Farming (Agriculture and Animal husbandry)

Key Unit Competence: 

Learners should be able to explain co-operative farming and its contribution to agro-economic problem-solving in Rwanda.

8.1 Learning Objectives 

(i) Knowledge and understanding 

(ii) Skills 

(iii) Attitudes and values 

Introduction

A farmer named Mr. Kubwayo has grown irish potatoes on 20 ares in his farm. After the harvesting he found that the yield was more than enough to his small family. He decided to carry a half of the harvest to the market. On arriving at the market he was not allowed to retail the harvest to consumers as he as not a member of cooperative society which has right to retail and was directly obliged to sell it to that co-operative at lower prices. 

1. What should happen if Mr. Kubwayo was a member of that cooperative? 

2. In what ways can people work together to increase their production?

Co-operative farming is a voluntary organisation in which farmers pool their resources. It helps to uplift those who may not have enough capital and resources to improve their farming. There are several types of farming co-operatives which include; producers, consumers, multi-stakeholders co-operatives. They are run on the principles of co-operatives. The success of co-operatives depends on its structure, culture and the risks taken. The picture(s) below give an overview of the unit.

8.2 Importance and  values of co-operatives in production growth in Rwanda

Activity 8.1  Research activity to find out the importance and values of co-operatives in production growth in Rwanda

Use the references provided to carry out the following activities: 

A co-operative is an organisation of people who have joined together voluntarily with a common purpose for mutual economic benefits. The importance  and values of co-operatives in Rwanda include the following: 

(i) Self-help: Co-operatives help members to pool resources together for selfhelp initiatives that improve their livelihood. This helps to uplift each other  economically. 

(ii) Self-responsibility: Members of co-operative societies learn the art of being responsible for their own livelihood without looking upon the government for support. 

(iii) Democracy: Members of co-operatives learn to follow democratic principles in carrying out activities  in social groups. Co-operatives educate their members on the need of democracy in fostering social harmony and order. This promotes peace and unity in the nation.

(iv) Equity: Members learn the need to treat others fairly and equally in a social set-up. 

(v) Equality: Members learn to appreciate and treat one another as equals in a social organisation irrespective of age, gender, tribe, race or religion. 

(vi) Solidarity: Co-operatives are based on the principle of unity is strength. Members learn to appreciate the benefits of being united and having a common voice in pursuing a certain goal in life rather  than being a lone ranger. 

8.3 Types of co-operatives 

Activity 8.2:  Research activity for describing different types of co-operatives 

Using the references provided, carry out the  following activities: 

Co-operatives are formed to cater for certain needs of their members. Therefore, co-operatives are categorised on the basis of goals for which they were established. The following are types of co-operatives: 

1. Producer co-operatives  

These are co-operatives whose members are  engaged in agricultural production. Members pool their resources together to buy large tracts of land such as large estates. Instead of dividing up the land and sharing such capital as tractors and other machinery,  they decide to work on the farm as a group and share benefits known as dividends at the end of the year. Each farmer gets dividends according to his or her share capital produced. Co-operatives are engaged in large-scale agricultural production. Example of producer cooperatives are ABADATEZUKA KU MURIMO, GATARAGA and ABIZERAPANA, GATARAGA.

2. Multi-purpose co-operatives 

These are co-operatives that diversify their activities. They carry out several activities at the same time. These activities could include credit lending, production, input supply and marketing. For example, GATERE TEA FARMERS SAVINGS AND CREDIT CO-OPERATIVE (GTF) 

3. Worker co-operatives 

These are co-operatives that are owned and managed by some  or all its workers. They are usually fairly small and have no separate board of managers. Everyone takes a direct role in its policy making in a democratic manner. For example, ISHEMA RYAGU and YOBOKA ITUMANAHO RUSIZI (KOYIRU) 

4. Worker-shareholder co-operatives In these co-operatives, a group of workers acquire a block of shares in an organisation and therefore become partial owners of the enterprise. For example, NASHO CROP TRADING CO-OPERATIVE (NCTC) and MWALIMU SACCO. 

5. Consumer co-operatives These are co-operatives that are basically involved in selling farm inputs. They buy the inputs in bulk and thereafter sell them to their members at fair prices. In addition to this, they offer marketing services to their members. 

8.4 Principles of co-operatives

Activity 8.3:  Research activity to find out the principles of cooperatives

Using the reference provided, carry out the following activities: 

Co-operative principles are guidelines through which co-operatives put their values into action. Co-operatives operate on the following principles:

(i) Voluntary and  open membership: Members can join voluntarily on paying  a membership fee regardless of race, religion, gender and political inclinations as long as they are adults and of sound mind. Withdrawal of membership is also voluntary. 

(ii) Democratic member control: Co-operatives are democratically ran on the basis of one-man-one-vote basis. The members have equal rights upon withdrawal of membership, members get back their share contributions. A  member  may buy shares up to a specific maximum limit in a co-operative. This avoids domination of  the members by one member or a group of members. 

(iii) Members economic participation: Any money occurring from the share capital is distributed to the members as dividends on the   basis of share contributions. Similarly, any  loss to the co-operative is also distributed to the members on the basis of share contribution. 

(iv) Autonomy and independence: Co-operatives are economically autonomous and free from any interference from the government. They should also not be inclined to any political party. 

(v) Education, training and information: Members should be continuously educated to ensure that they are knowledgeable in relevant skills and are conversant with the co-operative affairs. The co-operative should also train its members on the latest technology required in production and provide information concerning market research, commodity prices, supply and demand, inputs, pests and disease control and the effects of climate change on production. 

(vi) Co-operation among co-operatives: This is all about the co-operative spirit. Co-operatives are supposed to join the co-operative movement at the local, district, national and international levels to promote the cooperative spirit. 

(vii) Concern for community: The co-operative should have concern for the community within which it operates. This should be in form of allocating a portion of the income to the welfare of the community. This is  a social responsibility of a co-operative. Co-operatives give back a certain percentage of their profit to the community in which they operate. 

8.5 Factors necessary for the success of co-operatives 

Activity 8.4:   Research activity to find out the factors that contribute to the success of co-operatives

Using the references provided,  carry out the following activities: 

The following are the necessary factors for the success of a co-operative: 

1. Organisational structure  

This is a formal system or set-up of tasks and reporting relationships that co-ordinates and motivates members of an organisation to work together in order to achieve set goals and objectives. It determines how the resources of an organisation are allocated and utilised in the production of goods and services. The success or failure of an organisation to a large extent depends on its structure.

 If resources are properly utilised, there is success otherwise the organisation collapses. A co-operative is  an organisation and its success depends on its structure. Different types of co-operatives have different structures. Co-operatives are democratically  ran and therefore power lies with the members. The members vote to elect members  of the board of directors. The board of directors hires the management who in turn hires the staff in consultation with the board of directors. The senior management is answerable to the  board of directors while the board of directors is answerable to the people. 

 They must, therefore, give a report during annual general meetings. Where the  structure does not clearly define the flow of authority, there is no accountability and no one takes responsibility in case of a loss. This may lead to the collapse of the co-operative. Therefore, the type of structure contributes to the success or downfall of a co-operative. Figure 8.5 is the flow chart of an organisational structure in a co-operative.

Exercise 8.1 

Discuss in groups and find out what A, B, C and D stands for in the organisation structure illustrated. 

2. Organisational culture  

Organisation culture is a system of shared common values, norms and beliefs of an organisation. It gives meaning to the actions and procedures within an organisation.

It is the glue that holds members of an organisation together and what keeps them focused on the achievement of the organisation's goals and objectives where the core values of a co-operative are clearly stated and adhered to in the day-to-day life of a co-operative, it leads to prosperity, otherwise failure to uphold these values may lead to the collapse of the cooperative.  

Co-operatives have maintained the core values of honesty, openness, social responsibility and caring for others. These core values form the organisational culture of a co-operative. If they are well adhered to, they lead to the success of a co-operative otherwise, the co-operative falls apart. 

3. Risks bearing  

Risk is defined as the difference between what is expected and what is observed or the actual outcome of a business plan. The future is not known, it is said to be uncertain. Therefore, people move into the future by taking risks. 

Every organisation must, therefore, be prepared to bear the risks of investing in certain businesses. Co-operatives must, therefore, put in place measures to minimise risks in their investments. This may be done through the following: 

(i) Diversification: This is the allocation of productive resources in several and different enterprises so that, should one fail, members benefit from the others. 

(ii) Selecting more certain enterprises: Some enterprises have more steady income than others. It  is better to choose an enterprise which earns a more steady income though less profitable. 

(iii) Contracting: The co-operative may enter into a contract with consumers to supply certain goods over a specified period of time and at an agreed  price. Such a contract guarantees members of a constant  and fixed market for their produce.

(iv) Insurance: Insurance companies take the risk of insuring farm machinery, crops  and livestock against loss. Individual members or the co-operative society pay small amounts of money known as premium as insurance cover to an insurance company. The cover guarantees the members of  compensation in the event of a loss. It covers losses due to crop failure, death of livestock, theft, fire and accidents involving farm machinery.  

(v) Input rationing: This involves controlling the amount of inputs in various enterprises. Farmers may apply less inputs than the optimum required for an enterprise so that, should unfavourable conditions lower yields or prices fall, they suffer less loss than if they had used the optimum inputs. They can also use additional inputs in enterprises that have better chances of giving higher returns.  

(vi) Flexibility in production methods: Farmers may design their enterprises in such a way that, should there be a need to change from one enterprise to another in response to change in demand, they can easily do so with minimum expenses. For example, livestock buildings should be constructed in such a way that they can with minimum modifications be used to house  different types of livestock.  

(vii) Adopting modern methods of production: Adopting a new technique in production may reduce the amount of risk. For example, spraying crops against pests and diseases, vaccinating livestock against diseases and irrigating crops can enhance chances of high production. However, adopting these modern methods of production involves extra costs. But by incurring them, they help to avoid the would-be losses. 

Group activity 

A visit to a co-operative society premises to study the organisation and running of a co-operative.

Visit a co-operative society premises and carry out the following activities: 

Unit Summary 

A co-operative is an organisation of people who have joined together voluntarily for mutual economic benefits. Co-operatives uphold the following values; selfhelp initiatives, self-responsibility, democracy, equity, equality and solidarity. 

Co-operatives are formed to cater for the needs of their members. They are, therefore, categorised on the basis for which they were established. The  different types of co-operatives include: 

Co-operatives operate on the following principles: 

Key terms 

1. Co-operative movement – A worldwide movement that aims to share profits and benefits from jointly owned commercial enterprises among members. 

2. Co-operative principles – Guidelines through which co-operatives put their  values into action or practice. 

3. Co-operative value – Beliefs about  what co-operatives consider to be good, right and desirable. 

4. Co-operative – An organisation of people who have joined together voluntarily with a common purpose for mutual economic benefits. 

5. Contract – Legal agreement between two parties  or people  to do something. 

6. Democracy – Belief in freedom and equality between people in which power is either held by elected representatives of the people or  directly by the people themselves. 

7. Diversification – Allocating productive  resources in several and different enterprises so that, should one fail, members benefit from the others.  

8. Dividends – Profit of a business organisation that is paid to the shareholders or people who own shares in it. 

9. Equality – The right of different people or groups of people  in society to have similar social position and  receive the same treatment. 

10. Equity – Situation in a society where everyone is treated fairly and equally. 

11. Goal – The broad aim or purpose  of doing something. 

12. Insurance – A legal undertaking by a company to compensate someone or a group of people for losses incurred through theft, fire, accident or injury after regular payments of a certain amount of money known as premium. 

13. Organisational culture – A system of shared common values, norms and beliefs of an organisation. 

14. Organisational objective – The expected outcome of an organisation’s work plan. 

15. Organisational structure – A formal system of tasks and reporting relationships that co-ordinates and motivates members of an organisation to work together  in order to achieve set goals and objectives. 

16. Organisation – A group  of people who work together in an organisational way for a shared purpose or an arrangement of parts that make a whole. 

17. Risk – Difference or divergence between the expected  outcome and the actual outcome of an undertaking  or enterprise. 

18. Share capital – A large amount of money and possessions used for starting a new business contributed by members of the business organisation. 

19. Shareholder – A person who owns shares in a business organisation. 

20. Shares – One of the many equal parts that the ownership of the business organisation is divided into. 

21. Solidarity – Agreement between members of a group. 

End of Unit 8 Assessment 

1. Explain how the organisational structure of a co-operative contribute to its success. 

2. Describe the difference between producer and consumer co-operatives. 

3. Explain the difference between profit and dividend. 

4. Differentiate between risks and uncertainties.  

5. Analyse five main importance and values of co-operatives in promoting production growth in Rwanda. 

6. Explain how co-operatives control their membership. 

7.  Outline four core values of a co-operative.

References 

A., D. R. Ker et al. Agriculture in East Africa: An Introduction to Principles and  Practices. Edward Arnold (publishers) Ltd. 

D. N. Ngugi , P. K. Karau & W. Nguyo East African Agriculture. Macmillan Press Ltd. 

D. Rocheleau et al. Agroforestry in Dry  Land African. International Council for Research in Agroforestry (ICRAF). 

C.L. Wilson et al. Botany 5th Edition. 

Glenn O. Schwad et al. Elementary Soil and Water Engineering 2nd edition pilated by Toppan Printing Company, Japan. 

P. G. D Chard et al. Focus on Agriculture, a secondary course for Zimbabwe  Bk 3. College Press. 

G.R. Jones et al. Contemporary management, 2013. 

Secondary Agriculture Student's Book 4 Kenya Literature Bureau. Third Edition. 

Soil Conservation  in Kenya: Manual by the Ministry of Agriculture, Soil and Water Conservation, branch in Nairobi. 

Secondary Agriculture Student's Book 3. KLB Third Edition.