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A Decentralist Approach to Development

Article for Peace News on the programs of the International Independence Institute.

It is axiomatic that peace and justice must go hand in hand. While some will contend that one must come before the other, it is clear that we cannot have very much of either one without the other. When it comes to the problems of development, the issue of justice seems to have the primary force. Yet it is clear to everyone involved that in spite of all the efforts being put forward, no progress in righting injustice of poverty on a world scale is being made. The rich get richer and the poor get poorer. Not only is this true between the rich nations and the poor nations, but within the rich nations and within the poor nations the disparity grows as well. Moreover, it has become commonplace among workers in development to recognize that most of the efforts at development are only increasing this disparity. This is seen clearly in the “green revolution” which is making big farmers richer and small farmers poorer in India and other southeast Asian Nations.

The major cause of this disparity is generally coming to be recognized as a result of one or more of the following key factors:

  1. Maldistribution of basic resources (land, capital, etc.);
  2. Lack of credit (or usurious interest rates where available at all);
  3. Technology, overemphasis on high technology which can only be utilized by the relatively rich (i.e. Green Revolution), and lack of improved low, or intermediate technology.

While the first factor (maldistribution of resources) is fairly obvious, the other two factors are not always so obvious. Westerners often forget that nearly sixty percent or more of the world’s population consists of mostly small farmers or rural people (even in the U.S.) who have virtually no access to credit – at least low cost or reasonably priced credit (i.e. credit union rates of 12% per year). Nor do these farmers have access to a technology which can benefit them. Most of the financial benefits of our “high” technology (machinery, fertilizers, new improved seeds, etc.) goes to the big farmers, or in the U.S., to the corporation farms, which also benefit from the tremendous subsidies provided by governments.

Most radicals, however, tend to concentrate on the first factor to the virtual exclusion of the others, believing that unless the first is accomplished through a socialist revolution (violent or nonviolent) of one kind or another, neither of the other problems can be adequately dealt with. This conclusion doesn’t take the following considerations into account.

  1. Such a revolution depends often upon increasing the feelings of nationalism and militancy of the underdeveloped world. Considering the threat to peace which nationalism, even in Russia and China, has brought to the world, can we advocate such policies with equanimity?
  2. Without disagreeing that the emphasis needs to be placed on maldistribution of resources it is also true that through selectively choosing those places where social institutions provide a supportive structure, credit can be provided to small farmers, or changes in technology made which will make a decisive difference in bringing about change and development. If one is advocating nonviolence (or even if one is not) as a method of basic change, it is important to provide the small farmer or peasant with a realistic program which provides him with real help, rather than only future hope.
  3. In some places nonviolent change has brought about redistribution of basic resources (the Gramdan movement is the outstanding example) but has not been able to significantly decrease the disparity of rich and poor, partly because credit and improved technology [sic] have not always gone hand in hand with land redistribution. A peasant may find himself with land, but if he lacks the means with which to soundly develop the land, he is not much better off than without the land. Land reform programs generally suffer from lack of adequate credit to realize their potential.
  4. Even where national revolutions are successful they often falter or fail because grassroots organizing and alternative decentralized structures for credit and community development have not adequately been created.
  5. There are many places in the world where national revolutions, even if we wanted them, are not likely to take place for years and years to come – perhaps never. This is particularly true in the “developed” western countries. Yet many people in these countries also need (and want) the same kind of basic development.

If I seem to be emphasizing the economic development side it is not because of a Marxist bias, but rather because I do not believe that a vague concept of “community development” or “people development” is sufficient. We must be very concrete and specific. I do not think we can separate community development from specific economic institutions. It is naive to think that community development can take place where no hope or alternative is posed to the present concentration of land ownership in a few hands (for example in Vietnam) or where all credit is controlled by a few money lenders or merchants who charge up to 400% interest (this is true in parts of the Phillipines with which I am familiar. “Normal” interest rates in S. America or India to small farmers are between 40-50%.)

In order to act, rather than merely talk about such problems, we set up the International Independence Institute (I.I.I.) a few years ago and we, in turn, helped to establish a small fund to experiment with some ideas about:

  1. bringing credit to the small farmer in undeveloped countries and
  2. establishing the equivalent of the Gramdan program in U.S. or other western countries.

Since we had very few funds but rather specific ideas about what could be done, our role has been to catalyze a process, and to join with other nonprofit or voluntary agencies in helping to bring about this process.

Credit Program

In Mexico we joined with Farm Centers International (FCI), an organization with similar ideas about credit to small farmers. Beginning with a fund for credit of only $3,600 which brought credit to 90 farmers the first year, the fund has expanded in four years to reach almost 2,000 farmers this year. Farmers are organized in groups of 10 – 20 to receive credit for fertilizer, seed, chickens, pigs (no cash loans are given) through stores and warehouses established by FCI. Salary of the store manager is guaranteed for the first year, but after that the management and ownership is turned over to him (or to a local cooperative of farmers) to be run as a local enterprise. Technical assistance is continued but FCI moves into another town or region to initiate the same process.

With enough funding, such a process can proceed at an exponential rate and include an entire region, or several regions in a relatively short period. To date in this pilot project we estimate less than $50,000 will be nonrecoverable, and in the future, if the initial investment is large enough and over a long enough period of time all funds are recoverable (or on a revolving fund basis). This would not necessarily include all administrative costs, since we would expect to depend upon various existing voluntary agencies which could carry much of the administrative work as a part of overhead already in existence. For example we have recently initiated another credit program on the island of Floras in Indonesia, where we will depend upon selected members of a Catholic order to carry on the administrative work– at least during the initial phase. An unusually creative man, Biship Van Bekkum, who has spent 34 years on this island, has initiated this program. He had already helped form credit unions but had recognized their limited usefulness in a place where the average yearly income is only $30 per year.

While there are many existing revolving loan fund programs including credit unions among small farmers, some of which are very successful, we suspect that this program may be unique in one or more of the following ways:

  1. Credit is granted to small farmers or cooperatives only on the basis of productions needs (fertilizer, seed, etc.)
  2. Trained supervision is provided for all loans.
  3. Credit is granted in the form of commodities (fertilizer, seed, etc.) only – not in cash.
  4. Credit is granted by a carefully selected committee which advises a store manager who is in charge of sales.
  5. Store manager is paid out of returns realized on the sale of commodities furnished by the store, which may or may not be run as a cooperative.
  6. A sponsoring organization which trains store managers and other personnel, provides the initial administrative overhead and cost until each store becomes self-sufficient.
  7. Farmers sign up for credit in groups of ten or more, each underwriting or guaranteeing the loan of the others (same as co-signing in a credit union).
  8. Funds are provided through an international investment pool, which loans the money to purchase the inventory in the stores on a non-profit basis. (For this purpose we have established the International Foundation for Independence with headquarters in Luxembourg.)

It is not our assumption or contention that such methods will work equally well in any part of the world, but we are convinced that there are many places where they can and should be tried. Perhaps of crucial importance is the training, experience and quality of the people who are immediately involved in the field work. Obviously a great deal of commitment [sic] is also needed, but I am convinced that many people in many parts of the world, and many of them already involved in social movements, or voluntary agencies are capable of such committed work. For them the satisfaction involved is knowing that they are helping to build permanent, long range institutions for change which do not depend upon charity “not just to be granted as children, but freedom in arranging their own budget” (Bishop Von Bekkum from Indonesia).

If I may quote a little more from Bishop Von Bekkum’s letters from Indonesia:

…..”The credit system brought the first group (Borong) by their act of screening to a social decision: the peasants excluded in their individual secret screening all other groups; they demonstrated very clearly that they wanted to stay together as peasants only” …..”Last December there was another case of peasant solidarity. After three weeks of negotiating, the hope of the peasants and the participating officials in the division of land has been fulfilled; every member of the 1,500 farmer cooperative received his allocated hectares. This was the first time; it will strengthen the peasant world in their attempts to protect themselves and to increase the economy. A well organized production credit system could help to strengthen this spirit of solidarity”

…..”When I read about the hundreds of proposals, articles and books to help the so-called ‘Third World’, it seems to me, they talk too far away from the sources of development: man and his mental and physical power; man and his ability to make useful means of his environment, with the implied and necessary accompanying subsidy. Most of them start with large amounts of this subsidy as a condition at the beginning. We hope that this small amount of $400 (for the first loans) will be of decisive importance.”

Land Reform In U.S.

Finally, a word about our efforts to develop a land reform movement in U.S. based (at least in part) upon the concepts of the Gramdan Movement in India. As a first pilot program we have helped a group (mostly black) in S.W. Georgia to acquire 5,735 acres of good farm land. All of this land will be held in trust by New Communities, Inc., a nonprofit corporation established for the purpose of “providing land to small disenfranchised farmers, who otherwise would have no choice except to starve in rural isolation, or migrate to the ghettoes of the cities”. Land is leased to settlers according to a concept we now call the “Community Land Trust”. The concept of resettlement is to build a “Rural New Town” where 800 or more families can be resettled in three or more town clusters. Instead of numerous small farms, there would be a large, co-operative farm.. This, however, would employ a small percentage of the residents. Some will be employed in industries related to farm production (tree and plant nursery, peanut processing, etc.), some in service work, including schools, health, and recreation; others in light industries which may locate in an industrial park. Individual families will live in individual houses in the town clusters on land which will be leased from New Communities, Inc. on a long term (99 year) basis, as will all the land. There will also be a larger town center and a cultural center.

The community land trust concept, however, is not tied to the concept of a rural new town. In Maine, for instance, we have just begun to develop a trust which may hold land, perhaps small parcels, in different parts of the state. Whatever form it takes, the Trust is designed to accomplish the following:

      • a direct action approach to land reform which, we believe, goes beyond traditional land reform in that it is a permanent solution to the land problem, decentralist in its approach, and not dependent on government action;
      • a democratic vehicle of community control over natural resources to ensure they are used in ecologically sound ways, to benefit the larger community and future generations;
      • a means whereby poor people and small farmers can gain (or retain) more secure use-rights over land and resources;
      • a channel for land gifts by individuals, corporations, and government bodies that desire to ensure that land is used to meet human needs while at the same time avoiding tax responsibility or the responsibility for possibly unsound subdivision, development, or exploitation;
      • a way to facilitate new town development which residents of all income levels can afford, and in which community-generated values are retained to benefit the community rather than a few individuals;
      • an umbrella which could provide a new dimension to urban and rural communes and homesteader communities in terms of historical significance and practical considerations… integrity of the land is better protected than is possible through deed restrictions (since the land is never deeded) new possibilities for financing are raised… is more secure since leased land cannot be foreclosed or seized to satisfy financial claims against individuals or groups using the land.

The Institute has just completed a book “The Community Land Trust Guide“, subtitled, “A new approach to land tenure in U.S.”. We are hoping that the book and the models (in Georgia and Maine) which we are helping to establish, will become important concepts to challenge the commune movement in U.S. and the movement towards land reform. The latter has become especially intense in California where the rapidly growing “National Coalition for Land Reform” has been formed. At present the coalition is mainly concerned with legislative approaches, such as the enforcement of the 160 acre limitation on farm land in California which uses federally supplied water, as specified by the Reclamation Act of 1902.

We are hoping that through establishing such models, we can broaden the interest in land reform to establish new institutions (Community Land Trusts) with permanent, long range goals.


Publication By

Robert Swann

Robert (Bob) Swann was the founder of the E. F. Schumacher Society, now the Schumacher Center for a New Economics. In 1974 E. F. Schumacher asked Robert Swann to start a sister organization to his own Intermediate Technology Development Group, but it was not until 1980, when prompted by Resurgence editor Satish Kumar, that Swann organized the E. F. … Continued

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