Learning

Agricultural cooperative management

Category:

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.

Modules

Basic economics of an agricultural cooperative

This self-study manual was published by ILO as a MATCOM Learning Element in 1984. It introduces the core economic principles that underpin the operation of farmers’ marketing and supply co-operatives. All farmers need to buy “inputs” for their farms – things like seeds and fertilisers – and at harvest time, they want to sell their produce. Forming an agricultural cooperative can be an effective way for farmers to ensure they receive the services they require in terms of input supply and produce marketing. Some agricultural co-operatives offer very good services to their members. Others do well at first but soon get into trouble. Marketing and supply services can be provided effectively only if the cooperative leaders understand the “economics” of running a co-operative business. If they do not, the cooperative will soon find itself out of business. In the lessons that make up this manual, readers will first learn about the marketing business and how it works from an economic point of view. Then they will go on to supply services and the importance of the net surplus. Finally, three case studies are provided to show how problems can arise and what actions can be taken to avoid or overcome them. In the document section, there is a summary of the core principles, a poster and a set of questions to help readers assess how well they have understood the points being made.

Copyright © 1984 International Labour Organization

Web edition (revised) Copyright © 2006 Food and Agriculture Organization

Resources

“Check out!” Test Questions on the Basic Economics of Agricultural Cooperatives

A set of multiple choice and discussion questions to help you check how well you have understood the basic economics of an agricultural cooperative.

A Summary of the Basic Principles of Operating a Marketing or Supply Cooperative

A brief review of the key economic principles explained in the self study manual "The Basic Economics of an Agricultural Cooperative". A useful checklist and revision note.

Lesson 1: Marketing Services

The objective of this lesson is to explain the basics of how a cooperative can provide a marketing service for its members and how it works as an economic enterprise.

Lesson 2: Supply Services

The objective of this lesson is to explain the basics of how a cooperative can provide a supply service for its members to purchase the inputs they need, and how this works as an economic enterprise.

Lesson 3: How to Use the Net Surplus

The objective of this lesson is to examine the reasons for making a net surplus in a cooperative and how members can decide on the best use for it. A net surplus is equivalent to a profit in a non-cooperative business.

Lesson 4: Avoiding Problems
Plan for Success: a poster for agricultural cooperatives

A poster which highlights the importance of making a net surplus and how a cooperative can make improvements in its marketing and supply services.

Crop collection

Resources

“Check out!” Test Questions on Crop Collection

A set of questions and exercises to help you check how well you have understood the key concepts and management issues relating to crop collection in a marketing cooperative.

Lesson 1: Management choices

The objective of this lesson is to introduce the issues that concern marketing cooperatives in relation to collecting produce from their members. The various tasks and the factors which determine how the collection and receiving system should be organised are reviewed.

Lesson 2: The cost of collection

The objective of this lesson is to look at how alternative collection systems affect the society’s costs and consider the factors that must be taken into account when deciding which system to use.

Lesson 3: Planning transport routes and informing members

The objective of this lesson is to review the importance of planning and using transport as efficiently as possible and the alternative methods by which members can be informed about the collection or delivery procedures.

Lesson 4: Receiving produce

The objective of this lesson is to examine the issues involved in receiving produce and how best to organise and sequence such steps as weighing, grading, testing and paying members.

Lesson 5: Inspection

The objective of this lesson is to review the steps involved in sampling and testing produce delivered by farmers which can then act as a basis for making payments according to quality.

Lesson 6: Record-keeping

The objective of this lesson is to review the necessity for records in the process of crop collection and explain the importance of critically reviewing recording systems to ensure that essential information is obtained but unnecessary details are eliminated.

Making a budget

This study guide was published by ILO as a MATCOM Learning Element in 1984. It takes the reader through the discussions of a farmers’ cooperative committee meeting as they prepare a budget for their next year’s operations. The example cooperative is involved in both marketing produce and selling inputs and each lesson covers a different stage in the budgeting process, e.g. estimating income from the sales of produce and sales of supplies, estimating the running costs, preparing the final budget and estimating the net surplus, preparing a cash budget. All the calculations involved are carefully explained. The original Learning Element was written in the days when there was much more government intervention in agricultural markets in developing countries than there is now. Prices were often controlled and produce had to be sold to state controlled marketing boards. So the text has been edited to place the cooperative in the context of free market conditions for produce sales. However, a government controlled price for fertiliser has retained as this does still occur and it may be helpful to show how a cooperative can budget to make a surplus, even under these conditions.

Copyright © 1984 International Labour Organization

Web edition (revised) Copyright © 2006 Food and Agriculture Organization

Resources

“Check out!” Test Questions on Making a Budget

A set of multiple choice and discussion questions to help you check how well you have understood the process of making a budget for an agricultural cooperative.

A summary of steps in making a budget

A brief summary setting out the main steps in the process of making a budget as a series of checklists.

Lesson 1: Introduction to the Cooperative

This brief introduction sets the scene for the following lessons by introducing the cooperative and the agenda for the budget preparation committee meeting.

Lesson 2: Estimating the sales of produce

In this lesson the committee discuss the estimates of how much produce they will be selling on behalf of their members and what prices they can expect to get. They then review the commission that they will need to deduct from the selling price to cover their costs. At the end of this process they have the figures of projected income from their marketing service to include in the overall budget.

Lesson 3: Estimating the sales of supplies

In this lesson the committee of Unity Cooperative work out how much income they can expect to get from their input supply service. They make sales estimates and review their mark-up policy, taking into account the effects of price inflation, government controlled prices and leakage on their calculations.

Lesson 4: Estimating the gross surplus and running costs

In this lesson the committee of Unity Cooperative work out the gross surplus they expect to get and then discuss and decide on estimates for their expected running costs in the next year, including wages, interest, transport, depreciation and other costs.

Lesson 5: Completing the budget

The objective of this lesson is to show how the estimates of sales and costs are used to complete a budget for a cooperative and how the management committee can then see if they will make enough surplus altogether to cope with any problems that may arise

Lesson 6: Preparing a cash budget

In this lesson you will follow the manager of Unity Cooperative as he constructs a cash budget to see whether there are months in which he may have insufficient cash to meet expenditure requirements. This type of budget enables a manager to predict when it is necessary to arrange short term borrowing to maintain operations.

Lesson 7: Following up the budget

The objective of this lesson is to explain the importance of checking the cash budget and comparing actual results with the estimates. This process enables the manager to see if things are going to plan and if they are not, to discuss remedial action with the committee or bank.

Managing transport

For most agricultural co-operatives, providing transport is a very important service. Tasks that may be involved include:

  • transporting crops from member farms to the co-operative
  • transporting produce from the co-operative to its customers
  • transporting seeds, fertiliser and farm equipment from suppliers to the society’s store
  • transporting these supplies from the society’s premises to the farms of members
  • transporting staff

Some co-operatives carry out all these services; others provide none. Some societies purchase large, up-to-date motor vehicles for transport; others hire vehicles as needed. This guide, which was published by ILO as a MATCOM Learning Element in 1986, explores those issues and discusses how to calculate costs, schedule work, plan maintenance, comply with regulations and decide when to replace vehicles.

Copyright © 1986 International Labour Organization

Web edition (revised) Copyright © 2006 Food and Agriculture Organization

Resources

Lesson 1: Managing your transport system

The objective of this lesson is to introduce the issues and alternatives that agricultural cooperatives face in relation to transport decisions. This includes the question of whether to own or hire vehicles to provide the transport services required.

Lesson 3: The cost of transport

The objective of this lesson is to explain how to calculate the costs of owning and running a vehicle. The difference between fixed and variable costs is explained and calculations show how the amount of use affects the cost per kilometre.

  • Author/editor: MATCOM / ILO
  • Type
  • Language English
  • Year of publication1986
  • File Lesson 3
Lesson 4: Buying vehicles

The objective of this lesson is to explain the issues that must be considered when buying a vehicle and show how following a set procedure of information gathering and comparison can help to avoid costly mistakes. The steps recommended include defining the functions and the specifications of a suitable vehicle, gathering information on suitable vehicles that are available, listing and comparing data on these vehicles, and finally comparing terms of financing and payment for the vehicle.

  • Author/editor: MATCOM / ILO
  • Type
  • Language English
  • Year of publication1986
  • File Lesson 4
Lesson 5: Vehicle scheduling

The objective of this lesson is to explain the importance of planning how vehicles are to be used and introducing a requisition system to make this process easier and avoid misuse of transport. The proper use of vehicles is as important as their careful selection and purchase. In transport management, this means careful scheduling and making the most effective use of the vehicles you have before seeking outside resources.

  • Author/editor: MATCOM / ILO
  • Type
  • Language English
  • Year of publication1986
  • File Lesson 5
Lesson 6: Maintenance and fuel

The objective of this lesson is to explain the importance of vehicle maintenance and fuel recording, and to examine the pros and cons of a cooperative having its own maintenance facilities. Like all other management jobs, vehicle maintenance is a balancing act; you have to find the right point between extremes. Fuel accounts for a large part of transport costs and is easily stolen or misused. So a cooperative must have an effective system for issuing and monitoring fuel consumption by individual vehicles.

  • Author/editor: MATCOM / ILO
  • Type
  • Language English
  • Year of publication1986
  • File Lesson 6
Lesson 7: Insurance, rules and regulations

The objective of this lesson is to explain the importance of insurance and compliance with other regulations relating to vehicle use. Important terms are explained and an example log book is provided. A manager must make sure that his drivers conform to the law and to the society's own procedures, and that they understand why they should do this.

  • Author/editor: MATCOM / ILO
  • Type
  • Language English
  • Year of publication1986
  • File Lesson 7
Lesson 8: Replacing vehicles

This lesson explores the question of vehicle replacement and how to make the decision of whether to keep or replace a vehicle. Factors to consider and an example calculation are provided to show how alternative replacement strategies can be compared.

  • Author/editor: MATCOM / ILO
  • Type
  • Language English
  • Year of publication1986
  • File Lesson 8
Transport study guide: Follow-up exercises

Suggested exercises for people to carry out on completion of the Transport study guide for agricultural cooperative managers.

Planning

This study guide, which was published by ILO as a MATCOM Learning Element in 1985, is all about planning – knowing what you want to do, setting objectives, deciding what resources are needed and planning staff workloads. This is an important activity for a cooperative if it wishes to be successful. A manager who has planned will be alerted in advance when plans go wrong, and may be able to put things right in time. Planning involves making allowances for errors. The very best plans are not in themselves any use at all unless they are effectively implemented. Managers should not think that if they prepare good plans, everything will go right automatically. But if they do not plan at all, nothing is likely to go right.

Copyright © 1985 International Labour Organization

Web edition (revised) Copyright © 2006 Food and Agriculture Organization

Resources

Lesson 1: What is planning; why do it?

The objective of this lesson is to introduce the concept of planning and show by examples why it is so important in the successful management of a cooperative society.

Lesson 2: What are you trying to do?

The objective of this lesson is to explain the importance of analysing what it is you are trying to do and identifying all the possible ways to do it. The lesson then goes on to explain how to set up objectives that are useful for planning and effective management.

Lesson 3: Activities and resources

The objective of this lesson is to review the process of turning objectives into specific activities which must be undertaken in order to achieve the objectives, and the implications in terms of time, money and materials that will be required.

Lesson 4: Work planning

The objective of this lesson is to learn how to assess staff workloads and deal with the effect of variable workloads through the year, and then to look at the problems managers face in managing their own time. Guidance is given on deciding which tasks are flexible and which are not, preparing planning charts and setting priorities.

Lesson 5: Planning and Staff Management

This lesson provides a brief reminder to managers of the importance of delegation and permitting staff to take responsibility for planning their own activities within the overall work plan.

Planning study guide: Follow-up exercises

Suggested exercises for people to carry out on completion of the Planning study guide for agricultural cooperative managers.

Storage

All agricultural cooperatives are involved in storage of some kind. It may be the inputs that they are selling or the produce that they buy from members or both. Most agricultural co-operatives store at least some of the produce delivered by their members. This is done for several reasons:

  • To hold the small amounts of produce received from individual members until there is enough to make transportation to a processing plant or a bulk buyer worthwhile.
  • To store the produce until it can fetch a better price on the market.
  • To allow further drying of the produce in order to meet standards set by processors.

If a co-operative is unable to store produce, the members may have to do so themselves without proper facilities, or else sell immediately at unfavourable prices. There are many costs and risks involved in storage. This study guide is intended for managers and committee members who need to know how to store produce safely. It explains what the risks are and how to minimise them, and how to control the costs of storage so that the benefits outweigh them.

Copyright © 1991 International Labour Organization

Web edition (revised) Copyright © 2007 Food and Agriculture Organization

Resources

Lesson 1: Storage risks and moisture problems

The objective of this lesson is to introduce the type of problems that may arise in relation to the storage of produce in agricultural cooperatives and examine in detail the issue of excess moisture and how to measure and control it.

  • Author/editor: MATCOM
  • Type
  • Language English
  • Year of publication1991
  • File lesson 1
Lesson 2: Pest control – prevention

The objective of this lesson is to learn about the different types of pests that can damage stored crops and how infestation can be prevented through pest-proofing techniques and adequate store hygiene and inspection.

  • Author/editor: MATCOM
  • Type
  • Language English
  • Year of publication1991
  • File lesson 2
Lesson 3: Pest control – storing and using chemicals

The objective of this lesson is to learn how chemicals can be used to control rodents and insects and the importance of handling and applying these dangerous substances carefully.

  • Author/editor: MATCOM
  • Type
  • Language English
  • Year of publication1991
  • File lesson 3
Lesson 4: The storage building

The objective of this lesson is to introduce different types of storage building and the factors that have to be considered when planning the construction of a new storage building. The lesson also explains how to calculate space requirements for bagged produce.

Lesson 5: Good storage practice

The objective of this lesson is to explain key elements of good storage practice which help to protect products. Topics include stacking, care of bags and other containers, cleaning and maintenance, record keeping, and how to deal with spillage, pilferage and storm damage.

Lesson 6: Storage costs

The objective of this lesson is to explain how to calculate and compare the costs and benefits of storage. Unless the benefits exceed the costs, storage is not worthwhile, so these calculations should form the basis of all storage decisions.

Supply services

This self study manual was published by ILO as a MATCOM Learning Element in 1985. It explains in detail the operations of a cooperative that wishes to run an effective service supplying inputs to its members. Topics which are covered in the lessons include all the stages from deciding what and when to order, choosing suppliers, receiving goods, pricing and selling procedures, advertising and stock control. The lessons contain very practical advice and examples of calculations and appropriate forms that can be used to implement the procedures, e.g. sales notes, bin cards, order forms. Implementing these lessons will help to ensure that farmers groups and cooperatives can play an effective role in the supply chain by providing inputs to their members in a sustainable and business-like manner.

Copyright © 1985 International Labour Organization

Web edition (revised) Copyright © 2006 Food and Agriculture Organization

Resources

“Check out!” Test Questions on Supply Services

A set of multiple choice and discussion questions to help you check how well you have understood the key concepts and management issues relating to a supply service cooperative.

  • Author/editor: MATCOM / ILO
  • Type
  • Language English
  • Year of publication1985
  • File questions
Lesson 1: What do the members need?

The objective of this lesson is to review the basic principles of a successful supply service and explain how to conduct a member survey to find out their input requirements.

  • Author/editor: MATCOM / ILO
  • Type
  • Language English
  • Year of publication1985
  • File Lesson 1
Lesson 2: Deciding what to stock and which supplier to use

The objective of this lesson is to look at the issues affecting a decision about which items it is practical and sensible to stock and which supplier it is best to use to obtain stocks.

  • Author/editor: MATCOM / ILO
  • Type
  • Language English
  • Year of publication1985
  • File Lesson 2
Lesson 3: Deciding how much and when to order

The objective of this lesson is to review the pros and cons of ordering small or large amounts of stock and to explain how to evaluate discount offers, monitor what is in stock and set trigger points for ordering new stock.

  • Author/editor: MATCOM / ILO
  • Type
  • Language English
  • Year of publication1985
  • File Lesson 3
Lesson 4: Receiving supplies and paying the supplier

The objective of this lesson is to review the steps you should take before, during and after delivery of new supplies of inputs to ensure they are properly handled and to introduce the forms and procedures that will minimise mistakes and errors.

Lesson 5: Pricing and selling procedures

The objective of this lesson is to introduce the concept of mark-up and price setting and a simple system of record-keeping for sales. The process of estimating price and demand relationships is explained through examples.

Lesson 6: Providing a quality service and the role of information

The objective of this lesson is to review the basic principles of providing a quality service to members and the different methods that can be used to provide members with information about products and product availability.

Lesson 7: Stock control and leakage

The objective of this lesson is to review the importance of stock control and what a manager should do to make counting easy. The question of leakage is then discussed followed by a close look at the role of effective and secure storage and foolproof systems and procedures in reducing leakage.

The moment of truth: Claims management in inclusive insurance

Claims represent the tangible benefit of insurance to policyholders as positive experiences are key to developing trust. This training will provide microinsurance practitioners with the tools, knowledge and confidence to improve the claims management functions for their microinsurance programs, in terms of efficiency, cost-effectiveness and client value.

Training Objectives:

By the end of this course, participants will be able to:

  • Recognise the critical role that claims play in promoting client value and that the claims experience can be an opportunity to demonstrate value.
  • Understand the influence of product design, scheme philosophy and business model, as well as other factors, on claims processes in the microinsurance sector, and share experiences with other participants.
  • Understand the guiding principles of claims management for microinsurance and be able to identify them in their own programs.
  • Apply a conceptual framework for analysing claims processes to an existing microinsurance program, incorporating perspectives of both business viability and client value.
  • Understand the pros and cons of possible interventions or strategies that can be used to address performance issues, administration costs, and cost of claims.
  • Draft a customised action plan to improve the performance of the claims management function for their microinsurance programs.
Transferts d’argent et bureaux de poste en Afrique – Répondre aux besoins des migrants et de leurs familles en milieu rural

Aujourd’hui, les bureaux de poste en Afrique délivrent plus d’argent que de courrier (c’est-à-dire plus de transactions financières que de lettres), ce qui constitue sans doute la preuve la plus convaincante que des réformes d’envergure ont été menées au sein des réseaux postaux africains. Cela confirme également le rôle décisif que jouent ces bureaux dans l’offre de services de transfert d’argent des migrants. Dans plusieurs pays du continent, la part de marché de ces transferts atteint désormais 20 pour cent et plus,2 et sur les marchés où les bureaux de poste jouent un rôle important, le coût des transferts est bien inférieur à la moyenne africaine. Les bureaux de poste participant activement à l’offre de transferts améliorent la compétitivité du marché et sa transparence et contribuent à faire baisser à la fois les coûts et les délais de réception des transferts d’argent. Les bureaux de poste cherchent une nouvelle place sur un marché où les services (financiers) dématérialisés et numériques sont en plein essor dans des écosystèmes de plus en plus divers. Les agents d’argent mobile s’installent littéralement au coin de la rue et dans les hameaux les plus modestes, tandis que les banques se développent rapidement à travers leurs agences, leurs terminaux en libre service et d’autres canaux. En outre, les institutions de microfinance et les associations d’épargne et de crédit disposent de réseaux très étendus. Toutefois, bien que non encore prépondérants, les bureaux de poste africains occupent une position bien spécifique dans cet écosystème. Ils semblent toucher plusieurs segments de population peu ou pas couverts par les autres canaux, qu’il s’agisse des personnes âgées ou des femmes, des jeunes ou des ménages ruraux. Comme le souligne également le programme d’action d’Addis-Abeba (AAAA), les réseaux postaux sont déterminants si l’on veut garantir à tous un accès plein et égal aux services financiers formels.3 Les bureaux de poste sont généralement considérés comme des établissements dignes de confiance. Ils sont pratiques, ceux qui n’ont pas l’habitude des services financiers peuvent s’en faire expliquer l’utilisation par un employé et ce sont des lieux qui disposent toujours d’espèces