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Co‐operatives and rural developmentG R Cloete aa Environmental Development Agency ,Published online: 27 Feb 2008.

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Development Southern Africa Vol 4, No 3, August 1987

Co-operatives and rural developmentG R Cloete*

The role of co-operatives in rural development depends largely on the aims ofsuch development and on how co-operatives are defined and structured. It isargued that successful co-operatives at grassroots level need to be small-scale,democratically organized by the people themselves, and aimed at providing forthe benefit of as many households as possible. The objective of rural developmentshould be to provide a livelihood for people through small-scale production. Thechances of success in this regard are slim given the constraints (such as landshortage) resulting from the policy of separate development.

Co-operatives in South Africa range from the vast commercial organisationssupplying inputs and marketing facilities to the capitalist agricultural sectorto small groups who see in co-operatives the key to worker control. They coverthe field from established agribusiness to the search for radical alternatives.Along the way there are many permutations.

Any paper which tries to look at the part co-operatives can play in rural de-velopment needs to have some idea of a long-term goal towards which theycan work. At this point it seems important to try and look at what problemsface rural development and from there to move on to the part co-operativescould play in this process.

It is clear that whatever may happen in the future, agricultural production offood and raw materials will be essential to the well-being of South Africans. Itis equally clear that the present system of agricultural production, while itmay be achieving enough production in absolute terms to feed everyone, isaccompanied by huge imbalances in the distribution of both products andproductive resources. The result is starvation alongside surplus. There ismassive and growing unemployment in the country. A study by J Keenanand M Sarakinsky of the University of the Witwatersrand has shown an esti-mated 150 per cent increase in unemployment in the bantustans since 1977.They estimate overall black unemployment in South Africa at between 4,5 to5,9 million people [The Star, 12 September 1986). At the same time land inboth the white and black rural areas is underutilised (Murray, 1981: 96;Segar, 1984: 11: and The Star, 11 February 1986). Industry, commercial ag-riculture and informal economic activities in the urban areas are not goingto provide a livelihood for all the people in the country. That, broadly stated,is the situation which rural development has to confront. The challenge is to

• Environmental Development Agency.

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try and ensure productive and fulfilling lives for the people who live on theland, which raises the question of how co-operatives can contribute.

One answer to this question comes from a meeting of farm workers, probablythe most disadvantaged group of employees in the country. The meeting gen-erated a long list of demands for the future which included the following:

co-operatives to be formed in every sector of the farming industry; theseco-operatives should come together to take decisions affecting the farms.Wages should be fixed by co-operatives on a regional basis. They will worktowards a minimum wage for farm workers. Each farm to elect its owncommittee to run the farm (Farm Labour Workshop, 1986).

Clearly these demands look to co-operatives as a vehicle for a radical restruc-turing of the agricultural economy and this goes a long way beyond the scopeof this paper. For many people such demands represent a serious threat, butan important element which underlies them is the conviction that peoplemust have a say over their own destinies. This touches directly on the rolethat co-operatives can play in development.

Almost all definitions of co-operatives stress their role as organisations inwhich a group of people come together to achieve a particular economic goalfor all members of the group. They set out to do this through a democratic or-ganisation in which all members have an equal say. So there is a political di-mension to co-operatives which involves equal participation and sets themapart from conventional business enterprises. This may not be reflected inthe practice of all co-operatives, but it is essential for rural development be-cause it is through participation by people on the land that the problems ofpoverty and marginalisation can be tackled. I would like to try to give thiscontention some force by looking at the existing practice of co-operatives inthe homelands and by drawing on examples from some other countries.

There are a number of different kinds of co-operatives operating in the ban-tustans, some attached to the bantustan governments and others supportedby private development organisations. I will start by looking at those linkedto government.

In most areas there are supply and marketing co-operatives usually or-ganised by the agricultural departments, modelled on the co-operatives serv-ing white commercial agriculture. This model has little relevance to the situ-ation facing most agricultural producers or potential producers in the home-lands. Little attention seems to be devoted to whether people are motivated toset up co-operatives and see a need for them or to the kind of function theycould serve in terms of the needs of production which is at present takingplace. The main focus is on setting up structures and providing some train-ing for office bearers. Participation is largely confined to members of the tri-bal authorities and local elites who are in a position to make some use of theservices on offer.

In common with most government or private agencies working with co-operatives the approach to people is made through the tribal authorities.This top-down approach does not fit well with the idea of people coming to-gether to meet a commonly felt need. It also raises all the problems of usingthe tribal authorities as development agents which a number of studies have

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drawn attention to. Increasingly, since the nineteenth century, tribal struc-tures have moved away from the ideal of representing people's power, whichgave them their traditional sanction. In place of this they have become theagents of a government in which the people have no real representation andhave used the powers given them by government to repress all expressions ofdiscontent (Haines et al, 1984: 13-18; and James, nd: 18).

However the problem extends well beyond the role of the tribal authorities inadministering unpopular separate development policies. There are wide-spread reports of corruption. Choice farms have been given to members ofthe ruling elite. In many cases the allocation of land and pensions and thehearing of cases in the tribal courts are used to extort bribes from the people.There are instances of harsh action taken against people who try to resistthese practices. The general picture is of local government structures moreconcerned with the enrichment of office-bearers than with the well-being ofthe people. In this situation development projects introduced through thetribal authorities are likely to become one more resource directed into thegrasp of the corrupt elite. (Daphne, 1984: 1-2; and Haines et al, 1984: 14).

Given these problems an essential requirement of rural development is to setup effective structures to carry out the necessary work of mobilisation andco-ordination at the local level. There is little point in trying to be prescriptiveas to the precise form that such bodies should take. But one can say a fewthings about the qualities that they need to be successful in tackling develop-ment at grassroots. Most important is that they should be representative ofand accessible to local people. This implies that people at the local level needto be directly involved in setting up such bodies. Achieving this in the pre-sent situation is difficult and in some cases impossible. Established local au-thorities are jealous of their prerogatives and act quickly where they suspectthat these are being challenged. However one needs to avoid the trap of say-ing that at present all progressive work is impossible. Often it is a question ofhow development work is initiated and the light in which it is cast. If it is pre-sented as a direct challenge to local authorities it may well never get off theground. However, an approach which stresses the attempt to meet localneeds may be welcomed. Experience has shown that one of the best ways tobuild up local democratic organisation is through working on practical pro-jects. Through working together people build up a commitment to democra-tic organisation and an understanding of what it entails. I will return to thisat the end of the paper where I give some examples of groups working to-gether in this way. For the moment I would like to return to the presentpolicies on co-operatives in the bantustans.

Government policy on co-operatives gives no evidence of the kind of grass-roots organising work which would establish contact with people and lead toan understanding of what they might see as a useful function for co-opera-tives to fulfil. No particular attention is given to the problems facing women,although they are the people most involved in agricultural production. Theresult seems to have been a pattern of successive drives to establish co-opera-tives followed by stagnation and a decline in participation, complicated byfrequent misuse of funds. The problem seems to be that setting up co-opera-tive structures cannot be successful in the long run while the basic problemsfacing production by the majority of rural people remain unresolved. These

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problems include landlessness for some, but even those with land are con-fronted with a lack of draught power, cash for inputs and labour which is in-surmountable in the present situation. The result is that land is often notutilised despite the acute shortage. Rather than trying to serve the needs ofthe few who are in a position to produce and use the services offered throughexisting co-operatives, a better focus at present would be on how to enablepeople to produce on their family plots. Attempts to establish co-operativeson a large scale will have to outline clearly the basic problems facing produc-tion and then work to resolve them in such a way as to ensure that a largenumber of people can use the land to derive a livelihood. Policies which servethe interests of a few will in the long run only create greater problems of in-equality, unemployment and marginalisation. Homeland governments havegenerally recognised that there are major problems facing production. Itwould be difficult to ignore the evidence of declining yields from agriculture,under- or non-utilisation of the land, the increasing decay of the environ-ment and the impoverishment of the people.

In response the extension services have tried to encourage people to adopt'modern' methods of agriculture. These are mainly based on the practicescurrent in white commercial agriculture which is tending more and more to-wards large-scale, capital-intensive monocrop cultivation. This pattern doesnot fit the needs of bantustan producers, most of whom are compelled bytheir situation to engage in semi-subsistence production and must aim tominimise cash inputs. This problem of inappropriate choice of policies in ag-riculture is not unique to South Africa. A study in 1985 of state interventionin agricultural development in a number of African countries came up withsome startling results. It showed for example that there was an inverse re-lationship between the degree of involvement of government in promotingagricultural development and the increase in agricultural productivity (Ven-groff&Farah, 1985:84-85).

One of the high profile government responses to low agricultural productiv-ity has been through participation in large-scale development projects whichare often called co-operative schemes. Here there is direct involvement bygovernment or its agents in planning and, in some cases, in carrying out pro-duction. In common with many other African countries the response hasbeen to rely on large-scale production schemes which seem to offer a decep-tively simple solution to the problem, defined as one of low agricultural pro-ductivity. These schemes are characterised by high cost, high technologyproduction. This has meant the reliance on professional management andthe choice of cash crops acceptable on the capitalist market rather than trad-itional peasantcrops. One particularly striking example is the production ofcut flowers for the European market in African countries which face seriousfood shortages. The need to repay debts and meet production targets hascome to dominate over the interests of villagers in these projects (Dinham &Hines, 1983: 104 & 154). Anything further from the concept of a co-operativewould be hard to imagine.

Schemes of this type are present in almost all of the South African bantus-tans and most of them, despite local variations, have a lot of features in com-mon. Generally they have been planned and initiated by government, oftenthrough parastatal corporations, with little or no consultation with people,

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even at the level of the tribal authorities. They represent development plan-ning by expert professionals based on population trends, resource surveysand production targets rather than in-depth consultations with people. Thejustification for this approach is usually given as the urgent need to improvefood production. The schemes are credited with the ability to transform pro-duction in a relatively short space of time.

A number of studies of these schemes from different areas have come up witha remarkably similar set of criticisms; criticisms which are echoed fromother parts of Africa where similar strategies have been adopted. In generalthese centre on the lack of consultation with people in setting up and run-ning of the schemes. The capital-intensive nature of production requirescomplex management which is entrusted to professionals. The people whoseland is used, feel that they are unable to influence decision making and thishas led in many cases to fears that they will ultimately lose control of theirland. In some cases the introduction of large projects has led to outright dis-possession. Examples of this would be the tea estates in Transkei and Vendaand the sisal plantations in Lebowa and Gazankulu. The only recompense topeople in these cases has been the doubtful privilege of a limited number ofjobs, the majority of which are seasonal and pay very low wages (Keenan,1984: 324).

The high costs of production on these schemes have also led to much dis-satisfaction from landholders who find that their share of the harvest, afterdeduction of costs, is little better than they would have achieved on their ownaccount. Other grievances concern the change in cultivation practices whichmake it impossible for people to grow the variety of crops on their fieldswhich they are accustomed to. The grievances all have a common root, thatthe schemes were planned with a particular kind of production in mindwhich does not accord with the interests of most people. The different per-ceptions of these projects on the part of village people on the one hand andgovernment and its representatives on the other suggest a major conflict ofinterests (Cloete, 1985: 15; and James nd: 6, 18).

On the face of it there would appear to be no cause for such conflict. Surelyvillage people cannot argue with the aim of increasing food production andproviding jobs? But in fact it seems that the arguments about food produc-tion have little substance. South Africa as a whole does not suffer from foodshortages. The problems are rather those of distribution and the projects dolittle to change patterns of distribution of agricultural products. The foodwhich is produced is not being redistributed to rural people. The aim is tomove it through established channels into the South African market. Thatfood production for local consumption is not the real aim becomes clearerwhen one looks at the number of projects which are not in fact producingfood, but are rather geared to the production of raw materials such as sisal orphormium tenax, or luxury products such as tea and coffee. They have moreto do with the development of large-scale capitalist agriculture in the bantus-tans than co-operative production controlled at village level. Bantustan gov-ernments are preoccupied with the creation of a middle class which will pro-vide political and economic stability for their regimes. Any benefits from theschemes are likely to accrue to the bureaucracy and allied middle class ratherthan to the villagers (Keenan, 1984: 325).

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The argument that capital-intensive schemes are the fastest way to increaseproduction is open to question. Throughout Africa there have been majorproblems with such schemes failing to meet projected outputs as well as seri-ous organisational and management problems. Conversely, there is increas-ing evidence that small-scale producers can match or even better the outputof large-scale, capital-intensive agriculture if they are given a minimum ofsupport. Recent studies from both Kenya and Zimbabwe point to the rela-tively greater efficiency of the small family farm over the large-scale, capital-intensive farm in terms of return on capital investment (Hazlewood, 1985:453-454; and Weiner et al, 1985: 282). In Zimbabwe by 1985 the familyfarms were supplying half the marketed maize which in turn representedhalf of their production. As the authors of one study point out:

The results . . . indicate that there are better possible patterns of landuse, more intensive levels of production, and higher yields for lower in-puts available with different models of agriculture from that of large-scalecommercial farming (Weiner et al, 1985: 284).

In searching for answers to the problems of rural development they call forthe application of a 'variety of creative and indigenously applicable blends offamilial peasant and co-operative production systems . . . ' (Weiner et al,1985: 284).A number of private organisations have also attempted to use co-operativesas vehicles for development. Generally these have been confined to co-opera-tives of the credit and service variety. Acat (African Co-operative ActionTrust) is one of the largest private organisations involved in promoting co-operatives. It has branches in Ciskei, Transkei, KwaZulu and Swaziland.,The organisation is aggressively Christian and couples this with a simplisticdevelopment philosophy based on the belief 'that development starts withsacrificial saving by the individual'. An Acat organiser stated bluntly, 'Wepreach to people in the villages to see the Lord and save money and then wesell them packages of seed, fertilizer and pesticides.' There is little analysis ofthe real causes of underdevelopment which make it impossible for many in-dividuals to improve their situation simply through self-sacrifice. In addi-tion to selling production packages Acat provides booklets with easy-to-fol-low instructions on how to plant seeds and apply pesticides. In themselvesthese are quite useful services. But it is important to understand what a li-mited response they represent to the problems facing development work(Acat, 1984).

There is an inherent danger that an organisation like Acat will create a de-pendence on itself as supplier of inputs in a situation where people have fewalternatives. In so doing it can lock agriculture at village level into a particu-lar pattern which may become very difficult to alter. The result is that the co-operative structures are not an expression of people's free commitment to acommon goal, but are rather the agents through which Acat extends its in-fluence. In Acat's case this is of course tightly bound up with its own concernto spread the gospel through its work. In this context the creation of depen-dence assumes more than incidental significance. Fieldworkers in theTranskei who have contact with Acat clubs at ground level indicate consider-able dissatisfaction with the emphasis on religion. As in the case of govern-ment projects there are motives separate from the interests of village people.

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In addition to this concern to bring people into the fold there is another,perhaps more insidious factor at work. Commercial agriculture in South Af-rica has, over the years, become tied into a particular pattern of productionthrough control over finance and inputs exercised by the giant co-operativeswhich are themselves tied up with multinational suppliers of agricultural in-puts. About 50 per cent of short-term production credit for farmers comesfrom the co-operatives who take a lien against the crop as security. This cre-dit is used to buy inputs from the co-operatives. The co-operatives them-selves are linked with the multinational suppliers of machinery, seed andagro-chemicals, often through exclusive agreements. An example would bethe link-up between Vetsak and Fiat. The crop is sold to the co-op at a pricedetermined by the government control boards. There is very little space forthe individual farmer to manoeuvre in this network. He becomes bound to acycle over which he has little control.

In a much smaller way the work of organisations like Acat is heading peoplein the same direction, creating dependence on a certain package of inputsover which people have little control. This is reinforced by the virtualmonopoly over 'scientific' agricultural information that an organisation inthe homeland situation can easily come to have. This tendency to set peopleon a particular path becomes clearer when one looks at Acat's close connec-tions with the Farmers' Organisation. Despite its name, this is a commercialcompany rather than an organisation representing farmers' interests. It is asubsidiary of Farm-Ag, a Natal-based multinational which is mainly involvedin the distribution of agricultural chemicals and spraying equipment. TheFarmers' Organisation is the agent for a number of agricultural inputs rang-ing from farm machinery to pesticides and herbicides, and also representsthe seed merchants, Ciba-Geigy.

In addition to selling these inputs to the large-scale projects the Farmers' Or-ganisation tries to promote their use by whatever co-operatives exist. In thiscontext it supplies Acat with the production packages which Acat distri-butes. While Acat deals with the lower end of the market, the Farmers' Or-ganisation has its own sales drive aimed at the more up-market co-operativesthat exist. This drive is supported by lectures, demonstrations and instruc-tion booklets all featuring the products supplied by The Farmers' Organisa-tion. Clearly this has more to do with advertising than it does with looking atthe needs of small-scale farmers who might well benefit more by limitingrather than maximising their cash inputs. A ready source of inputs is cer-tainly important for production, but the Farmers' Organisation is chiefly in-terested in securing a market for its products and its involvement in promot-ing co-operatives must be seen in this light, and may have little to do with thewider needs of rural development. Its activities may be of help to those who al-ready possess the resources to engage in production. However, buildingstructures which mirror those of present commercial agriculture are likely tocreate more problems for development in the future than resolve those of thepresent. The increasing mechanisation and depopulation of the commercialagricultural areas holds little prospect of a solution for the rural people whoface unemployment, poverty and starvation in South Africa.

In the long run any attempt to use co-operatives to tackle the problems facingrural development is going to have to be accompanied by wider moves to re-

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structure land use and at least some areas of agricultural production. Withinthe constraints of present separate development policy there are only limitedoptions for promoting grassroots rural development.

I would like to draw attention to some initiatives in the field of co-operativework which seem to offer sound guidelines for future development. At pre-sent there are a few organisations which can really be said to promote co-operative work at a grassroots level. If we look at those organisations whichare committed to this approach we can see a number of common characteris-tics. There is a strong emphasis on democratic and open organisation. Thereis an attempt to centre the work on activities which rural people themselvesidentify as important and to move at a pace defined by local people. Such anapproach has many difficulties, perhaps a major one is that things tend tomove rather slowly. This slow consolidation of people's control over their owndestinies has to be set against the dramatic improvements which are prom-ised, but seldom delivered, by development schemes which place their majoremphasis on technical and capital inputs, rather than people development.

Development work needs to respect people's ability to do things themselves ifthey are given the opportunity. It hardly needs to be said that co-operation isnot unknown to rural people. It takes many forms in their everyday lives,from a group of retired men getting together to cultivate their fields to school-girls setting out after school to collect wood to cook for a forthcoming feast.The common element is the integration of these forms of co-operation intothe everyday lives of people. As a vehicle for rural development their majorshortcoming is their very limited objectives. This form of organisation isbrought up short by the nature of institutionalised local leadership. I have al-ready looked at the reasons why this leadership is, by and large, not a suita-ble vehicle for development. But this does not mean that there is no chance toextend the scope of existing co-operative activities and sentiment into an ap-proach to grassroots development.

Where organisations have been prepared to provide backup for grassroots or-ganisation the results have been rewarding. An important part of this bac-kup has been a willingness to take a stand against attempts by local elites tohijack all resources. This can take many forms. Some are fairly easy to seethrough, a headman ingenuously suggests that a water reservoir is situatedat the top of his field where it can be used to irrigate his crops. Others aremore insidious, for example attempts to use the organisation to promotelocal political ambitions or to further personal jealousies. All these types ofproblems plus any others have to be guarded against. But the rewards can beconsiderable.

This is particularly the case with womens' groups. Women carry the mainburden of everyday life in rural areas so it is appropriate that they should bemost active in seeking ways to improve that situation. There are many smallwomens' groups in the bantustans which have organised themselves, withsome outside assistance, around their everyday problems. Often there is aminimum of formal organisation. The legal constitution of a co-operative isof little importance when set against the major commitment to work togetherand share equally in making decisions; a commitment which seems to stemfrom a long history of being exploited and denied a say in their own destiny.

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These feelings are aptly summed up in the following quote from an interviewwith one such women's group:

In this co-operative work, you don't feel the pain, because it is your ownco-operation. There is nobody pushing from behind. You get involved be-cause you like the work. But this does not mean that the work is easy. Thework we have done in this village is HARD work! But because we work co-operatively and willingly we don't feel that strain. Like making these ce-ment water jars, the work was finished in no time, because we were one,and there was very little money involved. Because there is very little moneyinvolved, even a person with no money can participate. Even if you haveno money, there's nothing stopping you from getting the thing people aremaking. You help others, and you know afterwards you too will get thatthing. (Khumbane & Swan, 1987)

In looking at long-term prospects for such work one needs to be aware thatthe situation in South Africa differs from that in other countries furthernorth and also from that in countries in, for example, South America whereexamples of successful small-scale production can be found. The destructionof the peasantry has gone much further here than it has in most of theseareas. Presumably this means that more work will have to be devoted tomotivating people, and they will have to be sure that a viable livelihood is pos-sible on the land. But I think that most people with experience of work inrural areas will agree that there are still many people with a commitment tousing the land productively. In mobilising this commitment there is a bigquestion mark above the credibility of present government structures.Perhaps an even greater question at present is whether the political willexists to institute the necessary changes, because it is clear that such a pol-icy cannot be tackled within the bounds of the present bantustans struc-tures. Not only is there the problem of the existing power structure but also ofthe limited land available in these areas. It is only by looking at the situationon the land in South Africa as a whole that the present problems can be ad-dressed.

Alternatives will have to be based on an approach which does not attempt tomanipulate people or present them with offers they cannot refuse. They willhave to be based on consultation with the broad mass of rural people, provid-ing them with information which will enable them to make choices in theirown interests.

BIBLIOGRAPHYACAT, 1987. Mineographed prospectus, Umtata.CLOETE, D, 1985. 'Maize production schemes in the Transkei'. Unpublished paperpresented to the ASSA conference, Cape Town.DAPHNE, P, 1984. 'Community organisation through physical programmes: Astrategy for tackling rural poverty.' Carnegie Conference Paper no 227, Cape Town.DINHAM, B & HINES, C, 1983. Agribusiness in Africa. Earth Resources Research Ltd,London.FARM LABOUR WORKSHOP, 1986. Minutes of a farm labour workshop, Lochvaal.HAINES, R J, TAPSCOTT, C P, SOLINJANI, S B & TYALI, P, 1984. 'The silence of pov-erty: Networks of control in rural Transkei'. Carnegie Conference Paper no 48, CapeTown.

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HAZLEWOOD, A, 1985. 'Kenyan land-transfer programmes and their relevance forZimbabwe'. The journal of modern African studies, 23, 3.JAMES, D, No date given. 'From co-operation to "co-operative": Changing patterns ofagricultural work in a rural village'. University of the Witwatersrand.KEENAN, J, 1984. 'Agribusiness and the Bantustans'. South African Review II: 318-326.KHUMBANE, T & SWAN, N, 1987. Interview with womens' group in Gazankulu.MURRAY, C, 1981. Families divided: The impact of migrant labour in Lesotho. RavanPress, Johannesburg.SEGAR, J, 1984. 'Social inequality in a Transkeian "Betterment" village'. CarnegieConference Paper no 49, Cape Town.THE STAR, 11 February, 12 September 1986.VENGROFF, R & FARAH, A, 1985. 'State intervention and agricultural developmentin Africa: A cross national study'. The journal of modern African studies, 23, 1.WEINER, D, MOYO, S, MUNSLOW, B & O'KEEFE, P, 1985. 'Land use and agriculturalproductivity in Zimbabwe'. The journal of modern African studies, 23, 2.

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