Economics in the apple heartland

A Harvard doctoral student has traveled to the wild apple’s home in the mountains of Central Asia to lend a hand to an international nonprofit working with local apple farmers to improve how they grow, harvest, and sell their crops.

Plamen Nikolov, a first-year Ph.D. student in health economics, has designed an assessment survey and is leading data collection teams as they interview local households in two small villages on Kyrgyzstan’s Issyk-Kul Lake.

Many in the rural agricultural region rely on the annual apple crop for much-needed income. Until the arrival of Mercy Corps International, however, the infrastructure of the local apple industry was in disarray. A local apple warehouse had fallen into disrepair and the most direct road from the main highway to the warehouse was impassable, requiring a much longer detour through the village.

The result was that apple sales very often relied on farmers lugging their crop to the roadside to sell to passing cars. A problem with that marketing method, Nikolov said, is that the towns, Tamga and Tosor, are on the south side of the lake, while the main road traveled by tourists to the region runs on the north side, leaving income dependent on the whims of passing drivers.

Mercy Corps’ Apple Project aims to improve the lot of local apple farmers by providing the assistance of two agronomists on cultivation techniques and new varieties to plant. Further, the organization’s microfinance arm, called Kompanion, has begun to provide low-interest loans averaging $100 to families to help them upgrade their apple-related operations.

In addition, Mercy Corps repaired the warehouse and the road, allowing both better storage of the crop and easier access when the irregular trucks of industrial apple buyers visit town.

The apple has long been part of the landscape there. The wild apple tree, believed to be the ancestor of the modern domestic apple, is thought to have originated in nearby Khazakhstan and still grows wild throughout the region.

Nikolov volunteered with Mercy Corps in January 2006 to experience frontline development work firsthand. A native of Bulgaria, Nikolov received a bachelor’s degree from Ohio Wesleyan University in 2000 and a master’s degree in international economics and international development from Johns Hopkins University in 2004.

After graduation, he worked at the World Bank before leaving to join Mercy Corps, which was established in 1979 (as the Save the Refugees Fund) to aid Cambodians fleeing famine and war in their homeland. Since then, Mercy Corps has delivered more than $1 billion in relief and development assistance in 82 countries.

Nikolov said he liked Mercy Corps’ decentralized organization and emphasis on microfinance to help people help themselves.

“I truly like the approach that they take. They’re trying to merge private-sector approaches with community development work,” Nikolov said.

The Mercy Corps’ Apple Project grew out of the work of a Fulbright scholar conducting doctoral research on socioeconomic factors affecting the makeup of home gardens in that area of Kyrgyzstan. The researcher realized that the local people could improve their apple businesses with proper storage and other technical assistance, and approached Mercy Corps for help.

Nikolov’s role is to help Mercy Corps assess the success of the project. Catherine Brown, Mercy Corps’ Kyrgyzstan country director, said the organization is looking for a 20 percent increase in family income and a rise in overall household wealth. She praised Nikolov’s help in designing a survey and conducting two rounds of data collection, assisted by nine local people who did the actual door-to-door surveying.

“Unless we can measure our work, we really don’t know if what we are doing has any development benefit to individuals and communities. All we have are anecdotes, but anecdotes don’t reflect real improvement in the lives of the people we are working with,” Brown said. “Plamen’s work on the model was extremely important so that we can measure the impact of our work, which is the basis for informed decision making in terms of project adjustments and planning.”

The surveys seek to measure such variables as total revenue, cost of pesticides, value of the house, value of animals, and the amount a household owes in loans. The interviewers asked questions of roughly 500 families, including 100 involved in the Apple Project.

The initial surveys were met with some suspicion and reluctance, Nikolov said, with people asking who would have access to the information and how it would be used. Despite that slow start, people eventually became enthusiastic about the project and the prospect of improving a major local industry, with some volunteering time to key in data.

Nikolov also investigated alternative markets for the towns’ apples. He said the price per kilogram of apples in the capital of Bishkek was three times that in the towns, which might make it worthwhile for the families to truck their produce to Bishkek to sell it.

Although he is still assessing the survey data, Nikolov said programs such as these are important in places such as Kyrgyzstan where democracy and market economics are relatively new.

“People have never lived their lives in a different way. They never had to go to Bishkek to sell their apples. There’s a lot of opportunity for growth there,” Nikolov said.