Poverty Alleviation, Governance Improvement and Conflict Transformation in Rural Nepal - A Study of Four Selected Small Farmer Cooperatives Ltd. (SFCLs) in Eastern Nepal

This working paper takes a detailed look at four selected Small Farmer Cooperatives Ltd. (SFCLs) from Eastern Nepal and analyzes their contributions towards poverty alleviation, self-governance, and conflict transformation.

The paper particularly describes in detail the structural causes of poverty in Nepal and recommends SFCLs as an approach for addressing the root causes of conflict and bad governance in the rural communities. The paper critically reviews strengths and weaknesses of the studied SFCLs and suggests further measures to scale up the SFCL program.

Further, the study observes that:

• The tiered structure of SFCL provides a significant space for the self-help development of small farmers;
• SFCLs are self-sustainable despite no grant or subsidy;
• ADBN's (Agricultural Development Bank of Nepal) bulk lending facility has helped rural poverty alleviation by enabling the poor to make larger investments in their income generating activities;
• The saving and credit initiative under the SFCL approach is structurally tied to income generation undertaking by small farmers.Finally, the study makes recommendations for potential adjustments in the SFCL approach:
• To better incorporate the conflict subject in the present strategy;
• To show the possible role of SFCLs and their contribution in strengthening local self-governance;
• To achieve expanded and faster outreach of SFCLs.