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Contributions for With Technology and Elite capture - Are Cooperatives Relevant today?

Elizabeth Asiimwe Agric. Ext Student, Uganda

Yes, we need the c0operatives. and much as they did not fair well in uganda, it was largely due to institutional and managerial factors. These days, social capital is the fastest password to getting busines deals and this is majorly through face to face interaction. With ICT, yes many people can be be reached faster  through telephones, radios, networking sites, etc...thanks to FIT Uganda's channel of market prices - infotrade. however, i still feel that deals are usually sealed faster when there is a  face to face meeting-which was common with cooperatives.

I have had  cases where farmers sell their proucts at give away prices to middlemen just because they are duped that their colleagues are offering 'lower' prices. And because they badly need the money, and they fear associated risks of storing it for some time, they sell at a loss. But with cooperatives  farmer groups are able to have a collaborative and stronger say on prices which could minimise exploitation. this will happen only when there is a favourable policy environment. over to the concerned...

Economic Agri Advisors EAA University Of Guyana, Guyana
Economic Agri Advisors


Even in today’s society, not all farmers are able to respond to the rate of today’s growing economy and advanced technology. Reason for this being, is that they may not have the ability/capacity/knowledge to cope with the fast growing economy or maybe because their culture may restrict them in moving along with the world, or it can be stem from the inability of farmers to acquire adequate credit to invest in technology.  

However, even if farmers have the capital to invest in technology, their ability to grasp its use and efficiently use technology to its fullest capacity curtails most farmers. Thus, programs should be put in place to assist farmers in this regards.

Cooperatives might be outdated in this age, but in the past, its purpose was to help the small-scale farmer’s access markets, and in this era, the function is the same. Thus, having cooperatives in this age may not be such a bad idea. Cooperatives assist small farmers by informing them on the market condition; negotiating the sale of crops directly to buyers/giving them a market to supply their products, provide access to equipment in which small farmers would not be able to purchase etc.

However if Cooperatives wish to exist in this age then they will have to divert from the traditional practices and be in par with today’s developing world so as to reduce transportation  cost, transaction cost and other factors that may hinder them from achieving their sole purpose. Thus, the need arises to incorporate technology with cooperative practices in order to assist  farmers in today’s market.  





Economic Agri Advisors EAA University Of Guyana, Guyana
Economic Agri Advisors

Both Kathleen and Rwakakakamba raised a critical point about cooperatives becoming political foot balls. But these issues and tendencies could always be ironed out with effective institutional design accompanied with checks and balances and term limits. the incentives to become political must be eroded within the institutional design, and rents must only be sought from improving the welfare of the farmers, thus incentive structures must be well thought out.

Economic Agri Advisors EAA University Of Guyana, Guyana
Economic Agri Advisors

one must not see ICT development as the decline in cooperatvies as the benefits of ICT development to cooperatives are numerous. through fully utilizing ICTs cooperatives can cultivate new markets by reaching out to different customer bases on the we, they can keep up to date with developments and new innovations and receive training remotely. Market information and access stand to improve significantly. ICT could also transform the management of co-ops by improving management practices, financial information and reporting and records management as well as create an online presence.

these improvements help increase efficiency and lower operating costs.

Economic Agri Advisors EAA University Of Guyana, Guyana
Economic Agri Advisors

Tim made a valid point that cooperatives are much more than informing farmers about market conditions. cooperatives are about strengthening capabilities through education, training and skills development, but bot only in technical areas of sustainable agrculture production techniques and technologies. Cooperative members and managers also need to build their soft skills in areas like leadership and entrepreneurship, negotiation and self confidence business development, policy development and advocacy.

these go well beyound analysizing market conditions and buying agricultural inputs in bulk etc, reinforcing the relevance of agricultural cooperatives.

Economic Agri Advisors EAA University Of Guyana, Guyana
Economic Agri Advisors

AGRICULTURAL COOPERATIVES: KEY TO FEEDING THE WORLD was the theme for world food day 2012.

This is in recognition of the importance cooperatives play in ending hunger and improving food security globally. Given all the ICT developments 100 million jobs around the world fell within the purview of cooperatives, a number that is 20% greater than those for multinational enterprises. In kenya cooperatives have the following market shares: 70% of coffee, 76% of dairy, 90% of pyrethrum and 95% of cotton. In 2008, the top 300 cooperatives were responsible for an aggregate turnover of US$1.1 trillion, a value almost the size of spain. In Brazil, cooperatives account for 40% of agricultural GDP and 6% of total agribusiness exports. In the USA 80% of diary production is controlled by cooperatives and 500 000 coffee growers in colombia are apart of the National Federation of Coffee growers-a cooperative.

These are all recent statistics in light of ICT development and illusstrates the resilience of agricultural cooperatives.

ICT development has obviously improved the functionings of cooperatives notwithstanding the principal agent problems that exist with its management. These problems are well documented and there's no shortage of solutions to mitigate them. COOPERATIVES ARE STILL VERY MUCH RELEVANT.

Kay (Kathleen) Muir Leresche EcoNomics Africa, South Africa
Kay (Kathleen) Muir Leresche

There still remains confusion over Cooperatives in Africa.  Many well-meaning efforts have gone in to bringing together smallholders in order to scale up production; the most recent in South Africa with the land reform efforts.

Throughout history, production co-operatives have very seldom succeeded.  And Africa is no exception.  This is because costs and benefits of effort are seldom directly linked making the transaction costs very high. To succeed you need a small, very cohesive group with strong social sanctions for any diversion.  There have to be very stringent norms in place with closely shared values and very clear lines of accountability and transparency.  Few people are able to sustain this level of conformity to the group.

Marketing co-operatives on the other hand have far more promise and have a successful history in helping smallholders actively participate in the broader economy.  As Tim points out they are still relevant even with the much wider access to information available through modern technology.  And as Tim indicates, there are many  advantages including bulking produce, sharing transport, establishing shared "fair trade" or other labels, of contracts with large buyers in addition to the better prices and service when purchasing inputs and sharing the expensive equipment often needed in processing or for production.   HOWEVER they only work if the membership are fully conversant with their roles and both the benefits and costs of membership and more importantly that there are very transparent systems in place with accountability for actions and leaders who are trusted.

Rwakakakamba makes a very timely input on the fact that co-operatives have a history of being political footballs.  They can become a channel for influence and corruption and in this form they will inevitably fail.  If governments are serious about agricultural growth and reducing poverty, then they will provide access to training and to the computer software systems that allow for much greater transparency and accountability -- provided effective communication channels are used to ensure that all members are made aware of the business opportunities and decisions made by the Co-op.  This training, information and communication technology will reduce the opportunity for gaining political rents but it will have very positive effects on rural development!

Is there the will out there to reduce the political role played by co-ops and to make them rather engines for growth?

Tim Williams University of Georgia, United States of America
Tim Williams

If the only function of a cooperative is to better inform the small farmer of market conditions then the you may have a point. Implied in this discussion is that the sole role for cooperatives is to improve market linkage, but there is also the consolidation of farm inputs and outputs to achieve the scale that markets need to be efficient.

Despite all that communication capacity there is still a need to achieve the benefits that scale has in terms of transport, purchasing, etc.  Knowing what the maket condition is should allow members of cooperatives to be more effective and better negotiators.  Volume does count.

Finally, Cooperatives may  provide access to services and equipment that small farmers cannot justify based on their single operation.  As scale increases the benefits of cooperatives may decline but it still provides benefits to medium and large scale farmers.