Cooperatives: from inclusive to exclusive organisations?

Topic 24 - Stage 4 - Meso To what extent do cooperatives include all farmers or only a subset of the farming community? This paper aims to present the arguments that claim cooperatives are inclusive organisations and to review... [ view full abstract ]

Topic 24 - Stage 4 - Meso
To what extent do cooperatives include all farmers or only a subset of the farming community? This paper aims to present the arguments that claim cooperatives are inclusive organisations and to review the empirical literature supporting or rejecting those claims. The paper focusses on cooperatives in developing countries.

Traditionally, cooperatives were community-based organisations. They were a means to channel resources to the community or to mobilise activities in the community. Community-based organisations almost by definition are beneficial to most of the community members, particularly because they provide multiple services, and cooperative leadership often coincides with community leadership.

The concept of inclusiveness of cooperatives encompasses several dimensions. First, inclusiveness relate to the open or closed character of the cooperative: can all producers become member or does the cooperative hold strict entry requirements. Second, it also relates to the benefits that all individuals in a community, irrespective of their membership status, may experience from the activities of the cooperative. And third, inclusiveness relates to the extent to which participatory decision-making is conducted within the cooperative. A fourth dimension of inclusiveness is about gender and generational diversity: are women and youth sufficiently represented in the cooperative? Often participation in cooperative decision-making is dominated by male household heads, while most of the farm work is done by women and youth.

While there is an increasing body of literature showing that cooperatives, under particular conditions, facilitate smallholder market access and integration in modern value chains, the issue of inclusiveness is still unresolved. One of the challenges to inclusiveness is that community-orientation may not fit with the commercial orientation that is currently needed for market access. Market access often requires compliance to strict quality and volume requirements, while not all producers in the community may be able to deliver the required quality and quantity. As a result, cooperatives become more selective in permitting members and accepting products.

Several authors have found that cooperatives have a positive and significant impact on the degree of commercialization for large farms, yet sometimes a negative impact for small farms. Some studies speak of a ‘middle class effect’ in cooperative membership: cooperatives have a tendency to attract better-off individuals, are unattractive to the rich and exclude the very poor.