New thinking required after the demise of farmer cooperatives

by E.J. Mukhwana*

An important component of the development strategies in Africa during the 1960s and 1970s was creation of agricultural cooperatives. They were designed to promote export agricultural commodities such as coffee, tea, cocoa and palm oil. They had many functions, including giving loans to members and supplying them with farm implements. They were eventually run down by poor management. In addition, political pressures mounted and affected their operations.

One condition imposed upon African countries during the 1980s and 1990s by the World Bank and IMF was that these monopolistic cooperatives be disbanded. This created a disconnect between the cooperatives and other service providers such as input suppliers, loan-granting agencies and even processing and marketing institutions.

The basis of these structural adjustments were rooted in economic theory that promoted the private sector and small-scale enterprise. But after the cooperatives were disbanded, African countries found that there were far too few genuine investors and entrepreneurs to fill the vacuum left. In many countries the private sector remains thin and ineffective, leading to the near collapse of important sectors such as seed and fertiliser supply, grain marketing and ploughing services. It is only in Africa where, today, one still finds farmers tilling land with a simple hand hoe or waiting for rain before planting;evidence that the continent has a long way to go before catching up with the rest of the world which has embraced modern technologies.

Farmers have now begun to form self-help groups to fill the vacuum created by the demise of cooperatives. Groups of neighbouring farmers share common problems and opportunities and organise themselves for collective action. Indeed, the willingness of farmers to assist one another is a comforting feature of rural life. Most farmers, however, lack experience in managing self-help groups, and especially building them into effective entities that can provide reliable and cost-effective services to their members while lobbying governments for improved policies and service provision.

In the past two decades, several programmes have been initiated by governments and donors to improve crop and animal production. But owing to many constraints, these projects have never been effective. This is because they do not take into account the real challenges facing the small-scale farmers. Recent studies in five African countries showed that small-scale farmer associations cannot be burdened with complex operations, and that assistance should focus on strengthening the linkages between those associations with input suppliers, markets and credit facilities. The operations of the farmers' associations must closely match the expectations of the members and the skills of their leaders.

Market liberalization and structural adjustment imposed on Africa by donors was partly responsible for the removal of subsidies, but equally responsible was the lack of policies to justify them. Past attempts at giving subsidies to farmers also hampered private sector involvement in
agriculture.

But besides these, it is critical that governments address infrastructural development, such as roads and rail networks to provide opportunities for farmers to access markets quickly. It should help in providing resources for irrigation, market information and contract enforcement, rather than become directly involved in farm input supply.

*Dr. Mukhwana is an agricultural expert

Daily Nation