Agricultural cooperative management

Agricultural cooperatives have a long history of successes and failures both in the developed and the developing world. In some European countries the formation of agricultural cooperatives has made a major contribution to the development of agriculture over the last 150 years. These cooperatives were usually initiated by small scale farmers, as a response to their weak position in the market. By joining forces they could improve this position and obtain better prices and services for the purchase of inputs and the marketing of produce.

In developing countries the experience has been more mixed. One reason for failure has been the misuse of the cooperative concept for ideological or political purposes. This resulted in many poorly developed or unsustainable cooperatives being created. Some developing countries are still left with the remnants of these state-controlled “pseudo-cooperatives”. However, under the influence of current trends in market oriented reform, privatisation, decentralisation and participation, cooperatives are being rediscovered as a suitable organizational structure for farmers to improve their livelihoods. Agricultural cooperatives in which the members both participate and contribute can become powerful instruments for the development of the rural economy.

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