New strategies for mobilizing capital in agricultural cooperatives

by J.D. Pischke
and John G. Rouse

As with any business, agricultural cooperatives require capital to be successful. The search for capital leads cooperatives to explore various sources in order to maintain and strengthen their position in the market. Greater member financing is usually essential.

Farmer cooperatives in developing countries increasingly find themselves with lower levels of financial support; those that fail to mobilize more capital, including member capital, will be increasingly unable to compete with other more efficient types of business. A traditional interpretation of the principles of cooperative capital does not create strong financial incentives for members to invest in their cooperative. However, a more flexible and pragmatic application of these principles can create new opportunities for growth and prosperity, offering new ways of achieving the cooperative promise and potential.

Part 1 of this booklet discusses the current state of agricultural cooperatives in developing and transition economies, their environment, and their business practices.
Part 2 covers various forms of cooperative capital and ways that proactive cooperatives have found to mobilize such funds.
Part 3 outlines how cooperatives have mobilized funds from external commercial sources.
Part 4 deals with several financial management issues that face cooperatives.

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