By Dr. Thomas Herlehy
Dr. Herlehy is chief of project for Powering African Agriculture and practice manager for Agricultural Productivity and Competitiveness with International Development for the Land O’ Lakes. He is managing the new USAID-funded Powering African Agriculture project which will be working with the Kenya Geothermal Development Corporation and Winrock International to analyze how to harness geothermal energy for agricultural purposes, especially for processing primary products.
Millions of smallholder farmers throughout the developing world are struggling to eke a living out of their land, in an era marked by economic and political crises, severe weather patterns and limited access to technologies and markets. On top of that, most smallholders – who make up 90 percent of the world’s extremely poor, according to a new FAO report – are not members of farmer-owned organizations. Land O’Lakes, Inc. believes that when farmers come together through cooperatives or member-owned businesses, they can pool their resources and maximize the value of whatever work they do. Cooperatives link farmers to markets, input suppliers, new technologies and sound farm management techniques. Farmer-based organizations help farmers negotiate better prices for their goods and services through the power of aggregation. So, what prevents smallholders from connecting to markets, especially by establishing or joining cooperatives?
One of the major hurdles smallholder farmers face worldwide is that agricultural input and service companies have little incentive to send their marketing representatives to remote areas. The high cost of fuel and poor infrastructure makes it costly for input providers to reach millions of smallholders. Consequently, input suppliers fail to build demand for their innovative products, while farmers miss out on productivity-enhancing technologies that would substantially enhance their incomes.
The most effective way for input supply companies and buyers of agricultural products to reach smallholder farmers is by connecting with them via producer groups, like cooperatives. With 31 years of experience in cooperative development, Land O’Lakes International Development has witnessed the power seeing smallholder farmers band together to demand better inputs, services and information, and aggregate their produce for sale in formal markets.
Skeptics say that cooperatives have tried and failed to deliver rural agricultural development and to connect smallholder farmers to markets. But, many of these organizations are not true cooperatives. They are not member-owned or service-oriented. In fact, I have seen many examples of organizations governed from the outside, with leaders who are appointed, rather than democratically elected by their members. In this sense, membership is not voluntary and leaders are not accountable to their members. Without transparently electing leaders of cooperatives, farmers are not truly empowered to demand the goods and services which they need in order to boost productivity and earn better incomes. And, without a demand-driven, service-oriented approach, cooperative leaders do not have the incentive to reach out and bring the needed technology, information and services to their members.
The United Nations declared 2012 as the International Year of Cooperatives for good reason. Member-owned, bottom-up, demand-driven, and service-oriented cooperatives have the power to sustainably strengthen the livelihoods of millions of farmers. These organizations, when governed correctly, support the growth of markets and the private sector in communities that also need to grow and thrive. We should not forget that cooperatives form one of the basic building blocks for incorporating millions of smallholder farmers into markets that will provide access to the information, tools and services needed to lift them and their communities out of poverty. Cooperatives are an important and powerful tool for helping developing nations overcome persistent food insecurity and undernutrition, as well as contributing to national economic growth through agriculture.
Land O’Lakes, Inc. is a national, farmer-owned food and agricultural cooperative with annual sales of nearly $13 billion. The nation’s second-largest cooperative and number 210 on the Fortune 500, Land O’Lakes does business in all 50 states and more than 60 countries. Operating as a not-for-profit division of the cooperative, since 1981, Land O'Lakes International Development has improved the quality of life for millions of people in 76 nations through more than 275 projects worldwide that are generating economic growth, improving health and nutrition, and alleviate poverty by facilitating market-driven business solutions.