Mr. Won-Byung Choi: The role of agriculture co-operatives in addressing food security

ICA Global Conference –SA 2013

THE ROLE OF COOPERATIVES AS

AGENTS OF RURAL DEVELOPMENT IN SOUTH

AFRICA .

BYProf D. R. Thakhathi,

University of Fort Hare, South Africa.

OUTLINE

INTRODUCTION

THE COOPERATIVES IN SOUTH AFRICA

THE ROLE OF COOPERATIVES IN PROMOTING LOCAL

ECONOMIC

DEVELOPMENT (LED)

THE CHALLENGES FACING COOPERATIVES IN SOUTH AFRICA

THE ROLE OF SOUTH AFRICAN NATIONAL APEX COOPERATIVE

(SANACO)

CONCLUSION

INTRODUCTION

The majority of the rural communities are facing

hardships, unemployment and poverty and hence

the government’s decision to make ‘coops’ as

agents of local economic development especially

in rural areas..

The South African government decided during the

Presidential Growth and Development Summit

held in 2003 to endorse special measures to

support cooperatives as part of strategies for job

creation in the economy.

In order to address the high rate of unemployment and

poverty, the government came up with the concept of

“Vukuzenzele” which implies that people must be initiative

and do things for themselves instead of waiting for “hand

outs”.

This paper is addressing the challenges facing

cooperatives in the rural South Africa.

INTRODUCTION

In 2004 the new democratic government launched the

Cooperatives Development Policy and later in 2005

promulgated the Cooperatives Act, No. 14 of 2005 as

amended.

In 2010, the Department of Trade and Industry launched the

Integrated Strategy on the Development and Promotion of

Cooperatives which sets out an implementation framework of

the policy and the Act.



Common challenges facing cooperatives are;

• Lack of effective management skills

• Limited cooperation among cooperatives

• Limited access to finance and markets

• Lack of compliance with legislation

• Lack of monitoring and evaluation systems

• Limited access to technology

• Limited promotion and awareness

• Inadequate economic and social impact

• Poor management and technical skills • Underdeveloped network and economic values

chains


The strategic pillars for the support programmes for cooperatives

To increase non-financial support services

to cooperatives

To increase a demand for cooperatives

products and

services

To improve sustainability of cooperatives

To increase financial support services to

cooperatives


The institutional framework and support programme included the following;

Cooperative Development Fund

Cooperative Business Development Support Programme

Compliance with education and training legislation framework

Cooperative Incentive Scheme ( start-up grants)

Micro-Finance Loan

Cooperative Special Projects Fund

Enterprise Network Programme

Export Marketing and Investment Assistance

Bilateral and Multi-lateral agreements with foreign trade

partners


The following coordination bodies have been

established;

Department of Trade and Industry and its relevant

Provincial

counterparts and agencies

National and Provincial government Departments

Cooperatives Advisory Boards

Other State entities and para-statals

The following monitoring and evaluating

mechanisms for coops were established;

Provincial committee on coops Development

Inter-Departmental committee on coops Development

Cooperatives Movement, Labour and Private Sector

THE ROLE OF COOPERATIVES IN PROMOTING LOCAL ECONOMIC DEVELOPMENT ( LED).

The cooperatives are key players in getting the rural masses

to participate in the social and economic development of

their areas.

Coops enable their members to become active and

meaningful participants in local and national

economies..Help in creation of employment and they provide

training opportunities for the non-skilled members.

Coops provide organisational framework to deliver cheaply

interventions aimed at assisting members to access series

such as extension and input supply and facilitate access to

financial services.

THE ROLE OF COOPERATIVES IN PROMOTING LOCAL ECONOMIC DEVELOPMENT ( LED).

Cooperatives create space for rural communities to get income

flow through bulk marketing and collective negotiation, collective

investment in machinery as well as promoting economic of scale.

Facilitate expansion of productive activity and diversification to

agro-processing and other forms of value addition.

Reduce pressure and over-dependency on government with

regards to provision of housing, health-care, electrification etc.

Enhance family and social values and promote peace and

security within communities.

THE CHALLENGES FACING COOPERATIVES IN SOUTH AFRICA.

Mobilisation of local communities in combating unemployment

and poverty is crucial and essential. Lack of management

skills is a major challenge and this results in coops failing to

improve the quality of services and to respond to the needs

and opportunities of the locals In order to effective in their operations, the members of

cooperatives must clearly understand their roles and functions.

Implementation of their vision and mission is another obstacle.Cooperatives fail to respect the values and principles of

cooperativesPoor implementation of their strategic plans.

THE CHALLENGES FACING THE COOPERATIVES IN SOUTH AFRICA

They fail to identify their risks and come up with interventions

Some of the Coops lack community “buying” and legitimacy

Cooperatives lack the most effective and efficient management

and financial system that can identify crisis situations

Coops do not have the capacity for leadership which can take

quick decisions and actions when necessary

Coops cant employ the knowledgeable and competent staff that

have good background of business and financial management

The coops do not comply with the legislation.

THE ROLE OF SOUTH AFRICAN NATIONAL APEX COOPERATIVE (SANACO)

The South African National Apex cooperative (SANACO)

is an important leading organisation that can help the

cooperatives to deal with these challenges throughout

the country because they stay closer to both

government and cooperatives themselves.

In his opening address of the 2011 National conference

of cooperatives in South Africa, Mr Lawrence Bale

emphasised the following points:


Cooperatives must work together in order to fight

poverty, unemployment and inequality.

Cooperatives must operate within the legal framework

so that they must not be used by other people who

have their own personal and narrow views that are not

to benefit cooperatives but other agendas.

Government must set aside some procurement that

must be given to cooperatives as the means to

strengthen them financially and economically.


The cooperatives have the support of the president

and should ensure that they are always ready to

deliver services to the people and thereby building

the economy.

SANACO must always engage various stakeholders

through debates, discussions, workshops and

meetings on matters of economic and social

development of the country.

SANACO must identify challenges and provide

solutions that are facing various cooperatives


SANACO must play a crucial role in educating and training

all the cooperatives members

The SANACO members should always stand up for their

values, principles and constitutions.

SANACO must work with and monitor closely the

activities and the core business of the Cooperatives

Development Agency .

SANACO has the responsibility to turn rural communities

around through the generation of economic and social

development.

CONCLUSION

SANACO should assist the cooperatives to be united in search of

excellence, effective delivery, good governance, professionalism,

accountability, equity and effective administration.

SANACO should champion the cooperatives to be visionary,

competent and caring.

Cooperatives in South Africa must become the learning

organisations and inculcate a culture of research, harnessing

intellectual debate and encouraging learning, education and

development.

CONCLUSION

Speaking during the 2011 national Conference of Cooperatives

in Midrand, Prof Thakhathi chose the topic “Accelerating

Transformation and Service Delivery in the Cooperative

Sector” and emphasised the following points:

Cooperatives should play a crucial role in enhancing local

economic development in rural communities by reducing

poverty, unemployment and inequality through the attainment

of peace, greater freedom, social equity and sustainable

development.

The leaders and members of cooperatives must be creative,

innovative and grow the movement into vibrant, capable and

sustainable entities.

CONCLUSION

The rural communities must be developed in

various ways: inter-alia agriculture, farming,

business and commerce, agri-processing,

manufacturing, mining, training and education,

arts and culture, tourism, retail services, financial

services, sports, etc.

It is clear that if all cooperatives in South Africa can

plan strategically and back their plans with

business and operational details, they will

transform the country in tremendously.

A MILLION

THANKS