AGRICULTURAL COOPERATIVES By Mrs. Abigail A. Adaku Dept. of Agric. Econs & Agribusiness University of Ghana, Legon.

Presentation Objectives Origin and principles Types of Agric Coops Need for Agric Coops in dev countries Financial Requirements of Coop Societies Problems of agricultural coops in DCs Questions

Objectives This lecture is to help the student understand the origin, principles, types and roles of agric coops in the development process in developing countries. It is also to help students appreciate the need for agricultural coops in DC, financial requirements, and problems facing agricultural coops in developing countries.

Origin and Principles Coop movement the world over owe their existence to the development of coop in the UK around 1844. Their origin is associated with Robert Owen and a group of Rochdale Weavers commonly referred to as the Rochdale Pioneers. Robert Owen advocated for what he called village coop or coop colonies where workers would form communities and pull together to improve themselves

Origin and Principles Coop were introduced into west Africa in the late 1920s and they were mainly farmer’ organizations. They were organized mainly to teach cocoa and other cash crop producers the best methods of producing high quality export crops. Food, fruit and vegetable and farmers’ coop and consumer coop came into existence in WA after the Second World War. Second world war- 1939 to 1945

Coo-operatives Coop are business enterprises or organization owned and controlled by the members and they aim at rendering services for the mutual benefit of all members. They are to be self-reliant, self-controlling and self-sustaining peoples’ organizations Current day coops are based on the Rochdale Pioneers Bible of Coops.

Principles The ‘Bible of Coops’ refers to the principle laid down by the Rochdale Pioneers for running of coop society and could be regarded as the first ever successful coop society. The principles include: Democratic control, Open membership, Limited return on capital Sharing savings in proportion to share contributions

Principles Political and religious neutrality Cash trading Promotion of education Encouragement of the production (and supply) of pure and unadulterated goods. Democratic control: control not tied to members’ capital contribution. Every member of the society has one vote. The primary objective of coops is not profit but services at cost

Principles Open Membership: Anybody who subscribes to the ideals of any coop society should be allowed to be a member. This is to ensure that everybody rich or poor, benefits from the organization and that nobody or group can arrogate to themselves the control of the organization.

Principles Sharing savings according to share contribution: though it is one man one vote any savings made are shared to members according to their share contributions. This is to encourage people able to contribute more in the form of share contributions to the society to do so.

Principles Political and religious Neutrality: to ensure a very democratic, self-reliant, self-controlling and self-sustaining peoples’ organization, all members are expected to keep politics and religion out of coop activities. Cash Trading: Members of coop are expected to do purchases or sell produce strictly on cash basis. This simplifies transactions and remove ambiguities as to the value of goods

Principles Promotion of Education: Education of members is regarded as a very important means of making them aware of their rights and thus democratic coops. Education of members also includes educating farmers on the correct use of inputs, the most profitable use of credit facilities, new methods of storage and so on.

Encouragement of the supply of pure and unadulterated goods: the production and supply of pure and unadulterated goods is a very important objective of most producer coops. High quality produce over a period of time puts confidence in buyers. Quality goods facilitate sales, reduces market risks and attract good price.

In more recent times, though coop subscribes to most of these principles, they stress more the business nature of coops. They aim at profit but subject to the social goals of coops. In fact some coops have management separate from owners. Board of directors drawn from member-patrons appoint managers to run the day-to-day affairs of the coops. Coops are like limited liability companies in that respect.

Types of Agric Coops Farmers’ Producers Coops inputs: - credit and machinery acquisition and use, extension Farmers’ Consumers Coops: -consumer goods Agricultural Produce Marketing Coops: -marketing of members produce, competitive price Thrift and Credit Coops: - mobilize funds from members and lend to members at below market rates for production and consumption Multi-purpose Cooperative: combine many functions – production, marketing, credit, etc.

Need for Agric Coops in DCs Agric coops, like any other coops, are needed to help members solve problems collectively instead of looking to government for solutions. Agric Coops are needed to : Counter the exploitative tendencies of some middlemen in agricultural marketing operations. Help in obtaining production and consumption credit from financial institutions for its members

as well as mobilize funds within the societies for production and marketing of agric produce Help in the education of members on modern agric practices and provision of other vital information to farmers. Help in the provision of agricultural inputs and machinery to members, Provide essential manufactured commodities to farmers in the rural areas at reasonable costs Take advantage of economics of scale in production, processing and marketing of agric produce

Help overcome barriers to assets, information services and marketing commodities (quality, quantity – critical mass, price, etc)

Financial Requirements of Coop Societies Amount of funds required by a particular coops depends on the type of coop, the size of the society, the fund requirement of each member or group of members, and the types of investment the society or its members wish to undertake. Funding requirement is also based on the availability of materials and machinery and equipment members need funds to purchase.

Problem of Agric Coops in DCs Major problems include: Lack of patronage Lack of good leadership and management skills Lack of capital Low level of education of members Lack of well informed guidance; Lack of storage facilities and marketing outlets Lack of skills for records keeping and analysis Lack of advocacy skills for policy negotiation Lack of trust among members

THANK YOU Any Questions?

Questions What are cooperative societies and what are their roles in agricultural development? What are the principles governing the operations of Farmers’ Cooperatives? Though FBOs/Pos are said to be important in the development of agriculture in developing countries they are faced with numerous problems. Discuss these problems with specific examples.