We had a much stronger turnout for the Mutuelle meeting at Narabuye than at Mudende. We did our schpiel, and then Elie translated for me as a local official explained several government policies.
Two policies in particular piqued my interest...
Umudugudu
Under the Umudugdu (Village) policy, rural citizens will be given a 20m by 25m plot of land within a village to construct a house. These villagers will relocate from their homes which are scattered across the countryside.
Homes in the fields.
Currently, these villagers live near their fields, but clumping will (hopefully) allow human and health services to be more easily delivered. These services include:
· Rural electrification
· Sanitation and indoor plumbing
· Communications infrastructure
· Local trade and commerce
· Closer access to health facilities
By moving closer together, individuals lower the marginal cost of all of these services/transactions. Additionally, to mitigate the switching costs, the government is giving advanced warning, including recommending that people do not invest in permanent homes until the villages are laid out. This policy has not yet been enacted and surveyors continue to plot the ideal locations for villages and homesteads within villages.
Though on the whole I think it is a sound idea , there are a handful of potential drawbacks to the policy:
- This policy will increase the monitoring costs for residents. Currently, it is easy to make sure no one steals your crops – you look outside. Now people will have to monitor their crops in some other way. Perhaps it will give rise to security services – this could be an important value add for a crop insurance program.
- It is unclear who will bear the switching/moving costs
- People here are really poor. If they have a good thing going where they live now, it sucks to force them to move.
Crop Specialization
The speaker next spoke about a crop policy the government is enacting. Going forward, people will only be allowed to grow particular types of crops in different regions. For example, some regions may grow maize while others potatoes and others wheat. The speaker told the people that at some point the government would be inspecting fields and tearing out plants that are not allowed to be grown in the region.
This drew a loud outburst from the assembled villagers. They did not seem to love this policy. My initial reaction was first-world, freedom-loving indignation. People should be able to grow whatever they want! But then I thought about it a bit:
Positives:
1. Encourages specialization
a. Hopefully, farmers will more efficiently grow one or two crops instead of 5 or 6.
b. This specialization should generate a net surplus of food, which will encourage trade and employment opportunities outside of farming
2. Encourages trade
a. People will sell the one type of surplus crops that they grow for cash and purchase a basket of other types of crops and goods and services.
3. Encourages the use of currency
a. Currently, one of the issues we face with Mutuelle (community health insurance) is that people use bartering instead of cash, and therefore have no way to pay for enrollment.
b. Trade will necessitate the use of money
Negatives
1. Ignores individual preferences / abilities
a. Hopefully government agronomists designated districts best suited for growing maize as maize districts and so on
b. Even so, there will be certain farmers that are currently better at growing some crops over others and areas of land within regions that are better suited for different types of crops than is designated based on region-wide characteristics. This will lead to sub-optimal use of land. (Though that is not to say that the land is currently being used more optimally.)
2. Will interfere with market function
a. Related to the first point, in a perfect system, market demand, field characteristics, and farmer abilities would determine the most profitable crops to grow in a particular field.
3. Several residents noted that they do not currently grow the crops designated for their region. Thus, they faced switching costs such as 1) learning how to grow the new crops and 2) buying the initial inputs such as seeds or crop-specific tools
4. Our nutrition program emphasizes, among other things, a balanced diet. While in theory it is great for farmers to specialize and trade, the policy might encourage “diet specialization”.
5. Crop diversification may help hedge risk. Farmers might plant different crops that are resistant to different disasters, like drought-resistance crops, pest resistant crops, etc. With specialization, a whole region can be wiped out by a particular crop disaster (think Ireland in 1848).
The policy will not be enforced for some time period, so people will have time to adjust. At its core, the crop policy assumes that the government will make better choices than local farmers. Given the low penetration of education among the rural poor, I’m not convinced that this is untrue.
Generally, it seems hard to know whether it makes sense to wait for an endogenous impetus to push such a large change or use the force of law to induce an exogenous shock. There will likely be a number of unforeseen consequences of both these policies, but the long term benefit may outweigh the short to medium term pain.
Over a long time horizon, the hope is that these policies together will encourage better access to human services, economic specialization, the development of a rural service sector, and, generally, economic development. These policies take a step in the right direction. However, in the short run the policies are likely to 1. provoke widespread non-compliance from the population and 2. create unintended and unforeseen complications for everyone involved. The successful implementation of these policies will depend on the government’s flexibility in reacting to these issues and strong monitoring and enforcement mechanisms.
I’ll keep watching, talking, and listening to people.
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