The re-birth of co-operatives in Uganda

Lucrezia Biteete

The resurrection of Uganda’s co-operatives will strengthen communities, the agricultural sector and the Ugandan economy as a whole. But it will not be easy. Here’s our roadmap.

Co-operatives are not a new concept. The co-operative model has been around for hundreds of years, is widely used in Europe and is expanding fast in other parts of the world as well. This is especially true for the agriculture sector. In Uganda, there were several strong co-operatives in the 60s and 70s that accounted for large quantities of agricultural export. Unfortunately, with civil unrest cooperatives break down fast. This is mainly because the co-operative’s operations are based on trust and cooperation, as well as access to markets and a safe and secure environment.

Today, the government, donors, and NGOs are eager to revive the co-operatives. It’s easy to see why: Co-operatives represent a relatively cheap and effective grassroots structure that can support the larger agricultural supply-chains. Co-operatives help to ensure that the farmers, who are normally at the bottom of the supply chain, have a voice, get basic services and a price they deserve. It also ensures them the right knowledge and inputs to satisfy the off-takers. Co-operatives are also largely community-based, employing members of the area which ensures broad ownership and anchoring in local community structures.

However, the process is slow.

For years, NGOs and government extension workers have tried to improve the governance and efficiency of co-operatives. Nevertheless, many break down due to poor governance structures, political interference, misuse of funds, lack of organisational skills, and breakdown in trust between the members.

Why is it so difficult to revive the community-based organisations in Uganda, despite a clear need and experiences from a not-so-distant past?

Why is it so difficult to revive the community-based organisations in Uganda, despite a clear need and experiences from a not-so-distant past? And what should the government, NGOs and the private sector do to help this resurrection?

Train the people

First, the success of the community-based organisations is largely dependent on the people who participate and the surrounding community. While there are many challenges facing the communities, the main hurdle is the people.

Many of the people who have roles in the community organisations only have limited formal education, and the formal education system often lacks key skills needed in building a successful community organisation, like teamwork, communication, mobilisation and entrepreneurial skills

This is why any initiative to revive the co-operative structures should focus on training people. This training should be structured as “on-the-job training”, where people are allowed to make mistakes and learn over time, as opposed to theoretical, session-based training.

A milk assistant is using Emata, the milk ledger app, to register milk deliveries at Dwaniro Dairy & Livestock Farmers Co-operative Society. Photo: Maren Hald Bjoergum

Co-operatives as social enterprises

It is crucial that we recognise that the world is very different today compared to the 1970s. The capitalistic economic system has penetrated the most remote rural areas of the country. Yet, farmers and community members still lack essential skills to make the most of this.

Any community organisation is a mini social enterprise. And that is what they need to be run as. People need to learn basic skills in how to run a business, such as simple accounting and how to manage and motivate staff, as well as an understanding of underlying principles such as revenue, expenditure, and profit.

Unlike in the 60s and 70s, today we have the added benefit of technology. As we all know, technology offers many opportunities, and donors and governments alike are keen to employ technical solution as “silver bullets” to overcome developmental problems.

However, we would do well to remember that this is yet another skill that people need to understand, internalise, and learn how to benefit from. This process can be fast, especially when incentives are aligned (the proliferation of mobile phones), but it can also be painstakingly slow. For any technical innovation, intervention, or solution, it is important to keep this in mind.

Providing tools for co-operatives

Laboremus, in cooperation with UNCDF, has developed a technical solution to improve the management of co-operatives in Uganda. Emata, as it is called, is our way of providing a tool for co-operatives to run their services like social enterprises.

The development process has actively included co-operatives and farmers, as we have done extensive interviews and pilot tests with dairy co-operatives in Western Uganda. This means that the dairy co-operatives main problems are tackled first and that the technology solutions are simple and tailored for their experience and needs.

A key aspect of the project is that the business model has a long-term plan of benefiting the community beyond getting paid for their milk. Laboremus will ultimately use the data collected through the app to tailor financial products to farmers and co-operatives. We do this as an effort to inject much-needed capital in the agricultural sector.

The agricultural sector holds a lot of potential for Uganda, and we believe the co-operatives are the key to unlocking this potential. Through giving them better tools for their day-to-day operations we hope to educate and enable their growth.

Milk is delivered early in the morning at Dwaniro Dairy & Livestock Farmers Co-operative Society in Kiboga District. Photo: Maren Hald Bjoergum

More organisation should join the effort

Experience from community-based organisations shows that the entrepreneurship skills and “life skills” learned through being involved in a community organisation have much wider benefits than just a well-functioning co-operative. Members and staff of a co-operative are often the first to take initiatives for other community structures and businesses, such as savings groups.

This real life “school of business” is both beneficial for the growth of the agricultural sector and the country’s export potential, as well as the general development of the rural areas. Government ministries that allocate funds for co-operatives and the national education system should take note and join the effort.

The resurrection of the co-operatives can mean a return to a trust-based, secure and thriving economy. It is in everyone’s interest that the co-operatives succeed.

Read more about the history and the social impact of COOPs here: “Cooperatives: The sleeping economic and social giants in Uganda“ by Lawrence M. Kyazze for ILO (International Labour Organization).

Top photo: Project manager Cindy from Laboremus visits a dairy co-operative. Photo by Jjumba Martin of UNCDF.

Posted on:

Tuesday, January 15, 2019