Posted on July, 31, 2019 at 11:14 am
By GEORGE WACHIRA
There is an ongoing high level emphasis to revive cooperative institutions together with collapsed and limping agro-support industries, which include the Kenya Planters Cooperative Union(KPCU), Kenya Cooperative Creameries (KCC), Kenya Farmers Association(KFA) and textile industries like Rivatex and Kicomi. These institutions, among others, are known to have successfully driven the agro-economic miracles of the early years— 1960/70s — of our nationhood.
The initial national economic development plan for independent Kenya was mostly modeled on creating new co-operatives to mobilise, modernise and commercialise rural agriculture, while expanding the existing pre-independence large scale commercial farmers co-operatives to serve as apex national value-adding marketing and processing institutions.
And the co-operatives worked miracles in mobilising and empowering rural economic participation, through farmer education, credit and inputs support, and economies of scale in value-chain marketing logistics. Sustainable jobs were created, while providing economic re-assurance for the farmer through increased household incomes and guaranteed market for their produce.
The national GDP strengthened as agricultural-based exports increased, and local agro-industries proliferated across the country. The country was definitely headed to become an economic tiger, with the co-operative movement claiming credit for a large share of this success.
The farmers’ co-operatives were a clearly thought out strategy and a best practice borrowed mainly from the Nordic countries and Israel and customised for the Kenyan environment and needs. A strong ministry of co-operatives effectively presided over provincial, district, and divisional outreach networks. A tertiary Co-operative College provided governance systems and skills for the co-operative movement.
The cooperative institutional framework was arranged around a commercial crop or produce, with an apex institution to consolidate , process, and market the produce. Cross-cutting support institutions like the KFA supplied inputs at reasonable cost-plus prices, while Agricultural Finance Corporation (AFC) provided capacity expansion credit.
Then during President Moi’s years of 1980/90s most of the co-operatives across the country collapsed mainly due to mismanagement, corruption, and uncalled for political interference. Then came the IMF in mid-1990s and prescribed (or rather imposed!) liberalisation and private enterprise. These were good economic principles but they were implemented without much planning and preparation and this disrupted and weakened the well-oiled co-operative systems.
The Kibaki administration (2003/13) did not seriously focus on saving the dying co-operatives - except perhaps snatching KCC and Kenya Seeds from the greedy jaws of private interests. As the years have passed by, the agricultural sector has continued to limp as many commercial crops, and agro-industries have collapsed leaving farmers on their own, and as substitute imports became an accepted norm.
Going forward, we need to acknowledge that times have changed with new opportunities, technologies and alternative strategies. This is why we should not rush into reviving all the old co-operative institutions without first undertaking a thorough due diligence to establish current relevance and viability, while avoiding resource and capacity duplication. There will be many cases where private enterprises will work well in partnership with farmers.
However what is unlikely to change is the need for effective grassroots farmers cooperatives which should have the flexibility to extend beyond county boundaries for synergies and economies of scale. Co-operative laws and regulations will need to be reviewed and updated to ensure that they are in keeping with latest economic and technical developments. However first and foremost, the regulatory framework should target protection of farmers interests.
Where a case for revival of a cooperative is clearly justified, urgency should be accorded to re-create value chain systems for farmers and agro-industries, especially for the struggling produce like maize, coffee, sugar, cotton, pyrethrum, cashew nuts, dairy and livestock.
Further, as new initiatives and technologies evolve to commercialise “traditional” food crops like Irish potatoes, sweet potatoes, bananas, sorghum, avocados etc, there will be need to concurrently develop effective farmers marketing co-operative systems around these crops.
Finally we should acknowledge a number of successful farmers’ co-operatives which have won the race to become modern and well managed institutions. These include .Githunguri and Mukurueini Dairy Co-operatives which are a proof that it is not impossible for rural-based farmers cooperatives to succeed beyond expectations. My informed experience in co-operative systems is from past and present membership in farmers co-operatives.
Source: Business Daily