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Re: Enabling rural cooperatives and producer organizations to thrive as sustainable business enterprises

Peter Steele FAO, Italy


 Thinking Big

Half-way into the debate and no one has, as far as can be seen, made an attempt to shift the debate to larger-scale cooperatives and, importantly,  introduced the highly successful agro-industrial models that exist for all kinds of enterprises, crops, products and markets. Why is this? Are contributors restrained by their background and experience - typically national-, rural-, historic-, small-scale- and/or subsistency-based; and further constrained by parallel issues of safety nets, social networks, community food security and, not least, the platform provided by FAO/FSN?

Then too, there is the power and prestige of the academic debate with language that quickly shifts into the finness of interpretation; and which can be difficult to understand.

If 'cooperatives' are to continue to find a role with producer/industrial organizations, there is little point in continuing to look backwards to the euphoria of the post-colonial cooperative movement , for example, with the shared opportunities that were promoted at the time. And there is absolutely no point in continuing to see the national government as a potential source of investment funds, expertise and more in support of cooperatives. Success or failure, cooperative enterprises will have to succeed in the private sector.

This contribution then draws your attention to Fonterra New Zealand - a dairy cooperative company that has become the largest producer-processor food company of its kind in the world. You can check out this cooperative at and search the supporting pages but, in summary, it is owned by >11,000 dairy farmers (>95% of all national dairy farmers) with assets of the order >US$13B and an annual turnover of >US$15B. It is the largest company in New Zealand and, remember, this is a small country of <5M people that is quite simply miles (i.e x1.6 km) from just about everywhere. The cooperative buys >97% of all fresh milk in the country and exports and sells into >140 countries worldwide. Click on their live world map and follow the joint ventures in a host of other countries; they may have an office close to where you live. Check them out.

The issue is not so much to promote the success of Fonterra but to introduce opportunities that thus far may have not been considered, for example, to focus on what you do best, to produce for quality, to seek regional and/or global partnerships and to think outside of the usual restrictions. Sure, this is difficult; you may be in upcountry Uganda (like Christopher Mulindwa producing pigs or Moises Owiny growing maize) or  in Zambia (like Christian Chilese consulting on agro-enterprises/business) but many of the same issues apply when seen from grass-roots level - lack of just about everything, markets awash with surpluses, costs spiralling out-of-control and a home and family to feed.

Whoever you are and wherever you are you are likely to have a not inconsiderable wealth of community resources - people and their assets; and, if this is insufficient, then you need to mobilize others. There is simply nothing to be gained by waiting for people/assets/resources to come to you. Check out the Fonterra strategy and see how this one cooperative is seeking and developing partnerships worldwide; other agro-food companies are doing much the same. And, if dairy products are not your forte, then follow those producing cereals, beverages, roots & tubers, medicinal crops and more. The larger companies are always seeking new opportunities; search the databases and find those close to where you may be - and then make contact with them.

And, should you consider that you and your community/industry/resources are too small, target your public sector for agro-industrial planning/development on national/regional scale that you may be able to find a niche within the portfolio of national resources that are available - for those investments that can be mobilized and channelled to assist you.

There are an estimated 700M people in Africa and the continent has >20% of the land resouces of the world - much of this highly productive with good soils and sufficient water available, and infrastructure is improving by leaps and bounds. Travel the length of the continent by road - 15,000 km - from Cape Town to Cairo and marvel at the agricultural potential of this little known and poorly managed continent. If you are reading these words in south, central and eastern Africa - even North Africa - you are quite literally living in the world's food basket of the 21st century.

Now there's a role for cooperative ventures and their management teams.

Peter Steele


22 July 2012