Farming cooperatives help farmers to pool their small and fragmented land holdings: This facilitates improvements on the land.
An agricultural co-operative is where farmers pool their resources in certain areas of activity to provide distinguished services to their individually farming members.
Cooperatives can also be organizations of all types that address a wide range of issues, from food producers and consumers to credit and hybrid cooperatives.
Owing to strength in numbers, cooperatives offer solutions to common concerns and similar struggles bigger than individuals can accomplish. And it is against this backdrop that cooperatives are an important tool in poverty reduction.
Cooperatives have the capacity to put an end to the trend of speculation in essential food commodities intended for human consumption and reduce the large sale acquisition of arable lands that forces farmers off their land because by themselves, they are too weak to defend their rights.
Cooperatives play a vital role in supporting individual small farmers, promoting food security, generating employment and reducing poverty and contributing to the gross domestic product of the country.
Small scale farmers have the ability to expand and make an even greater contribution against poverty and hunger if they were given the right support by governments, civil society and academia.
Benefits of cooperatives
When small-scale farmers get together and form cooperative societies, they can access better markets because they have increased bargaining strength than they would, if they worked individually.
It is also easier to get market with higher prices since purchases will be in bulk thus, avoiding exploitation from middlemen who often disrupt the market prices with their own varying prices.
Also as a group, they can raise funds for joint procurement of farm inputs like fertilizers and quality seeds. Thereby, avoiding purchasing counterfeit products or fake inputs. This ensures easier affordability and increases output and profits for the farmers.
For instance, a moisture meter is too expensive for an individual smallholder farmer. Yet as a group, they can raise the money to buy one and use it in turns to check the moisture content of their produce like coffee. Through cooperatives, it is easier to get training in quality improvement practices from respective agricultural organizations.
Affordable Transportation and storage
As a cooperative society, farmers are able to organize quick and affordable transportation as well as storage facilities and similar such services for their products as compared to individual farmer's efforts.
Value addition: As a group, it's much easier to devise value addition mechanisms for their products. For example, agricultural cooperatives can provide support towards fruits processing and vegetables where tonnes go to waste because they are fast perishing commodities.
Sustained income source without negative externalities: As societies, tie-up with purchasers form cities on contract basis which generally last for longer periods, farmers are assured that their produce (however small it may be) has been sold and corresponding monitory benefits are obtained.
Also, farmers do not get exposed to the vulnerability of the market as the rates for purchase were fixed during contracts.
Financial accountability: The societies are to be registered under societies act and thus have defined accountability relating to accounts, procedures, and policies towards the member farmers. That means that farmers can seek justice if they feel like their interests are compromised due to acts of society.
Cooperatives are capable of providing social protection: Since people are already organized and collected together, it is easier to make a contribution towards social security as a group. Such a program provides a cushion that is otherwise unavailable and builds resilience against economic and environmental shocks.
Farming cooperatives help farmers to pool their small and fragmented land holdings: This facilitates improvements on the land. It paves the way for intensive cultivation by using modern technology.
Cooperatives promote collaborative entrepreneurship and economic growth: They reduce individual risk in much-needed business ventures and create a culture of shared productivity, decision-making and creative problem-solving.
They have the potential to revive communities by allocating funds to rising workers with vested interests. Credit cooperatives also supply money to start a new business or repair current ones. Profits from sales can then support larger community projects that help each member and the community as a whole to survive.
Cooperatives create competition within local markets: Purchasing cooperatives, in particular, helps businesses compete with large, national retailers. Cooperatives not only provide positive outcomes for its members but also excite local markets as a whole.
All the above indicates that cooperative societies have a significant impact on the development and sustainability of rural sectors by supporting farmers in improving their livelihoods.
Small and marginal farmers need support in the form of inputs, training, harvesting, storage facilities, distribution channels and a network of market information systems. Technical guidance is required to help agriculturists in processing their produce and reap benefits through value addition.
The village artisan faced with competition from the organised sector finds it difficult to maintain his traditional employment. That is why the reviving of cooperative societies is needed.
All cooperatives, social or economic are mechanisms that ensure the growth and prosperity of communities. In developing and transitioning countries that lack access to enough capital, sufficient education, and training, cooperative structures allow communities to pool together their resources to solve problems, identify common goals and target the causes and symptoms of poverty.