Agricultural Cooperatives

Oct 19, 2012 Editorial

Last Tuesday, the Ministry of Agriculture observed World Food Day. One of the most revealing aspects of the commemoration was that the Ministry did not use the official theme of the Food and Agriculture Organization of the United Nations (FAO): “ Agricultural cooperatives – key to feeding the world”, but instead came up with one of its own: “Better Technology, Better Farming, Ensuring Food Security”. It should be noted that interest in cooperatives was also reflected in the UN General Assembly’s designation of 2012 as “International Year of Cooperatives.”
Our government has evidently decided to downplay the role of co-operatives towards increasing our agricultural output. All Guyanese are probably aware of our disastrous foray into the world of ‘co-operatives’ in 1970 when our country was designated, “The Co-operative Republic of Guyana”. But it is our considered view that the enthusiasm of the rest of the world for ‘co-ops’ in agriculture suggests that we might be throwing out the baby with the bathwater.
Part of the problem might be that there is some confusion about what exactly ‘co-ops’ mean for us in Guyana as opposed to other countries. For Guyana, “co-operativism” was not just a way to organise agricultural production but an ideology adapted from a Tanzanian model of socialism – Ujaama Socialism. Burnham and the PNC that brought it to Guyana proposed it as an alternative to the Marxist Socialism proposed by the PPP. As with all ideologies, it was supposed to provide an all-encompassing world view that guided all facets of life. This is the model of ‘co-operatives” that failed and gave the term a bad name in Guyana.
Agricultural co-operatives are basically of two types – agricultural service cooperatives, which provide various services to their individually farming members, and agricultural production cooperatives, where production resources (land, machinery) are pooled and members farm jointly. The latter type would be closest to the ones proposed in the 1970s for Guyana – and were common in many socialist countries, but with the Marxist orientation towards egalitarianism and equality in distribution.
But it is the first type of agricultural co-operatives – the ones that focus on providing services – which the UN and FAO had in mind when they formulated their themes. These are numerically the most dominant form in the world.
“There are two primary types of agricultural service cooperatives, supply cooperatives and marketing cooperatives. Supply cooperatives supply their members with inputs for agricultural production, including seeds, fertilizers, fuel, and machinery services. Marketing cooperatives are established by farmers to undertake transformation, packaging, distribution, and marketing of farm products (both crop and livestock). Farmers also widely rely on credit cooperatives as a source of financing for both working capital and investments.”
We believe that we will significantly diversify and increase our agricultural production – including value-added production, only when we introduce corporate investor-owned mega farms and processing facilities and/or agricultural service cooperatives into our production matrix. Unlike the PNC/socialist-style co-operatives, the latter’s only difference from the corporate farms is that they are owned by the farmers that receive the service and, therefore, the rates they charge for their service provided are intended to maximise the profits of the latter. They must operate on strictly business principles however – no altruism inferred.
Three types of services are generally provided: a machinery pool: for small farms that cannot afford expensive and irregularly used farm machinery; manufacturing/marketing services to provide transportation, consolidation of produce to demand higher prices or delivery to factories or marketing channels and finally to provide loans through a credit union. In some instances, manufacturing/marketing cooperatives may have credit unions as part of their broader business.Agricultural supply cooperatives aggregate purchases, storage, and distribution of farm inputs for their members. By taking advantage of volume discounts and utilizing other economies of scale, supply cooperatives bring down the cost of the inputs that the members purchase from the cooperative, compared with direct purchases from commercial suppliers.
We believe that the Ministry of Agriculture should take another look at co-operatives, even as it is entering mega-farm arrangements with T&T.

Discover more from Kaieteur News

Subscribe to get the latest posts sent to your email.

Latest News