Jon Thiele
International Development

Getting results

Gender and economic development

Enterprise development and agribusiness

Small holder farmers

In Ukraine

Islamic economics

Promoting cooperatives

Community-based development

Credit in economic development

Economic institutions






A survey of small holder farmers


On a project I directed some years ago in western Ukraine we did a simple survey to learn about the people of the area in order to prepare more effective training sessions for new titleholders at recently privatized collective farms. It was very helpful.

Reading some of the findings now and knowing what the country was to experience in the next 20 years is interesting. Almost 17% expected "the national government" would make their lives better.

We had assumed, and the results of a survey showed, that the perceptions and understanding the rural population had about business, free markets, and management were not terribly bad or wrong, but they were not fully or accurately formed either. Their understanding of many of the facts and assumptions we take for granted is not as solid as it needs to be in order to operate a business in a market economy. Operating a small farm means operating a small business.

What we might assume as common knowledge might not be so common among this segment of the population. Or, worse, their understanding might be clear in their minds but different from ours, and this difference might act as a filter through which they might interpret differently or inappropriately the information that builds on the assumption. For example, the survey showed that over 47% of the population believes that negotiation does not end when a contract is signed, and another 29% "aren't sure" it's finished. So if an instructor from the west moves from a point about a contract, by which he intends "final agreement", his students will be moving on a different line of reasoning because to them agreement has not yet been reached. This might be a minor point in the teacher's presentation, but as his line of instruction continues, the minor divergence magnifies, and the conclusion he reaches might seem wholly unsupported in the minds of the students, because they don't share the assumption of agreement, so the point the teacher is making could be lost entirely.

Anyway, the survey findings illuminated a few similar points for our trainers, but I don't want to bore you with that academic perspective. Instead, here are some general and possibly interesting findings of the survey:

They are very rural. 67% have lived in the same village their whole life and 24% more have lived there more than ten years. 96% said both parents are from rural areas. This clearly limits their range of experience and familiarity with other societies and other ways of doing things.

But they are not "serfs". Going into this survey, we wondered if peasant economics were at work, if the people in the villages were markedly different from our assumptions of rational maximizers. Within the survey, we placed 18 responses which we thought a true peasant might give-- faith/dependence on a central authority, profit should be shared with the community, collectives should not have been broken up, sustenance over gain, et al. Only 2% chose more than ten of these responses.

They are not that badly informed. They acknowledge they have something to learn about business. When asked how they might start a business, almost all listed some source of advice or counsel as a first stop. When asked what they felt they needed to learn from that source, 53.8% said "understand management, marketing, business planning, etc." 28.3% also said that they would "conduct market research and a feasibility plan".

When asked simply to define "business", 62.5% correctly said it was an activity designed to make a profit, and 42.6% said a contract should be used to "show the specifics of an agreement to the signatories", and 38% said it should "used to settle disputes".

However, they displayed plenty of poor, inaccurate knowledge. While these groups said contracts should be specific and can help settle disputes, less than 20% of all respondents said negotiation is finished once they sign.

When asked to define "business", 37.5% got it wrong. 12% said it is "an activity aimed at solving social problems" and 13% didn't know what it really means.

Some went further. 32% said "an efficient national government is most capable of improving conditions (in this raion)". Only 39.5% think products produced by private firms are "better than products of a few years ago" and only 15.8% think they are better than the state-produced products of today. When asked if imported products are worth higher prices, 57.6% said "no, never".

There is some entrepreneurial spirit. Operating a small farm means operating a small business, and we had been skeptical of estimates of the level of interest in operating a business among the rural population. We placed 16 responses in the survey that we felt would be typical of a "would-be entrepreneur"-- profit-oriented, interested in opening a business, interest in learning about various business topics, self-reliance, et al. 10.8% of the respondents chose ten or more of these 16 choices.

Yet, we sense mixed feelings about commerce. The respondents seemed equally split over whether a business could provide a living wage or would be just a sideline activity. And while a surprisingly large number, 37%, said "yes, very much" when asked if they were interested in starting a business, only that 10% displayed what might be called an entrepreneurial attitude.

We asked why there are so many imported food products in Lviv's stores, because we wanted to see how many would identify consumer demand as one of three reasons they saw. 23% did. But 52% said it was because of "profiteering by local businessmen". 25% said it was because of "profiteering by local criminals". (In fairness, I should add that 37% said it is because the prices were lower than locally-made items, and 34% said there are no locally-made substitutes.)

They see a very strong social role for businesses with nearly a third saying that "contributing to the community" or "giving to the poor" are what "a good manager" does with his profit. If they were to go into business, we asked what would motivate them. 56% said that "they would do it so they could produce better quality products and services". But 83% said no when asked if a "product like cheese or sausage, packaged nicely, it more likely to be good".

We sense strength and even some optimism. Another response option to the question about why they might go into business was "to be responsible for my own life", and 38% picked it. Then we asked "who will make life better for your children?" 63% answered "I will", and only 5% said "it won't be better".

And 16.7% said "the national government" will make their lives better.