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III. Development policy, social transformation, and resource systems

1. Changing perceptions of the role of natural resources in socio-economic development
2. The concept of transformational development
3. The resource systems framework

The changes in development theories and policies that emerged during the 1970s and early 1980s not only shifted the focus of activities toward economic growth with social equity and human resource development, but also were accompanied by new perceptions of the role of natural resources - and especially of renewable resources - in satisfying basic human needs. This led to a search within international assistance agencies and many governments in developing countries for new policies to deal with environmental and resource problems. An alternative approach to planning the use of renewable resources for human development- the transformational approach - also emerged, and created the need for a more comprehensive resource systems framework with which to analyse development problems, formulate development policies and implement national, regional and local development strategies.

This chapter reviews the changing perceptions of the role of environmental resources in human development, discusses the concept of transformational development, and offers a resource systems framework through which national, regional and local development policies can be analysed and planned more effectively.

1. Changing perceptions of the role of natural resources in socio-economic development

1.1.The problem of marginal areas

Man's misuse and mismanagement of renewable natural resources and the biological and physical environment has a long history; serious problems resulting from the destruction or depletion of vegetation, soils and water resources have caused concern since classical antiquity. But the exponential rate of increase in destructive activities as a consequence of relentless population growth and attempts to apply inappropriate technologies and development strategies in fragile and marginal environments of developing countries, together with extravagant consumption of resources by individual nations, is a relatively recent phenomenon. At the end of the 1970s, the U.S. Agency for International Development reported that the consequences of inadequate resource management are no longer subtle. The continuing loss of tropical forest cover, the exhaustion of croplands. the depletion of fisheries, the advance of desert frontiers, the adverse consequences of indiscriminate pesticide use, epidemic levels of environmentally-related diseases - these and other problems are steadily intensifying, and the need for a more effective response is increasingly felt. There is growing evidence that a number of developing country governments are beginning to treat these issues as matters of high priority .1

In many developing countries, however, the poorest groups - those unaffected by the spread or trickle down of benefits of the investments concentrated in urban industrial centres have had little or no alternative but to continue exploiting fragile or marginal lands more intensively. During the 1970s, it became more widely recognized that the overexploitation of renewable resources further eroded the resource base on which the poor must subsist and severely degraded the biological and physical environment, thereby increasing the impoverishment of people and place. "Environmental degradation is partly a human phenomenon," the Secretary-General reported to the United Nations Economic and Social Council. "It often arises from the necessity to subsist upon marginal resources; and when it reduces the productivity of the resource base, it threatens the basic livelihood of the people dependent on these marginal resources."2 Poverty and resource degradation are inextricably related in developing countries. Government efforts to protect resources vulnerable to depletion in areas where poor populations are concentrated have been largely ineffective. Protection programmes have not been enforced in most countries; but where they have been implemented the poor simply scatter to other areas to over-exploit resources in new locations, or the policies further impoverish people living in the protected areas. "It is now increasingly recognized," the Secretary-General reported, "that prohibitive measures can act as constraints to the decentralization of environmental management responsibilities and to implementation of participatory resource management schemes."3

Elsewhere, well-intended but misguided attempts at development based on ill-adapted, exogenous technologies led to a similar pattern of impoverishment. In biological and physical terms, ruthless exploitation of resources and the resulting environmental degradation have been manifested in barren and eroded slopelands, in formerly fertile plains which have become saline and alkaline wastes, in the spread of deserts, the loss of genetic materials, and in greater hazards to human health. Even more threatening have been the potentially adverse consequences for the biosphere. The human consequences of environmental degradation were almost universally visible in poorer countries by the beginning of the 1980s in increased levels of absolute poverty, malnutrition, disease, lack of shelter and other basic human needs. Greater attention, therefore. had to be focused on the maldistribution of basic raw materials, energy sources, social and physical infrastructure, and investment capital. Environmental problems in many countries were exacerbated by unequal levels of resource use and wastage, poor resource management, uneven terms of trade and unsuccessful attempts at development in the pasty4

Officials of international development organizations began to realize at the beginning of the 1980s that the poorest areas of most developing nations, and indeed entire nations in some regions, had ecologically fragile, problematic or even hostile biological and physical environments. These marginal areas were subject to recurrent natural hazards, such as droughts, floods, typhoons, or insect plagues and their deterioration was exacerbated by man-made hazards. These areas include, for example, the arid and semi-arid uplands and basins of Iran; most of the Himalayan belt from Afghanistan to Burma; the immense arid, semi-arid and drought-prone tracts of the Indian Subcontinent; the swampy coastal lowlands of mainland and insular Southeast Asia and Melanesia; the Dry Zone of Sri Lanka, and the Philippine uplands. Nor, in general, have the dry savannas of East Africa, the Sahelian belt of West and Central Africa or most of the fragile ecosystems of the humid tropical zone responded favourably to either planned or spontaneous efforts to increase the productivity of agriculture or other uses of renewable natural resources.

It became clear that attaining the goals of economic growth with social equity demanded that closer attention be paid to the condition of the biological and physical environment. Little doubt remained by the beginning of the 1980s that a fundamental problem confronting mankind in the final decades of the twentieth century would be to find ways of simultaneously meeting basic human needs for food. energy and other essential raw materials, and for basic goods and services, while conserving the biological and physical environment, the resource base from which those needs would have to be satisfied. Thus a thorough understanding of the complex interrelationships among development strategies, resource use, the pace of economic growth, the application of technology and the preservation of the natural environment became essential for designing and implementing programmes aimed at sustaining an improved quality of life. Despite earlier condemnations of such a notion by developing countries, it became widely recognized by the end of the 1970s that development and conservation of environmental resources must be made more compatible.5 "The issue of conservation must be seen in the dynamic context of more diversified use of available and potential resources," a UN report concluded. "More intensive resource use - whether resulting from population growth or increased economic activity - when accompanied by a 'suitable' shift in the pattern of resource use need not result in resource depletion; indeed, when associated with technological change, it can lead to resource augmentation "6

Both developmentalists and conservationists began to move toward middle ground in the arguments over the use or preservation of natural resources in developing countries. Extreme or absolute positions on this issue could not be maintained in a world of increasing poverty and diminishing resources. "The critical questions relate to the speed of spreading technologies throughout the world, about the extent of substitutability actually present and about the adaptability of social institutions, value structures and patterns of living to the resource and environmental conditions that will exist in the developing world in the future," the UN Secretary-General reported.7 Moreover, new and more productive uses of renewable resources had to be found to sustain and improve the living conditions of the poor. In a sector policy paper on forestry, World Bank officials pointed out that for the 200 million people living within or near forests and who were dependent on shifting cultivation in forests for their food, fibre and fuel, and for those living in tropical savanna zones, "tree farming combined with agriculture could significantly improve the quality of life and per capita incomes." World Bank analysts concluded that "a major forest policy issue of the current decade is how to bring about a change that will result in a larger share of resources being allocated to rural afforestation programs directly benefitting small farmers. "8

Both resources and patterns of living would have to be transformed drastically to achieve equitable economic growth in developing countries. The Secretary-General of the United Nations argued that "accommodating future needs and numbers to the earth's natural capacities and resources will give rise to a transformation of human values, social institutions and economic structures on an order which could ultimately approach that of the agricultural and industrial revolutions."9

The negative environmental consequences of illconceived industrial development programmes received wide publicity during the 1970s and sometimes led to unrealistic demands for arresting economic growth in favour of environmental protection. But by the beginning of the 1980s it was clear that the more insidious and, in the long term, more dangerous environmental problems were caused by underdevelopment. Poverty forced large numbers of rural inhabitants to over-exploit fragile ecosystems from which they derived less than a subsistence living. Experience indicated that if the poor could gain even limited access to the benefits of development, then both the rate of population increase and the rate of environmental destruction might begin to decline.

The relationships among natural resource use, resource conservation and development became more obvious during the late 1970s, as international assistance organizations and developing country governments explored more seriously the plight of the poorest groups. The principle that both natural and human resources must be appropriately developed to satisfy basic human needs and to sustain higher standards of living became widely accepted. "The improvement of human capacities enhances the capacity of people for rational management of resources at the local level," UN officials noted. "It often happens that income, employment and other socioeconomic constraints necessitate particular production and consumption patterns and inhibit the adoption of environmentally more beneficial ones, even when technological options are known."10 The failure to improve the living conditions of the poor would almost inevitably lead to continued depletion of natural resources. Half of the world's remaining unlogged tropical forests would disappear by the end of the twentieth century, because 90 per cent of the wood consumption in developing countries is for cooking and heating. "The forestry problem, too, is largely a socioeconomic problem," the UN reported, "resulting from the inability of deprived populations to afford alternatives to firewood, such as kerosene and more efficient wood burning stoves and heaters."

Development strategies that sought short-term gains through degradation or destruction of any element of the environment threaten sustainable long-term economic growth and became less acceptable at the end of the 1970s. For the industrialized countries this implied a reorientation of societal goals and a reduction of the demands placed on the environment and its natural resources. It meant that extravagance and waste that has characterized their patterns of production and consumption must be replaced by conservation, recycling and, through the development of innovative techniques and technologies, learning to make do with less. In the developing countries, attention shifted to means of building basic physical and social infrastructure within the limits of each country's natural and human resources and according to its own needs and values.

1.1.The problem of marginal areas

Although in developing countries the desperately poor exist in a variety of circumstances, as landless labourers and small-scale farmers in rural areas or as unemployed or low wage earners in urban slums and squatter settlements, problems of extreme urgency for development planners were found in areas where human poverty and environmental degradation coincided: in the world's marginal areas. The term "marginal area" is a convenient shorthand that defies simple definition. The term has come to be used for convenience to refer to an area that is distinguished by some or all of the following characteristics:

- geographical remoteness (peripheral to the most highly developed and populous areas of a country);
- high levels of ecological fragility or extreme or recurrent man-made or natural hazards;
- dispersed, heterogeneous populations of minority ethnic groups living at subsistence levels;
- actual or perceived lack, or low levels, of physical and social infrastructure;
- lack, or low levels, of access to the towns and cities where services, facilities and economic opportunities are usually concentrated;
- economic backwardness or depression;
- "low productivity" of economic activities using current technologies and techniques, which fail to return the profits on investments that could be realized elsewhere; and
- populations with little or no political influence on the decisions affecting their lives.

Thus, the focus on marginal areas was not on poverty or social "marginality" per se, but rather on areas in which renewable natural resources were underutilized, or used inappropriately, or both. In the latter case the mismanagement of natural resource use has led or is leading to increasing impoverishment of the population. Several other terms, such as lagging, poor blighted, declining, distressed, backward or residual, all of which have differing but important nuances, have been used to describe marginal areas. But none is particularly satisfactory in that they all fail to embrace the multiplicity of socio-cultural and biophysical factors that, in combination, result in an area being considered as marginal.

Two caveats should be noted here. First, by definition, there can exist no such condition as ecological marginality; and since all ecological systems and subsystems are linked at some geographical and temporal scale, the ecological systems of tropical highlands and particularly severe perturbations within them, for example, are far from being peripheral or marginal to the foreland.12 Second, no attempt is made here to account for either the diachronic aspects of areal marginality or its causes, since this must be case-specific. However, diachronic aspects are important since marginality is relative and those areas which at present can be classified as marginal may have been or may again be far less marginal, or even core, regions.

In human ecological terms, development of marginal areas has been constrained by two major problems. First the design of effective development strategies has been hampered by a lack of understanding of the characteristics, behaviour patterns and institutional forms of the intended beneficiaries. The effectiveness of development programmes has been limited by the absence of data on specific human ecosystems, on how subsistence producers actually use natural, human and capital resources, as well as by the scarcity or lack of analytical ability to provide information on such systems to planners and decision-makers. Second, although the precise nature of rural development appropriate for the fragile ecosystems of marginal areas is still far from being properly determined, it is clear that if planned changes are not ecologically sound they may result in accelerated degradation of the biological and physical environment and thus in increased levels of poverty and alienation. The rural areas of the humid tropics, arid and semi-arid lands, many tropical coastal zones and high mountain belts are, therefore, among those parts of the world where new development policies have been most difficult to implement unless they are truely appropriate to local conditions and needs.

It became increasingly apparent during the late 1970s that the potential for irreparable damage to societies and environments from inappropriate or badly-designed development policies was as great as the potential for sustainable advances from well-conceived and effectively implemented strategies. Thus, a fundamental issue that now faces international development organizations and governments in most developing countries is how to generate the knowledge and methodologies needed to enable planners to design programmes and projects for the sustained development of impoverished rural areas in ways that will simultaneously provide solutions to urgent, short-term development problems at the local level and which in the long-term will conserve the biological and physical environment and the natural resource base that it represents.

2. The concept of transformational development

2.1.The potential for transformational approaches to the development of renewable resources:the case of palm sago in south-east Asia
2.2. The potential for transformational development

Two general approaches to the implementation of development strategy have emerged in recent years: transferential and transformational.13 Although often described as opposites, the two approaches can be complementary. The former, which characterized most national development efforts and the strategies of international assistance agencies in the past, was based on the assumption that technologies and institutions already proven successful in industrialized countries or in more economically advanced developing countries could be transferred to the poorest developing nations. It was assumed that adaptation problems could be overcome rapidly and the transplant would flourish. But transferential development alone proved to be neither particularly successful nor inexpensive. And being generally applied to urban settings with their established nuclei of complementary industries and services. the transferential mode largely benefitted entrenched urban elites. Although commonly raising gross productivity and income levels in the rural sector, the transferential approach to development often exacerbated existing inequities in distribution of income and wealth.

Transformational development is a deeper-reaching approach which, although not yet fully explored, seems particularly well-suited to the development of marginal areas and to the implementation of an equitable growth policy. Its main underlying principles are that development efforts never start with a clean slate, nor do they exist within a vacuum.14 Established patterns of man-resourceenvironment relationships exist because they have evolved over time as successful adaptive mechanisms within given socio-cultural and biophysical conditions, and therefore must be used as the base for future development.15 Complementing the transfer of technologies, techniques and institutions, the transformational approach argues ". . . that directed change in resource use must be appropriate to existing local systems, and should aim at finding critical points and processes within these systems that can benefit from and sustain specific changes; and [that] prior to formulating and instituting change, more sensitive forms of sociocultural and environmental 'impact 'assessment are needed."16

Implementation of equitable growth policies requires multilevel planning: at the national level, to coordinate national development plans with fluctuating international conditions; at the regional level, since central governments are usually incapable of planning, supervising and coordinating development activities nationwide, and to support and supplement local governments that generally cannot provide essential resources for broad-scale development; and at the local level, to ensure the appropriateness of development inputs and to provide a vehicle for popular participation in the development process.

The transformational approach to implementing equitable growth policies is different from earlier ones in its underlying concepts. Rondinelli and Ruddle note that "unlike development strategies that attempt to substitute modern organizations, technologies and methods of production, attitudes and social relationships for 'traditional' institutions and practices, transformational development seeks to increase incrementally the productivity of indigenous institutions and practices, reinforcing and building on those appropriate to local conditions and needs and adaptive to changing circumstances, and gradually displacing those that are not."17 They describe eight basic principles of transformational development:

1. Building on existing culturally embedded resources, institutions and practices;
2. Involving local people who will be affected by transformation and change in the process of development planning and implementation;
3. Adapting modern technologies, services and facilities to local conditions, resources and capabilities;
4. Promoting specialization in production and exchange activities based on existing resource, human and spatial comparative advantages;
5. Using appropriate, low-cost, culturally acceptable methods of change to generate "demonstration effects" that lead to widespread adoption of methods that have been tested in the local area and have been proven successful;
6. Planning for the displacement of unproductive and unadaptable traditional methods, institutions and practices as change occurs;
7. Establishing, through planning based on "strategic intervention", preconditions for change and transformation in social, technical, political and administrative structures and processes and in elements of the spatial structure; and,
8. Creating a planning process that is flexible, incremental and adaptive and that provides for experimentation and adjustment as transformation takes place. 18

If transformational development is to succeed, it must, of course, be translated from plans to policies, programmes and projects. Activating transformational development plans depends on providing decision-makers and planners with more appropriate information about the implications of alternative courses of action in specific circumstances. The success of transformational development depends as well on the organization of technologies and institutions that are appropriate to the socio-cultural, economic, biological and physical environments of the particular areas to be developed.

2.1.The potential for transformational approaches to the development of renewable resources:the case of palm sago in south-east Asia

The potential for transforming traditional resource systems of marginal areas can be illustrated briefly in a simplified case study of the palm sago industry in East Malaysia.19 This is an old established, small-scale industry and a subsistence pursuit of traditional populations of a particular kind of fragile ecosystem in marginal areas. For centuries, sago a starch derived principally from the stem of several genera of palms, has been a carbohydrate staple of many Asian and Melanesian populations inhabiting tropical, freshwater swamp areas.

After contact with Southeast Asia. Europeans used sago, a traditional foodstuff, to provision their ships and later for a number of industrial purposes, including textile and carpet size, and food ingredients and preservatives. Recent research shows a wide range of other modern industrial uses for palm sago, including oil-drilling and other lubricants, specialized glues, as a filler for biodegradable plastics, and in the manufacture of pharmaceuticals. Such high technology uses, however, require improved cultivation techniques and processing methods in the existing resource system to achieve a standard product of acceptable quality and regular supply. Improved marketing channels and a host of other changes are needed to sustain the production of a highgrade industrial raw material in underdeveloped rural regions. In these areas, because of both ecological and sociocultural constraints, the only feasible method of developing sago production in the swamps is through an appropriate transformation of existing technologies and modification of existing institutions.

1. Traditional production processes

The present-day commercial production of palm sago occurs mainly in mainland and insular Southeast Asia and Melanesia. The principal genera exploited are Metroxylon, Arenga, Caryota, Eugeissona and Corypha. There is considerable variation in the yield of sago palms, a variation attributable to biophysical differences in the palms or to differences in soil conditions and management techniques. But efficiency with which starch is extracted may vary among societies as a result of differential skill and technology. Also, many discrepancies undoubtedly have arisen from inconsistencies in measurement and reporting. Metroxylon palms are generally acknowledged to have the greatest yields, and are those mainly used to produce the palm starch of international commerce 20

Fig. 1. General Operations in Palm Sago Processing

The principles and methods of palm sago extraction are similar for both subsistence and commercial production, although the scale of operation is different. In general, the methods of extraction are as follows: First, according to some observed biological criterion, or sometimes as the result of simple testing, palms are selected and felled. Among some ethnic groups that process sago for immediate consumption and that construct a rudimentary apparatus for use only once or twice, the outer, bark-like layer is stripped from the trunk and the pith pulverized with an adze. Where operations are on a larger scale the trunk may be cut into sections or floated whole to a central processing facility. There it is reduced to battens and rasped either manually or mechanically to pulverize the pith and loosen starch particles within the fibre. The starch is removed from the fibres by kneading with the hands or trampling by feet or, in more highly mechanized operations, by a spray of water. Starch-laden water runs into a settling container, where the starch is precipitated and the water overflows. The starch is then removed, dried, and stored for use. This generalized sequence of operations is shown in Figure 1 for traditional subsistence production and for a modern chemical plant.

Small-scale commercial production of sago is highly developed and well-documented for the swampy coastal lowlands of Sarawak, where it has been traditionally associated with the Melanau community. There, commercial sago extraction begins with planters who own palm gardens and who sell Metroxylon palms to small, local mills. Exploitation of the palms is irregular and unsystematic. The sale to millers depends on the planter's need for cash, the availability of labour for felling and the urgency of the demand from the mills. Millers buy palms either on contract or ad hoc from the planters. Palms are sold either standing in the gardens, felled and ready for transport, at the mill or already processed into wet flour.

The mill extracts wet flour mechanically and produces three grades of dry flour, which, from low to high. are known as chong hoon, thai hoon and siong hoon. Palm logs are rafted to the mill and stored in the river to reduce deterioration. In the mill yard the bark-like layer is stripped from each log with an axe or bush knife and the logs split into 6-8 battens which are then rasped by a dieselpowered, home-made rasping wheel which rotates at high speed. This is a simple wooden disc studded with long nails. The wheel is mounted on a platform to permit the rasped pith to drop into one end of a cylindrical washing reel that rotates on a central shaft. A perforated water pipe sprays water into the body of the reel and flushes the rasped pith as it is passed along the inside by perpendicular splines arranged in a spiral pattern along the central shaft of the reel. This loosens starch grains from the stem fibre and washes them out in suspension. Waste fibres fall from the lower end of the washing cylinder. Starch-laden water then flows through the coarse wire screen that encases the reel and is led off by a conduit through a coarse sieve which removes most of the fibre prior to sedimentation in cement tanks or wooden troughs. The precipitated starch is later removed from the settling vessels and stored, prior to being sundried. When dry it is known as chong hoon. To produce that hoon, the middle grade, it is sieved after drying. Crude dry flour can be re-washed, dried again and then sieved to produce the highest grade of flour, siong hoon. Dried flour is bagged, weighed and stored to await shipment to the buyer-exporter.

Marketing prior to export is illustrated in Figure 2. In the international market, other more expensive starches are generally preferred to sago, which is seen as a supplementary industrial resource for use in times of general shortage. Traditionally-produced sago starch can, however, be competitive in terms of prices on the international starch market. But its future as an internationally acceptable product depends more on achieving a consistent quality and on standardized grading than on price competitiveness. Unfortunately, Sarawak palm sago has become well-known for its low quality owing to high moisture content (as much as 20 per cent by weight), low starch content. high crude fibre content, offwhite colour, and high ash content, problems caused by the excessive delays and inefficiencies of the traditional extraction and processing technology.

Fig. 2. Institutions Involved in the Promotion and Sale of Sarawak Sago

Under the present haphazard system of palm selection and transport to the mill it takes one to four weeks for felled palms to be delivered. During that time it undergoes putrefaction, discolouring and loss of starch Moreover, logs may remain in the water for an additional month prior to rasping. After rasping, precipitated starch may remain in the sedimentation tank for another week before transfer to a covered shed pending sun-drying. Prolonged storage of this semi-dry, crude starch results in "dead" material that has lost much of its starch content. Some four days are also required to complete drying. A degraded product is inevitable where the washing process is delayed; turbid, brownish river water is used for washing; starch is improperly dried in open yards on old straw mats; and the material excessively handled under dirty conditions.

There has been little technical innovation in the milling process during the last three decades. Additions to machinery, done on an ad hoc basis as finances permit, are made without consideration to the overall layout of the mill and its efficient operation. Many basic technological inefficiencies - most of which could be quite easily corrected - are apparent. The main problems are excessive, continuous pumping of river water and incomplete extraction of starch from the pith. Wire sieves are too coarse and cause a high fibre content in the finished product. Excessive starch loss in overflow water from sedimentation tanks, the loss of "dead" crude starch, and loss of flour during drying by wind and through poor covering of the drying floor are also correctable problems.

These factors result in a low quality product, with spot samples having up to 20 per cent moisture content, 62-82 per cent pure starch, 0.1-0.9 per cent ash, and 1.3-18 per cent fibre. This is unacceptable compared with the starch trade's usual requirement of 14 per cent or less moisture content. The cumulative losses to the traditional industry through inefficiencies in organization, technology and mill layout are considerable 21 On the average, mills in the main producing areas operate at only 65 per cent of present mechanical capacity with no saving on fuel consumption 22 Nevertheless, the combined employment potential of the small, traditional, labour intensive mills is considerable. In 1975, 65 small mills employed some 620 full-time workers and their families,23 and any scheme to upgrade mill operations and technology should not significantly upset their capacity to generate employment.

The traditional sago industry in Sarawak is also beset by a series of market imperfections. Three levels are involved: owners of palm gardens, millers, and buyer-exporters.

Owners of palm gardens enjoy a relatively competitive market for logs and are not heavily subject to monopsony, as they generally operate at a subsistence level, can defer the harvest of palms for one to two years from the start of inflorescence formation, and have many millers competing to purchase their palms. A symbiotic relationship prevails between owners of sago lands and millers.

Mill owners bear the brunt of reconciling sago production and the supply of palm logs and products with the requirements of the external market. They operate under the pressure of having to ensure an adequate supply of logs from basically subsistent palm garden owners to meet, often at short notice, the demand for sago flour from an unreliable external market. Running what are basically family operations, millers are in a fairly precarious financial position, generally unable to improve their mill and indebted to the buyer-exporter. Their weak position is exacerbated by credit requirements and obligations; lack of external market and price information; and the lack of standard grading and pricing criteria. When quality specifications are not met, discounted prices are passed on to the millers, who must also absorb the uncertainties of price and demand.

The position of the buyer-exporters is potentially monopsonistic owing to their small number, particularism in trading, and greater access to and control of supporting services and credit and external contacts and market information. Where the buyer-exporter has an interest in milling and thus there exists some degree of vertical integration, a better quality product results. But generally, "the objectives of local millers and exporters diverge, each typically out for quick returns from least capital outlay, neglecting standards of manufacture and turning out a crudely processed product, often adulterated and of poor repute in a competitive international market where potato, corn and tapioca starches vie for dependability of quality and supply" 25 Trading in a number of commodities, the buyer-exporter of sago flour functions more as a neutral market intermediary rather than a seller of sago flour committed to the development of the industry. Accepting whatever grade of sago the miller supplies, the exporter safeguards himself by taking the margin and passing back fluctuations in price and demand to the miller. Exporters profess only a vague understanding of external needs and uses for sago. A poor quality product, inadequate market information and general passivity are the major constraints on the growth of the Sarawak sago industry.


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