Is the “Cooperative Life Cycle” Framework
Relevant for Rural Africa?
Nicola Francesconi, CIAT-CGIAR
g.n.francesconi@cigar....
All the information/data in this presentation
are from peer-reviewed publications in
international journals
This presentat...
The evolution of cooperative organizations in rural Africa (from defensive to offensive)
Time
Community-Based
Mutuals/Asso...
Sahel (Mauritania, Mali, Burkina, Niger) (Francesconi and Ayerakwa 2012)
Grenieres Villageois
WFP-backed
Grain Banks
Marke...
The rise of a new-wave of market-driven agri-coops and FOs in Africa
• Structural adjustment reforms led to the collapse o...
The Rise of Market-Driven Agri-Coops and FOs in Africa:
(Bernard et al. 2014)
Countries (year) % of rural villages with at...
What is so far the Impact of Coops in Rural Africa?
Overall, a positive impact on farmers’
technological innovation, produ...
Ethiopian Dairy Marketing Coops improve farmers’ access to AI and
cross-bred cows and have a significant impact on milk pr...
Ethiopian agricultural coops
have a positive and significant
impact on farmers’ technical
efficiency. On average coop
memb...
Access to Financial Cooperatives produce a positive and
significant impact on technology adoption and application by
Ethio...
Cooperatives improve farmers’ access to credit/extension,
triggering innovation in farming technology:
Time
Technical
Effi...
Implications for Policy (1):
Cooperative organizations are widespread and highly resilient in rural Africa
They involve mi...
However the good news end here.
African coops tend to promote
elite-capture and farmers’ shirking
as opposed to inclusive ...
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)...
Ethiopia 2005, Agricultural coops
(Francesconi and Heerink, 2010)
368 farm-HHs Independent farm-HHs
(290)
Cooperative farm...
Kinship and Community Principles
(Ethiopia)
Similar qualitative info from Ghanaian FBOs in 2010, the founding
members alwa...
Farmers’ Shirking
Ethiopian agri-coops appear to have no significant
impact on farmers’ output commercialization
due to si...
Low collective commercialization among
African coops
% Villages with at
least one market-
oriented agri-coop
% of agri-coo...
Senegal (2010):
coops are better at providing inputs and credit
% groups
ever offered
service
% members ever
used service
...
What causes elite-capture and shirking?
Why do coops fail in promoting inclusive
agribusiness?
It is generally believed th...
Externally induced cooperatives are more
likely to promote elite capture and shirking
• Ethiopia (Francesconi and Ruben 20...
Yet, external incentives are key for coops’ establishment
(and contribute to technological innovation)
Prevalence of coope...
The Dilemma
Ostrom: “external incentives tend to promote
dependence and corruption among coops, but in
the absence of exte...
The Bankruptcy of Kilicafe in Tanzania:
1) FairTrade premium
2) Horizontal and vertical growth
3) Dilution of premium
4) E...
So the problem may not be
external incentives but internal governance
The Coop Life Cycle framework aims to improve intern...
Nobody wants to deal with coop governance
Business planning, value chain integration,
technological innovation, finance an...
The EDC project
Path-dependency and Way Ahead
Nicola Francesconi, CIAT-CGIAR
g.n.francesconi@cigar.org
IFPRI/IITA office, ...
EDC Mandate
OUTREACH: disseminate/discuss the “cooperative life cycle” theory
RESEARCH: produce policy research to evaluat...
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 – Interna...
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...
Research +
Governance
BDS: Social
Enterprises
Coops
Research +
Technology
Parastatal
Extension
Services
Coops
Our proposal...
Large
mature and
offensive coops
Small, young and defensive coops
Expand and globalize BDS
through governance training, ne...
The partnership for Africa:
Business Development Services (BDS): privately funded by coops
• PINORD (Senegal)
• Ease-Agr (...
NEW: Moshi Cooperative University (MOCU)
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Is the “Cooperative Life Cycle” Framework Relevant for Rural Africa?

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Nicola Francesconi, CIAT-CGIAR
IFPRI/IITA office, Naguru Hill
CIAT office, Kawanda

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Is the “Cooperative Life Cycle” Framework Relevant for Rural Africa?

  1. 1. 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
  2. 2. 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
  3. 3. 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
  4. 4. 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)
  5. 5. 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.
  6. 6. 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
  7. 7. What is so far the Impact of Coops in Rural Africa? Overall, a positive impact on farmers’ technological innovation, productivity and technical efficiency
  8. 8. 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)
  9. 9. 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)
  10. 10. Access to Financial Cooperatives produce a positive and significant impact on technology adoption and application by Ethiopian farmers (Abate et al. 2014)
  11. 11. 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)
  12. 12. 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!
  13. 13. However the good news end here. African coops tend to promote elite-capture and farmers’ shirking as opposed to inclusive agribusiness
  14. 14. 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)
  15. 15. 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
  16. 16. Kinship and Community Principles (Ethiopia) Similar qualitative info from Ghanaian FBOs in 2010, the founding members always have a common history/background…
  17. 17. 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
  18. 18. 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
  19. 19. 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
  20. 20. 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…
  21. 21. 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)
  22. 22. Yet, external incentives are key for coops’ establishment (and contribute to technological innovation) Prevalence of cooperatives by Region (Ethiopia)
  23. 23. 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”.
  24. 24. 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
  25. 25. 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)
  26. 26. 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..”
  27. 27. 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
  28. 28. 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
  29. 29. What have we done so far?
  30. 30. Global Outreach and Networking A multi-stakeholder workshops in Ethiopia 50 participants worldwide 20 coops from Africa
  31. 31. Local outreach and networking • Cook in Malawi • 3 events in Uganda
  32. 32. 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
  33. 33. Blogging (CIAT-DAPA Blog) Analysis of multi-stakeholders’ feedback for policy-research publication (due by June 2015)
  34. 34. The way ahead…
  35. 35. 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
  36. 36. Research + Governance BDS: Social Enterprises Coops Research + Technology Parastatal Extension Services Coops Our proposal for Africa
  37. 37. Large mature and offensive coops Small, young and defensive coops Expand and globalize BDS through governance training, networking a credit collateral
  38. 38. 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)
  39. 39. NEW: Moshi Cooperative University (MOCU)

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