Social capital refers to connections between and within social networks. This term is a key concept in economics, business, political science, organizational behavior, sociology, public health, and natural resource management. The first usage of this term is traced back to 1899 when John Dewey made the first direct mainstream use of the term social capital in the book, ”The school and the society”.
Though he mentioned this term he did not offer a definition. L.J Hanifan made use of this concept in 1916 when he wanted to put across the importance of involving communities to have successful schools. Hanifan offered the first definition when he wrote that it referred to tangible substances that mostly count in the daily lives of people. He gave examples of such tangible substances as, fellowship, goodwill, social intercourse, sympathy among families and individuals who make up a social unit.
He argued that if an individual interacts with his neighbors then the accumulation of social capital that satisfies his/her needs piles up and it may bring about improvement in the living conditions to the individual and the community as a whole.
The modern usage of the term social capital is traced back to the 1960s when Jane Jacobs used it in an article where she referred to the values that accrue from networks. In this article, Jane Jacobs did not explicitly define the term but in 1969 a political scientist Robert Salisbury made a great advancement to the term as an important component of his interest groups information article,” An Exchange Theory of Interest Groups” in the political science of Midwest journal. In 1972, Pierre Bourdieu used this term in the outline of a theory of practice and he clarified the term several years later in contrast to economic, cultural, and symbolic capital.
In 1977, James Coleman adopted Glern Lourn’s definition in popularizing and developing the concept. The world bank focussed on this term in the 1990s where it used it in research programs. The concept was also used in 2000 by Robert Putman in his book ‘Bowling alone’ and in 2003-2004 Patrick Hunout further developed the usage of this term in his work ‘erosion of social links experienced in economically developed countries. The social capital foundation that aims at
promoting social capital and therefore social cohesion was formed in 2002 in Brussels. The foundation has held a number of conferences such as the 2004 conference in Brussels where the topic ‘The future of family’ was discussed, the 2005 Malta 1 conference in Buggiba where the topic ‘social capital was defined, application of it and measurement were also discussed. The Malta 11 conference is set to take place on 19th -22nd September 2008 in Buggiba where the topic of social inclusion will be discussed.
The foundation argues that when social capital lacks in any society, people who do not have money and also fail to get help from other members of the society plan and decide to do things that they do not aspire to do or even go to the extent of forcing others to do things they would not think of doing. Social evils such as slavery, forced labor, and organized crimes are the fruits reaped by any society which does not embrace social capital. To measure social capital most of the ways used has to do with trust. People who favor and help others will also in turn get the same help when they need it and even get more.
Individual networks, trustworthiness, and norms of reciprocity characterize any society which welcomes social capital ideology. Social capital embraces the sense of civic virtue and calls to the attention that civic virtue becomes more powerful when embedded in a network sense of reciprocal relations in the society. If many virtues exist in society but the society is divided into isolated individuals then that does not necessarily make the society a social capital. Social capital is always at work in our day to day life but it has been hard to recognize it because of what it is and its potential has also been neglected by many, for example, when a neighbor or groups of neighbors keep an eye on each other’s homes or property that is said to be social capital put in action.
Norman up Hoff’s Paradigm on Social Capital
Norman Up Hoff’s paradigm is that there is a great need to strengthen rural institutions for equitable and sustainable development. He argues that this is only possible when social capital exists in society. His scientific thought is that communities should be collectively involved in agricultural research activities to enhance social capital.
A wide belief is that Agro – industrialization contributes to social and rural economic development. However economic development is a result of the value added by the activities of post-harvest and the multiplier effects within that rural community. Social contributors sometimes are less well defined but they appear to relate to increased integration and increased incomes of individuals and groups along the supply chains and within the agro-industrial firms.
The spillovers from all those economic activities are usually expected to result in the promotion of social cohesion in rural communities. Norman Up Hoff observes that social capital is a critical input in the process of agro-industrialization. Groups and individuals that cannot work collaboratively or maintain and establish trust-based relationships and networks find it difficult to carry out their activities. This is because firms in Agro-business compete in every supply chain that is information-intensive and therefore require active coordination among different stages and players in these areas must therefore work together.
Where transactions costs are huge and the market fails, the contribution brought about by social capital can not be underrated because it makes an important contribution to the performance of the firm by enabling access to information and also reducing the costs of coordination and contracting. Failing to recognize and also failing to explicitly incorporate the social capital concept as a vital input into agro-industrialization limits the effectiveness of projects and programs that would promote agro industrialization as one way of alleviating poverty. Social capital is a very important tool both in agriculture and rural development.
It is taken to serve the major purposes or functions namely to obtain information via all the broad networks of contacts that are maintained by agricultural firm owners and managers reduce any uncertainty and also monitoring any costs through working with trusted organizations and individuals. Agricultural firms would benefit also from engaging in collective action and social capital would bring a strong influence on the sustainability of collective action.
Importance of Social Capital to Agriculture
Information Networks
Agricultural firms use the information networks that they have created for four major purposes namely, identifying and contacting the farmers, access to market information, to also have access to inputs, and finally obtain financial and technical assistance.
Industry and business associations serve also as good sources of information to the agricultural firms. Agricultural producers who play the role of supplying the firms with raw materials are either friends or former employees who built contacts with producers and also other suppliers. This inter-relationship provides adequate and vital information that opens doors and also guarantees a long term relationship, for example, a dairy processor had a long term relationship with the farmers from his previous job as a technician and therefore farmers put their trust in him and continued supplying him with milk even though he faced some managerial constraints which had resulted into almost the collapse of his dairy company.
This is because of the willingness he had to work with the farmers when he was still a technician. It is, therefore, true that social capital is a very important tool in agriculture especially in accessing agricultural inputs.
Agricultural firms also have connections with the non-government and government agencies that in turn facilitate access to financial, management, and technical support, for example, social capital plays a big role in creating contacts in universities as a source of technical assistance. Politicians and community leaders also use their contacts to find opportunities for social and technical assistance both to the firms and the process of agricultural products in their communities’.Consolidation of such relationships opens more doors and therefore farmers and agricultural firms can reap benefits from these relationships. Farmers can reap benefits that go beyond the initial service offered by the support institution such as being trained by them.
Another importance of social capital in agriculture is trust. Trust is an essential element in developing and maintaining relationships that crop up between the farmers, agricultural firms, and the public as a whole. If farmers and agricultural firms can trust one another then they can spend less time and resources in enforcing and monitoring contracts. Trust also plays a vital role in facilitating the interaction with other players in the chain of production, helping agricultural firms maintain relationships with their clients such as the farmers thus creating an enabling environment where the farmers can obtain credit because the firms offering the credit have both trust and confidence in them thus enabling the farmers to expand their agricultural activities and as a result an overall expansion of the agricultural sector.
Trust also enables the farmers to understand and put into consideration the situation of the firm such as financial constraints faced by the firm and hence delay in payment of their produce in time, for example, a relationship of mutual respect and trust allowed a dairy cooperative to retain its volumes of milk supplied by farmers even though the cooperative had not paid the farmers for a long duration of time due to financial constraints.
This was because of the strong trust and confidence that the farmers had towards the cooperative. The strong relationship between agricultural firms and farmers means that agricultural firms are assured that producers will supply the given qualities and quantities on agreed dates and comply with their promises. Dairy and vegetable firms have reported that when they have trusted producers they can easily eliminate or reduce residue and quality checks that are carried out for other producers who are not trusted.
Farmers also trust the agricultural firms especially in transportation services that their products will not be transported in containers that have recently been used to transport other substances thus lowering the quality of their farm output. Of great importance is the need to note that a close personal relationship may automatically bring confidence and therefore social capital is useful in building and maintaining this relationship. The close relationship brought about by social capital enables the agricultural firms and farmers to manage crises such as transportation failures and power outages especially when the agricultural products are perishable.
Social Capital and Rural Development
Rural development is therefore inevitable when farmers are better of and empowered economically due to the strong social cohesion that exists between them and other agricultural firms. Farmers make the majority of the people who live in the rural areas and the need for the agricultural firms to obtain large supplies of raw materials from the farmers results in the accelerated growth of rural areas in terms of infrastructure, communication, and transportation facilities.
Agricultural firms contribute to a greater extent in the construction of roads, research centers, and training centers for the farmers hence opening up the rural areas to development. To enhance continued communication between the farmers and the agro enterprise’s communication networks are constructed to make these tasks simple further opening up the rural areas.
To realize continued production of agricultural output farmers collectively take measures of conserving forests to maintain their water catchments areas and therefore come together to plant more trees and curb any activities that might be done by any group or individual to destroy forests. Agricultural firms also come in to provide the necessary inputs needed by farmers in their desire to conserve forests such as providing tree seedlings, training, and skills for planting them and maintaining them. They also through their influence carry farmers’ grievances to higher authorities regarding any group or individuals who may bring deterioration of forests.
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