Smallholder Empowerment

ZambiaMenGroupOptOne of the objectives of farmer organizations is to enhance the political empowerment of the smallholders. This is a highly desirable task. The question then becomes would this objective be more effective if separated from the business objectives. This would be very consistent with the USA model if you separate farmer associations from farmer cooperatives. Farmer associations are farmer organizations usually associated with a specific crop or animal farm enterprise such as wheat or maize production, or dairy or poultry production for which virtually all USA farmers are members of at least one. They are basically information sharing via newsletters, trade journals, annual meetings, etc. They also are political empowering via lobbying efforts with various state and federal legislative bodies. They normally do not get involved in business activities such as input supply and marketing produce.

In contrast, farmer cooperatives are farmer-owned business enterprises. In the USA they command less than 30% of the market share of the various commodities with which they are associated, with only the dairy cooperative controlling a majority market share. USA cooperatives system have for many years been in a long term decline, both in market share and in the number of member farmers. This is too the extent the USDA, the federal department responsible for promoting them no longer monitors or reports on the cooperative system’s market share or membership, and has not intentions or doing so. The Most Recent Data is from 1998 and is now over 15 years old.

Farmland, which was a conglomerate of cooperatives and thus the largest cooperative entity in the US, attempted to vertically integrate from farm to the consumer similar to what the Value Chain Enterprises heavily promoted by development efforts are attempting to duplicate. However, Farmland became overextended and was forced into bankruptcy and ultimately dissolved. The limited market share cooperatives hold in the USA, as well as the bankruptcy of the largest cooperative enterprise, is not really a solid example upon which to base development efforts for smallholder producers in developing countries. What will assure the value chain enterprises will avoid the fate of Farmland?

Last Revised:25 March 2010

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