Experiences in Egypt were eye-opening
By Calvin Covington
Special for Farmshine
Last year I had the opportunity to see and experience a part of Egypt that does not make the news ... one that is away from the pyramids and the happenings in Cairo. My Egyptian experience took me to southern Egypt, first to the Aswan area, and then a couple of months later to the Assiut area, as a volunteer business consultant with the Farmer-to-Farmer program which is administered by the U.S. Agency for International Development.
The program provides voluntary technical assistance to farmers, farm groups, and agribusinesses in developing and transitional countries. Land O’Lakes, Inc., which works with the Farmer-to-Farmer program, arranged and coordinated my trip.
Let me begin with some geography. Aswan is almost at the southern border of Egypt, about 750 miles south of Cairo on the Nile River. Assiut is also on the Nile, about half-way between Aswan and Cairo. Once you leave the main part of either city, there are small villages, land farmed with irrigation water from the Nile, and vast amounts of desert. Both areas are extremely dry and hot, with summertime temperatures approaching 120 degrees. Rain is a rarity.
The Egyptian government gave families five acres of land to move to the Aswan area. The families are organized into associations, some with as many as 30,000 people. Each Aswan association elects their own board of directors. An Egyptian association is not a cooperative, but does have similarities to a U.S. cooperative. Each family is responsible for farming their land and marketing the products they produce, for which they keep the income. The association provides services to its members, for a fee; such as renting a tractor for land preparation, assistance in buying feed for livestock, and furnishing improved seeds and plants.
I worked with five associations in the Aswan area. My work involved assessing the activities of the associations, meeting with each association’s board of directors, and receiving member input. After the initial assessment, time was spent training the directors in how to set up a business plan, budgeting, establishing goals, developing a work plan, and better understanding how a board of directors should function.
As the association directors become more comfortable in their role, they seek to add value to the products their members produce, and provide additional member services. For example, the Aswan area grows alfalfa year-round, with a cutting about every month. Most of the alfalfa is used in the area. However, one association is looking into an alfalfa cubing operation. Their plan is to bring the alfalfa to a central area for cubing, put the cubes on a barge, send the barge up the Nile River to the port at Alexander, and then export to the world.
Some of the associations have goals to improve the educational offerings to their members, start pharmacies to provide lower cost and more available medications, and to develop a more economical way to provide transportation for its members to the city.
In Assiut I worked with the Assiut Business Women Association (ABWA) assisting them in strategic planning. This association focuses almost exclusively on micro-financing. ABWA has loans out to approximately 26,000 people, mostly women and a few men, with a goal of serving 50,000 people by 2015. The association, which began in 2000 with help from the Catholic Relief Services, has a main office and eight branch offices which solicit and service the loans. Customers make their loan payments, in cash, at the branch office. Each branch office has a number of field officers who are the contacts between the association and the customer. The field officers perform a variety of functions -- soliciting new loans, servicing existing loans, including receiving loan payments and providing educational assistance.
The maximum size of the first loan made to an individual is 400 Egyptian pounds or about $67. The loan has a 6-month term with about a 20% interest rate. Once a customer builds their “credit rating” they can work up to a loan of 6000 Egyptian pounds or about $1000 with a term of 18 months. The interest rate is the same regardless of loan size.
The main method of collateral is a group or unit, which has about five customers. If one customer in the unit fails to make a loan payment, the other members of the unit are responsible for the failed payment. Each unit meets at least once a month, generally with a field officer, to review their individual business. The members of the unit provide assistance and support to each other, and are accountable to their fellow members.
About 80% of the loans are for animal agriculture. This includes dairy cows, water buffalo, chickens, sheep, and goats. A typical dairy person has one to two cows or water buffalo. They sell fresh milk and some make cheese for the local market. The other 20% of loans are for home-based businesses. For example, one woman obtained a loan to purchase a sewing machine to make clothes to sell. Another woman received a loan to start a small grocery store and now she has expanded to three stores.
In my meetings with many of the loan recipients, it was obvious they are hard-working entrepreneurs. Almost all want to expand their operation, milk more cows, etc. and seek additional business opportunities. The majority of ABWA’s customers are on their second, third, or fourth loan. After the initial loan is repaid, they seek a second loan to expand their business. Then a third loan to expand further and so forth. I found it amazing and most rewarding to see first-hand how people improve their livelihoods with just a small amount of money. In the focus groups, people could not stop telling me their personal story of how their ABWA loan helped them start a business which allowed them to provide for their families and improve their standard of living.
People coming together and forming associations is a basic building block for improving socio-economic conditions and furthering democracy.
In the United States, farmers working together through various types of associations, from marketing milk to influencing farm policy to testing milk to breeding cows to providing farm supplies, have made significant contributions to improving their livelihoods, advancing agriculture, and feeding millions of people. Hopefully, the association movement will continue in Egypt with the same positive impact associations have made and continue to make in the U.S.
Editor’s Note: Calvin Covington has spent a lifetime studying and guiding segments of the U.S. dairy industry, including management of USJersey organizations and a Florida-based dairy cooperative. He is the recipient of numerous awards and honors, including being named Dairy Industry Person of the Year by the World Dairy Exposition.