Boosting African agribusiness with a new generation of cooperatives
For the International Day of Cooperatives to be celebrated on 1 July, the Linking Farmers to Markets team of CIAT and the Enhancing Development through Cooperatives (EDC) initiative of the Technical Centre for Agricultural and Rural Cooperation (CTA) just published a new policy brief that underlines the need of a new generation of farmer cooperatives to promote and facilitate the development of local and inclusive agribusiness in Africa.
The policy brief addresses the problem of “side-selling” affecting the commercial performance and income-generating role of agricultural cooperatives and farmer organizations (FOs) in Africa. Farmers prefer to side-sell their agricultural output through itinerant middlemen and spot markets, rather than through their cooperatives and FOs. Side-selling disrupts collective marketing, which occurs when cooperatives and FOs procure farmers’ output and sell it through value chain contracts. Because of widespread side-selling, most cooperatives and FOs fail to add value to farmers’ production.
The policy brief suggests that a cooperative in Africa is more likely to mobilize and sustain collective marketing when it pursues the following strategy:
- To procure as much produce as possible from each and every member-farmer, rather than strive to increase collective sales through membership expansion.
- To ensure that the amount and quality supplied by member-farmers are as homogeneous as possible, so as to avoid internal frictions and inefficiencies.
- To offer price incentives and quick (or on-the-spot) payments to member-farmers, and enforce sanctions against side-sellers.
To professionalize its leadership, through the hiring of university-educated and ICT-skilled managers.
African cooperatives that succeed in mobilizing and sustaining collective marketing are also more likely to adopt the six principles described in the policy brief, which are derived from the universal cooperative principles of the ICA (International Cooperative Alliance). In summary:
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Read the full study: Principles and Metrics for Cooperative Agribusiness in Africa
Find out more
Read more about this in Six steps to make cooperatives profitable (If you prefer to read it in French).
Read the latest news from cooperatives at CTA.
For more information, contact
Gian Nicola Francesconi
senior technical adviser, Linking Farmers to Markets