AGRICULTURAL VALUE CHAIN: AN APPROACH TO AGRIBUSINESS 4
Cooperatives and Group Dynamics
Introduction
One of the major problems of agricultural development in Nigeria is that of developing appropriate organization and institution to mobilize and induce members of the rural sector to a greater productive effort. As such rural farmers who are characterized by low income, low resource utilization, small farm holdings and scattered nature of farmland, finds it difficult to pool their resources together in order to raise their farm income and substantially improve their living conditions. This situation makes agribusiness entrepreneurship very difficult in Nigeria.
In such situation, cooperatives represent a strong and viable economic alternative. Cooperative organization offers the best machinery for reaching the masses of the small scale famers. International Cooperative Alliance (ICA) defines cooperative as an autonomous association of persons unified voluntarily to meet their common economic, social and cultural needs through a jointly-owned and democratically controlled enterprise. It is a business voluntarily owned and controlled by its member patrons and operates for them and by them on a non-profit basis. It is also a business enterprise that aims at complete identity of the component factors of ownership control and use of services.
In agribusiness entrepreneurship, a good understanding of cooperative formation and management as well as group dynamics is very essential. Cooperative societies in Nigeria perform multipurpose functions. They are engaged in the production, processing, marketing, distribution and financing of agricultural products. Cooperatives could be a significant force in empowering rural communities, farmers, women and micro entrepreneurs throughout Nigeria. It was estimated that in 2010, there were 82,460 cooperative groups with over 1.4 million members in 605 local government areas in Nigeria. This represents just about 1% of the farming population. Agricultural cooperative can be used to promote farm labour efficiency, provide cost effective ways of managing both large and small farms, used for the promotion of environment friendly farm practices, enhance, used to develop the rural economy of Nigeria. However, there is little systematic data available on cooperatives.
Currently, in Nigeria, small farmer cooperatives or groups are formed in a very superficial manner. Such groups are often left to their own devices with little or no support in any way that may strengthen them. They are often formed in order to access inputs, credits or other benefits under very fragile arrangement that makes them extremely vulnerable. This way many of such groups have very short life span, contributing very little to agricultural development and almost invariably dying a natural death. This state of affairs has made it difficult to have genuine well-structured farmer organizations with clear focus or agenda for meaningful development. Farmers - organizations (FOs) in Nigeria are not yet well structured, yet, several broad categories in terms of focus, size, spread, localization, sex, age group, can be distinguished. In cooperatives, each of the participants must see clear advantages in investing in joint economic initiatives instead of investing the same resources in their own farms.
Essence of Organizing farmers
The overall goal of organizing farmers should be for efficiently planned and purposeful development. Within an overall development program, governments should articulate their strategic goals in agricultural production, where the roles of farmers become most prominent. Through expert advice all requirements for highly successful production can be determined. In the case of field crops for example, after determining the crop for which a location has a comparative and competitive advantage of producing, all requirements in terms of the land, the soil, inputs, cultural and agronomic practices, tools and machineries, etc, can be identified. Farmers should then be invited to participate in the intended project. Condition for joining shall include formation of groups where each member is willing to abide by the production recommendations provided by experts. The capacity of individual farmers will be built accordingly and access to all production requirements duly facilitated. A team of experts will continue to guide and supervise farmers to logical final production of their crops. These experts should be private service providers, initially supported by governments but ultimately by a buoyant agricultural sector. This type of arrangement will not only fill the vacuum left by the collapse of agricultural extension in Nigeria but will even give agricultural financing institutions comfort and courage to release adequate fund to farmers. It will also build such confidence and trust between producers and consumers that will eventually lead to creation of futures markets which will mitigate farmers - concerns due to the erratic climate. In the same vain, problems of farmers can be promptly identified and possibly addressed and some passed over to Research Institutions for investigations.
For efficient drive, governments are supposed to act as catalysts and facilitators who should link various actors within the value chain of any given commodity, as well as link those within the value chain with those other actors that provide support toward smooth and successful movement of goods and services within the chain.
Role of Agricultural cooperative managers in the agribusiness environment
In many ways, cooperatives are similar to other businesses, especially in terms of facilities, functions, and business practices. Both cooperative and corporate structures elect a board of directors that establishes a vision and develops broad policies for the organizations, and both structures hire a manager or management team to oversee daily operations and implement these policies. There are, however, differences in principles, goals, and organizational structure that make managerial roles in a cooperative distinct from those in an investor-owned firm. The duties of some managerial roles in cooperatives are not only significantly different, but are often more difficult than those of investor-oriented businesses. Cook points to such role examples as conflict resolution, resource allocation, information spokesperson, and leadership.
Cooperatives also differ in terms of purpose, ownership and control, and distribution of benefits. These differences relate to cooperative principles, and include four traditional as well as three more contemporary principles. Traditional principles involve service-at-cost, financial obligation of member/owners, limited return on equity capital, and democratic control. Contemporary principles are described as user-owner (i.e. those who use the cooperative finance it); user control (i.e. those who use the cooperative control it); and user-benefit (i.e. benefits are to be distributed based on use/patronage of the cooperative). These principles and the roles they play in the operation and success of the cooperative may lead to conflicts within the organization. Conflicts, especially as related to ownership rights and member benefits, may occur among members, or between the board and management, or members and the manager and/or board. To minimize conflict, it is important that these parties have an understanding of cooperative principles and the contribution of these principles to the viable operation and success of the firm. Education and training of these individuals and groups is essential in this process.
Need for coordination of cooperative efforts among various levels of Governments
The policies and programs, by governments at different levels that affect and involve farmers and farmer organizations, are often carried out in isolation to one another. Governments at all level who seek to involve farmers in development programs should coordinate amongst themselves so as to avoid duplication of efforts and imprudent utilization of the meager resources.
Nigeria needs credible cooperative development agenda, which must be based on credible data, to attain meaningful agricultural development. If the nationwide registration of farmers which was targeted to capture 20 million farmers across the country by 2015 under the Growth Enhancement Scheme of its Agricultural Transformation Agenda has been logically concluded, then, the information captured can be used for organization of farmers into viable groups that will promote agribusiness entrepreneurship.
Failure of Cooperatives in Nigeria: The Challenges
Cooperatives the world over are in a state of flux. In almost all parts of the world, cooperatives face one or more of the following crises: crisis of ideology, crisis of capital, crisis of credibility and crisis of management. The most important reasons for cooperative failure in Nigeria include; the shortage of trained managers, lack of understanding of the principle and approaches of cooperatives and inability of cooperative member to cope with the modern methods and tools of production. Other problems facing cooperatives in Nigeria include shortage of skilled personnel, inadequate financing, excessive government control and lack of trust among members. The problem of dishonesty among cooperative leaders is another factor retarding the growth of cooperative in Nigeria. It has also been noted that the participation of cooperatives in marketing of agricultural produce is low as result of poor organizational structure, inadequate infrastructural facilities and administrative bottlenecks.
Importantly too, one of the major problems of cooperatives is how to keep balance in the two parts of cooperative business, efficiency and democracy since those who are charged with the operation of a cooperative chiefly the board and manager must serve two masters: the imperatives of good business practice and the social purpose of a community of people. Hence, to maintain their special character, cooperatives must be two things in one: a business organization and a social movement. This is what makes a cooperative a business enterprise with a human face and so, very difficult to manage.