Benefits of Farmers Cooperative



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One of the greatest challenges facing Nigeria’s agricultural sector is how to increase the number and variety of sustainable economic agricultural enterprises. Due to a number of varying factors small scale farmers have often found it difficult or nearly impossible to overcome challenges they are faced with in daily running of their business.

These myriad of problems stagnate their growth and ability to contribute meaningfully to the economy, as research has shown that small scale farmers produce most of the food available for consumption.

For example Nigeria's acting president recently revealed that Nigeria produces about two hundred thousand tons of maize annually, even though the annual consumption is at six hundred thousand annually, thereby creating a shortage of almost four hundred thousand tons annually, this leaves the country with no alternative than to fall back on importation.

Structural Programmes created by governments in Nigeria have done little to help farmers as they are usually short timed, weak and does not serve peculiar farmer needs and wants.


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Some of the problems faced by farmers include:

  1. Exploitation by market traders due to poor bargaining power
  2. Inadequate rainfall or irrigation
  3. Low/ No access to information
  4. Inability to access credit facilities from banks
  5. Lack of Farm machinery to facilitate Food Production
  6. Inability to access funds/ disbursements from government
  7. Lack of food storage or processing facilities
  8. Use of crude farm tools/ methods
  9. Bad/ Lack of social amenities such as Bad roads, no water for irrigation e.t.c

It has become imperative for Nigerian farmers to associate with a view at solving these belligerent problems, working with a group of farmers with the same target can be encouraging as it leads to sharing information, dividing tasks and sharing advertisement costs amongst other numerous advantages.

WHAT IS A CO-OPERATIVE

A cooperative is an autonomous association of persons united voluntarily to meet their mutual economic, social, cultural needs and aspirations through a jointly owned democratically controlled enterprise organised and operated on cooperative principles where production resources (land, machinery) are pooled and members farm jointly.

The ability to pool resources is a practical motivation for the creation of agricultural cooperatives, providing methods for farmers to join together in an association through which farmers can achieve a better outcome than by going alone.

In Nigeria a large portion of farming is done on a small scale which makes the farmer fully responsible for liabilities he may incur on his farm, these unsurmountable problems may lead to a closure of the farm which is detrimental to the economy.But through cooperatives farmers would be afforded the opportunity to retain their land yet pool their resources together.

Agricultural co-operatives have been found to be very successful in countries like Canada, India, China, with the co-operatives establishing companies in various sectors such as Agriculture, Retail, Petroleum, Construction e.t.c

Examples of Successful Farming co-operatives include:

FriesLand Campina (Producers of peak milk) is one of the world’s largest diary companies and has a co-operative union established in 1817. The member dairy farmers span across various countries such as Netherlands, Germany and Belgium and own 100 percent of the company. All member dairy farmers are independent farmers who contribute their skills and expertise to achieving growth and value creation.



United Farmers of Alberta (UFA) which was originally created as a agricultural supply cooperative in 1935 at Calgary and as of today boosts of an annual revenue of 2.1 Billion CAD

West Farmers Limited was found in 1914 as a co-operative to provide services and merchandise to western Australian farmers, growing into a global a conglomerate which at 2016 boosted an annual turnover of $65.98 Billion

Darigold (Formerly the northwest Dairymen Association) was formed in1917, as an association of dairy farmers which co-operated to find ways of storing and preserving milk from its member farmers, this lead to finding ways of processing preserved milk and creating viable products for the market. As at 2010, the co-operative has a turnover of $2.0 Billion with production of 8,600,000,000 pounds of milk a year.

It is worthy to note that businesses formed by co-operative societies is well run and tend to have a strong structural base as it serves a collective interest and purpose, eliminating mismanagement and vested interest.

Each of the co-operative societies listed above were formed when the countries were referred to as developing economies, leads one to believe that such structures can thrive in developing economies such as Nigeria.




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10 Advantages of Agricultural Co-operatives

  • Easy to Form: Procedures for forming co-operatives are easier as compared to organisations or companies
  • No obstruction for Membership: Depending on the rules of the co-operative, its usually easy to join a co-operative group
  • Increased Bargaining Power: Member farmers would be able to purchase farm tools and fertilizers at subsidized rate and also get to sell farm produced at increased prices collectively
  • Democratic Management: Executives are selected by election and are held accountable by members of the society
  • Constant Supply: The cooperative can ensure a regular supply of produce to the market by controlling sale
  • Stability and continuity: Cannot be dissolved by insolvency, lunacy or permanent incapability of any of its members
  • Easy Access to funding: Co-operatives would be able to get loans and grants from the government or other financial institutions much easier.
  • Service Motive: members are provided with reasonable services, aids and grants
  • Economic Operations: The co-operative eradicates the need for middle men thereby creating a favourable environment for its members.
  • Administrative Convenience: Easy to collect taxes, distribute subsidies

Finally, the need for farmers to come together and form a farmers cooperative society is very desirable, however they must have in mind the need to use a robust cooperative management software like Probitycoop to effectively manage the relationship among members and to ensure transparency is highly recommended.

By Abraham Olaleke
Technology Junkie & Agric Enthusiast

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