Authors: Meg Kauthen (Sustainability Designer) & Eddy Chibu (Country Manager Kenya)

A cooperative (‘co-op’), to me, is the beating heart of a community’s power to use enterprise to achieve joint outcomes that can lift, and have lifted, them out of poverty.

Individual farmers are often pushed around by those who claim the lion’s share of society’s power and wealth. By acting collectively and aggregating farmer produce through one sales desk, we create a microcosm of meritocratic ideals – where farmers and the community are less easily bulldozed by those in power such as middlemen, and if an individual farmer chooses, he or she can use their individual effort and capacity within the co-op ecosystem to be economically rewarded which leads to personal fulfilment, household benefits, better health, education outcomes, etc.

To build a functioning co-op within a community takes time. At B4D, we’re supporting a range of co-ops at different stages of their life-cycle. Utopia for us is a co-op that’s independent from external financial and management support and continues to flourish. To achieve this, here are some principles we apply.

COMMITTED FARMERS & INCENTIVES

Initially when working on the ground we identify farmers with the right combination of aptitude and willingness and provide them incentives to train and practice better farm management. Over time, these people see and experience the benefits of working collectively. Slowly, awareness spreads within the community of how those that work with the co-op achieve better yields and more income. Word-of-mouth is a powerful channel.

Money and status are rewards that can encourage people to do the things that need doing. Put yourself in their shoes – they’re often living on less than US$2 a day, struggling to feed their families and educate their children – so if you offer hope of a better way to farm which will increase their income, they’re naturally curious. Money can’t be the only motivator though.

Commodity prices fluctuate so it is important for a co-op to have a strong Purpose, Vision and Values. This enables the co-op to achieve two things: strategic guidance and motivational focus. Strategic guidance ensures resources are used to achieve set objectives and enables buyers of the co-op’s commodities to understand why they should support and purchase from the co-op – for example ethically-produced commodities free of child labour. It provides motivational guidance for farmers to feel part of a collective that meets their requirements and to understand how working together benefits all members.

GOVERNANCE

One of my favourite quotes is “All animals are equal, but some animals are more equal than others” (George Orwell, Animal Farm) – a statement by the pigs in the novel on the hypocrisy of governments that proclaim the absolute equality of their citizens, but give power and privileges to a small elite.

As humans, we have a natural tendency to favour our own family or friends – also known as nepotism. It’s innate. To deter this, we apply these principles to co-op structures:

• Fair election of a Board of Directors and delegates
• A strong/sound governance framework
• Responsiveness to its members (smallholder farmers)
• Openness and transparency, particularly on matters such as farm produce payments, loan repayments etc.
• Human rights, cultural diversity and social cohesion
• Sound financial management
• Accountability

As a result, member trust is built in the co-op. Without trust a vicious cycle can cumulate where retention of members is difficult, the performance of the co-op is impacted and satisfaction is down.

BE A BUSINESS

A co-op is a business. I have seen many co-ops that are only as good as the paper they are written on – in fact in some countries they’re literally referred to as ‘paper co-ops’. It is imperative that co-ops are run professionally. Key areas to consider:

• Keep and distribute accurate financial records
• Be financially astute, for example, look at payment models to ensure farmers are paid on time
• Continue management training for both the Board and co-op staff
• Introduce market agreements with key buyers to assure farmers there is a market for anything they produce
• Maintain adequate production volumes and look at complementary crops and/or animal production opportunities throughout the calendar year to reduce risk, e.g., rotational cropping and dairy production
• Abide by the law

Simple right? If it was that simple, we would have solved poverty in agricultural communities by now. It is hard work yet impactful. By working with communities in Papua New Guinea, Kenya and Mozambique, B4D is creating more meritocratic spaces, enabling farmers with their co-ops to change their world for the positive forever.