi (hand spun, hand woven cloth), and promoted a network of training centres, production units, common processing facilities and marketing outlets. In order to really benet, the rural producers not only needed training, but working capital and access to markets, as well. Similarly, the Green Revolution was another example of integrated sectoral livelihood promotion. Though the Green Revolution started with introduction of high yielding variety seeds, infrastructure support was provided in the form of irrigation facilities, roads, warehouses, market yards, etc. This was supplemented by development of an agricultural credit delivery system, support to fertiliser and other agri-input industries, and investments in agricultural universities for research and training. The Green Revolution was essentially conned to wheat and later paddy, and much later to soybean. The National Dairy Development Board (NDDB) was set up in 1969 to replicate the Anand model of co-operative milk marketing across the entire country. It created systems of milk procurement, processing and marketing across the country under the Operation Flood programme. Further, NDDB made infrastructure investments in chilling centres, feeder-balancing dairy plants, cattle-feed plants, and medicinal vaccine plants for veterinary use, among others. It also invested in research and development projects related to dairy science and processing of milk products.
1.4.3 Strategies for the Vulnerable Segments of the Population Though all the above interventions based on the principle of integrated sectoral support could inuence the livelihoods of millions of people, they needed heavy investments, and yet, still left out the poor, the landless, the marginal farmers, women, tribals and people living in remote areas.
By the 70s, despite following this livelihood development approach, the gap between the rich and the poor was growing. Deep dissatisfaction with the prevailing inequities saw the rise of Leftists, resulting in the Naxalite Movement in the country.
While the Naxalites chose the path of armed struggle, others who were dissatised with the state of affairs decided to join the voluntary sector. The leading gure in the voluntary development movement in India was JP (Jayaprakash Narayan). Many voluntary agencies later became larger and professional Non-Governmental Organisations (NGOs), and became an integral part of the development scenario. The efforts concentrated on those who had been left out of the benets of mainstream development. Some took this even further to work with the poorest, or what was called the sarvahara varga. However, this idea got politicised into the slogan of garibi hatao and bureaucratised through the launch of the nationwide programme for poverty alleviation the IRDP.
1.4.4 Directed Credit Nationalisation of banks was initiated by the then Prime Minister, Smt. Indira Gandhi during 1970s and 1980s. The major focus during this decade was on setting up rural branches. Further, RBI promoted NABARD, which focuses mainly on agricultural development and promoting Self-Help groups. The concept of Grameen Bank was evolved and promoted by various commercial banks during this decade, with the aim of providing nancial support to rural areas. These banks gave subsidised loans under the IRDP scheme to poor people who were identied, and for whom this scheme was developed.
Since banks did not replace the money lenders completely, and the repayment rate was also very low, in spite of the subsidised loan component, it ultimately destroyed the viability of bank loans. The collusion between bankers and the administrative staff of IRDP scheme led to misuse of subsidies on a large scale, and led to a large number of defaulters, which ultimately created a perception that the poor were not bankable.
1.4.5 Minimalist Credit However, all these efforts were based on an integrated approach, where the intervention would include all services necessary for supporting livelihoods of the poor. They required perpetual ongoing subsidies and still did not generate sustainable livelihoods. All of this gave rise to a new thinking, according to which- the poor know how to manage their livelihoods, all they need is ready access to capital. In India, Ms. Ela Bhatt started a cooperative bank of self-employed poor women in 1974- the SEWA Bank. Prof. Mohammad Yunus began the experiment of the Grameen Bank in Bangladesh in 1976. In Latin America, large number of NGOs began micro-credit programmes through solidarity groups.
These efforts quickly multiplied and their unique feature, in contrast to the IRDP type of loans was the high repayment rates, often over 95 percent. The 1990s saw millions of households being covered by micro-credit programmes, all over the world. In Bangladesh alone, the Grameen Bank, BRAC, ASA and Proshika reached out to over 2 to 3 million borrowers each. Swarnajayanti Grama Swarojgar Yojana (SGSY) targeted Self Help Groups (SHGs) unlike the IRDP, which was mostly targeted to individuals. The SGSY focuses on creating critical
infrastructure for livelihood support. Unlike the SHG-Bank linkage programme of NABARD, the per capita loan size is higher under SGSY. The debate between minimalist credit and integrated sectoral promotion approaches began to converge in the 1990s. A number of the integrated programmes dropped many of their offerings and became more focused on credit. On the other hand, a number of the minimalist credit programmes, started providing a lot of other inputs. An example of the synthesis is The Self Employed Womens Association, SEWA, from Ahmedabad. (The Case presented in the next module, SEWA Union- Organising Women Bidi-Rollers, may be referred).
1.4.6 Contingency Approach to Livelihood Promotion In 1989, Vijay Mahajan and Thomas Dichter, proposed an alternate livelihood promotion strategy through a paper: A Contingency Approach to Enterprise Promotion. They argued that promoting enterprises was complex, and a better approach was to identify specic bottlenecks and work on them, instead of providing all the services necessary for livelihood promotion. In many cases, credit could be the only constraint. In such cases, minimalist credit was right and also worked well. In other cases, credit is needed but is not the main constraint. What may be needed could be skills, inputs or markets. Their argument was that though a large variety of services are required, not all of them are required at the same time, and possibly not in every case. Thus the offering should be contingent upon what is needed in a given situation. They also asserted that
only a specialised type of organisation could extend specialised, but specic services and- as it is difcult to build competencies to address all these factors in-house, collaboration with different agencies having the core competency of providing different complementary services, becomes necessary. This approach is graphically explained in the two gures in Figure 1 above. The water that can be held in a barrel, made up of planks of different heights, is determined by the height
e t U r I n f r a s t r U c
e t U r I n f r a s t r U c
p O l I C Y
p O l I C Y
g y T e c H n O l O
g y T e c H n O l O
P e O p l e
P e O p l e
e C l i m a t
e C l i m a t
M a r K e t
M a r K e t
C redit
Fig 1a
C redit
Fig 1b
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of the smallest plank. If we replace this plank with a bigger plank then some other plank become relatively the smallest, and therefore limits the amount of water that can be lled in the barrel. The planks of different heights represent different factor conditions. Maximum livelihoods that can be supported are determined by the weakest factor (For example, Credit in the Figure 1a here). The livelihood intervention agency needs to identify the bottlenecks and provide services to overcome them. At any point in time, one decient factor is addressed, till, in comparison to it, another factor become decient and needs attention. Thus, various inputs become critical at various times and need to be addressed accordingly.
2. Collaborative Polygon
Over the years, the economy has become specialised, dynamic and complex. Thus, on one hand, the services required for supporting large numbers of livelihoods have become more diverse, on the other it has become necessary for agencies providing any of the services to be more specialised. For example, while setting up the Sriniketan Experiment, Tagore recognised that the weavers needed inputs in design and some related skill development. Most of the raw materials were produced locally and so was the marketing of the cloth, to which the weavers were accustomed. However, with the development of the industry, today the raw material comes
Collaborative Polygon
Different economic activities along a sub-sector can best be taken up by different institutions/agencies. Effective intervention in livelihoods requires collaboration between agencies with complementary strengths.
Credit Provider Input Supplier Output Processor/ Marketer
Rural Producer
Research & Training
Extension Agency
from distant markets. The fabric manufactured by a weaver may also go to markets about which the weaver may have no information, nor access. Thus, the range of services required for supporting livelihoods has become wider: it includes supply of raw material, marketing, in addition to helping them with the designs. Earlier, the designer would work as a trainer and help in skill building. But today, with rapidly changing design tastes and increasing competition, the designer has to become specialised in designing, in order to remain effective and efcient. Thus, for providing the larger number of services required today, a larger number of specialists are required. This also has serious cost implications, in the era of reducing margins, where organisations also have the cherished objective of making products available to the ultimate consumer at the lowest possible price.
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This problem can be addressed by creation of collaborative arrangements between various agencies, for example, in the case of the weavers- collaboration between agencies specialised in design and others in training. For supporting livelihoods, services are required in input supply, output marketing, infrastructure, technology development, research, training, community organisation among others. In todays economy one agency cannot develop the competency of providing all of them. Thus, an input supply company needs to collaborate with an output marketing company, which in turn needs to collaborate with a credit provider, and thus they all build a collaborative polygon. This sort of collaboration was seen when ITC Zeneca sold sunower seeds, for which BSFL provided the credit to the farmers, who were also linked to the Mantralaym plant of ITC Agro-Business. ITCs Mantralayam plant deducted the loan instalment when farmers sold them their produce, and so, paid back to BSFL. In various forums, livelihood practitioners have acknowledged the need for collaboration in order to address the problem. However, it has also been recognised that effective collaboration not only requires appreciation of the competencies of the other partners, but also treating them with respect and making space for each one of them.
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3. Types of Livelihood Interventions

Livelihood interventions can be in many forms and go far beyond running an incomegeneration programme. In India, some of the approaches of livelihood interventions are:
Fig 2: Types of Livelihood Interventions
Bastar District, Chattisgarh
Spatial Approach
Tribals of Bastar
Segmental
Forest Produce
Sectoral
End-to-End Tendu Leaf Processing
- Sub Sectoral
Credit for Agriculture, Trade and Arts
- Vector
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Spatial Approach: Promoting livelihoods in a specied geographical area, such as a region, sub-region, command area or a watershed. Supporting locally inter-dependent economic activities, based on a leading intervention, as done by various state governments in the irrigation command areas the Indira Gandhi Canal in Rajasthan, or the horticulture-based DHRUVA project of BAIF in Valsad, South Gujarat (Please refer to the Case A Holistic Programme For Tribal Development: Learnings from the DHRUVA Experience, in Chapter 2 for further details). Supporting livelihoods in a degraded watershed, or degraded forest area, such as MYRADAs PIDOW project in Gulbarga, Ralegaon Sidhi in Maharashtra and the numerous joint forest management projects supported by AKRSP in Gujarat. (See Case on AKRSP, Watershed Plus - Adding Value to a Watershed Programme: the AKRSP (I) Experience, presented in Module 2) Interventions in areas with a cluster of enterprises, such as in Ludhiana for hosiery, Badohi-Mirzapur for carpets, Kancheepuram in Tamilnadu and Sualkuchi in Assam for silk sarees, and many such others. (See Case on the Chanderi cluster in Module 2- Cluster Development Project of Chanderi, and further discussions in subsequent sections). Segmental Approach: Promoting livelihoods for a vulnerable segment of the population, such as landless households, tribals, urban poor, women and the disabled. Supporting livelihoods of the poor through micro-credit, for example by SEWA (detailed Case SEWA Union- Organising Women Bidi-Rollers, presented in Module 2), SHARE, CASHPOR and BASIX. Investing in human development - nutrition, health, education, and institutional development (for example CAREs Womens Income and Self-Help project, Jharkhand). Asserting the rights and entitlements approach of the poor whether to minimum wages, land tenure or access to public services, for example the National Association of Street Vendors of India asserted the rights of livelihood of street vendors. (Please refer to the Case on NIDAN, presented in Module 2- NIDAN: Voicing the Livelihood Issues of Street Vendors, for further discussions). Sectoral Approach: Promoting livelihoods along a sector of the economy such as agriculture, or a sub-sector, such as cotton. Sub-sector Interventions, such as dairy, shery, and sericulture, usually covering the value chain from primary production to the ultimate consumer, as shown in the cases of SIFFS, and the one on Dairy intervention, presented in the next Module. Intervention along a Vector (something which cuts across all sectors): such as water, power or market linkages. E.g. MART, which has worked on rural haats local markets.
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3.1 Spatial Interventions

Many livelihood interventions have a spatial or a geographical boundary. It may be a single village, a watershed, a river basin, a block, taluka or a district or a region. The main difference between other approaches and a spatial (or area development) approach is that it tries to tackle all the sectors and segments of the population in that area.
3.1.1 Area Development with a Leading Intervention e.g. Irrigation This approach has been followed by governments in a number of ways initially to develop the command area, that is area irrigated by a canal system of a major dam. Most of these projects began in the 1950s and 60s. The leading intervention here was ow irrigation, and it was supplemented with on-farm development such as land levelling, building bunds, building drainage channels, training farmers in irrigated agriculture through extension services, ensuring availability of tractors, supply of new varieties of seeds that are drought resistant, setting up outlets for fertilisers and pesticides, and nally marketing, in the form of rural roads, warehouses and market yards. This then led to the development of the local economy in an inter-dependent manner. Over a period, non-farm activities, based on agro-processing, took off, as also those, which supplied goods and services to increasingly prosperous farm households. While irrigation changed the livelihoods of millions of farmers for the better, it also led to a rise of inequalities, particularly for those who did not have any land, or whose lands could not be supplied with water from canals.
Even programmes such as the Drought Prone Area Programme (DPAP) were spatial interventions in livelihoods.
3.1.2 Watershed Development Approach A watershed is a catchment area feeding into a single identiable drainage system, such as a stream or a river. A watershed development programme, or an approach at promoting and supporting livelihoods in that watershed area, fosters relevant local institutions for managing natural resources in the watershed area, so as to increase the quality and productivity of those resources.
Typically, a watershed programme includes some, or all of the following interventions: Soil and land management Water management Crop management Afforestation Pasture/fodder development Livestock management Rural energy management Other farm and non-farm activities Community mobilisation
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While these components are often understood in general or standardised terms, there is scope for technology development and adaptation.
Mainstreaming the Watershed Approach The Government of India started recognising the value of using a watershed as a unit of intervention in the early 1980s. Over the last two decades it has set aside substantial budgetary provisions for micro-watershed rehabilitation and development. 3.1.3 Spatial Intervention in Clusters Another way of supporting a large number of livelihoods is supporting activities in a cluster. Usually a cluster arises around a particular activity, and eventually a number of related and supporting activities emerge, leading to all round livelihood promotion. The activity may be agricultural, such as sugarcane cultivation in the Kolhapur district of Maharashtra around which sugar mills, agro-service centres and retail markets have emerged. A cluster may emerge around a non-farm activity such as stone quarrying and polishing. For example, in the Bethamcherla cluster in Andhra Pradesh, growth of 250 stone polishing units has led to 100 polished slab-trading companies and 50 roughstone slab traders in the area. In addition, other support enterprises, such as transport companies, transport repair workshops, equipment supply, repair enterprises and small road-side restaurants have also sprung up in the area, supporting large numbers of livelihoods. These enterprises closely depend on each other for sustenance. On the one hand, the stone polishing units in the area support these enterprises, at the same time; these supporting enterprises have helped the stone polishing industry to grow. This area has also witnessed proliferation of many secondary organisations, such as, Rough-slab Traders Association, Slab-polishing Units Association, Lorry Owners Association, Polishing Workers Association, Slab-loaders Association. Livelihoods in Bethamcherla Cluster Various Units1 No. of Units Quarry 400 Transport (rough slab) 200 Transport (polished) 200 Rough-slab trading 50 Transport repair 15-20 Equipment supply and repair 5 Stone polishing 250 Polished-slab trading 100 Private nance companies 55 Banks 3
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No. of Workers 10,000 1,000 1,000 200 60-80 15-20 3,000 400 150 15
The Forgotten Sector by Fisher and Mahajan
The advantage of the growth of such clusters is that, related and supporting services become available to all participants, reducing the transaction costs for all. Imagine, if every
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polishing unit had to rush to the nearest town Kurnool, for every small repair, the costs involved wouldnt have made them competitive in the market. The cluster attracts various suppliers to the area, as it provides economies of scale. The strong competition attracts consumers, who are assured of choice, competitive quality and price. Growth of clusters attracts policy attention, increasing the availability of skilled workers. Clusters also enhance ability to cope with changes in the environment, as information ows quickly. There are several such clusters in India, renowned for their products, such as Sivakasi for matchboxes and recrackers, Ludhiana for woollen garments, Patiala for machine tools, Moradabad for brassware, Ulubedia for badminton shuttle corks, Lonavala for Chiki (a sweetmeat made of groundnut and molasses), Thirupur for hosiery, Kancheepuram, Varanasi and Dharmavaram for woven silks, Kolhapur for leather slippers, Kanpur and Agra for various leather goods, Bellary for jeans, Sualkachi in Assam for silk and Bikaner for Bhujiya,(ready-to-eat, extruded food products). Usually a cluster starts growing with one pioneering unit, which very often sets up an enterprise serendipitously. If this unit fails, the cluster never grows, but if it succeeds, many others follow, attracting providers of support services. This in turn makes setting up similar new units more economical. At this stage, the policymakers get involved; the infrastructure in the cluster gets developed; associations get established. These associations play a role in policy lobbying, start sharing market information, training and production facilities, etc.; the cluster gains market share. However, this process can be furthered with dissemination of information to the different key players. There are many agencies such as United Nation Industrial Development Organisation (UNIDO), which have adopted development of clusters as their strategy for livelihood intervention. Please refer the box item below, on promotion of clusters by UNIDO.
By Mukesh Gulati, UNIDO Cluster Development Programme for Micro and Small & Medium Enterprise In both industrialised and developing countries, there is increasing evidence that clustering and networking can help micro (including those run by artisans), small and medium enterprises (MSMEs) to boost their competitiveness. MSMEs in clusters have the qualities to effectively implement support initiatives aimed at enlarging the production base, capturing niche markets, accessing export markets, offering employment opportunities, alleviating poverty and redressing regional economic imbalances.
A cluster can be dened as a sectoral and geographical concentration of enterprises whether micro, or small & medium enterprises (SMEs), but faced with common opportunities and threats that can: Give rise to external economies like presence of specialised suppliers of raw materials, components and machinery; sector specic skills, etc. Lead to the emergence of specialised technical, administrative and nancial services;
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Create a favourable environment for the development of selective inter-rm business co-operation and specialisation, as well as of co-operation among public and private institutions to promote production, innovation and collective learning. The United Nations Industrial Development Organisation (UNIDO) is one of the early starters that developed, since 1993, an approach to help the public and the private sector co-operate in the design and implementation of cluster development programmes to re-vitalise underachieving micro enterprise and SME clusters. This programme draws lessons from the experience of successful clusters, in developed and developing economies, as well from UNIDOs own cluster development initiatives, in various developing countries. Cluster Development Initiatives in India The formidable challenges created for the MSME sector by the liberalisation of the Indian economy, as well as its closer integration within the global economy, have generated a great deal of interest within India on novel approaches to SME development. As a result, both private and public sector institutions at the Central, as well as the State levels, are increasingly undertaking cluster development initiatives. By the beginning of the year 2004, it is estimated that a total of 600 industrial and artisan clusters have been taken up for development initiatives by more than a dozen national institutions, ministries and state governments. Cluster Development Framework Cluster Development Initiatives strives to enhance overall performance of the cluster through targeted joint action of select cluster stakeholders, e.g. rms, local institutions, BDS providers, etc. Such joint actions lead to direct or indirect business gains of the stakeholders. The linkages created in the process, empower the implementing institutions and leads to the creation of an effective local governance framework. In the process, the cluster grows and also gains the capacity to carry this growth momentum in the future. The approach to such a cluster development sees the key problem faced by Micro Enterprises and SMEs as one of relative isolation, rather than size. Isolated enterprises are unable to achieve economies of scale, lack negotiating power, nd it difcult to specialise and have limited access to credit, strategic information, technology and markets. Small and Micro Enterprises can signicantly increase their comparative advantages by co-operating with one another and building linkages with private or public service providers. The small rms can thus build their competitive strength through cost reduction, value chain up-gradation, and exploitation of collective economies of scale. Cluster development therefore implies reducing isolation of micro enterprise and SME by strengthening the linkages among all the actors of the cluster (other SMEs, large enterprises, support institutions) in order to co-ordinate their actions and pool their resources for a common development goal.
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The advantages of being a part of co-operative network are several. At the rm level, it helps them overcome disadvantages of economies of scale and a weak capital base. As a result, the rms become more competitive by exploring the advantages of the exible structure and faster decision-making processes. At the cluster level, the local communities become more responsive to the common market challenges and there is easier and faster diffusion of information. Superior organisational capabilities, skills and technological innovations at the cluster level help distribute the cost of xed costs of intervention among a large number of beneciaries, thereby increasing cost-effectiveness and enabling a wider public appropriation of the benets. The Methodology Re-vitalising an under performing cluster is a complex and often long-winded process that requires careful planning and implementation. Hence most cluster initiatives have chalked out a frame of four to ve years as the period of programme implementation. The key elements of the methodology are selection of clusters, undertaking participatory diagnostic study of the cluster, breaking the barriers of mutual mistrust in the clusters through a range of pilot initiatives, drawing up a cluster focused action plan and its implementation by the local actors with support from public and private support institutions. A constant monitoring and evaluation of the quantiable and qualitative outputs helps provide a feedback to the planning process, which is evolutionary and self-corrective. The successful introduction of such a methodology is the responsibility of a Cluster Development Agent (CDA). The CDA is a person who oversees the implementation of the Cluster Development Programme in a professional and effective manner at the cluster level. CDAs are trained professionals drawn from the implementing Government Institutions or ofce-bearers of macro industry associations. They must understand the needs of the various actors in the cluster, help them formulate a vision for cluster growth and assist them in realising such a shared vision. As a facilitator, the CDA needs to be comfortable with leading, without being in the forefront. The role is mainly that of a relationship developer, not an analyst or an implementer. Some of these initiatives undertaken in the past have shown an exemplary element of sustainability with more than half of the development costs being shared by the local beneciaries, and the local collective bodies of the beneciaries themselves executing the challenging initiatives.
3.1.4 Local Economy Development At the workshop that brought together livelihood practitioners to reect on their experience, and to review the case studies for this Resource Book, many agreed that linking poor producers to expanding markets was the key. But some differed.
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How reliable are these markets? To what extent do they reduce the risks that producers face? While access to these markets can increase the share of consumers rupee to rural producers, it often pushes the locus of control, and/or of decision making away, and reduces their role from equity holders in their own small little business to mere suppliers of labour. This becomes even more pertinent in the face of the current economic crisis being faced by the world and the meltdown of the nancial sector. There have been many cases, where the rural producers; especially the smaller ones, have fallen prey to market vagaries. Thousands of farmers were forced to burn their sugarcane crops. Several hundred cotton farmers committed suicide when the crop failed to fetch them the right return. Tons of malt was thrown into the Ganges when the prices collapsed. Similarly, the carpet industry in Rajasthan faced a serious set back, when the European market stopped buying carpets, due to a change in their import policy that took note of the child labour practices at the worksites of the carpet makers. In countries like Mexico, Argentina, Indonesia, we have seen the impact of too much dependence on outside markets and generation of little wealth within. These countries had become entirely dependent on export of a small number of specialised goods and services. The local economy was no longer diverse, or self reliant for meeting several of their needs, and therefore highly vulnerable to external shocks, as almost nothing was sold in local markets. The effects were devastating. When nothing was produced for local markets, no money circulated within the local economy. All earnings from exports were spent on goods and services that were imported into the community money simply owed in and immediately out again, generating no further income and employment within the community. These communities are now desperately seeking ways in which they can gain back control of their local economy. How can these economies revive themselves? Is it a pipe dream- as many would argue; that local economies can be self-reliant? How effective are they? To nd some answers to this question, let us look at a simple example that effectively illustrates how making an economy self-reliant makes the money go longer. If the income of one person is spent within the local economy itself, it becomes the income of another within the same economy. For example, if a dairy farmer, Ram buys the fodder from a neighbouring farmer Shyam, the money Ram spends on buying fodder becomes Shyams income. This can have a perceptible implication for the economy as a whole. Let us examine how. Let us assume that Ram, Shyam, Laxman, and Bharat live in a village where only 20 percent of the goods required by anybody are available within the local economy. So, in this village, when Ram spends Rs 100, he buys goods worth Rs 20 from within the village itself, say from Shyam. Thus, Shyam has an income of Rs 20. Taking this logic further
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Total Income Rams Income Shyams Income Laxmans Income Bharats Income Total Income Generated 100.0 20.0 4.0 0.8 124.8
Amount spent within the economy 20.0 4.0 0.8 0.16
Amount spent outside the economy 80.0 16.0 3.2 0.64
The table shows that this Rs 100 generates an income of Rs 124.80 for the four of them. Now lets imagine if they could get 50 per cent of what they required locally Total Income Rams Income Shyams Income Laxmans Income Bharats Income Total Income Generated 100.0 50.0 25.0 12.5 187.5 Amount spent within the economy 50.0 25.0 12.5 6.25 Amount spent outside the economy 50.0 25.0 12.5 6.25
Their income would have gone up to Rs 187.50. Therefore, another way of enhancing income could be to produce more and more of the local requirements locally, and building a selfsustaining economy. If Ram could buy more fodder locally instead of buying cattle-feed from the town, the economy becomes stronger. To move towards this, we could train someone to produce better fodder locally. We could also train someone else to use the cow-dung to make compost, which in turn could be used for fodder production by other farmers. We could also train a local person to cut chaff. This would keep the money owing within the local economy and generate more income than before. The underlying principles of such a model are to: Use local resources to meet local needs Maintain diverse employment generating resources or opportunities within the local economy to reduce risks Ensure money circulates within the local community Enhance the communitys control over its local resources. Enhance nancial and other assets within the community that can generate future income streams Reduce the risks to poor producers due to the vagaries of distant markets Organise poor producers so that they have greater control over their livelihoods now, and in the future Increase the bargaining power of the producers.
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In the Indian context, Mahatma Gandhis economic thinking was based on these principles. Local market development has been tried by a number of NGOs: We will get some insights into similar interventions in India in the case on Dhruva, which helped establish a weekly market in Chonda Bazaar. (Please refer the Case 'A Holistic Programme For Tribal Development: Learnings from the DHRUVA Experience,' in Module 2). ASSEFA in Tamilnadu, and MART in Andhra Pradesh developed a number of weekly shandies (local weekly markets) with good results. In fact, the importance of local weekly markets (shandies and haats), as well as of seasonal markets (melas, during festivals), as outlets for the produce of farmers, artisans and craftsmen, has been brought out by MART in their study Rural Haats and Melas. The Internet has provided a very interesting opportunity to approach distant markets, even from remote places. Various NGOs such as Kutch Mahila Vikas Sansthan, and private rms like Craftsbridge, have set up websites to display the wares of craftsmen, book orders and receive payments over the Internet.
3.2 Segmental Interventions

While spatial livelihood interventions try to cover a whole region or a sub-region, a segmental approach focuses its attention on one specic group of vulnerable poor people: the landless, or tribals, or women or any other. However, even this can be limiting since many of the poor have little in terms of human endowments and need investments in nutrition, health, education, vocational training and they need to be organised into producers groups and cooperatives, before they can benet from micronance or livelihood promotion efforts. While some see this as merely a matter of changing the resource allocation priorities of the government, others see it as a more radical task. They feel that unless the poor are empowered and assert themselves, they will never get their rights. The rights-based advocacy is the hallmark of the movement led by Medha Patkar of the Narmada Bachao Andolan. The Patna-based National Association of Street Vendors of India, is yet another example of a group pushing for a rights-based approach to livelihood promotion.
3.2.1 Supporting Livelihoods of Vulnerable Segments through Micro-nance Recognising that capital was a major bottleneck for enhancing the income levels of vulnerable segments of people, efforts have been made to enhance access to capital for such groups. Various nance corporations for scheduled castes, scheduled tribes, backward castes, minorities, women, and so on, were created to make nance available to these segments. But these institutions have done badly due to over-subsidised loans and lop-sided planning.
In India, the strategy of using micro-credit to generate livelihoods for the poor was adopted by the government in a big way. In the early 1970s, this started with the Small Farmers Development Agency, and in 1976, with the setting up of the network of Regional Rural Banks (RRBs), to serve marginal and small farmers and artisans. The nationwide Integrated Rural Development Programme (IRDP) was also based on the idea of offering subsidised loans
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to the poor for acquisition of assets. The experiment failed, even though Rs. 56 million worth of loans were disbursed. Some of the reasons for this were leakage of benets to people who were not poor and even to those who sanctioned loans, and lack of backward and forward linkages. Loan repayment rates were an abysmal 20%. Disillusionment with the IRDP led a number of NGOs working in livelihood promotion, such as MYRADA and PRADAN to come up with alternative ways to enable the poor to access credit from banks. The Reserve Bank of India and NABARD approved the experiments with Self-Help Groups in 1992, which led to a pilot project of the bank lending to SHGs. The NGOs took the lead in linking SHGs with banks in Tamilnadu. This was evaluated in 1995 and found to be worth replicating nationwide. However, banks were reluctant, and it took MFIs (Micro-Finance Institutions) such as BASIX to show the way on linking SHGs. Till 1998, MFIs were the leading lenders to SHGs. In 1999, the recommendations of a task force, coupled with the impetus given by NABARD and state governments like AP, led to a steady increase in bank linkage with SHGs. By 2007, over 2.9 million SHGs with over 41 million members had received a cumulative Rs 180.4 billion in credit from banks. The SHGbank linkage programme became the predominant method of extending micro-credit in India. Subsequently, a second track developed in micro-nance where the micro-nance institutions (MFI) lent to the poor, either through SHGs, Grameen style groups, or joint liability groups, or even to individuals. SEWA Bank, SHARE, CASHPOR, Spandana and BASIX are examples of such MFIs. A number of NGOs built up substantial direct portfolios, supported by apex lenders such as the Rashtriya Mahila Kosh and the SIDBI Foundation for Micro credit and others. Later, a third track gathered momentum, mainly in AP, with Mutually-Aided Cooperative Societies (MACS) for thrift and credit, some arising out of SHGs and others directly of members. A detailed case of BANDHAN is presented in the next Module, which details its attempts to impact livelihoods through micro nancing.
3.2.2 Supporting Livelihoods of Vulnerable Segments through Human and Institutional Development In some ways, this has been the unstated strategy of a large number of NGOs, which have been working in the area of income generation for the poor. For example, the Association for Sarva Seva Farms (ASSEFA) works with very poor landless people, mostly belonging to the scheduled castes, scheduled tribes and minorities, who received some land as a gift under Bhoodan. Such land was mostly degraded, rocky, undulating, un-irrigated and difcult to cultivate. ASSEFAs strategy was to win the condence of the people, survey the land and identify water sources. They then drew up a project proposal for land reclamation, irrigation development and cultivation. 3.2.3 The Rights-based Approach to Livelihoods of Vulnerable Segments Some believe that poverty is not just an economic phenomenon, but results from structural inequalities bolstered by a feudal, caste-based social and political structure. They want to address poverty and inequity by goading the poor to demand their rights and entitlements, engage in militant struggles and also use the constitutional mechanisms such as the courts, human rights commissions to obtain their rights. The Chhatisgarh Mines Mazdoor Sangh, led
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by the late Sankar Guha-Neogy, who successfully gained minimum wages and work security for thousands of contractual mine workers in the Dalli Rajhara mines, which feed the Bhilai steel plant, is one such example. Likewise, the Kashtakari Sangthana in the tribal district of Thane in Maharashtra struggled to ensure minimum wages for farm work. They also work in neighbouring industrial estates and construction sites. In Gujarat, the Behavioural Science Centre worked with dalits to ensure that they got minimum wages and also the right to till their own lands. In Uttaranchal, Chandi Prasad Bhatt organised villagers to protect their forests from felling by contractors, by hugging the trees in what became known as the Chipko Movement.
3.3 Sectoral Interventions

3.3.1 Intervention along a Sub-sector What is a Sub-sector? Sub-sector is the network of farms and rms that supply raw materials, transform them, and distribute nished goods to a particular consumer market.
It cuts across traditional understanding of Sectors: For example Soya cultivation (primary sector), its trading (tertiary sector) and its processing into oil and de-oiled cake (secondary Sector) and nally retailing it (tertiary sector) together constitutes Soybean Sub-sector. Groups of Commodities with common procurement, processing and distribution channels can form a sub-sector: For example, red gram and lentil together are part of the pulses sub-sector. Though the production systems in rural India are highly fragmented and diverse, the rural economy has ourished around a growth sub-sector and its related and support industries. One of the best examples of this is soybean in MP. Historically, it can be seen that some of the most signicant interventions in rural livelihood promotions have been around a sub-sector. The White Revolution, supported by the National Dairy Development Board, and the support for egg production by the National Egg Coordination Committee, are prime examples of interventions in a sub-sector. However, it is difcult to ensure that the poor benet by sub-sectoral strategies alone. A sub-sector intervention is an attempt to enhance the share of the primary producers in a Rupee of revenue from the ultimate consumer. By resolving the bottlenecks, so that the poor can participate in different parts of the value addition chain of a single commodity, such as oilseeds, milk, would be helpful in ensuring benets accrue to the poor. There are several facets, which need looking into, for the sub-sector to generate large number of livelihoods and smoothly pass the larger proportion of the value addition to the primary producers. These include: Market: demand conditions Basic agro-climatic conditions or, natural conditions
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Value addition to a commodity happens through multiple stages. For example after harvesting the Soybean, it is cleaned and packed. This is some value addition that has taken place. Then it is traded and collected at the market yard. That is again another value addition. Then it is traded, processed, packed, and retailed, before it is nally consumed. These are different stages of value addition. Different economic players add value at different stages of the value chain. Value can be added by changing Form (Soy bean to Soy oil) Space (from farm gate to city) Time (from harvest season to lean season) Infrastructure Capital in various forms Technology; Knowledge; Research People, their skills and attitude, and how they are organised Policy and regulatory framework Inefciencies, in any of these elements can block ow of resources and hinder number of livelihoods supported by the sub-sector.
Sub-sector intervention, therefore, involves: Detailed study of the sub-sector, identifying Demand prole: is it growing or stagnant, what are the prospects? The whole value addition chain Various players who are involved in value addition Technology used for each stage of value addition Identifying the bottlenecks in each stage of value addition, and the key players involved in that stage of transformation Identifying the possible interventions that can help overcome the bottlenecks, in consultation with the key players Motivating the important players to take necessary action and working with the key stakeholders, including the gram panchayats, to resolve growth constraints Providing various transformation support; such as strategic reorientation to the market and livelihoods; building consensus, developing systems of information processing and sharing among key stakeholders. Continuously scanning market opportunities to tap into demand, using secondary sources and giving this feedback to the various stakeholders. Continuously monitoring the bottlenecks and informing the same to the agency for identifying any change in intervention when needed Similarly, intervention can also be made into a vector, which inuences many sub-sectors. For example, water is a vector, which inuences not only cultivation of food crops, but also animal husbandry, industrial activities and even tourism in an area. This methodology has been discussed in detail in Module 4.
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3.4 Holistic Approaches to Livelihood Promotion

Livelihood promotion is a very complex endeavour. Although many development organisations have attempted to extend a wide variety of services, there are few, which have attempted to address it fully. One good example is the Self Employed Womens Association (SEWA), which has over 750,000 members. The range and scope of SEWA activities were broadly touched earlier in this chapter, and some details are provided here: Financial Inclusion Services (FINS): Micro-credit by itself is helpful for the more enterprising poor people in economically dynamic areas. Less enterprising poor households need to start with savings and insurance before they can benet from micro-credit, because they need to cope with risk. Savings and credit through the SEWA Bank, district level selfhelp group federations linked to the SEWA Bank and insurance services through Vimo SEWA. Agricultural/Business Development Services (Ag/BDS): The staff from SEWA take up livelihood identication in the retail outlets and the market facilitation centre, which then informs various occupational cooperatives about the market opportunities. The producers are also provided a number of training programmes in both technical and commercial aspects of their occupation, and they are also linked up with input suppliers and equipment makers. SEWA also runs a chain of retail outlets for marketing members products, and a market facilitation centre to link them with overseas customers. Institutional Development Services (IDS): For engaging the marginalised and poor in the economy, who are generally dispersed and disaggregated, it is essential to bring them together as a group. Institutionalizing will bring stability and sustainability. SEWA itself is a registered trade union and places a lot of emphasis on member organisation and member education. It has also adopted the cooperative form for organising those of its members who need to come together for their work on a day-to-day basis. SEWA also undertakes policy research and advocacy work. It has collaborated for decades with researchers in the eld of gender issues, informal sector and micro-nance, and through them inuenced thinking and policy. Ela Bhatt has been a member of the National Commission on Labour and also a member of the Planning Commission of India. As a Rajya Sabha MP, she has worked actively to draw attention to the cause of self-employed, poor women. There is no better example of holistic livelihood promotion in India than SEWA. There are other examples, such as the NDDB, CDF, SIFFS, BAIF, MYRADA, and PRADAN, all of whom have used different combinations of this strategy. It is possible to conceptualise this work in the form of a Livelihood Triad, as shown in the following diagram. The Livelihood Triad includes the following services.
Fig 3: The Livelihood Triad

Institutional Development Services (IDS)
Financial Inclusion Services (FINS)
Agriculture / Business Development Services (Ag/BDS)
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The BASIX Livelihood Triad includes the following services: FINANCIAL INCLUSION SERVICES (FINS) Savings: (Direct and as Business Correspondent) AgricUltUre / BUsiness DevelOpment Services (Ag/BDS) InstitUtiOnal DevelOpment Services (IDS)
Productivity Individual level awareness, enhancement through skill and entrepreneurship increase in yields or development, building reduction in costs solidarity and trust Risk mitigation (other Formation of groups, than insurance) federations, cooperatives, mutual benets, etc. of producers Local value addition Accounting and management information systems using IT Building collaborations to deliver a wide range of services Sector and Policy work analysis and advocacy for changes/reforms
Credit: agricultural, allied and non-farm, short and long-term Insurance for lives and livelihoods - health, crop, livestock, micro-enterprise assets Money transfer, for migrant workers Commodity derivatives Financial orchestration (arranging funding from various sources)
Alternate market linkages - input supply, output sales Diversication from farm to allied and non-farm activity
The rationale behind this is as follows: Micro-nance (including savings and insurance) in general and Micro-credit in particular, are helpful for the more enterprising, amongst the poor in economically dynamic areas. However, for poorer people in backward regions, a whole range of other livelihood promotion services (input supply, training, technical assistance, market linkages) are needed. Likewise, it is not possible to work with poor households individually as they need to be organised into groups, informal associations and sometimes cooperatives or producer companies, all of which require institutional development services.
4. Understanding Income of a Household

Though economic well-being is not a sufcient condition for enhancing livelihoods, it is an essential element. It may come about by enhancing income, reducing expenditure, creating an asset base or minimising risk.
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Any household always tries to maintain a balance between income and expenditure, or between income portfolio diversication and the risks involved in such a diversication. The gure below illustrates this balance maintained by any household between Income and Expenditure on one hand, and between Creating an Asset Base or Diversifying Income Portfolio and Reducing Activity Risk on the other.
Fig 4: Factors that Need Balancing to Enhance Household Income

Expenditure Income
Risk
Income Portfolio Diversication
Let us try to understand the net economic benet that one gets from the activity using a simple example. However, we must remember that most households, especially the poor, are engaged in multiple activities. To understand it in a simple way, net benet from an activity is: (Volume of Production X Price of the output) - Costs X Risk
For example: If a dry- land farmer produces 4 quintals of millets on his 1 acre land, which he sells at Rs. 1,100 per quintal, the Rs. 4,400, that it fetches him in all, is not her/his total income. To produce this millet, s/he would have used 10 kg of seeds @ Rs. 20/kg that would have cost Rs. 200. S/he may have used 1 cartload of manure. Had s/he not used this manure, s/he could have saved Rs. 450. S/he may have paid a lease rent of Rs. 1,000 for the land for the whole year. Therefore the net benet s/he would have derived from this activity, would be: Rs. 2,750 that is (4 Q Millet x Rs. 1,100/ Q) - (Rs. 1,000+ 200 +450) (Production x Price) - Costs We must remember that for some people, especially the poor with less, or almost no assets, the only output is their labour and the price that they get for it is the wage. For such a person, the relation will be as follows: (180 days of employment x Rs. 40 /day wage rate) (Rs. 5,000, the cost of keeping the body alive) (Production x Price) - Costs This means, a net return of Rs. 2,200 for the year. We must not forget another dimension of cost, which is risk. Remember that uncertainty also has a cost. Often the high uctuations in production and/or price drain the resources out from a dry-land farmer. These uctuations are often referred to as risks.
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Let us try to understand this with an example. Say, in the dry-land area above, once in three years, there is a dry spell after the rst showers of monsoon. As a result in those years they have to sow again. Thus, from the 4 quintal millet that the farmer gets, s/he keeps aside 20 kg as seed for the next year, though s/he needs only 10 kg for sowing. S/he keeps the 10 kg balance, in case, there is any eventuality that leads to sowing again in that season. Thus, actual cost of seeds for the farmer becomes Rs. 400 (for 20 Kg @ Rs. 20/kg), though it could have been only Rs. 200. Now, let us examine how we can increase her/his income, or net economic benet from this activity. There are several choices: Increase the Volume of Production: Could be done through productivity enhancement efforts, introduction of new technology, or helping them get higher number of days of engagement as labour, among others. Increase in Prices: Could be done by accessing different markets, reducing the number of layers in the market, or doing some value addition at the local level, or negotiating a better wage rate. Improve Quality: As price is often a function of the quality of the produce, improving quality, or matching it with what the market wants, can also enhance price, and thereby income. Reduce Costs: Could be done through better package of practices, improved technology or enhanced efciency, among others. Reducing Risks: Given that risk is a major cost, especially for the vulnerable segments of the society, reducing risks of production, or of price, can also help improve the livelihoods of the people. The following section builds on these principles of livelihood promotion.
4.1 Livelihood Promotion at the Household Level

Looking from the livelihood perspective is an alternate way of looking at lives of people. This view recognises income as an essential, though not sufcient, condition for improving the quality of life. In contrast to income generation viewpoint, which looks at inputs and outputs of different activities, separately, the livelihood viewpoint looks at the portfolio of activities that the members of a family are engaged in, as a complete system of managing the household. In this view, the people and their family are the unit of analysis and not an economic activity.
The Micro-diversication Pattern of Livelihoods: A Study by BASIX in Andhra Pradesh for the Overseas Development Institute, London
The study looked at 31 cases of micro diversication taken from two agro-climatic regions, namely Telangana and Rayalaseema regions of Andhra Pradesh. The choice of districts is deliberate, Medak in Telangana region and Anantapur in Rayalaseema region. Anantapur district showed an interesting pattern of diversication. To cope with the uncertainties of the rain fed agriculture, the predominant occupation of the district, people adopted dairy farming as a supplementary activity without giving up
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agriculture. This was also facilitated by the government programmes, presence of AP Dairy Development Co-operative Federation and support agencies like United Nations Development Programme. With a large number of people adopting dairy farming, the sub-sector itself got a boost in the area, with many people shifting from farm base to trading of milk as their rst non-farm activity, slowly moving into tea stalls and to small restaurants. However, in spite of such diversication it was observed that all people based their livelihoods on a bundle of activities, with more than 50% people reporting being involved in three or more activities. Medak, which is much closer to the state capital and economically burgeoning city of Hyderabad, showed a different pattern of diversication. Many more diverse opportunities had come up in this area, allowing people to take up different routes of diversication. While some farmers chose to scale up existing cropping pattern of a mix of food and cash crop, some shifted to sugarcane cultivation. People also took to a wider variety of non-farm activities, including various services such as electric motor repair shops, whose demand had emerged in the faster growing economy. In this area too people supported their livelihoods through a bundle of activities, with 67% people pursuing three or more activities, none of which could individually support the whole family, in spite of being in an area that was economically better-off. The diversication process in both the regions reveals the following: A familys sustenance is maintained by a bundle of activities. Of these, one activity is a major one, where most of the family members contribute in some form or the other; and where investments have generally been made over time. The decision to choose the subsidiary activity is dependent on variety of factors, both internal and external to the family. In the subsidiary activity, one or two members were employed and minor investment is done to scale up. Most of the subsidiary activities taken up by the family are the one most common in the area. Pursuance of a mix of activities show a strategy of both income stabilisation and risk mitigation by the households in the rural areas, irrespective of the level of development. Development of a particular sub-sector in each district is evident. In Anantapur, most of the people were either in production or vending of milk. In Medak, there has been outsourcing of beedi rolling work to women in the villages by beedi companies. One of the most critical considerations in taking up a diversication decision was availability of additional hands at the household level. It was also observed that heads of family and parents of marriageable girls were risk averse and avoided taking up diversication from farm to non-farm activities. For these people, even the rates of failure in adopting
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new activities were lower. Investment in land is still considered as the means of creating assets and a means of savings for a family, and this reasoning is more pronounced within the farming community. People with some form of a safety net, either larger asset base or in the form of a regular earning member attempted diversication more often than those who did not. Diversication decisions are often due to unforeseen circumstances. In these situations, local institutions play an important role. Agro-climatic conditions, especially drought, often inuence the diversication decisions in dry land regions. The role of markets and infrastructure development has been reinforced, especially in taking up new activities. Diversication in an area was highly inuenced by the general economic growth in the area, and growth of any specic sub-sector in the area.
4.2 Enhancing Income from the Main Livelihood Activity

Though most households have a portfolio of livelihood activities, they usually practice one or two main activities. Let us examine how a producer can increase her net economic benet from this activity.
4.2.1 By Increasing Volume of Production Production can be increased either by increasing scale (such as area under cultivation, number of animals, number of handloom products or their volume, or shop space). Another way of increasing scale, is by increasing productivity, which means additional output per unit input. The other means adopted, is by diversifying into other activities- related or unrelated, depending on the circumstances. It depends on both market and resource opportunities, as well as on the risk taking ability of the household.
A study taken up by BASIX summarised in the box item above [The Microdiversication Pattern of Livelihoods: A Study by BASIX in Andhra Pradesh for the Overseas Development Institute, London], gives an overview of the factors inuencing such diversication decisions. This can be done through various productivity enhancement efforts: adoption of better technology, improved package of practices, better training, supply of better seeds, fertilisers and other inputs. This was the thrust of the Green Revolution.
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Later, it was repeated in the case of soybean, whose production went up from nearly zero to over ve million tons per annum, in two decades. In case of nonfarm activities, productivity can be enhanced by improved tools and equipment, such as frame looms in place of pit looms and potterwheels with roller ballbearings and so on. For example, the UNDPs project Operation Mojdi introduced left-right distinction (between the two pieces in the pair, which was traditionally not practised) so now the design of shoes has been incorporated in the production of traditional footwear (Mojdis) in Rajasthan, through RUDA. In Kerala, SIFFS introduced outboard motors on country shing crafts (kattumarams), thereby increasing the reach of the shermen in the sea, increasing their daily catch. In the service sector, increasing the skills of workers can enhance production and productivity. For example, in APSERP, migrant construction workers were trained in masonry, trebling their daily wages.
4.2.2 By Increasing Price Realised One of the reasons of inadequate income is that producers are not able to realise a fair price from the sale of their produce. This may be because they do not have adequate holding capacity, or have to use intermediaries.
The price realisation can be increased either by exploring alternate markets and market channels, or by value addition at the local level. Instead of selling millets in the local markets, it could be sold in a bigger market, which could fetch the farmers a better price. Alternatively, instead of selling it to the trader, they could sell it directly to the processing company. A third option could be to market grain instead of selling them in the form of cobs. Instead of increasing the price, helping people get an assured price may stabilise their income. This can be achieved through forward sales, or its more modern version futures contracts. A NGO, Janaarth, has set up a commodity trading operation in Aurangabad district of Maharashtra for this. Some companies, such as Pepsi, Rallis and Hindustan Lever have also entered into contract farming arrangements, which offer the farmers an assured price for a specied quality. Improvement in the quality of the produce is another way to get a better price. For example, Dastakar, a NGO and Fab India, a private company, have both worked for decades to improve the designs and quality of crafts and textiles produced by artisans and weavers. This has helped the weavers realise a higher price for their products.
4.2.3 By Reducing Costs Reducing the cost of production can also be a way of increasing effective income. Any cost, which proportionately increases per unit of production, is called variable cost. It can be reduced by efcient use of resources and introduction of new technologies. For example, adoption of Integrated Pest Management (IPM) techniques often reduces the cost of plant protection. Costs can also be reduced by collective purchase of inputs, which also ensure
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timely supply and quality. An example of this is seen in the work done by BASIX with cotton farmers in Adilabad district of A.P. There are certain costs, which do not increase directly with each unit of production. For example, the rent of a milk collection centre is xed even if 100 litres per day are collected or 250 litres per day. Though difcult, livelihood support agencies can try and reduce xed costs as well. This is possible by developing a network of service entrepreneurs, who provide various inputs, services and marketing support. An example of this is seen in tassar cultivation where PRADAN has intervened, in Jharkhand. Here, the production of disease free silk cocoons is managed by private grainages (tassar cocoon production units).
4.2.4 Reducing Risks in the Main Livelihood Activity Reducing risks in various economic activities is another way of improving incomes. There are two broad methods of risk mitigation the physical methods and the nancial methods. For example, in crop cultivation, deep ploughing in summer, timely sowing, protective irrigation during gaps in the monsoon rains, pest control measures, etc. are all physical methods used to minimise or eliminate the risk of losing either part, or all of the crop. In animal husbandry, vaccinating animals is a form of risk mitigation.
Financial risk mitigation methods involve insurance and hedging through derivative contracts (futures, options). While insurance helps with asset and yield related risks, derivative contracts help with price risks. Livestock insurance is a form of asset insurance as it is a risk mitigator against the death or loss of animals, or loss of productive assets. However, it does not protect against the animal going dry or becoming economically worthless. In contrast, crop insurance protects a farmer against reduction in yield of crops due to weather changes, pest attacks, or any other reasons. Derivative contracts are helpful against price risks. These include simple forward contracts, where a farmer agrees to sell, and a buyer agrees to buy a crop, at a particular price on a specied future date. A future contract is more complex but is surer of being honoured than forward contracts. Options contracts are even more complex.
BASIX Introduces Risk Cover Products Lac is a chemical secretion from a forest insect. Insect colonies on the branches are used for propagation in 15 kg units. These are brood lac.
However, as these insects are highly sensitive to weather, slight changes cause serious damage, if the production is less than 9 kg, the cost is also not recovered. BASIX designed a new nancial product with technical assistance from PRADAN. Low Production < 9 kg: all costs borne by BASIX, no repayment of loan, works as insurance Average Production (9 to 5 kg): Loan repayment, works as loan High Production ( > 45 kg): Sharing produces, works as venture capital
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4.3 Increasing Incomes in Diversied Portfolio of Subsistence Livelihoods (DPSL)

Most households are engaged in a number of livelihood activities. A rich farmer may only cultivate a major crop, and may keep livestock as well. The poorer households generally have a diversied portfolio of subsistence livelihoods (DPSL) that is, each activity by itself does not generate any, or much marketable surplus. Landless households engage in wage labour on farms, may keep some livestock for self-consumption and sale, and may produce some non-farm products such as rope and may migrate part of the year to work as labourers. To increase incomes in case of families with a DPSL is more complex than a single sub-sectoral intervention, such as in dairy or sericulture. But the advantage is that it enables poorer segments of the population to enhance their livelihoods. MYRADA has been using this approach in a number of its projects, where multiple interventions are aimed at the same poor household all the way from vegetable cultivation in homestead land, to backyard poultry, goat keeping, improving breeds of scrub milch cattle, and encouraging non-land based activities such as roof tile making.
4.4 Reducing Avoidable or Wasteful Expenditure

One of the characteristics of poor households is that they incur a lot of expenditure, which is avoidable and even wasteful. For example, a poor household often buys items of consumption in small quantities at a time and gets charged a higher rate per unit. If a number of households could pool and buy together, this increases their purchasing quantities and they could all get the same item cheaper. The same holds good for inputs for production, such as seeds, fertilisers, yarn, fuel wood, coal and other raw material. The SHGs retailing initiatives in Nizamabad, AP, through its collective purchase of inputs and consumption items has reduced these expenses with the interventions by GRAM (Gramabyudaya Mandali). Another example of expenditure is on health care. Some of the ailments are caused due to inadequate nutrition, lack of clothing and shelter. Others are caused by lack of clean drinking water, lack of toilets, inadequate personal hygiene and poor ventilation in houses. Poor people tend to ignore small ailments, till these become bigger and require expensive medical care. The reduction in incidence of disease would lead to ability to work more number of days and reduction on medical expenditure. Thus programmes for preventive health care, as well as community nanced curative health care, such as by ASHWINI in Gudalur, Nilgiri hills, Tamilnadu and by the Mahatma Gandhi Institute of Medical Sciences, Wardha, are very useful in reducing these expenses. A third area where expenditure can be reduced is in social customs, such as marriage functions, ceremonies after a death in a family, and so on. While these are essential to maintain their reciprocal social networks, through the right interventions, the expenditure can be reduced. An example is community marriages, which are regularly organised by ASSEFA in Maharashtra and Tamilnadu. Consumption of alcohol is another avoidable expenditure among poorer households. This is common among shermen and mining communities, as also in urban slums. Programmes for
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reducing this, such as the anti-arrack agitation by women in Nellore, AP and temperance programmes by Gandhian NGOs are useful in reducing these expenses. What is remarkable is that the effect of reduction of expenditure through collective purchase of inputs and consumption items, avoiding illnesses through clean water, sanitation, and ventilation; observing economy in social customs and reducing alcohol abuse, can increase the amount available to a household for food, clothing, shelter, education and health by anywhere from 30% to 50%, which is more than what can be achieved by increasing incomes through any other interventions.
5. Livelihood Promotion Organisations (LPOs)

A new type of institution has emerged. Entities under this category are termed as Livelihood Promotion Organisations or LPOs, by us. LPOs are specialised entities, initially promoted by an NGO, or a commercial entity and later owned and managed by the community, registered as co-operatives or producer company, under the recent amendment to the Companies Act. LPOs would be able to perform a number of critical roles, which would supplement the credit role that banks and MFIs are playing. The roles include: identifying promising livelihood opportunities, motivating, training and organising the poor to participate in these opportunities, arranging for credit and infrastructure, establishing the supply chain and the production processes, developing market linkages, seeking appropriate policy changes, stabilising the pioneering units and ensuring wider replication. The purpose or intent is also critical. For example, if a manufacturing industry provides employment for a large number of people, it has the potential to inuence livelihoods. However the efforts are more towards fullling the objective of earning prots, rather than that of creating livelihoods, or generating employment. The following box on SIFFS describes an LPO and the Case, Livelihood Interventions among Marine Fishermen: The SIFFS Experience, in Module 2 provides details on the same.
A Livelihood Promotion Organisation- SIFFS, Kerala 1 The South Indian Federation of Fishermens Societies, Trivandrum, works with a large number of marine artisans, who are also shermen, along the coast of Kerala and Tamil Nadu. Apart from providing technical assistance in terms of improving the shing craft and nets, and providing marketing assistance, it also arranges for credit. SIFFS was under pressure from members to start a credit programme, since existing credit delivery systems like revolving their own savings, and district federations credit system, were not in position to give the needed amount of credit. Banks, on the other hand, do not meet shermen needs and insist on collateral. The credit programmes under SIFFS network (SIFFS, district federations and primary societies) cover purchase and renewal of shing equipment, repair and maintenance of shing equipment, post harvest activities (sh vending, sh processing), food credit, employment diversication and other consumption credit (festivals, marriage, education, hospitalisation, and debt redemption).
1
Drawn from the section on Credit, from the SIFFS website- www.siffs.org
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Additional Resources
Vijay Mahajan and Tom Dichter- A Contingency Approach to Small Business and Microenterprise Development; Small Enterprise Development 1.1 (March 1990). Also available with BASIX, Hyderabad James R Held- Clusters as an Economic Development Tool: Beyond the Pitfalls; Economic Development Quarterly, 10:3:249-261 (August 1996) JC Kumarappa- Economy of Permanence; Akhil Bharat Sarva Seva Sangh, Rajghat, Kashi, 1942 Richard Douthwaite- Short Circuit: Strengthening Local Economies for Security in an Unstable World; A Resurgence Book from Green Books, UK, 1996 A.P. Fernandez, The MYRADA experience: the Intervention of a Voluntary Agency in the emergence and growth of People Institutions for Sustained and Equitable Management of Micro-Watersheds, MYRADA 1993 Bharat Kakade, The Watershed Manual, BAIF E.M.Tideman, Watershed Management, Guidelines for Indian Conditions, Omega Scientic Publishers, 1996 John Farrington, Cathryn Turton and A.J. James, Participatory Watershed Development, Challenges for the Twenty First Century, OXFORD 1999 Ministry of Rural Areas and Employment, Guidelines for Watershed Development, GoI 1994 Our Land, Ourselves, a Practical Guide to Watershed Management in India, Indo-German Bilateral Project 1999 Robert Chambers, N. C. Saxena and Tushar Shah, To the Hands of the Poor: Water and Trees, IT, London Roland Bunch, Two Ears of Corn, World Neighbors Social and Equity Issues in Watershed Management, OIKOS and IIRR 2000 Yogesh Kumar Bhatt, Rajesh Tandon and Prem N. Sharma, Building Farmers Organisations for Integrated Watershed Management in India -A Trainers Manual, PRIA, New Delhi Resource Management in Rainfed Drylands, MYRADA and IIRR 1997 Livelihoods-Key Concepts, ICRA learning resources written by Richard Hawkins, using material prepared for ICRA by Jon Daane Suresh Chandra Babu, Social Safety Nets for Poverty Reduction in South Asia Global Experiences Syed Noman, Rapid Rural Transformation through Voluntary Action
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Module 2
Promoting LivelihoodsSome Examples & Models
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1. An Overview of Common Livelihood Promotion Models and the Nine Cases

Models of livelihood promotion are numerous and diverse, and cannot be summarised in a simple manner. However, some common models can be classied along certain lines:
Table: Select Cases of Interventions, which had a signicant impact on the livelihoods of people from rural areas.
Case No. Case 1 Case Name A Holistic Program For Tribal Development: Learnings from the DHRUVA Experience Watershed plus -Adding Value to a Watershed Program: The AKRSP (I) Experience Livelihood Interventions Among Marine Fishermen: The SIFFS Experience Brief Introduction to the Case Farm/ Non-farm Key Player NGO
Both DHRUVAs intervention in South Gujarat, illustrates how a local value chain can be built using output of one activity as the input to the other. A variety of support services can be extended at the local level by involving both the landed and the landless. Watershed management with strong institutional focus by the Aga Khan Rural Support Programme (India) (AKRSP-I) illustrates how watershed development has enhanced a range of different livelihoods in an area. The case of South Indian Federation of Fishermens Societies (SIFFS) illustrates an NGO intervention in the sheries sub-sector. This intervention started by focusing on the marketing of sh, and later on introduction of technology for modern shing techniques. Now SIFFS works on many areas in the value- chain. Both
Case 2
NGO
Case 3
Both
NGO
Promoting Livelihoods- Some Examples & Models
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Case No. Case 4
Case Name BASIXs Intervention in the Milk Subsector
Brief Introduction to the Case
Farm/ Non-farm
Key Player Private Livelihood Agency, State, Co-op Federation
Farm This intervention in the dairy subsector by Indian Grameen Services, a BASIX Group Company is an example of a conscious attempt at promoting livelihoods. It followed a specic process of sub-sector analysis, identication of bottlenecks and feasible interventions to overcome them, which were tested through pilots and by consciously building a Collaborative Polygon Water is a vector. It inuences the livelihoods of not only the people involved in agriculture and related trades, but also of other activities that take root in the blossoming economy. Introduction of irrigation facilities in an area inuences livelihoods in more ways than one. This describes the efforts of Professional Assistance for Development Action (PRADAN) towards organising community managed irrigation projects of farmers in the Eastern Plateau region. Often livelihood opportunities for the poor are constrained by their rights (or absence thereof) to various resources. Provision of access to resources such as nontimber forest resources, or even space to hawk their products in a city, could be another vector that can protect and signicantly develop existing livelihood opportunities. This case of bidi-rollers organised by SEWA, illustrates how demanding rights granted to them by the State added to their earnings, in addition to strengthening their solidarity. Farm
Case 5
Community Managed Irrigation Systems: The PRADAN Experience in the Eastern Plateu Region
NGO- DRDA
Case 6
SEWA Union: Organising Women BidiRollers
Non-farm
NGO, State
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Case No. Case 7
Case Name
Brief Introduction to the Case
Farm/ Non-farm Non Farm
Key Player
Nidan: Voicing the Livelihood Issues of Street vendors
The case illustrates the advocacy approach taken by a Patna-based NGO NIDAN, in securing livelihoods of street vendors. The strategy of organising, mainstreaming and educating them on their rights and entitlements, inuencing state and municipal policies by linking them with national and global networks has had a signicant impact on their livelihoods. The Livelihoods of the weavers are promoted through a cluster development approach, by facilitating institutional development processes and through effective forward and backward linkages. The cluster approach enabled supply of raw materials at competitive rates and a reasonable market price for the goods produced The micro credit operations of Bandhan demonstrate how livelihoods can be created for the poor, and how large scale wage employment for the landless and other resource poor is possible. The strategies adopted signicantly strengthened the local economy, to empowerment of women and to the wellbeing of many families.
NGO
Case 8
Cluster Development Project of Chanderi
Non Farm
GO-INGO
Case 9
Bandhan: An Organization of Hope for the Poor
Both
NGO
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Case Study 1
A Holistic Programme for Tribal Development: Learnings from the DHRUVA Experience
Gitali Thakur1
Abstract
Poor people are often engaged in more than one activity for their livelihoods. As they have little or no marketable surplus from a single source, engaging in multiple activities at a time helps to maintain their cash ows. Organisations sometimes intervene in a local economy by weaving many interdependent activities that strive for local self-sufciency. The intervention by DHRUVA in the tribal areas of South Gujarat, illustrates how a local value chain can be built using output of one, as the input of the other. A variety of support services can be extended at the local level by involving both, the landed and the landless. It also illustrates how a holistic approach, rather than a sectoral approach, helps enhance the livelihoods of the poor and vulnerable sections of society.
1. DHRUVA
DHRUVA (Dharampur Utthn Vahini) is a NGO working in southern Gujarat. It is promoted by, and is an associate organisation of Bhartiya Agro-Industries Foundation (BAIF). BAIF works in eight states in India through several NGOs promoted by them. The late Manibhai Desai, who had worked closely with Gandhiji during the Freedom Struggle, set up the Bhartiya Agro Industries Foundation (BAIF) in Pune, in 1975. Since then its focus has been on creating gainful self-employment opportunities for the disadvantaged rural communities, in order to ensure sustainable development. To achieve this, BAIF works directly at the grassroots with NGOs promoted by them, through development, research, effective use of local resources, extension of appropriate technologies and by upgrading skills and capabilities with community participation. DHRUVA was established in 1995 as an independent NGO by BAIF after working in the southern Gujarat region for more than 15 years. Dhruva was involved in pioneering work with
1
itali Thakur is a freelance development professional based in Kolkata. This case has been revised and re-written by G M. Srini Babu, Faculty, The Livelihood School.
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the tribals with the able support of Sri. Arvind Mafatlal, a philanthropist and industrialist. Today DHRUVA works in 200 tribal villages in the districts of Valsad, Navsari and Dangs in south Gujarat and also in the Silvassa district of the Union Territory of Dadra & Nagar Haveli. Vansda block was selected based on a study conducted by IIM Ahmedabad in the year 1975. The study highlighted the low nutritional status of the block, where tribal families could manage a square meal in only 200 days of a year. Slowly the operations of Dhruva were expanded to the Dharampur, Kaprada area of Valsad District and subsequently the Vansda block was delimited under Navsari district.
2. The Context
The tribal population of India constitutes around 8% of its total population. There are about 67.8 million tribal families residing in 94,000 villages spread over 500 development blocks of the country. Traditionally, the tribal population has been mainly dependent on forests, livestock and agriculture for their livelihoods. But rapid urbanisation and the globalisation process has led to dwindling forest resources, shrinking water tables and poor fuel and fodder supply, which have in turn, have jeopardised agriculture and livestock productivity as a whole. More particularly, it has hit the tribal populations because of a lack of bargaining power and their scattered, isolated habitations. Besides, the tribals have fragmented, small and marginal land holdings with little, or no irrigation facilities that lead to low productivity. The income from these sources is not adequate to sustain their families. Most of them, therefore, migrate to nearby towns for subsistence. The operational area of Dhruva, comprising of Ahwa taluka of Dangs district, Dharampur, Kaprada taluka of Valsad district, and Vansda taluka in the Navsari district of south Gujrat is mainly inhabited by tribals. The region is characterised by steep, undulating, inaccessible terrain, with heavy rain fall up to 2500 mm, with high run off. The habitations are scattered and remote. Only one third of the area is cultivable with limited irrigation facilities. A typical tribal family living in this area would have three, or ve acres of land, of which only 2 acres would be cultivable. The soil condition is poor, and therefore even with heavy rainfall the productivity is pretty low. The annual livelihood cycle of the tribals of this region begins with cultivation of one rainfed paddy crop and nger millets during the monsoons, and after this spell of subsistence farming is over, they migrate to nearby towns- Vapi, Surat or Ankleshwar, for six to eight months. The income from work done during the period of migration is meagre with high overheads. The migrations also destabilise their family life creating many social problems. DHRUVAs intervention was therefore aimed at reducing migration, by creating self-employment avenues in their area and they started the Wadi programme with this objective.
3. The Intervention
The programme has a core activity in the form of the Wadi a horti-forestry orchard raised by the tribal family on sloping uplands. In this model, the central focus is on the Wadi.
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The other development interventions are built around the Wadi. The other programmes that converge on this intervention around the Wadi are: Agri business development, water resources development, soil and water conservation, dairy husbandry promotion, development nance, and improving quality of life (health & sanitation, education, and providing potable drinking water).
3.1 What is a Wadi?

Wadi in Gujarati means a small orchard covering one to two acres. The Wadi may be of mango, cashew, or amla, or any other fruit suitable to the region, or a combination of these fruits. In the south Gujarat region, a typical Wadi on one acre of wasteland has 40 cashew and 20 mango trees bordered by a peripheral plantation of forest trees and bamboo, providing timber, fodder and Minor Forest Produce (MFP). Two or more varieties of trees are selected in the Wadi programme to minimise biological and marketing risks.
3.2 The Programme Evolution Process

The idea of development of Wadis evolved out of the numerous, close dialogues that the team had with the community. They learnt that most families had around one acre of sloping, low-productive lands. Most people also had some skills as they used to work in the mango orchards of orchard owners in their area. Besides this, the tribal communities are intrinsically close to trees and forests. The programme started in the year 1984 with only 44 farmers.
3.3 The Programme Design

The Wadi programme is implemented through a Four-Tier Commodity Cooperative system. The fourth-tier, which was recently added, is the consolidation of all the Co-operatives of BAIF into a Producer company that takes care of the trade channels in the pan-Indian market. The rst tier consists of the Wadi owners, who are the primary members of the cooperatives. Unlike any other cooperative, the landless are also the primary members of the cooperatives. As mentioned earlier, this intervention has been designed with a strong focus on the landless, and they have been involved in offering the most essential support services for value-addition, as part of the programme. The second tier in the system is made up of the Gram Vikas Mandals (GVMs) at the village level. All the Wadi owners are members of the GVMs. The GVMs are responsible for planning and executing the Wadi programme in their villages. The planning and execution group (Ayojan Samiti) made of 6-11 members is part of each Gram Vikas Mandal. GVMs are instrumental in running the Krishi Sewa Kendras, and are the procurement points of cashew and mangoes from the wadi farmers. The produce from the villages is supplied to the cooperatives. However, the GVMs also buy foodgrains from the open market and the SHGs, and sell it to the cooperatives. The credit facilities are also devolved through 201 GVMs
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that have a membership of 2676.The responsibility of generation, appraisal and recovery of the loans lies with the GVM. The accountant is paid on the basis of a performance-based incentive system for recovery of loans. The GVMs are also responsible for mobilising farmers to take up wadi programmes with its assistance of subsidy and credit products. The third tier has mandal or taluka level cooperatives where post-harvest, part-value addition is done locally. It then goes to the Vasundhara Co-operative, which is the marketing body of all cooperatives. 12 cooperatives with primary membership of 18,000, and with 3000 non-members, transact with Vasundhara. Advanced processing and packaging is done by Vasundhra, which has a retail outlet as well. Vasundhara operates as a mother co-operative in the Cashew processing value chain. Cashew procured from all the co-operatives is processed and packed, and marketed in the name of Vrindavan, through the network of retail outlets. While the operating structure in case of cashews and its processing is as described above, the Vasundhara Agri-Horti Producer Company Limited (VAPCOL) pitched for marketing fresh mangoes. However, processed mango products like pickles, mango pulp etc are marketed by Vasundhara under the same brand Vrindavan. All together there are 12 co-operatives operational in the intervention area. Each co-operative has an entry level fee of 1 Rs, with a share of Rs 50 for the members. The co-operative has an Advisory Committee and a Management Committee in which the Dhruva staff are nominated as members. Dhruva extends capacity building support to the cooperatives towards developing self-sufciency. Vasundhara is planning a new setup in Lacchakhadi with a plan outlay of 1.8 crores, which has been leveraged from the Bank of Baroda. The fourth tier has a producer company that has been registered at Pune under the name Vasundhara Agri-Horti Producer Company Limited (VAPCOL). It has three operational, licensed branches. One of the branches is located at Lacchakhadi, and the other two are at Udaipur in Rajasthan, and at Peth in Maharashtra. All the co-operatives formed by Dhruva have been federated to VAPCOL with one member from Vasundhara on its board. The Producer Company was oated with the idea of enabling inter-state transactions and to help re-route prots to the farmers, irrespective of the state to which they belong. The programme is directed towards involvement of the masses following the Gandhian approach- Not mass production but production by the masses. Therefore, there has been an overriding emphasis on decentralised and well-disseminated activities with adequate centralised efforts for providing technical, nancial and managerial support and inputs for capacity building - whether it is for raising nurseries, or for processing cashew-nuts or mangoes.
3.4 An Integrated Model

The Wadi programme of DHRUVA aims at creating employment opportunities at the local level while strengthening the local economy.
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The Wadi approach is essentially a land based intervention and therefore would have only beneted the landed farmers, if it were not carefully planned. Since developing the local economy necessitates retaining more and more of the value addition in the local area, it calls for involving the entire rural community-landed and landless, women and vulnerable classes, within its intervention strategy. For this to work, it entails building linkages within the context of the local economy. These linkages have been built very strategically in DHRUVA. Both the landed and the landless are members of the cooperatives. While the landed farmers manage the orchard and also toil there, the landless inhabitants are also employed as labourers on the orchards and for post harvesting value-addition. This kind of a unique arrangement of having both the landed and the landless in the same cooperative with equal rights suits the landed too, as they understand the importance of the contributions from the landless in value-addition. For example, one kg of raw cashew-nut fetches Rs.35-37 only (depending on its quality) to the farmer. The same cashew-nut gets a market price of Rs. 390-430 per kg after processing and packaging. Likewise mango fetches an average of 10-15 Rs per kg, whereas mango pickle fetches a rate of Rs 80 per kg. Thus the actual value-addition takes place only in the post-harvesting period. Because of the cooperative system, much of this value-addition is retained by the community itself and both the landed and the landless are beneted. Again, the landless are involved in providing inputs for the orchards. The women SHGs of the intervention area make vermin-compost, which the farmers in turn use as inputs. DHRUVA takes a holistic approach to livelihood promotion and considers the family as the point of intervention. It therefore designs programmes that can help the family in a holistic manner. When it realised that much of the incremental income to the community from the Wadi programme was spent outside on health expenses, it started a programme on preventive health for the most common diseases in its intervention area. The local youth, especially women, are trained in diagnosis and treatment of common illness and act as Village Health Guides (VHGs). These VHGs impart basic health education and conduct training sessions within their communities, and refer serious cases to appropriate facilities outside. As part of this programme, the communities were also encouraged to create and tend kitchen gardens, so that their families could have a balanced, nutritious diet. The traditional healers in villages are identied and are provided inputs for operating in the villages through Charak Kendras. The Charak kendra owners form an SHG and have a savings account with each member saving Rs 25 per month. All the 90 traditional healers are organised into clusters, which have been federated into a co-operative named after Dr. Manibhai Desai- MANDASPHA (Manibhai Desai Sahakar Pharmacy). The co-operative has a nursery for rearing 40 species of medicinal and aromatic plant varieties. The traditional healers or Wadi owners are encouraged to grow medicinal plants like lemon grass, tulsi, aloe vera. MANDSPHA procures these plants from the growers for further processing. Provision of potable drinking water and its unhindered supply is assured through Swajaldhara and the Integrated Tribal Development Program. The programme is being carried out in 91 villages with support from Water and Sanitation Management Organisation (WASMO). The role
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of Dhruva is to promote and strengthen the Paani Samities (CBO) for planning, implementing, maintenance and ownership of the community assets that supply drinking water. As discussed earlier, BAIF launched its wadi programme in 1987 in some of the villages around Chondha in Navsari district of South Gujarat. Encouraged by the good results from the wadi programme, the village community joined the Cattle Development Scheme introduced by the government. 75 crossbred cows were purchased under this scheme and a Milk Co-operative was formed in the year 1989, with the active cooperation of the wadi holders. Dairy promotion happens through the provisioning of credit facilities, which are channelised through the GVMs to its members and the SHGs for rearing cattle. The District Milk Co-operative Federation (Vasudhara) has xed its milk routes for procurement of milk and some of the SHGs have come forward and bid for managing milk collection points on behalf of Vasudhara. The BAIF staff also supplemented their work on dairy promotion by regularly sharing technical inputs and know-how on aspects of health and sanitation with the people. This made the people more aware of such issues. An Ayojan Samiti, was formed to take collective decisions and action on issues related to the wadi programme, on improving agricultural practices, health interventions and water resource development. Taking women as the precursors for development in an area, about 8557 women have been organised into 796 SHGs who have managed a savings of Rupees 79.8 lakhs. Apart from micro-enterprise management at individual and group level, the women have established linkages with the Panchayats for making use of various schemes. The women of the project area are also responsible for advocacy in the area of health and education, and this includes raising awareness about AIDS and organising health camps. Poor access to credit for production requirements, as well as for consumption needs, was an endemic problem. Dhruva responded to this issue by implementing Sahabhagi Vikas Yojana (SVY) in 1998-99. Credit is available for farm implements, for farm and non-farm activities, livestock development and water resources development. NABARD renances DHRUVA and the beneciaries avail the loan through the GVMs @ 12-15%. Dhruva charges 3.5 % for its services to the beneciaries. At present (30th March 20082) under the programme, Rs 481.95 lakhs have been disbursed as loans and the net outstanding is Rs 86.11 lakhs with a cumulative recovery rate of 92%. The beneciaries of DHRUVAs credit programme are both individuals and groups. Individuals are mostly wadi owners, landless people, or people not owning wadis. While groups such as groups of wadi owners (GVM members), SHGs (members of GVM), GVMs and cooperatives, also take loans from DHRUVA. The GVMs also act as nancial intermediaries between end-users and DHRUVA, for the GVMs also lend internally to its members at an interest of 12%. This programme is an attempt to pave ways for inclusion of large number of people, with a simple pre2
Annual Report 2008
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requisite that the person should be a share holder in the cooperative and must be a Wadi owner. The programme also is an attempt to create a platform at the village level for nancial intermediation and for fostering linkages with mainstream nancial institutions in the future. Over a 15-year period, the villages have undergone many changes. The various interventions have helped in raising the income levels of the people. This was evident from the number of motorcycles owned by the villagers, the number of pucca (proper) houses and children accessing higher education; if required, even outside the state. However, with this growth in the local economic conditions, the community also felt the need for a market. Responding to this need, DHRUVA created a local market in Chondha in 1997. The following case-let on Chondha Bazaar will give a fair sense of how such local markets play an important role in, not only developing an alternate market for the local people, but also facilitating greater circulation of money locally. These locally managed markets were also responsive to the changing needs of the communities and made many raw materials available locally for their activities, while providing their nished products, access to the markets.
Chondha Bazaar A Community Managed Weekly Market3 Since 1995, the inhabitants of Chondha were toying with the idea of starting a weekly bazaar as an outlet to sell the agricultural produce of the village and adjoining areas and to raise funds for village development activities. However, it was only in 1997, that a need to raise funds for the construction of a village temple triggered this initiative and a village meeting was held to translate this idea into a reality. Some people had misgivings about starting a weekly bazaar but they were won over and this initiative was agged off with support from a majority of the locals.
A Bazaar Samiti (Market Committee) was formed with the selection of one representative member from each hamlet. The Bazaar Samiti decided to hold the weekly bazaar on Sundays to attract bigger crowds and to avoid disturbing the school situated next to the bazaar grounds. Next, the members contacted traders frequenting weekly bazaars. Most of the traders expressed their inability to come as they had well established trading outlets in the weekly bazaars being held on Sunday at Limzar and Mandavkhadak, villages situated around 35 kms from Chondha. The traders however were willing to consider the proposal provided the bazaar was held on any other day except Sunday. The Bazaar Samiti was rm on its decision of holding the bazaar only on a Sunday. Undeterred by the negative response of the traders, the village inhabitants decided to go ahead and hold the weekly bazaar on Sundays, after discussing this issue. On Sunday, 21st December 1997, the rst weekly bazaar was held with local shopkeepers
xcerpts from a case by Jyoti Desai, BAIF Development Research Foundation, Warje, Pune and edited by Vijay E Mahajan, BASIX, Hyderabad.
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and vegetable vendors putting up stalls to sell their goods. Gradually, as more people visited the bazaar, sales picked up and the traders who had initially declined to participate in the bazaar approached the Bazaar Samiti seeking permission to trade in the weekly bazaar. The collective efforts and determination of the village community paid off with the growing sales at the weekly bazaar. In the year 1999, a few traders stopped coming to the weekly bazaar as they preferred trading at Unai, a small town revered as a pilgrim centre. The members of the Bazaar Samiti took this opportunity to encourage the local villagers to take up trading. The members also took upon themselves the task of discussing with the village people the benets of trading in the weekly bazaar. They also advised them on the different items that were in demand in the bazaar, thereby opening up new opportunities for earning additional income within the village. Today, the bazaar plays host to as many as 50 small traders, both women and men dealing in vegetables, grocery, poultry, garments and such other items. On an average, goods worth Rs 50,000 are traded each Sunday. The sales reach a peak during the Holi festival, when approximately 250-300 traders set up makeshift stalls to make the most of the 10,000 visitors thronging the bazaar. Approximately 50 percent of the traders are residents of Chondha, and 80 percent of these are wadi holders. Members of the Mola Amba village community approached the Chondha Bazaar Samiti for guidance to start a weekly bazaar in their village. The village of Hanvetmal, situated at a distance of 12 kms from Chondha also followed suit and have started their own weekly bazaars. A mutual understanding exists with the members of the Bazaar Samiti of Mola Amba and Hanvetmal on the adjustment of dates of the big mela, which signals the reopening of the weekly bazaars. Mola Amba, situated within a short distance of 7 kms, holds the weekly bazaar on Tuesdays, in a spirit of co-operation with the Bazaar Samiti of Chondha. Hanvetmal however holds its weekly bazaar on a Sunday. However, trading is not affected in either of the villages as each caters to a different clientele, with a river acting as the perfect geographical divide.
Weekly Bazaar Benets What began as an initiative to raise funds for the construction of a village temple, has resulted in many unforeseen spin-offs. Apart from raising a fund of Rs.30,000, the Bazaar Samiti provides an opportunity to many budding entrepreneurs, both women and men, from within, and outside the village.
The weekly bazaar is a place where everything is available, obviating the need of visiting distant village bazaars, or the city, incurring additional travel expenses. Laljibhai Kalubhai Padvi, a farmer, is also a trader in earthen pots and pans. He started trading in earthenware because traders coming from outside were not
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interested in dealing in these fragile goods. Laljibhai, who had never traded in such goods before, now stocks earthen pots and pans at home to meet the needs of the villagers. This trade fetches him an additional income of Rs 100 to 200 per week, and around Rupees 2000 to 2500 during the festival of Holi. Kamubehn Lahnubhai, another resident of Chondha cultivates vegetables, in addition to trading other seasonal vegetables, not grown in the village. Apart from selling vegetables in the weekly bazaar held at Chorni and Bopi, now Chondha provides yet another trading outlet, bringing an additional income of Rs 500 per week. The case of Ramilabehn Mastubhai, who developed tremendous condence in her entrepreneurial abilities, is noteworthy. She started by selling small knick-knacks in the weekly bazaar. This experience gave her the condence to start her own shop in the village. She continues to run a stall in the weekly bazaar.
The Bazaar Samiti (Market Committee) The Bazaar Samiti is a representative body of 11 members, each member representing a hamlet in the village. It is an informal body and the members are selected by the villagers on the basis of their faith and trust in their leadership.
The Bazaar Samiti, in consultation with all the members decides the date of the annual village fair- a major event for the locality, following which the weekly bazaars are held every Sunday. This event is given publicity by the Bazaar Samiti by printing pamphlets and informing the traders and villagers in the adjoining areas about the forthcoming village fair. The Bazaar Samiti then discusses and plans the layout of the fair based on the feedback received from the traders and villagers. This involves ensuring adequate parking space for bullock carts and mini trucks, providing drinking water and other amenities and vigilance to avoid mishaps and other untoward incidences. The Samiti members periodically take a feedback from the traders on the sales performance and assure them of the Samitis co-operation and support. Each Samiti member shares information on the meetings of the Bazaar Samiti with the other people in their hamlet, at impromptu gatherings. The Bazaar Samiti recruits a trusted person to collect cess from the traders a nominal amount for availing the facilities provided by the villagers. The cess rates vary according to the size of the stalls. A vegetable vendor is charged Rs 1 while a garment seller pays, Rs 10 as cess. In this way, the Samiti collects around Rs 800 to 1000 each Sunday and close to Rs 10,000 during the festival of Holi. Thus, besides providing a service to the people, the Bazaar has become an important source of income to the Samiti, after meeting sundry expenses. Cess collections are normally the prerogative of the Gram Panchayat and the collections are credited to the account of the Panchayat and are used to full the village needs prioritised by the Panchayat. But in the case of Chondha, the funds are held by the Bazaar Samiti- an arrangement mutually agreed upon by the two
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peoples organisations (Panchayat and the Samiti). This is because the cess collections are included in the funds being raised for the village temple. The Bazaar Samiti has 11 members and they represent Chondha, Kaamal jhari and Bhawara. The Bazaar Samiti has come up with permanent set of 18 stalls, a Tribal Sub Plan fund, and an arrangement for drinking water is being negotiated through WASMO. The temple, which triggered the need for the Sunday market, was completed and opened for use by the villagers on 22nd November 2008. The temple was built with an amount of Rupees 4.5 lakhs, which was raised through the contributions of the villagers of Chondha.
BAIF-DHRUVAs model is based on transferring knowledge and skills to people through their participation. In all its development activities, there is a conscious effort of giving only those inputs that are available locally, and are interdependent on each other. Used as they were to the slash and burn form of cultivation, the tribals of South Gujarat- the Kukanas, Kolchas and Warlis, have been cutting out terraces on hill slopes, digging trenches and water storage pits (jal kunds) to hold water and transplant mango and cashew saplings. The sale of grafts is another lucrative enterprise for the wadi farmers.
Rags to Riches- The Case of Babanbhai Deshmukh Babanbahi and his wife Shantaben were penniless in the early 80s. They were mere farmhands in others wadis, earning a few rupees a week before luck favoured them. They grew paddy and nagli (nger millet) on their one acre of land, which barely fed their family.
At present, Babanbhai has 10 cows and owns a wadi with mango and cashew trees. He now earns Rs 500 a day from milk sales and Rs 25,000 by selling mangoes to the GVM. Babanbhai now runs a girls hostel and a milk collection centre with 80 members. A man who once used to be drunk all the while and underemployed, has became the sarpanch (village chief) of the Ghodmal Panchayat, and also served a term in the Janpad Panchayat. Like Babanbhai, the other tribals of Vansda dared to raise orchards on their waste landsthe wadi, which was once the prerogative of the rich Gujarati and Parsi seths (rich men) and have become entrepreneurial by selling produce and mango grafts. This has raised their status and brought them much needed recognition in their villages.
3.5 The Wadi Programme Today

In all these years - BAIF since 1982, and Dhruva from 1995, DHRUVAs Wadi programme has been implemented in aproximately 12,000 acres of land covering more than 13,000 families. All the products of the Wadi are either sold in the local markets like Chondha Bazaar, or through the Vasundhara Cooperative under the brand name of Vrindavan. The Vasundhara
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From One Acre of Land It is now known that one acre of Wadi gives a farmer an additional income between Rs. 15-20,000 after the sale proceeds by his GVM to the cooperatives. The farmer also gets a share of the prot made by the cooperative after it has processed the produce and completed its sale. In addition to this, the farmer can get more yields from other crops as well as increased quantity of fodder. Some farmers get additional income by raising nursery beds.
Cooperative has been able to sustain its brand image in the market over the years and now has a good distribution network in Gujarat and Bombay. The produce from the villages are collected at the GVM level and the farmers are paid at the source. Mangoes generally go to the local mandis (markets), if a competitive price is obtained, or they go to Vasundhara Cooperative for processing into mango pulp and pickle. Cashew nuts are semi processed and graded at the local cooperative level and then it comes to Vasundhara for labelling and marketing. Marketing is still done only through Vasundhara as the other cooperatives are yet to mature into independent bodies.
The Business Model of Cashew Cashews produced by the wadi owners are collected by the GVMs at Rs 35-37 per kg. The GVMs sell it to the mandal or taluka cooperatives at Rs 38.5 per kg where the processing and grading takes place. From the cooperatives, the cashews are sent to Vasundhara, which sells it for Rs 390-430 per kg, depending on the cashew grade.
Vasudhara redirects the prot margins to the producers in form of second payment during Holi. However the rate list for the season is supplied to all the players in the value chain, well in advance.
Fresh mangoes are marketed by VAPCOL In the last nancial year (2007-08) Vasundhara Cooperative made a prot of Rs 2,19,547.48 from processing and other activities. Vasundhara is also the trade channel in Amla and honey for the Gujarat Forest Development Corporation. VAPCOL earned Rs 3 lakhs as prot in 2007-2008 and it is estimated that it will earn a prot of Rs 12 lakhs in the present year. The prot of Rs 3 lakhs was earned by selling 1500 tons of fresh mangoes to ITC Ltd.
3.6. DHRUVA Staff and Structure

The organogram of Dhruva has an Executive Vice-Chairman from BAIF, a Chief Programme Co-ordinator and an Apex Co-ordination team of 8 that takes care of institutional development, members centrality and gender integration. The work force is anked by 21 engineers and technologists, a 24-member training team, 14 nance specialists, 46 agriculturists, 12 health and sanitation staff, and 9 administrative staff.
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The team facilitates the operations of 11 co-operatives. One ofcial has been deputed from BAIF for the operations of VAPCOL and is also the manager for Vasundhara. The deployment of the project implementation staff is based on cluster basis, which in demarcated on a geographical basis. Each block has about 5-9 clusters with a Cluster Incharge and 6 support staff. The beneciary coverage ranges from 12-15 GVMs and 1200-1500 wadi owners, 45-50 SHGs and 1-2 co-operatives. Likewise every block- namely Dharampur, Kaprada, Dangs, Vansda has a key Resource Person for each block.
4. Impact of the Intervention

At present, there are 201 GVMs with 2676 members, covering 288 villages and 22,675 households. Acreage under plantation is 8843 hectares- approximately 1 acre per household. Soil and water conservation work has been undertaken and watershed treatment has been implemented on 6040.9 hectares. 476 springs or rivulets have been developed beneting 2191 households. In addition, over 1898 temporary check dams are built every year. The most distinct impact of the Wadi programme is seen in the increased employment due to farms providing an average yield of 500 kgs of mangoes and 50 kgs of cashew, which are sold to GVM at the rate of Rs 12 /kg and Rs 37 /Kg respectively. As a result of this, migration has reduced and in any family now the wives and children stay back home. As a result, the children are able to go to local schools, improving the educational levels. The availability of protective irrigation through water resources development has increased cropping intensity. Because of availability of regular water, the farmers have been able to shift towards commercial crops such as vegetables and pulses, and earn a regular income. There is a substantial rise in employment opportunities for landless in activities around procurement and marketing of farm produce, processing of cashew and mango, as well as other income generating activities in the non-farm sector. During the evolution of the Wadi programme, DHRUVA had also promoted SHGs and started credit activities. At present, there are 796 SHGs in 222 villages, with a combined savings of Rs 79.8 lakhs. As a result of the development of an informal credit delivery system through the SHG network, the tribal women have been able to get better access to formal institutional credit. The SHGs have also helped in developing strong womens institutions. Many entrepreneurial women from these SHGs have taken up micro enterprises for production and sale of vermicompost, manufacture and sale of leaf plates, vegetable cultivation, sale of sh and sale of bamboo toys. Currently, the SHGs have a turnover of Rupees 4,34,586, where the contribution from the sale of vermin-compost predominates, adding Rupees 46,292 to the turnover.
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A tribal cuisine restaurant, NAHARI is operational, and had a turnover of Rupees 14,025 this year. The Wadi programme made another signicant contribution after it was widely replicated in other states. With aid from the Government of India, the Federal Republic of Germany, and the Commission of European Community, it has now been replicated in Rajasthan, UP, Maharashtra, Karnataka and M.P. The Wadi intervention has won nation-wide acclaim for its innovative programme and benets provided to the community. It has also brought a new dimension to Dhruva, which now is the Resource Support Organisation for various development agencies and helps them in replicating this model.
5. Investments Details
The Wadi intervention of DHRUVA has so far been largely on grant basis. In the initial years, most of the funds for this programme had been allocated from DRDA (under its NREP/RLEGP), CAPART and the National Watershed Development Board (mid 1980s). Subsequently funds were leveraged from The Ministry of Finance, Ministry for Tribal Affairs, Government of India, German Development Bank (KfW), NABARD, State Government of Gujarat and from UNICEF. A major funding is channelised through BAIF and renancing is through NABARD. The funds from the state government of Gujarat are directly devolved through Dhruva. The operations of Dhruva are being grounded with a corpus of Rs 939,000. Altogether Dhruva at present is implementing 32 projects in South Gujarat and Dadra & Nagar Haveli. At present the cost of cultivation per acre comes to Rs 35,000. The list of 19 loan-cum-subsidy products with asset insurance ranging from a sum of Rs 2501.5 lakhs bundled with it is catering to the productive and consumptive needs of the wadi farmers and the landless. The tailor-made made products have people, and activity friendly EMIs and loan terms have been customised as per the cash ows of the households. The same also helps in targeting prospects better and in adding new members, irrespective of them being landed or landless, in the ambit of the programme. This is possible by virtue of the member being part of the SHG, GVM and subsequently the Cooperative.
6. Lessons for Livelihood Promotion

The experience from the Wadi programme and its various features bring out some key learnings and directions: A move from sectoral to holistic approach, combining various aspects of livelihood enhancement like improving Health and Hygiene, Development Finance, Agri-business development, Womens development, Education and Livestock promotion has had a greater impact on the community. Although the focus of the intervention was on the
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Wadi, and primarily on those with lands, the planning was meticulous enough to include the landless and capitalised on the availability of their endowments in the form of labour. Having a well-dened central theme helps. However, there should be considerable built-in exibility to include various tailor-made interventions. A livelihood intervention may not start with a comprehensive plan but the needs of the community have to be articulated on the lines of securing the livelihoods of the community. Demystication and capacity building are essential for sustainability. It can help in developing strong, peoples organisations and a cadre of efcient eld technicians. Long term engagement of the Livelihood Promotion Agency (LPO) becomes one the prerequisites to develop a vibrant and robust model, where in the community is made accountable from the beginning of the implementation. The long term engagement and hand-holding helps in developing replicable models and prototypes that helps in replication and up-scaling. The role of the LPO has to be limited to facilitation as a third party, and the CBOs (Community Based Organisations) or POs (Peoples Organisations) should be an integral part of the decision making and governance issues. This helps in setting the normative behaviour of the CBO or PO members and thus contributes to the institution building process. Substantial activities with forward linkages, which provide stable markets, add value to tribal produce and create more livelihoods, are essential to maintain a diversied and substantial production base.
7. Challenges
The most signicant challenge faced while implementing the Wadi programme has been generating livelihood opportunities for the landless. Though it has been observed that the land-based Wadi programme can create off-farm livelihood opportunities for the landless as well- especially in the post-harvest phase, the resulting absorption is much less than on the scale required. Introduction of better package of practices in cashew cultivation may increase the production levels to the tune of 10 kgs per plant. Further research needs to be done to preserve the quality of the cashew at the time of processing at the level of the cooperatives, since percolation of oil from the kernel into the nut deprecates the value of Cashew in the market. The other challenge lies in identifying ways to tap synergies of such a livelihood-oriented programme, and an area-based, natural resource management effort. Though there seems
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to be ample scope for providing mutual benets by the superimposition of these two types of programmes, their mutual synergy needs to be more systematically tapped. The nancial and institutional sustainability of the people's organisations needs to be designed and a mix of vibrant leadership and robust systems have to go hand-inglove, with the current processes. Perhaps the movement from grant mode to revenue mode has already started taking shape, but the acid test is still to yield a desirable outcome. However, it is possible that the scope for involving the cooperatives in nancial intermediation, which is ingrained in the resolution of the cooperatives, has the answer to the vexed issue of sustainability of efforts of the last three decades.
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Case Study 2
Watershed Plus- Adding Value to a Watershed Programme: the AKRSP (I) Experience
Abstract
Apoorva Oza4
The traditional watershed treatment approach addresses issues of environmental degradation by physical treatment of natural resources, such as land and water. This approach has high biomass production. However, the typical watershed approach assumes that: Soil fertility and water are the only constraints to agricultural productivity. Agri-inputs and crop credit are available to all in rainfed, remote areas. Agri-markets in which rainfed farmers sell produce are fair and non exploitative. Increase in household income benets women equally. However, in reality, these assumptions dont always hold true. This acts as a barrier in converting the increased agriculture productivity to increased income in the typical watershed programmes and distributing the benets of watershed interventions equitably. The new approach experimented out by AKRSP the Watershed Plus approach- includes both economic interventions, which ensure that higher biomass production does lead to increased incomes, and institutional interventions that ensure sustainability by providing benets, even in the absence of an outside agency. The case presented, discusses the experiences of the Aga Khan Rural Support Programme, India [AKRSP(I)] in watershed management, which took to the plus approach. The case argues that higher returns would be possible on investments made, when physical work (soil and water conservation measures, afforestation, horticulture etc.) is combined with economic activities (such as savings and credit, the provision of agricultural inputs, agriculture output marketing, agriculture extension, agro business, etc.). The economic activities are part of the institutions development work where appropriate village organisations offer the alternative to the only micro-credit or only watershed treatment approaches.
4
poorva Oza is the Chief Executive Ofcer of Age Khan Rural Support Programme (AKRSP), based in Ahmedabad. This A case has been revised and re-written by Ms. Shilpa Vasavada.
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1. About Aga Khan Rural Support Programme (AKRSP(I))

Established in Gujarat, in 1983; with support from His Highness the Aga Khan, AKRSP (I) aims to address rural poverty by increasing natural resource-based income generation opportunities, and developing cost-effective and innovative approaches to livelihood security. Towards this end, AKRSP (I) adopts a three pronged approach: Physical development of natural resources, human resource development and support activities. Under the rst approach comes water resource development. While this includes; on the one hand, developing access and control over drinking water and irrigation through promotion of hand pumps, lift irrigation systems, canal irrigation, group wells, etc., on the other hand it also involves controlling demand of water through use of efcient devices, movement against salinity ingress, etc. Soil and water conservation, forest development on revenue, private, and public land, as also on forest land, agriculture extension along with agriculture input supply and output marketing and promotion of alternative energy programmes like biogas and solar cookers, all form part of this approach. With the rm belief that users themselves can best take care of their resources, AKRSP (I) develops human potential to develop, manage and maintain local natural resources. Organising the rural community into groups, which can then plan, implement and manage their natural resource based interventions is a crucial part of all ventures. All programmes are run through different forms of village institutions. The support activities include activities at macro level: research, policy advocacy, etc. that support creation of a larger, conducive environment for communitymanaged natural resources at the local level. Since its work initially, at three districts in the state of Gujarat, with varying socioenvironmental problems, today AKRSP (I) works in fourteen districts across three statesGujarat, Madhya Pradesh and Bihar. In Gujarat, it works in 875 villages, reaching out to over 85,000 households of four districts of South Gujarat and three districts of Saurashtra5. It receives funds from state, national and international agencies for its programmes.
2. The Socio-Cultural Context

This case is based on the interventions of AKRSP (I) in two blocks (out of the nine blocks in which AKRSP (I) works) of the tribal districts of South Gujarat. Dediapada and Sagbara blocks, in the erstwhile Bharuch district of the state of Gujarat (now part of the newly created Narmada district), are located in the eastern hilly corridor of the Satpuda range. These two blocks have the dubious distinction of being the rst and third poorest blocks in the state6. Both blocks are predominantly tribal, with the Vasavas; a sub group of the Bhil tribe, being the majority. Other tribes include the Tadvis, Gowalias (cowherds), Kathodiya and the Kotwalias (bamboo workers). Even within the tribal community, there is social hierarchy and Kotwalias are the lowest in the economic and social hierarchy. Kotwalias and Kathodiyas are in fact recognised as Primitive Tribal Groups by the Government of India.
5 6
As on December 2008. From Dr. I.G. Patel committee report on backward regions of Gujarat.
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Unlike other areas in the state of Gujarat, these two blocks have an average annual rainfall of 1100 mm. The terrain is undulating. Once-forested, but now irreversibly degraded hills mark the entire area. The soil in the area allows for good production, but high rainfall with poor vegetative cover and the undulating landscape has led to high soil erosion and consequently low agricultural productivity. While agriculture is the mainstay of the people, farmers who own land have, on an average, land-holdings of 1.2 hectares. Land is largely owned by men. Despite a few surface irrigation schemes in the area, when AKRSP (I) started working, agriculture was largely dependent on the rains, owing partly to bad management of the canal irrigation systems, and partly due to poor knowledge of effective land management and water harvesting techniques. Irrigated area had been only 5-8% of the cultivated area. Thus, despite such good rainfall, the peoples main source of livelihood was the single monsoon crop. Migration thereby became- and continues to be; to an extent, a common feature for alternative livelihood options. The presence of industrial towns nearby (Surat and Ankleshwar) attracts most of the inhabitants migrating in search of labour work in the lean agricultural months immediately after the festival of Diwali. Normally, men went out for work and women stayed behind in villages to take care of elders, children and livestock if any. Agriculture, even today, is predominantly the mixed cropping type. This is widely practiced, with farmers cultivating a combination of paddy and pigeon-pea or sorghum. Other crops, mainly pulses, are insignicant and mostly grown for meeting household requirements. In recent years some farmers have taken to growing cotton (the local variety). In 1984, when AKRSP (I) rst started working in Bharuch district, like in most other tribal areas, in spite of the regions immense wealth of natural resources, the villages suffered from problems typical of communities living in remote, rain fed, hilly regions. The villages suffered from degradation of natural resources along with under-utilised potential of available existing natural resources, low agricultural productivity along with subsistence farming, absence of a savings base, poor access to institutional agricultural credit along with poor
Figure 1: Seasonality of Migration in Bharuch Programme Area

100 Percentage of Population Migrating 90 80 70 60 50 40 30 20 10 0 Jan Feb mar Apr May Jun Months Jul Aug Sep Oct Nov Dec
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access to agriculture marketing and agriculture extension services. This lead to large-scale migration and high indebtedness. With no institutional marketing arrangements available in the area, agriculture products were locally marketed to private traders and returns were far below the rates that they would have got otherwise. The seeds and other agriculture inputs required by farmers were procured at high rates from private traders. Often, these input materials, of uncertain quality, were sold to farmers in loose packs. They often obtained these agriculture inputs on credit, and were thus obliged to sell their produce to the trader at a much lower rate at the end of the season, or pay 1.5 times the borrowed amount. Thus, the farmers faced multiple problems due to high priced, poor quality inputs on the supply side, and low prices, weight malpractices when selling their agricultural output. All these had manifested cumulatively to make things worse for the hapless tribal, despite the rich natural resource base of the area. The existing village-level organisations (the Gram Panchayats and Co-operative Societies) were more or less non-functional. While restriction on mobility of women was much lesser than other non tribal regions of the state, men took most of the community level decisions, and a signicant part of household decisions.
3. The Watershed Interventions

3.1 Watershed: The Initial Natural Resource-based Interventions In the mid 80s, when the work started, AKRSP (I)s interventions in these blocks focused on micro-watersheds covering an area of 350-600 hectares of one or more villages. AKRSP had by then initiated work on treatment of forest lands through large scale plantations on forest lands and also on farmlands. The beneciary of these interventions was a small or medium farmer owning two to three parcels7of undulating rainfed land, and surviving primarily on subsistence farming.
The work in Dediapada (as was the case with most of AKRSP (I)s work since 1994) was funded by the European Commission and the Aga Khan Foundation. In Sagbara block, funding was sourced from the watershed development programme of the Ministry of Rural Areas and Employment (MRAE). Since the funds provided by the latter scheme were only enough for a four-member team for three years, AKRSP (I) used EC funds for employing two more staff for two additional years. Work on watershed programmes in both blocks commenced in 1994-95. The initial activities proposed for implementation by the community in the watershed area included afforestation, and soil and water conservation (SWC). The Communitys perspective on giving preference to these activities took into account the potential they carried to generate employment opportunities locally, resulting in reduced seasonal migration. As forests have a great potential for regeneration, afforestation activities were undertaken on common land, including forest and grazing land. Over time, the Gram Vikas Mandals (GVMs) agreed to take up the responsibility of protecting the plantations. The JFM scheme helped
7
A parcel of land ranges from 0.5 acres to 1.5 acres in Bharuch (now Narmada) district.
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village women and men to access and use the forest produce. Increased availability of grass, fuel wood, and small timber has sustained the interest of the villagers in protecting the forests. Since the afforestation programme was initiated, more than 75, villages have jointly protected 4231 hectares of land with motivation and support from AKRSP. Today there are 15 villages, which protect their forest voluntarily while others have employed some people for protection, using the funds of the GVM. By 1989, AKRSP had realised that the key to improving land productivity was in-situ SWC treatment using simple technologies such as contour bunds, nalla plugs, contour trenches, etc. SWC treatment had the potential of beneting a large number of farmers with small land holdings. However, the technology was effective only if quality standards such as the height and compacting of the bund, etc, were met. AKRSP staff trained villagers in implementing and supervising the quality of these structures. Idealistic attempts at encouraging free labour, i.e., 100% shramdan, never worked, because most villagers needed wages to survive. However, farmers did contribute labour partially by accepting only 50% of the wages due to them for their work. Even so, farmers were not greatly disadvantaged, as AKRSP (I) had xed wage rates at the minimum wage, which were considerably higher than the prevailing market rate. Intensive training of Extension Volunteers (EVs) and an output linked incentive system then led to rapid scaling up of the SWC treatment work. Hundreds of small farmers treated their land, with supervision provided by the EVs and the GVM committee members. Apart from SWC, other Natural Resource Management activities implemented by AKRSP in the watershed areas included farm forestry and biogas. Developing Wadis, i.e., block plantation of horticulture grafts started after 2001, which, by 2002, has developed into a full package comprising seeds, fertilisers and insecticides with the support of Tribal Sub plan8. Different varieties like Dwarf Moringa have been successfully introduced for plantation under this programme, which suits to the needs of the area.
3.2 Watershed: The Initial Community Mobilisation The rst intervention of AKRSP (I) in the watershed areas, the formation of village-level organisations, began with the rm belief that unless the community becomes aware, and is mobilised, community natural resources cannot be developed and managed. The initial villagelevel organisations promoted by AKRSP (I) were the Gram Vikas Mandals (GVMs). Membership in the GVMs was open to the entire village, and their key function was to manage the initial natural resource management (NRM) activities undertaken in the watershed area. Initially, with the membership being open, the GVMs tended to be largely male dominated. It was envisaged that this village based organisation in the form of GVM would cover the entire village and would develop and manage all the natural resources of the village.
8
Wadi project is one of the special projects of the Tribal sub plan to promote Horticulture species, where permanent irrigation facilities are available in the land with the objective to improve tribal livelihoods. Each Wadi consists of oneacre land where 40 fruit tree grafts are given to farmers.
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The GVMs had a nominated president, a management committee, and a secretary on their rolls (whose salary was initially subsidised by AKRSP (I) and subsequently paid for by the GVM members).
4. Moving towards Watershed Plus

While the interventions of soil and water conservation, afforestation, etc. led to denite gains in these two blocks by arresting soil run off, retaining soil moisture etc., the enabling conditions for converting these achievements into denite productivity gains and increase in income, were not manifest. Hence, soon after the interventions started off in 1989, it became obvious to AKRSP that developing common and private land alone would not improve agriculture productivity and income. One needed to do much more than this, and take steps that would lead them from their current achievements to a general rise in income of the populace.
4.1 Watershed Plus: Beyond the Typical Natural Resources Dimensions i. The Savings and Credit Intervention Agriculture productivity, and thus income, critically depended on the quality and timely availability of key agriculture inputs, such as seeds and fertilisers. However, farmers in the region would exhaust the income earned from labour before the monsoons and would not be left with money to pay for agri-inputs or labour during the sowing season. Credit was extremely expensive, with informal credit sources charging interest rates as high as 120-240% per annum. Credit was generally taken only when there was a death in the family, or if someone was ill, or on occasions like marriage. Hence, in order to increase productivity of the land, even after SWC treatment, farmers needed timely credit to procure agri-inputs and to pay for labour. But who would give credit, without collateral, for farmers who had no savings to speak of?
While taking up afforestation and SWC activities, it was decided to induce farmers to save part of their labour income, i.e. the difference between the minimum wage rate which AKRSP (I) was paying and the market rate. The savings from wages were channelized into two deposits: individual savings, which was 70% of the savings amount, and group savings, which was owned by the entire GVM, thus creating a village development fund. Individual savings were used as collateral to give agricultural credit to farmers in the form of agri-inputs. As GVM was envisaged to be the only village based forum for multiple activities, responsibility for management of the credit activity was handed over to the GVM. This included scrutinising loan applications, disbursing the loan in kind and ensuring loan recovery. The responsibilities of the GVM, which earlier included planning and implementing the SWC and forestry activities, were expanded to include the savings and credit activity. Since the unregistered village organisations were not recognised by the banks initially, AKRSP put in its own nancial resources to extend credit to its members in the proportion ranging from 1:1 to 1:4 of total savings and funds to loan. However, it was soon observed that large GVMs ran into problems of poor recovery. Ofcebearers of the GVM found it impossible to manage the credit activity for 100-150 farmers. It was then decided to form smaller sub-groups of 20-30 members of the GVM for managing
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the credit activity. These were called credit management groups by AKRSP (I) and identied as self-help groups (SHGs) by banks. With the change in the banking policy, informal groups of the type AKRSP (I) had promoted were easily able to access banks for credit. AKRSP (I) stopped giving loans to the credit management groups and linked all groups to local Nationalised banks. Initially, AKRSP (I) had to act as a guarantor for these groups, but with good recovery rates, soon this was not required. Over period of time, with not so good recovery rate from mens or mixed groups, focus shifted to promoting credit management groups formed only by women. In 2007, there are 121 groups accessing credit worth Rs 33.33 lakhs from banks. In order to give focus and push to the programme, from 2004 onwards, a model of Credit Service Agent (CSA) has been developed. Cluster wise groups have been divided among eighteen CSAs, who are actively involved in conducting regular meetings and monitoring of the groups, record maintenance, preparing documents, building forward and backward linkages, data collection, etc. This has helped scale up the credit intervention with quality.
ii. Collective Purchase and Supply of Agricultural Inputs The credit initially started with providing loans in cash. Over a period they realised that linking credit with supply of good quality seeds and other agricultural inputs would help farmers doubly. Hence, three to four years after starting the savings and credit programme, AKRSP(I) linked the GVMs with government recognised input supply agencies. These agencies not only gave them standard and good quality seeds, which the farmers of the area needed, but it also provided seeds at standard rates. GVMs would collect demand from individual members, aggregate the same and approach the input supply agency for a bulk purchase. Later on, when federations got registered, they got their own license for dealing with agriculture inputs. This enabled them to supply agriculture inputs not only on credit, but also to sell them in cash to non-members, in order to earn additional income and bring quality products in the market. Today two federations and one Mahila Manch have their independent shops in the local market place, keeping private traders and their hold over the market totally under check. iii. Collective Agriculture Output Marketing Initiative Realising that the local market was exploitative, many GVMs sought AKRSP (I)s support in exploring better markets in the end of the 80s. As a result, the GVMs started collective marketing of pigeon pea and cotton. Under this initiative, when approached by members of the GVM, the GVM would collect whatever small produce each individual farmer had harvested, hire a truck on behalf of GVM through a tender system, load the produce and sell it at the government recognised market yard, about 150 kms away. All the accounts of the same were maintained by Extension volunteers for marketing, who were paid on incentive basis by the GVMs. By 2000, federations of GVMs promoted by AKRSP took over the role played by AKRSP for collective marketing activity. Over a period of time, as farmer federations came to be recognised by marketing yards, a substantial part of the rural produce was no longer available to local traders in Dediapada. Local traders were forced to raise the prices and improve the terms of purchase. Group marketing of produce proved to be of substantial benet to all farmers in the area. Price-addition was found to be almost 10-20% in the case of cotton by accessing more protable markets. From 2005 onwards, due to better
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prices and terms offered by local traders, farmers are carrying out marketing operations by themselves, with some assistance from federations, wherever required.
iv. Agriculture Extension While taking up measures beyond soil and water conservation, it was realised that there is a huge potential to improve agro practices and to enable wider access to new information. Unless the increased soil fertility and augmented water resources were utilised for growing productive crop varieties that could provide high income, increased soil fertility would never translate to income gains. The strategy was to have agriculture demonstrations for new varieties of seeds and crops, link up improved variety of agriculture seeds with input supply programme of GVMs, promote vegetable nursery and capacity building of men and women members of groups on different aspects of agriculture, increased access to agriculture tools and equipments. Building on the local variety, improved crop varieties have been successfully introduced for cotton, paddy, maize and vegetables. Adoption of these varieties has resulted in a tremendous increase in income. For example, the demonstration of a variety of paddy has increased the yield one a half times compared to the variety sown by them earlier. This means an additional Rs.30,000 per acre, with an additional yield of 6 quintals per acre9. Increasingly, SRI has also been taken up in the last four years, and its practise is expanding.
Gradually, it was felt that high income earning crops need to be introduced in areas where soil and water conservation work had been done. As a result, demonstrations on aromatic plants, as well as oriculture were carried out. However, with no consistency of demand in markets for these products, these interventions did not take off. The above work has been possible in 77 villages with the concept of farm managed extension. Intensive training of Agriculture Extension volunteers and Master volunteers play a crucial role in disseminating new information in federation and group meetings, spreading information from agriculture demonstrations and changing agro practices through sharing of experiences and effective monitoring. With the rm belief that women Agriculture Extension Volunteers would help women get recognition as farmers and would also be useful in reaching out to more women farmers, women are encouraged to play the role of EVs. In 2006, there were 8 Master Agriculture EVs, and 62 EVs, of which 23 were women.
v. Increased Access to Agriculture Equipments and Tools Lack of availability of agricultural equipments and tools, which could save time and drudgery, and give standard quality output was seen as another stumbling block in the area. Three agriculture tool libraries were set up in 2005 with the idea that tribal farmers could access tools at critical times. Two tool libraries are run by federations and one by the Mahila Manch. The apex institutions keep tools like tractor, plough, water lifting pumps, etc, which they lend on rent to individual member farmers. There are also tools that reduce drudgery based on roles. For example, in agriculture women are expected to help with removal of weeds, inter culturing, etc. and the tools help in these tasks. The apex bodies have worked out systems for leasing out the tools, collecting contributions, keeping records and accounts.
9
Annual Progress report February 2002-Janaury 2003.
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This is an important aspect for the agriculture operations, as it has enabled the farmers to access agriculture equipments at crucial times without having to purchase it, and this has broken the monopoly of large farmers who rent out tractors and equipment. Experiments have been made by introducing manually operated ground nut decorticators, maize shellers, and manually operated cleaner cum grader machines, as a low cost technology intervention for value addition and reducing drudgery. These technological tools were largely operated by women. However, maintaining these machines has been a little difcult task and hence, these have a limited spread, as of now.
v. Promotion of Agri business While on the one hand the agriculture output had been on increase with the above interventions, the value addition did not take place and the produce was sold at the market directly. An intervention was made here by promoting Agro-businesses based on local products, so that value addition is done locally, at the same time, opportunities for livelihood enhancement can be broadened at the local level. With the objectives of establishing nancially viable social enterprises, commercialising services and establishing market linkages, two MVMs have recently installed a mini Ricecum-Flour Mill which can grind even 5 kgs of rice. This is different from the normal mills in the area, which grind only 150 kgs at a time. These new mills thus benet poor women, reducing their drudgery. There have been different experiments in the past on mini Dal Mill, and so on, but these have not managed to sustain themselves. vi. Use of Water Saving Devices Over a period of time, with the understanding that the augmented supply of water through a typical watershed treatment needs to be used judiciously, from 2002 onwards, there has been an emphasis on promoting use of low cost, devices that use water efciently. As water availability is higher in the region compared to other regions, devices that improve water usage efciency like drum kits, bucket kits, micro-tube drip and easy tape have not found much of a market. However, drip has been successful wherever it has been directly linked with horticulture development intervention, through a package intervention. Federations take a lead role in promoting these devices at the village level. These are also devices to be used on homestead lands, and hence are popular with those who dont have farm land too. vii. Organised Collection of NTFP Local people collected Non-timber Forest Produce (NTFP) and sold it off to private traders at extremely low rates. With a view of helping both the NTFP collectors and the agents by giving them fair prices at village level, four local, tribal NTFP collection agents have been promoted who collect Madhuca indica seeds and owers, Neem seeds, Shorea robusta seeds, Bahada and Karanj seeds from individuals. AKRSP (I) initially extended loans to help them set up their enterprise. All of them have now got licenses from the State Forest Development Corporation. While in general, the number of NTFP collecting agents, as also the availability of NTFP is low, it is a novel idea piloted for increasing income from forest produce that is readily available to people.
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viii. Drudgery Reduction Measures With increase in irrigation facilities, change in cropping patterns and other agriculture systems, there is an increase in workload for farmers; particularly women, who also have to take care of their domestic responsibilities. Special attention has been paid to such issues under Watershed Plus, by addressing issues like easy availability of drinking water and fuel wood. Besides this, MVMs have been taken up repair of hand pumps, revived defunct drinking water schemes and deepened wells. A team of hand pump mechanics has been trained in three clusters, which addresses the needs of local SHGs and Panchayats. The mechanics are directly paid by these bodies for any hand pump repairs carried out by them. On the other hand, MVMs and women EVs have promoted biogas to promote alternative energy sources, and also to save time and drudgery that women often face by trudging to distant places to fetch fuel wood (In villages, the task of fetching water, fuelwood for the house, mainly falls on women and girls). Demand of biogas linked with toilets have increased in the recent years and has been promoted as a comprehensive intervention from 2003 onwards. Under one model, some women SHGs have been trained to repair biogas plants locally. This enhances the livelihood at the local level and meets local needs locally in a sustainable manner, while on the other hand, providing visibility and recognition of women in a technical domain.
Off late, some MVMs have accessed a government scheme which promotes smokeless chullahs (stoves) so that women do not inhale smoke while cooking a major cause of health and respiratory problems amongst rural women. Through this scheme, 126 such chullahs have been installed so far.
4.2 Watershed Plus: The Human Dimensions i. Promoting Pan-Village Organisations Over a period of time, AKRSP (I) realised that although most village-level organisations were active, there were common issues faced by several villages which needed to be addressed by a collective forum- like collective marketing of produce. There were also inter-village conicts (especially in Joint Forest Management) in which AKRSP staff had to intervene directly and mediate. The idea of a federal structure was discussed in year 2000, and ve Federations have been promoted, covering 107 groups and 83 villages. Although some of the womens groups were part of the federations, it was felt that most of the womens groups needed a forum for learning and sharing rather than focusing on a specic economic activity. In order to enhance their negotiating power and to address their common issues, a larger collective of women was desirable. Hence four Mahila Manchs were also promoted over a period of time. Today they have 344 SHGs/MVMs as members from across 157 villages. The Mahila Manchs meet regularly, discuss common issues and ensure that womens priorities are addressed by federations and government agencies working in their respective villages.
Three of the four Federations are now registered bodies and liaise independently with banks, agriculture input suppliers and government agencies. Two of these federations run a shop in the market yard where, apart from managing the entire agriculture credit and marketing activity, they procure agriculture inputs from standard, government recognised companies and sell it in cash to individuals, thus acting as a regulatory force against other traders, which benets the farming community at large. Having gained condence in managing
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agricultural input supplies, the Federations have extended the activity of bulk purchases and retail sales to roof-tiles, cattle-feed and note- books. Two Federations, and one Mahila Manch, today run agriculture tool libraries, which they manage independently. The Mahila Manchs have also motivated women in nearby villages to promote new MVMs. One Mahila Manch has been recognised and tasked by the government to promote Sakhi Mandals in the surrounding villages. Demands for repair of drinking water hand pumps are being put up in Mahila Manch meetings, where it is addressed by the hand pump mechanics. The Adivasi Mahila Manch, Kambodia, worked as pressure group on the Chaswad dairy and then built strong linkages with SUMUL dairy for cattle feed activities, thus ensuring better milk production in return. Two Mahila Manchs have taken up the issue of getting land titles registered in the name of widows, thus securing a means of livelihood for these widows. The Mahila Manchs have gone beyond the purview of natural resources and has addressed other issues e.g., they have tied up with other reputed organisations to take up issues related to reproductive health of women too.
ii. Involving Women in Watershed Plus Programme In 1992, AKRSP (I) realised that women were only marginally involved in decision-making in the watershed programme. Till then, no separate forum existed for women. In order to give women a platform to meet, build their capacity and bring out their leadership qualities, womens groups or Mahila Vikas Mandals (MVMs) were promoted by AKRSP from 1992 onwards. It was envisaged that increased empowerment of women would lead to increased involvement of women in watershed activities. Initially, the MVMs were organised around the activity of savings and credit. Though the women leaders of these groups were increasingly becoming condent and articulate, they still had little say in watershed-related activities, which were managed by the GVMs with their predominantly male membership.
In 1995, the gender sensitised eld staff (gender sensitisation training was done in-house) promoted mixed groups where special efforts were made to make women members of GVMs, in addition to their own forum. Women were encouraged to participate in the GVM meetings, which was the mainstream decision making body for natural resource based interventions in the village, apart from meeting exclusively in their own forum. Mixed-group meetings enabled women to contribute to major decisions such as the location of forestry plots and group wells, benet sharing from JFM plot, etc. Gradually, MVMs started managing community assets such as check dams, group wells or forestry plots, etc. As a strategy, some programmatic interventions are taken up exclusively with the MVMs: drinking water, smokeless chullahs (stoves), animal husbandry and biogas. This gave them the condence to meet their practical needs, while increasing their level of condence. This has enabled MVMs to acquire greater recognition in the village and have a greater say in the decision-making processes of the GVMs.
iii. Involving the Landless in the Watershed and Watershed Plus Programme The watershed programme has a predominantly land-based focus. The landless often get marginalised in a watershed programme. This had been the case for long. After 2003, a systematic approach to involving the landless in the Watershed Plus activities was taken up by promoting micro enterprises. The equity strategy of Watershed Plus, with its three components were so designed, as to that the long term benets of the programme reach
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landless families living in the watershed area, beyond mere receipt of wages during the construction phase. These three components were: A focus to develop homestead lands of tribal households- that most families have, even when farming land is not available. The tribals grow seasonal crops during the monsoon. Very few have irrigation facilities in their homestead lands and grow vegetables in the Rabi season. A comprehensive package- Wada Land Development package has been introduced where the cost of improving the productive capacity of the Wada land is less than Rs.1000/household. Priority is given to landless women, as normally women have more control over the homestead land, and also because increased productivity should not shift the control of this land to men. Families with no farmland were helped with growing vegetable nurseries on homestead land. These families now sell saplings to landed households in the watershed area. A focus on promoting off farm activities, which add value to the output of the farm-based interventions. For example, animal husbandry on either JFM plots, or on homestead lands, has been given a special push with the increase in fodder supply. Though promoted for all, this is an activity with a special focus on the poorest households. Besides providing exible interest loans, these families are linked to different government departments to access schemes for goats, cows and buffaloes, or to local dairies. Forward-backward linkages have been built in many ways- by training local Para worker for paid veterinary services, by promoting animal insemination centres, insurance cover for cattle, etc. This activity is exclusively carried out with the womens groups. 76% of the loans disbursed so far for MED have been used for animal husbandry, poultry, rearing goats and shing. As a part of the above strategy, a special focus has been given to develop a primitive tribal group, who are traditionally dependent on bamboo work- the Kotwalias. Activities like sheries, group wells for homestead lands, etc. have been developed apart from linking groups of Kotwalias with the Tribal sub plan for enhancing their skills on bamboobased work, and ultimately linking them with the external markets. With a view to promote non-farm, income-generating activities, loans from a revolving fund have been made available to landless families on exible terms. 16% of the total loans disbursed so far have been for non-farm based, micro enterprises like cycle repair shops, agricultural equipment repair shops, barber shops, grocery stores, diamond cutting, light motor driving, tailoring etc., which have ourished in the villages under the intensive interventions of the Watershed and Watershed Plus programmes. While SHGs of the poor are the centre for all activities, a rigorous beneciary selection process is being followed to identify the poorest among the poor. The bonades of the beneciaries are established only after screening wealth ranking categories and cross checking information through individual household contacts and eld visits. Meetings are held to orient beneciaries towards new ideas, to develop their condence and encourage them to think about the potential practices of the local areas. A detailed discussion on marker feasibility is done with the beneciaries before a suitable activity is selected. It is
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ensured that the beneciary is involved when a nancial assessment of the nancial aspects is made, or while collecting quotations for purchase of capital assets, or when deciding from amongst probable funding options, etc. An Entrepreneur Service Agents model has been developed to identify and motivate potential beneciaries, ensure regular follow-ups and for timely recovery of principal amounts. As part of this, backward-forward linkages have been established to ensure effective establishment of the enterprise.
iv. Capacity Building There has been a great focus on building the community capacity to build social capital. Mass communication means like Padyatras, Sammelans are used to reach out to the local populace and to create awareness on development issues before the community. In order to enhance the knowledge of women and men from the community on various Watershed Plusbased interventions like crop planning, vermin compost, organic farming, micro irrigation devices, and so on, a series of measures have been used- internal and external exposure visits, skill and knowledge-based trainings and workshops etc. Specialised trainings for women and men ofce bearers, Extension Volunteers of different issues: agriculture, biogas, etc.; masons, credit service agents, etc. helped address the needs of the community locally. In order to help the federation members to manage the entire intervention on their own, intensive training has been provided on ofce management, on input supply and marketing.
At present about 13736 households are members of these vibrant village organisations, which, with the support of the pan-village federations and Mahila Manchs, will continue activities initiated in the project period even after AKRSP(I) disengages itself.
5. Impact of the Intervention

Depth of Impact: Value Addition for a Typical Farmer in the Project Area AKRSP (I) has thus taken up multiple interventions, going much beyond what is commonly termed as Watershed. The impact of these Watershed Plus interventions can be seen in the following; brief and simplistic, assessment for a rain fed village Gajargota of Dediapada block. For a farmer with three acres of rain fed land, where he grows pigeon pea, paddy and cotton, and who had taken agriculture extension services, savings and credit and is part of the collective, the value addition has happened in numerous ways:
1. After the SWC work, the farmer took up hybrid cotton production (part of the agriextension work done by AKRSP (I)) and his yield increased from 3.5-4 quintals per acre to 5 - 5.5 quintals per acre. 2. Availability of credit and inputs at the door step resulted in savings in interest and transaction costs on credit at the rate of Rs 200 per acre for cotton, i.e. Rs. 400 overall. (The farmer grew cotton on two acres of land). 3. Collective marketing helped him gain Rs 750-1000 more per acre, as he sold cotton at Rs 1750-1800 per quintal, while the local rate was about Rs 1600 per quintal.
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Total Value Addition across Different Sets of Programme

25000 20850 20000 Value (Rs) 15000 10000 5000 0 8750 23130
7100
2 Programme
1. 2. 3. 4.
SWC SWC, JFM, Biogas. SWC, Waste Land Development, Biogas, Water Resource Development and Agri-Extension SWC, Waste Land Development, Biogas, Water Resource Development, Agriculture Extension, Savings Credit and Collective Marketing.
Hence the overall gain from all interventions made by village organisations and AKRSP (I) was roughly about Rs 3700 per farmer, of which nearly one third, i.e. Rs 1000/acre was due to the marketing interventions. With only SWC interventions, the gain would have been only Rs 1000-1500/acre because the constraints of low-quality inputs, and their non-availability when required, would not have provided a 30% increase in yield. (However, it is difcult to isolate the actual impact of each intervention as agricultural output is affected by many factors.) Although the money saved because of the input supply scheme (ISS) and credit availability seems low (Rs 200/acre), the impact of quantitatively superior and timely agriinputs due to timely credit is considerable. The perception of farmers is that about 50 percent of the overall gains in income (Rs 1800/ acre) are due to non-SWC activities, i.e. agriculture extension, credit, agriculture input supply and marketing. However, cotton is not grown everywhere, and many farmers continue to grow crops only for consumption purposes. Even so, studies indicate that there is substantial value-addition derived from combining extension and credit activities with SWC even in subsistence agriculture. Pigeon pea yields double with SWC work, and BDN-2 (a new high yielding pigeon pea variety) has been adopted by farmers after extension training.
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Another study by AKRSP (I)s research unit shows that the average incomes in the project area have increased for members from Rs 16,000 per annum to Rs 30,000 per annum since 1994 in real terms (as against an increase in income to Rs 21,000 per annum for non-members).
Some lessons Water management; not only harvesting High investment more than typical watershed projects Better returns from agriculture; agro-processing; Reducing risk, insurance and micro-nance 3rd year of drought, agriculture, animal husbandry not possible Need to introduce non-water based livelihoods, handicrafts Reduction of social costs
6. Lessons for Livelihood Promotion

In a watershed programme, a range of village organisations need to be promoted to manage different activities and to address the needs of different sections of the rural community. Soil and water conservation activities do not necessarily result in substantial increases in agricultural productivity. Such activities need to be supplemented with the provision of credit, timely input supply and agricultural extension work, as Watershed Plus activities. Increased productivity of land does not necessarily result in an increase in incomes increase in income is crucially dependent on tapping more viable marketing channels. Women have as much rights as any man, as farmers and as any other family member of a landless family. Hence, targeting land based, off farm and non-farm interventions to women in a strategic manner will not only increase efciency of the intervention, but would also enhance their status, leading towards their empowerment in long term. Experience of AKRSP (I) shows that the Watershed Plus approach has immense potential in this regard. Traditional watershed approaches can largely, only benet the landed. However, Watershed Plus approach has the potential not only to increase incomes in general, but if targeted well, to enhance livelihood opportunities for the land less too. This is a more holistic and sustainable approach. Targeting the landless, however, requires a separate focus in terms of human and nancial resources. The same team struggling to achieve balance between the landed and landless, yielded slow, or no results when reaching out to the landless in innovative ways, even within Watershed Plus. In fact, it is only when AKRSP (I) put in a separate team with specic resources that they could move towards MED or agro business in a structured way. Sequencing of interventions is a must in Watershed Plus. While interventions beyond NR like savings and credit, or agriculture input supply can start along with NR based
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interventions, one needs to build the apex institutions gradually. Once having built the strength of village based collectives, federations of these village organisations can take over several of the Watershed Plus activities. AKRSP (I) learnt lessons of what is structurally termed as Watershed Plus approach over a period of time with its own interventions. However, the multiple activities taken up by AKRSP(I) may not be possible for other NGOs, though the lessons learnt could surely be put in practice as a step towards replication. Some of the successes or failures of the interventions are context specic. Both these blocks have heavy rainfall and good quality soil. Hence, the results of the Watershed and Watershed Plus interventions here may differ from the same interventions when done in areas of water scarcity.
Abbreviations
AKRSP (I) CMG EV GVM ISS JFM MEV MVM NGO NRM SWC Aga Khan Rural Support Programme (India) Credit Management Group Extension Volunteer Gram Vikas Mandal Input Supply Scheme Joint Forest Management Master Extension Volunteer Mahila Vikas Mandal Non-Governmental Organisation Natural Resource Management Soil and Water Conservation
Technical Terms
Block Gram Vikas Mandal Lakh Mahila Manch Mahila Vikas Mandal Panchayat Shramdan Watershed Administrative division of a district Village development council 100,000 Womens Self-help group Womens Federation Local (village level) government structure Voluntary contribution of labour See additional resources on watersheds at the end of this module.
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Case Study 3
Livelihood Interventions among Marine Fishermen: The SIFFS Experience

Aruna Masarguppi and Gitali Thakur10
Abstract
The Marine Fisheries sub-sector supports the livelihoods of a few million shermen in India. However, the needs and interventions required by the artisanal or traditional shermen have been unique and require a concerted intervention. The following case depicts the efforts of South Indian Federation of Fishermen Societies (SIFFS) in organising artisanal shermen in the Marine Fishery subsector. The case also documents the evolution of SIFFS, which today is the biggest institution of this kind, from many small interventions that took place in the states of Kerala and Tamilnadu.
1. SIFFS
South Indian Federation of Fishermen Societies (SIFFS) is an apex body of federations of shermen based at Thiruvananthapuram (formerly called Trivandrum) in Kerala. It works in all the ve southern states in the Marine Fisheries Sub-sector. SIFFS takes a sectoral approach while working for traditional artisanal shermen. Though it started initially as a marketing intervention, over time SIFFS has been articulating the needs of the Marine Fisheries Sub-sector and has been carrying out interventions that inuence the livelihoods of a million, petty shermen.
2. Evolution of SIFFS
The genesis of SIFFS was a culmination of the attempt by small shermen of Marianad village to organise themselves against the exploitation by middlemen and merchants. Artisanal shermen tend to lose control over the sh as soon as it is landed, as merchants and middlemen take control over the sh on the beach itself. Marianad is a village created by the Bishop of Trivandrum in 1961. The shermen in the region had taken to Christianity when Francis Xavier walked these beaches four centuries ago, and their life revolves around the church as an institution. Most of the numerous churches
10
runa Masarguppi is a freelance writer based at Hyderabad. Gitali Thakur is a freelance development professional based A in Kolkata. The case study has been revised by B.N. Dhananajaya and John K. Devasundaram.
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doting coastal villages are built by the contributions of shermen, and the educated ones conduct the affairs of the church by dominating its committees. It may sound paradoxical that centuries of faith in Christianity had not improved the living conditions of the shermen and they continued to live in dire poverty. Cooperative efforts by the church to making boats and nets available to shermen with a hope that they would repay failed, as the church was viewed as a charity organisation and repayment was not taken seriously. Realising the difculties in working in existing villages, where the problems had accumulated and were not easy to tackle, the church decided to work in a new village, presuming that if the experiment was successful, they would extend it to other villages. It selected a few families from different villages and relocated them to an abandoned village where it had acquired land, and created a new village called Marianad. Along with the new inhabitants also came a team of community workers, who were to live with the people and learn from them. The approach adopted was community development based on self-help. Living with the people, the team was always available to the people and the feeling of togetherness grew in spite of the differences among the people, due to their different places of origin. The team worked on both the perceived and expressed needs of the people, involving them wherever possible and keeping the operation simple no elaborate schemes, no big buildings and sophisticated equipment. In this way many programmes were started a public health programme, clubs for boys and girls, saving schemes, nursery and crches, etc. Each programme was expected to initiate an informal education process with a view to bring change, build awareness and to inspire peoples condence in themselves. After seven years of such work, the team realised that no amount of community building would be effective if the economic structures remain unchanged. The shermen are poor not because the shing was not lucrative. They are poor because they are exploited. The exploitation had been institutionalised and they were not aware of it. After much study and inquiry, it was realised that unless the ownership of land, credit, production, marketing and savings were owned and controlled by the shermen themselves, they would not be free from the clutches of the exploitative forces. To overcome the problem, a large number of NGOs have worked independently and collectively since 1970s to create a new set of co-operative institutions for the shermen. SIFFS, which is the result of this, has built its interventions on the strengths of the earlier work done by the NGOs.
3. The Intervention
The intervention is ongoing, and has gone through many phases focusing on welfare and development of artisanal shermen. The initial intervention organised the shermen to help sell their sh collectively, so that they could increase their income. Later, SIFFS intervened in the area of technology, micronance and market linkage.
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Phase I: The Marianad Model Its Development and Initial Coverage

The rst phase saw the creation of a model of a village society that ensured the shermens control over beach-level sh marketing and enhanced incomes through better sh prices and reduced outows to moneylenders and middlemen. In 1970, the shermen of Marianad, which is 25 km north of Thiruvananthapuram, formed a small shermens cooperative to market the sh caught by their members and to counter exploitation by middlemen and merchants. They appointed their own salesman, who now auctions the sh according to the terms set by the shermen and collects the dues from the purchasers. The shermen then collect their catch value from the societys ofce where all accounts are maintained. The society charges 2-3% of the sale value as its commission. Normally 2-3% of the catch value is compulsorily deducted as savings and 10% is deducted for loan repayment. After the formation of the Marianad society in 1970, it took a few years for it to get established as a model, and for it to be replicated. By the end of the 70s, there were over 20 societies functioning in Thiruvananthapuram and Kanyakumari districts under the guidance of the respective promoters. The societies, in course of time, became nancially self-reliant and independent.
Phase II: Emergence of a Federal Structure

The second phase saw the creation of higher level structures that enjoyed greater economies of scale in controlling inputs and markets, as well as provided new technical inputs for upgrading the technology of artisanal shermen. In 1980, the societies of Trivandrum district formed a federation to carry out business activities like sh export and bulk purchase of shing equipment. The new federation ambitiously called itself the South Indian Federation of Fishermen Societies (SIFFS). While sh marketing and bulk supply of nets were reasonably successful interventions during this period, another activity that came about unexpectedly and created a break-through was boat building. Around this time the artisanal shermen started adopting imported Outboard Motors (OBMs) in an attempt to go to deeper waters in search of sh, and to compete with mechanised trawlers. The shift to motors brought with it a host of new problems since country boats were not suitable for tting motors. The development of a small marine plywood boat by another church project in Kanyakumari, with the help of the Intermediate Technology Development Group (ITDG) of UK, provided a vital break-through. The developers of the new technology handed over the technology to SIFFS. With the technical and nancial support from the ITDG, SIFFS gradually built up a strong boat building project. These plywood boats along with the OBMs helped the artisanal shermen upgrade from traditional, small shing boats to a new intermediate technology. SIFFS also got involved in training users and mechanics with the new OBMs. Eventually SIFFS started a chain of OBM service centres.
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Effects of New Technology

The advent of the OBMs and complementary improvement in boat building technology, in many ways, redened the social and the economic composition of the artisanal shermen community. There were many factors responsible for inuencing these changes. The total price of a shing unit (plywood boat, motor and 3 nets) was Rs.42,000 in 198384, as compared to Rs 15,000 of traditional Catamaran (locally known as Kattumarams). This effectively ruled out individual ownership of the boats. To overcome the problems caused by high prices of the new boats, the Fishermen Welfare Society (FWS) of Kollam, formed 220 units of four shermen each and nanced them to buy equipment and boats on a joint ownership basis. The arrangement worked well for sometime, but by 1986 the system collapsed, as no one knew how to use the boats. The high cost of repair, replacement and fuel for shing sorties without a commensurate increase in catch took their toll, and OBM groups started defaulting on loan payments to banks. This situation also ushered in another change, it created a class divide, where the more enterprising shermen became the owners and the rest worked as crew on their boats. At this juncture, SIFFS stepped in with some donor agencies and provided loans and grants. Another development that took place due to the arrival of OBMs, was that the value of the Catamaran shermens catch was so low, that it became unviable for these shermen to continue being members of the societies. This led to the decrease in the number of members. Also, the shermen from north Quilon were denied membership as a principle, since they were using ring siene shing nets, which had proved harmful to the sector. These changes however, brought many positive effects in their wake. The crew who accompanied the owner got an assured, regular income. From the total sh catch value the actual expenses incurred like fuel, food etc for shing trips used to be deducted. The remaining amount was divided in to ve parts. One part each for boat, engine and net was kept aside. These three shares went to the owner. Out of the rest, two parts went to the owners and remaining part was shared by the crew. The onus of maintenance and repair of the boat rested with the owner. The crew bore no responsibility for repairs. The presence of SIFFS in the OBM and boat building activity dampened the prevailing high market rates for motorised boats and beneted the shermen immensely.
Replication Realising the potential of the SIFFS intervention, the Government decided to replicate the model. An apex cooperative body called Matsyafed was formed in 1984. As the organisation was merely meant to channelise funds, it did not make much of an impact on marketing, as it failed to get rid of the middlemen. Also entrenched political interests saw funds owing to members depending on party afliations rather than the need. As a result Matsyafed did not inspire the condence of the small artisanal sherman.
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Need for Federal Structure

The apolitical nature of SIFFS attracted the shermen. Around 1980, the threat to the livelihood of small shermen due to introduction of mechanised trawlers created the environment for organisation of shermen for their right to livelihood. These local unions subsequently came together at the state level and joined the National Fish Workers Forum. While acknowledging the role of trade unions, SIFFS strove to separate co-operative activity from that of the Trade Union. Therefore SIFFS, while avoiding an organic relationship with the Trade Unions, supported their activities nancially, legally and so on. Noting these across the broad changes in the nature and composition of the shing community, in 1985, SIFFS felt the need to integrate the shermen of the neighbouring districts. The shermen of the three districts came together under the banner of SIFFS. From practical experience, it was decided to create a three-tier organisation with district federations taking care of most of the day-to-day requirements of the primary societies, and SIFFS focusing on the long-term requirements, especially in the eld of technology. SIFFS became the overall apex body and divested some of its activities to the district federations.
Federal Structure of SIFFS

The strength of SIFFS lies in its federal structure and joint ownership by the sherfolk across different levels of governance. SIFFS has four full members (federation of shermen having at least 5 primary societies as members and meeting other membership criteria) and three associate members (federations of primary societies yet to meet full membership criteria). The federal structure of SIFFS in 2008 is shown below:
SIFFS
Apex Body
KDFSF Kanyaumari
TDFF Trivandrum
FWS Kollam
MFFF Calicut
NKC Nellai
CTN Tamilnadu
AP Andhra
District Federations
53 Societies 22 Societies 5 Societies 13 Societies 18 Societies 25 Societies 1 Society
Primary Societies
Primary Societies
The primary society is an autonomous local organisation of shermen having membership ranging from 20 to 200, which controls the beach level sales of sh. It ensures a competitive price and timely payment for members. It makes deductions at source for the societys
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commission (3%), compulsory saving (2%) and loan deduction. A managing committee elected from the general body administers the society. Today, SIFFS has about 9000 shermen as members organised through 137 primary societies at the village level spread over 15 districts of South India in Andhra Pradesh, Karnataka, Kerala, Tamilnadu and Pondicherry (Puducherry).
Activities
Fish Marketing: Establishes shermens control over rst point of the sale of sh (beach auctions, direct sale to wholesalers, agents, export houses). Provision of credit from external sources and from own sources, for asset replacement Promotion of Savings: Compulsory and voluntary savings to tide over a lean season and for emergencies Loans to help shermen acquire shing equipment and maintain independence from middlemen Insurance for members (under Government scheme) Other welfare services
District Federation
Two elected members from each primary society constitute the general body of the District Federation. The general body elects eight members as the Board of Directors, who manage the federation. SIFFS has under its umbrella, seven district federations, of which four have full membership and three associate memberships.
Activities
Primarily the District Federations coordinate the operations and monitor the functioning of the member societies. Other functions of the federations are: Formation of new societies in its operational area Organise input supply like nets, boats, ice, and so on Provides linkages to sh marketing Provides nancial services and linkages Run complementary businesses like boat building, motor servicing, ice plants, and so on Organise welfare and capacity building programmes for shing community
SIFFS: The Umbrella Organisation

SIFFS, the apex body in the three-tier structure, has two kinds of membership. Primary membership is open only to District Federations that full certain basic criteria. Presently SIFFS has three full members. The associate membership is granted to two categories of organisations - one, federations of the primary shermen societies that do not yet comply with the stipulations for full membership and secondly, organisations which are not federations, but are associated with other programmes of SIFFS.
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Activities
As an apex body it engaged in various sectoral activities such as: Technological Services Marine plywood technology based on stitch and glue technique, breglass for building quality boats at reasonable price R&D for new boat designs, improved gear, propulsion, ice boxes, shelf life of sh, articial reefs for increasing catch, safety and communications, and post harvest techniques Information and Capacity Building Services Policy research and documentation (census of shing eet, tropical studies) MIS and Village information centre Advocacy and lobbying, studies, research, documentation and publications Capacity building support to federations Post-harvest and Marketing Services Input supply Boats, OBMs, nets, ice Export initiatives, social labelling and domestic retailing Marketing of sh products, rst level as well as export of premium category sh Cooperative and Financial Services Expansion of the societys network Saving, Credit and Insurance services Services to Member Families and Community Training for alternative employment Services to sherwomens organisations Activities for the development of crew members Resource Management Awareness, implementations of laws Effective co-management Reducing harmful methods of shing Expansion to other Geographical Areas and Raising Membership The design of SIFFS intervention does not give any scope for women membership. However, some federations have organised womens groups and they have been made independent entities. The vision of SIFFS is to see the emergence of a separate apex body similar to itself among sherwomen.
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Phase III: Greater Integration of the Federal Structure

The third phase saw a substantial increase in the control over the inputs in shing, as well as the credit required for shing. The tasks for the future include the spreading the intervention to other parts of south India and making the federal structures fully viable and self sustaining. The late 80s and early 90s saw the district federations becoming independent of the original NGO that promoted it. The district federation developed many weaknesses due to lack of professionalism. A major external change that affected the network was the drying up of bank credit to shermen due to increase in loan size and the reluctance of banks to provide security-free loans. Here SIFFS was forced to step in by launching a micro-credit programme with bulk loans from SIDBI. SIFFS today provides loans through four different channels to the members of the primary societies. i. Society loans from own funds (savings accumulated prots): Mainly meant for emergencies and are mostly small loans. ii. Bank loans from local commercial banks to members at the recommendation, or guarantee by of the local society. iii. Loans from district federations using revolving funds created with donor grants. iv. SIFFS loans (mostly from SIDBI). Throughout the 90s, the relationship between the district federations and SIFFS was dynamically integrated. From a specialised, technical organisation, SIFFS had to develop into an all-round apex body with a wide range of activities. The boat building and OBM related services became market-driven and had to move into far-ung areas where SIFFS had no membership. The plywood boat technology caught the imagination of shermen all over the south-west coast of India and SIFFS took the opportunity to set up boat building activities all over Kerala and also moved into Karnataka. The opening up of the Indian economy in 1991 provided new opportunities for getting into imports of OBMs and spares. SIFFS is now a leading supplier of OBMs in south India and runs a network of 15 OBM service stations from Mangalore to Tranquebar. Other activities that SIFFS has initiated include the setting up of an ice plant network, export of chilled sh under social labelling, and since Catamarans are still popular all over the eastern coast of India, growing trees, whose wood is suitable for Catamarans. SIFFS has also taken up the responsibility of developing new societies and federations in other potential districts. Thus the 90s saw a gradual integration of the activities of the district federations and SIFFS as well as a considerable diversication of the activities of SIFFS.
Phase IV: Diversication and Sustainability

The fourth phase of SIFFS was focused on reducing pressures caused by intensive shing, on the seas resources, to maintain sustainability. Towards this end it has been working on creating alternative livelihood options for the youth.
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SIFFS has been conscious of the sustainable use of shing by promoting effective comanagement of marine resources to reduce the pressure on the sea. The steady demand for employment in non-sea going operations and other livelihoods among new generation of the sherfolk, led to SIFFS initiating skill development programmes in boat building, OBM repairs, carpentry, computers, etc. In the aftermath of the tsunami, SIFFS had the opportunity to utilise its expertise in meeting the needs of the affected people. It was involved in relief operations right from the start, in coordination with other NGOs. After the initial relief operations were wound down, SIFFS set up a series of boat and engine repair centres across the affected areas with the aim of helping the shermen to return to shing activities as soon as possible. Even as it was repairing scores of boats across the coast, many NGOs started supplying boats. To meet the demand, boat-manufacturing centres started mushrooming with least regard for quality. In order to set the quality standard as well as to capture part of the emerging market, SIFFS started boat manufacturing centres. During the rehabilitation phase, SIFFS was pushed to take up some of the non core activities such as housing, where it gained new experience by building 2860 houses in Nagapattinam district.
4. Micronance Intervention
The micronance programme of SIFFS aims to provide savings services, minimise the credit gap and to provide suitable insurance services to the shing community. The credit programmes under SIFFS network (SIFFS, district federations and primary societies) covers purchase, renewal and maintenance of shing equipment, post harvest activities, food credit, and other consumption credit. The main component of SIFFS credit comprises production loans, which at the district and village levels are sourced from commercial banks. Besides this, loans up to Rupees Three Thousand were given to the crew by the society and routed through the owner. The outstanding loan amount disbursed to members as on 31st July 2007 was Rs. 106.47 million and the average loan size was Rs. 14,632. In the area of savings, SIFFS has come up with an Old Age Security Savings scheme, which aims to create a pool of savings which may be of use to shermen when they become old. Under this scheme, the members save Rs. 50 per month. When they become old and cannot venture out for shing, they can take up other livelihoods using the saved amount. SIFFS has been experimenting with micro insurance services to shermen and for their assets. It has tied up with Life Insurance Company for providing Janasree Bhima Yojana (JBY) group insurance to its members. For crewmembers, a special insurance scheme has been developed wherein the owner pays a premium for unnamed crewmembers. Any crew accompanying the owner is eligible to claim the insurance. As on 31st March 2007, 7049 members are covered under JBY and 16,585 crew members are covered under unnamed crew insurance scheme. The asset insurance scheme has been evolving suitable insurance products to cover assets like boat and engines.
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5. Impact of Intervention
After passing through various phases of growth and change, SIFFS shaped itself into a sherman-friendly co-operative catering to their needs in the best possible manner. The overall impact of such a large intervention, over time, is difcult to quantify. However, the following points summarise the impacts. SIFFS is the apex body of a network of over 137 village-level societies. The total membership of sea-going shermen at the village level is around 9000, implying the participation of 8000 to 9000 shing units. When the crewmembers that work on these shing units are taken into account, the total number of direct beneciaries is around 45,000 sea-going shermen. However, if the benets received by non-members of some of the major technological interventions by SIFFS, and the indirect beneciaries, i.e. the family members, and the effect of replication of model by Matsyafed etc. are taken into consideration, the number would be over 5 lakhs. SIFFS intervention has touched almost 10% of the shermen population in Kerala alone, which is a signicant number by any standards for a livelihood intervention by any non-governmental effort (according to one estimate, total population of marine shermen in Kerala would be around 1,50,000). Total share of sh exports went up by around 10%. There has been an increase in sh prices (20-50%) on the beaches for both members and non-members due to competition with the traditional middlemen system. Members continue to get around 10% higher prices than nonmembers. The beach level marketing system in the entire Kanyakumari district had been transformed, leading to increased share of wholesale price, or export price, to all shermen in that belt. Unlike earlier, the crew members are assured of regular incomes as the result of this new system. As described in the case, introduction of OBMs had made shing unviable for many small shermen because of their high costs. However, the traditional boats would have become obsolete and redundant in the face of competition from mechanised trawlers. Introduction of OBMs by SIFFS ensured assured wage employment to many crew members, who would have otherwise lost their only source of livelihood! Increased social security for at least for 9000 member households due to various member welfare schemes - savings, insurance, loss compensations, etc. The economic indicators of the benets are, increase in assets on land such as houses, jewellery and household amenities. Fishing assets like boats, motors and nets. The social indicators include educational status of children, higher awareness levels, etc. Savings, on account of regular credit availability to all members, at lower costs, is easily over 10% of incomes for members in all federations. Reduction in losses of income and outows due to borrowings on account of savings and other facilities at society level could be 3-5% of income.
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Substantial impact on Government system that copied the SIFFS model and has a network of Government cooperatives in Kerala. No trawler can enter the small artisanal shermens territory in any of these areas. Growth of shermens condence and leadership, and the greater integration of the traditional shermen into the mainstream. This united work has led to substantial information on artisanal shing as a livelihood, and has inuenced many policy discourses. Also this has helped them to access bank and institutional nance on a large scale, and a capacity to cope with technological changes better.
Impact on Environment
SIFFS is aware of the need to reduce the pressure on the seas resources. There was always a danger that the credit programme could lead to capitalisation of the shery and lead to environmental degradation. SIFFS tried to minimise this by measures like not funding technologies such as ring seines, which are considered the reason behind over-shing. In fact SIFFS does not work with shermen from Malabar, who use this technology. It is worth pointing out that a cooperative intervention, which is not environmentally sensitive, in a situation with a common pool resource (CPR), can have a negative impact and create serious problems like depletion of the resource itself- a fact ignored by Matsyafed in its intervention.
Impact on Social Relationships

The democratic functioning and self-management that the societies followed resulted in a change in the thinking of the sher folk. The societies have signicantly contributed to the gradual break down of domination by the elite in shing villages, and brought down the inuence of church committees and political parties.
6. Lessons on Livelihood Promotion

SIFFS intervention in not based on creating new livelihoods, but on protecting and enhancing existing livelihoods. It would have not been possible without the substantial investments made, in a sustained manner, over a long period of time, by NGOs and donors.
Some lessons that could be learnt from the SIFFS experience:

SIFFS intervention came about, because NGOs collaborated to create a peoples organisation that transcended their individual boundaries. They were ready for the loss of control that this would entail and also their redundancy. The SIFFS case demonstrates the basic characteristic of any livelihood promotion intervention, in that it requires variety of services and different inputs in order to become useful at different points in time. The challenge lies in building new competencies to adapt to the new scenarios.
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Considerable investments and experimentation are needed to develop sustainable livelihoods on any large scale, which calls for dedication and commitment from people. SIFFS network would have spread more rapidly if the government had created a more favourable policy environment instead of trying to duplicate and compete. All through the years, SIFFS concentrated on streamlining the beach level sale of sh. The reason was that the impact of the intervention at the point of sale is always signicantly useful for the largest number of beneciaries- in this case, the sherfolk. SIFFS three-tier model has an inbuilt autonomous structure. Each tier works independently, but is organically linked, which has provided much-needed stability and helped to address various issues for the welfare of the shing community.
Abbreviations Used
SIFFS OBM OASS NGO ITDG FWS SIDBI South Indian Federation of Fishermen Societies Out Board Motor Old Age Security Savings. Non Governmental Organisation Intermediate Technology Development Group Fishermen Welfare Society Small Industries Development Bank of India
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Case Study 4
BASIXs Intervention in the Milk Sub-sector

Sanjeev Phansalkar and Somnath Ghosh11
Abstract
To promote large number of sustainable livelihoods for the rural poor, a sub sectoral approach is very important for livelihood promoting organisations. This approach requires a thorough understanding of the factor conditions and demand conditions around the chosen sub sector, and strengthening activities, by intervening in certain crucial areas. This case study presents one such intervention by BASIX in Andhra Pradesh.
1. BASIX
BASIX is a livelihood promotion institution established in 1996, and head quartered at Hyderabad, Andhra Pradesh. It works in the poorer districts of Andhra Pradesh, Karnataka, Maharashtra, Orissa, Madhya Pradesh, Rajasthan, Jharkhand, Bihar, West Bengal, Delhi, Uttarakhand, Sikkim, Assam and Chattisgarh. BASIXs mission is to promote sustainable livelihoods for the rural poor and women, through an integrated provision of nancial services and technical assistance. BASIX adopts a cluster-based, sub sectoral approach to livelihood promotion. The basic premise is that the sub-sector approach fosters the dynamic growth of the local economy and generates more income and employment for the rural poor. A large number of rural poor, who have no inclination, or the ability to pursue self-employment, can therefore nd wage employment if a sub-sector is developed in the local economy.
2. Sub-sector Identication
The rst step in sub-sector development is the identication of a sector that has the potential to generate additional income and employment for the rural poor. BASIX has identied seven sub-sectors in which a large number of its customers earn their livelihoods. These are- groundnut, cotton, soybean, vegetables, pulses, non-timber forest produce and dairy. Among these, dairy is the most preferred diversication for marginal producers. India is now the largest producer of milk, and with 10 million producers, this sector contributes close to 5% of Indias GDP. More importantly, dairy is one of the few livelihoods that the poor, particularly women are able to practice. As a result of dairy programmes, womens incomes have risen, providing additional benets to the family, as the money gets spent on nutrition
11
omnath Ghosh is a part time professor at IIM-Indore. Sanjeev Phansalkar is a feelance development professional based S in Nagpur. The case has been revised by B.N. Dhananjaya.
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and childrens clothes, rather than on liquor and other non-essential consumption, on which men are prone to waste their income. After identifying the sub sector, it is necessary to understand the context in which the sub sector is operating. Understanding both the internal and external context broadens the scope of the sector, and also helps in identifying ruling constraints. Logically, if a sub-sector has the potential for development and has still not come into fruition, it presupposes the existence of some ruling constraints. Therefore, the next logical step is to understand the external context and identify such ruling constraints.
3. External Context
Factor conditions like availability of infrastructure- power, roads, milk chilling plants, etc. were considered. Traditionally, dairy management was practiced by the rural poor, particularly women, as it was one of the few means available for augmenting their family income in spite of resource and service constraints. And though the number and quality of cattle was not very high, there were enough to help the family make a decent living. Since BASIX could make signicant contributions to the availability of capital (credit), it could make a difference in this sector. Demand conditions represented by the size of domestic or local markets were good. There were quite a number of buyers like Andhra Pradesh Dairy Development Cooperative Federation (APDDCF), Heritage, Dodla, Britannia and Superday. The growth rate of domestic demand was excellent and there was signicant presence of external buyers. The size and structure of existing rms, was not encouraging. However, the possibility of new rms coming into existence, or of existing ones being revamped, was encouraging. Industry conditions were also favourable as the growth of the dairy sector, nationwide, was satisfactory. Additionally, Operation Flood created a network of cooperatives with some physical infrastructure or the other, in over 400 districts across the country. Finally, the assessment of institutional conditions was not encouraging. However, there were a number of government supported training schemes and support facilities like the availability of veterinary services. The institutional network of primary cooperatives was weak. To BASIX, conditions of the dairy sub-sector met three of the most important criteria of Porters Framework. Overall, dairy is a sub-sector that could be developed to foster growth of the local economy, and to generate incomes and employment. The results could be more encouraging if some of the ruling constraints could be addressed.
4. Ruling Constraints
Andhra Pradesh Dairy Development Cooperative Federation (APDDCF) had established Milk Chilling Plants (MCPs) at six locations in Mahbubnagar district alone in the 1980s. But three of the six MCPs in Mahbubnagar were defunct by 1997. For example, the APDDCF milk chilling plant at
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Wanaparthy, which had a capacity of 10,000 litres per day (lpd) and a breakeven of 6,000 lpd, had milk procurement of 270 lpd in the lean season and 4,000 lpd during the peak season, averaging to just about 1290 lpd. Since the plant was running under losses due to high operating costs and overheads, APDDCF thought of closing down the MCP. Another ruling constraint was the weak network, or functioning of the Milk Producers Cooperative Societies (MPCS). According to an analysis done by BASIX, four key factors contributed to the Wanaparthy plants impending closure: limited milk collection, a lack of production incentives, limited product knowledge, and limited availability of credit to village producers. Milk collection was limited and continued collection was uncertain. Only two milk routes were in operation, no milk producer co-operative societies had been organised and village producers did not know if milk collection would continue at existing centres. The villagers had no production incentive. The milk collection centres did not conduct fat tests on the milk, resulting in a low procurement price and no incentive for quality. Limited extension activities resulted in improper vaccination and outbreak of diseases among livestock, poor feeding practices, and improper care during animal pregnancy. Inputs supplied were only available to the inuential farmers. The availability of credit to village producers was limited. Most credit, provided under government sponsored schemes, reached only a few producers in each village, was not available when needed and obtaining it took too long for a borrower. In addition, it had high transaction costs and was misused by borrowers. Bank credit was negligible, with the exception of government-sponsored borrowers.
5. Efforts made by APDDCF

When a new manager was posted at Wanaparthy MCP, he took steps to address the rst three factors. MCP staff began visiting each milk collection centre and educated the producers about the benets of forming cooperative societies. As a result, nine new producers cooperatives were formed. MCP staff also explained to the producers that they can make more money by supplying milk with higher fat content than by adding water. New services were also provided. Articial insemination (AI) of cattle was introduced and the service was available at the producers doorstep with the help of Gopal Mitras. Women extension workers were also introduced, who discussed issues with women who took care of the cattle. And, two new milk routes were added. Within a year, i.e. by early 1999, the change was evident: Quantity: Average procurement increased from 1292 litres/day to 2526 litres/day (95% increase) Quality: Fat content: increased from 6.1% to 7.3% SNF (Solids-not-Fat): increased from 8.5% to 8.6% Milk Spoilage: decreased from 0.05% to 0.01%
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Although procurement nearly doubled to 2,500 lpd, it was still too low for break-even of the MCP. To further increase procurement, the population of productive cattle had to be increased. For this, dairy farmers needed loans but bank procedures were unfriendly.
6. Intervention by BASIX
It was at this stage that BASIX decided to intervene in Wanaparthy. For BASIX, this was to be a pilot intervention, before it could scale up operations to stimulate the development of the dairy sub-sector.
6.1. Overcoming Constraints - Providing Necessary Support Services In April 1999, BASIX tied up with Wanaparthy MCP to provide credit to producers. MCP was to recommend potential borrowers and BASIX was to appraise them and lend the required amount. Further, MCP was required to deduct loan instalments before making payments to the milk producers. MCP was also to provide Technical Assistance and Support Services (TASS) and extension services to farmers getting loans. Table 1: BASIX Credit Program in Wanaparthy area in 1999-2000
Number of Milk Cooperatives Number of Farmers Loan Amount Number of Buffaloes purchased Number of Buffaloes purchased through loans 15 500+ Rs. 60 lakhs + 700 600
BASIXs relationship was not limited to lending. Apart from credit, BASIX helped Wanaparthy MCP in the following ways: Identied areas for improving collection efciency after conducting a detailed study Purchased electronic weighing machines and electronic Milk-o-Testers for quick fat testing MCP bought computers and automated accounting and payments systems BASIX introduced MCP to a Hyderabad-based company to develop a software that would integrate all the three electronic systems for improving efciency BASIX tied up with New India Assurance and private insurance companies for insurance of milch animals. This was to cover the limitations of a government supported insurance package covering the animal, the cattle shed (usually made of thatch and prone to res) and the dairy farmers life, under the Gopal Raksha policy. As this was a government scheme, only a limited number of borrowers were covered, so later, BASIX persuaded the borrowers to seek insurance from private insurance companies, for their cattle.
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The results of these interventions are summarised below: Average milk procurement increased from 1300 lpd to 6400 lpd between 1998 and 2000. Improvement in milk collection efciency meant producers no longer had to wait in long queues for hours, thereby releasing them for other productive activities. The fat content of the milk could be easily checked, thereby facilitating immediate technical assistance to weak cooperatives. Measurement improvements decreased milk wastage and increased producer income. Individual producers could save nearly 20 ml/litre and MPCS saved 9 ml/litre. Producers could know the amount due to them for any period. Procurement crossed 10,000 lpd in October 2000. For the rst time, since the plant was established in 1981, local sale of chilled, loose (non-packaged) pure milk was initiated in November 2000, using 100 litre micro-coolers kept at retail shops in small towns. A milk-pouch packaging machine was installed aiding local customers. Hitherto, these customers were dependent either on the bicycle-borne milk vendors, whose milk quality was suspect since they added water to milk, or they depended on pouched milk from distant Hyderabad, which was much more expensive. Transport costs came down from Rs. 1.12 to Rs. 0.26 per litre, and milk handled per employee went up from 126 lpd to 580 lpd. The impact on livelihoods is even more signicant: Sale of milk from villages in the area has gone up from below Rs. 50 lacs to over Rs. 2.4 crores each year Net prot of milk producers has gone up by Rs. 40 lakhs per annum, or Rs. 5700* per household (*A signicant amount considering that the annual family income for a BPL family of ve, is below Rs. 25,000) It is also instructive to note the differential as well cumulative impact of TASS and credit on livelihood promotion, as shown through the two tables below.
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Table 2: Impact of TASS and Credit on Milk Production

Year 1997 1998 1999 2000 2001 Intervention Credit only TASS only Both TASS and Credit Both TASS and Credit Both TASS and Credit Milk Production 1260 litres/day 2526 litres/day 4537 litres/day 5800 litres/day 6400 litres/day
Table 3: Role of TASS and Credit Analysis of Milk Procurement in Villages over two years
Villages with No TASS, no Credit No TASS, only Credit Only TASS, no Credit Both TASS and Credit Increase in Milk Production 30% 34% 117% 183%
Four lessons emerge out of the above two tables, at least, so far as the Dairy sub-sector is concerned: 1. Credit alone does not have as much impact in terms of increased milk supply as credit plus TASS has 2. As a stand alone facility, TASS yields better returns than credit 3. The credit agency itself need not provide TASS support 4. It makes sense to collaborate with sub-sectoral agencies such as APDDCF, and strengthen them with credit support to their producers.
6.2 Scaling Up Based on the success of the Wanaparthy intervention, BASIX made a presentation to the Managing Director of APDDCF in late 2000 and he invited BASIX to repeat this in other dryland districts, where milk chilling plants were working well below capacity. By July 2001, BASIX was working with over a dozen APDDCF chilling plants in Ananatpur, Cuddapah, Kurnool, Mahaboobnagar, Nizamabad, Medak, Adilabad and Srikakulam districts. Now all the MCPs of APDDCF are operating satisfactorily. 6.3 Establishing Linkages and Leveraging Relationships It is easy to see the benet of establishing linkages with key players and leveraging those relationships, so that producers benet in some concrete ways like increase in productivity and reduced market risks. All parties beneted from their participation in these leveraged relationships. Producers beneted by getting an assured market for milk at their doorstep and at a higher price than otherwise provided by collection agents. The APDDCF beneted
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by reviving its chilling plant and also marketing more milk through its processing plants and marketing networks. And nally, BASIX beneted in two ways. First, increased incomes of the producers resulted in additional requests for loans. The improved livelihood of existing producers drew the attention of other producers, increasing loan demand. Second, loan repayment risk was reduced by the repayment structure instituted at the Wanaparthy MCP. The MCPs automatically deducted loan instalments before making payments to the producers. Loan instalments were then forwarded to BASIX. Later, in other locations, BASIX collected from the cooperatives too. Similarly, in Bichkonda in Nizamabad district, BASIX leveraged its relationship with GRAM (Gramabyudaya Mandali) to rejuvenate the MACS for the purpose of lending, as well as to revive the defunct bulk cooling unit (BCU).
6.4 Sustainability BASIX addressed the question of sustainability by focussing on

i. Improving its design and developing a revenue model, ii. A cooperative framework of producers organisation, which is the building block of social and political capital, and iii. Mitigating risks.
(i) Improving Design and Developing Revenue Model: Initially the MCP deducted the producers loan instalments payable to BASIX, before settling the dues with the producers. At other places, recovery was done through milk collection agents (MCA). The initial success soon ran aground and BASIX returned to the old methodology of maintaining greater contact and exercising better monitoring of instalment collections. Next, BASIX favoured introduction of bulk and micro-coolers. This had a strategic impact by pushing up local sales of chilled, non-pasteurised milk, transporting only excess milk upwards. This resulted in high savings in processing and transportation costs. In the process, the MCP was also able to sell milk at a lower price and yet pay a higher price to the producers. The overwhelming pre-occupation of some managers with revival of BCUs in Nizamabad district led BASIX to re-assert that the main objective was to enhance the dairy-based livelihoods of the poor in the four backward mandals in a sustainable manner. (ii) Establishing Cooperative Framework of Producers Organisation: The cooperative movement has often been shrouded in ideological controversy and rhetoric. Ideology apart, one would still need an organisation to manage the affairs of poor, marginally educated and dispersed producers.
But from a purely functional point of view, dairy cooperative unions have been generally beset with two sets of problems. The rst set relates to their failure in covering the marketing risks that member-producers face with regard to their inability to access working capital, closure of milk routes, and uncertain collection and payment schedules. Therefore one of the major concerns of the Bichkonda MACS that BASIX attempted to resolve, was to link MACS to FIs with the help of GRAM (Gramabyudaya Mandali).
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Discharging managerial tasks properly is the second set of problems that dairy cooperative unions face. They are often tardy in ensuring that technical assistance reaches members on time. Enforcing discipline within its own ranks is another problematic area. BASIX recognised that in some areas unions needed reorganisation. The Karimnagar Milk Union was therefore reorganised.
(iii) Mitigating Risks by Evolving New Strategy: In todays scenario, where policies and markets are constantly shifting, any sub-sector is likely to face risks. Therefore, signicant success notwithstanding, every player has to be ever alert to emerging challenges. Emerging challenges need to be met half-way, otherwise organisations are likely to be swamped by the forces of change. In short, pre-emptive strategising is the answer.
Nothing illustrates this position better than an internal note circulated by the MD of BASIX to his colleagues in October 2002. The same is reproduced below: The rst risk is that APDDCF is likely to be sold off by the GoAP. If that happens, we cannot be sure how many of the milk chilling plants that we are working with, will be continued by the new owners. The chances are that many of the marginal plants, which are collecting below the 5000 litres per day, will be dropped off the procurement network. This means many of the dairy farmers we have lent to will not have any steady marketing outlets. Of course, they can still sell locally but this would put them at a disadvantage. The second risk is more long term, and likely to become effective in 2004, when WTO led imports of milk and milk products become substantial. New Zealand and Australia are in a position to send milk to Chennai and Vizag at a landed cost of Rs 8 per litre, which means Rs 10 11 per litre in a pouch. Milk sells between Rs 12-14 per litre in pouches. This will make domestic milk uncompetitive, at least in the metros. (Those who nd this surprising or unbelievable should think of what happened to edible oils just a few years ago.) In terms of risk mitigation for us, the rst strategy should be to identify a range of small and medium private sector milk producers such as Jersey, Vasavi, Cream Line, etc. We need to persuade them to buy milk from the areas we have lent in, and preferably even buy up the chilling plants. The second strategy should be to get as many bulk coolers of 1000-2000 litres capacity installed in our operating areas using DRDA, SGSY infrastructure funds and DPIP CIF funds. A good beginning has already been made in Mahaboobnagar (six bulk coolers) Adilabad (6) and in Anantapur (16). The advantage of bulk coolers is that we can have the milk sold totally without pasteurising and pouching, sending only the surplus to a larger plant for processing. Cost of transporting liquid milk from major ports is high and thus unpackaged milk sold from bulk coolers at Rs 10 11 per litre will be able to compete with the imported milk. The third strategy has to do with the relative cost of transportation of milk vs. milk products. One truckload of liquid milk is worth only Rs 1 lakh whereas one truckload of butter/cheese/ skimmed milk products is between Rs 2050 lakhs. Thus imported liquid milk is unlikely to be competitive, except in port cities and metros. Thus the market is going to change to a situation where only domestic, low fat milk is competitive while milk products
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are imported. This means we need to shift more towards cow milk, which is low fat and reduce buffalo milk production. This has implications for our future nancing strategy for dairy. The ground reality has at least vindicated the worthiness of the second strategy, albeit with a certain amount of ne-tuning. This is illustrated by the installation of a bulk cooler in Nagar Kurnool town. In this case, the District Rural Development Agency (DRDA) sanctioned funds for installing bulk coolers. APDDCF installed a bulk cooler at Nagar Kurnool town and started milk procurement at villages, while BASIX extended credit for buying milch animals. Animals were sourced from coastal districts after a unique process of price bargaining. The buyer would check milk yield for a week before paying for the animal. APDDCF in turn, arranged for veterinary care and training of the cattle rearers. But APDDCF had to soon effect changes in the procurement and sales system. This was because a large number of vendors used to buy milk from farmers and sell in Nagar Kurnool town, mixing water in milk. They earned more than Rs. 100 a day. As a result, APDDCF was not able to procure more than 150 litres per day due to vendor practices. APDDCF hit upon a very novel idea to neutralise such vendor malpractices. Vendors were persuaded to become milk sellers using APDDCF issued micro-coolers. In the process, the vendors earn the same, but with much less labour. Consequently, total procurement went up from 150 litres a day to 2500 litres a day, and producers got a steady income. Bulk coolers have also been installed in other locations. With DRDA funding, APDDCF installed two more bulk coolers at Gadwal and Narayanpet. Due to additional bulk coolers, in the peak season, the total procurement in Wanaparthy reached 16,000 LPD, with 13,000 LPD being supplied to Hyderabad and balance sold locally. APDDCF soon earned a prot of Rs. 45 lakhs.
7. Situation as on Today
Today, in the year 2008, the dairy sector in the entire Mahaboobnagar district has changed completely. The district has acquired the distinction of being a high quality milk producer in the state of Andhra Pradesh and maintaining livestock has become a major source of livelihood. The favourable factor conditions, supported by encouraging demand and industry conditions, have resulted in competition for many private, as well as, state owned dairies. The institutional arrangement for milk procurement of APDDCF has changed dramatically. Now, APDDCF has involved SHGs, Village Organisation and Mahila Mandal Samakhya (MMS) in place of cooperatives for procuring milk (APDDCF collaborated with SERP - Society for Elimination of Rural Poverty, an autonomous Society registered under Public Societies Act, which is implementing the government programme Indira Kranti Pratham (IKP) in Andhra Pradesh). It has established a number of Bulk Milk Cooling Units at the mandal level and has handed over the responsibility of operations to Mandal Samakhyas. Totally 105 Bulk Milk Cooling Units (capacity ranging from 1000 litres to 5000 litres) are established in the entire state, with 21 BMCUs itself in Mehaboobnagar district. On the other hand, many private dairies, like Reliance, have also entered the market. This has created a more competitive environment, which nally benets milk producers in the district due to better price realisation. Now the producers have better choice for marketing milk. More importantly, the farmers have understood the importance of quality aspects of milk
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like fat and SNF (Solids-not-Fat) content, for getting better prices. The access to credit for dairy activity has also eased in the district. Financial institutions are lending to dairy activities on priority. The collaboration of BASIX with APDDCF does not exist now. But the collaborative efforts that happened between them for three years have strengthened the entire dairy sector in the district, and as a result, APDDCFs Bulk Cooling Units have got a new lease of life. More importantly, it has laid the foundation for use of quality parameters in the payment for milk. The introduction of electronic machines for testing, weighing, billing and payment has brought in transparency in the system and it has contributed to good management of the units. Encouraged by this impact of technical and support services, BASIX has evolved comprehensive, fee-based dairy services for their customers. The services includes fortnightly health checkups of animals, de-worming, articial insemination, periodically organised health check up camps, facilitating fodder and feed services etc. Presently BASIX is providing dairy services to about 3500 customers in the district. The Wanaparthy Milk Chilling Plants, where the pilot intervention started, now operates with an average milk procurement of twelve thousand litres per day, compared to just two thousand ve hundred litres in the year 1999, when the intervention started. It procures milk from the ve BMCUs set up at the mandal level, which are operated and managed by Mandal Mahila Samakhyas. The institutional arrangement for procurement of the milk is as follows: At the village level, Village Organisations (VO) (a group of 15 20 SHGs) procure the milk and transport it in to Bulk Milk Cooling Unit at mandal level. These BMCUs are operated and maintained by Mandal Samakhyas. The milk chilled at BMCUs is transported to bigger milk chilling centres and then to the Dairy for packaging and manufacture of other milk products. The APDDCF pays Rs. 1.35 / litre to MMS for rendering these services.
8. Endnote
Intervention by BASIX in the dairy sub-sector has had a signicant impact on livelihoods of the poor. The pilot intervention due to the BASIX and APDDCF collaboration has rejuvenated the MCPs and the interventions were scaled up in many places. As a result of all of these, the sale of milk from the area has gone up to one lakh litres per day in the district. More importantly, the dairy activity has become more sustainable and lives of many poor households have improved.
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Case Study 5
Promoting Community Managed Irrigation Systems: The PRADAN Experience in the Eastern Plateau Region
Abstract
Natural resources are the most signicant source of rural livelihoods in the country. Not surprisingly, some of the poorest regions in the country are also places where agriculture is least developed, and where land and water resources are poorly managed. Where irrigation is poorly developed, farmers typically grow only one crop each year. The vicious cycle of poor husbandry practices, low productivity and high risk; inherent in monsoon rainfed agriculture, leads to perpetually declining livelihoods. A shift from rainfed to irrigated agriculture offers some potential for signicant livelihood gains and opens up new frontiers of choice for a farmer. With irrigation, a farmer can evolve from depending solely on the monsoon crop to cultivating up to three crops in a year. Irrigation also provides protective irrigation for the monsoon crops. Even if the farmer continues to follow subsistence agricultural practices (as opposed to cultivating cash crops), at the very minimum, the provision for irrigation promises greater food security over the year.
K. Mamata Krishna12
The following case describes PRADANs (Professional Assistance for Development Action) efforts at promoting small-scale, community-managed irrigation systems in the Eastern plateau region. This region comprises the Chotanagpur plateau in the state of Jharkhand (formerly part of Bihar) and adjacent parts of Orissa and West Bengal states, as well as the Chattisgarh plateau in the state of Chattisgarh (formerly part of Madhya Pradesh).
1. PRADAN
PRADAN is a NGO working in six states in India, namely, Chattisgarh, Madhya Pradesh, Jharkhand, Rajasthan, West Bengal and Orissa. PRADAN was set up as a not for prot society in 1983, and since then its primary focus has been grassroots action to enhance the livelihoods of poor people in Indias rural areas.
K. Mamata Krishna is a freelance development consultant based in Bengaluru. Dhruv Sengupta, Faculty, The Livelihood School has reworked on the case and brought in the recent dimensions.
12
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PRADAN works directly at the grassroots, in the spirit of enabling communities to build upon their skills, initiative, resources and entitlements, rather than delivering services or solutions. The approach is to promote activities that help in building community organisations at the grassroots.
2. The Context
The Eastern Indian Plateau spread over the states of Jharkhand, Chattisgarh, Orissa and West Bengal, has undulating hills and forest patches. The region is mostly dominated by tribals and experiences low rainfall on an average between 1000-1300mm. PRADAN is operational in the Eastern Indian Plateau with the objective of promoting sustainable agricultural and community based institutions. As a strategy, PRADAN promotes community based institutions; and especially in the eastern plateau, the focus has always been on promoting sustainable agriculture, in order to reduce the effects of erratic rainfall. The region experiences torrential rainfall, which provides food for the tribals, for three to six months. The average landholding of the population is one acre. This case, on communitybased irrigation promoted by PRADAN, is an attempt to address the food security issue by promoting lift irrigation projects.
3. The Intervention: Community-Managed Lift Irrigation Systems

The Lift Irrigation Model of PRADAN A typical Lift-Irrigation project lifts water from a stream to terraced agricultural elds, about 10 to 20 metres above it. Each project irrigates 30 to 60 acres of land owned by 20 to 30 farmers. Ideally a patch of continuous land is selected as a command area, to ease the distribution of water and to facilitate maintenance of individual records. A simple centrifugal pump driven by a 5 to 8 HP diesel engine is used to pump water to the elds. Water is transported by 600 to 1500 metre long PVC pipes buried in the soil, with four to six delivery outlets positioned at suitable points in the elds. Often there are branches off the main line. Diesel engines are used in place of electric motors, as most villages do not have electricity. Depending on the need, a provision is made for an intake well at the water source with a pump house to protect the pump.
Wherever possible, PRADAN also promotes gravity-ow irrigation schemes. These schemes divert water to elds located at lower levels. Gravity-ow schemes involve constructing an earthen or masonry structure across the streams to increase the volume of water available for irrigation. This water is then conveyed by the force of gravity - without using any power - through buried PVC pipes, to the elds below.
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Institutional Arrangements for Management of Irrigation Systems

Irrigation systems are implemented with full participation of the community during the design, installation, maintenance and distribution phases. Farmers whose lands fall in the command area of the pump are organised into a Water Users Association (WUA), which runs and maintains the irrigation system, once it is commissioned. The size of the project has deliberately been kept small, for this enables effective functioning of groups, and makes the task of water distribution relatively easier. The technology used is simple, so spare parts are available locally and farmers can install, operate and maintain the pump by themselves. An operator selected by the WUA is trained by PRADAN in running the pump. The farmers pay for the services of the pump operator and for diesel, maintenance and depreciation costs. WUA decides the cost of irrigation in their monthly meeting, which is on an average Rs. 8 per hour per member, as charges towards maintaining the pump and paying the operators honorarium. This sum is deposited by the members in the WUA committee before irrigation.
Ensuring Viability of Irrigated Agriculture

If irrigated agriculture has to be nancially viable, then the farmers have to shift from subsistence-based farming to cultivating cash crops. There are many challenges in promoting market-led irrigated agriculture, in areas where rainfed agriculture; which is predominantly subsistence oriented, is the norm. These challenges include training farmers in more intensive husbandry as required by irrigated agriculture, linking farmers to the market economy to sell produce and procure inputs, and accessing credit for working capital to purchase inputs. After an irrigation system has been installed in a village, PRADAN continues to work with the WUA for two to three years, to provide training in irrigated agricultural practices, to oversee functioning of the groups that includes management of funds, helping farmers obtain crop inputs and to sell surpluses to the right markets.
Mainstreaming the Model

PRADAN believes in linking rural people directly to the mainstream, rather than acting as a conduit for funds. Funding for lift-irrigation infrastructure is generally sourced from the district administration. Once a project is sanctioned, funds are released directly to the account of the WUA. The District Rural Development Agency (DRDA) bears about 80 to 90 per cent of the cost and farmers bear the rest by contributing labour for digging trenches for laying pipes, and for constructing the pump house. Earlier, a typical project would cost around Rs. 1.5 lakhs, whereas now it costs almost twice that amount.
The Growth of the Irrigated Agriculture Programme in PRADAN

In 1989, PRADAN initiated its irrigated agriculture programme in Silli block of Ranchi district. In collaboration with the local community, PRADAN initially implemented 40 lift-
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irrigation projects in Silli block. Silli had then become the learning and training ground for most of the new Lift Irrigation units. Till October `08, PRADAN has installed more than 2000 irrigation systems, with a command area of around 30,000 acres, beneting 45,000 families. Geographically, the programme spans twelve districts in four states, namely, Jharkhand, West Bengal, Orissa and Madhya Pradesh. Lohardaga was the rst district in Jharkhand, where Lift Irrigation schemes were installed in partnership with the Government. At Lohardaga the lift irrigation project was executed in 1992 at the Saila Ambatoli village (Kisko block). With support from the Government, 185 lift irrigation schemes have been installed in Lohardaga, as on October 2008.
Why the PRADAN Model Works

The low cost, lift irrigation technology that has been designed, allows farmers to manage the projects efciently. Maintenance is done by local people themselves, thus reducing their dependency on external agencies and avoiding delays in repair. Community management of irrigation infrastructure is also egalitarian, thus making possible the promotion of cohesive water users groups. The technology is small scale and can tap irrigation sources as many small steams; earlier considered unviable by the state-run minor-irrigation departments, crisscross the region. The intensity of problems like unavailability of labour and capital for cultivation, are overcome through innovative measures: The system is so designed that only one farmer can irrigate his eld at any point of time, thereby minimising the possibility of disputes in measurement or distribution of water. The pumps are run on diesel, which is locally available and this is more suitable than electricity, which is either unavailable, or erratic, in the regions where PRADAN works. There are not many landless inhabitants in the project area. During site selection, PRADAN consciously chooses sites where poorer farmers own land. Farmers are required to invest at least 10% of the implementation costs by way of labour or cash, so that they have a stake in the project. The pump operator is selected by the farmers and given intensive training by PRADAN.
4. Impact
The most signicant impact of the irrigated agriculture intervention has been an increase in food security and food intake in the target families. It is estimated that food availability has increased by 80-100% in the project communities.
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All from an Acre of Land

In general, a farmer beneting from PRADANs lift irrigation systems owns around an acre of irrigated land. Assuming that s/he is cultivating two crops in a year, the following increase in income, or improvement in food security is generally observed after installation of a lift irrigation system. Incremental benets from the Kharif crop: The provision of irrigation doubles the yield of paddy. This translates to an increase in productivity by 800kg of paddy per acre, which amounts to Rs. 3000 in cash, or an increase in food security for six months for a family of four. Benets from the Rabi crop: Irrigation allows for cultivation of a second crop in winter. Assuming the farmer sows wheat on his land (and most do), wheat gives yields of 1000kg per acre, which equals Rs. 5000 in cash, or food security for ve months for a family of four. Hence, an acre of irrigated land in the Eastern plateau region can result in increased food security for 11 months for a family of four, or an increase in income by Rs.8000 per year.
It has been observed that the quality of food available has improved after installing irrigation systems, with the increased vegetable cultivation providing better nutrition to family members. Additional wage employment has been generated in the villages due to an extension of the cropping period to the Rabi and summer crops. This increase in employment has especially beneted the poor and the landless. Increased food security and the generation of additional employment have, in turn, resulted in a substantial decrease in migration from project villages. In villages where irrigated practices have stabilised, investment in childrens education is on the rise there has been a signicant increase in school enrolment among the children of the WUA members.
In Saila Ambatoli, a village in Gumla district, lift irrigation project was initiated with 35 farmers in 1992. As demand increased, two more lift irrigation systems were installed, leveraging funds from Government schemes. About 400 acres of land was covered under the command area. Farmers took three crops a year, with technical assistance from PRADAN and ICRISAT. The rate charged was Rs. 8.00 per hour. This was in addition to the cost of diesel, which the farmer had to purchase. With the increased cost of diesel and manpower costs, the WUA committee increased the rate to Rs.10 per hour, with 2 litres of diesel required for an hour.
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The income level of farmers has increased and most importantly, the farmers who were hunters are now settled agriculturists. About 40 households had purchased small pump sets of their own for vegetable cultivation from wells. Formation of strong community groups was the corner-stone of this intervention. Youth groups have come forward to sell the produce in aggregate. Interventions in the village have increased food security, savings, investment in education, and purchase of assets (mobile phones, motorcycles etc.). Earlier, in this area, money required for marriage expenses was obtained by mortgaging land. This is not the case now.
As the productivity of the land has increased with irrigation, it has prevented poor farmers from selling, mortgaging or leasing out their land. Farmers who have generated surplus income from irrigated agriculture have brought assets such as land and have invested in land development, or small purchased pumpsets for well irrigation.
5. Challenges
Developing a Loan-based Prototype for Promoting Irrigated Agriculture Peoples own investment on lift-irrigation infrastructure, as a percentage of the total amount spent, is currently low. In addition to this, extension training and motivation for farmers practicing irrigated agriculture for the rst time, is often inadequate. Both these factors when combined, at times leads to poor utilisation of lift irrigation infrastructure, as demonstrated by poor command area coverage and low productivity in some project villages.
Having demonstrated through grant based promotion that community-managed irrigation systems are viable, PRADAN focused on promoting loan-based lift irrigation infrastructures. This involved creating an irrigation infrastructure that would be nanced by the people to a relatively larger extent, through loans provided to farmers. This will ensure that farmers are motivated to use the system more efciently and would also help the programme achieve scale. Much of the irrigated agriculture work was, till recently, nanced through grants under targeted poverty alleviation programmes of the government. Due to the presence of these grant-based government schemes, small irrigation schemes could not be promoted through bank loans. Concurrent to the shift in PRADANs organisational stance on increasing investment by farmers for irrigation infrastructure, there has also been a change in the development nance environment. The Government of Indias poverty alleviation programme aimed at creating private assets has been merged into the SGSY (Swarnajayati Swarozgar Yojana) programme. Under SGSY, funds- comprising of a combination of bank loans and subsidy (up to 50%), are primarily given to self-help groups (SHGs) to create private productive assets, for poverty alleviation. Hence, in future, lift irrigation projects promoted by PRADAN will have a grant component of less than 50%, as opposed to the earlier grant component of 80-90%.
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The shift from a grant-based to a loan-based component to implement community based lift irrigation schemes places an emphasis on irrigated agriculture as a commercial venture. PRADAN has taken up loan based lift irrigation in two areas, the results of which are not so encouraging.
Increasing Command Area Coverage and Intensity of Agriculture

Although migration has declined, often irrigation infrastructures in villages are poorly utilised during the winter cropping season. In many villages, farmers cultivate a second crop only in years when the monsoon crops fail. Wherever a second crop is sown, it is mainly to meet subsistence needs of farmers, with only a few farmers cultivating cash crops. In addition to this, the production capacity of irrigated land in regions where PRADAN is working is much higher than what is currently seen. Subsidies for fertilisers are on the decline, diesel prices are increasing and the grant component available to create irrigation infrastructure is decreasing. Given these rising investment and working-capital costs, productivity of land must be increased substantially in order to sustain a viable prototype for irrigated agriculture. Apart from increasing the loan component of the scheme, this calls for initiating supportive measures, such as motivating farmers to cultivate a second and third crop, increasing production per unit of water used, and encouraging cultivation of cash crops. Farmers need to be motivated to be more entrepreneurial in their approach to agriculture. Apart from the provision of irrigation, in order to increase productivity, measures such as land levelling, provision of required chemical inputs and organic manure need to be considered. A better choice of crops, cropping patterns and practices must be promoted. Although extension training, linking farmers to inputs and markets, and motivating them to pursue more intensive husbandry, are all already being carried out by PRADAN, these efforts need to be intensied and institutionalised, and there is a need to involve other stakeholders in the region.
Institutionalising Linkages to Ensure Viability of Irrigated Agriculture

Till date, PRADAN has focused largely on individual communities where it is promoting irrigation systems. However, while scaling up irrigated agriculture, there is a need to look beyond individual villages. PRADAN follows an approach that involves the saturation of a geographical area when promoting lift irrigation infrastructure. Planning region wide linkages for inputs and marketing was essential. Therefore PRADAN established linkages involving stakeholders such as seed companies, fertiliser companies, government functionaries and bankers, research agencies and the community. ICRISAT has been working closely with PRADAN to provide technical inputs and promote the irrigated-agriculture programme. Farm equipments, tools and training were also provided under collaboration with ICRISAT and DRDA.
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Ensuring Inclusion of the Poorest in a Loan-based Programme

Currently, PRADAN makes a conscious effort to create access to irrigation for the poorest families in village where it works. It was noted that very poor people are excluded from ownership of lift irrigation infrastructures, when loan-based irrigation projects are implemented. As a strategy, villages under the very poor category are provided with grant support so that they rst learn and adopt the technology. Members of WUA from villages where such interventions have happened earlier, currently play the role of resource persons for the new villages.
Increasing the Participation of Women in Planning and Decision Making

Gender related inequities are not as stark in the tribal areas of the Eastern plateau, as compared to other regions of the country. Although women do not own property and most irrigation groups are male-dominated, women; in general, are earning members of the family and have control over income sources. In most lift irrigation projects promoted by PRADAN, women members of Self Help Groups are members of the WUA and are also involved in site selection, pump-operator training and agricultural extension training. Some WUA accounts are even maintained by SHG members. It was learnt that conicts at some of the WUA were resolved by SHG members, as they share a common platform with other SHG federation members.
Other Livelihood Options in the Region

Even if land is irrigated, supporting entire families through agriculture becomes increasingly unviable, as landholding size decreases over successive generations. PRADAN has initiated poultry farming as an alternative source of livelihood for the landless. The poultry federation promoted by PRADAN is the largest supplier of poultry in Jharkhand.
6. Staff Employed, Collaborators and Funding Staff Involved in the Irrigated-Agriculture Programme
Initially a team of 25-30 professionals from various disciplines, including agricultural engineering, mechanical and civil engineering, political science, social work, geology, rural management and dairy technology were involved in implementing the irrigated agriculture programme. However the number of visits to implement the programme has reduced as WUA ofce bearers have started working as Resource Persons and have taken up the responsibility of grounding the schemes including technical layout and training.
Collaborators and Funding Sources

Institutionalising resource mobilisation from government funding for lift-irrigation projects is a major concern for PRADAN. In 1993, the Bihar Government received a loan from the World Bank for the Bihar Plateau Development Project (BPDP).
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In July 1994, after visiting PRADAN lift irrigation sites, the Chief Executive of the BPDP issued a circular to the Deputy Commissioners of ten districts in the Chotanagpur plateau region (now Jharkhand) requesting them to collaborate with PRADAN in the implementation of BDDP schemes related to irrigation and watershed management. The circular urged district authorities to sign a broad MOU with PRADAN for promoting liftirrigation schemes with government funding, without signing a MOU for every project in their area. Although the BPDP guideline was a step in the right direction towards mainstreaming community managed lift irrigation projects, the funding of projects still often depends on the initiative of individual Deputy Commissioners. Schemes like BPDP, MESO (Tribal Welfare Department), RSVY, TWC (3 years prototype) are the major funding sources for implementing lift irrigation schemes. Apart from the infrastructure costs; which are directly transferred by the district administration to the accounts of the WUAs, PRADAN charges a service fee for each project amounting to 5% of the total project cost. The service charge covers only a fraction of expenditure incurred by PRADAN on the irrigated agriculture. The bulk of expenditure incurred by PRADAN on the irrigated agriculture programme is borne by grants from ICCO. GTZ, OXFAM, SRTT, CRS, CAPART and DVC have also been donors for various projects at different points of time in the past.
Learning:
1. PRADAN initiated its intervention to address one of the critical bottlenecks in agricultural productivity, which formed the basis for livelihoods of large number of the rural populace. 2. Changing the factor conditions with the introduction of lift irrigation led to many other changes, which the organisation had to constantly cope with. They had to build up new competencies and build linkages with a variety of agencies. 3. However, the set of services extended by PRADAN diversied with the changing needs of the community. Both external changes and the progress of the intervention led to changing needs of the people. 4. PRADANs case also shows the benets of collaboration, or partnership between private groups (NGOs) and the public (the district authorities) has a signicant impact both in terms of scaling up and resource mobilisation. However, at the same time, it also increases ones dependence on government subsidy. 5. Here, just as was observed in the AP Fisheries case and the SIFFS case (in the resource book), appropriate technology played a major role in the intervention.
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6. PRADAN developed a modular design of a one acre irrigation system including a diesel pumpset. This helped to replicate the standard module. This was easy to scale-up, especially in collaboration with the Government.
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Case Study 6
SEWA Union: Organising Women Bidi-Rollers

Abstract
Nabarun Sen Gupta13
The plight of the workers from the unorganised sector in general, and home based workers in India in particular, is a matter of concern. They all suffer from poor working conditions, exploitative wage rates and the unwillingness of the state to provide social security guaranteed under various constitutional provisions. The concern has heightened since a cartel of employers, legal experts and law enforcement agencies use their own methods to interpret the constitutional provisions. The case of Bidi Workers illustrates how organised action helps women win against these odds. The case is also instructive for livelihood promoters, who work with home based workers. The case describes the struggles and the collective action of the Bidi rollers (mostly women), to obtain benets due to them under the laws of the land, having been deprived of the same. The case also discusses the constraints faced by livelihood promoters while organising self-employed women and the lobbying strategy adopted to work with employers and the government, and the challenges inherent to this process.
Bidi Industry: A Backdrop

The Bidi (or Beedi) industry, which manufactures the local, Indian equivalent of cigarillos, is one of the oldest cottage industries in India. The industry does not run on power, nor employ machines. It is mostly a home-based industry. The process of manufacturing is simple, but requires considerable skill to roll the leaves perfectly. It is an industry that is mostly runs on the hard work of rural women. The Bidi industry is not a small industry. It employs over 7.5 million workers and supports livelihoods of over 37 million citizens. The industry has a total annual turnover of over Rs 190 billion. The industry brings in Rupees 8060 million in foreign exchange, and provides another Rs 6500 million as excise revenue (2007-08). Normally considered as a home-based industry, the estimates are that over 75 per cent of its workforce comprises of women. The social signicance of the Bidi industry is understood from the fact that it generates around 1310 million person days of employment (2002-03).
13
Nabarun Sen Gupta is a Faculty of The Livelihood School.
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Bidi Industry in Gujarat

In the late 1990s an estimated 1,50,000 bidi workers worked in Gujarat, of which 10,700 were from Ahmedabad alone. A small number, 700 worked in registered factories and rms, while the rest (10,000) worked from their homes. Together they generated Rs 58 million worth of bidis (Rani and Unni 2000). In Gujarat, bidi rolling is predominantly a womens affair. Over 95 % of the bidi rollers are women. The industry has shown a positive growth trend overall, and continues to be a major source of employment for women in Gujarat. The industry in Gujarat, as in the other states, is in doldrums since 2001-02. The macrolevel policies and the sops given to the multi-national tobacco companies, including the manufacturers of mini-cigarettes have made life difcult for the manufacturers. The anomaly in the tax policy has led to an unfair price differential in the market. The US ban on Indian bidis, under the pretext that children are employed in the industry, has added to the problems. The livelihoods of those associated with this industry are under considerable stress. The absence of a common, national wage policy has lead to the `migration of the industry from one state to the other, in search of cheap labour. The poor implementation, and in most cases the non-implementation, of the Bidi and Cigar Workers Act (1966), is also the cause of this state of affairs. The industry is regulated by a few good legislations. The Bidi and Cigar Rollers Act (1966) provided for comprehensive benets to those engaged in bidi rolling. The benets included identity cards, scholarships for workers children, uniforms, maternity benets, maximum working hours permissible per day and week, weekly holidays, provision of other services like drinking water, canteens, toilets etc. The second act, the Bidi Workers Welfare Fund and Cess Act (1978) was promulgated. This act called for levying a Rupee, per kg of tobacco used to manufacture the bidi. The cess amount so collected was to help to create provisions for health care, housing and other recreational facilities for the workers. During the mid 1980s the Government of India imposed a tax on bidi manufacturers who produced more than 2 million bidis annually. The idea was to use it to provide benets to the workers. In-spite of the several legislations passed by parliament, the benets have not reached the intended recipients. The employers cum traders have effectively circumvented each piece of legislation to their advantage, thereby preventing the bidi rollers from getting the benets due to them. For example, the largest company in Gujarat Jivraj Bidi Works sub contracts work to over 3000 women home-based bidi workers. They have operations in several states. This is a common trend with all industries operating from multiple locations. The differences in labour legislations and statutory minimum wages in different states are used to their advantage through this mode of operation. The employers have been adopting different strategies to circumvent the welfare provisions. Prior to the passage of the rst act, the industry operated from sheds of the employers.
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Figure 1: The Sale-Purchase Trade Process Employed by the Bidi Industry since 1999
Raw Materials
Women
Middlemen
Company
Finished Products (Rolled Bidis)
The bidi rollers were paid a standard rate for every thousand bidis they rolled. The system changed since the act of 1978. During 80s and 90s, most of the bidi rollers were employed through indirect subcontracting. The sub contractor supplied all the materials and received the nished products on behalf of the rms. This system later took another route. Since 1999, the employers adopted sale purchase system under which one trading rm sold all the raw material to the roller, and another rm bought back nished products (see Figure 1 above). This system helped circumvent the labour laws, particularly the Provident Fund Act, which is mandatory for those employed as industrial out workers. Statistics from the EPFO (Employees Provident Fund Organisation) show that in Ahmedabad alone there are 54 establishments involved in Bidi rolling employing 775 employees (bidi rollers) under the welfare act. There are over 350 establishments in Gujarat and 55,395 rollers have identity cards. In the state of Andhra Pradesh in India, particularly in Nizamabad, the laws related to PF are stringently followed. Each worker has a PF pass book in which the deductions are enumerated every month. The pass book contains information on number of bidis rolled, payments made and the PF deducted. Some of these establishments in Andhra Pradesh (AP) are sister concerns of the companies in Gujarat. There are over 743 establishments in AP providing employment to over 762 lakh bidi rollers. In its current form, the interests of the owners are heavily tilted against the interest of the bidi rollers. This case describes the struggle of SEWA (Self Employed Womens Association), where their unity and unied approach helped the women get what they were guaranteed under the national legislation.
The Making of the Bidi: An all-Women Affair

Bidi rolling act is an all-women affair. The process begins with women soaking the tendu patta (leaves of the tendu tree) for a few minutes and then draining out the water. This is
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done at night. The next day, after completing her household chores, the womens rst task is to cut the leaves to the specications of the bidi brand. The cut leaves are kept covered with a moist cloth and the bidis are rolled after placing the tobacco in the middle, and then tied using with a thread of a specic colour (every company uses a different coloured thread). The bidis are then organised into bundles of 25 and tied with the same thread. The bundles are handed over to the trader (at the end of the day) who then pays the agreed amount. The contractor checks the bidis, and on an average, 25 extra bidis are taken out per 1000 bidis given to the contractor, to compensate for the rejected bidis. This practice has been going on for a long time. The contractor also deducts a rupee or sometime two, as his fees for providing the women with work. Usually a woman gets 200 gms of tobacco, 800 gms of Tendu leaves and the coloured Dori (thread). This helps her to make 500 bidis.
SEWA: The Origin and Growth of a Self-employed Womens Movement

The Self Employed Womens Association, SEWA, was created in 1972 as a trade union of selfemployed women. It grew out of the Textile Labour Association founded in 1920 by Anasuyaben Sarabhai. Mahatma Gandhi, who led a successful strike of the textile workers during 1917, was the inspiration behind this union. The scope of the Textile Labour Association (TLA) expanded in the early 1970s, when a survey was conducted to probe complaints by women tailors about exploitation at the hands of contractors. The survey brought out many instances of exploitation of women workers, who revealed that there were large numbers of women who were not unionised, and had never beneted from the various government legislations and policies. In 1971, after successfully organising a small group of migrant women working as cartpullers in Ahmedabads cloth market, during a public meeting, the womens gathering unequivocally stated that they wanted to form an association of their own. Thereafter, Elaben Bhatt, and the president of the TLA, Arvindbhai Buch conceived the idea of the SelfEmployed Womens Association (SEWA) and the Union was formed in December 1971. From thereon, SEWA continued to grow. It increased its membership and included more and more occupations within its fold. The beginning of the Womens Decade in 1975 gave further boost to the growth of SEWA, placing it within the ambit of the womens movement. Over the next three and a half decades, the membership grew and today the membership stands at 9,59,658. In the state of Gujarat, where SEWA made its beginning, the membership is over 4,83,012, of which, 60.77% members hail from rural Gujarat. Within the four major occupational categories in which it works, the number of SEWAs members is as follows: 1. 2. 3. 4. Hawkers & Vendors Home-based workers Manual Labourers and Service Providers Producers & Services 53,053 members 69,795 members 3,35,065 members 25,099 members 10.98% 14.45% 69.37% 5.20%
SEWA is both an organisation, as well a womens movement. It is a movement of self-employed women workers, who have organised themselves to demand their rights. The Self Employed
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Womens Association (SEWA) has organised self-employed women from 33 different trade groups. SEWA is registered under the Trade Union Act of 1926. Membership to the union is open to all self-employed women workers, across the country. The membership fee is Rs. 5 per year. The union is governed by a two-tier level of elected representatives. The members of each trade elect their representatives in the ratio of 1 representative per 100 members. These representatives then form the Trade Council (Pratinidhi Mandal). In addition, and parallel to the Trade Council are Trade Committees (Dhandha Samiti) in each trade. The Trade Committee has no xed proportion to number of members, but usually the number varies between 15 to 50 members. The Trade Committees meets every month and discuss the problems of their trades and possible solutions. Trade Council members are members of their respective Trade Committees as well. The organiser of a Trade Group is the Member Secretary of that groups Trade Committee. Every three years the Trade Council elects its Executive Committee of 25 members. The representation on the Executive Committee reects the proportion of the membership. The ofce-bearers of the trade union are elected from among the Executive members. It has become a practice to elect the President from the trade with the largest membership. Of all the home-based workers and producers, the union of bidi rollers has been one that has experienced how legislation can be made to work for their benets. The movement, though it began in 1978, has seen many ups and down. The case illustrates the tumultuous passage of the bidi rollers union.
The Nexus that makes Self-employed Women Vulnerable

The main focus of almost all of SEWAs interventions is building unity. While this might seem obvious, accomplishing this is extremely difcult. The difculty increases, as most often, the women who are to be brought together, hail from diverse socio-economic backgrounds, and are often compelled by poverty to compete against others for the same jobs. This vulnerability is used to their advantage by the employers, and the Bidi Manufacturers are no exception. As piece-rate workers, these women are economically stretched. They often undercut wages in their desperation to get work, and this depresses the wage rates, which, they would have normally resisted. Along with these constraints is the looming power of the contractors, traders, and landlords who employ these women. The community and its social strictures, which limit womens mobility and actions, further compound the problem. The controls on women; as observed in the case of home-based workers involved in Bidi rolling, are similar to those applied on women engaged in other trades as well. The restrictions may differ slightly for a Muslim woman, from those imposed on a Padmasali woman but they are omnipresent. The restriction imposed by the traditional control structures often come in the way, when women are expected to raise their voice against oppression. A woman, who steps forward to protest, becomes the target of all sorts of social disapproval. The merchants take advantage and stop offering jobs to the women who protest. Women, thereafter without any support from their own family and the community at large, are further subjugated and suppressed.
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To add to the problems caused by these social conditions is the legal and policy climate, which is practically non-existent and unresponsive. They further contribute to her vulnerability. Although it may seem inappropriate to call these women weak, as they are indomitable in the face of so many odds, it wouldnt be wrong to say they are weak individually in their ability to bargain, and weak due to their initial belief that they do not have the power to change the situation around them. The story of united women bidi rollers shows how they all have been able to break down many of these barriers and unify their strength, all by themselves. The case shows that the self-employed women bidi rollers have realised that without their participation, the existing laws, even if they are well laid down, will never make an impact on their lives, considering the solid wall of bureaucracy that stonewalls every attempt at change.
The Intervention: Organising Bidi-workers

Bidis are indigenous cigarillos smoked by the poorer sections of the population. Tobacco is rolled in Tendu leaves to make these local cigarillos. Gujarat is one of the prominent states where a signicant number of women work for this industry. When SEWA rst initiated its work of organising the women bidi rollers, they had estimated that over 1,50,000 women and men are engaged in this trade. These bidi workers carried out the work of rolling bidis in the small towns of North Gujarat. Most of them rolled bidis on piece-rate basis and worked at home. During the course of the movement, the SEWA members saw frequent changes in the payment systems. Once, most of the bidis were rolled in factory worksheds, and this has now totally shifted to the workers homes. This change happened to counter legal provisions. As the working conditions underwent a change, so did the system of payments. To sum up, these changes made livelihood difcult for the bidi rollers. Though the systems changed, the net result, as seen from the perspective of the workers, remained more or less the same. The current terms and conditions of engagement of women for rolling bidis includes: obtaining raw materials (Tendu leaves and tobacco) from the employers or contractors; rolling bidis and handing over the nished products to the employers or contractors. The present system is known as a Sale-Purchase system and works to the advantage of the employers who can show the women as working on their own account, as self-employed, thereby not under their employment. The women members rolling bidis belong to three major social groups. There are women from Madhya Pradesh and Andhra Pradesh, who accompanied their husbands when they got jobs in Gujarats textile industries. These women acquired the skills of rolling bidis out of compulsion. The closure of the textile mills in Ahmedabad (since the 70s) made the women turn to bidi rolling to support their families. The Padmasali (migrants from Andhra Pradesh) and the Kosti women (migrant from Madhya Pradesh) represent the major sections among the bidi rolling groups. A small section of the bidi rollers hail from the Muslim community. The heterogeneity of the women, their backgrounds, and the complexity of the issues made the task of bringing the women together, to ght for issues that impinged on their
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livelihood, very difcult. It took years for the women to come and ght together. The movement had its share of ups and downs, but never lost sight of its objectives. The movement also saw changes in strategy to adapt to changing conditions. SEWA and the women, who are part of the movement, have learnt a lot from their experiences. The following section describes some of the major milestones achieved by the women members.
The Struggle for Guaranteed Rights

SEWA was rst approached by Chandabibi, a women bidi roller in Patan, who was denied access to medical facilities. She did not have the identity card, which would have helped her and her family members get the medical services guaranteed to a bidi roller under the Bidi Welfare Act. Her employer refused to issue a card a process adopted by all employers to evade legal responsibilities. The names entered by the employers all across were ctitious, and in many cases instead of women workers, the names of males from the family (head of households) were entered a practice followed to avoid contributing to the maternity benets, as required under the law. This was the state of affairs for other women as well, and the rst trade union was registered in 1978 at Patan. The struggle thereafter picked up momentum when SEWA realised that in Ahmedabad, women bidi rollers shared similar concerns. SEWA got hooked on this issue and soon realised the scope was way beyond what they had initially comprehended. During the initial years the struggle was around issues of identity cards which ensured medical facilities, scholarships and the like. In 1981, they had to struggle to change the timing allotted for bidi collection, for women were expected to deliver bidis at an inconvenient time at night - between 8 and 11 PM. SEWA later sought an increase in wages paid in lieu of rolling bidis. The wages were abysmally low. The employers also cheated the women. They knowingly supplied less quantity of raw materials than required for a specic output, and later deducted the wages to be paid for nished products citing this loss in output-furthering their iniquitous course of lowering wage rates. On the whole, the strategy adopted by SEWA was formation of trade committees, workers education, and dialogue with the employers and advocacy with the labour departments. The advocacy efforts stirred the labour department out into the eld to carry out its own survey to locate and enumerate the bidi employers and bidi rollers of Ahmedabad. One of the notable struggles waged by the bidi women was to get access to the benets of the Gujarat governments housing scheme. The Ahmedabad Urban Development Authority had allocated land for housing 110 bidi workers at a subsidised rate and SEWA negotiated with the Central Bidi Welfare board to obtain a subsidy of Rs 5700 per unit. SEWA ensured participation of the women when the units were designed. The initial plan estimated the cost of building one unit at Rs 15,000. SEWA negotiated with HUDCO to get loans sanctioned at 7 % interest rate and xed an EMI of Rs. 124 per month. When the house construction was nearing completion the Airports Authority India dropped a bombshell by objecting to the scheme (since it was close to the airport).
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The land and the investments had to be thereafter forfeited. The struggle continued, and SEWA through its negotiations, again got land allocated and convinced the state government to bear the cost differential. Finally after seven years of battle, the 110 women bidi rollers shifted to their own dwelling units on 25th November 1993. The price of this unit had escalated from Rs 15,000 to Rs 45,000 by then. This intervention came as a big boost to the morale of the women. They achieved victory in what they would have otherwise believed, was an extremely difcult task. They got what was due to them without paying any extra amount. All the women have paid back their borrowings within the stipulated date. SEWA also fought a number of legal battles to get retrenched workers the compensation due to them. In addition to all these struggles, the climax came when they successfully fought a case to get their provident fund claims. This is elaborated in the next section.
The Struggle to get Provident Fund Dues

Fighting a case, and winning it in the highest court of the land and ensuring that the women members get their PF dues, has been the hallmark of the struggles of the Bidi Workers Union. Prior to 1966, the employers paid provident fund and maintained records of the employees as well. The passage of the act in 1966 brought about a change. Manufacturing shifted to homes and thereafter the work was dominated by women. The Supreme Court ruled in 1978 that home based workers are employees within the meaning of the PF act. The employers refused to pay the PF denying the existence of employee-employer relationship. After thoroughly studying the judgment, SEWA led a case in 1983 in the PF Commissioners ofce at Ahmedabad. This was against the largest manufacturer of bidis in Gujarat Jivraj Bidi Works. SEWA led the petition on behalf of 154 women alleging non-compliance of the aforesaid act. It took six years for the regional PF ofce to pass its judgment- that home based workers are not employees! SEWA took the case to the high court. In the meantime the central provident fund commissioner asked the Regional commissioner to re-investigate the matter and this led the regional commissioner to pass a charge against the manufactures on non-compliance. A stay to the order was sought by Jivraj Bidi Works preventing payment of the PF. The case moved from the Gujarat High Court to Delhi employees PF Appellate Tribunal, which in 1998, asserted that there is an existence of employers-employee relationship in this case. The manufacturer appealed against this order at the High Court, which immediately dismissed the appeal and directed the regional PFC to comply with the order and determine the PF payment within the prescribed time. The delay in the process gave enough time to the Bidi manufacturers to get rid of the records, and in August 1999, a tripartite meeting of SEWA, Jivraj and the PFC sat to determine the due amount. SEWA initially used the minimum wages angle to calculate the PF dues. They arrived at a gure, which the manufacturers contested. Different proposals were placed by the manufacturing unit. SEWA also realised that asking the Bidi manufacturers to pay the minimum wages would spell disaster. The manufacturers would have no other option but to shift their operation to other states. After a lot of persuasion and follow up, the nal amount
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was settled (out of court). The manufacturers agreed to provide the 154 women an amount of Rs 1.5 million. This settled the issue of payment for the period 1977-1999. The amount was handed over to the 154 women on 6th of November 2007 bringing an end to a legal tussle that lasted for almost two decades! The livelihood promoter kept the women united during this long struggle. There were efforts from the manufacturers to spoil the reputation of the movement by engaging in a smear campaign. However, the women members exhibited a strong, determined face against the opposition they faced not only at their homes, but also beyond its walls. The livelihood promoter worked at various levels and invested its own resources and garnered support from well wishers to keep the ght alive and take it to its logical conclusion. The struggle has gone into the books of law, and is often referred by legal experts for the right interpretation of the law.
Replicating Learnings
The struggle for getting the Bidi workers their rights, as guaranteed under the Indian constitution, helped shape other struggles for SEWA. The most prominent among these was the efforts initiated by SEWA to help the Incense stick workers get their minimum wages. Today, a tripartite body constituting the women representative of the Agarbatti (Incense Sticks) union, the employers and SEWA Union representatives discuss and review the wages. They have done a time-motion study together to x up the number of incense sticks that a woman can roll on an average, at all levels of efciency. The meeting held once every six months, looks at the industry conditions and revisits the wages being paid. As of now the tripartite agreements have been honoured without fail and the women incense stick rollers get the highest per day wages, as per the minimum wages act of the state. SEWA is pushing forward this mechanism to the bidi industry as well. It understands that it will take time as the relations are rather strained, and the industry is also facing threats of survival from the mini cigar industries, and due to various policies of the government. The Bidi Union is one of the most dominant unions of the trade unions that are a part of SEWA. The president of SEWA, Godavariben has had an eight year stint (1984-92). The members of the Bidi Union are 3 % of the total SEWA members, 11 % of the urban members and 18 % of the SEWA home based members. SEWA has also been able to organise a majority; nearly 60 %, of the bidi rollers in Ahmedabad city. Their struggle continues and ushers hope for other self-employed people- especially women, across the country.
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Case Study 7
NIDAN: Voicing the Livelihood Issues of Street Vendors

Abstract
Mahua Roy Choudhury and Ratna Ghosh14
Street Vendors contribute signicantly to the national economic output. Yet, they constitute the poorest and most vulnerable segments of our population. The ignorance of their role, and the numerous problems faced by them makes eking out a livelihood a difcult option. This case attempts to study the issue and the advocacy approach taken by a Patna based NGO, NIDAN in securing livelihoods for these hapless street vendors. It endeavours to understand how by organising, mainstreaming and educating them on their rights and entitlements and linking them with national and global network and inuencing the state and municipal policies, has had an impact on their livelihoods. The case offers an interesting perspective on how interventions can inuence policy prescriptions, which in turn attract collaborators (including nancial donors and technical support) to help secure livelihoods. Again the direction of growth suggests inevitability of up-scaling, which has its own share of problems and issues, including those of decentralisation, sharing and communication and of human resources development.
Street vendors and Their Plight

According to the Arjun Sengupta Committee Report, of 2006 the Informal Economy provides livelihood to 93% (over 340 million) of the workforce in India. In the absence of any tangible organised sector, in Bihar, almost 94.7% of the people work in the informal sector. Women constitute more than 50% of this workforce. Street vendors constitute a large section of the informal economy. Their average earning is very low and ranges from Rs 40-80 a day. On an average, women vendors earn less than the men. Their earnings range from 40 to 60 Rupees per day15. They work under gruelling conditions for long hours and are frequently harassed by the municipal authorities and the police. A large part of their income is spent in bribes and protection money16. Vendors are often regarded as public nuisance. They are accused of depriving pedestrians of their space, causing trafc jams and having links with anti-social activities.
Mahua Roy Choudhury is the Faculty of The Livelihood School. Ratna Ghosh is a development professional. Nasvi study of 7 cities, as quoted by Sharit Bhowmik, Seminar, op cit 16 Sharit Bhowmik quotes the study on street vendors to estimate that the vendors pay between 10 to 20% of their earnings as rent. In Mumbai the total rent collection amounts to 4 billion rupees annually. In Delhi, it was found that 500 million rupees are collected monthly as rent from these people. These ndings were later endorsed by the Central Vigilance Commission.
14 15
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Dening Street Vendors

A street vendor is a person who offers goods or services for sale to the public without having a permanently built structure but with a temporary static structure or mobile stall (or head-load). Street vendors could be stationary and occupy space on the pavements or other public/private areas, or could be mobile, and move from place to place carrying their wares on push carts or in cycles or baskets on their heads, or could sell their wares in moving buses. The Government of India has used the term urban vendor as inclusive of both traders and service providers, stationary as well as mobile, and incorporates all other local/region specic terms used to describe them, such as, hawker, pheriwalla, rehri-patri walla, footpath dukandars, sidewalk traders, and more. Denition, as included in the National Policy on Urban Street Vendors, 2004, Department of Urban Employment & Poverty Alleviation, MUPA, GOI.
They have poor social protection and their working conditions on the streets expose them to a variety of safety and health issues17. The lack of toilets has an adverse effect on womens health and many suffer from urinary track infections and kidney ailments. The vendors provide a low-cost option of providing goods to the consumer. The poorer sections of the city in particular procure a large number of their daily needs from the street vendors, as the goods sold are cheap and are usually made by local producers. Street vendors also contribute to the urban economy. The total annual contribution of 2,00,000 vendors and hawkers taken from Mumbai alone comes to 60 billion rupees. However despite their contribution to the economy, vendors are subjected to enormous harassment by the authorities18. Further, the credit needs of the vendors, which are critical for their survival, are largely unmet by the mainstream nancial services.
NIDAN Evolution
In 1995, the Bihar State Government undertook a massive anti-encroachment drive, following a High Court order. Poor vendors were the soft targets and the administration focused on their eviction without taking steps to rehabilitate them. This senseless step evinced the interest of some members of ADITHI19. They decided to mobilise the unorganised street vendors and thereby provide the clout needed to raise their voice against the states indifference.
The SNDT ILO study on Mumbai found that around 85 per cent of the street vendors complained of stress related diseases migraine, hyper acidity, hyper tension and high blood pressure. 18 As quoted by Arbind Singh, Cities for All, available at http://www.nasvinet.org/articles/articles_2.htm. 19 ADITHI is a not-for-prot womens organisation that works for the socio-economic development and empowerment of resource poor and resource-less women and girl children through awareness generation, leadership development and supporting livelihood and income generating programs in key economic sectors, by forming self-susta inable groups.
17
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Around the same time, Ela Bhatt of SEWA (Self Employed Womens Association) was trying to galvanise civil society institutions to include issues of unorganised street vendors. She shared her concerns with Viji Srinivasan of ADITHI, who followed this with some important consultations with various like-minded individuals and institutions. The people expressed solidarity with this unorganised section of society, and soon Organisation of Street Vendors was an important project at ADITHI. Coincidentally, ADITHI was being restructured and Viji found this an opportune time to create an organisation dedicated to this cause. So, what began as a project at ADITHI was immediately registered as an independent institution, with the issues of street vendors as one of the key agenda. Thus, NIDAN20 was registered under the Societies Registration Act 1860 in 1996. The organisation has been intensively working with informal workers of Bihar and outside that state. The target group outreach has always been the unorganised worker- migrant workers, street vendors, waste pickers and other workers from the informal sector. It has been at the forefront of the campaign for a policy on urban street vendors and it works consistently for advocating better policies and programs to address wide range of issues pertinent to the informal workers- related to work conditions, to housing, to micro-nance and even for their social security. NIDAN collaborates with many organisations in the campaign for Comprehensive Social Security for informal workers.
The Need for Intervention

The urban poor, in most Indian cities, work in the informal sector. Poverty and lack of gainful employment in the rural areas and in the smaller towns, drive a large number of people to the cities for work and livelihood. In the urban location, hawking and street vending is one of the means of earning a livelihood, as it requires minimum nancial inputs and the skills involved are also low. The number of street vendors has increased sharply during the past few years. The total number of street vendors in the country is estimated at around 10 million21. Some studies estimate that street vendors constitute approximately 2 per cent of the population of a metropolis22. Mumbai has roughly 250,000 street vendors and Kolkata has nearly 200,000. Other cities such as Ahmedabad and Patna have around 80,000 street vendors23. Their numbers have increased ever since the economic liberalisation policy of 1991. Several large factories and establishments closed down due to rationalisation and the workers who lost secure jobs are now on the streets. Street vending is one of the ways of eking out an existence, for many. Although there are provisions in the Municipal Acts of many cities to provide licenses for Street Vendors, allotment of new licenses was stopped 20 years ago, all across the country. Moreover, the process was also cumbersome. As a result, street vending emerged wherever the vendors found a lucrative market, with a place where they could sell, even if it was not allowed. This
NIDAN is headed by Mr. Arbind Singh, a sociologist by training from Delhi University, who has been active in the development sector since fteen years. Mr. Singh was selected as the Social Entrepreneur of the Year 2008, by the Nand and Jeet Khemka Foundation, for his work on inclusion of the poor in emerging markets. 21 National Policy on Urban Street Vendors. 22 ibid. 23 Nasvi study of 7 cities, as quoted by Sharit Bhowmik, Seminar.
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was put into effect with a precarious mix of hard work and bribes to municipal and police ofcials, and patronage of politicians and criminals. With liberalisation and globalisation, the vendors were exposed to an onslaught from all sides. Politicians wanted clean cities for attracting investments. Planners, and even Municipal bodies perceived street vending as a nuisance, while the police had no scruples about evicting vendors who caused trafc jams and were in cahoots with anti social elements. The Courts also felt that the city authorities needed enabling judgments. The clout of emerging retail chains and established shopkeepers added to the problems of street vendors. This unholy mix of both the peoples representatives and the administration targeting their occupation, made life difcult for the vendors and only the resilient among the lot could continue with vending for their livelihood. Nidan understood the vulnerability of the vendors and took steps to respond to the emerging issue. To have good grasp of the issues, Nidan initiated a large scale survey of Patnas street vendors, covering nearly 6000 street vendors. The exposure helped the team understand the situation of street vendors in particular, and the urban poor, in general. The survey revealed the complex, informal, exploitative lending mechanism, available to the urban poor. Out of 6000, only 44 had been sanctioned a bank loan. Everywhere there was a craving for friendly institutional nance. This offered an apt opportunity, and Nidans tryst with micro credit started, and they began providing poor vendors access to nance. Nidan also identied that though the poor in an informal economy are economically active, they remain poor and vulnerable because, They are unorganised They do not own and control assets They lack access to nancial services Mainstream institutions are insensitive to their needs They lack social security, and The macro environment is increasingly becoming antipoor
Description of the Strategy and Approach of Intervention

Nidan tapped into the wealth of the poorprimarily their numerical strengthand then aggregated them into economies of scale. This process of collectivising helped to generate social capital and to provide representation and a voice to the unorganised poor, which they then leveraged to launch their own businesses and bring about the much-needed shift in policies. They helped these street vendors get their recognition as wealth-creators. Nidans innovation in organising the street vendors is based on the following tenets: The poorest can be competitive and ethical market players, if provided with access to social security and nancial services. The poor require infrastructure for aggregation and scale. Institutions run by the poor must quickly become nancially sustainable. Businesses led by the poor must manage strong balance sheets while preventing corruption and civil rights violations.
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Nidans service expanded to legal aid, advocacy initiatives, campaigns and the on-going, one-on-one redressal of individual and group rights violations. In 1995, the Nidan-initiated National Association of Street Vendors of India (NASVI); a platform of 300,000 vendors across 20 states, successfully eliminated the system of hafta (bribes) in Patna and ensured legal status and licenses to more than 1891 street vendors24. The multiple services of Nidan interlock into a comprehensive web of securities. A vendor, for example, can be a member of her occupation-based co-operative, but can access trainings, bank linkages, insurance, loans, child care services and advocacy initiatives through Nidans on-going programs. She can be part of NASVI, and market her products through Angana, a retail brand launched by Nidan. In the event of a face-off with an exploitative client, she can access the criminal justice system through Nidans legal aid services. In total, she can develop her income and sustain her business without interfacing with the exploitative regime that had determined her daily wage before 1995.
Changing Lives Asmeli Khatoon, 22 yrs, joined Hasrat Goshpak Mahila Mandal of Raja Bajar Patna in 2002. She also joined the Sanchay Cooperative along with her mother also a member. After she got married, Asmeli and her husband were thrown out of the house due to domestic problems at her in laws house. Her husband was unemployed. She got Rs. 2000 as loan. She started a small shop in the veranda of her mothers house. She made regular repayment and took Rs. 5000 and reinvested on a slight bigger scale. In 2004, she took Rs. 20000 to spread her business and started paying rent to her mother for the space she had let out. Today with the help of her husband she has bought a fridge and started a dairy outlet and a cold drinks shop. She has also purchased a scooter and is educating her children.
The Journey: Process of Implementation of the Intervention Initial Support

Both ADITHI and SEWA were the rallying points as they espoused the issues of the unorganised street vendors. In Nidan they found a young institution with young collective leadership committed to their cause. They nurtured, and systematically handheld, and offered all the capacity building opportunities for the young cadre. More than nancial security, they offered them tools and scientic methodologies to conduct their activities.
In the Beginning
The survey of the 6000 street vendors conducted by NIDAN helped to identify issues, and to prioritise their intervention points. With access to nancial services emerging as the prime need of the street vendors, NIDAN started collectivising the vendors to ensure access to nancial services from the Banks.
24
The Patna Municipal Corporation used to assign contracts of vending spaces to contractors based on the outcome of competitive bidding. The contractors in turn would collect a weekly charge from the vendors who used the space.
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Evolving Institutions for and by the Street Vendors - SHGs

Nidan started with three SelfHelp Groups in 1997, not to access subsidy from the government, but to help create an institution of street vendors to help them express their collective will. This placed the poor from a position of insignicance to the favoured status of being credit worthy and soon the banks came forward with credit support. In 1997, a small beginning was made with the banks providing a small sum of Rs 47, 000 to 47 women vendors. This helped acknowledge their credentials of credit worthiness and led to a strong partnership. The credentials and track record attracted institutional support to unbelievable levels- the Rs. 58 lakhs credit support from Rashtriya Mahila Kosh (RMK) proved to be a quantum jump. The sanctioning of the rst loan of Rs.58 lakhs to any new partner was a historical record for RMK. This was followed by another loan of Rs. 60 Lakhs from Rashtriya Mahila Kosh in the year 2004. This step clearly established that extending credit services to the informal workers not only beneted them by providing access to nancial services, which in turn, had a positive effect on their livelihoods, but also introduced a market for the nancial service providers that had remained untapped for long.
Promotion of Thrift and Credit Co-operatives

Further, while credit support was able to meet the loan requirements of the workers from the informal sector, the shocking realisation that even the meagre income or savings of these workers were not safe in banks or other institutions, forced Nidan to set up thrift and credit co-operatives (T&Cs), beginning with the Sanchay Thrift and Credit Cooperative, in Patna. Thrift and Credit Co-operatives were then set up in all areas of Nidans work, making them an important element in the strategy to provide nancial services to street vendors. An all-women thrift and credit co-operative, Sanchay, was registered in November 2001. This co-operative has grown over the years, and today has 3100 share holders. The success of Sanchay T&C in Patna encouraged them to set up similar T&Cs in Vaishali and Muzaffarpur. Now, they are in the process of setting up two more at Katihar and Samastipur.
Micro-Credit Services
Nidan introduced micro-credit services with a modest portfolio of Rs.30, 000 linked to three SHGs. Nidans micro-nance is a ray of hope for thousands of members, today. Presently, there are around 11,902 borrowers, in 5 districts through 992 SHGs. At the end of March 2008, Nidan has a corpus of Rs.21.11 million available for lending.
Cooperatives and Collective Enterprises

Nidan started organising the street vendors to form began its work with Co-operatives from the year 2003. As on date, it has promoted 19 Cooperatives from sectors such as
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(1) Financial-04; (2) Trading -05, (3) Services-02; (4) Producers-06; and (5) Consumer02. The members are diverse sections of society, ranging from artisans who produce jute items, handicrafts and handloom items, sweepers, rag and waste pickers, vegetable vendors, livestock traders and home based workers. A turnover of approximately Rs.1.70 crores demonstrates the substantial potential inherent in this group. More than the nancial and productive output, the institutional output of this endeavour is tremendous. The members enjoy and savour the benets of democracy, equality and inclusion. The cooperatives are located in Patna, Muzaffarpur, Vaishali and Katihar and are operational close to the district head quarters.
Social Security
As Nidans micro-credit programme strengthened, it received a severe set back in 1999 due to death of three members, affecting adversely the families of these three members and also the Self Help Groups to which they belonged. A serious introspection led to the creation of a new programme on social security with three components- Insurance, Childcare & Maternal Protection, and Health.
Network and Advocacy

Policy advocacy is one of the important items on Nidans agenda. All the work that Nidan carries out, has been reected in its advocacy efforts micro credit self help groups, insurance, housing, livelihood, child rights, quality education and sanitation. Its engagement with the issues of the unorganised sector has helped it in developing a deep insight into this area. The advocacy has used all important tools- memoranda, joint petitions, demonstrations, assembly level debates, dialogues, workshops and PILs (Public Interest Litigations). In addition they interface with government agencies and other stake holders, organise rallies, use posters and pamphlets, wall writings, promote networks at all levels- district, state, as well as at the national, or international level (WEIGO). Problems like harassment by the police, anti socials, inadequate and delayed wage payments, exploitation at work places, gender issues, and evictions are taken up in the districts. Mass meetings, demonstrations, dharnas, rallies, petitions, memoranda are organised and used to good effect. Panels of lawyers have been constituted in districts to assist victimised members. As a result, the physical attacks on members and illegal arrests have almost stopped. Each member saves anywhere between Rs 5,000 to Rs 10,000 annually, as a result of discontinuing bribe payments. There is no contract system for collection of municipal fees. The constant pressure from Nidan and other trade unions has resulted in a number of changes in the welfare scheme policies. A handbook on the condition and rights of workers in the unorganised sector has been printed. The book details the various legal provisions
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available for workers like street vendors, construction workers etc. Various types of posters were printed on the rights of street vendors. These posters were very helpful in publicising their rights. In November 2006, the Phulwarisarif Nagar Panchayat announced the cancellation of the contract system in force till then, for Urban Street vendors. The Patna Municipal Corporation soon followed them in this matter. The contractors, well connected to local goons and political leaders, soon raised a hue and cry. Initially they tried to put this change on hold. However, the strong resistance from the workers and other organisations made them retreat. About 5000 street vendors beneted by this decision. In Mithapur area, 287 street vendors were evicted from their vending sites for a construction project. Nidan raised this issue and after a long discussion with the Patna Municipal Corporation and District Administration, the vendors were rehabilitated in Karbighaiya. The National Association of Street Vendors of India (NASVI) was started in September 1998, to bring the collectives of street vendors in India together. This alliance was imminent because they had to collectively struggle for macro-level changes, to support the livelihoods of around 10 million vendors. Their livelihoods were severely threatened by outdated laws, and policies and practices that were changed to suit vested interests, and the attitudes of the powers-that-be. Facilitated initially by Nidan, NASVI, started as a network of street vendors, and is now an independent identity. NASVI has a membership of 376 street vendors organisations representing approximately 3,16,378 street vendors from 20 states across India. The numbers continues to grow. NASVI is now part of a global network the Street Net. NASVIs inuence has been manifold. Besides inuencing the local environment that was hostile to street vendors, it inuenced the state and national level policies.
Impact of the Intervention

Once unorganised- but now, entrepreneurs, shareholders and advocacy champions, members of Nidan now report income growth of 100 percent, or more. Advocacy has seeded a new fearlessness. Because of NASVI, Section 34 of the Bihar Police Act, which allowed for arbitrary arrests of vendors (ostensibly on grounds of removing obstruction), was eliminated. Today, 1891 street vendors in Patna carry formal identity cards. NASVI, has also lobbied for the passage of the rst National Policy for Urban Vendors under the Ministry of Housing and Urban Poverty Alleviation. The policy is en route to becoming a law.
Voicing Livelihood Issues and Accessing Services

The impact of the entire intervention was such that it led to an outcome that about 42% of the SHG members are from the scheduled castes. Women membership outnumbers the men,
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Financial Inclusion for impacting livelihoods

Nasreen Bano of Danapur joined Nur Jahan Mahila Mandal when she was 20 years of age. She had 4 sisters and a brother. Her father earned Rs. 60/day and mother used to sell bangles and earn Rs. 40/day. After her matriculation, she joined the Nidan group and made a saving of Re. 1 daily. In 2003 she took Rs. 2000 as loan to start a bangleselling unit. Again in 2005 she took Rs. 12000 from Nidan and another Rs. 6000 from the groups kitty to buy a shop. Today she is pursuing her graduation and earns Rs. 2500 Rs. 3000 each month.
with a female-male ratio of 97:03.The savings made by members, as of 31st March 2008, has been Rs. 2.75 crores, with bank balance of Rs. 71 lakhs. Internal lending from the own fund has been to the tune of Rs. 81 lakhs during 2007- 2008.
Gaining Recognition
The Government of India adopted the National Policy on 20th January 2004. The policy reects a landmark change in the perception of the street vendors moving from prohibition to a regulatory approach. The introduction to the National Policy on Urban Street Vendors, 2004 states: The role played by the street vendors in the economy, as also in the society, needs to be given due credit, but, they are considered as unlawful entities and are subjected to continuous harassment by civic authorities. It further states that this policy tries to ensure that this important section of the urban population nds recognition for its contribution to society, and is conceived of as a major initiative for urban poverty alleviation. NASVI was a part of the drafting committee and one of the architects of this unique bill.
Patna Municipal Corporation Moves beyond the First Milestone

The PMC placed an advertisement in the newspapers that it has decided to cancel the contract it had given to different contractors, and also asked the contractors to collect the money they had deposited in PMC. As a result of this, the extortion racket has almost stopped. PMC turned out to be the rst Municipal Corporation in India implementing the National Policy in letter and spirit.
Kewal Devi- The Juice Seller Kewal Devi, now 38 yrs of age, earned Rs 20-25 some 12 years ago, while her husband earned only Rs. 30-40. They had to support 3 daughters and a son. After joining the Amba Mahila Mandal, she became a group leader and also became the Secretary of Sanchay Cooperative. After taking loans she invested in a pull cart that is used for making juices, and today Kewal Devi owns 3 such sugarcane juice carts.
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Wining over Identity Crisis

As per the National Policy, identity cards cum licenses are also being issued to street vendors. So far, 1981 such licenses have been issued. It is intended that all existing vendors will be given licenses. The PMC has involved Nidan in issuing licenses.
Bihar Gears up to Protect Livelihoods

The process has been initiated in Bihar for adoption of the National Policy for Urban Street Vendors and a draft Bill for street vendors, namely, BIHAR STATE STREET VENDORS (PROTECTION OF LIVELIHOOD & REGULATION OF TRADE) BILL, 2009 is underway.
Securing Livelihoods with Equity and Dignity

As a result of the intensive campaign and organising, the Prime Minister Shri Manmohan Singh made a historic announcement on 15th August, 2008 that all unorganised workers would get life and health insurance coverage and those unorganised workers who are Below Poverty Line (BPL) will get pension coverage. If these policies are translated into tangible initiatives on the ground, and see the light of the day, they will go a long way in securing a better, secure, future for 37 crore unorganised workers. In a nutshell, it is evident that NIDAN has multiplied its portfolio from organising the street vendors into SHGs to gain collective strength, when accessing nancial services and voicing their issues, to introducing health insurance, legal aid support and education for the children, to securing livelihoods with dignity and equity. NIDAN has now linked these groups to national and international forums and aided policy advocacy to ensure their livelihoods are no longer vulnerable, by ensuring the passing of the National Policy on Street vendors.
Analysis of the Impact

Nidan has undoubtedly created an overwhelming impact for securing the livelihoods of the street vendors. Adopting need based and self-evolving strategies, Nidan designed and adapted strategies and programs which are compatible with the local situation, with strong involvement of the stakeholders. Through its strategies and actions it has developed a formidable clout in the social development sector and strong support base. Prompt service delivery as per the rising need of the target group resulted in enhanced acceptance, faith and response. Nidans Micro-insurance protects street vendors from the vulnerable situation caused by sickness or untimely deaths. This programme, covering complicated issues of health and poverty, provided an unique example in Bihar. Most of the interventions were unique, and were the rst of their kind to be initiated in Bihar, and attracted an overwhelming response from the recipients. Nidan educated the target group about their rights and reached out to them in vernacular languages thus acting upon the human capital.
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NIDANs galvanisation of the street vendors and agging their issues drew the attention of policy makers. This big assembly of determined street vendors forced policy makers to listen to them. So serious has been the NIDANs impact that the chief minister, at the helm then, had to assure livelihoods opportunity and policy support in favour of street vendors. NIDAN strictly follows the Livelihood Framework wherein initiation begins with institution building and mainstreaming for access to nancial services, and then working on human, social and political capital for securing livelihood with dignity and equity. The interventions have turned a full circle in ensuring livelihood with dignity and equity. The uniqueness of NIDANs intervention lies in the fact that it has dealt with the livelihood issues of the street vendors in totality, and established the fact that livelihood means freedom, food security, shelter, equity and justice. Most livelihood practitioners touch upon the economic aspects related to livelihood promotion, but NIDAN has expanded its portfolio to deal with issues related to the health and well being of its members, in the process giving its programme on livelihoods signicant success. NIDANs intervention has also dwelt on the policy needs and on setting up thrift and credit facilities. However, very limited efforts were made towards enhancing the capacities of the street vendors to upgrade products and services, product portfolio management (as vending is highly sensitive to market developments and demands), or to provide a choice of alternate livelihood options. The growing awareness among consumers about quality of produce and services, and lack of monitoring mechanisms can challenge their bargaining power in the market and can mean a loss of good customers, thereby adversely affecting their income. It is difcult to assess the actual impact of thrift and credit facilities and share of benets, owing to involvement of large number of stakeholders along the market channels. The inclination of individuals in groups, which tends to abhor group-based sharing of benets as well as losses, at times acts as a deterrent to participation by individuals in SHGs (as common to most of SHGs). As of now, the efforts are concentrated on pockets having a substantial population of vendors i.e. cities and urban centres. The benets need to percolate down to scattered local vendors in the rural areas. This would be a challenge as efforts needed to organise them would be greater, compared to the number served. The National Level Policy may need further stricter and more objective adaptations at State levels as given below. Few observations are made here, based on the National Policy for Urban Street-Vendors.
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a. Spatial Planning Norms: Demarcation of vending zones provides the means for allocating demarcated zones for hawkers and vendors, as well as dening of vending and nonvending zones. However, it needs to address the issue of seasonal adaptations and migratory patterns, as otherwise this would result in free-riders taking up space and conicts for access to vending space. b. Quantitative Norms: This refers to the norms for amount of space to be provided for vendors markets (at least to the extent of 2 to 2.5% of the total city population). However, this norm may conict with various other planning guidelines and requirements of the State as well as create space congestion (depending on the service requirements of the population and the existing vendor population). Thus, this implies that the State should have thorough and participatory discussions with the vendors associations and committees to chalk out detailed town and city plans.
Conclusion
NASVI, promoted by NIDAN can thus be seen as an organisation of the unorganised 3,16,378 street vendors across 20 states of India. It has also become a part of the Global network- The Street Net, thereby impacting the local environment apart from the state and national level policies in diverse ways. The movement of NIDAN is remarkable; more so because, in the course of working for the right of vendors, the vendors have reported income growth of 100% and more. On the one hand, there have been various policy advocacies adoption of the National Policy on 20th January 2004, elimination of the Section 34 of Bihar Police Act, issuance of identity card cum licenses as per the National policy, the process of adoption of National Policy for Urban Street Vendors, and draft bill of Bihar State Street Vendors (Protection of Livelihood & Regulation Of Trade) Bill, 2009 that are underway. Yet, on the other side, it has generated the nancial ow by means of SHG movements, Cooperatives, and linkages with other nancial institutions. The Micro-Insurance promotion by NIDAN was a step closer to addressing the vulnerability of the vendors covering poverty and health aspects. Thus, it can be inferred that NIDAN has worked on human, social, nancial and political capital for securing livelihood with dignity and equity. However, with street vendors who account for around 2% of the total population in the cities and urban centers, there is a huge scope and need for organising the vendors and strengthening their livelihoods. There are certain challenges too that call for more efforts. There is still a lack of state level implementation of the National Level Policy on Urban Street Vendors. The growing middle-class and their enhanced ability to pay, provides good opportunities for the street vendors (most of the clientele of street vendors are middleclass households). Co-operatives and SHGs of vendors have increased the ability of vendors to bargain in the open market, and equipped them to face distress situations. This encourages a healthy competitive environment in the informal markets that was earlier tainted by contractors and local money-lenders. Again the pressure
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of revenue generation and complications in decentralised mode of revenue collection directly from the vendors may compel the Patna Municipal Corporation to revert to the contractor system. The issue taken up by the implementing agency is huge and has the potential to inuence a large population. A task of such a nature; especially when the issue under consideration, needs mass mobilisation for changing mindsets and inuencing policies in order to attain desired results. It is important that more like-minded agencies collaborate and share a larger responsibility along with NIDAN, in order to sustain the momentum built by this movement.
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Case Study 8
Cluster Development Project of Chanderi

Abstract
Dr. Suresh C. Sharma25
Cluster Development is a mechanism to help micro, small and medium size enterprises (SMEs) acquire scale of operations that a) brings related and support industries and businesses together in their efforts to offer services to SMEs, b) enables raw material suppliers to supply at competitive rates and c) helps buyers to buy at a reasonable price for the products or services. In Chanderi livelihood promotion of large number of weavers has taken place, more so because of the institutional development around these weavers. As the study captured institution development, processes were proved to be effective for a large-scale, positive impact on the livelihoods of the weavers. Shortage of capital proved to be a bottleneck in the efforts for promoting livelihoods of the weavers. Though the institutions survived in a phase where they could not access capital, the enthusiasm has dampened due to the lack of funds needed to expand.
Introduction
Chanderi is a small town in the Ashok Nagar district of Madhya Pradesh. Situated in the Vindhyachal hills in the northern part of the state, it has beautiful, historical places in and around it. But it is poorly connected with other bigger towns and cities. The nearest railway station and mainline road links are over 30 kilometres away. Chanderi has a population of around 30,000. With about 3,500 looms actively working, almost 60% of this population is directly or indirectly dependent on the handloom business being carried out here for centuries. Chanderi is one of the best-known handloom clusters in India, particularly famous for its sarees, made with a mix of silk and cotton. But if we look at its history, Chanderi has been adapting itself as per needs. The Saree is the product of only the second half of the twentieth century, before which high grade fabric was woven for the use of royalty or the rich families. There have been changes in the methodologies, equipment and even the composition of yarns from the past. The skills of weaving high quality fabric products almost have a heritage attached with it. It has a history of around four centuries. The royal families; particularly those of Gwalior, provided consistent patronage to the cluster till independence. After independence, the government extended support in the form
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Dr. Suresh C. Sharma is the Associate Dean of The Livelihood School.
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of subsidies and market linkages. But this support, reduced over time, and is almost negligible now. The absence of patronage and increased competition in the markets has put pressure on the cluster resulting in a gradual decline in number of weavers and quantum of goods produced. The resourceful traders and master weavers realised the difculties well in advance and started investing in alternate business activities for the future. But the poor weavers had no other options but to face the increasing vulnerability, or to shift to unskilled labour, or bidirolling, which are far less remunerative.
Objective of the Intervention

In such circumstances, UNIDOs project team started working with the weavers, who inherit traditional skills. It aimed at poverty alleviation of weavers of the cluster using its organisational competencies around cluster development. At the time of this study, carried after two and half years had gone into the project, only six months were left to wind up the project formally. The success or failure would have implications, not only this cluster and these weavers, but on several other clusters and the poor, who could have obtained similar support on the basis of this experience.
Objectives of the Study

This case study aims at assessing the impact of each initiative taken up under the project, on the livelihoods of those involved in the initiatives, and on those not directly involved in the project. It also seeks to specically capture the role of the institution building approach adopted by the team during the implementation of the project.
Methodology
The intervention was aimed at poverty26 alleviation, using the cluster development approach. Therefore, the study observes the initiatives from the perspective of livelihood promotion and not the development of the handloom cluster as such, even though there could be a direct relationship between these two. The most important means of primary data collection has been personal interviews and group discussions. Individual interactions were held with the members of the project team, Bunkar Vikas Sansthan (BVS) members, traders or master weavers, members of Silk Club and Chanderi Development Foundation the two institutions created under the project involving different stakeholders of the cluster, and ofcials of the Chanderi-based Resource Centre. A series of group meetings was held with the members of SHGs and mass meetings were held with weavers belonging to various religious and caste groups, living in different parts of the town, to ensure a balanced and fair representation in the data. In the nal leg, personal interviews were held with persons supporting the project team and the weavers groups- Ms. Anuradha
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As dened by the stakeholders and understood through a Participatory Poverty Approach
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Kumra and Mr. Balbir Singh of NIFT, Mr. Prakash Tripathi of Desert Craft (Fab India) and Ms. Simi Bhagat of Lady Irwin College- all from Delhi. The secondary data was obtained from the available records. For updating the case, and to see the changes that had occurred in last three years, another visit was made to Chanderi. Formal and informal discussions were held with weavers and the functionaries working for different institutions created during the project period by UNIDO, and in post-project period, by BASIX.
The Intervention
The design of the project intervention by UNIDO in Chanderi changed substantially during its initial year- particularly in the area of institution building of the weavers. But this change in strategy proved important for creating an impact on the livelihoods of the poor. There were several activities that were carried out under the project. To observe the initiatives and to analyse them in a segregated manner, the Porters Framework was used. A detailed outline of initiatives with pre-intervention status is given below:
Michael Porters Framework
Institutional Conditions Demand Conditions Industrial Conditions Factor Conditions
Factor Conditions
Pre-intervention Conditions The town had poor road and rail connections, lack of regular supply of electricity and water, which hardly encouraged the procurement, production and marketing systems. The main sources for the raw materials were over a thousand kilometres away. The payments to the yarn suppliers had to be made in advance. Since the cycle time was long, blocking the working capital, the yarn suppliers were unable to store adequate stocks of different varieties of yarns. The weaver, or a small group of weavers couldnt even think of taking up marketing of their own produce. Even traders had difculty in transporting the goods to various markets. It increased the total effort, time and cost, reducing margins while increasing
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Quality of Dyes in Traditional Chanderi In January 05, Fabindia held a business meeting at Orchchha, Jhansi, which also had a eld visit on the agenda, so as to expose the participants to the Chanderi handlooms. At Chanderi, all the participants went to the market to shop for the towns renowned products. One of them was a senior functionary of Fabindia. She bought a beautiful saree for herself from one of the biggest traders of Chanderi. The saree bled its colours, the moment it was washed. Just a few months before this, a senior government ofcer of Madhya Pradesh bought a saree from another trader and that saree shared the same fate. Sometime back, a group of traders gifted a beautiful saree to Indias famous singer, Lata Mangeshkar, which bled as well, after the rst wash. Could she or any other buyer, recommend the Chanderi saree to some friend, or buy one from the market after this experience?
hassles. This, in turn, restricted the growth of the Chanderi handloom cluster. Under the pressure of low margins, the quality could not be maintained, in line with the requirements of the markets. The dyes used are of poor quality, with dyeing processes not carried out as per recommendations. e.g., yarn should normally be dyed at a temperature of 70-80 degrees centigrade for 30-40 minutes, but it was actually dyed at room temperature for less than ve minutes. This kind of processing not only ignored the requirements of a high value yarn like silk, but it was also unprofessional and against the basic principles of production and marketing. (See Box- Quality of Dyes in Traditional Chanderi). The contribution of the Government of Madhya Pradesh is appreciable in this project, in the sense that it has sponsored various projects in the cluster. However, there are still some problems, for example, high tax rates over handloom goods, whose solution may lie with the government. In Chanderi, there is a governments handloom Resource Centre (RC) that provides technical and information support. It remained inactive for several years, before it was reactivated by this project. Traders found the Computer Aided Design Section in the Resource Centre very useful. There is ample scope for further contribution by the RC. On the credit front, the banks and other nancial institutions were not willing to support the weavers, because they were considered not credit worthy.
Initiatives Taken to Inuence Factor Conditions

Under this project, following important initiatives were taken up 1. Yarn Bank: A yarn bank was started at the Bunkar Vikas Sansthan (BVS) level to maintain control on the supply, quality and price of yarn. It also gets a relief of 1 % as transport and stocks subsidy. It is still in its infancy and considering the total costs involved in managing and holding stocks, the team was still debating how far to go in that direction.
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2. Dyeing: Improved practices have been initiated around the fastness of the colours- a major quality issue faced by Chanderi products, at present. The weavers linked with BVS have been introduced to hot water dyeing with sufcient duration for the dyes to soak in. Other weavers and traders and master weavers also understood the importance of this procedure, but they have still not adopted it. That is why they are not getting sustainable markets. 3. Technological Upgradation: Efforts have been made to introduce new technological practices and equipment, like warping machines, which could be helpful in faster lling. Likewise, another new equipment, the taraloom is to be introduced in some time. 4. Credit Availability: The strength of the BVS has been acknowledged widely. There is increased willingness among nancial institutions to offer loans, e.g. the State Bank of Indore offered a loan of Rs. 80,000 each to the four SHGs. 5. Capacity Development: A number of activities for capacity development of the members of all institutions were carried out, as listed below: Training programmes for the weavers on dyeing, design, quality, new technology, raw material, etc. Some more programmes, e.g. accounting system, institution management, etc. were in the pipeline. Exposure visits for weavers, traders or master weavers to update them on the latest developments in marketing, technologies, practices, designs and products. Participation in overseas exhibitions and training in Varanasi were also part of some recent programs. Weavers have a big say in affairs of the BVS and SHGs, thereby inculcating in them leadership qualities and the condence to run the institution. Two traders were taken to Varanasi in order to motivate them, and to expose them to new technologies being practiced there, so that they could adopt them. An expert weaver from Chanderi has been trained at Varanasi so that he would incorporate those changes in the looms and weaving practices here, which could make signicant changes in production and costs. After the end of UNIDO project, signicant efforts for capacity enhancement of the weavers and the people employed in weavers institutions have been made by EDII, Ahmedabad and BASIX. They have also taken up other relevant issues at appropriate times. Recently, BVS set up a new dye house with a support of Rs.0.7 million from EDII for construction of the building. The land for the dye house was purchased for Rs. 0.5 million with a grant support from ONGC. However, the shortage of working capital has seriously affected the plan to set up a vibrant yarn house and upgrading technology, which is critical for increasing turnover and the productivity of the weavers. The new taralooms were found unsuitable for the cluster, as these looms are much
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wider than needed for the orders of Chanderi products. Shortage of funds partly occurred due to repayment of Rs. 0.855 million loan with interest to the Minority Commission.
Demand Conditions
Pre-project Status The demand conditions for the products from Chanderi had not been very encouraging for a couple of years. The total sales were decreasing in value terms. The reputation of the traditional product was going down in comparison to products of other competing saree/ fabric clusters, despite the heritage tag conferred to the handlooms of Chanderi. The number of weavers had gone down and the trend continued till this project was started.
The system used by the traders or master weavers to sell goods had been, and continues to be, traditional, not in synch with the requirements for growth. These intermediaries carry the goods to different towns and try to sell wherever they can, without prior knowledge of its demand there. The margins vary continuously, depending on the conditions at the time of the sale. This uncertainty and depleting market for Chanderi products pressurised the traders to compromise on quality, which in turn affected its market. Strangely, when everybody was trying to go global, at Chanderi, they were worried about losing even their domestic and traditional markets! To add to it, this vicious cycle- a compromise in quality leading to a decline in sales and that in turn leading to further compromises, was indeed threatening the entire industry. There were no signicant efforts put in towards diversication to meet the requirements and the changes in the market. The Saree continued to be the main product, with some efforts made to create dress materials for ladies, but these were very limited efforts and practically in no position to take advantage of the market. The market-focused experimentation; in terms of diversication, was out of question. The institutional support for sales of goods was declining, and it became negligible over time, both in terms of price and quantity, compared to the signicant support available earlier. The State Textile Corporation, Hast Shilp Vikas Nigam and Laghu Udyog Nigam have almost phased out.
Initiatives Taken to Inuence Demand Conditions

1. Diversication of Products: New products were introduced under the project, partly due to the demand from buyers and partly due to realisation of the changing markets. Ladys dresses, dupattas, curtains, bed covers, table covers, cushion covers and such other new products have been introduced. It has increased the possibility of reaching a larger number and range of outlets in the market. New combinations of yarns have also been used. For example, silk-silk, silk-cotton, silk-2 cotton, silk3 cotton, pure cotton, etc. are being used to make products suitable to the new demands and trends. Ensuring availability of suitable sizes and range of sizes of materials and dresses was another important area, which required close attention and this has been addressed.
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2. Market Linkages: Bunkar Vikas Sansthan, the newly formed weavers institution, has been assisted in many ways to access promising markets. The link with Fabindia is a big step forward. Likewise, some more linkages are in the pipeline. It includes one with a leading, global MNC, which was exploring the possibility of buying from BVS. The leverage from these links could be critical to the sustainability of the BVS. A joint market strategy is also being planned for Chanderi, Kota and Maheshwar. It is important to note that these linkages have not been created by taking away the market from the master weavers. These are all new contacts in a new segment of the market. The total sales for the second year stood at about Rs.3.6 million, while in the current year, it is estimated to be over Rs. 8.0 million. Fabindia would buy the lions share (around 2/3) of the products. The representative of the purchasing agency for the company said they are happy with the quality, despite some concerns raised about the fastness of one particular colour and manufacturing defects seen in some pieces, which is expected to be resolved soon. Most of the people conversant with the latest developments at Chanderi agreed that the BVS is capable of producing high end products, provided it gives more attention to quality, design and price, which are essential to compete in any quality conscious market. While the number of buyers has signicantly increased during this post-project period, the turnover of the Sanstha has actually decreased rather than increasing. Against an annual turnover of Rs. 7.1 million in 2005-06, it has come down to Rs. 6.07 million in 2007-08. The weavers attribute this to shortage of working capital. There are agencies, like Craft Council, Women Weave, Dastkar (Delhi), etc., which are ready to buy material from these weavers institutions. Fabindia has been consistently buying goods from them and still nds its demand is not fully met by BVS. It has started placing orders with private parties of Chanderi. There is no doubt a great potential for increase in business if the weavers get funds to increase production, and if the yarn bank and dye house could be made more active.
3. Exhibitions and Fairs: Under the project, BVS and some traders or master weavers were assisted with participating in some national and international exhibitions and fairs, to exhibit their goods. The idea was to let them experience and understand the changing market scenario, and also to help them sell their products. It has given them the relevant exposure and helped them know about the changes taking place in designs and the diversication in the bigger markets. Weavers and traders or master weavers participated in the globally famous international textile exhibition Hem Textile, in Germany, last year. BVS weavers also participated in an exhibition in London and a woman weaver took part in a fair in Pakistan, sponsored by Homenet South Asia, a sister concern of SEWA. The participation in various exhibitions and fairs of the weavers and master weaver or traders continues beyond the project period. The output, however, is limited since the weavers have very little variety to offer, due to the shortage of capital.
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Industry Conditions
Pre-Intervention Conditions There is an upcoming challenge from the power loom, which are able to produce large quantities of similar looking ne materials at far lesser costs. It is difcult for a common person to identify the difference between the hand woven and power loom products. Chanderi was affected most, much more than other handloom clusters, as there had been no efforts from traders and master weavers to develop new designs that are appreciated by buyers and yet difcult to produce on power looms. Actually, there was no willingness among the traders or master weavers to invest in research and development, which is not only essential for growth, but for survival too. The extent of the problem can be understood by the fact that some showroom owners in Chanderi, who are master weavers as well, sell goods made by power looms in Surat as Chanderi products, with a proper seal and bill.
In the given circumstances, the overall business of the Chanderi cluster was going down. The number of weavers actually involved in weaving reduced from around 5,000 (at its maximum in 2000) to around 3,500 in 2005. Large numbers of weavers migrated from Chanderi and many have taken up bidi making or other activities as unskilled workers. This was particularly true for women, who were willing to weave with the men, but there was no work for them. The future of the cluster did not seem to be bright.
Initiatives in Industry Conditions 1. Geographical Indicators (GI) Certication: Recently the Chanderi Development Foundation, an institution set up under the project to address larger issues, has been successful in getting the GI certication. It may play an important role in legally stopping power looms from producing imitations with labels bearing specications of the original handloom product. A detailed study has been commissioned on its implementation and the relevant forums have been formed. Also a strategy of promoting the GI Certication initially and taking recourse to litigation, if required at a later point in time, has been worked out.
2. Diversication: The diversication of products, which was earlier restricted to sarees with a silk and cotton mix, would help in attracting other market segments and the industry. Pure cotton fabric has also been introduced under this project. The increasing appeal of cotton globally would generate some synergy for the cluster with its new set of products and help it to revitalise itself. The Geographical Indicators Certication was obtained by the Chanderi Development Foundation, the institution formed in 2006 with all sections of Chanderi to protect the overall interests of the cluster. But it is yet to take up initiatives to stop imitations of Chanderi that do not meet specications and are being produced in the cluster. This step is important for ensuring the genuine materials get a better market share. The potential for increasing the space and reputation of the goods has also not been adequately exploited. The real breakthrough in industry condition could have been through the quantum increase in the total business of the cluster, particularly with institutionalised weavers. It could have attracted the traditional,
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domestic buyers and suppliers of yarn, dyes, looms, etc. But the failure to make this big leap has prevented this from happening. In other words, the shortage of capital with individual weavers and their institutions has proved to be a bottleneck to the efforts to promote livelihoods, and to the development of cluster.
Institutional Conditions
Pre-project Status The institutional conditions for the weavers community had never been very conducive. They have always been at the receiving end, dependent on the mercy of the traders or master weavers. Institutions, like STC, Hast Shilp Vikas Nigam (HSVN) and Laghu Udyog Nigam, set up to provide marketing support have faded away over time. They used to buy up to 20 per cent of Chanderis production, which also worked as a minimum support price system. These erstwhile buyers have reduced their activities to a bare minimum. In the previous decade, some cooperative societies were formed with weavers as members. However, these societies soon became the private enterprises of some master weavers who had initiated these societies, and they practically made other weavers work for them, as they traditionally did for traders or master weavers. The real objectives of institution development were not met. These societies still exist, but now they sell most of their goods to the traditional markets, since the government institutions have started slowing down purchases.
After a recent declaration by the government to provide support to only weavers institutions with the aim of promoting them, new bogus weavers institutions are being developed by vested interests. This time they have taken the form of NGOs. Already, over a dozen NGOs have come into existence. Their aim is to grab the benets offered by the government.
Initiatives in Institutional Conditions

Most of the efforts in the project have been expended in this direction. A number of initiatives were taken up for institutional development: 1. Self Help Groups: Sixty self-help groups of weavers have been organised, with an average of ten members in each. Eleven of them are all women groups, thirty two all men groups, and seventeen are mixed groups. These SHGs involve all sections of weavers, across castes and communities. Each member of the group saves a particular amount every month and deposits the same with the group. They collectively decide the amount to be saved. By July 05, all SHGs had a total amount of Rs. 0.522 million in their accounts, with an ongoing total monthly contribution of over Rs. 33,000. Around 50 weavers out of these groups have formed Producers Group under the guidance of EDII and Desert Artisan Handicraft (a company managing business earlier with BVS, where BVS is now a partner). 2. Bunkar Vikas Sansthan (BVS): Formation of BVS was not part of the initial plan. It evolved out of the process of working with SHGs while helping them take on all important activities related to the business. It was realised that it was difcult for a small group
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of weavers with limited resources and even limited spare time after weaving, to take on many activities together. Therefore, it was decided to form an apex group of these SHGs, which was called the Bunkar Vikas Sansthan (BVS). It is similar to a federation of the SHGs, and takes care of the larger issues of production, marketing, nance, management, the communitys social standing, etc. It started with seven groups consisting of 70 members, later adding another 60 members. Now it is planning to add another 60 members. From 130 active members, there will soon be 190 members of BVS. The process of enrolling new members would continue as long as it keeps getting more orders, and as long as weavers are willing to join. Each new member joining BVS, has to contribute Rs. 1000 towards capital (An SHG of 10 - Rs.10,000). BVS has an executive committee of 19 members, including 5 women, who take all major decisions regarding their business. There are two sub-committees. One is responsible for all marketing related tasks. It is yet to take full control, as marketing is too complex an issue to be handled. The other sub-committee takes care of production issues, including allocation of job-work, wage xation, payments to weavers, and so on. It is relatively better developed as compared to the other committee. Then there are Vyavasthapaks, one from each SHG, to take work orders, keep an account of supplies and payments to group members. These Vyavasthapaks are paid 3% of the total payment by BVS through the SHG, for their efforts. The dyeing house and yarn bank are under the control of BVS, which has an ofce with accounts section, rooms for stocks and for meetings. There is a general body consisting of all BVS members. It is the apex body, responsible for budget approval, ratication of all decisions and actions.
3. Silk Club: The Silk Club has twelve executive members. Most of them are traders and master weavers. A couple of them lead the cooperatives. Despite being the representative body for the whole cluster, it has no representation from common weavers. The role of the club is to take up issues related to trade, and which are of common interest, for example, taxes on traders and setting up a railway counter at Chanderi. But for the project team, it is supposed to be the apex body of master weavers and traders. The involvement of the representatives of this club has been limited, so far. They have participated in the Hem Textile exhibition in Germany, have made an exposure trip to Varanasi, and a few other places. The Varanasi visit seems to have motivated them to some extent. An expert weaver was given training there, and it is anticipated that he would make the required changes in the weaving techniques and equipment, which could reduce costs and help in increasing productivity, and in developing better designs. 4. Chanderi Development Foundation (CDF): It is the real representative body for the whole cluster. Members of CDF include four weavers, including women weavers and also traders and master weavers. It is a broader platform registered for overall development of Chanderi. Policy level issues would are addressed here. Recently, it has helped the handlooms get the Geographical Indicators Certication. It would be the responsibility of CDF now to make full use of it in the interest of business development at Chanderi. It is being viewed as the brokerage institution for the cluster. However, the CDF has not made full use of the Geographical Indicator Certication that has the potential to strengthen
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the brand name of the cluster, by blocking supplies of sub-standard and fake materials being sold under the brand of Chanderi. A publicity drive and well publicised legal initiatives against the cheats could make a substantial difference. 5. Financial Support Systems: Each member willing to join BVS is required to contribute Rs. 1000/- as capital. Initially, Rs.70,000/- was received from the members of seven groups @ 1000/-. Now there are 13 groups in BVS, with a contribution of Rs.0.13 million and another six are in the process of joining, with their contributions. That would take their capital to over Rs.0.19 million. UNIDO has contributed Rs. 0.15 million as training support. Besides this, government of Madhya Pradesh has given a support of Rs. 0.5 million per annum for three years. This support is exible and allows its usage as per the needs of the organisation. The Government is also giving 20 Taralooms, each costing Rs. 21,000 to weavers with a 75% subsidy. Under its social responsibility component, Oil and Natural Gas Commission (ONGC) gave a grant of Rs. 0.5 million towards development of the weavers. The National Minority Development Commission (NMDC) has given a soft working capital loan (at 5% p.a.) of Rs. 0.855 million. Besides
Empowerment Ms. Afroz Jahan joined her SHG, Indra Samooh in 2003, as yet another member. Her group was one of the rst ones to join the initial SHGs that formed BVS. She got the opportunity she was looking for and deserved. She has proved herself as a person with great leadership qualities. Not only is she one of the senior executive committee members of BVS, but also has been elected as Vice-Chairperson of the national body of Homenet South Asia, a sister concern of SEWA, Ahmedabad. Homenet sponsored her visit to an exhibition in Pakistan. Now, about 150 weaver women of Chanderi have formed a forum, called Hamari Duniya, of which she is the Chairperson. She is not the only one who has stepped out of the isolation of the four walls of her house, but a number of other women also have come forward to take a lead and take on responsibilities offered to them by the group. Of course, she has motivated many of them to do so. The project has indeed given many women the platform to break old barriers.
this, Nirvana (an NGO) has given an interest free loan of Rs. 0.1 million, to be returned in four equal quarterly instalments. So, the nancial base is increasing and with an increase in strength and the sustainability of BVS, credit availability would perhaps not be a constraint. 6. Womens Forum: Some social issues, like women empowerment, health and education, are being addressed. Involvement of women is ensured at all levels of project work. There is representation of women in the executive committees of all important bodies. They are encouraged to participate in exposure visits. One of the weavers has visited Pakistan to participate in an exhibition (See Box- Empowerment). About 80 women are enrolled in literacy classes and they are learning with interest. There was no lady doctor in the town at the beginning of the project. Initially, services of a qualied doctor were taken to ensure support to women on health related issues. Then efforts were made to
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get a lady doctor posted at Chanderi, which were successful. In the process of women empowerment, about 150 women have constituted a forum, called Hamari Duniya. Within the project period, there were several institutions created with an aim of strengthening the cluster and promoting livelihoods of the weavers. Of these, BVS was quite effective, while the SHGs brought vibrancy to the overall environment among the weavers. Another body of weavers was created during last the three years after the project closure, called Apna Kosh (Sakh Savayatha Sahkarita Samiti). It was formed by 423 members of various SHGs, under the leadership of BVS. Currently, there are 623 members in it, from all 60 groups formed under the UNIDO project. It undertakes both credit and savings activities with weavers. Currently, it has an outstanding loan of Rs. 0.375 million, with cumulative disbursements of Rs. 0.6 million. It also has a savings of Rs. 0.2 million from its members. It works on the Joint Liability Group model and seeks support from BASIX to manage its insurance portfolio and manages loans with a grant of Rs. 1.0 million received from ONGC. The Apna Kosh, started with lot of enthusiasm that seems to have whittled down now, again due to shortage of capital. The involvement of weavers in BVS has also been limited to the same number as there were three years ago. The means of procurement, distribution and management of orders has also not changed, and these are restricted to the same weavers in absence of an increase in overall business. Other institutions are also in the same state as before. The visit made to update the case has brought out a signicant feature of the institution building work done by the UNIDO team under the project. The fear that the weavers groups, particularly the BVS, may collapse after the project team had withdrawn has been proved wrong. They are going strong without any serious problems related with to institutional issues. It is nearly two years since the team left, and the BVS and other bodies are managing their affairs quite efciently. BASIX and EDII have guided them to some extent, but it is the inherent strength of the weavers groups that has helped them sail through these testing times. While discussing about their business, every member of the groups talked about the crisis of the capital and not about the clash of interests or their differences.
Impacts
The intervention has most signicantly impacted the cluster by reversing the declining trend in Chanderis traditional craft. It is an assurance to the worried weavers that they can expect a better future and continue with their work. While it is always difcult to gauge precisely the impact of a livelihood promotion intervention, over such a small time period, the stable institutions of weavers, growing markets and business, willingness of credible institutions to work with them and the enthusiasm among weavers and traders is clear evidence that these interventions have made a tangible difference and a sustainable impact over time. Importantly, there were no negative impressions gathered, or reported by the weavers or traders about the affect on incomes of any section, or on the cluster as a whole.
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Fighting Poverty Together Kalimans husband is a beldar (unskilled worker). He has been the sole breadwinner for this family of seven, which includes ve children. He has been struggling to earn enough to get them food. They live in the worst possible conditions, in a small hut measuring 8 ft x 8 ft in the outskirts of town. Moved by her miserable condition, the members of Indra SHG made Kaliman a member of the group. They motivated her to get trained on weaving. She enrolled for training at the Resource Centre, Chanderi. She was also paid some stipend. The members of her group contributed some amount to help her extend her hut, so that all the members of her family could be accommodated inside. Kaliman would soon nish her training and hopes for better times with the support of her group.
Kalimans hut, with the top open to sky, may not be a proper shelter for now, but the new glow on her face says a lot about the condence she has about her familys future.
Financial Benets to Weavers:

1. BVS Members: Their income has increased by 10-35 per cent through increase in quantum of work and wages. Through market linkages, an order worth Rs. 3.0 million was received last year. In this year of 2005, it is expected to be Rs. 8.0 million. 2. SHG Members: Members of SHGs, who are not yet part of BVS, also get to work at the same wages as provided to the BVS members, whenever there is an order that BVS members cannot meet. Of course, the total income of these SHG members may be less than BVS members in a given time period, because of the difference in orders received. 3. Other Weavers: Since the BVS members; and intermittently other SHG members, are engaged in their work, the other weavers get more work opportunities from other traders, as compared to the past. The traders also offer better wages to ensure their loyalty. The other weavers report a consistency in work and wages during rainy seasons after the project started, whereas normally they would get at least 30 percent less wages during that season. The nancial benets have not increased during last three years, as the total turnover of the groups has not increased. It has remained stagnant around 8.0 million, while it should have been around 12.5 million by now, as per the initial estimates. The major reason, highlighted by the weavers, is the shortage of capital. They have the orders, but are unable to satisfy them. Institution Development: The SHGs, BVS, Silk Club, Chanderi Development Foundation and womens group (Hamari Duniya) are the communitys platforms for working together for the common good. If managed well, these institutions have the scope to bring this craft to the forefront in the country. Besides the nancial gains and assurance about work, it has given the weavers the self-condence and self-esteem that they missed for quite some time, as described by a woman weaver: We feel, as though we are Gopi Chand Somanis (a leading
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trader in Chanderi). It has also made the weavers think about better conditions for their familys well-being- gender equity, education of their children, health issues, mutual support and so on (see Box- Fighting Poverty Together). Last year, another institution, called Apna Kosh, was formed by the members of the SHGs under the guidance of BASIX. It carries out lending and savings activities for the weavers. It created a lot of hope among the members that they could now access credit to maximise their business. But due to shortage of funds that could not happen. Skill Enhancement: The training programs created to enhance the weavers skills and knowledge, have a long term signicance. Their increased ability to manage quality, technology, new and ever changing designs, dyeing and management of institutions and other functions has enhanced their condence in taking their institutions forward. The exposure visits to overseas markets, and to other leading, domestic production centres like Varanasi, have given them a new perspective. The weavers and even traders are now in better position to interact and negotiate with government and business institutions in the market. A consistent support from organisations like Fab India is an evidence of their increasing ability to match the market pace. This is one area, which has been strengthened regularly even after the end of the project, giving them timely and relevant inputs. New Avenues: The product diversication in line with market trends and linkages with new niche market segments, both nationally and internationally, have given workers from this cluster, new abilities. It is altogether a new, lucrative segment for Chanderi, outside its traditional markets. The critical issue that the weavers and traders would have to address is that of quality and time management. The share of clients, both in the traditional, as well as the niche markets, has broadened. It has added to their growth potential provided other conditions are fullled. Availability of Yarn and Dyeing Facilities: The nearest suitable source for purchase of yarn and for dyeing it, is Coimbatore in Tamilnadu, over 1500 kms away. It takes the yarn over a month to reach Chanderi, after the payments are made. Yarn being the costliest component, blocks huge amount of working capital and reduces margins substantially. By creating facilities for yarn availability and also by having dyeing facilities at Chanderi, the yarn supply lead-time can be substantially reduced, in turn increasing the margins of the weavers and traders. It would also help to compete in the market against competitors with the means to respond faster. It would also encourage them to try out new combinations and designs within the available time. However, the setting up of a yarn bank and a dye house by the project team is just the beginning. A dye-house was recently constructed with nancial support from ONGC and EDII. It will not only provide the weavers with a place for to dye their yarn, but also provide a physical space that is their own. It could be the epicentre of all their activities. It would enhance
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their condence about achieving something signicant and also make them feel that their institutions are not fragile. However, it would not be sufcient to sustain their business in the absence of adequate working capital. Credit/Capital Availability: In fast moving markets, availability of credit and capital has become critical. The increased accessibility to nancial institutions and availability of support from promoting agencies, including government, would help both the weavers and traders to match market expectations. This is indeed the most signicant bottleneck that has emerged post project. The repayment of the loans and inability to access new sources hampered their chances of achieving the potential. It is an area that needs urgent attention. Brand Protection: The Geographical Indicators (GI) Certication was received recently. It is bound to protect the cluster as a whole, by minimising or eliminating the encroachment by power looms and others misusing the brand name of Chanderi. (Discussed in this case under Industry Conditions of section Institutions, under Chanderi Development Foundation)
Analysis
The UNIDO project came at a time when the Chanderi cluster was declining and there was low level of enthusiasm among the weavers. The intervention was primarily aimed at poverty alleviation through cluster development. With its globally acknowledged expertise in cluster development, UNIDO focused on business development around this craft. But soon it realised that the strategy might address the issue of cluster development, but would not tackle poverty alleviation. Therefore, they decided to focus their attention and resources on institution development, which proved productive. The intervention might not have made a monumental difference, but it has led to some changes that could make this project a model worth replicating under similar conditions. Some of the highlights of the project are: 1. Flexibility: Initially, the project had no plan to organise the weavers into formal groups, like Bunkar Vikas Samiti. As it went ahead, the implementation team realised the value in building a weavers institution. This major strategic shift would not have been possible without the considerable exibility demonstrated by the project management team. In the process of implementation, these changes were not only allowed, but were also fully backed by the people in charge. 2. Institutions: The weavers institutions, with their control over functions of procurement, production, marketing and management, are new phenomena for the handloom cluster, at least in this context of poverty alleviation through cluster development. There is a great potential in these institutions for livelihood promotion on a large scale. But simultaneously, there is a big, inherent threat of its collapse and potential negative impact on livelihoods, if these are not managed efciently and with just a focus on leadership, or control for nancial gains. A SWOT analysis of BVS explains this contradictory inherent feature in Annexure I.
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There are other institutions that also have a stake in the gains from the project, like Silk Club and the Chanderi Development Foundation. The representatives of other sections, traders or master weavers, are not fully assured about its usefulness to them. They have been involved in some activities like exposure to overseas exhibitions and other clusters, but they are still sceptical. These sections have the potential to disturb the balance of the institutions created under this project. Therefore, it is important to assure them that the growth of the cluster; even under the leadership of weavers, would benet them as well. The institutions created during the project continue smoothly, with another important institution of the weavers created under the guidance of BASIX- Apna Kosh, carrying out savings and lending activities. The total number of weavers involved in these institutions, however, has not increased over the period. It is quite logical as the total business done by the groups is not more than their available capacity.
3. Market Linkages: The most important linkage that has helped BVS the most, is the one with Fab India. There are other linkages as well, but those are small and fragile. The sustainability of the linkage with Fab India purely depends upon the ability of BVS to supply quality goods, in time. Some level of exibility and cooperation from its side can be expected, but being a retail chain dependent upon the timely availability and quality of its goods, Fab India cannot compromise beyond a limit. For an institution like BVS, it would be a challenge to maintain quality and timely supply of goods. This would be true for all the linkages that are built in the future. Currently, the quality issue was being actively discussed and there was constant pressure from the buyer to improve quality and meet timely supply. Therefore, it would be an issue to watch. Market linkages- a delicate area for intervention, have not only continued with existing clients, but also has expanded to several new, reputed market players from domestic and export markets. 4. Design: The cluster is in a transition in terms of its product range. The project has enabled the weavers to diversify this range into something that was never produced in Chanderi in bulk. New products like curtain clothes, bed cover, lady suits, etc. are being produced. Besides the silk-cotton combination, for which Chanderi was renowned, products of pure cotton have also been introduced. Then there are new designs suiting the recently introduced niche markets. It has proved to be a good strategy from the point of view of livelihood promotion. To sustain the high-end segment of market, it is essential to constantly innovate and change as per its needs. Whether the weavers and the traders could continue to do so after the withdrawal of the project, is to be seen. The inclination towards new designs has not grown any further in post-project period, partly due to lack of adequate capital. 5. Management: The functions of procurement, production, marketing, distribution of benets are crucial as they need professional skills. The members of the weavers groups are mostly either illiterate, or are barely literate. They have never managed any complex business, or group on their own. Presently, their trust in the project team is the binding thread that keeps them together and persuades them to work in unison, without being bothered by issues related to quality, procurement, distribution of work, marketing, etc. But after
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the withdrawal of the project team, they would be required to handle these problems themselves. Therefore, in absence of high grade training on these critical issues, it would be difcult for them to manage the business and institutions. Hiring professionals to manage these processes appears unlikely. The ability to work together for common interests has not reduced and the distribution of the roles and responsibilities is still done smoothly. 6. Collaboration: This project is a model of collaboration among several parties weavers, traders or master weavers, UNIDO, Govt. of Madhya Pradesh (from one political party) and Member of Parliament of the constituency (from other political party), Fab India, NID, NIFT, Lady Irwin College and several other institutions and individuals. There seems to be almost complete harmony and willingness to support the weavers institutions. But UNIDO has played a signicant role in making it happen. Their willingness to support might continue, provided the leadership of institutions is capable of accessing this support. Otherwise, slowly it would fade away due to problems of quality, demand of market, management or bickering within the institutions. The outcomes of the intervention, particularly related with institution building, have sustained to an amazing extent. However, the growth aspect has not been encouraging, primarily due to the shortage of capital, as discussed earlier.
Conclusions
On the basis of the assessment of the impact, it could be stated, that: 1. The project, with its approach to cluster development, has beneted the weavers, who are involved in the processes initiated under the project, (Their numbers, unfortunately, have remained stagnant after the end of project) 2. The project has indirectly, though marginally, impacted the weavers not directly involved in the processes initiated under the project 3. There are around a couple of hundreds new livelihoods created, attracting those who had left weaving for other, less remunerative options 4. No negative impacts, on any of the sections of the cluster 5. Geographical Indicators certication has the potential to make a difference to the entire cluster, and now has created the capacity in the form of a brokerage institution in the cluster, and 6. All these have been created by a classical cluster development approach, i.e. proactive joint action by a range of cluster stakeholders, involved in each activity The analysis also suggests that while these initiatives have a great potential to make this an exemplary model for other, similar clusters in India, it is too early to conclude the project mid-way, lest some of these efforts zzle out prior to their sustainable maturity. The
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creation of BVS, and the potential that it has created, is of particular importance. The newly networked weavers can be subject to more exploitation by traders and master weavers. Hence some resource should be mobilised to carry forward the projects good work. The limited sustainability of the institutions and their business is partly due to the inability of the weavers institutions to challenge the traditional traders and master weavers. However, it may prove to be just an assumption, as the cluster might grow on all fronts on the strength of Geographic Indicator Certication and growing recognition for the Chanderi brand. It is worth trying to strengthen the capital base of the weavers institutions to achieve the major objective of livelihood promotion of the weavers. With several government schemes and micro-nance institutions emerging on the scene, it should not be difcult, although it is, as of now, still difcult for the weavers themselves. An agency, like BASIX or EDII, would have to take another right step forward, to help them out of this impasse and achieve their potential.
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Annexure I
SWOT of BVS
Strengths 1. Condence in the new institution-BVS and weavers willingness to work with BVS. 2. Weaving skills and desire to continue weaving. 3. Representation from all important sections of weavers- castes and communities. 4. Understanding the importance of unity and collective working. 5. Positive attitude about quality issues and initiatives, including dyeing, designs. 6. Initial linkage with high-end buyers like Fabindia. 7. Linkages with relevant local and distant support institutions, like NID, NIFT, Lady Irwin College, etc. 8. Willingness to take and accept suggestions. 9. Institutional and nancial backing by UNIDO. 10. Willingness of nancial institutions to support. 11. Exposure to national and foreign markets. 12. The fame of Chanderi sarees to back new initiatives. 13. Government/political support. Opportunities (Potential) 1. Increasing consciousness among consumers about handloom and cotton products. 2. New combinations of silk and cotton yarns could compete on price in the niche markets. 3. Newly tapped markets could create demand for more weavers, thereby creating new livelihoods. 4. With exposure to the outer world, weavers; particularly women, are getting empowered in terms of competence and sense of right to equity. 5. Geographical Indicators certication has potential for checking encroachments. 6. BVS has the potential to lead all the weavers on all issues important for their livelihoods. 7. With ability to develop new designs, with better quality, BVS could tap a new, large market segment. Weaknesses 1. Lack of condence to handle newly created institutions, SHGs and BVS, independently. 2. Inability and lack of condence to take work from professionals. 3. Inadequate interpersonal trust among members on work allocation and nancially sensitive issues. 4. Inter-community trust on nancial issues is even lower. 5. Communal harmony is delicately poised. Traders, or MWs could create problems, if they feel threatened. 6. Low literacy level among weavers. 7. Lack of ability to handle issues demanding professional competence, like marketing, designing, schedule-keeping, institutional management. 8. Inherent contradictions with traders and Master Weavers. 9. Low internal nancial capacity for doing business, to survive crisis. 10. Difcult gender and other social propositions, for now. Threats 1. Relapse/failure of BVS could put the weavers in far more dreadful conditions than before. 2. Premature withdrawal of support from UNIDO might leave the cluster with unresolved contradictions between traders or Master Weavers and weavers, which might lead to collapse of the institutions created under the project. 3. The sense of discrimination among some sections of the weavers might lead to fatal conicts. 4. Retaliation from traders and Master Weavers could be disastrous, if BVS fails to survive the onslaught. 5. Interference of government beyond a limit might be harmful.
The SWOT analysis clearly indicates the great latent potential of the institutions created, and also that their present ability to survive on their own is low.
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Case Study 9
Bandhan-An Organisation of Hope for the Poor

Abstract
Sachin Mardikar and Mihir Sahana27
Can micro credit interventions alone focus on institutional sustainability and also promote large scale livelihoods? Micro credit operations by Bandhan provide some evidence for the same. Headquartered in Kolkata, Bandhan is one of the fastest growing MFIs in the country with a customer base of 0.2 million borrowers, with an outstanding loan of INR 410.42 million, in just under ve years. It has managed to reduce its interest rates to 12.5 per cent at a at rate, thanks to an efcient, low cost, decentralised and lean operation adopted from ASA, Bangladesh. The strategy of opting for a loan-based model has helped Bandhan secure funds at competitive rates. Its borrowersall of whom are women, are engaged in a range of wage generating activities, thus increasing the asset base of the borrowers and strengthening their livelihoods, while also making signicant contributions to the growth of the local economy. This has generated large scale wage employment opportunities for the landless and the poor. Besides the economic benets accrued, the micro credit interventions have made signicant contributions in terms of women empowerment and family well being. Bandhan was recently awarded USD 50,000 in a global competition for its pilot programme that helps its poorest clients graduate into regular micronance programmes.
Introduction
The fact that a single micro nance organisation has been able to provide approximately one million customers, in seven states, access to micro credit is truly remarkable! Bandhan, a MFI providing micro credit services to poor has emerged as the single largest MFI in West Bengal and has emerged as one of the countrys fastest growing MFIs in a period of six years. Mr. Chandra Sekhar Ghosh,28 with his experience in micro nance and rural development work with Village Welfare Society (VWS) in Kolkata, saw a huge gap in availability of micro credit to the
27
achin Mardikar is the Chief Executive Ofcer of Agriwatch. Mihir Sahana is the Associate Vice President of BASIX. The S case has been revised by Barna Baibhaba Panda. The authors acknowledge the help provided by Mr. Vivek Shrivastava and Mr. Prabhas Akhouri, while doing the detailed impact studies. Mr. Chandra Shekar Ghosh is the Chief Executive Ofcer of Bandhan.
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poor. Realising that there existed a huge gap in the understanding and functioning of the micro nance institutions of those times, he ventured out to promote Bandhan as a capacity building institution in 2000, with the objective of turning around weaker MFIs into stronger ones. Mr. Ghosh soon realised that in the absence of any practical, demonstrable example of micro credit, which can be scaled up, much of the training inputs would remain on paper, and no signicant contributions would be otherwise possible. In 2002, an exposure visit to Bangladesh changed the future course of Bandhan when it decided to undertake micro credit activity on its own. Back with the commitment for technical support from ASA Bangladesh, and nancial support from SIDBI, Bandhan started its MF activity with a modest 20 lakh loan fund. In over just three years, the micro credit portfolio of Bandhan has grown leaps and bounds and today Bandhan has emerged as one of the strongest micro credit organisations. As of March 31, 2006 its operations are spread across 14 districts of West Bengal covering 253 blocks reaching out to nearly 0.2 million borrower clients in 5,241 villages. The total loan outstanding as on March 31, 2006 was INR 371.118 million with an on-time repayment track record of 99.98 per cent. Most of the Bandhans borrowers are small and marginal households (about 64% belong to backward classes and minorities). Loans are provided for a range of activities- mainly income generating activities, which give a regular and sustained cash ow. Small and petty trading businesses account for 56 per cent of its portfolio. The credit operations are simple, need based and professional. All of Bandhans clients are women. Bandhan believes that true empowerment can come only when women have access to credit. The improved credit has also lead to increased livelihood opportunities to others, who are not clients of Bandhan. Armed with small loans Bandhans clients expand their business. They employ co-workers- many of whom are landless and poor, with women constituting a large proportion of this workforce- to help them in their work, thus providing job opportunities to others in the village. The thrust is on identifying lending opportunities that are backed by sustained cash ows, which ensure that the repayment is securitised. These groups are purely credit groups with pre-decided time lines for sanction of a loan. Thus a person joining a group is assured from day one that he will get a loan in the fourth week. The rst loan is between INR 1,000-5,000 in rural areas, and up to INR 7,000 in the urban areas. The tenure for all loans is xed at 46 weeks. The loan repayment is in equated weekly instalments. Each member contributes 2 per cent of the loan towards a risk fund, which is used whenever a borrower dies without repaying the loan. The entire operation is simple and after extensive study of the local area, a branch could be operational in less than a week with minimum investments. All branch operations are standardised; including the furniture. The staff work together and typically service a client base of 1800 borrowers. Meetings with borrowers are held at the appointed hour on a xed week day, with some allowance for a holiday in between.
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This study documents the process by which Bandhan has facilitated the livelihood augmentation of large number of rural poor in a short span of time.
Objectives and Methodology

The design of this case study was based on the premise that unlike most development interventions, interventions in micronance look for returns on nances employed and institutional sustainability. It has also been debated that micro nance is an essential input required by the poor and that it acts as a propeller of livelihoods. The objective of this case study is to see how the organisation being studied has addressed both its institutional sustainability, as well as the livelihood needs of the poor.
The study focused on the following:

a) Objective of the Intervention b) Nature and Design of Intervention The Methodology Followed c) The Design of the Institution, and d) The Impact of Micro-nance on the Livelihoods of the Poor The methodology followed for data collection is given below: The case writers circulated the case study protocol in advance, to enable the organisation to prepare for our visit. The case writers undertook a desk study of the reports, manuals and other relevant documents available at Bandhan. This was followed by discussions with the Chief Executive and Senior Staff in Kolkata. The draft report was shared with Bandhan, and this was followed by a presentation. Two locations were selected for an in-depth study to understand the impact of credit provision on the lives of the borrowers. Konnagar was the rst branch studied, and here the case writers interacted with 33 borrowers who had gone through two or more stages of a loan cycle. At Shantipur, the authors interacted with the Tantis - people engaged at different stages of value addition in the activity of weaving sarees.
Organisational Context
Bandhans direct eld level intervention started in 2002 with a branch headed by Mr. C.S. Ghosh and four staff members, of which, two were deputed by ASA Bangladesh, as part of its technical support. Operations in the rst year were started with the support of Small Industries Development Bank of India, which decided to support Bandhan based on the strength of its technical collaborator ASA- Bangladesh. As on March 2008, Bandhan reached out to over 1.02 million members (0.89 million of whom are borrowers) in 31 districts, of 7 states, through 502 branches. The cumulative disbursement as on March 2008 was INR 913 crores (loan outstanding INR 330 crores). Annexure I provides details of Bandhans performance over the years.
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All the borrowers of Bandhan are women- but they are skilled. Scheduled Castes, Scheduled Tribes, minorities and other backward castes constitute 30.5, 4.2, 28.7 and 6.7 per cent of the borrowers, respectively. This unique feature of its borrowers is the genesis of Bandhans intervention design. According to Mr. C.S. Ghosh, Women in rural areas in Bengal possess skills, but they do not have any access to money of any sort. They belong to poor households and thus do not even qualify for opening savings accounts, and therefore the possibility of getting loans is quite unlikely. He further says, If you wish to impact poverty, then the household income should increase. But this can happen only when the woman of the house is empowered. This means there should be support to such income generating activities that directly affect women. Bandhans micro-nance programme has high degree of community participation through formation and development of Self-Help groups (SHGs)29. The SHGs enable integrated development and play a pivotal role in implementing various social development schemes in an appropriate manner. Bandhan has adopted the micro nance approach to address the issue of poverty. Bandhans Micro Finance delivery model evolved in collaboration with technical support from ASA Bangladesh, and was facilitated by the nancial support from Small Industries Development Bank of India (SIDBI)30. Bandhans main source of income (82.24 %) is the service charge it recovers from members for the loans given. Grant income constitutes 11.02% of the income, and the rest comes from admission fees (4.54 %), bank interest (1.12%) and miscellaneous (1.09%). 44.10 per cent of the costs go towards establishment and administration costs. Financial costs are 28.44 per cent, while personnel costs are 27.46 per cent of the total. As of 31st March 2008,31 the total shareholders funds stood at INR 101.5 million. The loan funds were INR 224.5 million. Loans and advances stood at INR 528.8 millions. Bandhans current partners include ASA-Bangladesh, nancial institutions like ABN-AMRO, Standard Chartered Bank, ICICI Bank, Axis Bank, State Bank of India, Bank of India, Indian Overseas Bank, SIDBI, HDFC, IDBI, FWWB, BNP Paribas, Oikocredit Unitus and Rashtriya Mahila Kosh (RMK), Department of Women and Child Development and the Government of India.
Institution Building Leadership, Staff Incentives and Learning by Doing

Bandhan is registered under West Bengal Societies Registration Act, 1961. Its registered ofce is at Konnagar, Dist. Hooghly in West Bengal. All the operations are managed from the head ofce located in Kolkata. The General Body of Bandhan comprises of 16 members, of which 11 members belong to the Executive Committee. There is an Advisory Committee consisting of 4 members. These members are eminent professionals from the eld of business, nance, academics, and public
29
lthough the term SHG is used to generically describe these groups, they are more in the nature of credit groups. The A savings activities have been stopped from January 2006. Source. www.bandhanmf.com Source: Annual report 2004-05 and ofcial website www.bandhanmf.com
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service. They guide the management on new opportunities and demands arising from the eld. The board members are all related to the micro nance sector and take active part in the working of Bandhan (The annual report notes that during 2004-05, there were 13 meetings of the general body, where all members were present). Twice a year, the board members also visit the branch operations. The Executive Director(ED), belonging to the Executive Committee, is the head of operations. The ED provides policy decisions and leadership. The Director Operations (DO) is the operational head to whom the Regional Managers report. (Please refer Annexure III for the Organisation Chart)
Need for Intervention

Poverty in West Bengal is wide spread. The government puts it at 27 per cent, while the Non Government Organisations would like to put it at 50 per cent according to Mr. C.S Ghosh. He further states The poor need both savings and credit services. Perhaps credit more because they do not have any sort of nancial asset base. In 2000, Bandhan started as a capacity building institution. Recollecting the initial days of Bandhan, Mr. Ghosh says that The micro nance sector in Bengal lacked depth and there were hardly any viable MF Institutions working in the eastern part of India. As poverty was widespread it was imperative that the outreach of MF be increased. This was possible only by involving more and more NGOs into this eld. The challenge therefore was to build more and more viable MF Institutions. Bandhans initial objectives as a capacity building institution was to build these weak MFIs into a strong and effective source of development for the poor, and to ensure maximum outreach from these organisations. However, during its tenure as a capacity building institution, Bandhan got some invaluable lessons from its experiences: Reliance on grant funds to support micro nance operations was difcult. A loan was always a better option The existing banking and non banking sources are inadequate to meet the credit needs of the poor. Although there is a tremendous demand for credit facility The present system of credit is collateral security based and requires mortgaging of assets and valuables like gold for getting a loan. In parts of Bengal, where the poor pay any where between 5 to 10 per cent per month as interest for small borrowings, no business plan would ever be viable or generate enough wealth or sustainable incomes The commitment from the borrowers who are poor, is extremely high There is ample need for well-groomed, specialised MFIs Organisational sustainability is key to sustainability of Micro-Finance Programmes A borrowing fund can be the only resource to initiate and strengthen micronance programmes.
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Bandhan sees itself as a world-class nancial institution serving 6.5 million clients by 2015 through the best of its services in education, health care and insurance. Bandhan employees and board members are unied across one purpose with a mission to Signicantly reduce economic and social poverty by providing member focused, quality, and cost effective, sustainable nancial services. The value system at Bandhan is best summed by the word CREATE: C-Cost effective and simple R-Respect for all E-Exemplary governance A-Accountability, professionalism and discipline T-Transparency and integrity E-Effective team work and commitment
However Bandhans experience in this regard was not encouraging. The existing NGOs were not in consonance with the above learning experiences. In October 2001, a visit to Bangladesh under the capacity building programme (funded by CARE) gave Bandhan a new insight into its objectives. The visit to Bangladesh opened up new arenas. It was discovered that micronance was the most viable and effective tool for poverty alleviation. During the exposure visit we got a chance to visit BRAC and CDF in Bangladesh. I studied the BRAC Model closely. BRAC adapts an integrated approach to promotion of livelihoods. About 80 per cent of its funds are grant funds. In addition to income generating activities, it also promotes education, health and community development. The BRAC model gives not just credit but also a livelihood asset to the borrower. Thus a borrower gets a 3,500 taka loan and two poultry birds, or a goat. It is expected that the earnings from the asset would help the borrower repay the loan easily, Ghosh says. Noting the huge scope for micronance operations, Bandhan took the strategic decision of making a shift from being a capacity building organisation, to a delivery organisation. It decided to go for direct intervention into micronance. It then entered into collaboration with ASA, whereby ASA would provide two of its employees to Bandhan. Bandhan opened up its rst branch in Bagnan with 4 employees (2 from ASA and 2 from Bandhan). It approached many donors for support but due to various technicalities neither grant funds, nor loan funds were forthcoming. The most common reason being no past track record. It was at this point that the Small Industries Development bank of India (SIDBI) offered support through an initial, loan cum grant. According to Mr. C.S. Ghosh, We wanted to start something new and innovative. The only support we had was that of Mr. Shaqual Haque Choudhury, founder of ASA-Bangladesh and other board members. As we were a new organisation, formation of the board itself was a major challenge. It was on the strength of this support from ASA that SIDBI took the risk and sanctioned the money. However, there was some time before the disbursement could be made and by that time we had
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already started the eld operations. As per our schedule, loans had to be disbursed in the fourth week and we had no funds. Our credibility was at stake. We borrowed from the money lender for the time being. This helped establish our credibility among borrowers. The social and economic background of the members is given below: 41.5 per cent of the members belong to SCs, STs and OBCs and 28.7 per cent to minorities All members are landless women, but they possess some skills The monthly family income is not more than 2 USD per day in rural areas and USD 3 per day in urban areas, for a family of ve Those who do not have more than 0.5 acre of land, or capital of its equivalent value are made members Small business and trading loans dominate the loan portfolio
Background of the Intervention- The Intervention Context- Internal and External Context
According to Mr. Ghosh, In the rural areas of Bengal just about 26 per cent of the people have jobs of some kind, the rest have no where to go. A good 80 per cent of the people in rural areas have no bank accounts and hence have no access to credit, since having a bank account is a prerequisite. But then, given todays scenario of minimum balances etc. the poor fellow will have to borrow to maintain an average balance of Rs. 500. Bandhan realised that given the patriarchal structure it was most likely that the husbands would turn to their wives for money. This, it felt, could have a serious effect on the status of women, as they would be forced to bring dowry. However, if the women were earning members of the family then it was more likely that they may not be subjected to this retrograde practice. In addition, studies by Bandhan conrmed that the women had skills, which could be applied to generate small incremental livelihoods within the village itself. However, no bank would ever come forward to support, given the size of the loan and its associated costs. Divisional Manager Mr. Pritish Saha recalls an incident, where a woman from the group went to deposit her savings in the bank. All she had with her were coins that she had saved over months. However, the bank ofcial thought otherwise and threw her out of the bank. She was treated as though she had come to beg. Bandhans studies also indicated that often people did not work in isolation in the villages. For most of them it was an extension of their household and therefore, they willingly admitted newcomers, imparting them with skills for this was how most of them had learnt new skills. Bandhan felt this was a good intervention point (see Figure 1). It identied several such apprentices and encouraged them to borrow, to acquire basic livelihood assets or tools that would
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help them become self employed. This strategy worked and there were quite a few entrepreneurs who became independent petty traders, doing business under the guidance of an expert mentor. Bandhan also realised that the main bottleneck in the process of promoting livelihoods in the rural areas was credit, and on this basis they designed their intervention. Successive annual reports highlight the main problems being faced by Bandhan staff. Very often they are mistaken for money lenders. Traditional moneylenders are always there, but Bandhans erstwhile clients had no use for their services because of the high interest charged, as well as the exploitation they faced at their hands. Moneylenders charge anywhere between 10% to 15% per month (120% to 180% per year interest), and even at 365%. Credit at such exorbitant rates can never be useful for any income generating activity. As far as the government is concerned, there are programmes like SGSY. However given the seasonal nature of its credit delivery mechanism and the other various complications, they are not attuned to the credit needs of the poor. In addition, Bandhan realised that most people in the rural parts believed that the MFIs too would give them loans at subsidised rate of interest. Unwillingness on the part of bankers to open bank accounts of the poor often means a majority of the transactions have to be done in cash. The factor conditions of skilled human resources coupled with a favourable demand condition for small loans to promote and support livelihoods facilitated the intervention choice. But the institutional conditions that existed in the form of mainstream nancial institutions, like banks and traditional sources of credit, were not favourable for livelihood promotion efforts. As credit was the critical bottleneck, the contingency approach demanded prioritising intervention in credit. But delivering credit at affordable rates required tasks beyond mobilising capital at competitive rates. It required technical and managerial expertise. The task polygon required collaboration with nancial institutions for a start up fund, a technical collaborator with expertise in the sector for establishing systems, and managerial acumen.
Description of the Strategy and Approach of Intervention

Bandhan believes that the GDP of the country can be increased only by increasing the income (purchasing power) of the poor who form a greater proportion of our population. But
Figure 1: Bandhans Operational Strategy
Acquire Skills
Develop condence
Access Credit
Better Income
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how can the income of the client be increased? Bandhan believes that in this regard, what is actually required is to initiate a process whereby the poor are equipped to generate income for themselves. The genesis of Bandhans strategy is in its three fundamental beliefs (see gure 2). These are: 1. Avenues for Savings and Credit are Primary Needs and therefore increase in a familys income is crucial 2. For improving the GDP of a country, credit can be a major driver and thus there is a need to promote and develop income generating activities on a large scale 3. The poor have the ability to derive the highest productive realisation from a rupee, and thus, easy accessibility of credit and savings is important
Figure 2: Intervention Design

1. Avenues for Savings and Credit are Primary Needs 2. For improving GDP of a country credit can be a major driver 3. Poor have to ability to derive the highest productive realization from a rupee Institutional Processes No Grant Model Village Entry Organization structure W1 First Group Mtg. W2 Loan Application Internal Process W3 Appraisal Focus, Specialization W5 W 52 Repayment W4 Loan Disbursement IMPACT Incremental increases in income Rs. 73 million PM 0.2 million borrowers (Avg. 365 PA) 0.2 Million women have access to credit
Field Level Processes
Bandhan has chosen the direct mode of intervention. Bandhan is directly responsible for nancial intermediation. Various factors can be placed forward in favour of a direct intervention: The services can be easily delivered without being dependent on any other facilitators The funds can be channelised to the poor directly without having to pass through various channels Direct interaction with the clients results in a widening of the scope of the areas of improvement (according to the demands of the poor)
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Direct involvement of the staff in the system increases their competency as well as commitment levels The level of employment increases due to the direct mode employed.
Institutional Level Processes for Implementation of the Intervention

To really understand Bandhan, a thorough understanding of the underlying structure is extremely important. It has a three tier system of Field Branch, Region and Division. There are 16 Divisions and 80 Regions. Each Region has 6-7 Branches and each Division caters to 4-5 Regions. Branches are the lifeline of Bandhan. Since its inception, Bandhan has invested heavily in devising a system that resembles a complex web, and yet functions almost effortlessly.
Operations
Each of the branches is headed by one Branch Manager (BM) and four Community Organisers (COs). The Branch Manager supervises the activities of the COs. The BM holds weekly meetings with their respective COs, when problems identied during eld visits are discussed, tasks are prioritised and solutions provided to problems proposed. A branch serves as a residence for the eld staff (CO/BM) and an ofce unit from where activities of Branch originate and are managed. All Regional Managers (RM) and Divisional Managers (DMs) visiting branches must stay at the branch with the BM and COs. An overnight stay is mandated for all visiting DMs and RMs. The Regional Manager rigorously monitors the activities of each branch at least four times in a month. It is mandatory for the DMs to be present in the eld for 3 weeks and to cover 3-4 branches of each region every month. It is also mandatory for all visiting DMs/RMs to visit some borrowers personally and record details about their visit. Bandhan has six Internal Auditors. The Internal Auditors visit the branches every quarter to conduct internal audits.
Recruitment of Staff
Vacancies are advertised in the standard dailies (English and Bengali). The large number of applications that are received are sorted out in accordance with the requirements for requisite educational qualications and experience, and eligible candidates are called for the interview. The HR Manager makes a presentation on Bandhan, followed by a group discussion, where the applicants are assessed. The personal interview follows next. On the basis of their evaluation, the successful candidates are absorbed for the PSO (Pre Service Orientation). Once the new staff members join Bandhan they are sent for a one week PSO training where they learn the basic details of the work, on the job. On successful completion of their work, they are absorbed into the various branches of the organisation.
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Salary Structure at Field Level

All the staff members right up to the Community Organizer (CO) are salaried staff of Bandhan. A CO (usually a high school pass out) starts with a salary of Rs. 1750. A graduate draws a salary of Rs. 2200 in the position of a CO. After 3 months, the salary may increase by Rs. 500. After the next 8 months, the salary is increased again by Rs.500. In a years time, a good CO can get a raise of Rs. 1000. A Branch manager draws an average salary of Rs. 3700, and a Regional Manager draws Rs.5500. The staff incentives are all promotion based. A Higher Secondary CO can become a Branch manger within a span of 9 months. The same position can be attained by a graduate CO within a span of 6 months. On the other hand, a Branch Manager can get promoted to a Regional Manager within a span of 6 months.
Systems and Policies

The ASA based model has helped standardise all operations across the organisation. This has ensured that similar practices are followed by all levels, and at all locations. This includes the choice of utensils as well. The Operations manual is an exhaustive piece of work, which is revered by the staff members. It contains virtually all answers to any administrative issue. The manual contains formats of all the MIS reports and detailed instruction sheets. A majority of the decisions made by the staff relate to operations, which do not require senior management intervention. Standardising this has helped prevent encroachment on management time, which can be better spent on strategy related issues. The accounting system is simple, easy to understand and even a non commerce graduate can prepare a branch trial balance after three days of training.
Staff Capacity Building

The staff is provided in house training by the ED and a team of senior management staff. Specic time bound training modules have been developed. These are given in the following table: Stage Pre service orientation Credit Management and Development Operational Management Course Development Management Course OD Course Group Dynamics and High Performance Team Building Functional Communication Training Enterprise Development Training Duration (days) 4 3 3 3 6 3 2 3 Level Newly recruited staff Community Organiser (CO) Team Leader, CO Incharge and Branch Manager (BM) Regional Manager (RM) RM/BM/CO CO/BM/RM - do - do -
As a strategy, these trainings are offered by senior staff and members of board.
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As a system the branch staff lives together and there is enough space for accommodating the divisional manager, regional managers. The tour programmes are based on the monthly activity schedule of a particular branch. It is mandatory for the RM/DM to stay overnight in the campus. This allows the senior managers to address several personal/professional issues that the staff members might have. It also helps build camaraderie and a spirit of belongingness to the organisation. The accounting system is simple. There are no branch accountants instead the COs themselves double up as accountants through a system of rotation. This ensures that there are enough safeguards to prevent mistakes and frauds.
Field Level Process of Implementation of the Intervention Area

Selection Selection of the area where a branch would be opened is very important. The opening of new branch is a carefully thought out process that is based on economies of scale and cost optimisation. It is the Regional Manager who rst visits the area and makes an assessment of the region. During the survey the basic socio-economic data about the village and its surroundings are obtained. The managers also meet the local people and peoples A Day in the Life of a Community Organiser Samarda starts at seven in the morning when he rushes to the nearby meeting place. At the appointed hour the women are already present with their pass books and register. The meeting starts, and in about half an hour all the transactions are completed. All the borrowers are told to come to the branch to collect their loans. He gently encourages them to think ahead on how they can make better use of the money that they have now obtained. One of the women from the group says she would like to purchase a Tana with the loan. This, she says, will allow her to earn about 25 rupees a day more than what she does today. She also explains that the small investment of Rs. 2000 will be recovered in no time. It is eight oclock now and time for Samarda to rush to the next meeting. Samarda now cycles to another part of the village where the women are anxiously waiting for him to arrive. After another two such meetings he reaches the branch at 12 noon.
Samarda counts the cash and updates the daily MIS which is displayed in the ofce black board. Today he has recovered more than his target. This, he explains, is on account of the fact that one of the borrowers chose to repay the last four instalments in one tranche. He then updates the daily MIS. He is also the cashier/accountant today (at Bandhan each CO does the work of an accountant for two weeks, by turns). He goes through the daily sheets of fellow COs and also todays disbursement applications. Post lunch the disbursement starts and concludes by 4 pm. In the evening Samarda and his colleagues reect on the day in their home, which is an extension of the ofce. They catch up with the latest happenings in the village and retire at 9 pm.
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representatives to apprise them of Bandhans work. A written statement is led with the Panchayat Ofce wherein photocopies of all the necessary permissions etc are enclosed. A branch must have at least 1600 borrower clients. The branch operations are headed by a Branch Manager and four Community Organisers. The Branch Manager and the Community Organisers have a residence cum ofce from where they operate. The Community Organisers prepare an area business plan wherein week-wise details are provided. Since all the work is standardised including loan frequency, service charges, recoveries and the fact there are no savings products, the task is simple and easily understood by the Community Organisers. The Community Organisers go to the designated area and hold meetings with the borrowers.
Lending Operations Bandhan lends out to individual borrowers, who are members of a group. One has to be a member of a group before accessing loans. A group of minimum 10 members has to be formed before the loan can be disbursed to individual borrowers. A group can accommodate a maximum of 20 members. Further, the group also serves as a collection centre for the weekly instalment repayment. The group also serves as a centre for the illiterate clients to learn how to sign their names.
All the borrowers meet at a predetermined hour at a xed place. There are no notices sent, nor is any agenda xed. The purpose is simple, the group members should assemble and rst transact the lending business. Loans are made and repayments are collected. The CO updates the passbook, records the dealings in a simple register that serves as a minute book. The loans are sanctioned on the spot but the disbursement is made at the ofce the same day in cash.
The Products Offered At present Bandhan only offers loan products. It stopped accepting deposits from December 2005 due to legal issues. The extant rules framed by RBI prohibit acceptance of deposits without RBI permission. It offers two types of loans, the rst is regular credit, and the second is called Micro-Enterprise Loan. The loan size is the differentiating factor between the two.
The smaller regular loans are disbursed directly to the members during the weekly meeting. The rst loan is disbursed after four weeks of membership and the quantum of loan is between INR 1,000 5,000 in rural areas. The second loan is given once the rst loan has been repaid in full. A service charge of 17.5 % (interest based on at rates) used to be charged. Bandhan reviewed the same and after looking at its own cost of borrowing and operational costs reduced it to 15 percent per annum at. Effective May 2006, the rate of interest has been further reduced to 12.5 per cent at at rates. The old loans will continue to be repaid as agreed.
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Bandhans Loan Products Non-collateral based loans. One simply has to be a member of Bandhans organised womens group and ensure a minimum level of attendance in the weekly group meeting before accessing loans.
The rst loan is disbursed after four weeks of membership. The rst loan is between INR 1,000 5,000 for the rural clients, and between INR. 1,000 7,000 for urban clients. A service charge of 15% per annum is charged on the loans. Loan repayment is weekly. The weekly loan instalment for a Rs. 1000 loan is only Rs. 25. The loan term is only one year. The total number of instalments are 4 Subsequent loan is Rs.1000 Rs. 3000 more than the previous loan on the basis of two factors viz. future potentiality of the clients income generating activity and whether it generates the expected income of the client. Entitlement to a grace period of six weeks- three weeks on medical grounds and the last three weeks on account of holidays.
For Micro Enterprise Loans the process involves identication of eligible borrowers from the existing client base. This is followed by nancial and risk appraisal and visits by the staff. As the loan size is large (up to INR 50,000) the monitoring process is more elaborate. Features of Micro Enterprise Loans: 5% security needed to avail the loan The rst loan ranges from INR 15,000 INR 50,000 A service charge rate of 15% is charged Disbursement and repayment solely in cash Repayment in equal instalments in one year
System of Weekly Loan Repayment

The practice of weekly instalment repayment makes it easy for the borrowers to repay. It ushers in a feeling of comfort amongst the borrowers. Further, it does not affect the normal running of the households. The Micro enterprise loans, which are of higher value, used to be collected in 10 equated monthly instalments earlier. These are now being collected in weekly instalments.
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To mitigate the risk on account of death of a member, Bandhan collects 2% of the loan sanctioned, as risk fund. In the event of any defaults on account of untimely deaths, the reserves are accessed. However, now it is proposed to be reduced to 1.5 % based on experience. Bandhan has not tied up with any insurance agency. It believes that tying up may not be in the best interests of the poor. There is no possibility of reducing the premium paid and it works on global scale.
Impact Analysis of the Intervention

The central question before the case writers was that given the phenomenal growth of micro credit operations, how has it impacted the lives of the poor? An in-house study32 done in October 2005 (gure 3), suggests that the step process followed in loan disbursement has had a favourable impact on the household income. In a sample of 60 clients surveyed, twenty nine reported an immediate increased income of Rs. 100-300 per month. Once the loan has been repaid and sufcient condence gained, they took a slightly higher loan in cycle two and managed to improve their incomes. This has been primarily due to removal of critical bottlenecks in the livelihood generation activities. A separate eld study by the case writers appears to corroborate the ndings of the above study. Annexure V provides a detailed, loan cycle-wise break up of 25 borrowers from Konnagar where Bandhan rst started its micro credit operations. The authors personally visited the borrowers and ascertained the likely income impact on the borrowers using the Before-After methodology. This methodology is largely based on the borrowers ability to recall accurately.
Figure 3: Impact on Peoples Lives

30 25 20 15 10 5 0 100-200 200-300 300-400 400-500 500-600 600-700 700-800 800-900 900-1000 Loan Cycle 1 Loan Cycle 2 Loan Cycle 3 Loan Cycle 4 11 29 18 7 13 12 10 9 15 2 4 5 1 10 2 3 1 5 1 1 1 1 1 1 1
Source: Chatterjee Sanchari, Impact of Bandhans Micro credit Programme on income of the client Kalyani University
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Chatterjee Sanchari, Impact of Bandhans Micro credit Programme on Income of the Client, Kalyani University
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On the basis of the borrowers feedback and perception, it was found that a good percentage of the members had improved their economic condition after taking credit. The positive income effect had been due to the ability of the borrowers to buy cheaper raw materials (e.g. tailoring materials), to maintain enough stock of nished goods (fancy items, where choice is key), or to procure materials from alternate source (such as utensils made in Orissa, which are preferred by buyers). Mita Adhikari of Basahi village under the Konnagar branch came to know of Bandhan in 1993 and availed her rst loan in February 2004 in order to buy a sewing machine. She had only two machines in her house. This activity was also the only source of earning for the entire family, which comprised of two unemployed sons. They used to buy materials from a shop in Kolkata who also used to charge them unfair rates. All they could earn was INR 400 in a week. She rst took a loan of INR 3,000 from Bandhan, which she used to purchase of a second-hand sewing machine (for INR 1,800) and used the balance for purchase of raw materials. Mita and her two sons were now engaged in stitching of clothes, while her husband started selling clothes in the docks and on the steamer lines of river Hoogly. The business was good. There was more money to be made, as customers had little choice on a boat (where the competition was less). The family was able to raise their income by INR 125 a week and soon saved enough money to buy an additional sewing machine. Buoyant with her success, she applied for a second loan in December, which she used to buy two new sewing machines. Today, Mita is the proud owner of twelve machines, employing eight other women in the neighbourhood. According to Mita, each machine helped to increase her monthly income by INR 400-500. She now has a bank account where she saves for the future. Table 1 provides a break up of three such borrowers of the study sample, who have migrated to the fourth cycle.
Table 1: Borrowers who Completed Four Cycles

Loan L1 L2 L3 L4 Average Borrowing (INR) 3,000 5,333 6,667 9,667 Incremental Income (PM) 225 438 345 455
Table 2: Borrowers who Completed Three Cycles

Loan L1 L2 L3 Average Borrowing 3,615 5,923 8,231 Incremental Income 347 359 388
The availability of micro credit and the ability of the skilled persons, who took loans, have changed the business paradigm. People engaged in small and cottage industries have always been at the mercy of the traders who provided the orders, materials and money. This practice created a situation where the interest was often charged with the basic cost. Thus the buyer had no way of knowing how much he or she was paying for their purchases. Dolly Biswas of Konnagar makes sketch pens. She bought the raw materials from a trader in Kolkata who used to charge 5 per cent over and above the material cost as
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incidental charges. He was also the only person to whom she could sell. Here too the trader used to charge similar commission. Dolly applied for a loan to Bandhan. She now buys raw material from a different source and she is under no obligation to sell her sketch pens to a single trader. Dolly, and many others like her are in the third cycle. (See Table 2 for details)
Creation of Livelihood Assets

Creation of livelihood assets has perhaps been the single most, important achievement of Bandhans micro credit programme. The case writers spoke to a number of borrowers who have successfully crossed over to the second leg. Pampa di is one such borrower. She rst borrowed INR 3000 and invested an equal amount in setting up a jacquard machine for weaving. She repaid the entire loan @ Rs. 75 per week (equivalent to the wage rate for making sarees) in 45 weeks. With the machine, Pampa di and her husband can weave six sarees in a weeks time. This translates into a wage earning of Rs. 360. After repayment of her instalment she is still left with some amount that contributes to her household income. She has repaid the rst loan and again borrowed INR 6000 for a second tant machine. It has enabled members to own the livelihood asset instead of taking it on rent. This basically gives the borrower the Psychological Incentive to increase their efforts and enhance income. Take for example Archana di, whose husband was a rickshaw puller. He did not have a rickshaw of his own and thus had to take it on rent at INR 25 a day. His monthly income was around INR 1,600, of which he had to shell out INR 650 as rent to the rickshaw owner. They were hardly left with any money and lead a life on a very tightly balanced budget. At this point, Archana di came to know of Bandhan. She joined one of the groups in her area and availed a loan of INR 5000 in January 2005. By paying weekly instalments of INR 125, they managed to own a rickshaw by November 2005. This also led to a reduction in their household expenses. They decided to save this amount in Sahara. Archana dis husband was also now putting in more hours at work. One of the possible impacts that needs to recognised is that for the poor, savings happen in multiple forms, and not necessarily always in cash. The value of such investments on xed capital may be viewed as net savings, if the loan is repaid without having to take recourse to another asset such as past savings. A prole of Bandhans borrowers indicates that 68 per cent of the borrowers had invested their loans into acquiring livelihood assets. Most of these loans are less than INR 5000, which is preferred by the borrowers. These loans are payable in small weekly instalments, a mode preferred by the borrowers as their own cash ows are weekly. The increased availability of cheaper credit has also meant that reliance on external lenders has dropped. Discussions with some of the groups at Konnagar indicated that there was an overall decline of 46 per cent in the informal borrowings of members.
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Micro Credit and Livelihood Promotion - Impact on the Saree weavers of Shantipur
Shantipur is a small town in Nadia district of West Bengal. At the strike of dawn one can hear the rattle of the tant all over town. The place is well known for its handloom sarees, commonly known as Tant sarees. Agriculture is mostly in cash crops and plantations, and thus there is enough time available for the people to engage in supplementary livelihood activities. Almost every family in the town is engaged in the work on Tant, or the handloom saree of this region. Bandhan started its operations in Shantipur in July 2004. Table 3 provides a snapshot of the growth of credit operations at Shantipur between April 2004 and March 2006.
Table 3: Borrowers Prole at Shantipur Branch

No. of Borrowers Aug 04 Agriculture Animal Husbandry Small Cottage Industry Small Transport Small Business Small Trading Services Total 4 3 70 3 5 14 21 120 Mar 06 103 219 2,998 368 271 484 137 4,580 Cumulative Lending (INR 000s) Aug 04 10 5 199 6 14 42 56 332 Mar 06 385 914 10,413 1,390 1,064 1,932 445 16,543
There was no formal source of credit for people engaged in the Tanti work. In spite of the enormous demand for Shantipur Sarees and availability of requisite skills, the weaver community was completely dependent on the traders for their survival. Discussions with the weavers indicate that most of them never thought that bankers would give them collateralfree loans for such small amounts. Most banks in the area preferred to give large loans as part of some government initiative. The problem with the large loans; as Khatik Da of Fulia puts it, was, First of all, we do not require such large amounts to nance our work. This is a skilled job. Our cash ows too are such that we will not be able to repay large monthly, or quarterly instalments at a time. Splitting of instalments into weekly schedules helps us plan our cash ows better. What Bandhan has been able to achieve is to revitalise the tant saree market. Previously the indigent weavers depended on the local wholesale traders for supply of materials at all the stages of the value chain. The extent of business then depended on the nancial strength of the trader. When Bandhan rst entered into Shantipur and its neighbouring areas, the traders were against it. Mr. Pritish Saha, Divisional Manager of Bandhan recalls that once he was called by the local traders association- a body of over 260 members who trade in various items related to handloom sarees, for an explanation as to what Bandhan
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up to. They opposed direct lending by Bandhan to weavers as they felt their monopoly was being threatened. In reality, the availability of credit led to increased monetary transactions as more and more people started owning tants and thus demand for raw materials has increased. While no ofcial and reliable estimates are available for the number of Tants, old traders put this at 3,000. However, with Bandhans entry the number is estimated to have increased to over ve thousand. Each tant means 240 more sarees to sell and thus more demand for raw materials. It also means increased availability of sarees and increased turnover for the trader.
Impacting Markets through Micro Credit

Another interesting dimension, of the role of micro credit in promoting livelihoods indirectly, is through the demand creation process. According to Pritish Saha, Divisional Manager of Bandhan, Bandhans support to the traders from the market too has had a positive impact on the market for tant saree. Previously the wholesale saree traders used to give limited stocks to the local traders for sale in the upcountry markets of Durgapur, Asansol etc because their capital was tied up in the process. However, now that the wholesalers know that these individual traders would be nanced by Bandhan for their working capital, they are condent to give them more stock. Today, nearly 10 per cent of Bandhans borrowers in Shantipur are small time traders. A majority of them are engaged in trading of sarees. In terms of value this is 11.67 per cent of the total amount lent. (See Table 4)
Table 4: Category-wise break up of Borrowers at Shantipur

Category Small Cottage Industry Trading Others Total
Source: Bandhan Shantinagar Branch Reports
No. of Borrowers 2,998 484 1,098 4,580
Amount O/s Cumulative (in Rs. 000s) 10,413 1,932 4,198 16,543
Impacting Social Lives

Although understated, a silent revolution has been ushered in the rural parts of Bengal by micro credit. Women associated with such institutions no longer have to depend on their husbands for money. When the husband is unable to earn enough for the day, it is the womenfolk who chip in. They have managed to meet household expenses and also save a little. There are quite a few examples where the women took the initiative on their own to send their children to school for the rst time. Their childrens education is a priority for these women, and they see to it that they are able to do something about it.
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Subir and his wife Chabi are engaged in the Tant saree business. Chabi di is engaged in starching of the yarn and converting them into spools, which she sells to the local traders. She earns Rs. 45 a day from this activity which she can do in her spare time. Her children too help her in this work. She took a loan of Rs. 3,000 from Bandhan, which was used to nance the working capital for her husband Subirda. With this money, Subir da was able to convince the wholesaler to give him goods worth Rs. 9,000. This was three times the goods that he would have otherwise normally got. He sold his stocks at Burdavan, Asansol and Durgapur markets, where he has established a network of retailers. He managed to sell 50 sarees in the rst week itself. The entire sales proceeds were deposited with the wholesaler and a running advance was given to him to cover for the expenses. The accounts are settled during Puja he says. He expects better turnover this year as he has more sarees. Each wholesaler has a number of small traders like him, with whom they have regular dealings. The entire operations are conducted on the basis of mutual trust and long term relationships. The borrowers are important contributors to household income and that has changed the power equation in the family. These women, who could not afford a decent morsel for the family in the past, are today investing in a L.I.C, or depositing money in post ofce savings etc. The weekly meetings conducted through Bandhan also serve as a learning platform for the members of Bandhan. In these meetings they discuss the various social and economic issues that affect their day to day lives. The main goal of these meetings is to create a bond of solidarity between the women, and to learn from others. Problems that cant be solved individually at the domestic front are now solved in consultation with the group.
Impacting Other Sectors

While there is no rm sectoral strategy of Bandhan for lending, about two third of the borrowers in Shantipur are Tantis (Weavers). This is understandable given the fact that weaving is a traditional occupation. The improved credit ow has encouraged erstwhile tantis to go in for purchase of handloom units, which cost Rs. 4000. This has resulted in increased livelihood opportunities for others, who are not clients of Bandhan too. Although, the markets are extremely fragmented and it is difcult to know precise numbers, elders in the village to whom we spoke, were of the opinion that newer residential areas are being created, new raw material shops being opened and carpenters33 are busier than ever before. Interestingly, there has been a spurt in the loans for buying Vans. Vans are actually cycle rickshaws that can carry luggage and people alike. This is a cheap mode of travelling within the city and so far 368 people have borrowed INR 1.39 Million for acquiring these Vans. Elsewhere, armed with small loans, the clients of Bandhan are expanding their business and are actually looking for co-workers to help them in their work thus providing job opportunities to others in the village-mostly women.
33
The Tant frame, and its key parts are made by local carpenters from wood
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Where does Micro Credit Work Best?

If credit be the engine that fosters economic progress in a region, as has been suggested by the examples from Konnagar and Shantipur, then what are the conditions where it works best? In order to fully understand this, the case writers undertook a study of the entire value chain of the saree making process. In all six people are involved (excluding the wholesalers, transporters etc). With the exception of weaving and dyeing (where both men and women are engaged) the rest of the activities are performed exclusively by women. These are home based activities and whenever the women have free time they remain engaged in their work.
Table 5: Making of a Tant Saree Value Creation Process

Amount in INR Per Saree Stages Yarn from Trader Grey Yarn to Latai Making Trader to Starching Starched Yarn to Dyed Yarn Dyed Yarn to Reels Reels to Tana Tana to Weaving Weaver to Seller Trader Total 1 48.0 1 1 1 1 1 6 54.0 71.50 70.0 149.0 169.0 30.0 113.5 37.5 3.5 7.0 2.5 70.0 20.0 2.5 10.0 5.0 54.0 71.50 79.0 149.0 169.0 199.0 32.0 40.5 No. of People Opening Involved Cost Materials 27.0 4.5 5.0 Labour Prot 5.0 4.0 2.5 Total 32.0 40.5 48.0
Note: Figures are approximations and as given by traders/weavers during eld visit
A saree is woven on a Tant, which is a loom operated manually. Each loom is capable of producing a saree in a day and one person can work on it at a time. After allowing for non operational days, a tant is capable of producing 230 sarees in a year. The weaving of saree uses labour worth around INR 113.50. This is equivalent to wage earnings of Rs. 26,105 in the value chain. For a borrower who invests INR 4,000 in purchasing a tant; the pay back period is four months. If she chooses to work on it herself i.e., if she does not employ additional labour, her earnings from the tant are INR 20,700 in a year (pay back period a little over two months). More importantly, from the livelihood promotion point of view, each tant nanced by Bandhan adds INR 26,000 into the economy of Shantipur, which has the effect of transforming the lives of the poor. This also helps create many more jobs directly and indirectly.
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A prole of the borrowers of Shantipur over the last two years indicates that 65 per cent (2,992) of them have borrowed for various activities related to saree weaving activities. While a further detailed break up is not available, this translates into an infusion of INR 39.16 Million in the village economy in one year (when calculated for 1500 new looms that added INR 26,105 of value, per loom). This required an investment of INR 4.5 Million.
Credit for Demand Creation

It is well established that credit often leads to creation of demand in the local economy. This can promote livelihood on a large scale. Acquisition of capital goods through micro credit has the potential to generate additional wealth in the economy. The Shantipur and Konnagar examples are a case in point, where the wholesale dealers were now willing to offer more stocks to the traders.
Credit as a Mechanism to Correct Market Imbalances

As mentioned, market imbalances can result in continuation of certain practices that are detrimental to the interests of buyers. Most of the arrangements are one sided and the buyer usually has no option. Evidence from the eld suggests that credit availability has led to redening of the buyer-seller relationships. In most cases, once the borrowers have access to credit, it improves their negotiating power. This is evident in the cases at Konnagar and Shantipur, where some borrowers chose to redene the value chain.
Cheaper Credit Allows People to Innovate and Take Risks

As is borne by the study of two clusters, borrowers who were skilled and knew about market opportunities were willing to take risks by starting their own enterprise. Supporting labour intensive livelihood activities through micro credit has the potential of generating wealth in the local economy. A look at the type of ventures that have been supported by Bandhan indicates that almost all of them are home based, require little working capital, have faster turnover and produce articles of mass consumption. This allows for faster turnaround of cash and therefore enhances the ability to meet obligations. As a proportion of xed capital expenditure, the working capital requirement is relatively small and therefore the possibility of increasing earnings is greater, where the use of the xed assets is maximised- as demonstrated by the weavers of Shantipur.
Credit as an Empowerment Tool

The micro credit operations have not only had a positive impact on the members and their household incomes, but they have also brought about a qualitative change in the lives of the borrowers families. With stabilised incomes they have been able to provide education for their children. Be it Ganga Ray or Krishna Chatterjee, for most of the borrowers childrens education gets top priority. This, notwithstanding the fact, that there is always a great temptation to let the children work in home based enterprises. Nirmala Das is supporting the tuition classes for her child going to high school. She spends INR 250 per month on her
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sons tuitions. The savings that the members made at Bandhan and elsewhere take care of medical emergencies.
Conclusion -What makes Bandhan Succeed?

Bandhan represents a new generation of professional micro credit agencies. Demand for credit among the poor, whether in rural, or urban areas, has always existed. Bandhan chose to customise the ASA model over several others. Bandhan believes that the poor have the ability to derive the highest productive realisation from a rupee. All it requires is a paradigm shift in the way we think about the role of micro credit in livelihood promotion. Bundling of livelihood promotion activities with credit can affect recoveries and portfolio quality.
Learnings from the Case and Suggestions for the Future

Focus Helps Bandhan is a micro credit agency. They do not engage in other allied services or activities. This has helped them achieve a near 100 per cent, on-time, repayment track record, and also build a quality portfolio. Bandhan believes that the bundling of allied services along with credit often affects portfolio quality, as then the onus is on the organisation to also provide a mechanism to recover the loans.
For growth, simplicity and speed are the key. A standardised, low-cost model, and decentralised decision making, allows Bandhan to expand and set up branches quickly. All borrowers of Bandhan are women and are already engaged in some basic livelihood activity. This means they have an existing cash ow. The objective of credit therefore is to unlock the potential earnings that might be dormant for want of adequate credit. Evidence from Shantipur and Howrah suggests the same. Credit was identied as a major bottleneck stiing the economic growth of villages. The proximity to Kolkata was a great advantage as it ensured a large market that had excellent linkages with the rest of the country. Bandhans entire business model is based on achieving operational sustainability at branch level within 12 months. This creates effective entry barriers for others, such as commercial and private banks. Being a low cost player helps remain competitive. A branch costs just INR 31,000 to set up and it operationally breaks even with 1600 clients in 11 months. Since the focus remains on credit, other initiatives are usually not part of the formal services offered and therefore do not add up to the cost structure. There are no computers in the eld, or at any of the branches. There is opportunity cost of money. Bandhan has realised that it can set up a branch that generates revenues with the cost of a computer, whereas a computer at branch is a liability, given its real cost of operation. Instead of opting for third party insurance, Bandhan has set up a Loan Loss reserve for meeting any losses due to death of a borrower member. Thus on a portfolio of Rs. 100 Crores (2007) the premium collected at 2 per cent becomes a saving of Rs. 2 Crores, which provides better returns, when invested within.
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Institutional development through a series of mechanisms is aimed to ensure that a robust business model is created.
Moving from Strategy to Purpose Although one would like to attribute the success of Bandhan to its ability to devise a great strategy. In reality, it is not the strategy per se, rather its fundamental beliefs about the poor that drive the organisation. It believes in the inherent ability of the poor to identify livelihood opportunities, their willingness to repay in spite of severe hardships, their honesty- which unfortunately is not bankable with any bank or MFI. It works with this missionary zeal and these values are imbibed in the staff right from day one. Moving from Systems to Processes To enable Bandhan to achieve its objectives, all the processes, right from recruitment to loan disbursals, have been standardised. This has helped cut down senior management time spent on operational decisions. Managers are empowered to refer to the operational manual and act. Moving from Structure to People People are the key in the organisation and it is reected in every aspect of managing human resources. Bandhan follows an exhaustive and yet fast process of recruitment. Training and capacity building activities are conducted in-house, as this helps the senior managers to update themselves, as well as identify potential bottlenecks. There is, in general, a mentoring process, where the stress is on human development. Rules such as the mandatory overnight stay at branch ofces by senior management, all staff living together in the branch etc helps develop an atmosphere, where the senior management is in touch with happenings on the ground. Decisions are faster and have greater acceptability among the staff. Interest Rates and Operational Sustainability The key to the success of any MFI lies in its ability to address the needs of the poor, and yet provide competitive returns to the organisation to meet the cost of borrowing. Bandhan has succeeded in making efcient use of its funds, improved rotation through effective processes to increase the portfolio yield by ensuring that the poor get credit at affordable rates. Since this is a purely credit based operation, Bandhan was able to leverage the quality of its portfolio to other banks and nancial institutions and access funds for its micro nance operations. As a strategy, Bandhan chose the loan route, since loan funds are easier to obtain than grant funds, and if it was possible to keep its costs under control and also manage timely recoveries, it was possible for Bandhan to become sustainable in the shortest duration.
Sustainability of operations is also important to ensure that a MFI is able to service its clients on a continued basis. In Bandhans case, the mix of its own funds and loan funds has helped create a model where the internal accruals will, to a great extent, help it achieve nancial self sufciency in the years to come. Data34 suggests that the Net Owned Funds (NOF) have increased by 2.4 times (from Rs. 4.5 crores in 2005 to Rs. 10.84 crores in 2007). At the same time, the borrowings have increased to Rs. 100 crores by the end of 2007. A low cost structure
34
Source: Sa-Dhan The association of Community Development Finance Institutions
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allows Bandhan to maximise returns on its investments in operations. The operating costs of Bandhan have reduced from 39 per cent to 18.87 per cent. During the last four years the average loan size has increased by Rs. 1000 per borrower. There are more borrowers per staff members (262) now. The increased NOF and lower operational costs have led to a reduction in annualised cost of credit to clients from 34.44 per cent (2005) to 26.20 per cent (2007), which translates to nearly 12.5 per cent, at at rates, after including charges. This strategy has ensured that the entry barriers to any new organisation will be stiff. It will have to match the exibility and speed of Bandhan to be able to make a dent. Bandhan nances show that it receives grant subsidy of a little above ten percent (11.02%) for its intervention and its client services provide more than two fths of its income (82.24%). Its operational self sufciency and nancial self sufciency are improving, and in 2005-2006, they were about 120 percent and 116 per cent respectively. Savings continue to be an area where there is a demand, but the existing structure does not permit MFIs to accept savings. As incomes rise, so does the propensity to save among the poor- at least some part of it. As yet there are no micro savings products available and as a result of which, the poor often fall prey to unscrupulous operators. The banks who can accept savings, often do not do so, because of operational costs, or a general apathy. In future, it needs to be seen how the savings needs of the poor are met through an alternative mechanism. As the demand for credit and operations spread out to neighbouring states, there are limitations to the present structure of a trust. Bandhan acquired an existing non-Banking Finance Company, which was renamed Bandhan Financial Services Pvt. Ltd (BFSPL). This new entity is expected to be the vehicle for all future credit initiatives at Bandhan. As of March 31st 2007, the new company had an outstanding of Rs. 45.889 million and reached out to 19,314 clients in its rst nine months of operation.
Two Years Later

Bandhan has become a truly national level MFI in the last two years. As of January 2009, it operates in 11 states. Recently it has started operations in Delhi and Mumbai. Not only has the geographical spread increased, but it is trying its best to expand its socio economic base. Its development product Targeting the Hard Core Poor is now being offered in three districts of West Bengal, namely Malda, Murshidabad and South 24 Parganas. It is a grant based programme, where the beneciaries are selected in the village assembly after conducting wealth ranking and PRA. Assets, not money, are given in the programme. It provides weekly consumption support to the family before the asset yields returns. The outcome has been encouraging. Some of the families who were earlier begging for sustenance have now stopped begging. Sending children to school, and use of shoes, are being taken as benchmarks for improved economic and social status. As of March 2008, the programme beneted 397 families in the three districts. 23 beneciaries under four urban branches of Kolkata have also been targeted during the pilot in the urban areas.
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Similarly the Micro Finance and Health Protection Initiative, started in collaboration with Freedom From Hunger, California, is operational in 113 villages, spread across ve branches. The three major components are Health Forums in villages for discussion on health issues, Health Kit distribution and Health Community Organiser as the facilitator of the process. Since February 2007, Bandhan has been offering emergency health loans to its borrowers facing a major health expense. While looking at return on investments for organisational sustainability, it has not lost sight of social groups that may not get impacted by its core micro credit operations, or critical needs like health. Todays beneciaries are tomorrows clients. That thinking seems to be guiding Bandhan and taking it to new heights.
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Annexure I
Bandhan At a Glance
Particulars No. of Branches Districts Covered No. of Blocks Covered No. of Panchayats/Municipalities Covered No. of Villages Covered No. of Staff No. of Community Organizers (CO) No. of Groups Formed No. of Members No. of Cumulative Loan Disbursals No. of Borrowers Amount of Loan Disbursed in INR millions Amount of Loan Outstanding in INR millions No. of Overdue Borrowers Amount of Overdue Loans Average Loan Size on Disbursement Amount (INR) Average Loan Size on Outstanding Amount (INR) No. of Members per CO No. of Borrowers per CO Portfolio Outstanding per CO in million (INR) Portfolio Outstanding per Branch in INR millions On Time Repayment Rate - % 2001-02 2002-03 2003-04 2004-05 2005-06 1 1 1 2 10 4 3 50 512 131 131 0.351 0.294 2,679 2,244 171 44 0.098 0.294 100 2 2 3 12 61 12 6 135 2,029 1,185 1,054 2.748 2.18 2,319 2,068 338 176 0.363 1.09 100 10 5 15 91 290 46 32 581 9,282 7,186 6,001 19.642 12.038 2,733 2,006 290 188 0.376 1.204 100 54 8 93 374 1,635 234 158 2,956 51,586 49,397 40,286 147.175 85.638 2,979 2,126 326 255 0.542 1.586 100 155 14 253 1,020 5,241 678 471 9,061 176,063 208,231 149,886 755.631 371.118 170 0.53 3,832 2,483 374 318 0.79 2.401 99.98
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Annexure II
Bandhan Key Financial Ratios

Ratio Operational Cost Ratio Financial Cost Ratio Yield on Portfolio Dened as Operating Expenses/Average Loan Outstanding Financial Cost/Average Loan Outstanding Operating Income/Operating Income 2005-06 2004-05 % 2003-04 2002-03
21.71 8.84 26.24 121.66 116.66 11.38 91.46 12.87 0.07 297 0.09 3.15
39 10.15 26.37 70 67.35 - 1.51 61.05 25.55 0.11 324 -
15 12.90 27 103 92 1.98 74 0.12 328 -
14 10.50 26.50 90 64 3.30 0.11 272 -
Operational Self Sufciency Operating Income/Adjusted Operating Expenses Financial Self Sufciency Capital Adequacy Ratio Operating Income/Operating Expenses Net Capital funds/Risk Weighted Assets
Debt Service Coverage Ratio Operating Income/(Principal Amount Repaid+ Interest Amount Repaid) Administrative Cost Ratio Cost Per Loan Cost Per Loan Made Cost Per Money Earned Funds Rotating Administrative Expenses/ Average Loan Outstanding Operating Expenses/Loans Disbursed Operating Expenses/No. of Borrowers Interest and Fee Income/Loan Disbursed Total Loan Disbursed/Average of Net Borrowings plus Security Deposit
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Annexure III Tant Saree Weaving Process Illustrated
General Body-16 Members
Advisory Committee (4 members)
Executive Committee (7 members)
Executive Director
HR Manager -1
Programme Ofcer -1
Director Operations -1
Documentation Ofcer -1
Chief Internal Auditor - 1
Manager MIS - 1
5 Divisional Manager (responsible for 4-5 Regions)
Accounts Ofcer -1
Logistics Ofcer -1
25 Regional Manager (responsible for 5 8 Branches)
Field Level
Team Leader/Branch Manager (responsible for 1440-1660 members)
Four community Organizers (responsible for 360-400 members) + 1 Peon cum cook
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Activity Trade Cow Trading Tailoring Watch Repairing Tailoring Paper Craft Rickshaw Fruit Shop Tailoring Sketch Pen Auto Repair Rickshaw Van Snack Shop Industrial Gloves Tailoring Cloth Vending Vegetable Selling Tailoring Fancy Items Utensils Business Ice-cream STD Booth Kirana Shop Hotel Toys Making Flower Business 5,000 4,000 3,000 5,000 2,000 2,000 5,000 4,000 300 310 300 650 325 475 525 200 5,000 375 3,000 400 3,000 325 2,000 200 4,000 2,000 6,000 8,000 7,000 6,000 5,000 8,000 7,000 5,000 7,000 4,000 4,000 280 6,000 4,000 250 6,000 3,000 425 5,000 3,000 280 5,000 390 350 200 275 315 180 500 600 700 250 190 325 250 280 300 175 5,000 325 6,000 190 3,000 350 5,000 475 3,000 325 6,000 475 7,000 8,000 7,000 9,000 8,000 6,000 10,000 10,000 10,000 8,000 9,000 9,000 7,000 5,000 575 6,000 180 3,000 180 5,000 275 6,000 3,000 490 6,000 600 9,000 3,000 475 5,000 575 750 290 550 450 290 320 425 410 600 275 400 200 300 200 400 13,000 600 9,000 475 3,000 265 5,000 350 3,000 175 5,000 300 4,000 225 Amount Incremental Income(PM) Amount Amount Incremental Income(PM) Incremental Income(PM) Amount 7,000 First Loan Second Loan Third Loan Fourth Loan Incremental Income(PM) 290
Annexure IV
Master Sheet Showing Incremental Monthly Household Income from Bandhans Micro-Credit Lendings Branch Konnagar
Sr. No.
Name of The Borrower
NAME
Jhuma Dast
Rita Devi
Anjana Das
Nita Adhikari
Lokhi Polen
Archana Polen
Rekha Devi
Romita Chatterjee
Dolly Biswas
10
Shikha
11
Krishna Sarkar
12
Sunita
13
Arti Saha
14
Ujwala Saha
15
Maya Dey
16
Maya Ray
17
Ganga Ray
18
Nirmala Das
19
Kalyani Das
20
Reena Singh
21
Bela Das
22
Nivedita Mukherjee
23
Mitali Ghosh
24
Keya Sarkar
25
Bina Devi
Annexure V Tant Saree Weaving Process Illustrated Madurai Cotton Yarn Traders Upcountry Markets
Kolkata Yarn Traders
Kolkata Saree Traders/Shops
Shantipur Wholesale and Retail Traders RM
Shantipur Saree Traders Repurchase of Dyed Yarn Repurchase of Reels/Bobbins
Sale of Yarn or on Job Work basis
Individual dyeing Units
Sale of Reels or on Job Work basis
Reelers conversion of yarn into Bobbins/Reels
Tana Making Process Sale of Sana-Bua (Warp and Weft) to weavers Weaving Process Sale of Saree to Traders
Village Based Saree Traders - Individuals
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Stage 1: Cotton Yarn Procurement

Cotton yarn is the basic raw material needed for weaving a saree. Traditionally the cotton yarn is procured from down south notably from Madurai, Tamilnadu. Although no one in the saree weaving activity at Shantipur could provide a satisfactory reason, the traders opined that the yarn is preferred due its soft feel and excellent dye retention properties, which are a hall mark of a Bengali tant saree.
Stage 2: The Yarn Traders of Shantipur

The cotton yarn is procured by the Kolkata-based traders, who then supply to the markers of Shantipur, Kalipur and other places. Saree weaving is a long process. However, most of the people who are engaged in the different activities are poor and have no capital to invest of their own. The entire operation is labour intensive and therefore people have acquired specialisations over the years. The village-based traders act as routing mechanisms to ensure that these activities are smoothly conducted. They play an important role in absorbing additional stocks and act as a market maker for intermediate products such as dyed yarn and sana bua (warp and weft).
Stage 3: Starching and Dyeing

The yarn is sold in terms of Lachhas (called Moda). It costs Rs. 27. It takes 1.2 moda to weave a saree. The rst step is to apply starch to the loose yarn. The dyers use Sago as a base material for starching the loose yarn. The yarn is soaked in water for about 10-12 hours before applying Sago. The wet yarn is then allowed to drip dry by draining off excess water and woven on a small drum called Natai, by using a small charka. It is then removed and dipped into the Vat (vessel containing starch material). The Natai is then withdrawn and allowed to dry in shade or in a room with a ceiling fan (especially during monsoons). The starched yarn is then woven on small bobbins using a charkha. This activity is labour intensive and usually a family can make seven bobbins in a day. This fetches them Rs. 35 for their labour. The dyeing process is quite elaborate and involves use of materials, which are to be procured by the concerned person himself. The usual assets are a big pan for heating, abundant water, bleaching powder and acids/chemicals and coal. The total cost of dyeing each lot of 25 bundles (moda) is Rs. 217 to 457 depending upon the type of colours used. For darker and brighter shades the process needs to repeated and hence costs increase. Mahajans or traders usually pay Rs. 6 per moda of dyed yarn. A person engaged in the dyeing activity can expect to earn about Rs. 60 per day from 25 bundles (625 modas).
Stage 4: Reeling
The dyed yarn is then converted into small reels or cops. This is a simple activity and an improvised charkha is often used. The cost of this charkha is about Rs.100. Women are engaged in this activity. Whenever they have spare time they prefer to weave the dyed yarn around small bobbins. They get Rs. 2 per reel as labour charges. The reels are the base material for preparation of Tana (warp).
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Stage 5: Tana Making

Tana making process involves creating design pattern using a wide variety of coloured threads. The colour scheme is decided by the saree traders. A drum unit comprises of a wooden frame where 204 reels can be mounted. Depending on the type of sari to be woven, the number of reels is adjusted. One frame is enough to make 40 to 60 sarees. This is again a factor of design and other related complications. Individual bres are then passed through a device known as Sana-Bua which is basically a frame to guide the bres from the reels into a uniform pattern. This also acts as a tension device to ensure that the bres are uniformly tied. The operator keeps a close eye to ensure that there are no breakages. The threads are then tied to the large drum. The drum which is 221 inch in circumference is operated manually by rotating it with a handle. One person can operate this machine. There are local fabricators in Shantipur, who can manufacture this machine. The machines which cost Rs. 6000 can be procured easily. The higher end machine such as those being used at Falia, which are double jacket machine and are capable of creating intricate designs are more expensive. These cost Rs. 15000 each. On one drum about yarn equivalent to 40-50 sarees can be mounted.
Stage 6: Weaving
The weaving activity involves use of an improvised wooden loom. The loom can be fabricated locally and costs Rs. 4000. There are local carpenters who can make the same. It requires eight days labour to make one loom. One worker can work at a time on a loom. There is also a jacquard machine that creates the designs and patterns. Each worker can make one saree a day and gets Rs. 70 as wages.
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Case Notes
The following teaching notes are aids to facilitate the case discussion process. These notes point towards some of the issues that need to be brought out during a case discussion and some lead questions that need to be explored. However, these issues and questions are only indicative, and therefore, can be modied as required.
Case 1: A Holistic Programme For Tribal Development: Learnings from the DHRUVA Experience
Learning 1. The intervention agency chose to strengthen local resource-based livelihoods to stop migration, using skills acquired by people during their migration periods, instead of looking at migration as a constraint.
2. This was an attempt to build an inter-dependent economy. This involved identifying various tasks, which were not only complementary, but also could be taken up by different segments of the community to retain larger parts of the value addition within the local economy. In addition to identifying such activities, it also necessitated building appropriate skills and developing arrangements of inter-group transactions, while holding them together. 3. While designing the programme, the promoters made specic design provisions to involve different segments of the community, the landed and landless, men and women, and so on: a. In terms of membership in the co-operatives b. In terms of carrying out distinct, but complementary tasks. 4. The DHRUVA intervention was also designed as a holistic intervention. Various components- community health, nutrition and a gender focus, were all incorporated in the programme design. However, building competencies for different types of work in diverse sectors had implications on staff hires, their training needs, resources needed for building such competencies etc. 5. Sustainability of such an intervention in light of the time required for the intervention, the competencies, human and nancial resources required, and the long pay-back period needs to be discussed.
Lead Questions 1. What were the set of activities chosen for this intervention? Were there any relations between these chosen activities? How were they chosen?
2. What were the implications of choosing such a set of activities, in terms of the human resources, nancial resources? 3. What was the nature of peoples institutions created? What were their design features
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(landed and the landless part of the same organisation)? Why was such a design necessary? What efforts would have been required for creating such institutions?
Case 2: Watershed plus - Adding Value to a Watershed Programme: the AKRSP (I) Experience
Learning 1. AKRSP attempted protection of degraded natural resources. Since most of the natural resources are community owned and common property resources, it calls for involvement of the community. Thus, designing appropriate peoples organisations formed the core of the design of the programme.
2. Though initiated for conservation of natural resources in the area, AKRSP had to start extending a large variety of other services responding to the changing needs of the community. Both external changes and the progress of the intervention led to changing needs of the people. For example, when the need for input supply arose, the programme made space for the appropriate intervention. Later, when there was a need for output marketing, the intervention made space for that too. It also had to start credit intervention as lack of timely credit became one of the bottlenecks to farmers hoping to get benets after changing cropping patterns in a treated watershed. 3. In order to be able to respond to emerging needs, AKRSP had to build several different types of competencies. This process is highly resource intensive. 4. Unlike the DHRUVA case, in the AKRSP case the involvement of the landless and women emerged as a part of programme evolution. The implementing organisation realised the need of inclusion of women and the landless and hence made scope for the same.
Lead Questions 1. Why did the implementing agency have to get into extending various services, such as agro-input supply, credit, marketing, while its main intervention was to regenerate the natural resources base?
2. Why did the intervention agency have to create various peoples organisations when watershed related activities were meant to primarily benet the landed farmers? 3. When the intervention agency had to constantly build new competencies as and when new requirements emerged, what implications did it have for the intervention agency?
Case 3: Livelihood Interventions among Marine Fishermen: The SIFFS Experience

Learning 1. The intervention of SIFFS was initiated with the development of an appropriate technology. However, then they had to start providing a variety of other services as the
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needs of the shermen kept changing with time. Both external changes and the progress of the intervention led to changing needs of the people. 2. In the SIFFS intervention, a mechanism of internal control was built in for ensuring sustainability by restricting new shermen from joining. Since captive shing is dependant on the availability of natural resources, this kind of control was necessary though it might have led to only the not-so-poor groups becoming dominant partners. 3. The institutional arrangement is another hallmark of the case. Strategically SIFFS an umbrella institution has evolved to cater to the needs of all technological changes that have happened in the marine sector. The cooperative institutional structure with greater autonomy at primary level, has had a positive inuence on a large number of livelihoods among the poorer sections of the shing community.
Lead Questions 1. Why did SIFFS have to get involved in micro-nance activities, though it was neither their core competency, nor a part of their mission?
2. Co-operatives promoted by SIFFS are designed very differently and do not have a open membership. Why? 3. Who were the various parties that SIIFS had to constantly involve in order to achieve the desired levels of technology adoption?
Case 4: BASIXs Intervention in the Milk Sub-sector

Learning 1. The Dairy sub-sector, which had favourable demand and factor conditions, with systematic interventions over the years, has provided a supplementary livelihood opportunity for a large number of poor people, especially in resource poor areas.
2. This intervention required signicant investment in building a wide range of infrastructure; both social and physical, over a sustained period of time. 3. With changes in the economic environment, especially following globalisation, the APDDCF needed changes. This change was possible only by the active collaboration between APDDCF and BASIX, a new generation rural livelihood promotion institution. Collaboration between different parties was necessary for taking the work ahead. 4. Combination of credit services and Technical Assistance and Support Services (TASS) has signicantly contributed in bringing desired changes in income levels of the poor households.
Lead Questions 1. Why did an intervention by BASIX become necessary when such a large investment had
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already been made by APDDCF? Would the BASIX intervention have worked, had there been no intervention by APDCCF? 2. Why was it necessary to build a collaboration between different agencies, so diverse as APDDCF, BASIX, a Hyderabad based software rm and New India Insurance Company? What was necessary for maintaining such collaborations? 3. How did BASIX go about designing the intervention in the Dairy sub-sector?
Case 5: Community Managed Irrigation Systems: The PRADAN Experience in the Eastern Plateau Region
Learning 1. PRADAN initiated this intervention to address one of the critical bottlenecks in agricultural productivity, in an area, which forms the basis for livelihoods of large number of the rural masses.
2. Changing the factor conditions with the introduction of lift irrigation led to many other changes, which the organisation had to constantly cope with. They had to build up new competencies and build linkages with a variety of agencies. 3. However, the set of services extended by PRADAN diversied with the changing needs of the community. Both external changes and the progress of the intervention led to changing needs of the people. 4. PRADANs case also shows that collaboration, or partnership between private groups (the NGO) and the public (the district authorities) makes a large impact, both in terms of scaling up and resource mobilisation. However, at the same time, it also increases ones dependence on government subsidy. 5. Just as in the SIFFS case, here too, appropriate technology had a major role in the intervention. 6. PRADAN developed a modular design of a one acre irrigation system including a diesel pump set. This helped to replicate the standard module. This was easy to scale-up, especially after the collaboration with the Government.
Lead Questions 1. Why did PRADAN set up lift irrigation systems in Jharkhand? What were the various considerations- internal and external, which were important for this choice?
2. Having made this choice, what arrangements did PRADAN have to make for initiating the work? 3. Why did PRADAN develop a modular design and what were the implications of using this design? 4. What were the considerations, which helped the PRADAN-Government collaboration?
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Case 6: SEWA Union: Organising Women Bidi-Rollers

Learning 1. The most signicant learning from the SEWA case is that there may be bottlenecks outside the enterprise, that restricts the ow of resources to the poor. We need to bear this in mind and identify them. It could be lack of organisation of producers to the enforcement of legislation.
2. There could be different ways of building private-public partnership. SEWA, instead of confronting the Government for not implementing its own policies, actually worked to win them their side. They took the help of the Government to implement some of the policies. 3. In the SEWA case, we see that there was a signicant role played by the local leadership. This needs to be brought out while discussing the case.
Lead Questions 1. Why did SEWA choose to intervene in the Bidi sub-sector?
2. Did this movement lead to any material benets for the Bidi rolling women? 3. How did SEWA react to the situation where some of the Government policies related to safety and health of workers were not been adhered to? 4. Who were the leaders? When did the initiative take the shape of a movement? What was the role played by Godavari ben? 5. Were labour forces other than the Bidi workers affected by this movement? How?
Case 7: Nidan: Voicing the Livelihood Issues of Street Vendors

Learning 1. Organising, mainstreaming and educating the poor- in this case street vendors, on their rights and entitlements is critical for empowerment of the poor leading to a positive impact on their livelihoods.
2. Policy advocacy and a dialogue between the poor and the state would be essential in a situation where the rights of the poor are at stake, with such problems as harassment by the police and anti socials, exploitation at work places and so on.
Lead Questions 1. Why did Nidan carry out all the work by itself- micro credit self help groups, insurance, housing, livelihood, child rights, quality education and sanitation, the advocacy efforts that were required, and so on?
2. What is livelihood? Should we look beyond economic returns? What is the signicance of results related to freedom, equity and justice?
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Case 8: Cluster Development Project of Chanderi

Learning 1. Often a wide range of related and support services ourish in a cluster. These enterprises are mutually dependent on each other.
2. Growth of a cluster can be facilitated by an external intervention agency, and the nurturing of the institution needs attention. 3. Multiple parties, representing different groups need to participate for effective growth of a cluster. It is important to create appropriate forums or agencies, which can facilitate dialogue between diverse groups. 4. Growth of a cluster; though it initially creates competition between various players, attracts multiple customers, enhancing demand. This has a positive implication in overall terms, not only for the cluster, but also for the individual enterprises in the cluster.
Lead Questions 1. Was the Chanderi cluster growing naturally?

2. Did UNIDOs presence in the cluster help? What role did they play? 3. What were the roles played by government and other government agencies like banks?
Case 9: Bandhan: An Organisation of Hope for the Poor

Learning 1. Credit was identied as a major bottleneck for women who are already engaged in some basic livelihood activity. As they have an existing cash ow, the objective of credit is to support the livelihood activity, which then has a higher possibility of success.
2. A low cost business model, based on achieving operational sustainability at branch level within 12 months, helped the institution remain competitive and scale up rapidly to reach large number of clients, supporting their livelihoods. 3. All the processes, right from recruitment to loan disbursals, have been standardised leaving little scope for a trial and error, which could prove expensive.
Lead Questions 1. How was it possible for Bandhan to create wage employment for the landless and other resource poor, while its core activity is micronance?
2. What are the strategies adopted by Bandhan to reach large number of customers yet contribute signicantly for empowerment of women and family wellbeing?
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Module 3
Framework for Analysing Livelihood Intervention Choices
A Framework for Analysing Livelihood Intervention Choices External Context Institutional Conditions
Objective of the Intervention
Intervening Agency
Peoples Livelihood - Portfolio - Capacity - Strategy
Demand Conditions Nature of Intervention
- Mission - Capacity - Funding
Factor Conditions Design of Livelihood Activity
Internal Context
Industry Conditions External Context
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1. The Livelihood Intervention Framework-An Introduction

While making a livelihood intervention, we are continuously engaged in making choices. These choices include decisions on the objectives we wish to achieve, the communities, groups or individuals we seek to work with, the sector we work in, the scale of impact we desire, the manner in which we organise the livelihood activity, and so on. In the previous module, we looked at the experiences of several agencies/institutions, whose work has left a mark on the livelihoods of people. These experiences illustrated different approaches to livelihood promotion. All too often, organisations do not believe they have choices, and are not conscious of the implicit choices they are constantly making. This module proposes a framework that helps us think analytically and systematically, about the choices, and helps design a livelihood strategy. The key learning in this module is that, whatever the constraints, as an organisation, we DO have signicant choice to chart the path we would walk while promoting or supporting livelihoods. Reecting on the choices we have made in the past, why we made them, and whether they were the best choices in the given context is crucial. This module also helps us look at the variety of factors that affect the livelihood choices, and therefore need to be taken into consideration for designing livelihood interventions. This framework, which has also been referred to as the Coolie Framework (Mahajan 2008), builds upon the framework used by Michael Porter (1990) to investigate the competitive advantages of Nations. It is introduced in the context of the poor, whose livelihoods need to be promoted in the same manner. An implementing agency planning to undertake a livelihood promotion intervention could have two kinds of situations (i) it has the exibility to choose the sector and coverage depending upon its capacity and the need of the poor, and (ii) it has already decided (or has a mandate) to work in a particular sector, but has exibility on objectives, nature and design of the interventions within that sector. The understanding of Livelihood Promotion Framework helps in both the situations identication of an appropriate intervention, as well as designing the intervention within a given context. The Framework could be even used for assessing or evaluating the impact of a livelihood intervention. The key learning is that whatever the constraints, a livelihood promoting organisation has signicant choice to chart the path they can take while promoting or supporting livelihoods identication of an appropriate intervention, as well as designing the intervention within a given context.
A Livelihood Intervention Framework is a tool that provides a set of critical considerations for analysis. It consists of well-thought out sequence of steps, which may play an important role in the course of implementation of the intervention, and is applicable for identication of appropriate intervention, as well as for analysing available options.
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Why have a Livelihood Intervention Framework? When initiating a new livelihood intervention that aims at promoting livelihoods of large number of poor households, it is critical for any livelihood promotion agency to ensure that it identies an appropriate intervention and designs it suitably. An inappropriate, or poorly designed intervention, is bound to fail in achieving its objectives. A systematic approach is therefore critical to ensure that the intervention does not fail in its objectives.
A framework is a tool that provides a set of critical considerations for analysis. It consists of well-thought out points, which may play an important role in the course of implementation of the intervention. Mostly, the cause of failures in livelihood interventions stem from the fact that these were not envisaged, or planned for. If we analyse the options thoroughly, the chances of sudden surprises and unforeseen problems springing up are considerably low, or we can say that the chances of success improve signicantly. It is applicable on both the conditions identication of appropriate intervention, as well as analysing the available option(s). The framework is like a rule-book or protocol, which is referred for ensuring completion of all steps, in order to accomplish the objectives. Livelihood comprises of a set of economic activities, which always operate within a context. Some elements of the context are external to the situation, and a good way of looking at them is through the Diamond Framework proposed by Porter (1990). However, there are two other elements, which are internal to the context, and are important when examining livelihood interventions. These are- the Implementing Agency, which is proposing to intervene, and the People whose livelihoods are to be promoted.
Figure 1. Context of Livelihood Intervention Design External Context Objective of the Intervention
Internal Context Nature of the Intervention Design of the Livelihood Activity
External Context
In other words, a livelihood intervention is inuenced by various conditions categorised under the Internal and External Contexts. The Livelihood Promotion Framework helps in
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assessing each of these conditions for identication of appropriate interventions, and also for designing an intervention around the identied sector, or for assessing an ongoing intervention, for further interventions and improvements.
2. Understanding the Internal Context of Intervention

There are two important elements of Internal Context that we need to bear in mind, while designing or assessing a livelihood intervention, as described above. These are: People, whose livelihoods are to be promoted, and The Organisation or Agency, which is going to promote or support livelihoods.
Fig 2. Livelihood Prole of a Household

Livelihood Capacity Livelihood Strategy
2.1 The People
Livelihood Portfolio
Livelihood promotion or support efforts are always around a set of people. Therefore, it is essential for us to get to know the people and their livelihood patterns, before we design any intervention. Though there may be inadequacies in their current livelihood options, people may have some livelihood activities. Therefore, it is always desirable to take up activities, which are incremental to their present livelihoods, or can easily be dove-tailed into their present way of living. It is therefore, important for us to know three things about the household: their Livelihood Portfolio, their Capacities and their Livelihood Strategy.
2.1.1 Livelihood Portfolio It is a set of economic activities being undertaken by the household. It is important to know the mix and pattern of activities in the portfolio of the household, in which different household members are engaged, at different times of the year.
A poor household with an acre of land, sets aside the entire land for cultivation of paddy. However, this is not adequate to meet the requirements of the entire family, and this land also does not keep them fully occupied throughout the year. Thus after completing transplantation in their land, the lady of the house earns some wages from paddy transplantation in other peoples elds. When the rainy season ends, the man gets some wage employment as the construction works picks up speed at that time. During this period, the lady also gets some wages from weeding activities. The family has two cows, and gets some income from the sale of milk. Their daughter looks after these two animals as well as the dozen country chicken in their back-yard. However, they sell the fowl only when they need some cash. The son works in the tea-shop near the bus stop. The livelihood portfolio of this household constitutes return from sale of paddy, milk, chicken and wage earnings from transplantation, weeding, construction, as well as wages earned at the tea shop.
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2.1.2 Livelihood Capacity The livelihood activities that members of a household engage in, depends on their livelihood capacity. The livelihood capacity of a household is determined not only by the number of people in the family, but also by their skills and knowledge that can be used to earn for the family, their attitudes towards new activities, their asset base, and their opportunities, as well as the cultural and social conditions of the area.
Therefore it is important to know: The various sets of skills and knowledge that the people have Shortfalls in a households income and buffers from which these are met. Opportunities that are accessible to them as a family living in that area, as well as barriers posed by social and cultural conditions. Finance, including credit available throughout the year, to make investments as well as to even out cash-ows at different seasons
The Livelihood Capacity of a family gets affected by different events. When the son gets married and the bride joins the family workforce, their capacity for work goes up. Similarly, a death or ill-health of a working member of the family reduces their capacity for work. Acquisition of some new skills by members of the household increases their capacity to produce new objects, or provide new services, and thereby enhances their income. Acquiring a new asset; for example, a new plough, increases the livelihood capacity of the house, as it allows the household to till their land better, or also presents an opportunity of renting out the plough after their own use.
2.1.3 Livelihood Strategies To use the livelihood capacities, different households use different strategies. Thus it may also be useful to understand: The preferences of the families from different livelihood strategies The risks and shocks faced by the family Their ability and coping mechanisms to meet these risks and shocks Some work on other peoples land, while Entrepreneurial ability of the people: some others choose to migrate. If there both in terms of their ability to take risks and their attitudes towards taking is some additional income some choose to expand the existing activity, while yet up new initiatives. others choose to diversify. (BASIX, 2002) Different people use different strategies for The process of examining the livelihood coping with risks and shocks. patterns of people has been discussed 1 further, in the following Module on (Chambers and Conway 1991) Designing a Livelihood Intervention.
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Reections Let us spend some time thinking about our own livelihood choices. To help you with this, some questions have been provided below. Please answer them. What is your background? What is your familys background (circumstances, social standing, economical or nancial level)? What are the educational qualications of all family members? Do you know some others who also have a similar background? List down your friends who hail from similar backgrounds. How many of them are currently working in the same, or similar area as you are? Are they all doing similar things, or is everyone working in very different areas? Why, do you think is this so?
2.2 The Intervening Agency

The other important element of the internal context is provided by the organisation making the intervention. Let us now look at the various aspects of any intervening organisation, about which we need to pay some attention. The following three elements are important for the agency involved, in relation to the intervention: Mission: Does the intervention t with the organisations mission? How core is livelihood promotion, to the mission of the organisation? Any mission is translated into specic objectives that the organisation tries to achieve. In order to achieve those objectives, it creates a Structure, and adopts a Strategy, and some working Systems. It also has some Staff who execute their work and adopt a particular Style of functioning, which is appropriate to the organisation. An appropriate alignment of these helps the organisation achieve its mission. All of these have been discussed further in Module 4. Capacity: The capacity of an organisation includes its set of competencies and depends on the availability of relevant nancial and human resources. It is important to be aware of an organisations core competency, as it is likely to have serious implications on the interventions that they would take up. Similarly, different funding sources may also inuence
Examples of Core Competency AKRSP(I) addressed the problem of migration in parts of Gujarat through a watershed intervention, as AKRSP(I)s core competency lies in providing techno-managerial solutions that are necessary for effective management of watersheds.
SEWA chose to organise the unorganised, self-employed women of Gujarat to uphold their rights, as their core strength was in their trade union activities, which are necessary for asserting the rights of workers.
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the objectives and the implementation strategy. Whether an organisation receives funding from donors, or from the government, the missions of those agencies are likely to play a major role when designing the intervention. Legal Form of Organisation: Livelihood activities are commercial in nature. However, all organisational forms are not permitted to undertake all types of commercial activities. Certain parts of the intervention may be charitable in nature- like giving training, skill building, or building peoples organisations; but these, very often are only a part of the intervention. Very few commercial activities that are required for meeting the main goals of a NGO can be taken up on a small scale without really violating the law, provided they do not charge any fees for service charges on these activities. But once the activities scale up and volumes increase, legal complications related to taxation, capital mobilisation, licenses may arise. Therefore, it is critical to look at ones own organisational form, as this would also help in taking the right decisions on the organisational strategy required for scaling up. (See Annexure I to this Chapter)
Reections Refer to two cases in the earlier Module- one on AKRSP, and the other on SEWA. Both work for the poor in Gujarat.
Why did they choose different problems to work on? Why did they choose different interventions? Was it only due to the fact they wanted to reach out to different communities? Was there anything about their focus and competencies that might have been the reason behind this difference in their approaches?
3. The External Context

There are four elements of the external environment, which inuence livelihood choices: Factor Conditions, Demand Conditions, Industry Conditions, and Institutional Conditions
Figure 3: Elements of the External Context Institutional Conditions Demand Conditions Industrial Conditions Factor Conditions
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Let us look at each of these conditions:
3.1 Factor Conditions

Livelihood activities utilise various accessible resources. These resources, which go into production of goods and services, constitute Factor Conditions. There are mainly ve resources in Factor Conditions that dene the boundaries of livelihood choices, as detailed below: The presence of different Factor Conditions, leads to adoption of different livelihood intervention strategies. For example, the organisation PRADAN, made an intervention to promoting Lift Irrigation in the Ranchi-Lohardaga area, whereas they chose to intervene in the Leather Sub-sector in Barabanki-Uttar Pradesh, because of different favourable factor conditions in the two places. The factor conditions in Ranchi necessitated intervention in irrigation, while the situation in Barabanki did not warrant one in the same area, but in the leather sub-sector.
A. Natural Resources Land: Terrain, available area, quality, distribution and uses Water: Annual rainfall, groundwater levels, sources of irrigation, humidity Forests: Size of forested area, tree species and usage Livestock Mineral wealth, energy sources B. Physical Resources Irrigation infrastructure: Tanks, canals, borewells Shandies, Haats, market yards Warehouses, electricity Roads, railway lines, transport facilities Post Ofce, banks, health facilities C. Human Resources Population, number of households and family size Number of earning members per family Labour availability and skill levels manual, craft, service and knowledge base Entrepreneurial ability of various communities in the population Education, health prole of population Classication by gender, of all the above D. Social Resources Relationships of trust and reciprocity within and between communities Relations based on gender, caste, religion, agrarian status E. Financial Resources Available sources of credit and interest rates formal and informal Collateral requirements on different credit sources
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Credit requirements of different income, or occupational groups of people Saving mechanisms, etc. However, while looking at the factor conditions, we must remember that just the presence of the factor conditions in the area is often adequate to make them useful. However, for a factor condition to actually enable livelihood opportunities, it must have the 4-As: Asset: The asset, physical or otherwise must exist. Awareness: People must be aware that such an asset exists. Ability: People must have the ability to use that asset. Access: People must have access to the asset. For example, MEADOW could be promoted by MYRADA because there was a scope of promoting ancillary units in that area. Similarly with the introduction of lift irrigation by PRADAN, people started growing vegetables, for which there was a growing demand.
3.2 Demand Conditions
Whatever be the chosen livelihood activity, there is some output of goods or services. These goods or services are bought or used by some people constituting their demand. Then, the questions one must ask are: Who is demanding these goods or services? Is the demand local? Is it increasing, decreasing or stagnant?
Such aspects determine the Demand Conditions, which in turn determines the number of livelihoods that can be supported, and the kind of income that can be generated from the activity. Demand Conditions play a signicant role in determining livelihood intervention strategy.
3.3 Industry Conditions

The third element that relates to external context is the nature and status of the industry, of which, the livelihoods activity is a part. Here we use the word industry in a broader sense, to include all economic activities. For example, production of paddy is a part of cereal food industry. (Please refer the section on Sub-sector study in Stage IV of Designing a Livelihood Intervention, as given in Module 4) Thus, it is important to assess what is the status of the industry, in which we are going to promote livelihoods. Is it growing and vibrant? Is it stagnant or dying? Are there other related and supporting industries that extend services? These related and support industries often play a critical role in the chosen livelihood activity. It can be seen that there are several related and support industries that are required for an industry to ourish. For example, if the dairy industry ourishes in an area, the Milk Can industry also grows. Presence of these related and support industries not only indicate growth and vibrancy of the industry, but also potential limits of further expansion. The presence, or absence of supporting industries creates conditions for making one livelihood intervention more effective that the other. In the above example, presence of many Milk Can plants in an area may indicate presence of a robust Milk industry.
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3.4 Institutional Conditions

All economic activities related to livelihood are set in some institutional context. Apart from state policies, or tax laws that govern the activity, there are local norms, social arrangements that also infringe upon livelihood choices. Presence of various institutions such as research and training institutions, producer associations and ones engaged in promotional activities also have signicant inuence on the choice of livelihoods. These, together dene the Institutional Conditions inuencing the choice of livelihood. Therefore, Institutional Conditions form the fourth element of the external context, which inuence the choices in a livelihood intervention. Thus we see that there are several these kinds of conditions that have signicant implications for the growth of an activity that supports livelihoods. Therefore, livelihood interventions are made in a context, which have internal and external facets, as shown in the diagram (Figure 4).
For the soybean industry to grow in Madhya Pradesh, it was necessary that the seed and fertiliser trade, the oil extraction industry, were also thriving in the area. Not only were supply-side and demand-side activities, or industries to the soybean industry required, but it was also important that the transport industry be strong in the area. The soybean industry also requires suppliers of gunny bags in order to grow. Then there must be weigh-bridges to weigh inputs and the produce. Hence, the transport industry, the gunny-bag trade and other peripheral, supporting activities grew in MP, as soybean became popular. But their presence, in turn, helped spread of soybean cultivation, in a mutually synergistic growth spiral.
4. Making Livelihood Intervention Design Choices

Having understood the internal and external contexts within which livelihood interventions occur, let us now focus on designing the intervention. There are three elements in the design of a livelihood intervention that need to be considered by any practitioner, when designing a livelihood intervention. Please refer Figure 5: Three Elements of a Livelihood Intervention. In the example of the growth of soybean industry in MP, described earlier, the presence of research institutions in MP that focused on soybean research helped in development of varieties suitable for local conditions. The presence of a chain of primary cooperatives which supplied seed, rhizobium and also helped producers market their produce, helped in the spread of soybean cultivation. Similarly, the governments policy of importing edible oil from Malaysia affected the prices of soybean oil, and thereby inuenced the growth of soybean industry.
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Figure 4: Internal and External Facets Operable in Livelihood Interventions
External Context
Institutional Conditions
Intervening Agency - Mission - Capacity - Funding
Demand Conditions
Factor Conditions
Assets Awareness Ability Access
Internal Context
Industry Conditions
External Context
Figure 5: Three Elements of a Livelihood Intervention Objectives of the Intervention
Nature of Intervention
Factor Conditions
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4.1. Framing Objectives

In the section on Principles of Livelihood Promotion, we have seen livelihoods can be enhanced in many ways, but more importantly by: Increasing Production Increasing Price of the produce Reducing Cost of production, and Reducing Risk To make the right choice, we have to be clear about, which of the above (one or more than one) could be the objective of the intervention being considered. We read in the section, Evolution of Livelihood Promotion, in Module-1, that Frank Brayne, the Deputy Commissioner of Gurgaon district, introduced the iron rod in the ploughs and the Persian wheel for well-irrigation, with the objective of increasing agricultural production. Similarly, the government aimed to increase food grain production by introducing and encouraging use of fertilisers, pesticides, irrigation facilities and farm equipments like tractor, under the Green Revolution. The objective of all these interventions was to increase agricultural production. In other interventions, such as AMUL, the objective has been to ensure that producers get the best possible price for milk. Similar objectives can also be seen in the governments efforts to promote Handicraft Marketing Corporations, Large Agricultural Multi-purpose Cooperatives (LAMPs) among others. Some other efforts like collective purchase and inputs from Borewell User Associations, bulk purchase and distribution of day-to-day utilitarian items through a network of SHGs by Jagruti Mobile Kendra, or the Aadarsha Welfare Society have tried to minimise costs in order to support livelihoods, instead of making efforts to increase income for members. A large number of farmers Cooperatives, including the reputed Mulkanoor Co-operatives, the Sridhrarpur Cooperatives were set up with similar objectives. Organising producers into producers organisations, cooperatives, companies or societies such as SIFFS (Refer Case from Module 2- Livelihood Interventions Amongst Marine Fishermen: The SIFFS Experience), or Meadows, or PRADAN at Barabanki, or unions such as SEWA (Refer Case from Module 2- SEWA Union: Organising Women Bidi-Rollers), helps them secure better prices and enhances their power in the market. This helps them to invest collectively in their business, secure their rights mandated by law, or combat competition. It creates buffers against market uctuations and ensures that the market does not exploit individual producers. Rabindranath Tagore initiated Sriniketan to enhance skills, introduce new designs and enhance bargaining power through collectives, to enable the weavers get better price for their woven materials.
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Likewise, to reduce the risk to the production and therefore to their income, BASIX, SEWA introduced insurance schemes, including crop insurance, as part of their livelihood promotion efforts. But insurance is not the only means of managing risk. Vaccination of animals reduces their risk of contracting diseases. Proper treatment of soils for moisture retention reduces risk to crops from the vagaries of weather. Such methods have been integrated by many organisations in their livelihood intervention programmes.
4.2. Nature of Intervention

The nature of livelihood intervention can vary along four dimensions: Strategy of Intervention The Intervention Sector The Point of Intervention The Instrument of Intervention
4.2.1 Strategy of Intervention As has been indicated in the Module 1, there could be several strategies for intervening in the livelihoods of the people. These could be:
Spatial Interventions: Area development using a Leading Intervention in an area like Irrigation, or a Watershed Development approach, or by developing a Cluster of related and support enterprises, or by Local Economy Development. Segmental Interventions: Supporting Livelihoods of vulnerable segments through micro-nance or specic human and institutional development, or by ascertaining and supporting the rights of vulnerable segments. Sectoral Interventions: Intervention along a Sub-sector or a vector. Holistic Approaches to Livelihood Promotion. The intervening agency needs to choose the appropriate strategy for their context. Most Livelihood Interventions go Through Three Distinct Phases: The Pilot Phase: When a new idea is tested to see if it works on a small scale. The Development Phase: After the pilot phase is successful, a model is developed with the expectation of scaling it up, or replicating it. The Scaling Up or Replication Phase: After the Development Phase, if the model works well, then it is scaled further, either by expanding or replicating the business.
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4.2.2 The Intervention Sector The sector in which Livelihood Promoting Organisations (LPOs) intervene is often a choice based on the demand and factor conditions. LPOs intervene in a sector that is large, or is growing and where the factor conditions are favourable for it to be taken up by large number of people.
However, there are choices: LPOs could choose to improve an existing livelihood activity. For example, SIFFS introduced motorised boats among small shermen in Kerala (See Case Livelihood Interventions Amongst Marine Fishermen: The SIFFS Experience in Module 2). LPOs could work on a livelihood activity, which is new to the area. For example, MYRADA introduced the activity of assembling watchstraps, in collaboration with Titan Watches, in a predominantly agrarian area.
4.2.3 The Point of Intervention After choosing the sector in which to intervene, it is important to identify the activities that merit intervention. For example, if a LPO has chosen to intervene in the Dairy sub-sector, it is necessary for them to identify whether to improve fodder production, or to help process the milk, or to build linkages with the market or to merely ensure that the producers get the best benets.
A specic activity is part of a larger value chain- from pre-production, through production, to marketing and nally to distribution, which together ensure that the goods nally reach the consumer. LPOs need to determine the stages of the value-addition chain where the key constraints lie, and need to gure out what can be done to overcome bottlenecks, if any, at these stages. If LPOs can work on eliminating, or minimising the effects of one, or many of these critical bottlenecks, their livelihood intervention is likely to positively impact the livelihoods of many people. For example: KribhCo focuses on ensuring fertilisers are available to farmers aiming to increase farm production. PRADAN developed a small-scale technology for rearing poultry, and is helping tribals to take up such production with the aim of improving the production process itself. SIFFS helps market the sh caught by its members, so as to help them get a better market price for their catch. But these stages do not represent exclusive choices. One could work at the production stage, while simultaneously extending support to pre- or post-production activities. For example, the poultry project of PRADAN has not only intervened at the production stage, but also supports post-production marketing of the birds that have been reared using their methods.
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4.2.4 The Instruments of Intervention The issue of where to intervene in the value-addition chain, and the choice of approaches for intervention, are closely linked. LPOs can intervene by either providing a single missing input, or by integrating several inputs, or in the holistic case, by taking a systemic approach. Some of the approaches are described below, with examples:
a) Technology: SIFFS introduced motorised boats using a simple technology, to help shermen compete in the changing environment with the advent of mechanised trawlers. b) Training: Training inputs have been an integral part of most livelihood interventions. While promoting MEADOW, MYRADA gave signicant training to rural girls to develop skills, so that they could take the contract of watchstrap assembly for Titan. c) Marketing: Interventions like Janarth, NDDB, extended market support services to the producers. d) Public Interest Litigation: The National Alliance of Street Vendors led several public interest litigations, at the local high court and in the Supreme Court, while lobbying for the rights of street vendors. e) Demonstration and Street Theatres: SEWA made a signicant dent in the policy environment, by conducting a series of demonstrations on the streets of Ahmedabad. The National Alliance of Street Vendors also organised several demonstrations, which were supplemented with street plays, which helped communicate issues easily to the common man. f) Credit: BASIX extends micro-credit services for a variety of rural activities including farming, animal husbandry, cottage industries, trade and services. g) Infrastructure: DHRUVA, has created community owned processing units. h) Institution Building: The Aga Khan Rural Support Programme (I) in Gujarat has been involved in organising communities into various peoples institutions such as Water Users Association, Mahila Vikas Mandal, while developing watershed in this area. Organisations that work with a single focus intervention strategy often develop core competencies in their respective specialisation and may achieve scale. The selling of pedal pumps by International Development Enterprise (IDE), involves marketing of a niche technology- foot-operated treadle (foot-lever) pumps, to small and marginal farmers. The intervention has reached 200,000 farmers in the country, with has led to an estimated rise in total income by Rs 220 crores in a span of nine years. IDE has developed staff, internal systems, marketing channels for irrigation related products and services.
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It is not essential that we should choose only one instrument of intervention. It is also possible to use more than one instrument, which in some cases can lead to an intervention spanning an entire sub-sector, as in the case of BASIXs intervention with APDDCF (see Case on BASIXs Intervention in Milk Sub-sector in Module 2).
The Challenges of Integration Organisations taking up multi-pronged interventions will have to invest in acquisition of new skills and competencies. This may have implications on the scale of their interventions, and its costs.
In its watershed programme (Case study Watershed Plus- Adding Value to a Watershed Programme: The AKRSP(I) Experience, in Module 2), the Aga Khan Rural Support Programme (AKRSP) realised that soil and water conservation measures do not necessarily mean increased production, which translates to larger incomes and to a better quality of life. To ensure more production, one needs to introduce better quality inputs. Once production increases, lucrative markets need to be found in order to obtain competitive prices so that farmers incomes increase. Once incomes rise, opportunities need to be created for additional investment. AKRSP initiated various actions to address these issues. What started off as a land and water treatment project, culminated in a programme for agricultural extension, training, marketing and building institutions. Some of the serious difculties faced during integration are the issues or problems faced at the ground level, where the action rakes place. Though, strategically, an organisation may chose to intervene in multiple areas, the person who actually delivers the services may nd it difcult to prioritise and integrate the array of services required.
However, this choice needs to be made, keeping in view the mission and capacity of the organisation, as discussed in the section on Internal Context, earlier.
NGOs and Marketing: Which of the Following Apply to us?

NGO workers have an ideological bias against the commercialised activity of marketing; however, the market does not follow emotions. The market demands good quality, assured supply and lowest price. NGOs often lack the business acumen to ensure this. Their motivation makes NGO professionals desire to work closely with the poor rather than spend time exploring distant markets. The chicken and egg problem - Markets need volume, but production at volume is not possible in small, scattered, rural settlements.
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To develop a market we have to invest as an entrepreneur (by taking risk), but NGOs are not structured to do this. NGOs seek to reduce risks that the poor people face, but do not have the capital to take risks by themselves. To be a signicant player in the market, one needs deep pockets.
4.3 Design of the Livelihood Enterprise

Livelihood activities, which are economic in nature, are often manageable through an enterprisesometimes a collective enterprise, or in some cases, are unmanageable. Hence, the third elementthe design of this enterprise is important when developing a livelihood intervention. The rst and foremost question when embarking on the design of any enterprise is, who is the main stakeholder, and what would be each individuals responsibility. In other words, one needs to rst decide about the ownership and management of the enterprise. It is important for us to note that these two are not the same. For example, there are organisations like AMUL, which are owned by the members of the community, but are managed by professionals who are not part of the community.
4.3.1. Ownership of the Livelihood Activity Deciding on the right ownership is one of the most crucial areas when designing a livelihood enterprise. Questions, like the following need to be addressed, while designing the ownership: Who will own the enterprise? Do they have the capacity to discharge the responsibilities that stem from taking on the role of an owner? What, or whose interests do they represent? Is there some party, or group of stakeholders, whose voice needs to be heard when managing the activity? Are we; as an organisation that has decided to take up this livelihood intervention, willing to hand over power to the chosen group of owners?
Ownership also has signicant legal implications. It would be useful, and extremely prudent to consult experts with a good understanding of the legal issues related to organisations and their ownership.
Livelihood Activities Owned by Individual Producers In many livelihood interventions, the primary enterprise is owned by an individual producer. For example, in the milk co-operatives run on the pattern of Anand, the individual dairy farmers run their own dairy production enterprise. However, the cooperative, which is a collectively owned enterprise, is engaged in marketing of the milk.
Examples of such livelihood activities are- the tassar grainages1 promoted by PRADAN, the large number of grocery shops promoted by NBKJ, auto-rickshaws owned by member of SHGs afliated to the DHAN Foundation and the leather works supported by EDA in Rajasthan.
1
assar is the silk reeled from cocoons of a silk-worm. Grainages are places where larval eggs are stored, before they are T placed on the leaves of trees for their growth to the stage of pupae.
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Livelihood Activities Owned by a Collective of Producers Often livelihood enterprises are collectively owned by the members of a community, whose livelihoods are sought to be supported by organisations. Examples of such collectively owned livelihood activities are- MEADOW, milk co-operatives promoted by NDDB, marketing of sh by SIFFS and leather cooperatives supported by PRADAN in Barabanki. Livelihood Activities Owned by a Livelihood Promotion Organisation Examples of livelihood activities owned by the livelihood promotion organisation include several marketing organisations such as Dastkar, SASHA, Range Sutra, Industree- which markets handicrafts of a variety of producer groups, the Tassar products produced by weavers, bamboo products, metal idols, leather bags and decorative stationery, among others. Livelihood Activities with Mixed Ownership Often the livelihood activities are organised in multiple tiers, with different tiers performing different functions in the value chain. Such cases open up opportunities for different tiers owned by diverse groups, which can also be structured differently from the others. For example in Tamil Nadu, SHGs at the village level have promoted a for-prot trust at the block level. These trusts in turn have invested in a Non-Banking Finance Company, Sarvodaya Nano Finance Limited.
Whos in Charge? Managing the interface with rapidly changing markets is a highly skilled job. The dilemma before intervention specialists is whether the capabilities of local communities can be built so that they manage unfamiliar tasks (such as negotiating with export markets) themselves, or should it be left to hired professionals to manage such activities? What would be the costs? If organisations pay the fees that professionals charge, would they remain competitive in the market?
As a marketing agency, the Association of Crafts Producers (Please refer additional casestudies provided in the diskette) seeks to act as a buffer between producers and the vagaries of the market. Can we ensure that the producers are able to meet the demands of the market themselves? How will the losses, if any be borne?
In a study conducted by Astad Pastakia (2007) along with Solution Exchange, it was found that in the present context, most agencies engaged in livelihood promotion such as, SEWA, BASIX, PRADAN, BAIF, MYRADA, SIFFS etc, prefer promoting more than one organisation, which perform different, but complementary set of functions. One amongst them is a not-for-prot organisation, which provides inputs like capacity building, organising producers, while the others are commercial entities, either owned by producers or by investors. One needs to clearly understand the advantages and disadvantages of each of these ownership structures.
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4.3.2 Management of the Livelihood Enterprise Management of the livelihood enterprise need not always vest with the owners. Even in large corporations, owners engage a group of professionals to manage the enterprise. AMUL, though owned by the farmers of Khaira district, is professionally managed. There are various choices available for managing a livelihood enterprise. Producer-Managed Livelihood Enterprise Local producers very successfully manage many small livelihood enterprises, which deal with local markets, by themselves. However, there are many functions in a larger business enterprise, which cannot be easily managed by local producers. For example, functions like estimating sales trends in Bhopal city for broiler chicken, negotiating prices with urban consumers, surveying urban markets for consumer preferences in handicraft design, etc. may be some of them. Livelihood Enterprise Managed by Hired Professionals Many producer-owned livelihood enterprises hire professionals to manage key functions of their business. Managing business enterprise with a developmental focus requires people with special skills. However, such people are not easily available. The ip side to hiring professionals to manage producer-owned organisations is that, it may be challenging to build capacities of local producers for maintaining control over the management. 4.3.3 Size of the Livelihood Intervention The size of a livelihood enterprise should ideally be determined by viability considerations. The need for achieving economic viability; to achieve economies of scale, may call for activities on a bigger scale, but the limited ability of the producers to manage an enterprise may weigh in favour of a smaller enterprise. Collective ownership may be an option for managing larger enterprises. Example, a farmers cooperative establishing a paddy-processing unit.
PRADAN has worked hard to divide the production processes for poultry and mushrooms. Processes that require more capital investment are managed as a large enterprise by a collective group, or by a more entrepreneurial member of the community. Other processes that are viable as part of micro-enterprises, are permitted to be managed by individual households.
4.3.4 Funding of the Livelihood Intervention Grant-based Funding Grants are good to start with, and to provide a range of services in addition to the primary activity itself, but may lead to uncompetitive businesses, which close down when grants run out.
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Loan-based Funding Loans allow for proper investment in the business, but may be difcult to access and difcult to repay if the business fails. Equity Equity is more exible and less risky than loans, and is; in many ways, the ideal nance for an enterprise. However, it is often very difcult for a micro or small enterprise to secure equity. The example of MYRADA-MEADOW provides an instance where workers themselves contributed equity-type funds to allow the business to invest in infrastructure. In many livelihood interventions, poor households provide sweat-equity, in the form of their labour. Financial Orchestration We can also choose to have a combination of grants, loans and equity. This kind of nancial orchestration gives us exibility to do initial work (which is often not commercially feasible) with grant support, and then take loans when the livelihood enterprise is in a position to scale up.
Thus, we see that there are three design areas, which are critical for designing a livelihood intervention: 1. Objective 2. The Nature of the Intervention, and 3. The Design of the Livelihood Enterprise These choices are made in an Internal and External Context, both of which have several elements that one needs to take stock of. This is schematically represented in the gure 6.
Figure 6: E lements in the Internal and External Context, which need attention when designing livelihood interventions External Context Institutional Conditions
Assets Awareness Ability Access
Demand Conditions
Intervening Agency - Mission - Capacity - Funding
Factor Conditions
Natural Resources Physical Resources Human Resources Social Resources Financial
Internal Context
Industry Conditions External Context
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5. S ome Important Frameworks used for Livelihood Promotion

5.1. Sustainable Livelihood Framework by Robert Chambers and Gordon Conway.
The Sustainable Livelihoods Framework (please refer Fig 7) presents the main factors that affect peoples livelihoods, and the typical relationships between those factors. It can be used, both for planning new development activities, as well as for assessing the contribution to livelihood sustainability by existing activities. In particular, the framework: Provides a checklist of important issues and highlights the way they link to each other Draws attention to core inuences and processes, and Emphasises the multiple interactions between the various factors which affect livelihoods. The framework is centred on people. It does not work in a linear manner and does not try to present a model of reality. Its aim is to help stakeholders with different perspectives, to engage in structured and coherent debate about the many factors that affect livelihoods, their relative importance and the way in which they interact. This, in turn, helps in the identication of appropriate entry points for support of livelihoods.
Figure 7: Sustainable Livelihood Framework by Robert Chambers and Gordon Conway (1991).
Capital H = Human S = Social N = Natural P = Physical F = Financial
Livelihood assests Volunerability context

Shocks Trends Seasonality S P F H N
Policies, institutions, processes Levels of government Private sector Laws Culture Policies Institutions Livelihood strategies
Livelihood outcomes
More income Increased well-being Reduced vulnerability Improved food security More sustainable use of natural resource base
Inuence and access
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5.2. Nine Mandala SDCs Rural Livelihood Systems Framework

As per the Nine Mandala Framework given by SDC, (please refer Fig 8) the metaphor of a rural house can be used to describe a three-tiered view of livelihood: The foundation represents the material and non-material resource base, including the emotional resource base of livelihood. The walls shape, metaphorically, the room for three different notions of space, placing the family space of decision-making in the centre. The roof points to the three-fold orientation of a livelihood system: (1) Collective Orientation, (2) Orientation held by the family and (3) Orientations in the minds and hearts of the individuals.
Figure 8: Nine Mandala or Rural Livelihood Systems Framework.

The RLS mandala as a heuristic tool for approaching livelihood The house as metaphor for livelihood
Individual Orientation e.g. version aspirations Inner Human Space e.g. integrity, identity, selshness/ compassion Family Orientation e.g. ancestors, caste, social status Collective Orientation e.g. religion, tradition, worldviews, education Socio-economic Space e.g. systems, of cooperation community, organisation
The nine-square mandala
Ghar Chalava, meaning, keeping the house going, a local perception for sustainable livelihood
Family space e.g. gender relations, solidarity
Emotional Base e.g. memones, attachements
Knowledge and Activity Base e.g. technology, experience, skills
Physical Base e.g. natural resources, assets
A cross-culturally valid, archetypical symbol for a centered universe.
Inner realities
Outer realities
Why BASIXs Livelihood Promotion Framework

The LPF is a practitioner-friendly framework, which helps identify where and what action needs to be taken. It also views the internal context involving the organisations capacities and suitability for households, considering their livelihood portfolios.
Conclusion
In this module, we have seen that by considering various conditions, categorised broadly into internal and external contexts, we can analyse an intervention choice even before making investments in terms of money, time and human resources. By using various elements
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systematically, as discussed in next module, we can identify an appropriate intervention activity. In other words, this being a practitioner-friendly framework, it could be helpful to a livelihood implementing agency in several ways: 1. Analysing given intervention choices. 2. Identifying an appropriate intervention, in a sector that was not considered earlier. 3. Planning the intervention better by examining various critical elements of the inuencing factors. 4. Evaluating, or assessing t0he impact of a livelihood intervention, by investigating the change in the status at the beginning and at any given point in time (please refer the Chanderi Case in Module-2: Cluster Development Project of Chanderi).
Exercises
Now that we have seen the different ways of promoting livelihoods, we may already be thinking like a development professional. Just imagine how many choices and variations are possible in an intervention! To ensure our feet are rmly planted on the ground, why not return to the case studies in Module 2, for a reality check? 1. Using the Framework, compare the choices made in some of the interventions 2. What are the implications of each choice for the producers and for the intervention agency? 3. Why did the intervention agency make these choices and what could they have done differently?
Michael E. Porter, The Competitive Advantage of Nations, The Free Press, London 1990 Caroline Ashley and Diana Carney, Sustainable Livelihoods: Lessons from Early Experiences, DFID, available on the web BASIX (2002), A Study of Micro-diversication Pattern of Livelihoods in Andhra Pradesh, Paper done jointly with Overseas Development Institute, London Chambers, Robert and Conway, Gordon, (1991), Sustainable Rural Livelihoods: Practical Concepts for the 21st Century, Sussex Institute of Development Studies IDS, Working Paper 296 Pastakia, Astad, (2007), Making Institutional Choices for Livelihood Promotion under Changing Economic Environment: Solution Exchange, UNDP, www.solutionexchange-un.net.in/en/Download-document/785-Institutional-Models-forLivelihood-Promotion.html
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Annexure I
Comparative Analysis of the Legal Provisions for Various Organisational Forms in India
Type of Organisation Not for Prot Registered as Societies/ Trust Section 25 Company Mutual Benet, Producers MACS, Self-help Company Groups, Co-op Bank, State Co-op acts, Mutually Aided Co-op Societies Act in AP, MP, Orissa, Bihar, Jharkhand Mutual help: Enhancing benet to users of service (self) Banking Regulation Act 1949, NBFC Guidelines 1987
Applicable Laws Registration of Societies Act 1860, Indian Trust Act 1882
Companies Act 1956
Purpose
Service to Service to others: other others: other than promoters than promoters No owners; controlled and managed by the board of trustees No restriction
Ownership control and management
Owned by only Elected board of Members are directors (sec 25 shareholders and primary producers owners; Managed company) by elected Board of Directors No restriction Area of operation is restricted to within the state unless regd. under the multi-state CoOperatives Act. RBI licenses under Banking Regulation Act, 1949 and Cooperative Societies Rules for UCB No restriction. Deposit taking restricted to state of regd. ofce (if net worth is below Rs. 50 crores) RBI act 1934, NBFC rules
Area of operation
No licensing Licensing provided regulation for banking activity
No licensing provided
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Type of Organisation
Not for Prot Registered as Societies/ Trust
Section 25 Company
Mutual Benet, Producers MACS, Self-help Company Groups, Co-op Bank, Co-ops can accept deposits from members UCB can accept deposits from general public with the permission and under supervision of RBI Yes Yes Yes No external equity May accept public term deposits minimum investment grade, subject to permission from RBI
Deposits
Taking deposits Deposits may be not allowed accepted only after obtaining permission from the RBI. The companys (acceptance of deposits) rules would apply.
Equity Borrowing Indian Grants and donation Foreign direct Investment
No Yes Yes No
Yes Yes Yes Yes
Yes, minimum Rs. 2 Crores Yes No Yes, proposal routed through FIPB; RBI and SEBI approval reqd. No permission reqd. up to 50 million US Dollars; Beyond this, need ECB clearance Subject to FCRA registration
External Commercial Borrowings
No
No
On a case-tocase basis.
Foreign Grants/ Donations
Subject to FCRA registration
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Module 4
Designing a Livelihood Intervention
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ncovering Suitable Livelihood U Opportunities for an Intervention

In the preceding module we have seen a framework for analysing livelihood choices, (Module 3 of this Resource Book). This framework helps us analyse and systematically make choices when designing a livelihood intervention. In this module we will walk through the process of designing a livelihood intervention, and suggest how an intervention agency can use these tools to identify the required steps to promote livelihoods in their area. The following gure shows an overview of the steps to be followed for an intervention, by a Livelihood Promotion Agency. These steps are described in detail in the following sections of this Module. Identifying the livelihood intervention that the Livelihoods Promoting Organisation (LPO) would like to make, would depend on two aspects: a. The LPO has already decided the sector in which they want to intervene. This could be, for example, paddy, cotton, goat rearing etc. b. The LPO is yet to gure out a suitable sector where they want to intervene. In the rst case, the LPO has to work out where exactly in their chosen sector they would choose to do their intervention. Whereas in the second situation, the LPO has to rst gure out the sector, and then determine what they intend doing in their chosen sector. The steps to be followed in the second case (The LPO is yet to gure out a suitable sector where they want to intervene), are given below. A Livelihood Promotion Organisations intervention has a direct bearing on the lives of the people, and so, one needs to observe and understand all that the people do their existing livelihood patterns, their culture, attitudes, skills and life-style, which are important determinants shaping the ultimate choice of livelihoods.
Stage I: Observing and Understanding the Local Economy

Step 1: Step 2: Step 3: Getting to Know the People- Understanding their diversied Livelihood Portfolio Assessing Factor Conditions Understanding Local Demand Conditions: Identifying existing enterprises in the area Mapping the ow of all products and services While the Livelihood Promotion agency may diligently follow all the exercises and steps given in this book, it must remember that even after doing the exercise with all sincerity, it must not ignore what the heart says.
Stage II: Selecting Livelihood Activities Suitable for the Poor in the Area
Step 1: Triangulation- Putting together information on People, Factor Conditions and Demand Conditions Step 2: Understanding Demand Conditions of short-listed activities
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Schematic representation of steps for intervention by a Livelihoods Promoting Agency Assess factor conditions Understand local context + Assess local market demand
+ Map current activity portfolio of people
Select suitable livelihood activity for the area
Triangulation
Determine livelihood portfolio
Select set of suitable portfolios (activities) that could be promoted
Determine, where to intervene
Examine the external environment (3-E exercise)
Identify possible areas of intervention
Identify bottlenecks to livelihood promotion - areas of intervention thereby identied
Overlay organisational competence
Assess organisational competence of Livelihood Promotion Agency
Decide from available options to promote livelihood opportunities for a large group
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Stage III: Deciding on the Intervention

Step 1: Exercise for 3-E Step 2: Overlaying Organisational Competence Step 3: Additional Tool- Sub-sector Analysis In this Module, we shall explain how an intervening agency must go through each of these steps.
Stage I: Observing and Understanding the Local Economy

All livelihood opportunities are available to people from the rural parts, in their local economy, or in the context of their location. It is important to understand this context before the LPO gets down to working on any livelihood intervention. The local economy is a reection of the Demand Conditions expressed in the area. The local economy is also a reection of the Factor Conditions that limit or promote livelihood opportunities in the area.
Step 1: Getting to Know the People

A livelihood promoter engages primarily in generating and supporting livelihood opportunities for the people. The LPOs intervention has a direct bearing on their lives, and so, one needs to observe and understand all that they do. As such, before any livelihood intervention is planned, it is important to know their existing livelihood patterns, their culture, attitudes, skills and life-style, which are often important determinants that shape the ultimate choice of livelihoods. The following anecdote makes it clear why this step is important. A landless widow was delighted to receive a milch animal from a NGO promoting livelihoods. The promoters were pleased because milk had great local demand, and the earnings from the sale of milk were clearly an addition to her income. When the NGO returned later to see how she was getting on, they were surprised to be greeted by her wrath. She said, Earlier, we moved to where the work was. Now you have tied this millstone around my neck. How can I look after this wretched animal? I have to come back to feed it everyday. It prevents me from going out and earning my wages. One aspect that comes out clearly from the above example is that people have their own ways of managing livelihoods. They also know how to optimise the resources at their disposal. It is therefore very important for the LPO to pay attention to what the people are primarily engaged in, within their context. The LPO must get to know its target groups
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Steps for Uncovering Livelihood Opportunities LPO has Determined Intervention Sector? Stage I No Yes Stage I
Step 1-Understand Diversied Livelihood Portfolio
Step 2-Assess Factor Conditions
Step 1a-Understand Contribution of Identied Sector to Overall Portfolio
Understand Local Economy
Step 3-Understand Demand Conditions Step 3a-Identify Existing Enterprises
Step 1b-Uncover bottlenecks, if any
Step 3b-Map Flow of Goods, Services
Stage II Select Suitable Livelihood Activities
Step 1-Triangulation Exercise (Collate Information on People, Factor and Demand Conditions)
Stage II When the Agency has already identied the Intervention Sector, step 6 of the 3-E Exercise (Comparing Scores of Different Activities) need not be followed
Step 2-Understand Demand Conditions of Short-listed Activities
Stage III Decide on the Intervention
Step 1-Exploring External Environment (3-E) Exercise Step 2-Overlay Organisational Competence and Mission Step 3-Additional Tool for Sub-sector Analysis (Optional Step, Only for Large Interventions)
Finalise Intervention Area ?
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well, to ensure that they do not make the same mistakes. They therefore need to consider: How will the proposed livelihood opportunities meet the needs of the household? It is important to know whether any livelihood activity satises more than one need. How well does the proposed activity match the resources and skills available to the household? How will it t into the daily and seasonal rhythms of the household? Will it increase the households income or assets? Will it reduce or enhance the probability of risks that may be faced by the household? What assurances or means can be put in place to mitigate risk? Will the activity require organising poor households in groups? How prepared is the household to participate in such organisations? What inputs or support will the household require from the promoting organisation? It is good to remember that the poor; even before the LPOs intervention, are deployed into different activities. Inuencing any one of them, or introducing a new piece of action often happens at the cost of one of the existing activities. In the above case, the old womans mobility became constrained and was unable to take on new work opportunities, or her regular work. There are two aspects that any intervening agency needs to recognise, in order to get a better understanding of the peoples livelihood prole. (a) Understanding the Diversied Livelihood Portfolio of the Area (b) Getting to know the Livelihood Prole of Poor Households
(a) Understanding the Diversied Livelihood Portfolio of the Area

As indicated in Module 3, there are three elements of the Livelihood Prole of a poor household: The Livelihood Capacities, Livelihood Strategies, and Livelihood Portfolio It is well known that a poor household is often engaged in more than one activity. This is done by the household to maintain their cash-ow, and it also serves as a risk reduction strategy. For example, it was seen during the cases of suicides by farmers in Vidarbha (Maharashtra) in 2003-04, that families with a diversied livelihood portfolio were better off, as compared to those dependent on a single livelihood activity. Since agencies try to promote livelihoods for the poor, it is important that they understand the livelihood prole of the households in their area well, so that the proposed intervention ts into their daily and seasonal rhythm of life. First, The Livelihood Promotion Organisation (LPO) must identify three groups of people from within the group of people they would like to work with. These could be groups from
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Some of the Employment Conditions Worth Considering Workforce Size and Work Participation Rate Trends Work Participation Rates
Employment Growth and changes in Sectoral Distribution of Workers Broad Sectoral Distribution of Workers Percentage Distribution of Workers by National Industrial Classication (NIC) Unemployment, Types of Employment and Productivity Current Daily Status Unemployment Rates Unemployment across Age Groups Distribution of Usually Employed, by Category of Employment Productivity: Gross State Domestic Product (GSDP) three villages, or three communities, or from a different social segment from the one they are working with.1 One must consciously do this exercise with a womens group. The LPO must carry out a seasonality mapping exercise with the groups to understand their livelihood pattern throughout the year. See Annexure II- Participatory Methodologies for Resource Analysis at the Village-level for an overview of the PRA Techniques. The Livelihood Promotion Organisation (LPO) then prepares a list of various activities that the households are involved in, at different points in time. The income derived from these various sources can be gured out by developing the Seasonality Diagram for, in different seasons, people may have different sources of income. Often poor people nd it difcult to assess their income. Therefore, the LPO may try to understand their expenditure pattern, in order to gure out their income pattern. The LPO must try to understand the major bottlenecks encountered by the households while carrying out each activity. These must be noted down, for they will be referred at the stage where the 3-E Exercise is carried out. The LPO must note down the months in a year the household does not have income earning opportunities, and therefore migrate to other locations. Finally the LPO would be required to consolidate the seasonality diagrams of different groups, to develop a list of various activities that the people in that area are involved in and would try to nd out the proportion of people engaged in each of these activities.
sually we talk about a minimum respondent size of three. Talking to just one sample group may mean our data can have U some errors. However, if we check with one more group and we come across a different view, we need to check with a third group to assess which of the two views are closer to reality.
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Seasonality Mapping Exercise This is an exercise which provides information on any specic topic that has seasonal variation. Capturing this data will give information on an issue and help in the planning process where one needs to know what happens specically to an issue round the year. An example could be Agriculture. The understanding of issues like rain fall, crops grown etc. could help those involved with planning to devise the interventions better.
A seasonal mapping exercise comes in the form of a calendar. This is a participatory tool which will help us explore seasonal changes (e.g. gender-specic workload, diseases, income, expenditure etc.)
Objectives of the Exercise To learn about changes in livelihoods over the year and to show the seasonality of agricultural and non agricultural workload, food availability, human diseases, genderspecic income and expenditure, water, forage, credit and holidays.
(For details refer Tool 6- Seasonality Diagrams under Annexure II)
Figure: Seasonality Analysis

Month Income jan ***** Feb ** Mar * Apr * May Jun * * ** * *** ** * * Jul * *** ** * *** Aug Sep **** **** ** **** **** ** * ** **** * * Oct ***** ** **** *** * Nov ***** ***** ***** ***** ***** * Dec ***** ***** ***** ***** ***** *** *
Expenditure ***** ***** Saving * Credit ***** **
***** ***** ** ** ** * * *
***** ***** **** *** ***** *****
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Outcome of the Exercise A list of opportunities that help people of that area earn, either in cash, or in kind, across seasons. Knowledge of the different sections of the population that are engaged in such activities. (b) Understanding the Livelihood Prole of Poor Households
This step is carried out in order to understand the following three aspects (See gure). Step 1 (a) Livelihood Portfolio Mapping: The rst step requires the intervening agency to get a fair sense of the livelihood portfolio of the people in their project area. This exercise also helps them get a sense of the livelihood capacities of the people of that area, and also gives some insight into the livelihood strategies employed by them. This has Livelihood Capacity Livelihood Strategy been elaborated later, in this chapter. The Livelihood Portfolio exercise is simple. It needs to be carried out with data from at least a hundred households. A surveylike instrument
Livelihood Portfolio
is used to collect data (See Table 1 below). In case the organisation had carried out a wealth ranking exercise in the area, that data can be used to select families to whom this survey questionnaire can be administered. The survey should try to collect the following information.
Table 1: Portfolio Mapping Format Name of the Village: Name of the Household Head: Rank of the Household (Wealth Ranking):
Sl Name of the Livelihood Activity Growing Maize in own land Growing Paddy Activity Season Who all from the Household are Engaged in this Activity? Males 2 Females 3 Males 2 Females 3 Male 1 Females 2 Male 1 Female 1 Males 2 Females 3 Children 5 Average Annual Income Days of of the Household Involvement from the Activity. in the Activity (Rupees) 50 75 Along with above 50 60 120 120 15 45 15 7000 5000 Difculties Experienced while Doing the Activity Pest attack Good quality seeds not available Shortage of water for irrigation Do not get employment everyday Conicts during collection
1 2
July-Oct July-Oct
Growing Wheat
Nov- Feb
10000
Labour Dec- April opportunity due to Migration Collection of Mahua May
25000
8000
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This data from all the sample families need to be added to get the overall prole of the area. This prole would show: a. b. c. d. The major and the minor sources of income for the families in the area. The employability of the livelihood option prevalent in the area. The seasons when people are occupied and carry out their livelihoods. The common difculties experienced by the families when they engage in carrying out work for their livelihood.
The LPO can thus nd out the most common set of difculties. These need to be listed down and referred at a latter stage. This output is referred while framing the 3-E questions, later. The practitioner, after having collected and analysed the data, is required to carry out two other exercises, which are useful to the study. 1. Ranking Bottlenecks (Difculties) Faced by the Population: The LPO should cross check each of the difculties listed and rank the same within the group. This information will establish the most critical bottleneck. 2. Ranking the Major Livelihoods in the Area: The data would by itself reveal the major livelihood of that area, but cross checking the same with the group will give further insights. Step 1 (b) Livelihood Capacity: The engagement of the people from the household in different set of activities, round the year, is an indication of the households livelihood capacity. However, while this is only an indication, the capacity can be triangulated, particularly when details are obtained in Step 2 below, i.e. when Factor Conditions are known. The Human Resource Assessment provides details about the same. Step 1 (c) Livelihood Strategy: It has been argued in the previous section (Module 3) that every household has its own livelihood strategy. However, some common strategy is used to counter situations. Drought, for example, is countered through a strategy of initially selling off some assets (like silver or gold ornaments), and later by migrating to some nearby or distant places. For example, in the Portfolio Chart above, the households employed members in different activities considering the members capacity or ability to do the same (for example, children are tasked with Mahua collection). Similarly, information on the effect of the seasons on the nature of work chosen may be available from the Seasonality Mapping Exercise. For example, one may nd out how farmers decide on the type of crops that need to be grown, depending on either the late or early arrival of the monsoons.
Step 1- Summary Collect data from 100 plus households Analyse the data from all the three perspectives- Livelihood Capacity, Livelihood Strategy and Livelihood Portfolio Cross check the analysis in focus group meetings
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Step 2: Assessing Factor Conditions

Factor Conditions play an important role in delimiting the livelihood opportunities that can be taken up by people. Therefore, the LPO needs to know the factor conditions in their area, in some detail. Livelihood choices are dependent upon availability and or access to various resources. In our discussion on the Framework for Analysing Livelihood Options in Module 3, we had discussed Factor Conditions in detail. Some of the Factor Conditions that we need to examine include:
A. Natural Resources
Land: Terrain, Quantum, Quality, Distribution and uses Water: Annual rainfall, Groundwater levels, Sources of irrigation humidity Forests: Quantum, Tree species and usage Livestock Mineral wealth Energy sources Details of environmental threats to these natural resources, if any. Irrigation infrastructure: Tanks, Canals, Borewells Shandies, Haats, Market yards Warehouses Electricity Roads, Railway lines Transport facilities Post Ofce, Banks Health facilities Population No. of households and family size No. of earning members per family Labour Availability and skill levels Manual, Craft, Service and Knowledge base Entrepreneurial ability of various communities in the population Educational prole of population Health prole of population Gender division of all the above Relationships of trust and reciprocity within and between communities Gender relations Caste relations Agrarian relationships
B. Physical Resources
C. Human Resources
D. Social Resources
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E. Financial Resources
Available sources of credit formal and informal Interest rates and collateral requirements on different credit sources Credit requirements of different income/occupational groups of people Savings mechanisms Other nancial services
Various tools have been developed by agencies to assess Factor Conditions. One may use any of these and modify them to suit their requirements. As explained in Module Three, the Factor Conditions refer to the ve types of resources that aid the production process. If any of these Conditions are favourable, then their continuation would enhance the livelihood activity, if it is supported. Whereas, if the Factor Conditions are not favourable then it implies that additional efforts must be taken, or new activities initiated, to make the Conditions favourable (e.g. Soil conservation work to retain soil moisture). The example on Goat Rearing (see box next page) and the notes on Tools to Facilitate Promoters Understanding of Factor Conditions Annexure II- Participatory Methodologies for Resource Analysis at the Village-level on PRA Techniques, will help us understand the impact of the Factor Conditions.
Goat Rearing It is well known that Goat rearing is one of the livelihood activities that the poor engage in large numbers. Let us see what aspects need to be considered with regard to this livelihood activity, for each of the resources (factor Conditions) given above.
Natural Resources: Goat rearing would depend on the following resources from nature Availability of leaves and other fodder that goats consume. Availability of water for drinking Climatic condition of the area. Land for grazing Physical Resources: The physical resources that goat rearing would require, could be: Roads, Transport facilities Veterinary facilities Insurance facilities Human Resources: For rearing goats, the individual must have: The requisite skills and knowledge about goats, to rear these animals Knowledge on managing feed and about primary health issues Either people who can take the goats out for grazing, or the individual should be able to manage this by himself. Social Resources: With regard to this condition, one has to understand aspects like: Gender: Who is actually involved in rearing and managing various activities Agrarian-Pastoral relationships in the area Caste relations of the population.
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Financial Resources: Goat rearing, like other activities, also requires capital, which is available from some sources. Therefore one needs to assess the same. Some of the dimensions for assessment could be Which are the credit sources available to the shepherds? What are the rates that people pay to avail credit from these sources? Is nance available for working capital requirements? Are insurance facilities for goats, available? As such the favourable presence of these resources will certainly mean that rearing goats will give better returns to those who depend on it for their livelihood. On the other hand, absence of any of the critical resources would mean that the promoter has to actively ensure that these resources are favourably available to the community. The above exercise will help the practitioner understand the state of the resources that are critical to promoting livelihoods.
Step 2- Summary Present status of the resources Can people access these resources easily? Analysis of the relevant factors Based on the above investigation, deciding on the plan of action Step 3: Understanding Local Demand Conditions
After examining the Factor Conditions in the area, the LPO should next study the Demand Conditions. As indicated in Module 3, Demand Conditions have many facets. The activities that people take up at the local level are shaped by the local Demand Conditions. The Portfolio Mapping Exercise carried out earlier, provides the list of activities that people are involved in, and the same, now needs to be analysed from the perspective of the Demand Conditions. Assessment of any thriving, or potential livelihood activity can be done in the market. The market is the place where the output of a livelihood activity is traded. The output could be goods, as well as services e.g. those provided by a lohar (blacksmith), a vankar (carpenter), or a kumbhar (potter). Therefore the promoter has to make a proper assessment of the market. The following steps make this exercise of assessing the market, simple for the practitioners: Walk and Tick: The practitioner needs to go around the market place to observe and record the transactions. By market place we mean any local haat (village-market). This needs to be done once or twice a week. The practitioner maps the transactions and collates information on the major businesses in the market by ticking the relevant business column. Obviously, the column with the maximum number of ticks indicates the major livelihood activity of that area.
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Gleaning Information from Traders: The traders either purchase goods bought to the market from the neighbouring sources, or sell goods or services that the local population needs. By discussing with these traders and recording information, the practitioners can estimate the weekly sales and purchases. This data helps in estimating the annual, or seasonal demand of is the local produce, or of goods and services required by the local residents. Understanding the Terms and Conditions of Trade: Every business activity follows certain terms and conditions. For example, some fees are to be paid to bring goods to the market. Some goods are exempt, whereas others have a different fee structure. There are fees to be paid to middlemen, who possibly took part in the auction, or carried out some such activity for the business. If a producer immediately requires cash then he should be prepared to accept a deduction in the amount that he would be receiving, as markets have either a weekly, or a fortnightly payment system. Similarly, whenever the government buys commodities from the producers, they follow their own procedures for procurement and payment. Cooperative societies that make purchases also have their own procedures. The livelihood promoter must be aware of this and the dynamic nature of the relationships between all these transacting bodies because of the terms and conditions implicit in these deals.
Support Systems in the Market: Support services are important features of any trade or business scenario, and often they come in the way of promoting livelihoods if they are not available. Similarly, their presence aids livelihood promotion, in some conditions. The support systems could include weighing systems, materials for packaging, skilled labourers engaged in packaging etc. For example, in the ower market at Ajmer, there are people who supply jute rolls, news papers, ice blocks, bamboo baskets and other articles that aid the main business. They are paid for the goods or services they supply. Similarly, there are skilled labourers who pack the auctioned owers skilfully, ensuring that the owers reach their destination undamaged, without wilting. These labourers are paid on a piece-rate basis.
Table 2 shows the format that could be used to collect information from the traders:
Table 2: Format to Collate Local Market Conditions

Name of the Goods, or Service Traded Potato Cauliower Tomato No. of Traders Whether Sourced from Outside to be Sold in the Area? Yes No No Purchased from Quantity Local Producers Transacted per day for Selling Outside? Yes Yes Yes 10000 Kgs 7000 Kgs 12000 Kgs Season of Activity
12 10 7
Feb-March Jan-March Jan-March
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Once the information is collected, it is then important to map the seasonality of the local produce, which is traded in the market. It is necessary that the team involved in the Household Portfolio Exercise, collate the portfolio data. This helps understand whether the produce is ready for the market. Also, the bottlenecks identied during the Portfolio Exercises would have some relation to some market conditions. The team must understand the same, quite well. The team must discuss these bottlenecks with the traders and other players in the market who can give them a better view. The analysis of the Demand Conditions must very clearly bring out answers to the following. A. Which are the major goods being delivered from outside the focus area? B. What is the major produce of the area, being sold in the market, and which of these, are purchased by traders for exports? C. What are the quantities of various items being traded (incoming and outgoing)? D. Is there a seasonal pattern to the sales or purchase of goods in the market? E. What are the general rules and terms of trade of the market? F. What are the services that are available in the market to facilitate trading activity? G. What are the price variations across seasons? Marketing and Research Team (MART), New Delhi, has also developed a methodology, 3M (Micro-Planning, Micro-Markets, Micro-Finance), which can be used when examining demand conditions in a local economy. A two-step process adapted from the 3M Methodology will help the practitioner understand the tools that can be used to get the demand conditions in the local economy. (For complete details on the methodology, please visit www.martrural.com2)
Step 3- Summary The exercises carried out under this step helps in getting to know What product(s) is/are traded the most? The seasonality of the trade Mechanisms of the trade. Support features that help the trade.
The above three exercises provide the data needed to assess the local economy. The promoter or the LPO can now use this data to take the next step- Triangulation. The data collected after the assessment of the local economy will now be subjected to another set of exercises.
Stage II: Selecting Livelihood Activities Suitable for the Area

Earlier, at the Stage I, the Factor and Demand Conditions in the area, which needs to support peoples livelihood activities were analysed. As described below, in the Second Stage, those activities are selected; from the ones identied in the earlier stage, where the outcome of the interventions appear to be promising. The process adopted for this selection of activities, is called Triangulation.
2
3M Livelihood Promotion Model, MART-New Delhi, 2009
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Step 1: Triangulation
(Please note, this exercise should not to be carried out, if the livelihood agency or promoters have already selected an activity for their intervention.) This exercise helps collate the data that has been gathered by the team, at one place. Assuming the team has carried out the steps given earlier, they would have with them broadly three types of data: Data from the Portfolio of 100 Households Data from the market, which gives an idea of the product(s) traded and the terms of their trade. Data from the analysis of the Factor Conditions, which gives some idea of the status of the resources required to carry out a set of livelihood activities, or an individual activity. This step must therefore be carried out by involving all those who had gathered the data of the local economy (Steps 1 to 3 of Stage 1). The exercise involves giving the identied livelihood a ranking score that is based on ve broad parameters. The team considers each identied livelihood from the Portfolio Mapping Exercise and then ranks them individually. The ranking is done using a Five-point Scale. A score of 5 is given if the condition is most favourable, and a condition merits a score of 1, if it is least favourable. The ve parameters used in this exercise are: 1. How Favourable are the Factor Conditions? When we use the term favourable Factor Condition, we understand that the resources (Natural, Physical, Financial, Social, Human and Information) support, or help the livelihood activity. In short, the favourable state of the resources would help in promoting livelihoods around that activity (portfolio). For example, Good Rainfall and Water Resources in an area would support vegetable cultivation, and so promote livelihoods around this activity. 2. How Favourable are the Demand Conditions? The proximity to a market, increase in demand for the produce in the markets, in general, a positive trend and good future prospects, signies favourable Demand Conditions. For example, if goat meat is consumed in the local market, and traders from other areas are observed visiting the local market, or even meeting villagers in their homes or localities to purchase goats (meat), then these would indicate favourable market conditions for goat meat and hence for rearing goats. If information is available, then by examining the national or regional statistics on production and consumption of the product and the gap due to the demand, one can reasonably establish the future prospects of that product. 3. How Many Jobs will the Activity Create in the Local Area? The livelihood promoter needs to consider the potential for creation of jobs in the activity (portfolio) that they wish to promote. If the activity or the portfolio has the
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potential to create more opportunities, and will engage more hands, then it merits a high score. If the activity chosen displaces more people from their jobs, than the same should be ranked low. For example, vegetable cultivation is extremely labour intensive. Apart from the effort needed to grow the same, there are other linked processes with a bunch of activities, like collecting vegetables from farms, sorting the vegetables, primary processing and trading. All of these activities have the potential to generate more employment opportunities at local level, and so, the scope should never be limited to just one activity. 4. How Suitable is the Activity for the Poor, and for Women? Any livelihood promotion effort becomes more meaningful, if the same is found suitable for improving the lot of the poor. There are other criteria that would help in judging this parameter better: What is the investment required? What is the gestation period (the initial period when no returns maybe possible) of the chosen activity? Where would this activity be performed? What is the level of risk for the chosen activity? 5. How Competent is the Livelihood Promoter in Dealing with the Chosen Activity? Since the success of interventions also largely depends on the competency of the promoting organisation, the competence of the organisation is an important parameter that needs to be considered and ranked. For example, if under an intervention, NTFP (Non Timber Forest Produce) collectors were asked by the livelihood promoter to process the NTFP, then that would mean they should be linked to relevant agencies, which can help market the processed goods. If this aspect has not been considered by the livelihood promoter, then clearly they are not doing a good job by merely helping the NTFP collectors to process their goods. Many projects do not take off, as the organisation supporting them does not have the competence to support the livelihood on the chosen activities.
Case - Overlooked Market-Forces Foul Good Intentions An organisation wanted to support salt workers, and wanted to provide them with better returns from their work. The organisation provided working capital to the salt workers. This was done to free them from the traders cum moneylenders. The moneylenders would advance capital, and set a price at which they would purchase salt from the salt workers. The entire salt manufactured by the salt workers was purchased at the set price and then traded in the markets at a prevailing market rates. The organisation noticed that there were signicant margins and any intervention would economically benet their work.
However, when the organisation decided to sell the salt in the markets, in order to help the salt workers and circumvent the traders, they found it difcult to sell the salt for many reasons. After the salt was collected, a means of transporting it had to be found and organised. Many transporters played truant and delayed picking up the salt. The organisation also had to deal with purchasers and institutional buyers. They had very strict norms for procurement, about which the organisation had no idea when they started their activity. As a result, the organisation incurred heavy losses while carrying out the salt trade.
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Table 3: Contribution of Different Activities to the Income Basket of the Surveyed Population
Sr. No. A 1 2 3 4 5 6 7 8 9 10 11 Livelihood activities Agriculture Jowar Moong Bajra Cotton Til Udad Maize Guvar Wheat Flowers Vegetables Group Total Sr. No. B 12 13 14 15 15 Livelihood activities Animal Husbandry Buffalo Cow Sheep and Goat Poultry Horse Group Total Income (Rs.) Total Income 547180 244940 313130 52000 76700 2000 88100 83800 112900 34500 279800 1835050 Income (Rs.) Total Income 1205320 1002230 315320 0 10000 2532870 Rs 810800 721150 89400 0 10000 1631350 % 67.3 72.0 28.4 0.0 100.0 64.4 Rs 137600 65700 50000 0 0 253300 % 11.42 6.555 15.86 0 0 10 Rs 91000 99300 103700 0 0 294000 % 7.54 9.9 32.9 0 0 11.6 Rs 165920 116080 72220 0 0 354220 % 13.77 11.58 22.9 0 0 13.98 Rs 229200 115600 146200 35000 37300 2000 30700 46900 56500 20000 250300 969700 Rich % 41.9 47.2 46.7 67.3 48.6 100.0 34.8 56.0 50.0 58.0 89.5 52.8 Rs 87000 85000 53900 7000 30700 0 12000 12500 14000 0 0 302100 Middle % 15.9 34.7 17.2 13.5 40.0 0.0 13.6 14.9 12.4 0.0 0.0 16.5 Rs 92300 23940 43200 0 1200 0 20300 8300 20400 13500 2500 225640 % 16.9 9.8 13.8 0.0 1.6 0.0 23.0 9.9 18.1 39.1 0.9 12.3 Rs 138680 20400 69830 10000 7500 0 25100 16100 22000 1000 27000 337610 % 25.3 8.3 22.3 19.2 9.8 0.0 28.5 19.2 19.5 2.9 9.6 18.4 Rich Middle Poor Very Poor
Poor
Very Poor
Source: Livelihood Portfolio exercise done by RCDSS, Ajmer, June 2008
The task should begin with an analysis of the data collected after the Portfolio Exercise. The data (Table 3 above) shows that though in Animal Husbandry, Sheep and Goat Rearing contribute to around 12.5 % of the total income from Animal Husbandry, working on the same would benet the poor more, as a little around 56 % of the total income from Goat and Sheep Rearing goes to the Poor and the Very Poor. Similarly working on Maize and Jowar would contribute to poor households more, than if the organisation decides to focus on Cotton. It is possible that in addition, one may have to compare the employment potential of Cotton vis-vis that for the other two crops. This kind of analysis is done as part of the process that the organisation needs to follow, once they have completed the Portfolio Exercise. In Triangulation, a Ranking and Scoring Exercise is carried out to eliminate some of the activities that are thrown up after the Portfolio Exercise. The portfolio that receives the lowest total score is eliminated since it follows that this particular livelihood promotion
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may not make much of a contribution. This process of elimination is illustrated by an example, below:
Table 4: Illustrative Ranking in a Triangulation Exercise

Sr. No. 1 2 3 4 5 Growing Seasonal Vegetables Growing Ginger Goat Rearing Rearing Milch Animals Collecting Tendu leaves Source: Exercise on Ranking carried out at Udaipur, 2008. 4 5 5 5 4 23 3 5 3 4 5 3 3 4 2 2 4 2 3 3 3 15 21 13 Activity Favourable Factor 4 Favourable Demand 4 Employment generation Potential 4 Favourable to Poor and Women 2 Competence of Organisation 2 Total Score 16
The example in Table 4 above, shows that if the livelihood promoting organisation decides to work on Collection of Tendu leaves and Goat Rearing, then the possibility of their intervention making a forceful impact on the livelihoods of the target groups, would be higher, as compared to the other three activities. Triangulation shortens the long list. It does not help the LPO with understanding what needs to be done in the selected activity. This can be ascertained only after working out the other steps.
Step 4: Summary Eliminate portfolio or activities receiving low scores Consider portfolios or activities getting high overall scores for the next step, Step 5 Step 2: Understanding Demand Conditions
Economic opportunities in the present-day world can be found in the Market. A Market implies inherent demand for a product or service. Though we have already examined the demand conditions briey, we have not yet considered some of the global and national market trends for these selected activities. While gauging the market and market trends, it is always good to scan the global or national markets in order to assess their characteristics. Market trends have to be understood. For example, coarse food grains have now been replaced by ne grains, of better quality. A similar trend is observed in the increased demand for oil seeds, which are considered healthy. This change in consumption behaviour will have an impact on the demand for edible oil sources that are not considered healthy. The promoter has to understand the changes in the markets.
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However, identifying future trends for a product, or a service is a complex task, and yet it needs to be done. A variety of factors inuence these trends: i. New Technologies ii. Change in Peoples Lifestyle iii. Change in Demography iv. Change in Political Balance v. A mix of all of the above
What Do We Look for in the Market?

While scanning the markets, one should look for: Size: Large markets can support a number of livelihoods. For example, millions of households depend on wheat production, while only a few thousand people can produce Psyllium (Isabgol) that the whole world can consume, or a hundred thousand people can produce all the bamboo baskets that we need. Intervening in a segment where there is a fairly large demand, makes good business sense. Growing Market: A growing market offers potential for more people joining in at different segments, possibly over a period of time. It offers better opportunities for supporting larger number of livelihoods. An existing large demand, which has no future growth, or which is likely to dwindle, cannot be called a growing market. Therefore it does not offer very good prospects. Dynamism: Dynamic markets absorb changing technologies. They constantly witness entry and exit of players, offer scope for a wide range of activities and are hence dynamic markets that can support many livelihoods. Transparency: Transparent markets are usually fair, giving all players a level playing eld. Low Barriers: Markets with low exit and entry barriers are an ideal choice. Usually these markets become very competitive and are efcient. Systems: Look out for markets that have well developed systems in place since that helps develop efcient ways of working. Support: The presence of a well developed chain of related support industries is usually very helpful.
Analysing Market Trends

Intervening agencies need to analyse market trends carefully and their members must be conscious about external inputs or signals from the market and the environment, so that they are aware of the changes happening around them.
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The simplest way of doing this could be by plotting the market size (either in terms of total production, or in terms of total value) of some of the commodities, or of products that are, or can be produced in the area, on a graph. In order to do this, it rst needs to be listed for that period under consideration. Let us look at the production of some crops in India, in million metric tonnes, during the 1990s and the initial years of the 22nd century.
Table 5: Production of Select Crops in India

Millets 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Decadal Growth 8.13 12.28 8.49 10.30 8.66 10.94 10.38 10.60 10.23 8.68 8.32 2% Potato 15.21 16.39 15.23 17.39 17.40 18.84 24.22 17.65 23.61 25.00 25.00 64% Beans (Dry) 3.53 3.87 3.27 3.06 3.44 3.51 2.96 2.75 2.69 2.63 2.57 -27% Soybean 2.49 3.39 4.75 3.93 5.10 5.40 6.46 7.14 6.79 5.09 5.60 125%
When this information (the trend) is plotted on a graph, we get a graph, like the one shown below.
Production of Agricultural Products in India 1990s

30 25 20 15 10 5 0 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Years Millets Potato Beans Dry Soybean
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What does this picture tell us? It shows that the potato and the soybean markets seem to be growing, though the potato market seems to be much bigger in size, when compared with the soybean market. The markets for Beans and Millets however, seem to be stagnant, if not declining marginally. If the farmers in the LPOs area of intervention produce any of these four crops, it would be useful for the LPO to help them improve production of potato or soybean, and support other activities around these items, whose markets show signs of growth. Though these are national level production gures, they do give us a fair sense of the market behaviour. This also shows that the markets for potato and millets are more risky (more variability) as compared to beans or soybean. There are specialised techniques available for carrying out Trend Analysis. This module will not deal with those techniques. The interested reader can refer to any good book on Statistics or Marketing Statistics for the same.
Sourcing Information
There are many sources that can provide information on the global market trends and opportunities: Walking Around: The promoting agency can at least begin its search by looking for data available at the local market yards. They can expand their search to get the data available from other parts of the state, as well. Internet Search: Websites are the latest and most interactive sources of information. They provide an opportunity to interact with specialists on the sites, who respond to various queries. Also, the Internet is a major source for tracking worldwide trends and getting every kind of market information however specialised, in a matter of minutes. (Some of the information may however, be available for a price). Some sites that can provide such information are: www.agriwatch.com, www.commodityindia.com, www.cmie.com Directories: Trade directories, economic databases, which are periodically brought out and updated by research organisations, give the latest status of the markets. Publications: Business publications, such as Economic Times, Business Line etc. give day-to-day information on the latest developments in the local, national and global markets. Also, they are a very good source for information on sectoral studies, or for obtaining various industry trends. Business magazines and special journals dedicated to specic areas of interest are great secondary sources of information.
Stage III: Getting to Know the Selected Activity- Deciding on the Intervention
Step 1: Exploring the External Environment
Referring to the Livelihood Framework, one realises that as of now, one has only examined the Demand Conditions and the Factor Conditions.
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The other two external conditions, namely the Institutional Conditions and the Industrial Conditions, are yet to be examined. It is important that the promoter also have another look at the Factor Conditions and the Demand Conditions. In order to understand the intervention that may be helpful, an exercise 3-E or Examining External Environment (EEE) needs to be carried out. The steps for conducting this exercise are given below.
Step I: Framing Questions
This step is critical as framing questions on four external contexts viz. Factor, Demand, Institutional and the Industrial context, will have to be done by the promoting agency. The leads to the questions that are to be framed would come from the bottlenecks encountered while preparing the portfolio. So please refer to the Bottlenecks discussed during Portfolio Mapping. Some questions may also arise from the exposure that the LPO has had, to the sector. While framing questions, care must be taken to frame them in such a manner that the answers can be scored. Questions, whose answers can be in the form of Yes, or No, or Agree, or Disagree, or which are based on opinions like Good and Bad, or questions whose answers raise further questions like How Much, When, What etc, are to be avoided. The promoter has to ask these questions to a minimum of three persons (experts). GOOD QUESTION: How would you quantify the demand for the product in the local market? BAD QUESTION: Is there a good demand for the product? The respondents answer to the rst question can be scored, whereas in the second case, the answer can be either a yes, or a no. Therefore the questions of the second type must be avoided. The answers in response to the questions must be rated on a Five-Point Scale, which must be explained beforehand to the experts. The highest rating (5) must go to a favourable response, that helps the issue being discussed and a low rating (1), must be given when it does not help at all. This means that the questions must be so framed, that the response lies anywhere between 5 (the best) and 1 (the least). Please note that decimal or fractional scores are not allowed. While framing questions, it should be ensured that the questions are exclusive of one another. For example, in Factor Conditions the ve questions could be on each of the different resources: Physical, Financial, Natural, Social and Human. Similarly when framing questions on other external conditions, it should be ensured that they pertain to different aspects around that Condition. Hence, the questionnaire needs to be framed bearing this idea in mind. The easiest way of checking this is by inquiring whether a particular question is different from the others, or does it cover a feature hitherto not covered? If the answer is yes, then it may imply that the questions have been framed well.
Step II: Identifying Key Informants (Experts)

Once the questions are framed, (expect a minimum of ve questions on each of the Conditions) they are to be administered to experts for scoring. Three Key Informants may
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have to be identied. The Key Informants are people who have a good knowledge about the sector, and understand the issues before it. For example, in case of any agricultural crop, the Key Informants could be a farmer (one who knows, or has worked in the area under consideration), a trader (preferably a big trader dealing with the crop and has knowledge about the same), and an agricultural scientist associated with an agricultural university, or a government employee from the agricultural department, or someone senior, from an industry which deals either with seed production or output processing. While selecting these Key Informants, it should be ensured that they all represent different levels of the value chain, in the same sector. More the diversity of the Key Informants, greater is the possibility of getting richer information and a diversity in the scores. These are important aspects to be considered when determining what needs to be done, with the help of experts.
Step III: Scoring Responses with the Help of Key Informants

This step involves asking each of the selected experts, the prepared set of questions. The system should be explained to them before asking the questions. The experts must give their responses in terms of scores in absolute numbers and not in fractions, or decimals. The scores given by the respondents are entered. One should avoid prompting the Key Informants, as they respond to questions, to avoid bias.
Step IV: Totalling the Column and Row Scores and Score of each Condition Separately
The column scores are given by each Key Informant. They are totalled. Also the row scores, i.e. the scores given by the key informant on each of the questions, as well on all the ve questions on a Condition are totalled. The Condition that gets the highest score is the Most Favourable Condition, and the question that gets the Least Average Score, within the condition, as well as compared to other conditions, is the weakest link. This Lowest Scored Condition and the Lowest Scored questions are the points of intervention, or the areas, where if suitable interventions are made, they will bring about good results. The table on next page gives an illustrative list of questions, with scores given by Key Informants.
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Example of a 3-E Exercise done on an NTFP [Give a higher score, if you feel that the answer to the question is most favourable or helps the issues being discussed, and a lower score, if it does not. Rate your answers on a scale of 1 and 5 and please note, no fractions or decimals are allowed.]
KR 1 KR 2 FACTOR 1 How is the rate of depletion of the trees due to attack of pests and diseases? 2 How would you rate the storage facilities available to NTFP trade in the area? 3 What is the level of knowledge among the local population on preservation of the trees? 4 How would you rate the nancial support extended by traders to collectors? 5 How would you rate the favourability of the climatic condition for growth of the NTFP trees? DEMAND 1 How would you rate the increase in the demand of the product in the local market? 2 According to you, how favourably have product prices increased in recent years? 3 How would you rate the number of buyers in the market for this product? 4 During the procurement months how would you rate the presence of external buyers in the market? 5 How would you rate the fairness of the trade (dealings) in the local market? INSTITUTIONAL 1 How supportive are the legal systems in allowing the trading of this forest produce? 2 How good is the support from forest cooperatives in trading this commodity? 3 According to you, how is the support extended by the Forest department to collectors? 4 How would you rate the existence of formal institutions dealing with procurement in the local context? 5 How are the terms of trade supportive to this forest produce? INDUSTRIAL 1 According to you what score would you like to give for existence of processing units in the nearby area? 2 How would you rate the growth of processing industries in the local area? 3 How much score would you like to give for the transport industries in the local context? 4 How would you rate the availability of technology for storage? 5 How adequate is the demand trend from the medicinal industries? KR 3 2 3 3 2 4 Total Score 7 9 11 5 13 Average
3 2 4 1 5
2 4 4 2 4
2.33 3 3.67 1.66 4.33
5 4 5 3 2
5 4 3 4 2
5 4 4 4 4
15 12 12 11 8
5 4 4 3.67 2.67
2 1 1 1 1
4 2 1 1 3
1 2 1 1 2
7 5 3 3 6
2.33 1.67 1 1 2
3 3 4 2 2
3 3 4 4 2
2 3 3 5 3
8 9 11 11 7
2.67 3 3.67 3.67 2.33
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The example given above is with respect to one activity. It is necessary that similar questions be developed for all activities identied after the Triangulation Exercise targeting at least three Key Informants. An aspect that should be borne in mind is that for every activity one selects (e.g. Agriculture, Animal Husbandry) one needs to have different set of Key Informants, and also different sets of questions. For example to understand the activities around wheat and paddy, one needs to have different sets of questions.
Step V: Identifying the Point of Intervention

The conditions with the Lowest Average Score are considered bottlenecks. The above example shows that bottlenecks exist in the Institutional Condition. The bottlenecks are, for example: a. The Forest Department somehow appears to be less supportive to the collection of NTFP. b. There seems to be no existence of formal institutions like Collectors Cooperatives promoted by the Government, to deal with this commodity. c. The trading done at the market place does not appear to assist this activity. These three elements, if worked upon by the livelihood promoter, could help in promoting the livelihoods of the community involved in this activity. These points are the points of intervention.
Step VI: Compare Scores of Different Activities

(This step need not be carried out, if the sector has already been selected) Total the scores given by the Key Respondents for each activity (question in table above) and write it in the column for totals at the end of each row. Then work out the average of the scores for each row and write it down in the corresponding column (Average) of that row. (Since there are three respondents, divide the total score by three in this case). Examine the column totals. Compare and see which activities have got high scores. The activities, which have scored high totals, are likely to have had favourable conditions for most of the elements. Poor people may nd it easier to work in such a sector than the one where many conditions are unfavourable. We have already assessed an important element of the Internal Context- the people, in the 3-E Exercise. We will now see how to assess the other important elements of the Internal Context- the Organisational Competency. We will use a simple methodology for this assessment.
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Step 5- Summary Frame questions sets for the four Conditions Identify a minimum of three Key Informants, or experts from different levels of the value chain, in the same sector. Ask Key Informants to provide responses on a scale of 1 to 5 with 5 as the most favourable response, or which helps the issue, and proportionately lower, if it does not. Collate the scores, total and average. The lowest scores for activities or conditions indicate bottlenecks that must be worked on by the Livelihood promoter to help the beneciaries. Step 2: Overlaying Organisational Competency
The 3-E Exercise gives a fair amount of information about some of the potential tasks that the livelihood promoter should engage in. Apart from the score obtained, the dialogue with the three Key Informants of these activities would be helpful. Once the 3E Exercise is complete, the role of the promoter becomes clearer. The promoting agency now needs to choose the intervention to initiate their work. They can also plan for many such interventions that they could take up later, after having prioritised, or sequenced them. This choice needs to be made on the basis of the capacity of the promoting organisation. It is important for to recognise that livelihood intervention is a complex task. Therefore, the promoting agency need not have all competencies within their organisation. The Case related to the salt intervention- Overlooked Market-Forces Foul Good Intentions, described earlier, shows how the lack of competence could make things difcult, not just for the organisation, but also for the people whose livelihoods are being promoted. The Competency of an organisation can acquire different shades. It is possible that the organisation already has the competency, or the organisation can build its competency with the help of existing people, or by developing relevant skills and knowledge in the chosen area through training programmes. The organisation can hire new people with the relevant skills and knowledge, if training current employees is difcult for any reason. The organisation can choose to collaborate with other organisations, which have the relevant skills and competencies. This aspect has been discussed in Module 1, and depicted in the Collaborative Polygon. It may just so happen that the required competency may not be available at all, or it may be too difcult to develop those competencies or skills for any number of valid reasons. In such a case, if the livelihood promotion agency still persists with taking up the activity, it may prove detrimental to the organisation.
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A similar analysis needs to be done on the Human Resources of the organisation, its Financial Resources, Infrastructure, and so on. In these cases too, the promoting agency needs to ask: 1. Do we have the relevant resources within the organisation, which will provide the necessary skills, or knowledge, or experience needed in the particular case? 2. Are there other organisations with the required skills, knowledge, competencies or experience, with whom we can collaborate, or who can provide the required resources? And so on This analysis therefore involves two steps. Step 2.1: Identifying the intervention that can help overcome bottlenecks. Step 2.2: Assessing whether the organisation has the required competence for the task, or can acquire such competency in collaboration with some other agency or agencies.
Step 2.1: Identifying the Intervention to Overcome Bottlenecks
Identifying the specic interventions that can help overcome a bottleneck identied through the 3-E Exercise, is a creative task. For this, we need to consult a number of stakeholders, and also examine efforts of other organisations in that area. It is possible that during the interaction with the Key Informants, during the 3-E Exercise, many suggestions would have been aired. The LPO needs to consolidate these ideas. The rst step is therefore to generate all plausible ideas. It is only through a brainstorming process that the LPO can generate such a list. For example, in a Dairy intervention, if credit is identied as a major bottleneck, we could choose from amongst the following: Making credit available through the organisations micro-nance activities Making credit available by collaborating with one of the micro-nance agencies working in the area Making credit available by promoting a new micro-nance agency owned and run by people from that area Making nance available by linking producers with banks in the area.
Step 2.2: Assessing the Organisations Competence
Having generated the list of possible interventions, the LPO must check whether they have the required competence and the mandate, to take up that intervention. The following Table-6 can facilitate this process, for the example of the dairy intervention mentioned above.
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Use a Scale of 1 to 5 to assess the competence of the organisation, where a rating of 5 implies that the Competence Available for Use within the Organisation, and a rating of 1 is to be used where It is Extremely Difcult to Mobilise this Competency Even From Known Organisations.
Table 6: Assessing the Organisations Competence

Sr. No 1 2 3 4 Interventions Through our organisations micro-nance activities In collaboration with one of the micro-nance agencies working in the area Promoting a new micro-nance agency owned by people of the area Linking producers with banks in the area Human Resources Financial Resources InfraTotal structure
The case Gauging Organisational Competence and Re-modelling the Complete Set-up for an Intervention in NTFP amongst Orissas Tribals, given below, would help in understanding the issues involved.
CASE: Gauging Organisational Competence and Re-modeling the Complete Set-up for an Intervention in NTFP amongst Orissas Tribals3 Prakruti, a development support agency working with forest dwellers in Orissa, wanted to engage in procurement and trade of Non Timber Forest Produces(NTFPs) to take advantage of changed Govt. policies relating to NTFPs which allowed multiple players instead of the earlier monopoly trade environment. The policy (of March 2000) entrusted the management of selected NTFPs to gram panchayats thereby enhancing access of small players/traders and enabling institutions like SHGs to enter into NTFP trade. Prakruti for almost a decade had advocated the cause of forest dwellers and was in the forefront demanding decentralization of NTFP management. It had also promoted large number of SHGs in its operational area and some of them were also linked to the Banks as part of the SHG Bank Linkage programme. It wanted the benets of new Govt. policies to ow to the forest dwellers who are supposedly being exploited by kuchias(intermediaries). But it had scant ideas about the market. To understand the situation in perspective especially the market condition, it undertook a study. Based on the ndings of the study, it designed its intervention strategy. The objective was to move to a cooperative model where the forest dwellers themselves manage all the functions connected to procurement, processing and value addition and marketing. But initially Prakruti had concerns relating to scale, quality of produces procured and access to credit as far as SHGs are concerned. At the same time Prakruti wanted it to be an economically sound model. The tasks were to enable aggregation to achieve the desired scale, put in place a mechanism of quality control and make available short term credit at competitive interest rates. Moreover there was the challenge of sensing and scouting the market, negotiating with the buyers and packing the produces in desired units, transporting the produces to the markets and realizing the sale value.
Prepared by Shri Barna Baibhaba Panda, The Livelihood School for classroom discussion only.
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Though the mandate of the organization did not deter it to take up this venture, but it required a different set of competencies. Moreover the non prot nature of the entity was coming in the way of accessing mainstream commercial credit, making and retaining prots for reinvestment to boost procurement infrastructure like weighing machines, godowns and more so, in putting up processing units for moving up in the value chain. After deliberating on various options, it decided to promote a company called Grameen Vikas Pvt. Ltd. to take up the NTFP business. This not only provided the desired legal exibility for accessing credit and retaining prots, but also gave a message that this required different mindset. The organization assessed its present human resources and identied the potential hands who can be tasked for the job. It also recruited two persons having substantial exposure to NTFP marketing, one being from a state govt. entity engaged in NTFP procurement and marketing. The CEO of Grameen was an entrepreneur in his own right. He was given a competitive compensation package without any reference to the existing remuneration structure within the organization. The guy chosen from the organization to be in the team was an MBA in Marketing. The team consisted of six persons including three eld level personnel placed strategically in key NTFP catchment areas like Bhawanipatna, Bissamkatak and Koraput. It also mobilized some funds from a donor agency to meet the initial costs relating to human resources, establishment and seed capital. While Grameen took care of the core business aspects, Prakruti focused on building and nurturing institutions like SHGs and their federations, building the capacities of their leaders, raising quality awareness and developing quality checklists for NTFPs and liaisoning with Govt. agencies and ofcials to create a conducive environment.
Let us also remember that, the mission of the organisation inuences most of these choices. If the mission of the organisation is to extend any services necessary for supporting livelihoods, then the LPO could explore all of the choices, in the example of the dairy intervention given earlier. But, if the mission is to extend any non-nancial services necessary for supporting livelihoods, then the choice will be limited to options 2 and 4 above. This level of analysis is often good enough for the promoting agency to initiate the livelihood intervention process. However, in case it is planning a large intervention, and would like to be more accurate, then in addition, they can also carry out a sub-sector study. Some of the key points of this methodology developed by Gemini Consultants are given in the Annexure (Annexure VI- Sub-sector Analysis) to this Module. In conclusion, while the promoting agency would diligently follow all the exercises and steps given in this book, it must remember that even after doing the exercise with all sincerity, it must not ignore what the heart says. The case below illustrates one such instance where the organisation chose to listen to its heart.
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Listen to Your Heart as Well In a workshop held at the campus of the NGO, Gram Vikas, in Orissa, the participants examined the livelihood opportunities in marine sheries in the surrounding area. They realised that sh production in the nearby coast was exploited to the hilt, and could not support more livelihoods. With trawlers from neighbouring states steaming in and scraping the bottom of the continental shelf, the catches of the local shermen were dwindling.
The total number of people eking a livelihood off the sea in Gram Vikas area of operation was about 10,000. This was too small a number to inuence the policies of neighbouring states. Well-meaning experts suggested that Gram Vikas stay away from the issues of these shermen, as there was little it could do to change the situation. Also, the critical leverage point lay beyond Gram Vikas capacity to intervene. The challenge before Gram Vikas was: What happens to those 10,000 people, who have never done anything other than shing? As the best point of intervention, shown by this analysis, was not feasible, do they go hungry? Gram Vikas chose to continue working with the shermen.
The Gemini Project, A Field Manual for Sub-sector Practitioners, USAID Thomas Fisher, Vijay Mahajan and Ashok Singha, The Forgotten Sector: Non-farm Employment and Enterprises in Rural India, 1997, Intermediate Technology, London (Available at BASIX, Hyderabad for Indian readers) A range of sub-sector proles on non-farm sub-sectors are available with the Swiss Development Cooperation in Delhi, and BASIX, in Hyderabad.
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Annexure I
If I were to Conduct a Village Study...

I guess I would begin by locating a village to study, would you not? I would choose a village I knew very little about, so that what I know does not bias my inquiry. Since it is a new place and I have a very poor sense of direction, I would mark it on some kind of a map with respect to places that can serve as reference points. That should help me make inquiries. I would also like to know how far the village is, how one reaches there, what kind of terrain one has to traverse, any landmarks, etc. Whenever I go to a new place where people live, I am curious to know how the settlement came about. Often, there is nothing to know, but some places have a history that is worth knowing, especially if people themselves attach some signicance to their history. Questions like who lives where and why, who does what and why, who relates with whom and why... are sometimes connected to the past. In any case, these are some of the questions I would like answered. Often, there are reasons why people build houses of a particular type, where they locate houses relative to those of others and how houses are clustered- especially in case of identiable communities. We know so little about communities, and how they get formed, how they function. Who lives here? is an obvious question that pops up, whenever I go to any settlement. How many people live here? How many families? Are there children here? Are there old people- men, women, or people chronically ill or handicapped? Is it not remarkable that there are so many ways of looking at people! I would do that if I were conducting a village study. Why? I am nosy enough to want to nd out who is related to whom! I have known villages that descended from a bare ve families some three centuries ago and now there are as many hamlets. I would also want to know how families are composed, how many generations stay together, who does what in the family, are there established customs and patterns about these things? Landscapes and all they encompass fascinate me. And what meaning bits and parts of a landscape have for different people! A building may be a home, a school, a factory, a jail, a place of worship. Land, water, trees, forests, pastures, livestock, mines, quarries are all parts of a landscape. But wait! Peoples lives depend on these! So naturally, I would like to know more about these. To some land is merely a hunk of earth. But others may call it farmland, pasture, forest, etc. It may be terraced, networked with bunds, well looked after or untended. Different kinds of lands with soils that are either irrigated, or awaiting the promise of rains, eroding or well managed, near peoples homes, or far away. What do people do with different pieces of land? How do they use it? What sense do they make of it? How do they keep it? I would explore all these facets, and I would inevitably draw inferences and make judgments about how people look after their land and what meaning different pieces of land have for them. I would try to nd who owns how much land and where, who can use which piece of land, I would also explore what I might do with the land I see.
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Then there is water- ponds, springs, streams, wells, rivers, water underground- how is it being used? How much is being used? For what purpose? What happens to it through the year? There are trees, some isolated, others in groves; some growing naturally, others planted; some carefully nurtured and others vandalised. Then there are forests, mines and quarries. I would try to learn about these. Whenever I go to a new place, I ask myself, What if I lived here? What would my life be like, if I lived in this village? Where would I get water to drink? Where would I get provisions for the house? How would I cook my food? What would I do if I got ill? Where would my kids study? I could be a farmer in this village, or a blacksmith, or a potter- where would I buy the things I would need for my occupation? And if I had to sell my produce, or whatever I collected, where would I sell it? If I needed to borrow money, whom would I go to, and what would be the terms? Hey, when do people borrow in my village? And who has borrowed how much, for what purpose, since when? What if I was unable to sort out a quarrel with my neighbour? Funny, isnt it, that we take all this for granted. Things seem to happen in life without people having to question how? What about the government? The Government, after God, appears omnipresent, omnipotent and omniscient in our country. Does my village have anything to do with government? Are there signs and symbols of any relationship? I would want to dig that out. Do people in this village ever do things together? And how- in a sporadic, happenstance sort of way or more systematically? By some kind of design or because of customs? What kind of things? Seems like an obvious question, does it not? After all, man, as the saying goes, is a social animal. My study would hardly be complete if I do not learn how people make a living. Then again, it is not much use to say, People do farming. One person may cultivate his own land, another may rent it out or take it on lease. Someone may use hired labour, yet someone else may refrain from hiring. One person may use fertilisers, another may avoid them. One person may sell a part of his produce, another may use it all. Different members of the family may do different things and the outcomes may vary across households. And this is just one-way of making a living by farming. There may be myriad other ways by which make a living, and I should want to know about those. Some occupations I know give a steady ow of incomes, others do not. There are more, or less risks in every occupation. Some are regular, others are available sporadically. What does it all add up to? For example, how much does a farmer spend to earn how much? What do they do with what they produce or earn? How do people make do? What if there is not enough to eat? Does that ever happen? To whom does it happen? I would like to know that. What if there is a huge, unexpected expense? Does that ever happen? When? And what do people do then? Is life the same through the year- year after year? Are there ups and downs- even in these placid villages? What do people do when they are down? Do they plan ahead for the times when they
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might be down? Is it the same for men, women, the aged, children, and all families? What are peoples fears and anxieties? What are their aspirations and hopes? These are people I am dealing with, not cattle, but human beings like me. So I would want to know all these things. Now, did I ever come here before? Have I ever been to this village before I chose it to study? Well, not really. Though whenever I go to a new place -any place I always feel I had been there before. But wait! Suppose I had come here some years back. What would have been different? Curious, is it not! Did people live differently? Did they make their living differently? Have families changed? Have things that I see around changed? Do people think about the rest of the world differently now? Has the landscape changed? Has anything happened in the recent past that people talk about? How would things be in future? Did I say something about man being a social animal? I guess, I did. Well, what I understand by that is that people do not live in isolation like stones. Not even like trees. They deal with each other all the time, in many ways. If one sells labour, another buys it. If one has any thing extra, he may sell or lend to others. Some people come to be regarded as wise, so everyone seems to consult them. Some have lots of money or food, so people borrow from them. Over time, some of these dealings become frozen, due to habit, convenience or compulsion. A person may always deal with some people and avoid some others. Does that happen in my village? May be not. And as people deal with each other as people, as performers of specic tasks, etc., some become more prominent than others. Some people like to be prominent and they do things that would make them prominent. So, what is the worth of my study if I do not decipher all this, the most fascinating of things about people? Of course, I do not expect my village to be an isolated enclave. If it were, I would not be here, would I? And if it is not isolated, whom is it connected with? Just as people deal with each other within the village, they perhaps deal with outsiders. What are these dealings, these connections? I would surely want to explore and understand. People buy and sell things, for example; some work for others; some seek others advice. Of course, it would not surprise me one bit to nd that these connections are not the same for everyone. Finally, as a developmentwallah, I would like to know what is happening in my village by way of development. I understand government does various things for the development of villages. Is it doing anything in my village? Do people know what is being done? I would like to nd out what has been the outcome, and how it has affected peoples lives. I would also want to know what people think about it. Are they themselves doing anything? That is all very well! But how do I know people are telling me the truth? I am a stranger here, after all. What if I do not understand what I see? Alas, there are no easy answers to these questions. Perhaps I can ask others around me if I do not understand something. I could analyse what I have learnt and see if it makes sense. I could cross-check. I could try various ways of going about my study so that people in the village open up to me.
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You may well ask, How would you do all this? and I have no answer to give you. I think it is just as well that I do not have one answer, for there is no single answer, there is no single method! I know I would travel around the village, walk, walk, and walk. I would listen and talk to people, as they are, where they are. I would keep my eyes open to see. I would keep my mind open and alert so that I observe what I see. I would ponder over what I have observed, so that I understand. I would discuss with my colleagues and others around me. I would read if I can nd something about my village or the region where it is located. I would share with the inhabitants of the village what I have learnt so that they may educate me further. And in the end, if I have uncovered my own ignorance, may be it has been a worthwhile exercise. Dr. Deep Joshi, PRADAN4
r. Deep Joshi was one of the recipients-along with ve others from Asia, of the prestigious Ramon Magsaysay Award for D 2009, which is considered Asias equivalent of the Nobel Prize.
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Annexure II
Participatory Methodologies for Resource Analysis at the Village-level

Source: Adapted from Britha Mikkelsen, Methods for Development Work and Research A Guide for Practitioners, Sage, 1995 The following methodologies are a description of participatory learning and action (PLA) tools, which may be used for resource analysis at the village-level. The use of these methodologies helps in understanding the local context and peoples perspectives better.
A. For Mapping
Participatory mapping is used for providing information on physical space and settlements, e.g. on population distribution, demographic data, infrastructure, natural resources and social services. The method is quick and reliable, as communication among participating group members has a corrective function. Mapping is done by a group of villagers. Ask the participants to draw maps on the ground using coloured chalk or rangoli powder or on paper with coloured pencils or pens. The advantages of mapping on the ground are that it is visible to many people, it can be altered easily, and may be preferred over pen and paper by older or illiterate people. The advantage of mapping using pen and paper is that it is permanent. However, the map can only be of a limited size, only a limited number of people may participate, and it is also more difcult to make changes during the process of mapping.
Applications of Mapping Tool 1: The Village Map

Purpose To understand the location of the village in relation to other places and resources, access to the village, modes of transport, etc. Method Select a group of villagers Explore what there is to the east, west, north and south of the village. Explore access routes to the village At an opportune moment hand over a chalk/pen to the person in the lead to translate observations made during the discussion on the ground/chart. Different persons may take the lead at different times.
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Figure 1: The Village Map of Berapal in West Bengal, with its Wealth Ranking
Tool 2: The Social Map

Purpose To understand the location of individual households belonging to different castes, economic strata and other groups in the village in order to understand inter-group social relations.
To carry out a census; by visiting each household, of population, illiteracy, health conditions, occupation, earnings etc.
Method The point where the group is sitting in the village may be made the reference point for exploring information about nearby households. The exploration can go on with various lead questions about each individual household, referring to family size, composition, occupations, literacy, health status, etc., until all the households are covered.
Let the participants locate different households on the chart/ground during the above discussion. Individual households on the map may be given an identication number. The names of the household heads with these numbers may be noted separately for the wealth ranking exercise.
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Figure 2: The Social Map of Jwalapuram Village in Andhra Pradesh.
Source: Damodaran, 1991
Tool 3: Resource Map

Purpose To understand the quality, quantity, location and usage of natural resources in the village like land, water, forests, etc. Method Let the villagers sketch a map of the village with only important landmarks to identify locations within the village. If planned properly, the village map drawn earlier can also be used for this purpose.
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Discuss with the villagers the topography, quality of land, tree cover, source of irrigation, etc. in different parts of the village. Facilitate the villagers so that they can indicate all of these on the map.
Figure 3: Resource Map of Jwalapuram Village
Source: Damodaran, 1991
B. For Diagramming Tool 4: Services and Opportunities Map

Purpose To understand the availability of various services and opportunities related to education, employment, health, marketing, bus routes, etc. both within and outside the village. Method Discuss each possible service and opportunity with the participants and ask them to locate their availability on a village map, indicating distances as they do so. Participatory Diagramming Participatory Diagramming is used for
1. Summarising empirical information, e.g. in time lines, as well as for, 2. Summarising analysed information, for example in bar charts and pie charts.
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Applications of Diagramming Tool 5: Chapati Diagrams

Purpose To identify key persons, key groups and key institutions that inuence major decisions in the village. These diagrams may be used to depict the participants sense of relations between local groups or organisations. The size of the chapati symbolises the different weights allocated to the groups or organisations by the participants. Method This exercise may be done either directly on paper by drawing circles of various sizes or by using circular pieces of paper. Figure 4: Chapati Diagram of Decision Makers in a Peasant Association, in Wollo, Ethiopia
Source: Venn Diagram- Ethiopian Red Cross Society. 1988/McCracken. 1991:46
Ask the participants questions such as Which is the most inuential group in the village and who controls it? Which are the other inuential groups in the village? Who resolves conict in the village? Facilitate the participants to represent the power of these groups by the size of the circles on the chart. Each circle should bear the name of the concerned person or group. The overlapping of circles should depict the interactions between various people/groups. The
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distance of a circle from the main circle shows how peripheral or central a group is. Circles within a circle indicate subgroups.
Tool 6: Seasonality Diagrams

Purpose To indicate annual and seasonal variations for vital factors of production and reproduction e.g., rain, labour availability, food availability, income, expenditure, credit requirements, etc. Method Identify key persons, group or groups with whom this exercise has to be done. There are some items like rainfall pattern on which responses may not vary from person to person or group to group. However, there are items like employment, income and migration which responses may change from one economic group, or caste group, to another.
Try to identify different periods in a year on a mutually understandable basis. This may be on the basis of local names of the months, festivals and fairs, climate and so on. Visuals may be used to represent these periods to enhance accuracy and participation.
Figure 5: Seasonality Diagram of Agriculture and Limbi Forest Usage Patterns, South Gujarat
Source: SPWD, 1992.
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Let the group mark these periods in a horizontal line either on the ground or on the top of a chart. It may be more convenient to start with the period that is close to the time of the exercise. Let the groups indicate seasonal variations by using curves, twigs of different lengths, different sized heaps of grain, seeds or whatever medium is convenient. If the exercise is done on the ground, it may be copied on to a chart paper for further reference.
Tool 7: Village Transect

Purpose To avoid road side and group biases during the appraisal To verify maps and to understand various micro-environments in the village and their characteristics such as topology, soil, crops, animals, ownership, opportunities, etc. Method Take some villagers with you and start walking from one end of the village to the other. You can take a zigzag route, S-shape route or any route which covers as much of the village as possible. Observe the micro-environments, discuss these with the villagers and facilitate them to indicate these micro-environments on a chart as you move along.
Figure 6: General Transect of Kambalia
Source: McKracken, 1998
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C. For Ranking
Ranking means placing something in order. Ranking is a useful tool for initiating a discussion on possibilities in a local setting. It can be useful for obtaining sensitive information. Practitioners who have ever asked directly about peoples income or wealth know the difculties of obtaining reliable information- if they get a reply at all. Informants tend to be more willing and possibly more able to provide relative values rather than absolute gures.
Applications of Ranking Tool 8: Wealth Ranking

Purpose Wealth Ranking is a technique to nd out who is poor and who is wealthy in a village (as perceived by the inhabitants of the village). Wealth Ranking also helps us understand in what way the poor are poor, and, the rich are rich- again from the point of view of the villagers. Method The Wealth Ranking process is described below:
1. Obtain a clear and complete list of the names of the households in the community you are investigating (you may use the list generated while drawing the social map). 2. Write each name clearly on one small card: shufe them to obliterate any order in the names when they were given to you. 3. Choose your rst respondent. It doesnt matter if it is a man or a woman, or rich or poor, or old or young, but the respondent should be a permanent resident, and know all the households, and must be able to spare an hour for the discussion. 4. Choose a place to do the ranking. Inside, away from the wind and rain and with a at space to lay out the cards is best. 5. Make your respondent feel comfortable and at ease with you. Check that she believes that in her village some households are poorer than others. 6. Remove the respondents card from the pile of cards for the time being. 7. Choose two cards at random and ask the respondent which of these two is poorer than the other? (If your respondent is illiterate you will constantly have to repeat the names). 8. If she says both are the same, probe a bit more. If she insists, place the two cards together side by side.
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9. But if she says X is poorer than Y, then put X beneath Y. 10. Ask, In what way is X poorer than Y? and note the answer on Xs card. (The answers to this question will tell you the respondents understanding of the dimensions of poverty). 11. Ask, Why is X poorer than Y? and note the answer in your notebook. (The answers to this question will tell you the respondents understanding of the causes of poverty). 12. Never prompt the respondent. Do not say For example, do they have more heifers?, or For example, did they inherit the land? We want the respondents opinion, not our own. 13. Now produce the next card. Ask how it compares to X, then to Y. Place it above other cards of households poorer than it, and beneath households richer than it. Again, note In what way and Why the household is richer or poorer. 14. Continue until all the cards (ending with the respondents own card) are done. 15. Make a nal check of the order of the cards with the respondent: she may want to change her mind: if she is illiterate, read them all out to her. 16. Mark the cards, starting with 1 (or 1=) for the richest. (Note that if there are two households that are rst equal, the next will be numbered 3rd, and so on.) 17. Ask her to identify on the cards which households she has a reciprocal interest-free lending relationship with. Mark the cards with b for the ones she borrows from, with l for the ones she lends to, and with bl if she does both. 18. Choose your second respondent. Choose a man if the rst respondent was a woman, rich if the rst was poor, old if the rst was young, and so on. 19. Make fresh cards and repeat steps 4 to 18 inclusive, with the second respondent. 20. Choose a third respondent and repeat steps 4 to 18 inclusive. 21. Back in your ofce, compare the three results- if they are broadly similar youve probably done well. If they are starkly different then theres been some mistake. 22. Add up the total score for each household. For example, a very rich household may have been ranked 1st by one respondent, 3rd by the second respondent and 3rd by the third respondent. That households combined score will be seven (1 + 3 + 3). 23. List the households with the one(s) with the smallest score (the richest) at the top and the one(s) with the highest score (the poorest) at the bottom.
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Tool 9: Matrix Ranking

Purpose A matrix ranking exercise is done to compare and study the merits and demerits of various items against a set of criteria, such as different tree species against timber, fodder or fruit provision or credit sources against rates of interest, availability of loans, need for collateral, etc. The participants themselves should generate the criteria against which each option is ranked. Figure 7: Matrix Scoring of Vegetables Grown by Young Women
Source: ActionAid, 1992: 56
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Annexure III
Household Survey
Source: Developed by Dinabandhu Karmakar, PRADAN (Professional Assistance for Development Action), Purulia
Understanding the Rural Livelihood System, Family Cash Flow and Coping Strategies Assessment of Criticality and Quantum of Credit and Other Inputs Needs (Formats)
1. Family Economic History: Names of the Family Heads: Ms._____________________________ Mr. _______________________________ (Suggestions: The family history needs to be explored with a focus on the economic condition of the family over the past years as far as the family can remember. The surveyors can help the members relax by starting the interaction with some general small talk). Years 2000 to 2004 1995 to 1999 1990 to 1994 1985 to 1989 1980 to 1984 1975 to 1979 1970 to 1974 1965 to 1969 1960 to 1964 Observations to be noted: Primary Coping Mechanism: ____________________________________________________________________ Most Reliable Buffer Used by Family in Bad Times and its Capacity (in Monetary Terms): ___________________ Any Debt the family may have- Source and Amount: ________________________________________________ Entrepreneurial Ability: ______________________________________________________________High / Low Source of Motivation or General Proclivity: Any Major Incident Affecting the Family Financial Implications for Familys Economy What did you do? Why did you do so? How did you do?
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Family Resource/Income Source Study:

(2.1)
Type of Resource Category Quality Quantity (in Decimal or Acre) Use (Fallow/ Productive/ Crops Grown) Present Return (in Kgs of Grain or Rs.) Scope for Improvement as per the Family (LevelingBunding -Digging Well etc) Scope for Alternative Use as per the Family (Horticulture/ Vege-tables/ Pig Sheds etc.) Potential Capacity of Each Alternative
Land
Homestead
a. Cultivable - With Irrigation
(Local sale value)
- Without Irrigation b. Not Cultivable
Remark of the family and the participant as per their understanding (Please Tick) How efciently/productively is the homestead being managed? Excellent Good Average Bad. Primary reasons for Optimal / Sub-optimal Use: Knowledge/Lack of Knowledge Finance/Lack of Finance Motivation/Lack of Motivation Market/No Market Anything else, specify Family Participants
o o o o
Family
o o o o
Participants
o o o o o
o o o o o
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(2.2)
Type of Resource Category Quality (Situation of land, Soil Depth, Slope, Fertility as per the Farmer) Quantity (Show Area in Decimal or Acre Separately for Each Category) Use (Name the Crops & Duration Specifying Months) Present Return (in Kgs) Scope for Improvement as per the family (Introducing New Variety, Fertilisers, Weeding Hoeing etc.) Scope for Alternative use (as per Family) Potential Capacity of each Alternative. (Additional Production in kgs or Rs.)
Land
Agricultural 1. Low land (Local land with sale value) deep soil. 2. Up (terraced) lands medium type soil.
___ acres
___ acres
Remark of the Family and the Participant as per their understanding (Please Tick) How efciently/productively this resource i s being managed. Excellent Good Average Bad. Primary Reasons for Optimal/Sub-optimal Use: Knowledge/Lack of Knowledge Finance/Lack of Finance Motivation/Lack of Motivation Market/No Market Anything Else, Specify Family Participants Family Participants
o o o o
o o o o
o o o o o
o o o o o
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(2.3)
Type of resource Category Quality Quantity Use Present Return Scope for Scope for Improvement as alternative use (As per per the Family family) 1. _________ 2. _________ 1. ______ 2 _______ Potential capacity of each alternative.
Land
Non-Agricultural productive lands (Local Sale value) Fallow lands (Local sale value)
Remark of the family and the participant as per their understanding: (Please Tick) How efciently/productively this resource is being managed. Excellent Good Average Bad. Family Participants
o o o o
o o o o
Family Participants
Primary reasons for Optimal/sub optimal use: Knowledge/Lack of Knowledge Finance/Lack of Finance Motivation/Lack of Motivation Market/No Market Anything else, specify
o o o o o
o o o o o
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(2.4)
Type of resource Category Quality (ability-skill, physical tness) Quantity (numbers of effective days) Use (earning, other than farming) Present return Scope for Improvement (as per family) Scope for Alternative use (as per family) Potential Capacity of each Alternative.
Old MenFamily Human Resource Old WomenAdult-Men Adult-Women Young-Boys Young-Girls
Remark of the family and the participant as per their understanding (Please Tick) How efciently / productively this resource is being managed. Excellent Good Average Bad. Primary reasons for Optimal/sub optimal use: Knowledge/Lack of Knowledge Finance/Lack of Finance Motivation/Lack of Motivation Market/No Market Anything else, specify Family Participants Family Participants
o o o o
o o o o
o o o o o
o o o o o
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(2.5)
Type of resource Category Quality (Reliability of supply and duration) Quantity (numbers and volume in acre feet) Use (drinking, farming, shery, etc) Present Scope for return improvement as per the family Scope for alternative use (As per family) Potential capacity of each alternative.
Water
Well Tank Others (specify).
Remark of the family and the participant as per their understanding (Please Tick): How efciently/productively this resource is being managed. Excellent Good Average Bad. Primary reasons for Optimal / sub optimal use: Knowledge / Lack of knowledge Finance / Lack of nance Motivation / Lack of motivation Market / Lack of market Anything else, specify Family Participants Family Participants
o o o o
o o o o
o o o o o
o o o o o
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(2.6)
Type of Resource Category Quality: Good/ Medium/ Bad (Present Value in Rs.) Draught power Livestock - Buffalo - Cow Poultry Goat Rearing Quantity Use (e.g. (numbers) Ploughing for 2 months) Present Return (e.g.50 Ploughing days-Rs. 2000 Scope for Improvement as per the family Scope for Alternative use (As per family) Potential Capacity of each Alternative
Remark of the family and the participant as per their understanding (Please Tick): How efciently / productively this resource is being managed. Excellent Good Average Bad. Primary reasons for Optimal / sub optimal use: Knowledge / Lack of knowledge Finance / Lack of nance Motivation / Lack of motivation Shed / lack of shade Market Anything else, specify Family Participants Family Participants
o o o o
o o o o
o o o o o o
o o o o o o
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(2.7)
Other sources of Income 1. Trading/ Service 2. 3. 4. Category Annual turn over Expenses Net margin Scope for improvement Potential Capacity (Enhancement in Turnover) Business/
Remark of the Family and the participant as per their understanding (Please Tick): How efciently/productively this resource is being managed. Excellent Good Average Bad. Primary reasons for Optimal / sub optimal use: Knowledge / Lack of knowledge Finance / Lack of nance Motivation / Lack of motivation Market / absence of market Anything else, specify Family Participants Family Participants
o o o o
o o o o
o o o o o
o o o o o
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(2.8)
Type of Resource Category Quality: Good/ Bad etc. please ask local value in Rs.) Quantity (numbers) Use Present return Scope for Improvement as per the family Scope for Alternative use (As per family) Potential Capacity of each Alternative
Trees Forest
Mahua Tamarind etc. Reserve forest Community forest
Access to any common property
Remark of the family and the participant as per their understanding (Please Tick): How efciently / productively this resource is being managed. Excellent Good Average Bad. Primary reasons for Optimal / sub optimal use: Knowledge / Lack of Knowledge Finance / Lack of Finance Motivation / Lack of Motivation Market / Absence of Market Anything else, specify Family Participants Family Participants
o o o o
o o o o
o o o o o
o o o o o
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1. Overall Efciency of Resource/Income Source Use in the Familys Opinion:

Perception Family Participant Primary Reason for Under Use Family Participant
Optimal Use 25% below optimal 50% below optimal 75% below optimal
Knowledge/ Lack of Knowledge Finance/ Lack of Finance Motivation/ Lack of Motivation Market/ absence of Market
Any other: Participants comments (if any): ________________________________________________________________
_______________________________________________________________________________ _______________________________________________________________________________
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2. Expenditure & Income Statement

Expenditure/Consumption Items 1. Food 2. House Repairs or Construction 3. Clothing 4. Illness 5. Farming 6. Buying Assets/Savings 7. Festivals/Family Rituals 8. Any work wanted to take up but could not do because of unavailability of fund/labour. Total expenditure Income sources: 1. Farming Crops a. Paddy b. Maize c. Wheat d. Vegetables e. f. 2. Business/ Trade/Service 3. Wage Earning a. Local b. Migration 4. Forest 5. Service 6. Live stock a. Buffalo b. Cow c. Goats d. Pigs e. Hens f. g. 7. Others Total Income Difference between Expenditure and Income Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Total
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3. Mapping Vulnerabilities of Sources of Income

Regular Income Sources Vulnerability Factors Reduction in Income Reduction in Income (in % compared to normal years yield/income) Alternatives to meet these Unforeseen Decits
1. Farming Crops a. Paddy b. Maize c. Wheat d. Vegetables e. Mustard f. 2. Wage earning (local) 3. Forest 4. Live stock a. Buffalo b. Cow c. Goats d. Pigs e. Hens f. 5. Any common property a. b. c.
Food /Income Sufciency from Various Assured /Primary Sources of Income: (Maximum) How many Months________________________, (Minimum) How many Months___________________________ Decit: Maximum___________________________________, Minimum_________________________________ Most Critical/Difcult Period of the Year (Name of the Months): _______________________________________ __________________________________________________________________________________________ __________________________________________________________________________________________
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4. Preparation of Inventory of Resources/Sources of Income and Understanding Priorities:

Assets/Sources of Income What they want to do (A plan based on farmers priority) Inputs Required Cost (in Rs.) Sources of Inputs Farmers Opinion of taking Bank Loan for the Same Purpose.
a. b. c. d.
a. b. c. d.
a. b. c. d.
2 3 4 5 6 7
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5. Plan for Increasing Familys Income:

The Idea: Need to be Addressed (Quantied): Resource Base: Knowledge Base: Skill Base: Capital Required: 1) 2) 3) Sources: Amount (in Rs.) 1) 2) 3)
Linkages: Market and other Linkages: Inputs Required 1. 2. 3. 4. 5. 6. 7. Total Loan Repayments Return Balance Jan (Rs.) Feb (Rs.) Mar (Rs.) Apr (Rs.) May (Rs.) Jun (Rs.) Jul (Rs.) Aug (Rs.) Sept (Rs.) Oct (Rs.) Nov (Rs.) Dec (Rs.) Total (Rs.)
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6. Overlay of the Plan with the Expenditure-Income Statement

Jan Total Expenditure Total Income Difference Between Expenditure and Income: (A) Investment for Proposed Venture Gross Return Repayments to be made Net income from proposed venture: (B) Difference between A&B Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Total
Some Questions to Facilitate Final Analysis of the Exercise: Assessment of Credit and Other Input Needs
What arc the major needs of the family? (1) (2) (3) (4) (5) Which is the most critical period of the year? Which is the most reliable and most often practised copping mechanism of the family? What is the most critical input the family is missing to enhance its income/livelihoods? What is the most critical linkage the family is missing to enhance its income/livelihood? What is the relative importance of credit with respect to all other missing inputs for the selected/proposed venture to enhance income? What is the maximum volume the family can handle properly? What is the minimum amount of credit the family immediately need for what it has a well thought out viable plan? What should be the timing of credit? Does the credit planning ensure that the credit will not be used to meet some other emergencies?
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Annexure IV
Format5- 4: Village Level Information

Village Code : Cluster Code: About Village Residents Occupation Agriculture Artisans Agri-labour Employees Trader Others Population Literacy in % Number of Families Address Village Name Panchayat Police Station Block District Male__________________Female__________________Children ________________________ Male__________________Female__________________Children ________________________ Address
Social Category
Religion Hindu Muslim Christian Others No. of Families Category Schedule caste Schedule tribe Backward class Others No. of Families
Income Categories
Income Level Below Poverty line (aprox. less than Rs 12,000 p.a) Subsistence Farmer or worker (between Rs.12000 to 36000 p.a) Middle Farmer (between Rs.36000 to Rs.72000 p.a.) Rich Farmer (more than Rs. 72000 p.a) Number of Families
Land Holding Categories

Category Landless Below 3 acres Between 3 - 5 acres Between 5 -10 acres Above 10 acres No. of families
The number mentioned against each category are indicative. You may use gures relevant to your area and the time
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Resources available: Land

Status Cultivated Cultivable Not cultivable Forest Area Total Forest Resources (Items of NTFPs) Apx. Annual Value Water Resources Tanks Wells Canals Rivers Any Other Number Area Dry Area (units) Wet Area (units) Total Area (units)
Livelihood Systems in the Village: Agriculture

Major crops 1 2 3 4 5 Area under Cultivation Yield per acre
Livestock
Nature of live stock Cows Buffaloes Goats Ships Others Approximate No. Average Annual Income from a Unit
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Non-farm Activities including Trade, Services6, Construction etc.

Major Non-Farm Enterprises (1) (2) (3) (4) (5) (6) (7) No. of Units Average Turnover Total Turnover
Service/Labour/Migration/Remittances
No. of people involved People involved in Wage Labour People engaged in service in the village People engaged in service outside village People who migrate seasonally out of village Demand of local skilled labour outside village Lack of livelihood opportunities locally for all round the year High wage rate outside/ Low local wage rate Only if there is a drought or any other natural calamity Average Wage-rate in Village (Rs./day) Total income from services Total remittances to the village How many months in a year? Tick where applicable
Reason for Migration
Source and Use of Credit: Formal

1. Name of the source Interest Security Remarks
6
2.
3.
Include services like Barber, Washermen, Potters, Blacksmith, Tailor etc.
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In-formal
1. Name of the source. Interest rate Security Remarks 2. 3. 4.
Avenues of Savings
(1) ___________________________________________________________ (2) ___________________________________________________________
Facilities and Infrastructure

Facility Transportation Railway Station Metal Road Bus Stop School Primary School High School Bank Market place Hospital Animal Husbandry Clinic Any Other Facility Electricity Drinking water Drainage : Available Not available Name of the Nearest centre Distance from Village
Organisations Working in the Village

Nature of the Organisation Youth Associations Mahila Mandalis Voluntary Orgns. ( NGO ) Cooperatives Any Other Name of the Organisation
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Annexure V
Market Survey
Format 1 Name of Village:
Population (approx): Sl. No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 1 2 3 4 5 Major Products / Services Products Food Products Beverages and tobacco Textile fabrics only Textile apparel Wood and wood products Paper and paper products Leather and leather products Rubber and plastic products Chemical products/ paints Pottery, chinaware, glass Metal and metal products Machinery and tools Electrical goods Transport equipment, parts Miscellaneous products Services Repair of electrical items Repair of motor vehicles Hotels and restaurants Freight/ passenger transport Miscellaneous services Space for Tally Mark Total No. (one for every shop) of Shops Comes in/ Goes out
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Format 2
Local Markets: What comes in?

Sl. No. Product/Services Used but not produced Annual Consumption in the Area Quantity 1 e.g. Marie Biscuits Price/ Unit Total Value Rs.5,00,000 One local bakery makes some similar products Local Production
1,000 kgs/ Rs 500/ year kg 400 /year
2 3 4 5 6 7 8 9
e.g. Cycles
Rs. 1,600/ Rs.6,40,000 Not manufactured piece
10
Format 3
Local Markets: What can go out?

Sl. Product/services produced No. locally and are surplus 1 2 3 4 5 6 7 8 9 10 Annual Production in the Area Quantity Price/Unit Total Value Demanded where?
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Annexure VI
Sub-sector Analysis
The 3-E Exercise helps us identify some of the existing bottlenecks that need to be overcome in order to support livelihoods of many people in the area. However, if you are planning to take up an activity on a large scale, which may potentially impact a large number of people, you may like to know more about the economic system, the whole value addition chain and various players in it, before you really took a step. This can be done through a methodology popularly known as the Sub-sector Analysis. As we will see, this analysis goes further. It also allows us to determine the most costeffective intervention to achieve the livelihood outcomes we seek in our area. You may be surprised to nd that promoting individual enterprises among the group of poor people you wish to assist may not be the most effective way to enhance their livelihoods. You may be able to intervene at some other point of the sub-sector and inuence large numbers of enterprises at a single stroke. Note that this section of the manual draws heavily on two sources: The Gemini Project, A Field Manual for sub-sector Practitioners, USAID, available through www.mip.org Thomas Fisher, Vijay Mahajan and Ashok Singha, The Forgotten Sector: Non-farm Employment and Enterprises in Rural India, 1997, available in India from BASIX in Hyderabad, and from Intermediate Technology, London outside of South Asia. The Gemini Manual is extremely useful. We have adapted material from it in the light of applying the sub-sector methodology in India (this has also been described in The Forgotten Sector). For example, we have given greater emphasis to initial market surveys (in Stages I and II of Module 4), developed the institutional and environmental context, and added a section on matching potential intervention points with the capabilities of the intervention agency. However, the brief overview of sub-sector analysis provided here cannot do justice to the detailed resources provided in the Gemini Manual. If you wish to carry out a sub-sector analysis, you should make it a point to buy a copy of the Gemini Manual- not in the least for the range of valuable formats it provides.
So what is a Sub-sector? A sub-sector is a network of farms and/or rms that supply raw materials, transform them, and distribute nished goods to a particular consumer market or markets.
Any group of commodities, which share a common procurement, processing and distribution channel, can be clubbed into a sub-sector. There is more to a sub-sector than just the core manufacturing process such as rice-
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milling. The rice transportation system is as much a part of the paddy sub-sector as ricemilling or trading is. We must also note that sub-sector is not within a geographical conne. If the groundnut for manufacture of the Chiki (sweetmeat) sub-sector in Lonavala comes from Saurastra, then the groundnut market in Rajkot (Saurastra) is very much a part of the Chiki subsector, and it needs to be considered as well.
What is Sub-sector Analysis? Sub-sector analysis is a process of getting to understand different stages in the value addition chain in a sub-sector and understanding who-all do the value addition, the nature of the technology used, the terms under which the activities are carried out, and who all help.
There are FOUR basic steps that need to be executed well, for carrying out a Sub-sector analysis. 1. Preparing a preliminary sub-sector map 2. Rening the understanding of the sub-sector 3. Analysing sub-sector dynamics and leverage points 4. Choosing the intervention point Through this analysis one is able to put the potential livelihood opportunities identied in Stages I and II of Module 4 to a rigorous test. Are they likely to grow and signicantly benet a large number of poor people, or are they going to remain a stagnant activity bringing only marginal benets to your target group?
Step 1: Preparing a Preliminary Sub-sector Map

There are THREE action points required when preparing a preliminary sub-sector map. These are: a. Getting to know the Sub-sector b. Interviewing Key Informants c. Drawing a Preliminary Sub-sector Map
A: Getting to Know the Sub-sector The rst thing that one needs to do, when attempting to know a sub-sector, is to identify the entire value-addition process. One must attempt to get as much information as one can, by asking the following questions:
1. 2. 3. 4. What are the basic raw materials? Where do the people source them from? How? What do they produce, or make? What happens to their produce after it is sold? Who buys it? When? What does the buyer do with it?
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5. Is there some processing done or required after it is sold? Is there more than one way in which it can be processed? 6. Which are the one or more nal markets for the product? How do they use it? Who buys these products? One could apply a similar set of questions to potential livelihood opportunities in services as well as manufacturing. The analyst can get much of this information by talking to people who are involved in the business. They could be farmers or producers, traders who deal in the commodity, products or services bankers who nance the activity, a government ofcer responsible for supporting or regulating the activity, or even a professor at the local college. Why not just spend some time with them? One may also nd some books, articles and websites about the activities that that one is interested in. Read them carefully. The person carrying out the analysis must be familiar with: Participants in the Sub-sector: Producers (both women and men), traders, regulators, nanciers, promotional agents. Alternate Technologies in Use: (E.g. in sugarcane: gur, khandsari, sugar mills. In cloth production: khadi handloom, power looms). Note the environmental impact of these production processes. Factor Conditions: The nature of the various factor conditions, as well as support services, that the business requires in order to become an important livelihood activity in the area. Product Flows: Physical ows (places) and control of ows (traders, regulators). History: The ups and downs of the sub-sector and the causes of the same.
B: Interviewing Key Informants

One may have already interviewed a few key informants to get an initial understanding of the sub-sector. It is now time to interview key informants more systematically and in much greater depth, and to visit both large and small rms, to get a better idea of how the subsector operates. The key informants to be interviewed for analysing a sub-sector in greater detail may include: Smaller and larger producers Market traders or authorities Bankers Ofcials from promotional and regulatory bodies
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Figure I: Sub-sector Map for Soybean All Stages of Value Addition De-oiled Cake Exporter Oil Retail Wholesale De-oiled Cake Trade Wholesale Oil Trade Private Traders MARK FED Various Markets Domestic Oil Institutional Oil Animal Feed Exports
Prestige DoCs
State Trading Corp.
Private Traders
Apna Bazar
Rening
Pvt. Ref1
Pvt. Ref2 Co-Op Federation
Processing
Modis
Vindhya
Wholesale Trade
Private Traders
Local Trade
Small Traders
Com. Agents
Primary Co-op
Agents of Processor
Cultivation
Seed, Fertilisers, Rhizobium Trade
Private Traders
Co-ops
ITC
DoA
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NGOs specialising in the sub-sector Researchers During the interviews, the analyst must ask at least the following seven questions: 1. 2. 3. 4. 5. 6. 7. Where do you get your raw materials? To whom do you sell your output? What technology do you use? What alternatives exist? Why do you use this one? What are the main regulations/ laws you have to follow? What are your main sources of funds for working capital and xed assets? Which are the main agencies/ actors who help you? How? What problems do you face, if any?
C. Drawing a Preliminary Sub-sector Map

One can now draw a preliminary map of the sub-sector. The sub-sector map summarises the initial understanding of the sub-sector structure. Although conceptually simple, the map is a powerful tool for describing what one knows about a set of related business activities. It identies the sub-sectors principle functions, participants and channels. In preparing the map, it is useful to review the elements in that order. The functions describe the transformations of the commodity, product or service or service that take place. The participants indicate who performs them. And the channels describe how products ow among participants, who buys from whom, and how the network works together. 1. 2. 3. 4. 5. List the functions List participants performing each function For each function identify alternative technologies and quality differences Identify nal markets On a blank piece of paper, list all functions one above the other on the left side starting with the base raw material at the lowest corner 6. List all nal markets across the top 7. Map various participants who perform these functions in the rows where the functions are listed. 8. Draw arrows to describe product ows among participants 9. Dene principal channels 10. Review sub-sector boundaries Figure i, taken from the Gemini Manual, illustrates sub-sector mapping conventions. Please review and understand them carefully. One may not see the point of using such conventions yet, but we have found over and over again in workshops that those who ignore these conventions often produce unclear sub-sector maps.
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Step 2: Rening the Understanding of the Sub-sector

There are four action points that are involved in this step of the Sub-sector Analysis. These are: a. Specifying the Institutional Context b. Specifying the Environmental Context c. Rening the Sub-sector Map d. Quantifying Overlays of Particular Interest To achieve good results, one needs to execute these action points in an iterative manner, meeting the key informants such as producers, traders bankers, regulatory, promotional and other ofcials repeatedly, as well as drawing on secondary date. When meeting key informants make sure to validate and cross-check the information gathered, to determine its accuracy.
A. Specify the Institutional Context

One can divide the institutional factors that impact the participants within a sub-sector into four broad categories: Regulation, Promotion, Credit and lastly, Producer Organisations. Some of the issues that need to be covered in the course of the analysis of each of these categories are as follows:
A-1 Regulation a) Identify the main laws and rules (including taxes) that apply to different stages in the sub-sector. b) Identify the main agencies responsible for enforcing the above. c) Check the actual application of the law vs. the rules, as laid down. d) Ask key informants about the most bothersome aspects of regulations. A-2 Promotion a) Identify the main promotional policies of the government relevant to the sub-sector. b) Identify the main agencies responsible for implementing those policies. c) Check actual implementation against policies on paper. d) Ask key informants about how useful or not these policies are, and what are their most helpful aspects. A-3 Credit a) Identify the credit available to the sub-sector: What is available for how much? b) Identify the main sources of credit (banks commercial, regional rural banks moneylenders, etc) c) Which parts of the sub-sector are most constrained by the lack of appropriate credit? A-4 Other Institutional Factors a) Are there any producer organisations? b) Are there any other institutions that affect the sub-sector? c) Is there a political economy that signicantly inuences the sub-sector?
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B. Specify the Environmental Context

Examine the environmental context within which this sub-sector functions. Examine how the activities that take place within the sub-sector inuence; and are inuenced, by their environment. For example: a) Do activities within the sub-sector have any environmental impacts? What are these impacts? Are they positive, or negative? b) Are various conditions of the environment favourable for taking up the selected activities? c) Could more environmental-friendly practices be introduced within the sub-sector? How easy, or difcult, would this be in practice? d) Are additional investments required to make the processes more environmental-friendly? How much? Who will make those investments? Eventually you may want to create an overlay (see Action Point D below) that represents the institutional and environmental context on the map itself. For potential environmental impacts, both positive and negative, of a range of livelihood activities, please refer the two chapters at the end of the appendices: Notes: On Environmental Issues for a Range of Livelihood Activities, and On Supporting Small Enterprises.
C. Rene the Sub-Sector Map

By this time you are familiar with many participants, processes and channels within the subsector. You are also aware of the institutions that are inuencing the sub-sector, and of some factors that can help minimise adverse environmental impacts. This is a good time to check: a) Did you miss some important processes within the sub-sector? Have you found any new channel that you were not aware of earlier? b) Have you identied some additional functions that need to be performed for the commodity, product or service to reach its ultimate markets? c) Have you determined that some functions or channels on your preliminary map have turned out to be no more than side shows for the main channels within the sub-sector? With all this additional information you can now rene your sub-sector map. A major part of rening your map it is to add overlays.
D. Quantify Overlays of Particular Interest

It is important not only to have map of the sub-sector, but also some idea of the scale of activity at each point of the sub-sector. We call these overlays. For example, if you are using
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transparencies, you can overlay a clean transparency over your sub-sector map and add gures for the livelihoods generated at each point represented in the map. You need to identify the overlays that are of interest to you and then quantify them. These may include: Number of enterprises at each level Employment and livelihoods generated at each level Gender division of employment Volume of product Sales value Price margins at each level Income to different layers Returns to labour Inventory holdings Environmental impacts
In the process of quantifying this range of overlays, using information from key informants and secondary data, you will inevitably signicantly deepen your understanding of the subsector, once again rening your sub-sector map. Adding numbers always helps because it forces you to be precise.
Step 3: Analysing Sub-Sector Dynamics and Leverage Points

A sub-sector is not a static phenomenon. Demand patterns in the markets are changing. New technologies are being developed. New players are entering the eld. Some are getting out. It is important for you to understand these dynamics before you make an intervention. It is also important to be cost effective in an intervention. When we look at a sub-sector map, we can see that there are various points at which interventions can be made. But there are some points of intervention, which can benet a larger number of people with the same amount of effort. It is always useful to identify such points of intervention, which give high leverage. This step, therefore involves two action points: a. Analysing the Dynamics of the Sub-sectors, and b. Identifying Sources of Leverage
If a particular plant disease is common in an area, two types of interventions may be possible: Identify the right control measures and train farmers in their use Work with plant breeders and introduce a disease-resistant variety. With the second intervention you may be able to benet a larger number of people, and perhaps with less effort.
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a. Analyse the Dynamics of the Sub-sector

This step is vital for moving from analysis to action. By understanding how the sub-sector is changing, you learn where the opportunities and pitfalls lie. Further understanding of the forces driving this change often reveals the key opportunities for growth in enterprise and livelihoods. When analysing sub-sector dynamics, you seek answers to the following four questions: a) Which channels enjoy the most secure prospects for growth? b) Do these channels face any emerging threats? c) What role can micro and small enterprises play in these channels? d) How can you enhance their ability to participate in the growing niches? These questions can be answered by understanding how the sub-sector is changing and why. Among the forces affecting change, the following driving forces and constraints are often signicant:
Key Demand Estimate the demand and trends over the last few years, locally, nationally and even globally. Population growth and changes in the larger economic environment (prices, wages, monsoons, booms, recessions and so on) can cause consumption patterns to change rapidly. Technological Change New machinery or know-how can greatly change production costs, making small rms more competitive or driving them out of business. What impact will such changes have on poor producers, on women producers, on the environment? Protability of Different Niches Individual niches within the production system yield differing returns, providing incentives to change to the more protable technologies, supply relationships, and level of specialisation. Risk Changes in demand, inputs, technology, the labour scenario, environmental conditions and the need for protability bring both opportunities and risks. The micro-entrepreneur and the collective enterprise, must balance rewards and risks when choosing the operating channels. Barriers to Entry Regulations (such as licensing and zoning), banking practices, lack of information, and collusion can restrict growth opportunities for micro and small enterprises. Large Firm Behaviour Changes in the level or range of activities of a few large rms may dramatically affect the opportunities open to micro and small enterprises. Input Supply Poor quality raw materials, unreliable supply sources and environmental damage can severely restrict the growth potential of enterprises.
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Institutional Support Changes in regulation, promotional and credit policies can have a major impact on functions within the sub-sector- including raw material supplies, technologies and marketing. Are changes developing, or expected? What impact will they have on the functions and channels represented on your map?
B. Identify Sources of Leverage

Leveraged interventions are those that inuence large numbers of enterprises at a single stroke. They are likely to be more cost-effective than one-to-one assistance delivered to individual enterprises. Because they affect many rms at once, leveraged interventions can signicantly enhance impact and reduce contact costs per enterprise. To identify sources of leverage look for one of three key ingredients: System Nodes: These are points where large volumes of products pass through the hands of only a few actors. Geographical Clustering: Physical locations where many producers are located. Policy Constraints: These affect almost all; or most producers, e.g. taxes, subsidies, import and export quotas.
Step 4: Choosing your Intervention Point

By this point, the analyst must have a good understanding of the following: The production process and details of the specic, commodity selected for the intervention The various raw materials and support services required to produce it The channels it passes through to reach its nal markets The different players along the value chain The different technologies in use and the skills required to manage them The environmental issues The institutional framework within which the sub-sector operates The critical numbers- of production, sales, employment, etc. The dynamics of the sub-sector as it changes over time The key leverage points It is possible to have a fair idea about some of the interventions that one could take up for promoting or supporting many livelihoods. Now, the analyst needs to revisit the
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organisational context and determine the interventions that can be effectively taken up. Every intervention requires some basic competencies and resources. Examine if your organisation has these. The analyst can now draw up an Intervention-Competency Matrix. List all possible interventions under the heads of different columns Assess what competencies/resources are required to take up these interventions and list these on the left hand side of the table. Put a tick mark () in the boxes for competencies required for a particular intervention and a cross (X) for those not required. Fill up the various boxes in the table, taking into account the particular competencies under review, either of your own organisation, or of other organisations on which you are dependent for such expertise, when fullling the livelihood intervention strategy. Consider carefully whether you will be able to collaborate with these organisations. Based on the outcome of this analysis, the analyst has to choose the relevant intervention strategy for his or her organisation, in order to promote or support a large number of livelihoods.
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Notes
1. Environmental Issues for a Range of Livelihood Activities
Source: This information is sourced from a useful publication produced in Vietnam, with the assistance of the Canadian International Development Agency: Environmental Assessment of Rural Credit Loans in Vietnam: Field Guidelines. It has been developed for use by credit ofcers in assessing environmental and health risks posed by rural credit loans.
Land Clearing
Characteristics of Erosion Erosion occurs when the surface of ne-grained soil is stripped of vegetation and subject to weathering effects of rain. The degree of soil erosion is largely determined by the following four factors:
(i) (ii) (iii) (iv) The nature of the soil The type and extent of vegetation cover The slope of the land and The frequency and intensity of rainfall.
The only factors, which can be inuenced or manipulated by man, are the degree of vegetation cover and the slope of the land. Agricultural practices have been developed that control erosion on low-to-moderate slopes, however, depending upon the nature of the soil, slopes-above certain limits should not be cleared for plantations. Besides the loss of valuable topsoil, erosion leads to high sediment content in surface water, making it unsuitable for many uses. Activities that result in environmental or health impacts: Clearing land on steep slopes Clearing more land than is needed for plantation Letting the land be unused for a long time after clearing Not practicing appropriate erosion-control techniques Permitting sediment to enter local water bodies
Fertiliser Use
Characteristics of Fertilisers Chemical fertilisers are man-made compounds that contain various ratios of nitrogen, phosphorous and potassium, which are essential elements for plant growth. At high concentrations fertilisers are poisonous. If humans ingest food or water that have high concentrations of nitrates (nitrogen derivatives) they get sick. Build-up of fertilisers in the soil can lead to serious declines in plant growth and reduced harvests. A high concentration of fertiliser in water-bodies causes excessive growth of aquatic plants. The decomposition of
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aquatic plants reduces the level of dissolved oxygen in the water, leading to the death of sh and other aquatic life-forms, which are dependent on dissolved oxygen. Activities that Result in Environmental or Health Impacts: Use of inappropriate types of fertiliser Too frequent application, or in excessive concentrations Application under windy conditions, or when it is raining Application, when not wearing appropriate protective clothing Harvesting crops too soon after fertiliser application Washing spray equipment in water bodies Inappropriate storage or disposal of unused fertilisers
Pesticide Use
Risk from Chemical Pesticides It has been estimated that over 1.5 million people are poisoned by pesticides each year, primarily as a result of improper transport, storage, application and disposal procedures. On an average, over half of the pesticide applied is lost to the atmosphere as an aerosol and can travel over long distances. The remainder can accumulate and contaminate crops, soil and water. In low retention soils pesticides can leach to the ground water. This can lead to health risks for both humans and livestock. There are a number of persistent and broad based pesticides, which are generally banned, however, which may be available in Vietnam. It is also possible that unauthorised pesticides may be available, i.e. those that are contaminated or have gone beyond the period of safe use.
Activities that result in Environmental or Health Impacts: Improper storage, application and disposal procedures Failure to wear appropriate protective clothing Using banned or unauthorised pesticides Using old pesticides containers for storing food or water Improper disposal of dead birds affected by pesticides Discharging excrement into local drinking sources Improper storage and disposal of antibiotics
Artisanal Fishing
Unsustainable Fishing Practices Artisanal shermen usually operate from small coastal communities using small, open boats that stay close to shore. They tend to use traditional methods, but are not opposed to applying new technologies. Competition among shers is keen and as stocks become depleted there is growing pressure to use alternate, more effective, harvesting methodsirrespective of whether they are legal or not. Micro credit loans may be used to buy illegal
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equipment materials and supplies, such as nets with a mesh size that is smaller than legally permitted, explosives for underwater blasting, chemicals (cyanide) to kill or paralyse sh and equipment for harvesting coral. Loan ofcers may be aware of these types of practices and can take account of such knowledge while appraising loan applications. Activities that Result in Environmental or Health Impacts: Using illegal harvesting equipment or practices Harvesting protected or endangered species Fishing in protected areas, or during closed seasons Fishing more than the catch size allowed by quotas
Aquaculture
Impact of Aquaculture Ponds and drainage channels are normally dug with machinery. Young sh are stocked at high densities and grown to commercial size as quickly as possible. High stocking often leads to diseases and the loss of all sh. Articial feed is used, as well as antibiotics to control disease, and chemicals to inhibit plant growth. Waste water and bottom sludge become toxic, and if not properly treated and managed, can contaminate local soil, water and marine resources. Inland or brackish water ponds require large amounts fresh water that may lower ground water tables. Properly managed ponds can be productive for up to 15 years, but some owners abandon operations and dig new ponds after only a few years.
Activities that Result in Environmental or Health Impacts: Destruction of man groves, or productive farmland Excessive use of articial feed, antibiotics and chemicals Release of untreated wastewater Inappropriate disposal of bottom sludge Excessive pumping of ground water Premature abandonment of existing ponds and digging of new ones
Food Processing
Impact of Food Processing Almost all types of food processing involve the production of organic waste from plants animals. They also use large volumes of fresh water. Depending on the specic activity, the waste may also contain pathogens, toxic chemicals and heavy metals. Direct human exposure to these wastes, or ingestion of contaminated food or water, may cause serious illnesses. When this waste decomposes in water it reduces the level of dissolved oxygen to the point where sh suffocate. The decomposing material also produces highly offensive odours. Organic wastes may also contaminate ground water and, in high concentrations, they can block natural drainage channels.
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Activities that Result in Environmental or Health Impacts: Location of facilities close to residential areas Inadequate odour control system Inefcient processing procedures Lack of hygienic, housekeeping practices Depletion of local fresh water supplies
Leather Production
Impact of Tanneries Leather production may cause health and environmental problems. The complete tanning of each tonne of raw hide requires about 50 cu. m. of water and produces about 340 kg of organic waste. The hides are boiled in water containing toxic chemicals (heavy metals and caustic soda). The boiling process produces unpleasant odours. When released, the resulting solid and liquid wastes can lead to serious health problems for workers and local inhabitants. Decomposition of the organic matter can deplete dissolved oxygen levels in local water courses resulting in death of sh and other aquatic life-forms. Processing skins of wild animals may reduce populations of endangered species.
Activities that Result in Environmental or Health Impacts: Location of tanning plant close to residential areas Inadequate containment and disposal of solid wasters Release of untreated waste water Inadequate control of odours Excessive use of ground water Processing of hides from wild animals
Manufacture of Bricks
Impact of Brick Making The unmanaged mining of clay and limestone for brick making causes an adverse environmental impact. Operations tend to concent6rate on natural deposits. Over time, the mining and disposal of waster products can visually degrade local landscapes, interfere with farming, alter water courses and increase erosion. Combustion gases from kilns also pose serious health risks to workers. When kilns operate near dwellings, the dust and combustion gases may lead to the development of respiratory diseases and reduce the quality of life for local residents. It is not uncommon for residents to complain about brick making plants in their communities.
Activities that Result in Environmental or Health Impacts: Location of facilities close to residential areas Lack of appropriate erosion control measures
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Improper disposal of solid wastes Inadequate control of dust and gas emissions Workers not using adequate face masks Depletion of trees from local forests due to increased fuel wood consumption by kilns
Ceramics
Impact of Ceramic Production Making ceramics involves heating hand formed objects made from a clay-water mix to high temperature in kilns heated using wood, coal, or electricity. Breathing clay dust over a long time can lead to serious lung diseases. Kilns release carbon monoxide and other toxic gases that can also put workers at risk. Following ring, glaze is applied to the objects for protection and colour. The chemicals used in glaze are normally in the form of ne powders, which are mixed together with water. These chemicals are highly toxic and may cause cancer if inhaled or released to the environment. Fuelling kilns can also deplete local wood supply sources.
Activities that Result in Environmental or Health Impacts: Poorly ventilated working areas Failure to wet-down pottery areas to control dust Not wearing proper face masks and protective clothing Improper storage, use and disposal of chemicals Failure to follow appropriate re protection measures.
For more information, see Environmental Assessment of Rural Credit Loans in Vietnam: Field Guidelines, made from assistance from the Canadian International Development Agency. It has been developed for use by credit ofcers in assessing environmental and health risks posed by rural credit loans.
2. Supporting Small Enterprises

Livelihoods involve economic activities. Most economic activities are organised in the form of an enterprise. Hence this section gives some useful tips about supporting enterprises, which often are an integral part of many livelihood support or promotion efforts. Some enterprises are involved in farm activities, while some are involved in non-farm activities. Enterprises can also be seen in: Production or Manufacturing: Paddy cultivation, pottery, weaving, readymade garment production, brick kilns Processing: Rice mill, atta chakki (indigenous our mill) Trade: General grocer, trader of clothes and readymade garments Services: Motor vehicles repairing, hair dressing, tailoring, tea stalls and restaurants.
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Enterprises are of various sizes. One of the common ways of classifying them in India is as follows: Tiny or Micro Enterprises: Mostly at household level, proprietary concerns, with investments up to Rs. 1 million7. Most of them are own-account enterprises hardly employing any persons outside the family, or Non-Directory Enterprises, with not more than ve workers. Small Enterprises: Mostly separate enterprise, proprietary or partnership concerns, with investments up to Rs. 30 million. Most of these are Directory Enterprises employing anywhere between six to twenty workers. Few of them can also be classied as Factories, employing more than twenty workers. Medium Enterprises: These are clearly identiable enterprises, owned by private limited companies, or in some cases, partnership rms with an investment up to Rs. 500 million in plants and machineries. Most of them are Factories employing more than twenty workers. Large Enterprises: These are also clearly identiable enterprises, owned by private or public limited companies with an investment more than Rs. 500 million in plants and machineries. Most of them are Factories employing more than twenty workers. While promoting, or supporting livelihoods of the poor, we mostly deal with the tiny or micro enterprises. But we often need to support Small Enterprises, which: Generate wage employment for the poor Supply inputs for the enterprises of the poor Utilise, or process outputs of enterprises run by the poor In this section we will focus on the support required by such small enterprises, in case our intervention calls for working with such enterprises. It may be useful to identify people in the area with some entrepreneurial bent. Entrepreneurs usually display some of the following characteristics: High Achievement Motivation: Usually would have achieved quite a few things in life and are proud of their achievements High Control Orientation: Concentrate on variables under their control. Such people also believe that many things are controllable. Information Seeking: They usually seek (and also give) information. Personal Efciency: Always attempt to improve their personal effectiveness Goal Setting: When taking up any assignment, they set very clear goals for themselves Problem Solving: Their attitude is to nd a solution to a problem, and not analyse it Creative: Many entrepreneurs are creative people Supportive on Inter-personal Front: They display a very supportive behaviour Risk Taking: They are often willing to try out new things
7
These classications change from time to time. The gures given here will give you some idea of the classication norms. For the exact, current classication limits please check with the District Industries Centre, or search for it at the National Information Centre website.
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The small enterprise promotion process goes through some typical phases: Desire Generation Phase: At this phase, the entrepreneur- mostly a rst-generation business-person makes up her/his mind to set up an enterprise Development of Idea Phase: At this phase, the entrepreneur decides on the enterprise to be set up, where it should be se-up, with what resources. Articulation of the Idea Phase: At this phase, the idea is documented, mostly in the form of a project report, which can be shared with others like bankers, the industries department. Resource Mobilisation Phase: At this phase, the entrepreneur mobilises various resources: men-material-money, from different sources, which may include informal sources like friends & relatives, and formal ones like nancial institutions, banks. Project Launching Phase: At this phase, the enterprise with its infrastructure and operating systems is set up. Establishment Phase: At this phase, the enterprise starts operating and becomes established as a business. In different phases an entrepreneur will have different requirements and may be in need to relevant kind of support, which may have to be extended to him. Support extended to small enterprises can be: Technical: At different phases, the entrepreneur may require different types of technical support. While developing the idea, s/he may require support in identifying alternate technologies, whereas during resource mobilisation s/he may need help with identifying the suppliers of various equipment, raw materials, services, and so on. The livelihood promotion agency needs to determine the stage of promotion of the identied small enterprise, and the nature of support required at that stage, to make necessary arrangements for the same.
Some Resources Needed for Setting up an Enterprise: Land, Building Equipment, Plant, Machinery Spare Parts, Repair Equipment Human Resources: Skilled, Unskilled Capital: For investment, working capital Raw materials, Consumables Support services Infrastructure for transport, water, power, storage Markets: Access to right markets
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Market: An entrepreneur may require support in identifying the specic market, assessing the demand during the idea development phase, while s/he may need support in developing the channels, pricing and aligning with the trade practices during the project launching phase. In this case too, the livelihood promotion agency needs to determine the stage of promotion of the identied small enterprise, and the nature of support required at that stage, to make necessary arrangements for the same. Finance: The entrepreneur may require support in drawing up the nancial projections during the phase of articulation of the idea and development of a project document. S/he may also benet from advice on identication of suitable sources for the different resources that may be required. While at the establishment phase, s/he may need some guidance in funds management or inventory management. Compliance: The entrepreneurs of small enterprises, lacking the means to hire or retain experts on myriad legal, statutory topics, would benet from some inputs related to compliance requirements. Some guidance about her/his obligations related to Sales Tax, Income Tax, Excise Duties, Labour laws, Shops and Establishment regulations would be of great help. Most it may be required during the project launch phase or in the establishment phase. During each of these phases, the entrepreneur is required to undertake different sets of actions. For example, during the phase where ideas are developed, the entrepreneur should get clarity on ideas, discuss them with people having some experience, study relevant literature, statistics on the selected activity. During this phase, the promotion agency can help them in rene ideas, point out relevant literature and data sources, arrange meetings with practitioners and evaluate ideas and help select the best among them. The nature of support required by these enterprises will never be uniformly the same. Different enterprises would require different kinds of support services, depending on the nature of the industry, the type of the economy and specic groups of entrepreneurs targeted. The following form, when lled in consultation with some potential entrepreneurs will help crystallise ideas about the type of support required by these selected enterprises. [Some boxes in this table have been lled up (italicised) to illustrate how to ll them. Please clear the lled in content, before using the form].
Small Enterprise Support Assessment Sheet

Industry or activity for which small enterprise needs support What contribution is expected from LPO in livelihood support Number of such enterprises required to be supported
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Expectations from entrepreneur Desire Generation - Set long Phase term objectives - Identify interests - Assess resources Development of Idea Phase - Look for details on activity: read literature, talk to practitioners Write up the proposal
Services expected from support agencies Technical Marketing Finance Help appreciate implications of nancial obligations incurred and possible nancial sources Compliance None
Help identify Help assess demand specic technologies that can be used for the proposed rm
Exposure to alternate technologies, including collection of literature Review the draft proposal and give feedback
Exposure to alternate markets and agencies that can help in marketing
Articulation of the Idea Phase
Resource Mobilisation Phase Project Launching Phase Establishment Phase
Major Pitfalls
There are seven major pitfalls facing small enterprises: Excessive or exclusive dependence on one buyer: Often small enterprises are promoted as a supplier or service provider of a larger enterprise. In the process it becomes attached to the larger rm for all its transactions. As a result, the small enterprise becomes vulnerable to the vagaries of the business of the large rm and/or its relationship with them, which can be risky and potentially dangerous. Inadequate attention to working capital management: Often capital layouts are made without planning adequately for working capital. As a result the entrepreneur ends up using all her/his money and has nothing left for working capital. This often forces the
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entrepreneur to borrow from the expensive, cash market. This, may at times, force the entrepreneur to use poor quality materials, to generate enough `cash to service the loan. Doing business `informally: Often business being small, transactions are done informally. This is also encouraged by a not-so-favourable tax regime. Appropriate records are not maintained. This often becomes a major block in the way of growth of the small enterprise. As the books do not reect the actual size of the business, it becomes difcult for the entrepreneur to access formal nancial institutions at a later stage. It also does not allow them to build the image of the products and services. Spawning too many rms: Small enterprises also often do business under many names, registering multiple rms. Some do this to help them manage their taxes and thereby offer a competitive price in the market. But this also hampers the growth of the `enterprise. It does not allow building a brand image. The enterprise gets stuck at a low level of equilibrium. Unrealistic project planning: In order to mobilise resources quickly people often make unrealistic project proposals. Sometimes due to inadequate writing skills they engage `third parties to write project proposals, which do not accurately capture the design and intent of the business. As a result some of the things projected in the business plan do not work out on the ground. Inability to understand the needs of the consumer: Often entrepreneurs focus only on the production system, without paying attention to what their customers actually want. When everything is going ne, it does not hit the small enterprise. But with increased competition, or with changes in the priorities of the customers, the enterprise is suddenly left high and dry. Hiring employees for reasons other than competence: Often small enterprises hire people for variety of reasons other than competence. This is also often compounded by their inability to pay for the specic skills that they require. But this never helps. For more details on this and other related areas, please refer, How Not to Ruin your Small Enterprise, by Sanjiv Phansalkar
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A Resource Book For Livelihood Promotion - 3rd Edition

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A Resource Book For Livelihood Promotion - 3rd Edition

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k o o B e c r A Resou for

Second Edition: April 2004 (Revised and Enlarged)

Second Reprint Edition: August 2005

Third Edition: November 2009

Price: Rs. 600/- (Including a CD)

Sankar Datta Dean, The Livelihood School October 2009

BAIF BCU BMCUs BPDP BVS CAPART

CBO CDA CDF CMG CRS DHRUVA DPAP DPIP

DPSL DVC EC EDII EGS

A Resource Book for Livelihood Promotion

A Resource Book for Livelihood Promotion

A Resource Book for Livelihood Promotion

A Resource Book for Livelihood Promotion

How to Use This Resource Book

Module 1 helps understand what is meant by livelihoods

Module 2 helps understand how livelihoods can be promoted

A Resource Book for Livelihood Promotion

Module 3 gives a framework

Module 4 familiarizes readers with some tools and techniques

Expected Learning from this Resource Book

A Resource Book for Livelihood Promotion

A Resource Book for Livelihood Promotion

A Resource Book for Livelihood Promotion

1.2 Why Promote Livelihoods?

1.3 What is Livelihood Intervention?

A Resource Book for Livelihood Promotion

1.4 Evolution of Livelihood Promotion Efforts in India

A Resource Book for Livelihood Promotion

A Resource Book for Livelihood Promotion

A Resource Book for Livelihood Promotion

Credit Provider Input Supplier Output Processor/ Marketer

Research & Training

A Resource Book for Livelihood Promotion

3. Types of Livelihood Interventions

Fig 2: Types of Livelihood Interventions

Bastar District, Chattisgarh

End-to-End Tendu Leaf Processing

Credit for Agriculture, Trade and Arts

A Resource Book for Livelihood Promotion

3.1 Spatial Interventions

The Forgotten Sector by Fisher and Mahajan

A Resource Book for Livelihood Promotion

A Resource Book for Livelihood Promotion

A Resource Book for Livelihood Promotion

Amount spent within the economy 20.0 4.0 0.8 0.16

Amount spent outside the economy 80.0 16.0 3.2 0.64

3.2 Segmental Interventions

A Resource Book for Livelihood Promotion

3.3 Sectoral Interventions

A Resource Book for Livelihood Promotion

3.4 Holistic Approaches to Livelihood Promotion

Fig 3: The Livelihood Triad

Financial Inclusion Services (FINS)

Agriculture / Business Development Services (Ag/BDS)

A Resource Book for Livelihood Promotion

4. Understanding Income of a Household

Fig 4: Factors that Need Balancing to Enhance Household Income

Income Portfolio Diversication

A Resource Book for Livelihood Promotion

4.1 Livelihood Promotion at the Household Level

A Resource Book for Livelihood Promotion

4.2 Enhancing Income from the Main Livelihood Activity

Annual Report 2008