Issues in establishing agricultural cooperatives

摘要

These means of avoiding the common problems of cooperatives all lend support to the KIS principal. Keeping the capital structure simple and equitable minimises the risk of conflict between members. Keeping the business simple reduces conflict between those members wanting basic services and those wanting to add value. The value-adders may be frustrated, but they may have other ways of investing in downstream businesses. Keeping the business simple also reduces control problems. The NGCs have been notably successful on control issues, and this is generally regarded to be at least partly because they are generally highly focused and narrowly defined businesses. Keeping it simple is, in any case, a good starting point for any new business. Growth and complexity can always be added later. So it is important for those establishing cooperatives to have a clear idea of their purpose and to focus on that. If, as is frequently the case for farm cooperatives, the primary purpose is to increase the farmers' bargaining power, then the cooperative needs only undertake those activities that are essential to that purpose. Thus, it may need to take delivery of the product and store it in one or a few places but having done that, it has the opportunity to negotiate sales to processors or other customers. In this way, a cooperative can minimise the requirement for its members to contribute capital, and minimise the risk of the investment. At the same time, the benefits in terms of improved bargaining power, may be just as great as if the cooperative had taken on many of the tasks in the supply chain.