Is the “Cooperative Life Cycle” Framework
Relevant for Rural Africa?
Nicola Francesconi, CIAT-CGIAR
g.n.francesconi@cigar.org
IFPRI/IITA office, Naguru Hill
CIAT office, Kawanda
Tel. +256 794756336
EDC Enhancing
Development
through Cooperatives

All the information/data in this presentation
are from peer-reviewed publications in
international journals
This presentation outlines the EDC
publication that we will release
in June 2015

The evolution of cooperative organizations in rural Africa (from defensive to offensive)
Time
Community-Based
Mutuals/Associations
State/Donor-Driven
Coops/Unions
Market-Driven
Coops/FOs
Pre-Colonial Colonialism
Nationalism
Post-Structural
Adjustment
Governance
Structure

Sahel (Mauritania, Mali, Burkina, Niger) (Francesconi and Ayerakwa 2012)
Grenieres Villageois
WFP-backed
Grain Banks
Marketing
Agri-Coops
Senegal (Wouterse and Francesconi 2014)
Organisations
Paysannes (OPs)
State/Donor-backed
Groupement d'intérêt
économique (GIE)
Financial and
Commercial
Agri-Coops
Susu/Nnoboa Registrar-led Coops
Farmer-based
Organizations (FBOs)
Idir and Iqub
State/Donor-led
Coops
Marketing Coops
Ghana (Salifu et al. 2011)
Ethiopia (Francesconi 2009)

The rise of a new-wave of market-driven agri-coops and FOs in Africa
• Structural adjustment reforms led to the collapse of parastatal coops..
• ..which were not replaced by Investor-Owned Firms (IOFs), as expected..
• ..resulting an institutional vacuum between farmers and markets.
• Marketing coops/FOs are emerging to fill that gap.

The Rise of Market-Driven Agri-Coops and FOs in Africa:
(Bernard et al. 2014)
Countries (year) % of rural villages with at
least one market-driven
agri-coop or FO
In which year market-
driven agri-coops/FOs
started to arise?
Ethiopia (2006) 56 1993
Senegal (2002) 47 1990s
Burkina Faso (2006) 35 1990s
Ghana (2010) 31 2000

What is so far the Impact of Coops in Rural Africa?
Overall, a positive impact on farmers’
technological innovation, productivity and technical efficiency

Ethiopian Dairy Marketing Coops improve farmers’ access to AI and
cross-bred cows and have a significant impact on milk productivity
(Francesconi and Ruben 2012)
8
2.5
0
2
4
6
8
10
12
14
16
Cooperative Farmers Individual Farmers
Dairy Cows productivity (lt/cow)

Ethiopian agricultural coops
have a positive and significant
impact on farmers’ technical
efficiency. On average coop
members produce at least 5%
more output from a given set of
inputs, thanks to better access
to agricultural training, info,
extension, etc.
(Abate et al. 2014)

Access to Financial Cooperatives produce a positive and
significant impact on technology adoption and application by
Ethiopian farmers (Abate et al. 2014)

Cooperatives improve farmers’ access to credit/extension,
triggering innovation in farming technology:
Time
Technical
Efficiency
Cooperative
Members
Neighboring
Farmers
Coops also generate
important peer-pressure
and spill-over effects
promoting the adoption
of improved technology
by neighboring farmers. (Cotton coops in Mali, Balineau 2013; coffee coops in Central America,
De Janvry et al. 2010; cocoa coops in Cote D’Ivoire, COSA, 2012)

Implications for Policy (1):
Cooperative organizations are widespread and highly resilient in rural Africa
They involve millions of farm-households
They survived multiple policy/governance changes
They improve farm productivity, efficiency and tech-adoption
This a huge achievement…mostly thanks to coop development programs!
Why is nobody mentioning it?
Coops as agro-sustainability champions?
Let us help you get this message out!

However the good news end here.
African coops tend to promote
elite-capture and farmers’ shirking
as opposed to inclusive agribusiness

0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
Total Members Male Members Female Members
Ethiopia 2007 (Meherka 2008)
23,000 primary coops (not only agriculture)

Ethiopia 2005, Agricultural coops
(Francesconi and Heerink, 2010)
368 farm-HHs Independent farm-HHs
(290)
Cooperative farm-HHs
(78)
Age of HH head 43.9 43.4
Male HH head 77% 91%**
Education of HH head
(years of schooling)
3.02 5.90**
Landholding (Ha) 1.39 2.93**
** Denotes statistical difference at the 5% level

Kinship and Community Principles
(Ethiopia)
Similar qualitative info from Ghanaian FBOs in 2010, the founding
members always have a common history/background…

Farmers’ Shirking
Ethiopian agri-coops appear to have no significant
impact on farmers’ output commercialization
due to side-selling
Francesconi and Heerink 2010
Bernard et al. 2008

Low collective commercialization among
African coops
% Villages with at
least one market-
oriented agri-coop
% of agri-coops active
in collective output
commercialization
Sénégal (2002) 47 38
Ethiopia (2006) 56 59
Burkina Faso (2002) 35 59
Ghana (2011) 31 37

Senegal (2010):
coops are better at providing inputs and credit
% groups
ever offered
service
% members ever
used service
% groups
offering service
last year
% members
used service
last year
Commercialization 39.7 59.5 26.1 65.0
Inputs 92.4 51.5 86.7 45.0
Credit 94.3 69.5 89.9 68.7

What causes elite-capture and shirking?
Why do coops fail in promoting inclusive
agribusiness?
It is generally believed that external incentives
are the causes of all coops’ problems…

Externally induced cooperatives are more
likely to promote elite capture and shirking
• Ethiopia (Francesconi and Ruben 2008)
• MiDA-Ghana (Francesconi and Wouterse 2015)
• IFPRI-Agriconnexions (Ethiopia, Senegal, Malawi, 2014)
• Platteau 2007
• Ethiopia (Ruben et al. 2014)

Yet, external incentives are key for coops’ establishment
(and contribute to technological innovation)
Prevalence of cooperatives by Region (Ethiopia)

The Dilemma
Ostrom: “external incentives tend to promote
dependence and corruption among coops, but in
the absence of external incentives farmers do not
always (nor often) self-organize”.

The Bankruptcy of Kilicafe in Tanzania:
1) FairTrade premium
2) Horizontal and vertical growth
3) Dilution of premium
4) Embezzlement allegations
5) Side-selling & members’ drift
6) Bankruptcy
This could have been avoided if Kilicafe had
better coordinated members’ entry
and better defined property rights

So the problem may not be
external incentives but internal governance
The Coop Life Cycle framework aims to improve internal governance
by:
1- training and coaching coop managers and leaders to better anticipate and
confront external incentives
2- guide coop development programs to better target their incentives to
coops that are ready to receive them
(organizational diagnostics: coop age and heterogeneity in leadership)

Nobody wants to deal with coop governance
Business planning, value chain integration,
technological innovation, finance and book-
keeping, bylaws, but not governance!!
J. Sachs: “..the worst enemy of development is cynicism, believing that
Africa would be better-off without international support, that donors
and governments are not the solution, but part of the problem. The
question is not whether support should be given or but how to make it
work..”

The EDC project
Path-dependency and Way Ahead
Nicola Francesconi, CIAT-CGIAR
g.n.francesconi@cigar.org
IFPRI/IITA office, Naguru Hill
CIAT office, Kawanda
Tel. +256 794756336
EDC
Enhancing
Development
through Cooperatives

EDC Mandate
OUTREACH: disseminate/discuss the “cooperative life cycle” theory
RESEARCH: produce policy research to evaluate the relevance of the
life cycle theory in developing countries
INSTITUTIONAL: build an international network for coop R&D (OCDC)
Research-based Outreach and Networking

What have we done so far?

Global
Outreach and
Networking
A multi-stakeholder
workshops in Ethiopia
50 participants
worldwide
20 coops from Africa

Local outreach and networking
• Cook in Malawi
• 3 events in Uganda

Presentations at International Conferences
Sept. 2014 – Symposium on Producer Organizations, Toulouse.
Oct. 2014 – International Summit of Cooperatives, Quebec.
May 2015 – Conference of International Cooperative Alliance, Paris

Blogging (CIAT-DAPA Blog)
Analysis of multi-stakeholders’ feedback
for policy-research publication (due by June 2015)

The way ahead…

Grants:
USAID, Ford Foundation, GIF, etc.
CIAT, EURICSE
EASE-AGR, KDA,
PINORD, FF/FUs
Africa
Coops
MU, GICL,
ISPRI, Agreri, AU
US, NZ, EU, Brazil,
China, etc. Coops
Collaborations:
(OCDC, CGIAR, OXFAM,
FAO, SNV, etc.)
Towards an International Network for Cooperative R&D?Privatefunds
andDemands
Publicfunds&Strategy
Data&PolicyResearch
BDS,ICT,Networking,
Diagnostics(T&C)
EDC

Research +
Governance
BDS: Social
Enterprises
Coops
Research +
Technology
Parastatal
Extension
Services
Coops
Our proposal for Africa

Large
mature and
offensive coops
Small, young and defensive coops
Expand and globalize BDS
through governance training, networking a credit collateral

The partnership for Africa:
Business Development Services (BDS): privately funded by coops
• PINORD (Senegal)
• Ease-Agr (Charles Angebault,Uganda)
• K-rep/KDA (Dora Waruiru, Kenya)
• FUM/MUSSCO/NASFAM (Malawi)
Research and Governance Support (RGS): publicly funded
• CIAT (Uganda, Ocung, Francesconi)
• EURICSE (Ethiopia/EU, Gashaw)
• GICL-MU (US, EU, Brazil, China, etc.)
• WUR-LEI (Ruben, African PhD students)
• MOCU (Tanzania, MSc students)

NEW: Moshi Cooperative University (MOCU)