Five Household Co-Op Project
Rural Development in China's AIDS Villages of Henan

Project Overview

When HIV first arrived in central China, it wasn't through unprotected sex. It was mainly through blood. In the early 1990s, impoverished farmers were enticed by a government scheme of compensated blood donations. However, the unsanitary conditions and the practice of collecting only the plasma for making of blood products while the red blood cells were injected back into donors-spelled disaster for tens of thousands of rural poor. By the mid to late 1990s, Henan province became the epicenter of AIDS.

In 2004, China announced its "Four Frees and One Care" policy, promising free HIV meds as well as other benefits to the rural poor. As a result, people are no longer dying at the rate they were when HIV/AIDS first appeared in China. However, the lives of people living with HIV (PLWHA) in rural areas are still threatened by devastating poverty, which has a direct effect on their health, as PLWHA swallow the free drugs on empty stomachs. On a day-to-day basis, the disease is less frightening to them than hunger.

The overall goal of the "Five Household Co-op Project" is to improve the health and the lives of PLWHA in rural China by helping them develop sustainable sources of income to relieve the worst of their poverty. The Project is divided into three phases lasting two-to-three years each:

Phase 1 focuses on animal husbandry as a means to achieve subsistence level income and to stabilize the health and nutrition intake of the participants.
Phase 2 develops safe-food farming and/or off-season produce production to help increase income and to raise productivity, further improving the health of participants.
Phase 3 implements value-added processing to move participants toward long-term self-reliance for themselves and their children.

A full curriculum of trainings, including accounting, animal husbandry, safe-food farming, women's health and basic rights, and urban marketing will be provided along with the loans. The training workshops are scheduled six times a year. The goal for the Project is not only to provide financial assistance but also to increase knowledge.

This Project is a multi-organizational partnership, led by ARFC. The Project will be implemented by several local NGOs in China, which will each provide necessary services. These services include serving as rural liaison to the Project participants, organizing the co-ops, technical assistance, and management of the microloan aspect. ARFC is seeking the support of individual donors and collaboration of funding organizations to ensure the continuity and long-term success of this promising nine-year Project.

While assisting the participants with income generation, ARFC and its NGO partners will also administer a series of empowerment workshops on such topics as rural women's health, environmental protection, fiscal management and developing home-based businesses. This Project will bring many improvements to the lives of the participants with the right planning and cooperation.

Background

China is estimated to have 650,000 HIV infection cases. The majority of the infections are in rural areas due to blood selling or needle sharing. Rural AIDS care was the main consideration when the government was making its new AIDS policy, "Four Frees and One Care."

China now has free generic anti-retroviral drugs available for people with AIDS. However, the chief concern among rural people with HIV is often financial hardship. People are not as afraid of AIDS as they are of hunger.

Poverty in rural China is endemic. One of the major causes of poverty has been linked to China's primary modern farming practice of using monoculture farming methods that do not take into account diversification to meet food needs and provide for local community consumption. Wheat and corn are the two most popular crops in central China and as a result during harvest time, the price of wheat and corn is often extremely low. Farmers are often forced to sell their crop to local flour mills just for quick cash. Many farmers often do not have enough reserves to last them through the year or to face emergencies such as bad weather, drought or storms that may impact the entire crop.

Even without such disasters, many farmers face such dire circumstances that they are forced to sell their lands to brick factories. This process involves more than 10 feet of soil being excavated for making bricks. This practice is detrimental to the future of farmers as well as to the environment.

For PLWHA in rural China, there are additional factors that make their financial hardship especially severe and intractable. People with AIDS have diminished productivity. Opportunistic illnesses often keep patients in bed for up to one to two months a year. Many are plagued by chronic fatigue. Working as farmers or moving to cities to work as migrant laborers are often the only economic options for many people with HIV in rural areas. But living with HIV makes this more difficult. People with chronic illnesses are also not eligible to apply for loans in rural credit unions. While there is no social security or adequate subsidy (some rural PLWHA's receive about $5 a month from the government), this restriction further constrains capable HIV+ farmers from continuing their livelihoods and many are forced to leave home.

Project Description

In 2007, ARFC is creating a new project to supplement its small-grant program. The Five Household Co-Op Project combines micro-loans with safe-food farming in four AIDS villages in China. This new initiative has come about through three years of observing the conditions in rural villages affected by HIV/AIDS, and close consultation with Chinese NGOs and activists. It is rooted in the recognition that, in rural China, improving the health of people with HIV cannot be separated from their economic condition.

Microfinance is not a new concept in China. Currently, there are over 100 microfinance programs in the rural areas of China. However, rarely are these projects accessible to people with HIV. Generally, the design of these Chinese microfinance programs leaves it up to the borrowers to come up with business ideas, without adequate technical support or marketing knowledge. ARFC is taking a different route by giving the borrowers tools to increase their chance of success.

Sustainable environmental development and safe-food farming are also not new concepts. However, the issues of environmental protection and HIV/AIDS are not typically connected. Environmentalists and AIDS activists rarely collaborate on solutions that may reflect the multiple aspects of social issues, like the environment, poverty alleviation, and public health. However there are many ways in which these issues link in rural China. We have already mentioned how in Henan many people with AIDS sell their lands to brick factories. They sell their future in order to deal with the immediate emergency of trying to find economic options, while dealing with their HIV status. These desperate financial conditions inevitably cause long-term environmental devastation in many areas. In the design of our Project, we aim to create a caring community for all the participants, while also caring for their environment.

The Five Household Co-Op Project combines several components of successful community development programs and creates a unique concept. By providing micro-loans, technical assistance, and organizing co-ops, this Project will enhance knowledge, skills, and capacity of the rural HIV+ communities. Income generation is just one of the measurable outcomes. Improvement in the health status of participants is clearly another. In addition, the Project aims to increase participants' awareness of public health, and environmental protection.

The concept of five household co-ops has been familiar to China's farmers since the 50s. Many governmental rural credit unions are still utilizing this model for community development. But people with chronic illnesses are not eligible to apply for loans from credit unions.

Our Project will set up in four AIDS villages where the HIV prevalence is 10% or higher. The higher the level of HIV prevalence, the lower the level of stigma experienced by PLWHA. When everyone in the village has a family member or knows someone with HIV, there is very low discrimination against PLWHA. In its implementation the Project will avoid causing our participants any unwanted social difficulties.

In order to accomplish this Project, ARFC is providing leadership in the creation of a network of Chinese NGO partners. Knowing the complexity of rural development programs and the strengths of our NGO colleagues, we believe that creating a multi-level partnership is necessary to ensure success.

Goals

Simply put, the Five Household Co-Op Project is a micro loan program that lends capital to rural families with HIV. The goals are:

To stabilize the health of people with HIV
To increase earning potential of PLWHA
To help farmers in AIDS villages become self-reliant
To help farmers implement environmentally sustainable agriculture
To cover 20% - 25% of the population of the Project sites
To encourage the locals to form their own rural credit unions with the initial capital

Three Phases and objectives

1. The first phase of 2-3 years will stabilize health by creating an income stream for PLWHA. The means is through raising appropriate livestock. Our research suggests that raising goats or rabbits is most likely to gain a quick return. Pig flu and avian flu make some domestic livestock an investment risk. Goats are resistant to virus and don't require special feed or care. And they are fairly fast growing. Usually it takes about 6 to 8 months for goats to have kids. The young goats can be sold and consumed locally, no outside channel of marketing required. Goat raising is not physically demanding for farmers with HIV.

The objective of phase one is to generate subsistence income which will provide the food and nutrition for farmers with HIV, a critical factor for improving their health.

2. The second phase of 2-3 years will increase income by safe-food farming or off-season produce production. Safe-food farming is not only an environmentally desirable choice. It is also strategic, because food safety is a big issue in China. The abuse of pesticide and chemical fertilizers, industrial pollution of lakes and rivers, contaminated or fake food products, and livestock viruses are creating a food scare. The demand for safe-food vegetables in urban areas has grown tremendously. When farmers can harvest produce in the winter, their cucumbers and cherry tomatoes will be able to fetch a much better price than usual.

The objective of phase two is to increase earning potential which will help stop the financial spiraling down effect among the people who have been ill for some time.

3. The final phase of 2-3 years, to assure self-reliance by producing value-added food products. We have observed that borrowers of many microfinance programs would keep on borrowing, thus becoming forever dependent on outside financial assistance. To achieve financial independence, processed, preserved, or packaged food will yield higher income than raw crops. Jam making, meat curing, and vegetable dehydration, for example, can easily be done outside of a factory setting.

The objective of phase three is to be financially self-reliant. We believe that, at this point, the participants of the Project will be able to give their children a proper education and a good future. So this final phase is the crucial exit step for the Project.

After the first phase, the borrowers are asked to come up with their own ideas while we continue to provide financial support, technical assistance, and marketing channels. They are not obligated to complete all three phases. They don't have to give up their animals while they grow vegetables or sell processed food. With the tools we provide, our goal is to encourage the entrepreneurship of all participants.

Services

One essential element that sets this Project apart from other micro credit programs is the services we provide to the participants. With the loan, they will also receive:

Six workshops a year to provide training in farming technology, co-op organizing, accounting, and women's health and rights
Market channels to make selling easy
Eye-opening trips to urban markets
Local loan manager to settle disputes
Third-party survey for satisfaction level

Structure of the Project

Loans are only issued to co-ops that are made up of five families, not to individuals
Each co-op is required to contribute 30% as the down payment and may borrow 70%
Initial loan amount is $270 per family or $1,350 per co-op, with an annual interest of 8% (a comparable rate to similar micro finance programs), for 30 months
The co-ops should consist of at least 50% women
A low interest will be charged for the loans
Only borrowers who pay back their loans on schedule will be able to receive subsequent loans.

Implementation Partners

AIDS Relief Fund for China provides funding, initial planning and coordination.
Loving Source Education Center in Beijing is the rural liaison for Henan, responsible for organizing the co-ops.
Global Environment Institute in Beijing will provide technical assistance for safe-food farming and micro-loan management.
AIDS Project Los Angeles is providing a portion of the initial funding for this Project.

Evaluation and monitoring

There will be a Project coordinator in Beijing and local loan supervisors at Project sites. We will collect verbal and/or written feedback from the participants. We will also interview our NGO partners and rural liaisons for their input. The goals for the first year of the Project are simple:

80% of the participants returning 40% of the loans with interest
The participants' attendance at the training
A good satisfaction level of the Project participants

Timeline

For the First Year (August 2007 to July 2008)

July 07: Project launch after harvest season, screening potential participants, funding transfer to the local managing NGO in Beijing

Aug 07: Issuing loans and conducting training

Feb 08: 6-month evaluation/field visit, collection of the first repayment of 20%

July 08: 12-month evaluation/field visit, collection of the second repayment of 20%

Budget

For the First Year (August 2007 to July 2008): $30,000

Development and management: $15,000

Technical support, 6 trainings annually: $9,000

Rural liaison and management (in Beijing): $3,000

Loan supervision (in 4 Project sites): $2,000

Miscellaneous costs: $1,000

Loan funds available to 8 co-ops: $15,000

Initial loans: $11,000

Contingency loans: $4,000

Expansion

1. After the first year of implementation, the Project will double the number of co-ops in the same regions. To ensure an economic transformation of the community, the final goal is to reach 20% to 30% of the population in all chosen sites.

2. After a successful roll-out of the Project, we will begin to expand the Project to areas where HIV prevalence is not as high and yet the stigma of AIDS may be a big factor. So an adjusted model of partnering HIV positive and negative people will have to be created.

3. Initially ARFC will be driving the Project with our funding. Global Environment Institute will provide knowledge in safe-food farming, methane tank building, and rural community organizing. Loving Source in Beijing will be the rural liaison for Henan. Another group being considered is the Academy of Social Sciences in Shanghai for providing third-party survey and evaluation.

4. The Five Household Co-Op Project is built on the idea of micro-loans. But it also brings in other models of community building, sustainable development, and personal empowerment. As AIDS and poverty ravage the lives of the rural people and their communities, we expect this Project to foster new hopes and possibilities.

Contact ARFC for future developments: info@arfcusa.org

07.23.07




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View this article in pdf format Five Household Co-Op Project Rural Development in China's AIDS Villages of Henan Project Overview When HIV first arrived in central China, it wasn't through unprotected sex. It was mainly through blood. In the early 1990s, impoverished farmers were enticed by a government scheme of compensated blood donations. However, the unsanitary conditions and the practice of collecting only the plasma for making of blood products while the red blood cells were injected back into donors-spelled disaster for tens of thousands of rural poor. By the mid to late 1990s, Henan province became the epicenter of AIDS. In 2004, China announced its "Four Frees and One Care" policy, promising free HIV meds as well as other benefits to the rural poor. As a result, people are no longer dying at the rate they were when HIV/AIDS first appeared in China. However, the lives of people living with HIV (PLWHA) in rural areas are still threatened by devastating poverty, which has a direct effect on their health, as PLWHA swallow the free drugs on empty stomachs. On a day-to-day basis, the disease is less frightening to them than hunger. The overall goal of the "Five Household Co-op Project" is to improve the health and the lives of PLWHA in rural China by helping them develop sustainable sources of income to relieve the worst of their poverty. The Project is divided into three phases lasting two-to-three years each: Phase 1 focuses on animal husbandry as a means to achieve subsistence level income and to stabilize the health and nutrition intake of the participants. Phase 2 develops safe-food farming and/or off-season produce production to help increase income and to raise productivity, further improving the health of participants. Phase 3 implements value-added processing to move participants toward long-term self-reliance for themselves and their children. A full curriculum of trainings, including accounting, animal husbandry, safe-food farming, women's health and basic rights, and urban marketing will be provided along with the loans. The training workshops are scheduled six times a year. The goal for the Project is not only to provide financial assistance but also to increase knowledge. This Project is a multi-organizational partnership, led by ARFC. The Project will be implemented by several local NGOs in China, which will each provide necessary services. These services include serving as rural liaison to the Project participants, organizing the co-ops, technical assistance, and management of the microloan aspect. ARFC is seeking the support of individual donors and collaboration of funding organizations to ensure the continuity and long-term success of this promising nine-year Project. While assisting the participants with income generation, ARFC and its NGO partners will also administer a series of empowerment workshops on such topics as rural women's health, environmental protection, fiscal management and developing home-based businesses. This Project will bring many improvements to the lives of the participants with the right planning and cooperation. Background China is estimated to have 650,000 HIV infection cases. The majority of the infections are in rural areas due to blood selling or needle sharing. Rural AIDS care was the main consideration when the government was making its new AIDS policy, "Four Frees and One Care." China now has free generic anti-retroviral drugs available for people with AIDS. However, the chief concern among rural people with HIV is often financial hardship. People are not as afraid of AIDS as they are of hunger. Poverty in rural China is endemic. One of the major causes of poverty has been linked to China's primary modern farming practice of using monoculture farming methods that do not take into account diversification to meet food needs and provide for local community consumption. Wheat and corn are the two most popular crops in central China and as a result during harvest time, the price of wheat and corn is often extremely low. Farmers are often forced to sell their crop to local flour mills just for quick cash. Many farmers often do not have enough reserves to last them through the year or to face emergencies such as bad weather, drought or storms that may impact the entire crop. Even without such disasters, many farmers face such dire circumstances that they are forced to sell their lands to brick factories. This process involves more than 10 feet of soil being excavated for making bricks. This practice is detrimental to the future of farmers as well as to the environment. For PLWHA in rural China, there are additional factors that make their financial hardship especially severe and intractable. People with AIDS have diminished productivity. Opportunistic illnesses often keep patients in bed for up to one to two months a year. Many are plagued by chronic fatigue. Working as farmers or moving to cities to work as migrant laborers are often the only economic options for many people with HIV in rural areas. But living with HIV makes this more difficult. People with chronic illnesses are also not eligible to apply for loans in rural credit unions. While there is no social security or adequate subsidy (some rural PLWHA's receive about $5 a month from the government), this restriction further constrains capable HIV+ farmers from continuing their livelihoods and many are forced to leave home. Project Description In 2007, ARFC is creating a new project to supplement its small-grant program. The Five Household Co-Op Project combines micro-loans with safe-food farming in four AIDS villages in China. This new initiative has come about through three years of observing the conditions in rural villages affected by HIV/AIDS, and close consultation with Chinese NGOs and activists. It is rooted in the recognition that, in rural China, improving the health of people with HIV cannot be separated from their economic condition. Microfinance is not a new concept in China. Currently, there are over 100 microfinance programs in the rural areas of China. However, rarely are these projects accessible to people with HIV. Generally, the design of these Chinese microfinance programs leaves it up to the borrowers to come up with business ideas, without adequate technical support or marketing knowledge. ARFC is taking a different route by giving the borrowers tools to increase their chance of success. Sustainable environmental development and safe-food farming are also not new concepts. However, the issues of environmental protection and HIV/AIDS are not typically connected. Environmentalists and AIDS activists rarely collaborate on solutions that may reflect the multiple aspects of social issues, like the environment, poverty alleviation, and public health. However there are many ways in which these issues link in rural China. We have already mentioned how in Henan many people with AIDS sell their lands to brick factories. They sell their future in order to deal with the immediate emergency of trying to find economic options, while dealing with their HIV status. These desperate financial conditions inevitably cause long-term environmental devastation in many areas. In the design of our Project, we aim to create a caring community for all the participants, while also caring for their environment. The Five Household Co-Op Project combines several components of successful community development programs and creates a unique concept. By providing micro-loans, technical assistance, and organizing co-ops, this Project will enhance knowledge, skills, and capacity of the rural HIV+ communities. Income generation is just one of the measurable outcomes. Improvement in the health status of participants is clearly another. In addition, the Project aims to increase participants' awareness of public health, and environmental protection. The concept of five household co-ops has been familiar to China's farmers since the 50s. Many governmental rural credit unions are still utilizing this model for community development. But people with chronic illnesses are not eligible to apply for loans from credit unions. Our Project will set up in four AIDS villages where the HIV prevalence is 10% or higher. The higher the level of HIV prevalence, the lower the level of stigma experienced by PLWHA. When everyone in the village has a family member or knows someone with HIV, there is very low discrimination against PLWHA. In its implementation the Project will avoid causing our participants any unwanted social difficulties. In order to accomplish this Project, ARFC is providing leadership in the creation of a network of Chinese NGO partners. Knowing the complexity of rural development programs and the strengths of our NGO colleagues, we believe that creating a multi-level partnership is necessary to ensure success. Goals Simply put, the Five Household Co-Op Project is a micro loan program that lends capital to rural families with HIV. The goals are: To stabilize the health of people with HIV To increase earning potential of PLWHA To help farmers in AIDS villages become self-reliant To help farmers implement environmentally sustainable agriculture To cover 20% - 25% of the population of the Project sites To encourage the locals to form their own rural credit unions with the initial capital Three Phases and objectives 1. The first phase of 2-3 years will stabilize health by creating an income stream for PLWHA. The means is through raising appropriate livestock. Our research suggests that raising goats or rabbits is most likely to gain a quick return. Pig flu and avian flu make some domestic livestock an investment risk. Goats are resistant to virus and don't require special feed or care. And they are fairly fast growing. Usually it takes about 6 to 8 months for goats to have kids. The young goats can be sold and consumed locally, no outside channel of marketing required. Goat raising is not physically demanding for farmers with HIV. The objective of phase one is to generate subsistence income which will provide the food and nutrition for farmers with HIV, a critical factor for improving their health. 2. The second phase of 2-3 years will increase income by safe-food farming or off-season produce production. Safe-food farming is not only an environmentally desirable choice. It is also strategic, because food safety is a big issue in China. The abuse of pesticide and chemical fertilizers, industrial pollution of lakes and rivers, contaminated or fake food products, and livestock viruses are creating a food scare. The demand for safe-food vegetables in urban areas has grown tremendously. When farmers can harvest produce in the winter, their cucumbers and cherry tomatoes will be able to fetch a much better price than usual. The objective of phase two is to increase earning potential which will help stop the financial spiraling down effect among the people who have been ill for some time. 3. The final phase of 2-3 years, to assure self-reliance by producing value-added food products. We have observed that borrowers of many microfinance programs would keep on borrowing, thus becoming forever dependent on outside financial assistance. To achieve financial independence, processed, preserved, or packaged food will yield higher income than raw crops. Jam making, meat curing, and vegetable dehydration, for example, can easily be done outside of a factory setting. The objective of phase three is to be financially self-reliant. We believe that, at this point, the participants of the Project will be able to give their children a proper education and a good future. So this final phase is the crucial exit step for the Project. After the first phase, the borrowers are asked to come up with their own ideas while we continue to provide financial support, technical assistance, and marketing channels. They are not obligated to complete all three phases. They don't have to give up their animals while they grow vegetables or sell processed food. With the tools we provide, our goal is to encourage the entrepreneurship of all participants. Services One essential element that sets this Project apart from other micro credit programs is the services we provide to the participants. With the loan, they will also receive: Six workshops a year to provide training in farming technology, co-op organizing, accounting, and women's health and rights Market channels to make selling easy Eye-opening trips to urban markets Local loan manager to settle disputes Third-party survey for satisfaction level Structure of the Project Loans are only issued to co-ops that are made up of five families, not to individuals Each co-op is required to contribute 30% as the down payment and may borrow 70% Initial loan amount is $270 per family or $1,350 per co-op, with an annual interest of 8% (a comparable rate to similar micro finance programs), for 30 months The co-ops should consist of at least 50% women A low interest will be charged for the loans Only borrowers who pay back their loans on schedule will be able to receive subsequent loans. Implementation Partners AIDS Relief Fund for China provides funding, initial planning and coordination. Loving Source Education Center in Beijing is the rural liaison for Henan, responsible for organizing the co-ops. Global Environment Institute in Beijing will provide technical assistance for safe-food farming and micro-loan management. AIDS Project Los Angeles is providing a portion of the initial funding for this Project. Evaluation and monitoring There will be a Project coordinator in Beijing and local loan supervisors at Project sites. We will collect verbal and/or written feedback from the participants. We will also interview our NGO partners and rural liaisons for their input. The goals for the first year of the Project are simple: 80% of the participants returning 40% of the loans with interest The participants' attendance at the training A good satisfaction level of the Project participants Timeline *For the First Year (August 2007 to July 2008)* July 07: Project launch after harvest season, screening potential participants, funding transfer to the local managing NGO in Beijing Aug 07: Issuing loans and conducting training Feb 08: 6-month evaluation/field visit, collection of the first repayment of 20% July 08: 12-month evaluation/field visit, collection of the second repayment of 20% Budget *For the First Year (August 2007 to July 2008): $30,000* Development and management: $15,000 Technical support, 6 trainings annually: $9,000 Rural liaison and management (in Beijing): $3,000 Loan supervision (in 4 Project sites): $2,000 Miscellaneous costs: $1,000 Loan funds available to 8 co-ops: $15,000 Initial loans: $11,000 Contingency loans: $4,000 Expansion 1. After the first year of implementation, the Project will double the number of co-ops in the same regions. To ensure an economic transformation of the community, the final goal is to reach 20% to 30% of the population in all chosen sites. 2. After a successful roll-out of the Project, we will begin to expand the Project to areas where HIV prevalence is not as high and yet the stigma of AIDS may be a big factor. So an adjusted model of partnering HIV positive and negative people will have to be created. 3. Initially ARFC will be driving the Project with our funding. Global Environment Institute will provide knowledge in safe-food farming, methane tank building, and rural community organizing. Loving Source in Beijing will be the rural liaison for Henan. Another group being considered is the Academy of Social Sciences in Shanghai for providing third-party survey and evaluation. 4. The Five Household Co-Op Project is built on the idea of micro-loans. But it also brings in other models of community building, sustainable development, and personal empowerment. As AIDS and poverty ravage the lives of the rural people and their communities, we expect this Project to foster new hopes and possibilities. Contact ARFC for future developments: info@arfcusa.org 07.23.07

© 2007 AIDS Relief Fund for China

Five Household Co-Op Project Rural Development in China's AIDS Villages of Henan