Agricultural Administration 21 (1986) 135-146

Institutional Development: Some Lessons from the Experience of Israeli Technical Assistance in the Setting

Up of Moshav Multi-Purpose Co-operatives

David Kahan

AGRIDEV International: Agricultural Development Consultants, PO Box 213, Rehovot 76101, Israel

{Received: 18 February, 1985)

SUMMARY

The moshav multi-purpose co-operative has played a vital role in Israel’s technical assistance to the developing world. However, the experience has shown that the moshav co-operativeformula as shaped in Israel was in the earlier settlement projects largely unsuccessful in its application to the developing world. The relevance and suitability of’ the organizational form to varying conditions was only observed gradually over time. Improvements in institutionul development took place by trial und error. Chunges in the ,farm enterprise composition or market orientation resulted in the needfor modifications to the organizationalform selected. The need to focus and concentrate upon the appropriate organizational

form both at the initial planning stage and at later points in the development process became apparent.

The lessons learnt from the experience accumulated by Israeli technical assistance overseas is that organizations should be viewed dynamically and that changes in the organizational form should be predicted by planners and decision-makers so that modtjicutions can be introduced at optimal points in time. In this way continued eflectiveness should be ensured.

INTRODUCTION

Since statehood, much of Israel’s technical assistance to developing countries has been provided within the framework of integrated rural

135 Agricultural Administration 0309-586X/86/$03.50 0 Elsevier Applied Science Publishers Ltd, England, 1986. Printed in Great Britain

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development projects. The approach has focused upon two principal components: (a) increased agricultural production, through improved planning and policy, agricultural research and extension programmes; (b) institutional development and strengthening, through setting up new or strengthening existing co-operative settlements and other local, regional and national level institutions. The character of these projects emanated from Israel’s own successful experience in institution building in general and the establishment of co-operatives in particular. In Israel, local institutions cover a whole range of forms, from local authorities and village councils to the communal kibbutz and the co-operative moshav. Since Israeli success with moshav multi-purpose co-operatives became apparent, interest in that form of settlement has been prompted in many developing countries. This paper attempts to draw some practical conclusions from reviewing the experience gained in the setting up of moshav multi-purpose co-operatives in developing countries.

THE MOSHAV MULTI-PURPOSE CO-OPERATIVE

The moshav (pl. moshavim) is a smallholders’ multi-purpose co-operative village designed to establish farming as the major occupation and source of living for its members. Although the family is the basic unit of production and consumption, the moshav structure provides for the economic and social needs of its settlers.

The co-operative organization of the moshav has the function of supplying required services-marketing, credit and technical inputs-to the family farms; in addition, the social objectives of equity and democracy are pursued.

The moshav form of settlement was based on a well-defined normative pattern, important aspects of which were that: (a) farming should be the main occupation and source of living; (b) labour should be provided principally by the family; (c) there should be full utilization of the resources allotted; (d) there should be an adequate and potentially equal standard of living; and (e) universal participation in decision-making should be practised by the community.

The major focal point of the moshav was the emphasis on the smallholding size of the farm unit, which was managed by the household with family labour providing the total labour supply. The farm was taken to be the prominent source of income with a mixed farming system

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enabling a degree of self-sufficiency in producing and providing for the consumption needs of the household.

The image of the moshav may be viewed as a highly gemeinschuJi community describing a high level of social interaction and solidarity as well as the practice of mutual aid and lack of differentiation in farm structure and standard of living. This concept of the moshav as a ‘family of families’ was reinforced by the co-operative unit’s provision of both economic services and a framework for corporate decision-making. The co-operative unit fulfils a central function in every moshav; all smallholder members are, by virtue of belonging to the moshav, also members of the society. The normative model was regarded as the blueprint for future settlement patterns of moshavim both in Israel and abroad.

THE MOSHAV MULTI-PURPOSE CO-OPERATIVE IN RURAL DEVELOPMENT

The moshav multi-purpose co-operative contributes to rural develop- ment through a number of ways. Resource mobilization, the provision of technical and supplementary services, marketing, control of agricultural administration, control of services, and feedback of the demands of farmers. Each of these functions and activities is described below.

Resource mobilization

The mobilization of resources, such as credit, authority, status, etc., is essentiai for monitoring the co-operative nature of the society. The multi- purpose co-operative has the advantage of mobilizing resources with economies of scale accruing. The administrative unit of the co-operative, by being located at the local level, is in an advantageous position regarding acquisition of resources.

Provision of technical inputs and supplementary services

An essential function performed by the co-operative unit is the forwarding of required materials and inputs, such as fertilizers, seeds, concentrates, to the farmer. These inputs are essential for agricultural production.

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Marketing

The marketing service represents the output channel for produce sold. The function of the co-operative unit is to select appropriate markets and to conduct negotiations with marketing organizations. The process of distribution is essential in order to secure speedy delivery and to attain the best market price for produce sold.

Control of services

The co-operative unit plays an essential role in controlling the timeliness of technical inputs and credit provided, as well as in ensuring continued marketing of produce by way of the co-operative. The process of co-ordination of services at the local level is a major problem in the administration of rural development. In order to integrate inputs, there is a necessity for an effective network of communication between the administrative leaders and co-operative members. It is a function of the co-operative to maintain such a system.

Feedback and demand of farmers

It is essential that the goals of rural development take into account the requirements and demands of farmers who are the intended beneficiaries of the development programmes. The co-operative organization is an important element of the rural infrastructure and as such has the responsibility of providing feedback from farmers, acting as a mechanism through which their demands are articulated and processed. For these reasons the moshav multi-purpose co-operative was viewed as a mechanism through which rural development could be attained.

TRANSFERENCE OF THE MOSHAV PATTERN OF CO-OPERATIVE DEVELOPMENT

Although the moshav multi-purpose co-operative represents one of a number of co-operative institutional structures in Israel, it has been the most preferred model for village development in developing countries. To a large extent this is because of its basic character, consisting of family farms. In contrast to this, although the collective village (kibbutz) has an

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impressive impact on Israeli society itself, Israeli experts and planners were never induced to try to apply collective systems to the problems of the developing countries.

The moshav formula was considered in particular as offering a favourable solution to the process of rural modernization in African countries. According to Frank, the moshav’s ‘. . . flexible structure and the methods developed in Israel for introducing new settlers gradually to modern farming.. . could be a pattern suitable for implanting in other developing countries as well, after adaptation to local conditions’.2 Both the individually orientated pattern and the economic and organizational advantages accruing to a multi-purpose society, large turnover, low overhead expenses, etc., were further attractions of the moshav model.5

In the course of the years, since statehood, a wide network of reciprocal ties between Israel and Latin American, African, and Asian countries took shape.’

In most instances, introduction of the moshav multi-purpose co- operative did not take place in isolation but rather as part of a more broadly based integrated rural regional development project. The projects involving rural settlement, including resettlement schemes and the establishment of new isolated settlements, were oriented towards ex- army personnel, school-leavers, refugees, landless people and the like. Some of the settlement projects carried out over the past twenty years are listed in Table 1.

Contact between Israel and some of the developing countries took place because of the ideological principles of co-operation within the approach to rural development. However, not all the countries that sought Israeli assistance were motivated by co-operation. In many cases it was the practical advantages of successful rural development that was the principal attraction. Israeli rural development projects were founded upon two underlying basic principles: (a) the assumption that if a rural co- operative form of organization is to be effective, it has to aim at an integrated approach of both economic and social services; and (b) the belief that the village, and not the individual holding, has to be considered as the unit of focus.8 The second principle is expressed through the system of supervised credit, which was one of the most important innovations of Israeli experts in integrated village development. The scheme extends credit in the form of technical inputs to a whole village through an established co-operative unit. This replaces the forwarding of credit in the form of cash to selected farmers. To qualify for credit it is required that

TABLE 1 The Moshav Co-operative in Developing Countries

Country Nature of the project

Philippines

Thailand

Zambia

Nepal

Iran

Venezuela

Burma

Nigeria

Cameroon

Central African Republic

Dahomey

Togo

Dominican Republic

Barrio Ricarte: Organization of multi-purpose co- operative village of 100 family farms. Http-Kapong: Settlement of landless farmers--construc- tion of a model co-operative village of 130 family farms (to be expanded). Tak-Fa: Proposal to establish a pioneer resettlement project consisting of 4 villages of 400 family farms organized along multi-purpose co-operative lines. Kafubu and Kafulafuta: Settlement model based on family farms organized into co-operative villages affiliated to a regional framework. Establishment of 840 family farm units into 6 villages. Terai: Co-operative settlement project of 39 villages and 2 100 peasant families. Ghazvin: Integrated rural development plan. Rehabili- tation of 270 villages and 22 280 families in an earthquake zone. Development of land adjoining villages. Planting of orchards in 92 villages. Introduction of co-operative multi-purpose services. Majaguas-el-Cortijo: Integrated rural development plan. Resettlement of farmers on multi-purpose co-operatives. Two supervised credit schemes, two regional settlement programmes. Development of a new settlement. In 1968 there were 16 projects being implemented. Shan State: Settlement of ex-servicemen. Fifteen new multi-purpose settlements established with 70 families each. Western Nigeria: Settlement project of 25 moshavim, scattered throughout the area, consisting of 50 families in each village. The co-operatives are composed of school- leavers. Built as part of an integrated regional approach. Eastern Nigeria: Settlement project of 18 multi-purpose co-operative villages, consisting of 120 persons in each village. Integrated regional approach. Three co-operative-type training villages to train about 500 young people for permanent co-operative settlement. Four multi-purpose co-operative villages of 70 to 80 members each, established by the National Pioneer Movement. Two co-operative villages of about 80 ex-servicemen and their families. Training before settling on farmsteads. Training for 120 members of Togo’s Agricultural Pioneer Youth, after which they are expected to establish new multi-purpose co-operative villages. Irrigation and settlement scheme. Rural regional develop- ment. Settlement of 171 families in two co-operative villages.

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the co-operative unit prepares a production and marketing plan, based on submissions by the individual farmers. The provision of credit under the supervised credit system was seen as a first step towards the creation of an autonomous rural community.

The earlier settlement projects were directed towards establishing isolated pockets of multi-purpose co-operatives whilst the later projects concentrated upon the institutional development within a broader integrated rural regional development scheme. In view of the vital role that moshav co-operative settlements played in Israel, in the initial years of overseas technical assistance, Israeli experts were inclined to adopt similar development techniques. The moshav multi-purpose co-operative was established in many instances automatically without any major modifications. The relevance and suitability of different development patterns to varying conditions was only observed gradually over time. Improvements in institutional development took place by trial and error.

The experience showed that, even though the apriori advantages of the moshav co-operative were apparent, the co-operative formula as shaped in Israel was in many instances unsuccessful in its application to the developing world. The central issue was one of the degree of transferability of one type of experience to alternative environments. This danger has been stressed repeatedly in the literature.’ The experience of organizational transplantation in most situations is likely to be doomed from the outset.

In this context, Lamming has stated that, ‘. . . co-operative develop- ment differs from one part of the world to another, because it has been conditioned by differences in the history and culture in social institutions and in scales of values. On the theoretical plane, therefore, what may be looked upon as an immutable principle in one community may be considered by another as little more than an ingrained practice.. (therefore) action aimed at promoting and putting into effect the potentialities of cooperation in underdeveloped countries should be rendered on the basis of a clear understanding that the concepts of cooperation are not to be regarded as static, and that they must be capable of flexible interpretation’.(j

Such a call for more flexibility in the application of the moshav system was made by Klayman.4 According to him, it is not the physical or operational model which should be exported, but rather the basic principles making up the doctrine of the moshav. It is from these principles that other models should be developed. According to the

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author, the basic principles to be introduced are: (1) that agricultural development should be planned comprehensively and co-ordinated at the various administrative levels; (2) that the village should be regarded as the centre of planning and implementation and by involving the entire local population it should be possible to provide both cheaper and better services; and (3) that settlements should be based on family farms which tend to be efficient and adaptable to the development milieu.4

A corollary to this, is that multi-purpose co-operatives should be used only in so far as is possible, and, if selected, should be applied flexibly to the existing conditions in the country.

Although initially Israel’s experts were inclined towards the automatic adoption of the moshav co-operative, gradually, as more experience was accumulated, the question of organizational suitability and relevance became the central issue. The necessity of studying the predispositional characteristics of members towards co-operation were realized. Issues such as whether co-operation should be initiated from ‘above’ or from ‘below’, whether the social fabric of the traditional peasant societies is suited to the co-operative pattern, and whether the co-operative should be socially homogeneous or heterogeneous in population, were raised. These problems have been repeatedly referred to in the literature on co- operatives.3~“*‘3*‘4

In addition to the social issues, problems relating to managerial effectiveness-dishonesty, corruption, and debt accumulation of the complex array of co-operative activities-were similarly raised by students of co-operation.’

Although some of these lessons were learned over the years, success with the introduction of the moshav multi-purpose co-operative has on the whole been sparse. In addition to the above-mentioned reasons, emanating from unsuccessful planning of the social component and an inability to cope with managerial deficiency, corruption, and mutual suspicion, insufficient emphasis was placed on the organizational form- structure, functions, scope of services-of the institution. It was for these reasons that Naor and Regev found cause to criticize the Israeli settlement project in the Azua region of the Dominican Republic. lo In their opinion the structure of the multi-purpose co-operatives based upon the normative moshav form was inappropriate to the socio-economic conditions prevailing in the Dominican Republic.

This failure may be due to both the faulty selection procedure in deciding upon where to promote co-operative enterprise as well as to a

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failure in designing a set of guidelines regarding the analysis of organizational alternatives in order to promote the selection or design of suitable institutional patterns. The Israeli experience suggests that the strategy of examining organizations and their role in development has been somewhat neglected. The need exists to study new forms of organization stemming from specially oriented organizational research. Such an approach presupposes that rural development planners ask a number of questions in light of the existing social and economic characteristics of the country, region or project area concerned: whether it is advantageous to go for small-scale or family-type farming; whether co-operation is the appropriate method of development; whether it is more fitting to propose a less complex single purpose co-operative society (engaged in credit provision or in the marketing of a single product), or rather a multi-purpose society. Once the institution is selected, a further series of problems are faced regarding the design of the appropriate structure, its scope of services and necessary linkages required.

CHANGES IN THE ORGANIZATIONAL FORM OF THE MOSHAV MULTI-PURPOSE CO-OPERATIVE

Given that at the planning stage a multi-purpose co-operative is selected, a change in the farm enterprise composition over time or in the market orientation, from subsistence to mixed farming, is likely to result in an increasingly greater complexity in the organizational sphere of activity. This transition from subsistence to mixed farming towards product specialization is, according to Weitz, inevitable in all developing countries.’ 2 Such trends are likely to influence the scope of services provided, the level of co-operative involvement by members, the degree of co-operative ability, the demand for credit, and the policy criteria and methods underlying the operations of the co-operative unit. Further- more, product diversification may in certain instances result in vested interest groups being formed, in conflict with each other. This may emanate from an increased self-interest by the various conflicting factions.

Such a development is likely to have an important effect on the internal structure and processes of the co-operative unit. With diversification of products, a general tendency could be expected in which occurs a broadening of structure and increasing size and complexity. These

144 David Kahan

changes are likely to take place owing to the need to provide members with wider and more specialized services. What is needed is to focus and concentrate upon the appropriate organizational forms, both at the initial planning stage and at later points in the development process. It is essential to view co-operative patterns dynamically and to be aware of the consequences of environmental changes upon the original co-operative form. This may bring about the need to adjust the organization accordingly. An inability to adapt to these changes is likely to lead to the failure of settlement schemes.

PRACTICAL IMPLICATIONS

The implications of Israel’s experience overseas, in the area of institutional development, suggests that decision makers ask two principal questions: what form of organization is most likely to achieve policy objectives and how should the selected organization be promoted effectively?

Decisions have to be made both at the u priori planning stage and at different periods over time. The need is emphasized for the organizational form to be adapted to both the social and economic requirements of the rural populace and the project area, as well as to changes within the external environment. It is wrong to view co-operatives, or any organization for that matter, as a static concept. The co-operative organization should adapt as environmental circumstances influence it. The setting up of co-operatives or other local level institutions should be viewed as part of a dynamic process involving continuous decision making and planning. It is the task of planners to acknowledge the dynamic nature of the organization, to predict the changes likely to occur and to guide the decision makers towards the relevant issues and problems. It is crucial that planners are aware that changes within the farm enterprise composition of the moshav co-operative are likely to have an effect on the organizational pattern. Changes over-time in the economic structure of co-operative villages may result in the following policy alternatives:

(1) Omitting the municipal activities of the co-operative. (2) Restricting or eliminating some of the social or economic goals. (3) Dividing the scope of services between primary and secondary co-

operatives.

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(4) Reformulating the co-operative on a homogeneous farm enter- prise basis.

(5) Dissolving the village co-operative for second level, regional or national co-operatives.

These policy alternatives should not be adopted as an aftermeasure following a co-operative breakdown or an extended period of ineffectiveness. Rather the changes should be predicted by planners and decision makers in order to ensure that modifications and changes are introduced at the optimal points in time in order to ensure continued effectiveness.

In conclusion, these findings suggest that focus needs to be placed not only on the introduction of the appropriate institution, but also on the changing organizational pattern likely to eventuate along the develop- ment path. It is thus proposed that a conscious selection of organizational form should be made in rural development planning, varying not only over space but also over time. Choices should be keyed to the economic life-cycle of the organization, the internal composition and constituencies of members, as well as to the external environmental conditions.

REFERENCES

1. Dore, R. F. ‘Co-operatives in Traditional Communities’. In: Two blades of grass (Worsley, P. (ed.)) Manchester University Press, 1971.

2. Frank, M. Co-operative land settlements in Israel and their relevance to Ajrican countries. Basel, Kyklos-Verlag, 1968.

3. Gentil, D. The establishment of a new co-operative system in Niger. Paper delivered to the Second International Seminar on Change in Agriculture, Reading, 1974.

4. Klayman, M. The moshav in Israel. New York, Praeger, 1970. 5. Kreinan, M. Israel and Africa: A study in technical co-operation. New York,

Praeger, 1964. 6. Lamming, N. Possibilities and limitations of cooperation in underdeveloped

countries. Archives Internationales de Sociologic de la Cooperation, No. 5, Paris, 1959 (as quoted by Frank’).

7. Laufer, L. Israel and the developing countries: New approaches to cooperation. New York, A Twentieth Century Fund Study, 1967.

8. Levi, Y. Co-operative and community development in rural areas of’ developing countries. Rehovot, Settlement Study Centre, 1976.

9. Milikan, M. F. and Hapgood, D. (eds.) No easy harvest: The dilemma qf agriculture in underdeveloped countries. Boston, 1967.

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10. Naor, G. and Regev, S. Evaluation of Israeli agricultural co-operative projects in Latin America. (Rehovot, Settlement Study Centre, 1970.

1 I. Texier, J. M. The promotion of co-operatives in traditional rural societies. Paper delivered to the Second International Seminar on Change in Agriculture, Reading, 1974.

12. Weitz, R. From peasant to farmer. New York, Columbia University Press, 1971.

13. Widstrand, C. G. (Ed.). Co-operatives and rural development in East Africa. Uppsala, 1970.

14. Worsley, P. (Ed.) Two blades of grass. Manchester University Press, 1971.