Ruang Sooksawasdi
ThailandFellow since 1989

Ashoka commemorates and celebrates the life and work of this deceased Ashoka Fellow.

Ruang Sooksawasdi, a teacher turned developer from northern Thailand, is creating an increasingly interlocked web of organizational, nonformal education and savings and loan mechanisms to give small, chiefly landless farmers independence and an escape route to growth and financial independence.

#Fulton County, Illinois#Investment#Poverty#Rice#Fertilizer#Village#Villager

The Person

Ruang grew up in a small fisherman's family. Graduating in the field of occupational education, he became a teacher at a teacher's college but resigned after a year and a half to work in rural development. After a decade of working with the rural poor, Ruang has come to the conclusion that current efforts aren't succeeding, that the rural poor are giving up and that their ancestral village communities are weakening. he has accordingly "dedicated the rest of [his] life to help them." He continues to search for an approach that could bring a far richer set of opportunities to youngsters growing up, as he did, in parts of Thailand far from Bangkok.

The New Idea

Thailand's heavy reliance on sharecropper agriculture leaves an increasingly wide gap between many working farmers and the landowners. Ruang seeks to restore healthy cohesive rural communities for everyone, but especially for the young, for women, and for the poor. He's pursuing a number of financial, organizational, and educational means to this end. Focusing first on savings and investment, he is promoting village savings through the use of rice and buffalo banks, specialized institutions that lend and receive payment in kind. Ruang also is developing village banks that collect and lend money. He has strengthened these institutions in a number of ways, including their management processes and the managers. Ruang's approach is built up from a number of small practical design improvements. For example, unlike the conventional credit unions that ask members to save a small set amount per month, he seeks large deposits in the cash-rich harvest months and little or nothing in the lean months. This approach nets larger deposits over the full year than flat-rate schemes. His approach to managers and group members alike involves extensive awareness and skill building. He regularly involves spouses, contrary to usual practice, recognizing that involving a village's women brings a dimension of commitment and engagement well worth the extra costs. Ruang's work is already bringing measurable results, ranging from a reduction in the use of expensive and often environmentally harmful inputs to improving market access. However, he has increasingly come to believe that the many separate strands to his approach need to be welded together. Consequently he is now building a new prototypical tripartite rural organization consisting of area farmers, farmers' organizations (including those he is helping build up), and development workers. Through this group, Ruang plans to launch interlinked programs to promote savings and farm investment, to provide agricultural training programs, and to back both up with nonformal education (including regarding how best to handle the environment).

The Problem

Ruang is struggling with the classic traps that keep rural villagers in demoralizing poverty. In the central region of Thailand, 85 percent of the rice farmers are landless. The landowners tend to be uninvolved since many, especially the most wealthy, are from outside the region. Furthermore, while the legal rent is 250 kilograms of grain rice per acre, actual rent costs are closer to 375 kilograms per acre, which is almost one-third of total production. On top of this, the tenant farmers must pay for all inputs, including the rental cost of buffalo or tractors. Purchasing one's own tractor remains prohibitively expensive, requiring loans as large as 50,000 to 100,000 baht (US$2,000 to $4,000). While legal interest rates are between 15 percent and 18 percent annually, frequently especially small farmers, must accept loans from less formal sources at illegal rates that reach as high as 30 percent per month, further dramatically increasing their risks and lowering their take-home income. As markets and dominant farming technologies change rapidly, the small farmers' condition and therefore the well-being of the communities must deal with even more risk. The farmers have been absorbed very quickly into a rapidly changing market. They now buy more and more from others and depend on what they can sell their crops for to balance their budgets. They buy more and rely on themselves less. A tractor and chemical fertilizers may look more effective than the water buffalo and organic fertilizers, but they also have a different risk profile. They can also have serious secondary ill effects, such as the decline in aquaculture yields, once large-scale use of chemicals in an area begins. The decline of common lands such as forests (now only 20 percent of Thailand) further hurts the poor, who depend most directly on these resources. The cumulative impact of these and other forces is, draining village life. Every year, more and more of the countryside's most talented and energetic leave for the city. This rapid emigration not only directly lowers the educational level left in the countryside, but it also seriously impacts community cohesion, interrupting traditional lines of family and kinship and disrupting the decision-making process at the village level. More simply, it is demoralizing, especially to the young. Ruang's initiative not only addresses the concrete economic problems of Thai villagers, but also seeks directly to maintain and strengthen their social institutions.

The Strategy

Ruang's first priority is to develop community organizations and leaders. He works to encourage the development of local community and farmers' organizations, either strengthening what already exists or building anew. He encourages the groups to deal with a wide array of issues ranging from animal husbandry to organizing cremations and other traditional ceremonies. In this building process he gives first priority to identifying, encouraging, and training community-based leaders who can coordinate nonformal education activities in subject-matter areas as diverse as planting, animal husbandry, and basic veterinary skills. These local leaders in turn provide the spark the growing number of community and farmer organizations need to grow. These village organizers will also work to facilitate coordination between such village associations and whatever governmental and non-governmental organizations are working in the area. Once such community organizations begin to take the initiative, there is almost always a need for accessible and affordable credit. Therefore Ruang next envisages building decentralized savings schemes that will allow for groups of farmers to save together and then benefit from low-cost loans. Already implemented in 15 villages (with a total membership of 459 villagers and a total savings of 162,258 baht), these savings funds lend out from 100 to 1,000 baht at the nominal rate of only 1 to 2 percent per year. Major deposits of 100 to 300 baht are made annually after the harvest, and subsequent smaller deposits of five to 30 baht are made 11 or 12 times throughout the year. The low-interest loans these savings make possible will help farmers survive during bad years, avoiding the usurious loans that have been so destructive of their equity. Eventually, Ruang would like to have these groups be able to borrow funds directly from the government's Rural Development Fund, thus leveraging their direct saving significantly. Once villages have such organizational and financial capacity, they can undertake significant-scale projects otherwise out of reach. Ruang is already beginning to show the way. For example, he proposes to replace government-designed 30-ton-capacity rice silos with privately designed 50-ton-capacity silos that cost two-thirds the price of the former. Another example: One village group has recently made the largest private request ever made by a private group of the government forestry department, a request for 30,000 seedlings with a value of 120,000 baht. They will be planted through local elementary schools and sub-district councils.