Most of the world’s poor are subsistence farmers. So the connection between microfinance an agriculture is of great importance. A friend and former colleague, Bernard Kamanga, has just finished a PhD on soil fertility, which is relevant to microfinance in general and the project I’m involved in Malawi in particular. The story he is telling in hsi PhD goes like this: Compared to their richer colleagues, poor farmers do not weed, they don’t use manure and they don’t use fertilizer. Are they stupid? No. They know the benefits. They are simply to poor. To get enough food immediately for their family, they employ themselves as informal labourers looking after the richer farmer’s fields. Because of this, they miss out on looking after their own fields.
The relation to microfinance is this: If these poor farmers had savings, they might be able to smooth income and ensure their’ families’ livelihoods even in hungry periods. Then they would take better care of their own fields and over time escape the “low productivity trap”, as Bernard calls it.
Watch Bernard’s defense online, live or recorded (follow links on the right).