characteristics which are more commonly found among the rich households. These ob
servations explain why rich villagers responded early to opium suppression by investing
in productive resources. Furthermore, they explain the villagers' response to the TG- HDP recommendations. Why then should they not also explain differences in economic performance? One other factor which I have not mentioned yet is that the incidence of opium addiction is higher amongst poorer households. I cannot determine whether opium addiction causes poverty or whether people respond to poverty by using drugs; but opium addiction certainly affects labor input negatively. In the Christian village of Pha Charoen, people claimed to pay higher wages for laborers (40 baht instead of the usual 30 baht) because the work performance of non-addicted people is of a higher quality. The most striking differences encountered between the wealth groups are the capital resources and the economic performance of the 1990/91 agricultural year. Regarding capital resources, rich households are definitely at an advantage. During times of hardship they are able to liquidate some of their stocks while poor farmers have to borrow money or rice without knowing whether they will be able to pay back in the next year. The limited financial resources of the majority of the villagers need to be considered in introducing new technologies and crops. While some better-off villagers in the study area have already adopted the cultivation of perennial trees without financial assistance, other villagers will not be able to follow suit easily since their capital does not even allow for basic investments such as seedlings. The differences in capital resources should be regarded as such but not overemphasized since there are also low input farming methods available which do not require a high cash outlay before benefits can be reaped. Lack of knowledge about potential new crops and farming methods may be far more restrictive to their introduction than limited financial resources. The case of Satha Pudin, a villager in Bo Khrai, indicates very well that the establishment of a one rai orchard is possible without the use of capital.
Data were also collected about the villagers’ interest in new crops and their perception about soil and water conservation (see also Chapter Four). Almost all villagers of the three wealth groups expressed their interest in new crops. Annuals mentioned included those crops that villagers had already some experience with (red kidney bean, green bean, barley). Green bean received most interest from villagers of the three wealth groups. At the same time, some villagers claimed that they would not grow green bean any more or would never try it because of its labor intensity and the required pesticide applications. More than 90 per cent of the respondents of all wealth groups showed interest in fruit trees. Most could not suggest a specific kind of fruit they would be willing to test. The species most commonly (25 villagers) mentioned was improved peach. Most respondents have land and labor available for fruit tree cultivation. According to their answers, they lack however the capital to acquire seedlings and the knowledge about management. They are also afraid that once the trees bear fruits they will face marketing problems.
Why do villagers want to grow fruit trees? All respondents want to sell the produce and would select those which can be easily sold. Home consumption is of minor importance. With regard to the participation in the SWC scheme, respondents who did not participate in the TG-HDP conservation activities claimed that they were not chosen as participants because either their fields were too far away or because only a limited number could be selected in the initial stages of the project and "they did not end up on the list". Some of the poorer villagers said that they were never contacted by project representatives and did not know anything about soil and water conservation measures. Many opium addicts fall into this category. In general, it appears that especially poorer villagers, who are on the fringe of the village society, are less informed about the project's intentions. Especially in the initial stages of project participation, villagers benefited from incentives (cash, seeds, fertilizer). Analysing adoption rates by wealth group reveals that the more influential community members who usually fall into the "rich" category were able to claim the incentives predominantly for themselves. This may indicate that rich households were not more interested in the project activities
per se
but rather in the incentives. However, poor households also did not make efforts to learn more about project activities by asking fellow villagers. While their status in the village partially can explain this phenomenon, these respondents also lacked any interest in the conservation practices and some appeared to be quite glad to know nothing about them.With the adoption rate lower among poor households, it is automatically higher among the other village segments. Most reasons for adopting the SWC technology have been discussed in C hapter Four. The mere presence o f project activities in the village, communal pressure as well as incentives and disincentives are the predominant reasons for the adoption of the recommendations. Many villagers said that since they were encouraged to test the new method they thought that they could or should not resist. Incentives made the recommendations more interesting to them. M ost villagers tested contour buffer strips only on one of their fields to reduce the risk of failure. Since the grass species chosen (Kongo grass) posed numerous problems for the villagers, some gave up their fields or switched to leucaena and pigeon pea hedgerows. But even those fields were abandoned when villagers of all wealth groups felt the need to produce more rice, as was the case in Luk Khao Lam in 1991.
While the poorer or less privileged villagers appear to be at a disadvantage in regard to communication and the adoption of new crops and technologies, reasons for adoption or non-adoption are similar among the three wealth groups. The only exception is that rich households were initially in a better position to acquire the incentives.
In summary, the analysis of the three wealth groups shows that the farming strategies of the three groups are generally the same and villagers follow the same economic strategies though rich households produce cash crops on a significantly larger area than poor households. Restricted land availability affects only very few households. Labor shortages appear for all households to some extent during the rainy season. Considerable differences exist in regard to capital resources and the economic performance o f the 1990/91 agricultural year. Villagers’ interest in new farming practices or crops is also equal for the wealth groups. Therefore, it can be concluded that recommendations are applicable to all farmers in the same way with two exceptions. The first one concerns the lack of capital of the majority of the villagers to cultivate crops requiring a high initial financial investment. Examples are expensive seed (e.g. ginger) or seedlings (perennial crops) as well as fertilizer or pesticides. The limited capital resources need to be considered and widespread adoption of new crops is only possible if villagers are assisted under a credit scheme.
Beside the three conventional production factors, technical efficiency and management capabilities need to be accounted for. This is the second exception. As the analysis of the three wealth groups has shown, poor villagers' performance is mainly a result o f their limited farming capabilities. In introducing new land management strategies or new crops this restriction is much more difficult to overcome. Furthermore, it has to be considered in a farm investment analysis to reach realistic results not only for the successful farmers who may be able to help themselves but also for the unsuccessful ones who need help in various ways.
5.3 THE REPRESENTATIVE FARM HOUSEHOLDS
For the financial analysis I decided to design two model farm households. I chose the extremes, a rich one and a poor one. The decision is a result of the analysis in the previous section. For many variables describing the households and their economic perform ance, the medium household depicts the average of the two other groups. Therefore, no new insights would be gained by analyzing it further. However, the decision is also based on the answer of the headman in Pha Mon to the question regarding his decision in the wealth ranking. He responded:
"You asked me earlier whether the farmers of my village are interested in growing fruit trees. The farmers have told you that they generally are interested. You also asked me about the differences among the villagers regarding their wealth. I can tell you the differences now. The rich villagers will be able to plant fruit trees by themselves. They do not need any assistance. If the price is good and they find a suitable piece of land they will
be able to do it on their own. The medium villagers will need some assistance such as free seedlings. The poor villagers, however, will not be able to plant fruit trees without outside assistance. They need subsidies and credit until the trees have been successfully established and bear fruit."
Most characteristics of the two extreme household groups were discussed in the previous section and need not be repeated in detail here. While the economic strategy of all the households interview ed was similar, only the rich households were able to grow sufficient rice and generate enough income to fulfil their basic needs. They cultivated a larger area which should not be seen as an indicator to their better access to suitable land. Their workforce was slightly larger but they also had to produce more because of larger family sizes. The differences of the land and labor resources between villagers of the rich and the poor groups were small, but poor households had far less capital assets available. They owned less animals and also generated less income. In addition, the returns to their labor input on the four crops under investigation were below average. The reasons for their poorer performances during the 1990 agricultural year have been discussed at length in the previous chapter. While it is difficult to identify their failures from the available data, it appears that environmental factors did not impose restrictions. It was rather their limited managerial capabilities and technical efficiencies which resulted in poorer crop yields and a low total income.
Tables 5.8 and 5.9 present a detailed account of the number of person-days devoted by the households to their main crops. Information for most crops was provided by the respondents during the interviews. Labor input data for wet rice was provided by Julsrigival (pers. comm., 1991). Income from opium cultivation was assumed to be in the order of 4,000 baht per household. If the labor productivity for opium cultivation is about 50 baht/person-day (Wiboonpongse et al., 1989) a household spent about 80 days in their opium fields.* Agricultural activities are closely related to rainfall. Labor peaks occur during the rainy season when villagers are preoccupied with weeding activities and again at the end o f the year when rice needs to be harvested and red kidney bean fields are prepared.
A number of assumptions have to be made in calculating the total number of days spent cultivating crops and the number of days available. No difference in opium cultivation was assumed between rich and poor households. Rich households, however, cultivate sesame and red kidney bean on larger fields. Therefore, they may also have larger opium
$
Durrenberger (1989) assesses the labor productivity of opium production to be only 9.45 baht/person- day. This appears to be a gross underestimation considering the high income some families were able to generate from opium.
fields. This may explain why the workforce of a rich household spends more than twelve days less cultivating crops than a worker of a poor household.
Table 5.8 Days devoted to the cultivation of main crops by rich households.
Jan. - March April - June July - Sept. Oct. - Dec. Total
Upland rice 24.0 43.2 48.6 41.4 157.2
Com 17.4 26.3 29.6 - 73.3
Sesame 5.4 13.3 12.9 - 31.6
Red kidney bean 7.6 - - 12.4 20.0
SWC field 1.8 30.6 15.7 12.2 60.3 Wet rice - - 31.5 6.0 37.5 Green bean 2.3 - - 15.6 17.9 Opium 27.4 - - 57.5 79.9 Total 85.9 113.4 138.3 140.1 477.7 Days/WFU 33.4 44.1 53.8 54.5 185.9
Days available for field work/WFU
39 45 51 54 189.0
Surplus labor or labor defict
5.6 0.9 -2.8 -0.5 3.1
Note: During the dry season villagers devote more of their time to non-agricultural activities. Therefore, it was assumed that they spend only thirteen days/month in their fields during January to March and fifteen during the next three months. During the rest of the year it was estimated that they spend eighteen days/month in their fields.
Table 5.9 Days devoted to the cultivation of main crops by poor households.
Jan. - March April - June July - Sept. Oct. - Dec. Total
Upland rice 26.5 37.0 58.0 38.5 160.0
Com 23.0 31.1 28.1 - 82.2
Sesame 2.9 6.3 6.8 - 16.0
Red kidney bean 3.0 - - 7.0 10.0
SWC field 0.6 22.6 16.6 11.0 50.8 Wet rice - - - - - Green bean 2.3 - - 15.6 17.9 Opium 27.4 - - 52.5 79.9 Total 85.7 97.0 109.5 124.6 416.8 Days/WFU 40.8 46.2 52.1 59.3 198.5
Days available for field work/WFU
39 45 51 54 189
Surplus labor or labor deficit
-1.8 -1.2 -1.1 -5.3 -9.5
Note: During the dry season villagers devote more of their time to non-agricultural activities. Therefore, it was assumed that they spend only thirteen days/month in their fields during January to March and fifteen during the next three months. During the rest of the year it was estimated that they spend eighteen days/month in their fields.
The calculation of labor availability is even more difficult. According to the respondents, about three quarters of the villagers’ time is spent with field work. Sutthi (pers. comm., 1991) believed that Lahu farmers are preoccupied with field work only about 50 per cent of their time. In the calculations of the previous two tables it was assumed that villagers work about 60 per cent in their fields. Villagers rest on three days a month (Tiger day) and spend another day with development work for the community. 60 per cent of the remaining days is about 190 days. 189 days were used in the tables. According to the calculations a rich households has still 3.1 days available for additional field work, while poor households fall 9.5 days short. Compared to the total amount worked the surplus for rich households and deficit for poor households is negligible. This is especially so because they are based on only rough assumptions which cannot be easily verified. Recognizing these limitations, the results for the whole year as well as the individual seasons indicate that there is either very limited or no labor at all available for additional agricultural enterprises. This finding contrasts somewhat with the villagers' statement about sufficient labor being available for growing fruit trees. This may be explained in three ways. First, villagers may think that fruit trees require virtually no work once they have been planted. Second, villagers may automatically reduce one of their agricultural activities (e.g. the least remunerative one) and therefore do not foresee a labor shortage. Third, they may be willing to give up some of their leisure time to invest in what they regard as a worthwhile enterprise. Following the first explanation means that in assessing the profitability o f adopting a new technology the opportunity cost of labor is the foregone production from the reduced or abandoned activity. On the other hand, if villagers are willing to give up leisure time the opportunity cost of labor is zero*. How an opportunity cost greater than zero affects the profitability of tree crop enterprises, is shown later in Tables 5.13-5.16 (see p. 133).
With the information presented in the previous sections it is now possible to assess the profitability of activities which can be recommended to improve the current economic situation o f the households. One problem with the use of the representative average household still exists, regardless of the number of different types which are created. These households actually do not exist. Therefore, I chose to include a third household in the financial analysis. I chose Satha Pudin, a Lahu villager of Bo Khrai who acts in his village as an informal demonstration farmer and can be classified as an innovator, an individual who is by definition the first one to adopt new ideas in his or her social system (Rogers, 1962).
*
Opportunity cost in the financial analysis should not be mistaken for the shadow wage rate in economic analysis, which should never be zero even in cases of high unemployment (Grut, 1987; Dixon et al., 1989a).