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A deeper understanding of the potential for agricultural cooperatives

For improved CDO practices in North America and Europe to improve the effectiveness of their co-op development strategies

Recently Completed Research; Sub-Saharan Africa: Identifying Processes and Policies Conducive to Cooperative Development in Africa

  • Contact Judith Hermanson, Research Group director
  • Contact Details jhermanson@ocdc.coop
  • Partner European Research Institute on Cooperative and Social Enterprises
  • Geographic Area Sub-Saharan Africa (Kenya, Mozambique, Ethiopia, Senegal)
  • Sector Agricultural Cooperative
  • Intention To identify factors that can help or hinder the creation of agricultural cooperatives in Africa through an exploratory study of cooperative development projects within the agricultural sector.

The purpose of this research is to describe the overall legal, policy, regulatory frameworks for cooperative development in four countries and, within that framework, to provide nuanced insight into agricultural cooperatives formation and development based on the challenges and opportunities facing a number of selected cooperative development programs working on the ground.  The exploratory study is focused on four sub-Saharan African countries (Ethiopia, Kenya, Mozambique and Senegal) and consists of a series of papers (country reports, overall mapping, and conclusions) which taken together lead to a deeper understanding of the potential for agricultural cooperatives in each of the countries, which in turn can translate into practice of CDOs in North America and Europe to improve the effectiveness of their co-op development strategies.

Research Questions:

  1. What is the national context for cooperatives in the selected African countries in terms of economic environment and legal frameworks?
  2. What is the history of the selected cooperative projects in each of these countries? What characterizes their membership and their relationship with foreign partners? What are the different strategies used by CDOs to provide technical and financial assistance to the identified or newly created cooperatives and cooperative-like farmer organizations? How do they interact with other actors in the value chain in which they are embedded? What benefits do they produce for their members? How are these benefits distributed? How are these benefits perceived?
  3. What management strategies and public policies can maximize the advantages that cooperatives bring to a community and minimize potential problems?
  4. What are the advantages and problems that can arise in trying to promote agrarian cooperatives?

Approach and methodology

This research project is conceived as having two phases:

  1. The first stage included a thorough desk review of secondary data from four selected countries and includes a comprehensive literature review, policy and legal document review and analysis and project report review and analysis.
  2. Based on this initial phase of the research, OCDC and EURICSE are exploring the possibility of complementary field-based research.

To select the countries to be included in the exploratory study, 15 cooperative development organizations were invited to participate in a survey and mapping project. All Cooperative Development Program projects, funded by USAID, from 2010 to 2015 were included in the map. The map included 186 projects in 30 countries. Ten countries hosted over 70% of the projects, of those 10 countries 4 were selected as case studies.

Major outcomes and recommendations

Key Problems within the Agricultural Cooperative Sector:

  1. Smallholders’ weak bargaining power towards buyers and low prices paid to small-scale farmers
  2. High vulnerability to risks, both in terms of natural agents and in terms of price volatility
  3. Difficult access to input, especially high quality inputs
  4. Scale-related constraints to make productivity-increasing investments
  5. Market-size problems and constraints on the demand side
  6. Constraints to innovation introduction and diffusion for small producers, related to different aspects: knowledge production, network building, risk bearing capacity

Key Issues for cooperative development:

  1. Importance of market structure and value chain integration
  2. Presence of side-selling and risk of “small-scale trap”
  3. Need of better integration of input- and output-related functions
  4. Problems of selection into co-ops
  5. Importance of well oriented training and leadership
  6. Appropriateness of the legal frameworks
  7. Importance of advocacy and co-op movement organization
  8. Consistency of the time dimension of the project

Complete findings can be found in the paper, “Identifying Processes and Policies Conducive to Cooperative Development in Africa.” The four country case studies are also available: Ethiopia, Kenya, Mozambique, and Senegal.

Identifying Processes and Policies Conducive to Cooperative Development in Africa Identifying Processes and Policies Conducive to Cooperative Development in Ethiopia Identifying Processes and Policies Conducive to Cooperative Development in Kenya Identifying Process and Policies Conducive to Cooperative Development in Mozambique Identifying Processes and Policies Conducive to Cooperative Development in Senegal
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