Effect of Cooperative Farming Society on Ginger Marketing in Makurdi Local Government Area of Benue State
Chapter One
Researchย Objectives
The main purpose of the study is to assess the role that co-operatives play in theย development ofย ginger farmersย withย respect toย ginger marketing inย Benue state.ย Theย studyย hasย beenย guidedย byย theย followingย specificย objectives:
- To examine the performance indicators of ginger farmers participating in co-operativesandย compareย themย toย farmersย notย participatingย inย co-operatives.
- To identify the types of transaction costs ginger farmers face and to determine whether co-operative participation has any positive effect in minimising these costs.
- To identify key farmer co-operative constraints and opportunities, and make possible policy recommendations that could help in promoting the ginger sub- sector through farmer co-operatives.
CHAPTERย TWO
LITERATURE REVIEW
ย INTRODUCTION
Theย mainย objectiveย ofย thisย studyย isย toย assessย theย roleย ofย co-operativesย inย gingerย productionย andย marketingย activitiesย inย Benue state.ย Inย orderย toย analyseย thisย role,ย theย internationalย experience with co-operative development and the role of these forms of horizontal co-ย ordinationย inย assistingย farmersโย accessย toย inputย andย outputย marketsย asย wellย asย creditย markets haveย to be studied.ย The purposeย ofย this chapter therefore is toย present aย reviewย ofย the international experience on the role playedย by co-operativesย inย ginger production andย in the broader context of agricultural development as documented in secondary literature.ย Empirical studiesย on theย roleย ofย co-operativesย andย their challenges are alsoย presented inย thisย chapter.
OVERVIEWย OFย ISSUESย CONCERNINGย CO-OPERATIVES
ย Definingย co-operatives
Theย Internationalย Co-operativeย Associationย (1995)ย definesย aย co-operativeย asย anย autonomousย associationย ofย peopleย unitedย voluntarilyย toย meetย theirย commonย economic,ย socialย andย culturalย needsย asย wellย asย aspirationsย throughย aย jointly-ownedย andย democratically-controlledย enterprise.ย Theย definitionย ofย co-operativesย impliesย thatย firstly,ย they are formed by groups of people who have a specified common need or problem.ย Secondly, the organisation is formed freely by members after contributing to its assets.ย Thirdly, the organisation is formed and governed democratically so as to achieve desiredย objectives. Fourthly and lastly, the organisation is an independent enterprise promoted,ย ownedย andย controlledย byย itsย membersย toย meetย theirย needs.
Accordingย toย Galorย (2003:1),ย co-operativesย areย economicย enterprisesย thatย areย initiatedย by theirย membersย andย belongย entirelyย toย theirย members.ย Theseย enterprisesย areย formedย withย the intention of providing the best possible services at the lowest possible cost to theirย membersย when marketsย fail to provide required goodsย and servicesย at affordable pricesย and acceptableย quality.
Co-operativesย canย be formed inย any sector of theย economy and they vary greatlyย in termsย ofย sizeย andย scaleย withย regardย toย theย functionsย theyย performย (Rondotย &ย Collion,ย 2001:2).ย Theyย canย operateย atย villageย level,ย regionalย andย evenย nationalย levels.ย Likeย all formsย ofย businesses,ย co-operativesย areย alsoย guidedย byย aย setย ofย principlesย thatย wereย firstย setย outย byย theย Rochdaleย Societyย ofย Equitableย pioneersย inย 1844ย (Ortmannย &ย King,ย 2007a:41;ย Rheingoldย 2008:2).ย Theseย principlesย areย universallyย applicableย toย allย co-operatives.
Co-operatives differ from other organisations in the sense that profit is returned as benefits, depending on the type and structure of the co-operative (Suber, 2005:5). Member benefits are relative to the amount that a member utilises the co-operative services. Generally, benefits include quality supplies at discount rates, increased market power; a share of the earnings relative to the percent of business performed with the co- operative as well as increased economic activity within the local community.
Historyย ofย co-operatives
According to Shiferaw et al. (2006:5), farmer co-operatives were historically introduced inย Sub-Saharan Africa (SSA) during the colonial period for promoting the production of cashย cropsย byย peasantย farmers.ย Afterย independence,ย aย numberย ofย governments,ย includingย donors,ย promotedย co-operativesย andย otherย ruralย organisationsย asย aย potentialย sourceย ofย decentralised grassroots participation in agricultural credit, input and commodity marketsย (Ortmann & King, 2007a:44). Their performances were mixed and this was attributed toย technologicalย problemsย andย poorย management.ย Generally,ย co-operativesย wereย controlledย by government hence being considered as an extended arm of government and not asย institutionsย thatย canย helpย farmersย inย accessingย marketsย asย wellย asย requiredย inputsย (Satgarย &ย Williams,ย 2008:5).
Theย politicalย interferenceย byย governmentsย alsoย contributedย toย co-operativesโย poorย performance. However, in the 1980s, the situation changed in the sense that economicย liberalisationย openedย upย newย opportunitiesย forย producersย toย beย activelyย involvedย inย organisationsย thatย theyย ownedย (Worldย Bank,ย 2008:154).ย Thisย ledย toย reconsiderationย ofย theย roleย ofย co-operativesย inย developmentย despiteย pastย failuresย andย bitterย experiencesย (Kodama,ย 2007:87).
RATIONALEย FORย THEย ESTABLISHMENTย OFย CO-OPERATIVES
Improvementย inย theย abilityย ofย poorย smallholderย farmersย toย participateย inย marketsย isย aย seriousย challengeย inย most developingย countries.ย Thisย problemย is especially acuteย inย theย SSAย region,ย givenย theย dominanceย ofย smallholdersย inย theย agriculturalย sectorย (Onumah,ย Davis,ย Kleihย &ย Proctor,ย 2007:3).ย Evidenceย suggestsย thatย theย proportionย ofย farmersย engagedย in subsistence agriculture in this region is still high because of high transaction costs thatย inhibitย them fromย participating inย markets (Bernard, Gabre-Madhin &ย Taffesse, 2007:1).ย Theyย lackย essentialย inputsย andย improvedย technologiesย preventingย themย fromย improvingย their production as well as participating in markets. Development programs designed inย developing countries to develop smallholder farmers are unable to do so especially at theย initialย stages.
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CHAPTER THREE
RESEARCH METHODOLOGY
ย Researchย Design
A research design is defined by Borg et al. (2003) as the processes chosen by the researcherย to investigate questions or assumptions with the goal of gathering relevant data. Also, Ko-ย thari (2004: 31) defines research design as the โconceptual structure within which research isย conducted;ย itย comprisesย theย outlineย forย theย collection,ย measurement,ย andย analysisย ofย data.โย The research design of this study is a cross-section that employed structured questionnairesย collect data from smallholder ginger growers and semi-structured interviews for governmentย officials, both carried out in August 2021. The data collection was guided by research ques-ย tions,ย objectives,ย andย theย researchย problem.ย Accordingly,ย bothย qualitativeย andย quantitativeย methodsย wereย employed.ย Toolsย suchย asย semiย structuredย interviewsย ofย qualitativeย methodsย wereย usedย whileย quantitativeย toolsย suchย asย structuredย questionnaireย isย used.ย Researcherย hasย used these different tools to answer research question. The choice of these methods andย toolsย wereย seenย toย beย mostย appropriateย toolsย toย realiseย objectivesย ofย thisย study.
Samplingย Procedure
A stratified random sampling procedure was applied using farmers from the central andย northern parts of Benue state. As mentioned, these parts of the country were purposivelyย selected because they have a higher percentage of smallholder farmers. Moreover, theseย areas were selected because of the existence of co-operatives with good potential, thusย membersย fromย these co-operativesย wereย used for theย study.ย There areย 386ย registeredย smallholderย farmersย inย Markurdi
Theย targetย populationย (smallholderย farmers)ย wasย dividedย intoย twoย strata:ย co-operativeย members and non co-operative members. Farmers were then randomly selected from twoย listsย obtainedย fromย SDBย toย makeย upย aย sampleย sizeย ofย 120ย farmers.ย Theย co-operativeย farmer list usedย inย the sampling process included farmers fromย all 5 co-operatives listedย inย theย table above. The sampleย size is representative ofย the total population ofย gingerย farmersย inย Markurdi.
CHAPTERย FOUR
DATA ANALYSIS AND REULTS
ย INTRODUCTION
This chapter presents findings of the study. It presents the descriptive analysis of the roleย playedย byย co-operativesย inย gingerย pย marketingย ofย smallholderย farmersย inย Benue state.ย Characteristicsย ofย bothย co-operativeย andย nonย co-operativeย farmers,ย theirย productionย systems,ย marketingย systemsย asย wellย asย theirย performanceย indicatorsย areย presented and discussed in detail. All of these were used in the assessment of the roleย cooperatives in ginger production. This chapter also presents the benefits of being a co-ย operativeย memberย asย wellย asย theย constraintsย experiencedย inย farmer co-operativesย whichย inhibitย co-operativeย development.
CHAPTERย FIVE
ย SUMMARYย ANDย CONCLUSION
ย SUMMARY
Theย studyย wasย undertakenย toย determineย theย roleย ofย cooperative farming societyย andย marketingย activitiesย inย Benue state.ย Itย wasย aย surveyย researchย wherebyย aย sample size of 120 farmers (60 co-operative members and 60 independent farmers) wasย randomly selected and interviewed through a questionnaire. Data on their production andย marketing activitiesย wasย collectedย and analysed through Microsoft Excelย and STATAย 10.ย Both descriptive and econometric analyses were performed. An econometric analysis wasย performedย toย determineย whetherย co-operativesย haveย aย positiveย influenceย inย minimisingย transactionย costsย incurredย byย gingerย farmers.
Resultsย indicated that production systemsย ofย co-operative and non co-operative membersย do not significantly differ from each other. Both uses specialised ginger breeds, and haveย almost similar herd sizes as well as use the same feeding systems. However, farmers inย co-operativesย performย betterย inย termsย ofย productionย andย productivityย asย wellย asย sellย moreย gingerย thanย independentย farmers.ย Thisย isย mainlyย attributedย toย theย factย thatย co-operativeย members haveย regular training and extension programmes that constantly provideย themย with vital information required for production and marketing of ginger. Farmers sell more gingerย because of the reliable market offered by co-operatives enabling them to sell both theirย morning andย afternoonย ginger,ย whereasย independentย farmersย often onlyย sellย their morningย ginger.
In addition, independent farmers are not efficient in the use of variable inputs in the senseย that more of variable inputs are employed compared to co-operative members. Informalย marketingย channel was mainly used toย sellย farmersโย gingerย becauseย ofย minimal restrictionsย on productย quality.ย Main marketย outletsย usedย were co-operatives,ย traders, farm gate andย localย community as wellย asย processors.ย Moreover,ย the price paid by co-operativesย wasย 35%ย lowerย thanย theย averageย priceย receivedย byย independentย farmersย whichย thenย resultsย to lowerย incomeย onย theย partย ofย co-operativeย membersย comparedย toย nonย co-operativeย members.ย Theย mainย benefitsย asย indicatedย aboveย includeย theย provisionย ofย guaranteedย marketย accessย asย wellย asย technicalย services,ย suchย asย trainingย andย extension.
CONCLUSIONS
Conclusions are formulated on the basis of the extent of the role that co-operatives play inย bothย productionย and ginger marketing inย theย caseย ofย Benue state.ย Theyย areย discussedย inย theย following manner:
Roleย ofย co-operativesย inย production
Farmer co-operativesย haveย madeย aย positiveย contributionย toย theย productionย activitiesย ofย smallholder farmers.ย However,ย theirย contributionย is notย significant whenย comparingย themย to co-operatives in other countries.ย Results indicate that co-operative farmers produceย slightlyย moreย gingerย thanย independentย farmersย andย thisย canย beย attributedย toย anย improvementย in access to training and extension services. Further, co-operative farmers use more gingerย breeds for production. Training provided may have contributed to a slight improvement inย farm management skills and animal husbandry practices of farmers because it is designedย accordingย toย theย specificย needsย ofย farmers.ย Althoughย herdย sizesย ofย co-operativeย and independentย farmersย areย notย significantlyย different,ย someย farmersย reportedย toย haveย acquiredย moreย animalsย after beingย aย co-operativeย member.
Briefly, cooperatives have played a positive role in the provision of inputs, although farmers could not access all the required inputs through co-operatives attributed to challenges co-operatives are faced with. Farmers are still not in a better position to access credit to improve their production activities as well as to invest in improved ginger technology. Apart from the use of AI for breeding, aluminium, ginger cans and buckets have been introduced by co-operatives to enable proper ginger handling and transportation. Majority of co-operative farmers have adopted the use of aluminium buckets compared to independent farmers who use plastic containers for ginger handling and transportation.
Roleย ofย co-operativesย inย marketing
Fromย theย resultsย presentedย inย Chapterย 4ย andย Chapterย 5,ย co-operativesย haveย madeย aย positive contribution to the marketing activities of farmers in Benue state. However, theirย contribution to marketing is impaired by the challenges that co-operatives are faced with.ย Currently,ย co-operativesย inย Benue stateย doย notย offerย significantย benefitsย toย farmersย comparedย to co-operatives in other countries. In the case of Benue state, co-operatives have improvedย the amount of ginger sold by farmers, improved the regular flow of income as well loweredย transaction costs incurred.ย Moreover, losses incurred are now lower for farmers becauseย they can now sell both their morning and afternoon ginger, made possible by the shorterย distances they have to travel in order to sell their ginger.ย Nevertheless, the price offered byย co-operativesย isย veryย lowย and,ย onย average,ย theย priceย attainedย byย independentย farmersย isย 35%ย higherย thanย priceย offeredย byย co-operatives.ย Thisย putsย independentย farmersย atย anย advantageous position becauseย the enterpriseย is profitableย regardless ofย whether they areย inย aย co-operative.
RECOMMENDATIONS
Basedย onย theย resultsย ofย theย study,ย theย followingย recommendationsย areย madeย forย theย improvementย ofย smallholderย production,ย marketingย andย theย improvementย ofย co-operatives.
The success of ginger farming and farmer co-operatives depends on four factors,ย namely the provision of technical inputs, institutional support, improvement in governmentย policiesย andย socioย economicย initiatives;ย whichย allย influenceย theย successย ofย ginger farming and decisions to expand and improve ginger operations.ย Therefore, there is aย need for support programs by government and all stakeholders involved that will help toย motivateย individualย farmersย andย strengthenย co-operativesย forย betterย promotionย ofย production and marketing of smallholder farmers. This includes a more supportive policyย environment to reduce obstacles inhibiting the effective formation and management of co-ย operatives,ย infrastructureย development,ย accessย toย financialย andย creditย services,ย improvement of markets, and provision of effective training and extension to provide moreย extensive and dynamic opportunities for ginger development in Benue state. Thisย willย positivelyย contributeย toย reducingย theย highย demandย ofย gingerย thatย prevailsย inย theย countryย andย enableย co-operativesย toย diversifyย theirย operations,ย whichย inย turnย willย facilitateย theirย effectivenessย andย sustainability.
In addition, there is a shortage in ginger supply to co-operatives because the quantity of gingerย collectedย isย smallย asย wellย asย theย membershipย base.ย Thisย preventsย furtherย processingย ofย gingerย sinceย theย demandย forย rawย gingerย isย farย tooย high.ย Thereย isย aย needย toย expandย theย capacityย ofย ginger collectionย centresย by improving the membership base,ย increasing the price per bagย ofย ginger or providing price incentives considering thatย low price promotes free riding byย farmers. With an increase in the number of ginger collection centres, the volume of gingerย collected and processed will also increase.ย Co-operatives with very few members neverย achieveย theirย goalย ofย becomingย aย proficientย toolย forย development. Co-operativesโย effectivenessย isย constrainedย byย organisationalย problems,ย suchย asย freeย riding,ย aย lack ofย commitment and participation,ย lowย managerialย capacities and aย lack ofย trust. Hence, there is a need for capacity building and member training to strengthen co-ย operative functioning and internal structure. The improvement of management capabilitiesย and skills of co-operative members are essential for the development and sustainability ofย co-operatives. Further, trained and experienced leaders will be in a better position to solveย arisingย problemsย toย enableย betterย performanceย ofย theย co-operatives.
Policyย recommendations
Co-operativesย have a smaller membership base and they areย not effective in promotingย gingerย productionย andย marketingย ofย smallholderย farmers.ย Therefore,ย complementaryย institutionsย needย toย beย designedย toย address theย specific needsย ofย theย smallest farmers.ย This will motivate more farmers to join co-operatives and hence improve their membershipย base.
Smallholder farmers are receiving low prices for their products, which is attributed to theย prevailingย marketingย systemย inย theย country.ย Thisย discouragesย investmentsย inย gingerย productionย andย qualityย improvement.ย Therefore,ย thereย isย aย needย forย aย pricingย policyย improvement which will incentivise farmers to produce and sell more as well as invest inย qualityย improvement.
One of the main constraints cited by most farmers was inadequate land for productionย purposes.ย Farmersย areย unableย toย growย theirย ownย feedsย andย herdย sizeย improvementย isย restricted,ย whichย inย turnย limitsย gingerย production.ย Therefore,ย thereย isย aย needย toย provideย farmersย withย moreย landย throughย policy efforts.ย Thisย willย improveย gingerย productionย inย theย country.
References
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