It is our view that cooperatives definitely still have a place in the world of agriculture. Granted, the increased use of mobile technology in Uganda might be seen as the death of cooperatives but we do not see it this way. According to UN Deputy Secretary General Asha-Rose Migiro cooperatives possess three very important values i.e. sustainability, solidarity and inclusiveness. These three values are key especially in the case of small scale farmers where these farmers do not have as much market power as their larger scale competitors. Farmers are known for being slow to adapt to new technologies so although statistics show this increase in use of mobile technology it might very well be the case that these statistics are not very representative of farming families. This then shows why sustainability of cooperatives is important for it will be the means by which these farmers who are slow to adapt the mobile technology, will gain access to the up to date agriculture related information that is disseminated through these mobile networks. The increased use of these mobile technologies should be seen as a means of enhancing the existence of cooperatives instead of rendering them obsolete.
In addition to what "Final Year Economics Students (group 2) University of Guyana " we also see the need for the existence for the agriculture cooperatives .Small farms are not economically efficient because of relatively high input costs compared to profits. Small farmers in developing countries such as Uganda are unable to take advantage of economies of scale and often lack the financial resources such as credits and loans to make their farms profitable. Establishing cooperatives, farms in areas of developing countries where small farms are prevalent will allow farmers to share capital and reduce input costs thereby increasing production and income.
There are many advantages to establishing small farm cooperatives. According to Motiram and Vakulabharanam, farmers in cooperatives have more bargaining power, lower transaction costs in getting loans, and better access to information about its members and their resources compared to “outsiders” such as moneylenders and contractors, benefits which strengthen the cooperative’s power (Motiram & Vakulabharanam, p. 4). Farmers have more individual power and control over production, including inputs and land use, than they do through contract farming, and thus food security is less vulnerable under a cooperative model (Motiram & Vakulabharanam, 2007).
Co-operative can still be an important, even with the increase use of technology. Co-operative can be looked at as a custodian of framing knowledge. As Tim pointed out, the benefit of scale and consolidation that is brought about by co-operative can be used as recruiting agent. This is an interesting way to think; we need more framer to ensure future food supply. It is estimated by the UN Food and Agriculture Organization (FAO) that by 2050 the world population would demand 70% more food. Co-operative serves as a means of sharing knowledge gathered to improve framing techniques. Technology can help promote more membership participation. It can help draw in women and younger generation into framing. This can bring out novel ideas. Women and younger generation serves as reinforcing and adding to the processes of framing. Also, essentially this is a passing of the wealth of information to the younger generation.
Yes Uganda still needs cooperatives to connect farmers and small businesses to markets even with millions connected to mobile devices, internet and radio station. The primary objective of the media is providing information, cooperatives goes beyond providing information to farmers and small businesses, they share skills, techniques, increase innovative capacity for them to adjust to market situations, increase problem solving ability with join inputs from members, just to name a few. These are all critical functions cooperatives play which the media alone cannot successfully fulfill. Even if the media is successful in transferring information about marketing opportunities, small farmer may lack the individual capacity to react promptly to changes in market prices. They may not produce the adequate amount that buyers find economically viable to purchase at once. This could largely hinder their ability to capitalize on marketing opportunities, which in term would enable them to growth.
We agree with Mohammad Mohammad Hasan in that “the internet and the fm radio can convey the information but it cannot change the life of the poor people, especially the illiterate people. They need assistance, support to grow, finance to do business, training to improve, advice to look forward, then only a vibration can be created”. A cooperative cannot function without members believing and working together, cooperative during the 1970s and 1980s was not just a business unity it creates unity amount people, customs which would greatly impact any nation going forward to economic development.
It is our belief that cooperatives are still relevant in Uganda based on the changes that the models have already undergone since the 1980s through the reform initiatives made by the Uganda Cooperatives Alliance(UCA). Though liberalization and the wide dispersion of technological accessibility have indeed led to the collapse/dysfunction of many of the institutions within the earlier cooperative models, there was still political will to maintain the existence of cooperatives for good reasons.
In a policy note on the Revival of Agricultural Cooperatives in Uganda (Kwapong 2010, it was noted that the changes in the representation of farmers along with the establishment of self-sustaining, autonomous support organs have led to increases in welfare by way of incomes and other benefits for farmers, derived from maintaining membership with cooperatives. Training and education, as well as access to financing and the promotion of product diversification are all initiatives that were undertaken by the reformed cooperatives to take advantage of the advances appended to the process of liberalization. Where perceptions of income have increased in rural farming communities (Kwapong 2010), cooperatives have played a key role in the reduction of rural poverty in Uganda. Rural farmers reported that they were able to provide their families with three meals a day as a result of the increases in income brought about by cooperative membership. The organizations established within the UCA's umbrella: Rural Producer Organizations (RPOs); Area Cooperative Enterprises(ACEs) and Savings and Credit Cooperative Organizations(SAACOs) have effectively allowed for autonomous self-sustaining business and democratic units that offer support for members, who have grown in number over the years. The intimacy of these organizations has allowed for cooperatives to effectively provide welfare improvements to farmers and their families.
Though the ubiquity of communications technology has the potential to derail traditional collective efforts through the advancement of individual enterprise and opportunity, there can be no replacement of the benefit that reformed cooperatives have brought to rural communities by way of enhancements in knowledge, productivity, profitability, income and food security.
Even with the large number of citizens connected to mobile phones, internet and tuned into radio stations in Uganda today, the need for cooperatives still exist. Moreover, we agree with Mr. Morrison that if cooperatives do not change, what currently exist of them may soon disappear. Therefore, what can be done? As our previous post stated, in essence cooperatives should be moving with technological advances – in this case, the great number of mobile phones, internet access and radio stations – in order to remain sustainable. A 1987 US Department of Agriculture (USDA) report reflected the views of a panel of farmer-owned cooperative leaders in that country on a number of key issues and concluded that “cooperatives must continually adapt to the changing marketplace and needs of farmers and that nothing inherent in the cooperative form of business prevents that type of evolution”.
According to UN Deputy Secretary-General Asha-Rose Migiro, cooperatives have the virtue of bringing about stability in its social responsibility as well as its economic viability. She recognizes that cooperatives play a great role not only to its members but also to the wider society by helping to reduce poverty, creating jobs, promoting food security and inclusive finance. She also emphasizes on three very important values of a cooperative: sustainability, solidarity and inclusiveness. Cooperatives consolidate domestic economies while crafting a sustainable future through their use of local labour and capital and the high value they place on protecting the environment. While cooperatives serve the needs of its members, the well-being of the society as a whole is just as crucial. In addition, given that people form the foundation of any cooperative, cooperatives provide the opportunity for advancing its member and the broader community in terms of fostering their skills and abilities in order that they become more actively and passionately involved in enhancing their lives.
Therefore, one should not see the introduction of new technologies as the obsolescence of cooperatives but rather as a means of garnering improvements within cooperatives. In this way, cooperatives will move time and with changes in the market place. At a time when the world is faced with many issues of financial crises, food shortages, climate change and environmental degradation, cooperatives are indeed relevant and should be taken more seriously. We leave you with a statement by UN Secretary-General Ban Ki-moon:
"Through their distinctive focus on values, cooperatives have proven themselves a resilient and viable business model that can prosper even during difficult times. This success has helped prevent many families and communities from sliding into poverty."
Cooperatives are very important in that it aims to address the problem of small farm inefficiencies especially in the developing world. They help farmers to gain more bargaining power, lower transaction costs in getting loans and better access to information about its members. These small farms are inefficient due to relatively high input costs as compared to the profits. These small farms also often lack the financial resources such as credits and loans to make their farms profitable. As such establishing cooperatives especially where small farms are dominant help farmers to share capital and reduce input costs which in turn help increase production and income.
Yes there is still a need for Cooperatives. Agricultural Cooperatives are important for development and food security especially for smallholders in rural areas. Majority of those facing hunger live in rural areas where agriculture is the mainstay. Cooperatives bring about social development, poverty alleviation, employment opportunities, income and economic growth in rural communities. Farmers that are a part of a cooperative will benefit from social protection, bargaining power, reduction of costs and sharing risks. For rural development, there should be provision of credit facilities, provision for marketing, supply of agricultural inputs, and improvement of irrigation. These factors are achieved through cooperatives, of course only cooperatives that hold their true meaning.
In addition, development problems that may arise in cooperatives can be address through Information and Communication Technology (ICT). Volume of transactions can shift from manual to automotive which will resolve issues of efficiency, accuracy and MIS. In Rwanda, the registration process was hectic for farmers. The method was long and filling out forms required knowledge which the farmers lack and computers were also inaccessible in rural areas. Rwanda Cooperative Agency implemented a model of bylaws to ease the registration process. As such, field officers could also assist farmers in filling the forms through use of portable computers.
While we agree that these traditional farmer cooperatives are necessary, it might be irrelevant in places like Uganda since a vast amount of people are connected electronically. Hence, in this case there is an ease of communication and it is less costly since there is no need for a standing institution. However, we believe that traditional meetings and discussions (where everyone is in one room) are more productive since not everyone is able to keep up with these technological changes. Then again, with the exception of places like Uganda where there can be a compromise between the two so that traditional cooperatives are not completely eliminated but are complemented by communication technology.
We still do need cooperatives, but their functions should be more than just connecting farmers and small businesses to markets. A common problem in agriculture is that farmers tend to be small and dispersed which leads to the problem of information asymmetry. Even though technology has made communication easier it has not eroded the problem of information distribution. Farmers are notorious for being risk adverse and slow to adapt new technologies, so it’s probably interesting to know how exactly the technological increase affected farmers. Cooperatives can now assist in this regard to help in cooperate the use of these new communication technologies; show how exactly the communication mechanisms available can lead to productivity increase.
I believe that Uganda still needs the cooperatives for the socio-economic perspectives. According to the CIA report 2012, about 50% of the total population of Uganda are connected to either land phone or cellular phone and 9.5% of the population is connected to internet using. Albeit the rapid growth of the media and impressive growth of the economy, Uganda suffers from some major problems like poverty (25%), inequality, malnutrition, illiteracy (34%) and high HIV prevalence rate (6.5%). Despite of not being a very big country, there are numerous ethnic groups and multi-lingual people live here. So I believe the importance of cooperative for Uganda is very high despite the emergence of the massive uses of electronic and communication media. It is always advisable to massively advertise the social goals of the government by this media but the necessity for consolidation of the mass population is always demanding. Individual person is motivated by the social norms and values and this social norm and values are monitored by some institutions. Electronic media is far away from monitoring this consolidation of the individuals towards the beliefs and customs.
From the economic perspective, the cooperatives those who are engaged in providing microfinance and agribusiness consultancies are very important to make a change in the life of the poor people. This wretched of the poor population are deprived of from getting the benefit of the country’s economic growth. Inequality rises but there is no one to change the life of the poor. The internet and the fm radio can convey the information but it cannot change the life of the poor people, especially the illiterate people. They need assistance, support to grow, finance to do business, training to improve, advice to look forward, then only a vibration can be created. So I think the SME and the cooperatives can play a vital role for this kind of social objectives.
About the prevalence of HIV, everyone knows that is a very dangerous disease, all the electronic and social media are posting for this awareness, but how much vibration can be created without a real physical movement, a procession, a rally, a HIV awareness week, blood donation program, national seminar etc. So some cooperatives should work for this. It is not good to ignore the smalls. Smalls are the beauty and they can do some wonderful jobs. Think about the Microfinance institute which is developed from Bangladesh, it was small but now the vibration is enormous. So being small is not a problem. The emerging growth of the telecommunication can never replace the necessity of the cooperatives. It will prevail in the long run. It would not be wise to stop them to operate.
I believe in market. If there is big change in the society and in the life style of the population, the cooperatives will change its operation by its own. They will develop the new products for the new population. So it is not wise to control the innovations. But I believe it is necessary to monitor this cooperatives and about their activities. What are they doing and how they are doing? Is it bad for the layman people, is it market distorting etc. So a regulatory body can observe the works of these cooperatives.
Mohammad Monirul Hasan
Institute of Microfinance (InM)