Farmer-Controlled Economic Initiatives: Starting a Cooperative

This manual suggests that cooperatives should be seen as private business organisations with primarily economic objectives. But it notes that it is not an easy task to organise and successfully develop a cooperative. The manual highlights that market conditions, government policies and the legal environment should be conducive for such a development. Moreover, strong leadership and management capabilities should be available, together with sufficient financial resources. The manual suggests that these are all factors which are often scarce in developing countries.

The manual also points to the historical record and notes that history has shown that cooperatives are not the most suitable institutions for the development of the poorest farmers. This is because these people are least able to finance and organise a cooperative. Yet, under the influence of current trends in market-orientated reform, privatisation, decentralisation and participation, cooperatives are currently being rediscovered as a suitable organisational structure for realising economic initiatives of farmers. The manual proposes that agricultural cooperatives in which the members both participate and contribute can thus become powerful instruments for the development of the rural community.

The aim of this manual, therefore, is to act as a guide to support farmers’ groups through the process of starting a cooperative business and to help them finding their way and make their own choices in developing a successful enterprise.

The first half of the manual covers useful background topics that are relevant to forming a cooperative:

  • What is a cooperative?
  • Why farmers are interested in cooperatives?
  • What is needed to form a cooperative?
  • Cooperative management
  • Statutes and by-laws
  • Finance
  • Potential pitfalls

The second half of the manual then describes 8 steps to the development of a cooperative:

  1. Developing the initiative
  2. Building consensus
  3. Establishing a steering committee
  4. Surveys and studies
  5. Institutional design
  6. Business plan and securing member commitment
  7. Involving other stakeholders
  8. Starting up the enterprise

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