This is part of a series of think pieces by scholars and practitioners working on a broad range of issues within the field of Social and Solidarity Economy. The series is being published iin conjunction with the UNRISD conference “Potential and Limits of Social and Solidarity Economy”. The conference took place on 6-8 May 2013 in collaboration with the International Labour Organization and the UN Non-Governmental Liaison Service.
This think piece examines principles of the participatory economy (“parecon”, including fair trade and collective rights) to envision a social-justice-based framework that addresses the shortcomings of the current capitalist trading system, which largely excludes small-scale producers. Expansion of parecon relies on worker solidarity and shared, socially responsible values along the supply chain. Women producers play integral roles in sustaining agriculture, ensuring food security for their families and communities, and strengthening solidarity for a participatory economy. Initiatives from Sri Lanka and India offer evidence of the creation of parecon producer networks, yet further efforts could enhance women’s inclusion.
is an independent consultant focused on trade policy, intellectual property, extractive industries, and protection of land rights, biodiversity, and traditional knowledge. She has worked with the UNDP Asia-Pacific Regional Centre, UNDP Bureau for Development Policy, The North-South Institute, and Doctors of the World.
is a programme manager at The Asia Foundation in Sri Lanka. She specializes in the areas of trade policy, gender and human development. She has worked with the UNDP Asia-Pacific Regional Centre, UNOPS, as well as in the corporate sector.
Factors excluding small-scale farmers from global agriculture supply chains
Globally, 2.6 billion people
depend on agriculture for their livelihoods, with the majority living in poorer rural communities. Often overlooked in national policy making, small-scale agriculture is an important source of rural employment and staple food production. Small-scale farmers struggle to gain and maintain access to land, agricultural inputs and skill-enhancing training in order to secure their rights to food, livelihoods and decision-making power over land use and environmental sustainability. These farmers’ constrained access further impedes their abilities to demand a fair price for their produce, and lack of a guaranteed fair pricing system compounds problems of their poor wages and labour conditions.
Global trade reforms, trade-distorting subsidies
and restructured supply chains have resulted in a handful of corporations dominating the world’s agricultural production systems and controlling resources required for producing food, biofuels and other agricultural technologies. With corporate holdings changing land ownership there is a significant shift from community-based modes of agricultural production to more indirect, impersonalized, complicated and globalized systems. Buy-outs from larger agricultural firms and conglomeration of land holdings pose threats to small-scale farmers, who must then shift to working within larger agribusinesses or migrate for other employment, contributing to increased urbanization.
Women form an essential part of the agriculture sector in developing countries, as farmers and guardians of traditional knowledge. Their roles and responsibilities—from growing home gardens, to tending large-scale food crops, to managing and sharing seeds, to passing down knowledge on the medicinal, nutritional and environmentally resilient values of plants to future generations—help guarantee food security and maintain biodiversity. When land access changes and women move into larger agribusinesses they often work at lower wages; agribusiness capitalizes on current gender inequalities with dramatic consequences for household/community food security. Insufficient or precarious wages disrupt sustainable income for women and their families, exacerbating poverty conditions. When such practices become the norm, competition constrains employers’ willingness to pay fair wages.
Developing the agriculture sector to meet poverty reduction and food security objectives that translate into benefits for all requires envisioning an economic system with space for people—particularly those who are living in poverty, socially marginalized or otherwise vulnerable and disadvantaged—to become part of decision-making processes. An economic system that actively engages producers must endeavour to create positive social change that ensures true forms of democracy.
Making an economy more participatory
Can methods of production promote labour norms that remunerate according to intensity, talent, duration or participation? Workers who control and manage aspects of production form the basis of a participatory economy.
Buglione and Schlüter (2010) and Stiglitz (2009), for instance, note that a more balanced economy would utilize and strengthen cooperatives, mutuals, not-for-profits and other social enterprises. Worker-owners could participate in consensus-based decision-making and management processes, guided by principles that put workers first. Such an economic system would rely on strengthening small-scale farmers’ solidarity with similar efforts in order to build cooperative networks across borders and link to broader social movements.
Starting with small-scale farmers’ inclusion, a participatory economy (“parecon”) framework built on social justice includes the following principles.2
- Workers control and manage aspects of the production chain to form the basis of a participatory economy.
- Workers share visions of solidarity, mutualism, cooperation and sustainability.
- Workers participate in decentralized planning and decision-making processes that are proportional to the amount in which decisions affect them.
- Workers are remunerated according to their active contributions and sacrifice while ensuring fair living wages.
- Workers have a range of responsibilities, including those that optimize their skills and potentials; labour abuses cannot occur during production processes (dignified work).
- Workers are provided agreed minimum prices (floor prices3 ) on goods, usually above the market minimums.
- The participatory economic system ensures development and technical assistance via payment to the suppliers of an agreed social premium 4 (often 10 per cent or more than the cost price of goods).
- Workers can access market price information and credit when requested.
- Workers’ efforts encourage sustainable production, including use and creation of common goods (e.g., promoting organic farming methods and green technologies; Participatory Plant Breeding can encourage farmers to select varieties, manage crops and control seed supplies at local levels).
Several South Asian communities use some or all of these principles. By valuing these shared principles, workers can potentially overcome the divisive, competitive nature of capitalism, thereby opening up a range of possibilities for addressing current global crises, including food insecurity. Thus, a participatory economy relies on worker solidarity along the production chain, from the bottom-up, to truly transform our economic way of life into one organized to protect social justice and human rights (see Figure 1). Using these principles to build relationships within and across farming communities has the potential to compare practices while advocating pluralism (Miller 2010).
The framework shows that actors do not operate in isolation; rather their interconnectedness must be examined in any action or policy recommendation for each stage of the supply chain.
At the producer/farmer level, priority areas for policy change that would help transform their roles and engagement in the economy include access to technology, credit, information, knowledge about markets, and fair and equitable benefit-sharing. At the micro-level, producers can build on informal networks to share information about market prices, administrative procedures on market and credit access, and agricultural technologies.
At the next level, to formalize these practices, producers/farmers can establish associations/cooperatives.5
This would foster increased access to markets, credit, information, and technology as a result of their collective power and pooling of resources.
Worker-owned cooperatives could use their profits, after paying workers Fair Trade wages, to create social premiums. At this meta-level, social premiums or common pools can create a number of sites for other capital to get goods from farm to market: "dragon head" enterprises,6
auction centres, collection/warehouse centres, or expansion into community-owned enterprises. These sites could operate to improve famers’ skills and productivity, such as by being spaces to buy/sell goods, hold training, provide storage, or rent capital to other producers.
At a third level, producers/farmers engage with the domestic, regional, and global markets. The point of sale offers an opportunity to negotiate the floor price for agricultural goods (which then applies to international markets).
This conceptual framework is one way to envision aspects of a participatory economy taking place in South Asia in diverse forms. Parecon is one facet when working towards a social and solidarity economy (SSE). If these efforts are linked and shared among a network of similar producer societies, it may yield transformations at the macro-levels.
Parecon efforts in Sri Lanka and India
In Sri Lanka, while the agriculture sector employs over one-third of the labour force, it only contributes 12 per cent to gross domestic product. More than 650,000 farm families (about three million people) engage in smallholder paddy production, utilizing 500,000 acres of land—more than one-third of all paddy lands (Rural Returns 2013). Parecon tenets can be seen in efforts by Rural Returns, a
social enterprise working with small-scale, traditional rice farming communities to generate income sustainably.
The enterprise buys rice processed, packaged, stored and transported by the farmer groups which allows communities to keep profits from those activities. This method demonstrates returns going to entrepreneurialism and value addition, and incentivizes communities to increase their productivity in order to allocate increased social premiums into community-led development activities. The enterprise acts as an intermediary agent to help guarantee minimum floor price to farmers, so they do not depend on market price. It does not set a maximum price and purchases all their produce up-front. It also supplements farmers’ income by procuring warehouse facilities and transportation services from within communities. It helps organized groups of smallholders obtain Fair Trade certifications to improve their positions in the value chain (Rural Returns 2013).
Rural Returns promotes environmental sustainability by encouraging traditional rice varieties, specifically adapted for conditions such as flooding, poor soil, insects and changes in temperature. Traditional varieties form a rich gene pool, which enables breeders to isolate traits of resilience. Low-input smallholder rice farming can build an ecosystem of beneficial species as well as traditional knowledge, yet it is important to examine closer how breeding practices consult and include women.
The enterprise relies on women to make woven packaging and assists with branding/marketing. Women’s inclusion emphasizes their importance in the agriculture sector, develops other rural employment, and places a high value on their traditional knowledge, such as nutritional and health aspects of rice varieties. Yet women farmers’ participation in decision-making processes from inception of the enterprise’s projects to implementation in their communities could be further investigated to understand their roles in transforming local economies to be more participatory with equitably distributed benefits.
Future steps include helping communities purchase rice mills to incorporate them into processing aspects. Farming communities, often working on small and disparate plots of land, can come together to use nearby rice mills collectively. Rural Returns aims to create networks of “partner communities” around Sri Lanka. The networks form a logistical foundation to bring agricultural and other products to market. Communities benefit when the network then brings them additional knowledge, services, technologies and eco-/agro-tourism. Their formation contributes to building shared goals, strengthening solidarity with similarly operating producers, and broadening social movements in the region.
More examples of initiatives that include many of the parecon principles can be found in India. In these initiatives women are at the centre of activities in which they become social and economic agents, rather than seen as victims of strife, natural disasters and conflicts. Its agriculture sector employs almost 60 per cent of the population, with 72.8 per cent of women involved, compared to 48.9 per cent of men. Small-scale farmers make up 82 per cent of total farmers (FAO 2011
The Self-Employed Women’s Association (SEWA), a membership-based trade union, built a network of member-organizations using a comprehensive approach to help with women, small-scale farmers’ social and economic inclusion (FAO 2011
). The approach aims to:
- organize women into membership-based trade unions/co-operatives/associations;
- enhance technical and managerial skills within these collectives;
- encourage capital formation for individual members and within collectives; and
- create social safety nets which ensure access to health care, childcare, insurance, housing, and elderly benefits (Bakshi 2008).
In Gujarat, SEWA helped create the Sabarkantha Women Farmer's Association, providing a platform for groups to help themselves: women’s groups identify common problems and collectively solve them. Through SEWA’s facilitation women identify challenges, take decisions and weigh risks, which enriches their collective strength, increases bargaining power, and gives them identity, voice and representation as workers. By strengthening such solidarity the groups can link to external organizations at local and macro- levels. This, in turn, can bring in additional access to capacity-building (e.g. training), financial (e.g. insurance) and other support services.
Furthermore, SEWA facilitates about 112 Village Resource Centres to strengthen communication among village networks (FAO 2011
). For example, farmers receive text messages each week regarding current market prices, which enhances the groups’ bargaining positions for their products. In addition, SEWA has another cluster of organizations, the rural distribution network (RUDI), to help connect farmers to end-consumers. Connections and transportation between processing and selling centres ensure villagers have access to goods from other districts that they use regularly, such as grains, spices and salt.
SEWA’s coordination of various activities shows the importance of an integrated system that is sustainable, accountable and inclusive in approach. Its emphasis on grassroots movement-building, effective service provision, and solidarity among women producers/farmers have made it a powerful organization with ties to external partners, while helping women to empower themselves within the sector (FAO 2011
Conclusions and further considerations for realizing and sustaining a participatory economy
Examples such as Rural Returns in Sri Lanka and SEWA in India, illustrate that the principles underlying a parecon framework can indeed be put into practice: they are already being pursued within many initiatives. Organizations based on social values and solidarity, using a participatory approach, may be underdeveloped and underfunded, but they are a significant link for confronting current global crises, overcoming inequalities, and working towards a sustainable future for all of humanity. A participatory economy can be a valuable way to organize economic activities using participatory decision-making processes, Fair Trade pricing and collective rights. As such, the principles of the participatory economy can add value and operate within a social and solidarity economy.
In order to further understand the functioning of participatory economy, key future research questions include:
- How do parecon organizations, using social values and solidarity, avoid corporate co-optation of the organizational structure? What are their experiences to balance engagement with the private sector, in ways that ensure corporations adhere to principles defined by the community?
- What are additional examples of collectives that utilize and reproduce common goods (e.g., caregiving services, food for all, seeds, traditional knowledge, greener technologies, renewable energies, etc.) that can be understood as safeguarding the commons?
- Noting there are different approaches by parecon organizations which are women-led vis-à-vis ones that do not necessarily have a gender focus, how we can ensure greater participation of women and other marginalized groups in production?
- How can participatory worker cooperatives build solidarity across deeply embedded social constructs, such as caste, class, ethnic and gender lines, in order to work towards a more inclusive economic system? How can identity politics be overcome to strive towards larger goals?
Albert, Michael. 2000. Moving forward: Program for a participatory economy
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Bakshi, Rajni. 2008. “A cooperative in India: The Self Employed Women’s Association (SEWA)” accessed at: http://www.socioeco.org/bdf/en/corpus_document/fiche-document-1749.html
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The content drew from findings in a previously published article, “Cultivating Social Justice Initiatives for a More Inclusive Global Trade Framework to Flourish.” In Prashan Thalayasingam and Kannan Arunasalam (eds.), (2007). Does Inequality Matter? Exploring the Links between Poverty and Inequality.
Colombo: Centre for Poverty Analysis, December.
Richer countries in the global North continue to provide government support to domestic producers via high subsidies. This encourages a small percentage of farmers to produce surplus food, which floods developing countries’ markets at cheaper prices.
Influenced by Albert (2000), Nicholls and Opal (2005), and Bollier and Helfrich (2012).
Floor price includes the costs of production, provisions for family members, and farm improvements. Commodities are bought at world market prices from the producers, but when world market prices fall below the specified floor price, the floor price is paid instead. A guaranteed minimum price grants producers the security to plan ahead.
A Fair Trade premium is separate and above the Fair Trade minimum price; it is paid to small-scale producers to assist with development projects.
Mondragón in Spain is one of the most successful cooperatives: 23,000 member-owners make estimated annual sales over US$3 billion. Membership is non-discriminatory; decisions are made in general assemblies with a one-person-one-vote system. Members elect a “governing council” to oversee the cooperative’s management. The council ensures access to participatory decision making and transparent information. The cooperative donates 10 per cent of profits to charities, 40 per cent remains with the cooperative to benefit the “common good” (such as research or job creation), and the remainder goes into the capital accounts of its worker-owners (IISD, [n.d.]; Justpeace.org, [n.d.]).
“Dragon head enterprises” are possible vertical storage, collection and distribution centres that could incorporate small-scale producers directly into supply chain processes. They operate as collection centres or warehouses that reduce the division of profits among middle agents. Rather, through dragon head centres producers could also set a floor price.