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The Role of Opium as a Source of Informal Credit
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STRATEGIC STUDY #3
Preliminary Report January 1999
ANNEX A: TERMS OF REFERENCE
Strategic Study 3: The Role of Opium as a Source of Informal Credit
Objective:
This Study seeks to explore the role of opium as a source of informal credit in UNDCP?s target districts. Summary:
The study will be based on semi-structured interviews with a cross section of farmers from target districts including sharecroppers, owner-cultivators and landlords. It will explore informal sources of credit on agricultural products with a particular emphasis on opium. Issues to be addressed will include socio-economic profiles of lenders and borrowers, current levels of debt, and strategies for repayment. This Study will be undertaken in close consultation with ?Strategic Study 2: The Dynamics of Farmgate Opium Trade and the Coping Strategies of Opium Traders?. Justification:
Substituting the existing informal credit system that gives preferential access to those households that cultivate opium poppy and thereby coopting more vulnerable households into opium poppy cultivation, is seen as integral to UNDCP?s efforts to reduce opium poppy cultivation in its target districts. This Study forms the first phase of a three-stage process aimed at increasing the credit opportunities of communities in Ghorak, Khakrez, Maiwand and Shinwar. The second phase will consist of a workshop with other agencies with experience of implementing credit schemes in Afghanistan in order to define ?best practice and lessons learnt?. The third phase will field a consultant to assist in the design of an appropriate and sustainable credit initiative in consultation with the relevant stakeholders in the target districts, in particular the village shuras. It is envisaged that this iterative and consultative process will assist UNDCP in its efforts to find viable credit opportunities for communities in its target districts. Methodology:
Due to the current sensitivities associated with discussing the issue of credit and opium cultivation in rural Afghanistan, emphasis will be given to conducting a number of in-depth semi-structured interviews. However, in order to verify findings and distinguish between generic patterns and localised issues, in-depth interviews will be conducted over a wide geographical area across UNDCP?s four target districtsSemi Structured interviews will be conducted in three villages in each of the four districts. To document the role credit and opium plays in the livelihood strategies across different socio-economic groups, interviews will be conducted with three households from three categories, landless, owner-cultivators and landlords. In total nine interviews will be undertaken in each village.
A number of these interviews will be conducted with farmers who were already interviewed for the Socio-Economic Baseline Survey, allowing fieldwork to draw on existing information and contacts. Moreover, the quantitative information on credit already gathered during the 600 household interviews conducted by the Baseline will be used to consolidate the findings of this more qualitative fieldwork.
Given the assumed role of farmgate opium traders in the provision of credit this Study will be undertaken in close consultation with ?Strategic Study 3: The Dynamics of Farmgate Opium Trade and the Coping Strategies of Opium Traders?. This will allow findings to be cross checked against those provided by lenders.
Reporting:
A preliminary report will be produced by the end of July 1998 this will represent the third report in the Strategic Studies series.�
KEY ISSUES TO BE DISCUSSED
i. What is the socio-economic profile of those that take credit?
ii. During what months is credit typically taken?
iii. What is the socio-economic profile of those that provide credit?
iv. What area are those that provide credit from?
v. How is credit given? Cash? Kind?
vi. Is credit available for farmers on all crops or just specific crops? Wheat? Black cumin? Opium? Fruits?
vii. How do credit arrangements differ from crop to crop?
viii. What is the credit used for? Productive purposes? Subsistence? To repay previous debts?
ix. What was the amount of the last loan taken?
x. What are the repayment arrangements? Cash? Kind? If opium what quantity?
xi. What is the farmers current level of household debt?
xii. Does the farmer have periods of time where there is no debt owed? When?
xiii. If the farmer cannot repay his debt on time what are the financial penalties?
xix. If the farmer cannot repay these debts what strategies will he adopt to ensure they are repaid? Sell land? Work elsewhere? If work elsewhere? Where and what kind of work?
ANNEX B: CALENDAR
Afghan Months:
| Gregorian Months:
|
| Jadee |
|
| January |
| Dalwa |
|
| February |
| Hood |
|
| March |
| Hamal |
|
| April |
| Sawar |
|
| May |
| Jawza |
|
| June |
| Saratan |
|
| July |
| Asas |
|
| August |
| Sunbula |
|
| September |
| Maizan |
|
| October |
| Aqrab |
|
| November |
| Quos |
|
| December |
| Jadee |
|
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