The development, structure and operations of cooperatives in Zambia in recent decades have been decisively influenced by the general political and economic conditions prevailing in the country. The political situation has been characterized by one party rule and the economic situation by socialist type central planning and government regulation.
In this environment the cooperatives were assigned an increasingly important role in agricultural marketing, eventually leading to a virtual monopoly in the strictly regulated area of the marketing of maize, the Zambian staple food. They were also assigned a major role in the related activities of distributing fertilizer and grain bags.
Recent political and economic changes in Zambia have, however, ushered in a new era of plural politics and an emerging market economy. Multipurpose agricultural service cooperatives, mainly operating in agricultural marketing and input supply, is the main cooperative type in the country. This is also the type of cooperatives that has been most directly affected by the new political and economic environment.
The current overall government policy in Zambia reflects a positive attitude to member based cooperatives as business enterprises in the private sector of the economy. The implementation of such a policy, however, requires a clear definition of the governments role in relation to cooperatives. The cooperative movement has therefore been involved in an intensive dialogue with the government since 1991 about the implementation of the overall government policy.
The principal aim of the study is to review and analyze the process of disengaging the cooperative movement in Zambia from government intervention and control. A related subsidiary aim is to discuss areas in which the cooperatives need strengthening, including the critical area of capital formation, with a view to making them viable and competitive in the emerging free market environment.
The study largely focuses on those two dimensions of the establishment of independent cooperatives. This is preceded, in section 2, by a conceptual consideration of the interrelationship between cooperatives and government, and in section 3 by a description of the historical development and the current position of the agricultural cooperatives in the country.
Section 4 discusses the various instruments that the state has adopted to control cooperatives. In section 5 the process of fostering genuine local cooperatives, and thereby a stronger cooperative movement, is presented and major critical issues discussed, including the mobilization of equity capital.
Section 6 initially gives an overview of the macro-economic and agricultural marketing policies in Third Republic of Zambia, which commenced in 1991. The section subsequently describes and discusses the process and the achievements of the cooperative dialogue with the government about their respective roles, on the basis of the overall government economic, agricultural and cooperative policy.
Section 7, finally, summarizes the Zambian experience in developing independent cooperatives, including the necessary process of rapid change in the new political and economic environment. It also draws conclusions regarding the management of such a change process, which may be of use also in other countries in a similar situation.