1.The cooperative
The cooperative is the most well known form of cooperation among farmers. Members of a cooperative benefit by performing activities together. Costs can be divided and the farmers' negotiating position vis-à-vis the buyers can be improved.
The fundamental rule of any cooperative is that all members have equal rights. Also, the earnings of the members are the most important factor, not the earnings of the cooperative itself. By working together, the members of a cooperative can take advantage of the points described in the previous session above: improved negotiating position, increased access to credit, greater access to information, opportunities to supply to supermarkets and other large-scale buyers, and collective processing and transport.
i. Potential problems
The members of a cooperative can benefit from working together. Nevertheless, problems can, and often do, arise within a cooperative. A government can get involved and support goals that are not in the interest of the farmers. Or, the leadership of the cooperative can fall in the hands of a small group of people who lose sight of the goals of the cooperative and do not put the interests of the members first. A cooperative can also become too bureaucratic. The organization can become too rigid, so that it can no longer adjust quickly to new developments.
ii. How to keep a cooperative running well
To keep a cooperative running smoothly, it is important to meet a few requirements.
Sufficient communication
A cooperative is created for its members. The wishes of the members should therefore come first. This is only possible if there is sufficient communication between the members and the administrators of the cooperative. This means that farmers have to have direct contact with the administrators and the leadership of the cooperative.
Limited number of goals
A cooperative should not try to attain too many goals at the same time. It is not wise, for example, for one cooperative to organize selling, processing, transport, and access to credit. The organization of all these factors becomes too complicated and the cooperative runs the risk of losing sight of its main goal.
Limited costs
The members of a cooperative have to pay for the costs of the organization themselves. If the organization becomes too complicated, the costs will become too high. If this happens, the advantages for the members will be cancelled out. To keep the cooperative lucrative, it is important that the overhead costs are kept low and the administrators and leadership of the cooperative keep the members informed of the costs that are being made.
Clarity about the rights and responsibilities of members
Members of a cooperative have a number of rights and responsibilities with respect to the cooperative, and thus actually with respect to each other. These rights and responsibilities must be clearly defined for all members of the cooperative.
Rights are, for example, agreements about payment for delivered products. Responsibilities are in the area of supplying products to the cooperative. The cooperative cannot change these rights and responsibilities without consulting the members.
The Group
Farmers can also work together in the form of a group. The group is similar to a cooperative, but it is less official and often smaller. It is therefore easier to start a group. The members know each other well and because of its smaller size, the group is more flexible. The organizational structure of a group is usually simpler than that of a cooperative. The organizational costs can be lower and it is easier to keep sight of the group's goals. Farmers can work together in such a group to improve their negotiating position, transport costs, access to information, savings, processing and sorting.
In improving the farmers' negotiating position in buying or selling products, a group usually has a weaker position than an official cooperative. For a buyer, the unofficial character of the group makes it appear to be less sustainable. It will thus take extra effort to convince these buyers that the group is a long-lasting organization. In practice, a group is not necessarily more temporary than a cooperative. A group can even function better than a cooperative, due to its small size and the strong bond between its members.
For the rest of the activities it does not matter whether farmers are organized unofficially as a group or officially as a cooperative. As long as they are willing to work toward a shared goal.
A group
is a less formal and small-scale form of organization. The advantage of a group is that the relations between the members are more direct and the bonds can be stronger. This makes it easier to keep the group’s goals in sight. The disadvantage is that the organization can be weaker, because far less of its structure and functioning has been formally determined.
c) Solidarity
Farmers work together to benefit more from their activities. However, for some products it is difficult to recognize that continuing to work together will be more profitable in the long term than obtaining a small financial advantage in the short term.
Imagine, for example, that a group of farmers or a cooperative has a contract with a supermarket to supply capsicum. The price is fixed for a determined period. It is possible that the price at the local market is temporarily higher
than the price the supermarket pays. For an individual member, it is at that moment more profitable to sell all of the capsicum harvest at the local market. If a number of farmers do this, the supermarket will not receive the amount of capsicum agreed upon in the contract. The group will not meet its obligation and it may thereby lose the contract. In this way, the group loses its chance to sell the product for a longer period for a good and stable price.
Working together requires solidarity. It is important that individual members of a cooperative put the interests of the group above their own short-term interests. Only if all the members of an organization hold this view can a group or cooperative of farmers function optimally and to the advantage of its members.
marto answered the question on March 15, 2019 at 08:19
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