Qualitative elements constituting effective agricultural cooperatives among rural smallscale farmers

Abstract

Agricultural cooperatives like all cooperatives are built on the principle of cooperation and community spirit, also known as ubuntu. They are widely promoted as a positive force for collective effort in smallholder agriculture development. However, research suggests that they generally have not been effective and successful in the South African agricultural small-scale farming context warranting an investigation into this area. Therefore, based on the literature search, an agricultural cooperative effectiveness analysis framework was crafted based on objective, operational and marketing information. The analyses found that the cooperatives generally fell in the South African government's set objectives for cooperatives. However, the analysis framework revealed that they were largely ineffective
because of a number of factors. The objectives and activities of the farmers were found to be hampered by internal factors that included low capabilities of the cooperative to mobilise and utilise their limited resources, and low capabilities for management of institutional arrangements. Further, lack of external support such as finding, education and extension services were also contributing to the ineffectiveness of the cooperatives. Apart from the small land holding limiting farmers’ expansion to meet the high produce demand, the land tenure system legally prohibited the farmers from using the land as collateral for obtaining
loans from funding institutions. Therefore, there was serious under capitalisation issues within the cooperatives leading to the aforesaid ineffectiveness. Therefore, improving on the internal factors, such as pooling resources, putting in place legal frameworks governing the cooperatives and improving communication lines were suggested as ingredients to effective cooperatives. External support in the form of funding, improvements in the infrastructure, access to farmer education and information and favourable land tenure by governments were suggested as necessary for effectiveness of the agricultural cooperatives.

Keywords: Agricultural cooperatives, agricultural small scale farming.