Markets for agricultural products with special quality, environmental, and social attributes can provide a profitable outlet for poor farmers in developing countries. However, participation in high value markets requires that farmers commit to deliver pre-identified volumes on time and in the required form and quality – a tall order in many cases. Agri-cooperatives play an important role in linking farmers to these markets; they forge business relations with distant buyers, realise economies of scale in processing and marketing, and provide advisory and other services to help their members respond to buyer demands (see Box 1). Examples of these services include technical assistance, training, and input and credit provision. This note presents a practical approach by which cooperatives strengthen their ability to deliver impactful and financially sustainable services. In doing so, it recognises the challenges faced by cooperatives to design services that both meet the different needs of members and are financially sustainable. Too often cooperative services are supported by external actors with no clear vision of how to continue once project support terminates, leading to disrupted service offerings for members, and fragmented learning processes for cooperatives and their partners. Innovation is urgently needed in how services are designed, how they are implemented, and cost recovery mechanisms. At the heart of the approach lies a focus on joint learning among stakeholders – cooperatives, their business partners, government agencies, and non-government organisations (NGOs) – to better tackle the complexity inherent in the provision of effective services to poor farmers.
BOX 1: COOPERATIVES
Cooperatives represent a business model in which members have an equal say in what their business does and equal share in the profits. Cooperatives are guided by strong commitments to their members’ wellbeing. They commit to open membership and self-help and often seek non-market goals, such as gender and youth empowerment, increased influence over political processes, and community development. The development of cooperatives into viable businesses is a long-term process often involving buyers, government agencies, and NGOs. Rural development will benefit from a greater number of strong cooperatives and there is an urgent need to strengthen commitments to facilitate development of cooperatives, including developing innovative ways to strengthen their business capacities, improve the services they provide to their members, and tackle those features of political–legal frameworks that inhibit cooperative growth and development .