Centre for Sustainable Agriculture, Rural Development and Extension
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Item Open Access Socio-economic impact of agricultural and agro-processing co-operatives on food security and incomes in Limpopo Province, South Africa(University of the Free State, 2016-09) Dagada, Maanda Caiphus; Nesamvuni, A. E.; Stroebel, A.; Van Rooyen, C. J.English: Food security is central to the policy of the new democratic government in South Africa. An estimated 70 percent of rural populations are classed as poor with most of them still locked into poverty and subsistence farming. However, there is a growing realization and acceptance that agricultural and processing co-operatives can be both productive and efficient at alleviating poverty through a food security strategy. Most smallholder farmers have established co-operatives to help themselves. Co-operativesā policies and strategies are currently being put in place to redress past neglect of smallholder farmers, who are predominately black in Limpopo Province. The rural traditional system is dependent on rural institutions for a livelihood. Agricultural and processing co-operatives are central to the supply of farm inputs, farm tillage, marketing, product value adding and provision of much needed finance. However, their sustainability beyond the period they have government funding is questionable. The co-operative enterprise plays a major role in food production. Records show that in 1993 to 1994, 180 million people were members of 330 000 agricultural co-operatives in 47 countries. Also, in developing countries co-operative membership is high. In Ivory Coast 827 000 small farmers are members, in Nicaragua 78% of maize and 59% of beans are marketed by co-operatives. Present trade, marketing, and institutional policies in South Africa make limited provision for the unique interests of emerging small-scale farmers. Furthermore, the current institutions involved in promoting market access are not well co-ordinated. Co-operatives have direct linkage with extension services. The extension services play a vital role on the development of co-operatives. It was noted that where there is strong link between co-operatives and extension, those co-operatives are still surviving and able to provide enough food in their families. Market access is another factor that determine the sustainability of the co-operative and its ability to have significant potential to contribute to the reduction of poverty and are better able to mobilise wide participation and can reduce costs, enhance incomes and improve the viability of business activities. The co-operative model which was developed and practiced by LADEP showed how co-operatives can be developed and be sustainable even in the rural province of Limpopo. As part of the model, production of market oriented crops could be encouraged via contract production, whereby processors provide financial, technical and marketing services to smallholders. To make the plan viable and to ensure beneficiation throughout the value chain, co-operatives should have a stake at all levels of the value chain. This can possibly be done by establishing primary, secondary and tertiary co-operatives. It is difficult for smallholders to penetrate the monopoly of market fraternity individually - clubbing together as co-operatives can give them enough bargaining power and solve the economics of scale challenge. This way they can enhance and improve their production which, will resulted in poverty reduction and increase income.