Building and Maintenance of Social Capital in Rural Farming Community of the Western Hills of Nepal

Building and Maintenance of Social Capital in Rural Farming Community of the Western Hills of Nepal

Ram Krishna Shrestha, Donald Charles Cameron, Jeff Coutts, Jim Cavaye
DOI: 10.4018/IJABIM.2015070103
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Farmers' cooperatives are considered social capital dependent organization. Fostering the development of social capital and its maintenance would help improve the performance of farmers' cooperatives. Multiple case studies of agriculture cooperatives from Western Hills of Nepal were carried out to explore what prompts the building of the social capital and what factors influence the maintenance of this capital in farming communities. Finding shows that ‘extension and rural development intervention', ‘access to external supports and benefits', and ‘existing economic potential' in the form of market-oriented vegetable production were the drivers of social capital building. Similarly, ‘leadership', ‘good governance', and ‘members' commitment' influenced maintenance of social capital within the framework of case study cooperatives. The finding concluded that channelizing extension services through cooperatives had a strong bearing on social capital building and that internal dynamics of cooperatives were critical in the maintenance of social capital. Some policy implications are given.
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1. Introduction

Good balance between endowment and utilization of natural, physical, financial, human and social capitals is considered essential for the sustainability of rural livelihoods (De Haan, 2000). De Haan asserts that with low endowments of physical assets and resources, and a relatively poor state of human resource development, poor and marginal people rely heavily on their stock of social capital in order to manage their living. Social capital is of particular importance for poor and marginalized people as it is one assured form of capital on which they can draw to mobilize other forms of capitals to lead a satisfactory livelihood (Mubangizi, 2003).

Smallholder farmers of developing countries have been confronting the various problems associated with market failures including difficulty in market access, unfavorable terms of trade imposed by upstream and downstream trading partners, high transaction costs, and inherently low resource endowment. These problems have been limiting the capability and incentive of such farmers to participate in product markets. To overcome these problems, smallholder farmers may band together to form an agricultural cooperative and involve in collective activities designed for mutual benefits (Markelova & Mwangi, 2010). Social capital is considered to be essential for the formation of a farmers’ cooperatives and its continued operation (Valentinov, 2004).

However, there seems a dearth of literature on how social capital is built and maintained within the framework of farmers’ cooperatives. Specifically, little is known about what prompts the building of social capital building and what affects its maintenance and sustained utilization. Taking the cases of four agriculture cooperatives operating in rural Nepal this paper aims to (1) shed light on impetus or factors that prompt the building of social capital in agriculture cooperatives, and (2) explore the factors that influence the maintenance of social capital.

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