Farmer Cooperatives
1
First know people.
Then you can work together.
Pro
ble
ms/O
pport
unitie
s
Food, Farmers, and Hunger
Problem
Coops are Solution
2
50% of food production wasted, severe malnutrition, substantial imports (big market, trade imbalance)
Farmers are majority of poor but are small and fractured; forming coops opens opportunities to BUILD MARKETS
Increasing production (5x typical) is resource to make investments (processing, storage, marketing)
Turning crops into cash creates village economy; once there is an economy, development can occur sustainably
Sum
mary
Coops are the Answer:
• Cooperatives have been a model for lifting farmers for over 200 years (1810 in USA) and almost all cultures
• They provide sharing of production expenses and joint marketing, financing and purchasing
They fail in Africa for two primary reasons:
• Corruption and lack of trust
• The need to BUILD MARKETS (of size!)
4
Crops
New Org
Structure Timu
Wakulima
Timu
Wakulima
Timu
Wakulima
Team
Farmers
Ushirika,
Association
Cheetah
Development
Ubia, Joint
Venture
Muundo wa Ushirika
Organizational Structure
Accountability and management through
small groups (Teams) of 5-15 farmers that self-
organize
Cheetah can’t join coop but coop can join Cheetah in Joint
Venture
JV is unifying point for all coop marketing. It controls crops so is
how investments are secured.
Summary: Coop Components
Ag Services - Coop
• Extension services for seeds, fertilizer, training
• Microfinance
• Simple post harvest processing
Financial - JV
• Direct marketing of goods
• Warehousing and other investments
• Coop financial mgmt by Cheetah
Member Support Services
• Group Health Insurance
• Upgrade Health Care
Preparing to Scale
Working in 3 village areas representing around 20 villages
Starting with dry, wet and export crops (corn, potatoes, and tea) to learn about different challenges
Doing hard work of building markets
Key farmer message: trust each other or trust middle-men
Largest buyers also want to eliminate middle-men
7
CropsValue
ChainCash
Economic
Development
Human
Development
Business
Model
• Make investments that
can achieve 3 year
repayment
• Let farmers self-
organize
• Investor joins
cooperative and
manages finance and
marketing
• Turn CROPS into
CASH!
Dev
elo
pm
ent
Pro
cess
Begin to make investments
Improve agronomy (provide microfinance link)
Build warehouse Manage cooperative
Do Test Marketing
Find temp warehouse Find market See if village responds with
total crop commitment
Organize
Recruit members Write bylaws Define commitments, etc.
Select a Target Village
Choose target villages based on high production
Let villages compete with business plan discussions
Choose one that shows highest likelihood of success
Summary
Most of the poorest people on earth are
farmers because they are small & lack access
to markets
So most food rots because lack of food
preservation, processing & distribution
businesses
Because businesses have no investment capital in $20k to $500k range to
get started – and needed leadership mentoring
Impact!
12
1.5% more
African
economic
growth
in the ‘80s
would
have saved
500,000
children by1990
Economic growth
saves more lives
than income
redistribution
- and it is created
with small
businesses
10% increase in
income
= 6% decrease in
infant mortality
= lower birthrates
= higher education rates
= less child oppression
= less domestic violence & more stable families
= more rights for women
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