The Impact of Extension and Ecosystem Services on Smallholders’ Credit Constraint.

On formal credit markets, access to formal credit and reasonable credit terms of smallholder farmers
in rural sub-Saharan Africa is limited due to adverse selection. Financial institutions operating in
rural areas often cannot distinguish between borrowers (farmers) that are creditworthy and those that
are not, thus, allocate limited resource to agriculture to reduce credit risk. In the presence of limited business quality signaling by smallholder farmers, financial institutions shall demand for collateral and/or offer unfavorable contract terms. Moreover, agricultural productivity of rural sub-Saharan
Africa, dominated by subsistence or small-scale farmers, is also negatively impacted by the adverse
effect of climate change. A strategy that may make the farming practices of smallholder farmer’s
climate resilient and profitable may also improve smallholder farmer's access to formal credit. This
study investigates to what extent participating in ecosystem and extension services (EES) programs
signals business quality of smallholders, thus granting them credit accessibility. We collected data
on 210 smallholder farmers in 2013, comprising farmers that receive payments for ecosystem
services (PES) and farm management training from the International Small Group Tree Planting
Program (TIST) Kenya to test the aforementioned theory empirically. We use game theory,
particularly a screening and sorting model, to illustrate the prospects for farmers with EES to access
formal credit and to improve their credit terms given that they receive PES and banking services
training. Furthermore, the PES’ long term duration (10 – 30 years) generates stable cash-flow which
may be perceived as collateral substitute. Results suggest that smallholder farmers in the TIST
program were less likely to be credit constraint compared to non-TIST farmers. Distance to market,
education, livestock and farm income are factors that determine access to credit from microfinance
institutions in rural Kenya. Amongst farmers that have obtained loans, those keeping business records
enjoy more favorable formal credit conditions. These farmers were observed to pay ca. 5 percent less
interest rate in microfinance charges. For TIST farmers, this type of farm management practices may
be attributed to the banking services and other training they receive within the program. While the
availability of classical collateral (farmlands) and PES may reduce interest rate, the latter was found
to be statistically insignificant. This research underlines the importance of an effective extension
services in rural areas of developing countries and the need to improve gains from conservation
agriculture and ensuing PES. The benefits associated with EES and PES may encompass agricultural
financing.

Participation of Smallholders in Agroforestry Agri-Environmental Scheme: A lesson from the rural Mount Kenya region

The likelihood of smallholder farmers not participating in agroforestry agri-environmental schemes and payments for ecosystem services (PES) may be due to limited farmland endowment and formal credit constraints. These deficits may lead to an ‘exclusive club’ of successful farmers, which are not necessarily poor, enjoying the benefits of agri-environmental schemes and PES although agrienvironmental schemes and PES have been devised as a means of fostering rural sustainable development and improving the livelihood of poor smallholder farmers. Smallholder farmers in parts of rural Kenya continue to enroll in ‘The International Small Group Tree Planting Programme’ (TIST), an agri-environmental scheme, promoting agroforestry, carbon sequestration and conservation agriculture (CA). The question remains if these farmers are really poor? This study examines factors that determine the participation of smallholder farmers in TIST in parts of rural Kenya. We use survey data compiled in 2013 on 210 randomly selected smallholder farmers from Embu, Meru and Nanyuki communities; the sample consists of TIST and non-TIST members. A random utility model and logit regression were used to test a set of non-monetary and monetary factors that influence participation in the TIST. The utility function is conceptualized to give non-monetary factors, particularly the common medium of communication in rural areas – formal and informal – a central role. Furthermore, we investigate other factors (incl. credit accessibility and interest rate) that reveal the nature of farmers participating in TIST. The findings suggest that spread of information via formal and informal networks is a major driver of participation in the TIST program. Furthermore, variables such credit constrains, age and labour supply positively correlate with TIST participation, while for education the opposite is true. It is important to mention that these correlations, although somewhat consistent, were all found to be weak. The results indicate that participation in the TIST program is not influenced by farm size; therefore we argue that the TIST scheme is NOT an ‘exclusive club’ comprising wealthy and successful farmers. Older farmers’ being more likely to join the TIST is an argument for their long- rather than widely assumed short-term planning horizon and a new contribution to the literature. Given the importance of poverty alleviation and climate smart agriculture in developing countries, sustainable policy should strengthening the social and human capital as well as informal networks in rural areas. Extension services should effectively communicate benefits to less educated and credit constrained farmers.

Sources of patient knowledge and financing of cataract surgery in rural China: the Sanrao Study of Cataract Outcomes and Up-Take of Services (SCOUTS), report 6.

AIM: To study patient sources of knowledge about cataract surgical services, and strategies for financing surgery in rural China. DESIGN: Cross-sectional case series. METHODS: Patients undergoing cataract surgery by local surgeons in a government, village-level facility in Sanrao, Guangdong between 8 August and 31 December 2005 were examined and had standardised interviews an average of 12 months after surgery. RESULTS: Of 313 eligible patients, 239 (76%) completed the questionnaire. Subjects had a mean (SD) age of 69.9 (10.2) years, 36.4% (87/239) were male, and 87.0% (208/239) had been blind (presenting visual acuity < or = 6/60) before surgery. Word-of-mouth advertising was particularly important: 198 (85.0%) of the subjects knew a person who had undergone cataract surgery, of whom 191 (96.5%) had had cataract surgery at Sanrao itself. Over 70% of subjects (166/239) watched TV daily, whereas 80.0% (188/239) "never" read the newspaper. Nearly two-thirds of suggestions from participants (n = 211, 59.6%) favoured either TV advertisements or word-of-mouth to publicise the programme. While the son or daughter had paid for surgery in over 70% of cases (164/233), the patient's having paid without help was the sole predictor of undergoing second-eye surgery (OR 2.27 (95% CI 1.01 to 5.0, p = 0.04)). DISCUSSION: Strategies to increase uptake of cataract surgery in rural China may benefit from enhancing word-of-mouth advertising (such as with pseudophakic motivators), using television advertising where affordable, and micro-credit or other programmes to enable patients to pay their own fees, thus increasing uptake of second-eye surgery.

Getting Close to the Action: The Micro-Politics of Rural Development

This article identifies and positions micro-politics within rural development practice. It is concerned with the hidden and subtle processes that bind groups together, including trust, power and personal perceptions and motivations. The first section of the article provides a theoretical context for micro-political processes which reveals subtle distinctions from social capital. The section following describes the ethnographic approach that sets the methodological framework for the research. The findings reveal how micro-political processes manifest in a rural development group affect norms and relations both positively and negatively. Finally the causes of and factors affecting micro-politics are considered before concluding with a discussion on how micro-politics may be managed in rural regeneration.