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Writer's pictureDeveloping Perspectives

The Problem of Incentivisation in International Aid

Updated: Jan 15, 2019


By Yoshihiro Takata.

The avenue of Baobabs, clear beautiful shiny seas, the island of Lemurs…

Madagascar is a land of abundant and bountiful nature; however, the life of its citizens tells a very different story. This blogpost examines the problems that arise when international aid is involved in the development of a country.


Farmers generally cultivate a field only with traditional tools, such as shovels and ox pulled plows.


Despite its abundant nature, Madagascar is one of the poorest countries around the world. About 78 percent of its population lives below the absolute poverty line of $1.90/day and it is ranked the 9th lowest country on the MPI. The agricultural sector consists of about 75 percent of the total employment even though it contributes only 24 per cent of total GDP. Agriculture in Madagascar is extremely inefficient and not mechanised at all. In fact, farmers are generally poor. Almost all small or medium size farmers still use traditional manual tools in any kind of farm work, such as cultivating or weeding their field.


From 2016 to 2018, I worked in Madagascar for the Japanese International Cooperation Agency (JICA). My mission was to introduce small manual agricultural machines to farmers not only by promoting or selling them but also training people who make these kinds of machines to ensure agriculture is more efficient. Then I was assigned to the national training centre of agricultural machinery, in which they had a factory to produce those machines. A lot of donors have been trying to tackle the situation of agriculture in Madagascar and many of them succeeded. For instance, JICA have been working on the project of improving rice productivity since 2009, which made about 1.5 tons increase of rice harvest per hectare in a model field by 2014. However, implementing projects frequently comes with many problems.



Problems in Program Implementation


To achieve my mission, firstly I started doing market research, and pricing was identified as a main problem. Our other competitors’ products in the market were too expensive for normal farmers, who own only 0.5 ~ 2.0 ha rice fields and cannot afford to make certain investments. These products were not affordable and cost-effective for them. During the marketing research, I did many demonstrations of small machines in villages or small farmer communities, and most of the farmers were really interested, until I told them the prices. Thus, these products had to be cost-effective, which means improving quality at the same price, or discount its price at the same quality. Since I was working for a national organization, it was not feasible to discount its price without permission from the Minister of Agriculture. Therefore, while quality improvement activities in my centre were carried out, I started training programs for local artisans to reinforce their technical skill and sales force. Almost all small or middle size artisans in my province were also poor. Therefore, this program had the possibility to achieve improvement of both quality of life of artisans and farmers. 


There should be competitiveness in the market to improve quality and reduce price of products. In other words, more artisans who can make small machines were needed. The training program had two parts, one for marketing and another for technical training. In the marketing part, for instance, we had lectures concerning the importance of research of market price and preference, how to approach merchants to know market information or how to decide timing to sell their products with the peak of the market price, etc. During meetings, participants could learn how to decide their price or the variety of products they made. In latter parts, based on results of marketing, they decided which adjustments they needed to make to their products and product range. For example, if the marketing training had shown a demand for weeders, the technical training provided the artisans with the knowledge of how to build a weeder, thus expanding their portfolio in key ways.


An important point was the autonomy given to the artisans. My colleagues and I provided tools (marketing or technical skills) but ultimately, the artisans themselves had to decide which product they would produce. Furthermore, competence was also a key point for them to keep improving their products or sales after they completed the program. If they would succeed in increasing their sales and income with these two elements, they could achieve self-esteem and self-realization. Sometimes poor people lack confidence. They think they are desperate or miserable and cannot do anything without help from aid agencies or the government. If you help them get information and give them a little push to do something by themselves, they can dramatically change their lives. I think this strategy to help poor people is fundamental. 


An important point was the autonomy given to the artisans. My colleagues and I provided tools (marketing or technical skills) but ultimately, the artisans themselves had to decide which product they would produce.

At the start of this program, orientation meetings were held in five districts in my province. As a result, only ten artisans decided to be in this program although there were over 60 people in the meeting. I assume they had many reasons not to join, but one key reason might have been related to the lack of allowances. Allowance is generally distributed to participants depending on how many days they attend a training program or project by international aid. There may be two reasons to distribute it. One is to compensate their income per day because they cannot work while they take part in the program. Another is to achieve a greater number of participants in projects. It is important for aid projects to collect a certain number of participants even if participants do not continue their activity after finishing the project. Hence, my colleague and I decided not to give participants anything apart from transportation fees, lunch, and technical support sessions because our program was expected to stay longer in artisan’s economic activity. And I stressed upon the fact that autonomy and competence could be threatened by allowances, which might replace better incentives to participate in the program. Indeed, a prior JICA-led technical training program had used allowances as incentives to teach artisans how to make new machines. Today, almost all participants have stopped producing said machines, proving how limited the success of the allowance-incentive program was. To make matter worse, since the World Bank had done the same kind of training program for artisans decades ago, artisans knew that foreign aid projects or programs give them money. Fortunately, all ten artisans who decided to join our program completed the entire one-month training. They were really motivated because they decided by themselves to invest their large amount of opportunity cost to increase their sales. Some of them succeeded in selling new products in local market after finishing their training.


Technical training for artisans in a factory.


Lessons Learned


I learnt some lessons from this experience. First, aid projects cannot be their own purpose. Rather, they should be the means to an end. Projects are just a tool to help poor people escape poverty. The quality of the program is much more important than the number of participants. Allowance-schemes often run the risk of making participants more passive towards improving their life, becoming dependent on international aid. Second, autonomy and competence are crucial elements to make activities sustainable. If participants decide and succeed by themselves, without coercion, their activity to improve their lives will be more sustainable because they know how to manage problems. I assume that the main job of international aid is to help and motivate participants to move forward.


I learnt a lot from my experience in Madagascar. Farmers, artisans, and local people always helped me and worked together with me. I believe there are many people really motivated to improve their life even if they are ‘poor’. I assume true international cooperation is not to implement projects with top-down approach but to work and struggle together for better life with local people. I am convinced that all aid would be successful if donors would trust local people and act with respect for local contexts. 


 

By Yoshihiro Takata





Yoshihiro Takata is from Japan and was volunteering for the last two years in Madagascar as a Japanese official volunteer after his experience in international sales in a Japanese heavy electric machinery company. His main mission in Madagascar was to improve productivity of rice harvest by promoting small agricultural machines to ordinary farmers. Yoshihiro is currently studying MA in Poverty and Development at IDS.

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