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Decision and Policy Analysis Research Area – DAPA

Enhancing Development through Cooperatives (EDC): Round Two

What are we doing?

In September 2014, 50 development and agribusiness professionals representing international organizations, governmental and non-governmental agencies, social enterprises, business development service providers, agricultural and financial cooperatives and research institutes met in Addis Ababa, Ethiopia, at the first workshop on “Enhancing Development through Cooperatives” (EDC), organized by the US Overseas Cooperative Development Council (OCDC), International Center for Tropical Agriculture (CIAT), International Food Policy Research Institute (IFPRI) and the Missouri University College of Agriculture, Food and Natural Resources (MU-CAFNR). This first EDC workshop and its additional follow up events allowed organizers to identify key potential partners to develop and scale-up research and outreach activities in support of cooperative agribusiness in developing countries.

On January 12 and 13, 2015, these carefully selected individuals and organizations reunited in Washington D.C. for a second workshop to share more ideas and discuss a collaborative strategy for the way ahead. Organized by MU and CIAT and hosted by OCDC, the workshop played out over two tightly scheduled and highly interactive days. The program and the list of participants for this second EDC workshop are available at the end of this text.

21 attendees representing all points along the cooperative spectrum met January 12 to 13, 2015 in OCDC's Washington, D.C. offices.

27 attendees representing different points along the cooperative spectrum met January 12 to 13, 2015 in OCDC’s Washington, D.C. offices.

What are we learning?

Professor Michael Cook, endowed chair in agricultural economics and director of the Graduate Institute of Cooperative Leadership (GICL) at MU set the stage for discussion by recalling his previous experience working as the CEO of two large US agricultural cooperatives. This experience, which he described as “very lonely,” helped him realize the importance of external governance, needed to support cooperative leaders and managers. In an effort to ameliorate this, Professor Cook became director of GICL, an institute that in the past 20 years has provided research-driven training, coaching, advice, networking and knowledge exchange services to thousands of cooperative leaders and managers from the US, EU, New Zealand and Australia.

Today, all major US agri-coops (e.g. Blue Diamond Almonds, Ocean Spray, Florida’s Natural, Land O’ Lakes, etc.) consider participating in the GICL program compulsory for their managers and leaders. According to Professor Cook, the success of the GICL program is mostly attributable to its content, largely based on the Cooperative Life Cycle Framework. Developed by GICL’s researchers, the framework sheds light on the unique governance structure of user-owned, user-controlled and user-benefited organizations such as cooperatives, providing insightful diagnostics of the organizational challenges they face. Additionally, GICL offers networking experiences and knowledge exchange opportunities that allow cooperative leaders and managers to feel less “lonely” by learning from their peers and developing strategic business alliances.

Kristi Livingston (MU) and Greg Gothe (Land O' Lakes) take a break with Professor Michael Cook, endowed chair in agricultural economics and director of the Graduate Institute of Cooperative Leadership (GICL) at Missouri University,

Kristi Livingston (MU) and Greg Gothe (Land O’ Lakes) take a break with Professor Michael Cook, endowed chair in agricultural economics and director of the Graduate Institute of Cooperative Leadership (GICL) at Missouri University.

Samuel Ocung (CIAT-Uganda) discusses the workshop with Rebecca Savoie (Abt Associates).

Samuel Ocung (CIAT-Uganda) discusses the workshop with Rebecca Savoie (Abt Associates).

An important goal of the workshop was to discuss the applicability and validity of the GICL model beyond the US and the developed world by sharing relevant experiences and evidence from Latin America and Africa. Professor Fabio Chaddad of Missouri University shared his knowledge and evidence about the context of cooperatives in his native Brazil, particularly in the booming agricultural region of Mato Grosso. Professor Chaddad also presented his efforts to extend the GICL program to Brazilian cooperatives and his growing engagement in providing them with both the research and outreach services needed to improve governance. As a result of Professor Chaddad’s work, a delegation of more than 30 Brazilian coop representatives recently travelled to Missouri University, visiting some of the GICL-affiliated US cooperatives.

In a similar vein, Dr. Nicola Francesconi (CIAT-Uganda) and Dr. Gashaw Abate (EURICSE) shared their experiences conducting research and outreach activities throughout rural Africa based on the Cooperative Life Cycle Framework. They argued that coops are widespread and resilient organizations that contribute to the improvement of agricultural productivity and environmental sustainability throughout rural Africa.

However, they also noted that African cooperatives are prone to elite-capture and member side-selling (when member-farmers avoid selling their output through their organization and sell it instead through traders and spot markets), affecting commercial viability. Although these problems are generally attributed to external interference – as these organizations tend to attract large amount of subsidies from governments and donors – Dr. Francesconi and Dr. Abate argued that external economic incentives are not always counterproductive. On the contrary, cooperatives characterized by good governance can foster both horizontal and vertical growth. They thus concluded that the Cooperative Life Cycle Framework, as well as similar research and outreach approaches aiming to improve cooperative governance, are key to unleashing cooperative agribusiness development in Africa.

Where are we going?

Participants’ feedback and discussion emphasized the need to combine GICL’s Cooperative Life Cycle Framework, which essentially aims at improving cooperatives’ governance through research, outreach and networking activities, with demand-driven Business Development Services (BDS) for improving cooperatives’ financial management, product quality, ICT systems, marketing strategies, etc. Both Mr. Alan Doran (Oxfam Great Britain) and Mr. Bernhard Conilh de Beyssac (SNV Netherlands) emphasized the importance of supporting the development of private BDS providers in order to create the necessary ecosystem for rural cooperatives to thrive as businesses.

Alan Doran (Oxfam GB) and  Paul Olson (African Development Foundation).

Alan Doran (Oxfam GB) and Paul Olson (African Development Foundation).

As further stressed by Mr. Gianluca Salvatori, general manager of EURICSE, the global cooperative movement is becoming increasingly market-driven and must be accompanied and supported in this difficult transition, which requires both the reinvention of its governance-structure and business-strategy. Further interventions by Mr. Matthias Jaeger (CIAT), Mr. Alex Serrano (NCBA-CLUSA) and Ms. Katie Garcia (USAID) pointed out that public funding from donor agencies is rarely available to work specifically and consistently on cooperative governance and business. Mr. Paul Olson (USADF) noted that cooperative governance is one, if not the key issue, that determines project sustainability.  The assistance provided by USADF, for example, to all of the groups they fund includes technical assistance and training focusing specifically on cooperative governance, member education, business management and planning skills over the two to five year period of each individual grant.

Cooperatives tend to be seen by donors and development agencies as a means to achieve agricultural sustainability or to alleviate rural poverty and malnutrition, or as channels to transfer subsidies, credit, inputs and knowledge to farmers. In other words, good governance and business viability is seldom the objective of donor-driven development interventions.

Overall, the discussion indicated the tendency of donors to overlook cooperatives, BDS and perhaps institutions and organizations in general, in the design of their development strategies. This issue was clearly raised during the workshop, where participants representing donor organizations seemed to agree that funding to improve governance and business services for cooperatives could only be leveraged by through collective action, i.e. by mobilizing collaboration between different donor agencies. It follows that a key challenge for the EDC project will thus be to build the necessary linkages among donor agencies around the topics of rural governance and agri-business services for cooperative development.

We are currently in the process of creating a few videos to share more insights from this second EDC workshop. We also look forward to sharing the first EDC publication by June 2015. You can find all the presentations made at the first as well as this second EDC workshop via Slideshare, soon to be accessible below.

Nicola Francesconi (CIAT-Uganda) organized both the first EDC workshop in Ethiopia as well as this one in Washington, D.C.

Nicola Francesconi (CIAT-Uganda) organized both the first EDC workshop in Ethiopia as well as this one in Washington, D.C.

Participants listen as Costas Iliopoulos (University of Athens) shares his thoughts.

Participants listen as Costas Iliopoulos (University of Athens) shares his thoughts.

program

 

participants

Photos: http://www.nigelyons.com/

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