Episode 9: The value of local connections in the Dairy Industry

Sosheel Godfrey warns against making a bogeyman out of an alternative banking system. That is, he doesn’t see the so-called ‘middlemen’ of Pakistan’s dairy industry as evil collectors that rob farmers of profit, rob the chance to sell milk urban consumers. Rather, he sees them as a part of the community, investing back into their communities through the farmers. Living alongside the local farmers, they extend cash advances to farmers, sometimes providing loans to small hold farmers. And so, their motives are not just making a profit, but rather helping other members of their community to survive and thrive.

In this episode of What’s Sociology Got To Do With It?, Sosheel shines a spotlight on how an outsider’s preconceived notions of economics and a farmer’s behaviour can quickly vary from what is actually happening on the farm. In other words, every farmer and every region has its own economic, cultural and social context around farming–and these must be taken into consideration when research try to analyse farming behaviours and the risk involved in farming. For Sosheel, a farmer who hasn’t had rain in several months would act differently to a farmer living through a monsoon. Both are facing different risks, and so are going to need different advice and resources when making decisions or preparing for the future. And it is a qualitative research approach that is needed for this, he argues.

If you want to contact Sosheel e–mail him on sgodfrey@csu.edu.au.

Produced by Dr Sarina Kilham with support from Charles Sturt University and The Australian Sociological Association for Social Science Week 2020.

Transcript of Sosheel Godfrey

Godfrey episode

[00:00:00] Sosheel: [00:00:00] And unless I go and talk to farmers and understand that social context, my analysis is not going to be as powerful. It would be flawed because I have not understood the social context [00:01:00]

Sarina: [00:01:02] So thank you for joining us on the podcast What’s Sociology Got To Do With It? Can we start off by, asking you to tell us about your research?

Sosheel: [00:01:12] Good morning and thank you for having me today. I have been PhD student-I started my PhD back in 2010, so a researcher for almost 10 years, I started my research studying agri. business supply chains, the industry in Pakistan in particular where I come from. And as part of that research, I did some economic analysis. Supply chains, which required a qualitative approach. And then studying the final consumers, which was understanding consumer perceptions. More recently I’ve been focused on risk in business, in agriculture in particular. And production risk at the farm level. And that means business risk and financial risk. And I have also been [00:02:00] interested in doing some research at consumer end, understanding consumer preferences. usinga method called conjoint analysis or discrete choice modeling.

Sarina: [00:02:09] Tell us then, Sosheel, what has sociology got to do with any of that?

Sosheel: [00:02:15] Sarina, that’s, ah, that’s something which is, often addressed to me. And I guess the research I do, if you talk about marketing, for example, and consumer preferences, in discrete choice modeling weekend we can come up with attributes in a certain product that consumers would prefer. But you see it’s really about the consumer behavior and the choices that we consumers make as humans, which are quite complex. So even if you go to the professional seminars that the advocates of this, quantitative method suggest is first start with interviewing, the consumers or a group of consumers, something like a focus group, and then build on that. [00:03:00] So the base off it is some kind of qualitative research, understanding the the behavior of those consumers in the context of that society. Same goes with the risk as well. So something which I might perceive as risk might be very different to a farmer. Unless I go and talk to a few farmers and understand their perception about risk and what they think is important, it’s not going to be very powerful. It is good, but I think it would add more strength if I bring in that human aspect in risk, for example.

Sarina: [00:03:35] So if we go to the part of your research that looks at talking to farmers about risk. What do you think are some of the benefits of applying a sociological lens to that research?

Sosheel: [00:03:48] So to give you an example. See, now more recently we have got a small grant from Graham Center and it’s about the competing crops of [00:04:00] rice, cotton and almonds in Riverina region. And, what is the risk? Commodity and the competition is really for water. I can do some modeling, desktop modeling to understand what that risk entails. And I can almost certainly come up with saying that almonds would be more profitable. But there is this social context as well, you know. We’re-farmers are making those choices and see if I am in this mixed farming zone, producing a certain crops. Say wheat for example, or cotton. And I switched to a Creek crop. They should be a good reason to do that. And unless I go and talk to farmers and understand that social context, my analysis is not going to be as powerful. It would be flawed because I have not understood the social context in Riverina, for example.

Sarina: [00:04:57] So have you already started talking to farmers as [00:05:00] part of this research?

Sosheel: [00:05:01] That’s a good question, but we have not, unfortunately, because of COVID-19 restrictions. We have not been able to do that, but we plan to do that at some stage and get in touch with the local farmers through telephone or zoom.

Sarina: [00:05:16] So given that you haven’t yet gone out and had the chance to talk directly to farmers can you give for our listening audience, some of the things that you might think are influencing how farmers are perceiving risk or influencing their decisions about what type of crop they put in, beyond the pure desktop modeling that you’re able to do.

 Sosheel: [00:05:39] Sarina, you know, this, the production in this sheep-free zone that we are in is fairly complex. And to my mind being, an economist, I guess the most that  somebody would make is profit. And they are driven by profits. But having said that I-as I said earlier-it might be flawed. So in a [00:06:00] certain rotation, for example, in a cropping rotation or choosing whether to keep livestock or to grow pasture more this year or to have more wheat, for example, produce this year. There are certain factors, particularly whether, for example, or the availability of water or-or the past experiences and my perception as a farmer, but in terms of taking risks as well, you know. If it has not rained, say until April/May it would rain, how would I make that? The CNET varies a great deal from farmer to farmer as well. So what we do as a desktop thing is make a few assumptions based on that, read the data. But we can’t really beat an experienced farmer’s perceptions about how they would make decisions at a certain time in the year. I guess I don’t have a clear answer to your question unless we go and talk to some farmers and their perceptions about risk, but really a great deal as humans as well. You know, so your perception about risk [00:07:00] might be very different to mine.

Sarina: [00:07:01] If we go back to your research in Pakistan, Sosheel. What were some of the social factors that came out of that research that were surprising to you, as an economist?

Sosheel: [00:07:12] Sarina, one of the things that we had, as part of the supply chain research was this ‘the middlemen are bad. They’re evil in the society and they take the cut from the farmer and fromrom the-the consumers are not given a good quality product’ as well.

Sarina: [00:07:29] Can you just explain for our listeners what you mean by middleman? They might not be familiar with that term.

Sosheel: [00:07:35] Sure. The dairy industry is big in Pakistan. It’s-Pakistan is about ranked sometimes a third or the fourth largest milk producer. And 90% of the production of more than 90% of the production of the milk produced in rural areas goes to the consumers through these informal channels, where the raw, fresh milk changes several hands from [00:08:00] farmer to the final consumer. And those intermediaries are along the supply chain are middlemen and they can be small, somebody who’s collecting a hundred liters of milk, for example, and then another middleman who might be next step in the chain collecting say, thousand liters of milk from small collectors. And then another big one who might be collecting 5,000 or 10,000 liters of milk. So we categorize these as small, medium, and large middleman.

And so the perception is, Sarina, that they are, an evil in the societ; whereas, to my surprise. they are not. They are generating a lot of job opportunities. In that society, in that social context. And that was surprising. And not only that, they’re also extending cash advances to the farmers when they need them. And  they almost, like, work like an ATM machine for those poor farmers, small holders, [00:09:00] who don’t have even bank accounts in that country.

Sarina: [00:09:04] So those middlemen relationships, I guess in much literature, they are perceived as being, like an evil necessity. And it’s evil from the point of economics only, because it seen that they take a cut from the producer and take something, make it more expensive for the consumer. But actually your research echoes, very similarly to my research experience with middlemen in Brazil, is that those middle men have a really key function in their social context. That the fact that they can broker loans. The fact that they can give advances for small holder farmers who might not have access to formal banking systems. So the social context has totally flipped that narrative about middleman then.

Sosheel: [00:09:51] Absolutely right, Sarina.

So to my surprise, we had not applied any the social lens to these dairy [00:10:00] supply chains in Pakistan. So those perceptions were based on quantitative studies and just calculating the margins without bringing in that human factor and the cultural context of that society. So what we were able to do is through these case studies, applying a qualitative lens, we were able to understand these functions, as you said, Sarina and I can relate to all of that. In Pakistan as well they were extending loans to the farmers we are needed and extending cash. And even when the cows would go dry, they would still keep giving money to the farmers. Things like wedding or children’s school fees or funerals, things like that, they will. So there’s a human context in those supply chains, which you can’t ignore.

Sarina: [00:10:47] Because-yeah. They’re often the neighbor or the person who lives down the street. So that relationship is beyond just the pure economic relationship there.

Sosheel: [00:10:55] Absolutely correct, Sarina.

Sarina: [00:10:57] So Sosheel, how would you say [00:11:00] that a social lens is disrupting that normal economist way of looking at things like supply chains or farmers’ perception of risk.

Sosheel: [00:11:12] This is an interesting question Sarina, but I don’t think it’s disrupting. It’s in fact informing  economists to make sense of that world. It’s not just profit driven. And the motives are not only profit from an economist’s perspective, there is more to that. So these qualitative, uh, studies or the social lens brings a whole new dimension to understanding these agri. business supply chains, for example, which is missing, at least in that Pakistani context to inform the policymakers as well. And for example, in argument for IES has been that we need to develop and we need to bring in big processes in the country. And we need to modernize a dying industry. [00:12:00] And I don’t disagree with that. But at the same time, we need to think, how can we uplift these exising chains which   are generating so many employment opportunities. Because one of the policy goals is employment opportunities for the population, for the masses as well. So if a country has 25% of its GDP is from agriculture, and that means a job creation as well, how can you then ensure that whatever alternative system is brought in the place gives, at least the amount of opportunities as in job creation, for example.

Sarina: [00:12:34] And to take account of what might be lost; for example, social cohesion and those social relationships.

Sosheel: [00:12:42] Correct. Surely.

Sarina: [00:12:45] Can-this is  almost flipped-but can you tell us, what is your full name, where you’re talking to us from and what is your current role?

 Sosheel: [00:12:54] Sarina, my full name is Sosheel Solomon Godfrey. And I am working [00:13:00] with Charles Sturt  University in the School of Agricultural and Wine Sciences. And I teach economics and marketing as part of my role. But I also do some research, in my role as a staff of, this Charles Sturt University.

Sarina: [00:13:18] Sosheel, how do you hope to change the world with your research?

Sarina, one of the things which is on my heart, for example, is in Australia, where I am now. And it has given me so much as-as an immigrant. I think, given the recent droughts and  the fires, for example, and the COVID-19 for example, and the impact of that on the economy and farmers in particular. The research-I mentioned the risk, for example, it has so much to offer in terms of even just the preparedness for a farmer. Because what we do, Sarina is [00:14:00] we generate, um-

I’ll give you an example. I’m doing some analysis of  dairy industry in Australia. And the Victorian government has data for the last thirteen years. Comprehensive data for three dairy regions in Victoria. I have taken up that data and I have analyzed that to understand the probabilities of making net profits or losses. And what we can do then is if I’m a farmer, say in Gippsland, that probability of profitability gives me a very good understanding of how things would pan out because we have taken the historical data and we have projected the future based on what has happened in the past. So if you’re a farmer in the Northern region, for example, which is not as good as a farmer in Gippsland or Southwest, for example, it gives you picture of what is the chance of my winning or losing, and if I’m a farmer and if I go in depth, I can maybe adjust [00:15:00] just a few things in my production practices or maybe ha-explore alternative investment opportunities as a farmer. So, this research is most relevant now, to inform the farmers of how they can be better prepared, if nothing else. At least be better prepared for the future that they are facing, Sarina. I want to contribute more towards that.

That’s fantastic, Sosheel. Where can our listeners find you on social media or on your institutional website?

Sosheel: [00:15:31] Sarina, unfortunately, I’m not very big on social media, which I should make a bit more effort.

Sarina: [00:15:36] LinkedIn?

Sosheel: [00:15:39] But I-even if you Google my name, Sosheel Godfrey, School of Ag. and Wine Sciences, my portfolio would come in there and they can contact me if anybody’s interested.

Sarina: [00:15:50] Fantastic. Sosheel thank you so much for joining us on What’s Sociology Got To Do With It? Have a lovely day.

Sosheel: [00:15:59] Sarina [00:16:00] you’d have thank you very much for the opportunity and it’s lovely talking to you.

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