JOURNAL OF RURAL COOPERATION

Transcription

1 JOURNAL OF RURAL COOPERATION Vol. 42 No The Center for Agricultural Economic Research המרכז למחקר בכלכלה חקלאית THE HEBREW UNIVERSITY MAGNES PRESS, JERUSALEM

2 Role of Farmers Cooperative Societies in Rural Development in Nigeria FRANKLIN E. NLERUM AND PATIENCE I. OGU 1 Abstract The study determines the role of farmers cooperative societies in rural development in Okrika Local Government Area (LGA) in Rivers State, Nigeria. A structured survey was conducted on a random sample of 105 farmers. Almost 90% of the respondents were members of farmers cooperative societies, with the highest participation (61%) registered in fishermen cooperatives. Financial assistance was the main benefit derived from membership in farmers cooperative societies, while fostering unity in the solution of problems was the main role of farmers cooperatives in rural development: both issues were identified by 100% of respondents. Additional roles included mobilization of people to participate in other rural projects and training of leaders for rural enterprises (about 75% of the respondents for each issue). Provision of agricultural extension services and strengthening of rural industries were identified as least satisfactory in the cooperative s range of activities. The study accordingly recommends to put more effort in improvement of extension services and strengthening of rural based industries by farmers cooperatives. Keywords: farmers, cooperative, society, rural development, Okrika, Nigeria. 1 Department of Agricultural and Applied Economics/Extension, Rivers State University of Science and Technology, Port Harcourt, Nigeria (frankezi@yahoo.com). JOURNAL OF RURAL COOPERATION, 42 (2) 2014: ISSN

3 Role of Farmers Cooperatives in Rural Development in Nigeria 155 Introduction Agriculture is one of the largest contributors to the Gross Domestic Product (GDP) in Nigeria with an estimate of 42% of the total GDP (Central Bank of Nigeria 2013). Although crude oil is of huge importance to Nigeria, agriculture is still of great significance to the country s economy. Despite the significance of agriculture to the economy, farmers in Nigeria still face various difficulties, such as low incomes, low yields, and shrinkage of agricultural labor. These difficulties can be addressed by a collective effort of farmers coming together and pooling their resources to achieve the common goal of enhanced productivity. Farmers cooperatives have the potential to foster economic growth at the rural and regional level, building on the spirit of cooperation that is already prevalent among the rural population (Zeuli 2002). Thus, cooperatives provide a ready tool for addressing farmers difficulties in Nigeria. Generally, a cooperative society is a business organization in which a group of individuals with common interests mutually agree to come together with the goal of promoting their economic activities, such as production, distribution or marketing of goods and services, and provision of other welfare benefits to their members (Anyaele 2003). Matthews-Njoku et al. (2003) view the cooperative as an association of persons, usually of limited means, who voluntarily join together to achieve a common economic end through the formation of a democratically controlled business organization, making equitable contributions to the capital and accepting a fair share of risks and benefits. Over a 100 million jobs have been created by cooperatives around the world (Allahdadi 2011). On the other hand, an agricultural cooperative, also known as a farmers cooperative or farmers cooperative society, is a business enterprise jointly formed, owned, capitalized, patronized, and democratically controlled by farmers, fishermen, or other operators in agriculture to meet their pressing needs (Igben and Eyo 2002). Such needs may be to raise financial resources or to acquire farm supplies and make them available to members at affordable rates. Apart from satisfying members needs, agricultural cooperatives share the risks and profits of cooperation among the members according to the volume of business transacted with the cooperative (Igben and Eyo 2002). In Nigeria, the first agricultural cooperatives were established as pilot projects in the early 1970s and 1980s to take care of farmers needs in supply, production, processing, and marketing, and since then they have gradually grown to a position of dominance, covering every aspect of agricultural production in the country (Matthews-Njoku et al. 2003). The major types of farmers cooperative societies in Nigeria covered in this study are the credit and thrift cooperatives for savings and provision of loans, farm supply cooperatives for provision of farm inputs, fishermen cooperatives focusing on the

4 156 F. Nlerum and P. Ogu welfare of the fisheries sector only, machinery maintenance and repair cooperatives servicing specialized farm equipment, and agricultural multi-purpose cooperatives that encompass a whole bundle of farm-related activities, including marketing and consumer services (Omoregbee and Ighoro 2012) A farmers cooperative is an instrument that can be used to foster rural development. Rural development, in turn, has been described as a multidimensional process by which a group of people or a society harnesses, mobilizes, and utilizes its human and material resources for the purpose of transforming its socio-physical environment (Obasi 2010). This transformation is intended to advance the rural population to the point of being able to provide the basic necessities of life, such as food, shelter, education, health, employment, security, and electricity; it also encourages participation of the rural population in decisionmaking about their governance (Akaruese 2002). The main roles of farmers cooperative in rural development that we analyze in this study include improvement of agricultural development, enhancement of community growth, strengthening of rural-based industries, mobilization of participation in rural projects, provision of financing for rural projects, and employment creation. Other roles include human resources development, fostering unity in solving community problems, training of leaders who manage other rural organizations, poverty reduction, advancement of welfare of women and youths, etc. In China, rural cooperatives have facilitated economic cooperation and market integration (Song et al. 2013). Farmers cooperatives have enabled the consolidation of fragmented land and facilitated investment in mechanization and irrigation. They created greater bargaining power for purchasing farm tools and inputs at lower cost and selling farm products to traders at better prices, they set up storage facilities for farmers, and they also made banks comfortable with extending agricultural credit, thereby improving the productivity of agriculture and raising the income of cooperative members (Doleres 2009). However, despite the multiple benefits of membership in a farmers cooperative, the study of Pinto (2009) has shown that the participation of farmers in cooperative formation has been declining. Pinto s finding has suggested the research question for our study, which assesses the current roles of farmers cooperatives in rural development in Okrika Local Government Area in Rivers State, Nigeria. The survey-based study analyzes the socio-economic characteristics of farmers, identifies the benefits accruing to members of farmers cooperatives, and determines the role of farmers cooperative in rural development in the study area.

5 Role of Farmers Cooperatives in Rural Development in Nigeria 157 Methodology Okrika is a Local Government Area (LGA) in Rivers State, Nigeria, located at the apex of Bonny River in the Eastern Niger Delta. The people of Okrika LGA are mostly occupied as fishermen and fisherwomen, producers of oil palm, locally processed salt, cassava, plantains, and yams. The 2006 Census determined the population of the Okrika LGA as 222,026 people. The population for this study consisted of all farmers in the Okrika LGA. The respondents for the survey were randomly selected from the five major towns of Okrika LGA (Okrika Mainland, Isaka, Ibaka, Ogbogbo, and Ogoloma), 21 respondents from each town. The total sample size was accordingly 105 respondents. Data were collected by means of a questionnaire and an interview schedule administered by trained enumerators. Results and discussion Table 1 shows that there were more male respondents than females in our sample (57% and 43%, respectively). This result is consistent with that of Pinto (2009), who observed that farm cooperators in his study consisted of 60% males and 40% female respondents. These results tend to be contrary to the general observation that women constitute a higher proportion of the population in our rural communities and as such are expected to be more engaged in farming activities than the males. In terms of age, the highest proportion of respondents (33%) were 41 years and older, whereas the young generation aged represented less than 3% of respondents. The elderly were more active in farming than the young people. This may portend a poor future for farming in the study area because when the elderly retire, it may be difficult to replace them with the younger generation of farmers. About 18% of the respondents had no formal education, whereas the rest had some formal education, mainly secondary (44% of respondents). The fact that the majority of the respondents had some formal education implies that farmers in the study area can at least read and write. This high level of human capital should facilitate cooperative activities in the area, as education has been found to be a significant determinant of cooperative activities among farmers in Northern China (Zheng et al. 2012). The results in Table 2 show that nearly 90% of the respondents were members of farmers cooperative societies. The fact that the vast majority of respondents were members of a cooperative is contrary to the finding of Pinto (2009), who noted that cooperative enrolment had been declining. The result further implies that

6 158 F. Nlerum and P. Ogu the majority of respondents are probably able to access the many benefits of a farmers cooperative in their agricultural activities. Table 1: Distribution of socio-economic characteristics of respondents (n=105) Characteristics Frequency Percentage (%) Sex Males Females Total Marital Status Single Married Total Age Categories (in years) and over Total Education No formal education Primary education Secondary education Tertiary education Total Source: Field survey, Table 2: Membership status in farmers cooperatives (n=105) Membership status Frequency Percentage (%) Member Non-member Total Source: Field survey, 2013.

7 Role of Farmers Cooperatives in Rural Development in Nigeria 159 Table 3 shows that out of the 94 respondents who were identified as members of cooperatives in Table 2, the majority (61%) belonged to fishermen cooperative societies. Distant second and third in popularity were agricultural multipurpose cooperatives (16%) and credit and thrift cooperatives (15%). No respondents were members of machinery maintenance and repair cooperatives. Table 3: Distribution of types of farmers cooperative societies in the survey area (n=94) Types of cooperative society Frequency Percentage (%) Credit and thrift cooperative societies Farm supplies cooperative societies Fishermen cooperative societies Machinery maintenance and repair cooperatives Agricultural multi-purpose cooperative societies Total Source: Field survey, Table 4 shows that all 94 members regarded financial assistance as the major benefit they receive from the cooperative. This finding indicates that farmers cooperatives in our study area actually perform the basic function of channeling financial resources to their members for enhanced productivity. The second benefit to cooperative members was access to essential and scarce production inputs (74% of responses). The cooperatives provided farm inputs and equipment that were difficult to obtain for individual farmers acting separately. Scarce inputs like fertilizers, agro-chemicals, tractors, etc., which are not within the reach of individual resource-poor farmers, became accessible with the aid of cooperative societies. Provision of insurance cover against crop failure due to weather, pests, or diseases, with 70% of responses, almost matched the importance of input supply. This is a very important function of agricultural cooperatives, as private insurance companies are usually unwilling to ensure against agricultural disasters. Provision of extension services by the cooperatives received the lowest ranking among respondents (37%). This may indicate the existence of alternative sources for extension and advice (e.g., private advisors and firms, newspapers and magazines) and does not necessarily point to a poor level of extension services provided by the cooperatives.

8 160 F. Nlerum and P. Ogu Overall, the benefits of cooperation as indicated by the findings in Table 4 showed that farmers cooperatives in the study area perform a useful role for the respondents. Indeed, none of the respondents indicated that they received no benefit from being a member of a cooperative. Table 5 shows that the major role of farmers cooperative societies in rural development was fostering unity in the solution of community problems (100% of responses). Cooperatives provided a one-voice platform for solving community problems in the study area. In other words, cooperatives provided a basis for collective action in addressing community problems. The second and third most important roles of cooperatives in rural development were enhancing participation in other rural projects (76% of respondents) and training leaders for other rural organizations (74% of respondents). Participation in other rural projects implied that cooperative members could provide trained working teams to help implement other projects. Cooperatives thus acted as a springboard for mobilizing rural initiative. The leadership training function indicates that cooperative members are a human resource for heading and running other rural organizations in the study area. Both functions indicate that cooperatives are an important force in the development of rural human capital. Table 4: Perceived benefits of membership in farmers cooperative societies (n=94) Benefits Frequency Percentage (%) Improve standard of living Financial assistance Increased income Material and technical assistance Access to essential and scare production inputs Improved sales of products Employment creation Improved capacity training Mobilization for effective community action Increased production output Provision of crop insurance Agricultural extension services No benefit 0.00 Source: Field survey, Multiple responses allowed.

9 Role of Farmers Cooperatives in Rural Development in Nigeria 161 Table 5: Perceives roles of farmers cooperative societies in rural development (n=94) Roles of cooperative societies Frequency Percentage (%) Enhanced community growth Strengthened rural industries Enhanced infrastructural development Improved agricultural development Enhanced participation in other rural projects Provision of funds for rural projects Employment creation Human resource development Unity in solving community problems Develop leaders for other rural organizations Poverty reduction Advancement of women Upgrading of roads, markets, schools, town halls, etc Source: Field survey, Multiple responses allowed. Conclusion and recommendations Our findings show that membership in farmers cooperative societies is very high among farmers in the study area. This is attributable to the benefits that members derive from their cooperatives. The most common benefits include financial assistance, access to essential and scarce production inputs, and a form of insurance cover against crop failure on the members farms. On the other hand, members were generally not satisfied with the level of agricultural extension service provided by the cooperatives. Farmers cooperative societies played a useful role in rural development on several levels. Cooperatives united their members in tackling community problems, they mobilized members to participate in other rural projects, and helped to train leaders who acted as drivers in other rural organizations. Cooperatives were not judged to have been particularly successful in strengthening of rural industries. Two obvious recommendations for cooperatives emerge from this study: improve agricultural extension services to members and devote more attention to strengthening of rural based industries.

10 162 F. Nlerum and P. Ogu References Akaruese, L.A. (2002). Scientific culture: The solution to the developmental problems in Africa. Philosophy and Social Action, 28(2): Allahdadi, F. (2011). The contribution of agricultural cooperatives in poverty reduction: A case study of Marvdosht, Iran. Journal of American Science, 1(77): Anyaele, J. U. (2003). Comprehensive Commerce for Senior Secondary School. A. Johnson Publishers Limited, Lagos, Nigeria. Central Bank of Nigeria (2013). Annual Report, Federal Republic of Nigeria, Abuja. Doleres, S. (2009). Development cooperative services, paper presented at Lakewood State Conference of Cooperative Specialists, 10 April Igben, M. S. and E. O. Eyo (2002). Agricultural Economics. An introduction to Basic Concepts and Principles. Best Print Business Press, Uyo, Nigeria, pp Matthews-Njoku, E. C., A. I. Ugochukwu, and N. G. Ben Chendo (2003). Performance evaluation of women farmers cooperatives. Journal of Agriculture and Social Research, 3(2): Obasi, O. (2010). The concept of rural development in O. Obasi and N. Erondu (eds.), Essential Issues in Rural Development, Centre for Research and Manpower Development, Owerri, pp Omoregbee, E. F., and A. Ighoro (2012). Effect of agricultural cooperative membership in farmers income and membership in Delta State, Nigeria. Open Science Repository, Agriculture Online, doi.10:7392/. [ Accessed 25 December 2014] Pinto, C. A. (2009). Agricultural Cooperatives and Farmers Organizations Role in Rural Development and Poverty Reduction. Swedish Cooperative Centre, Agricord Publishers, pp Song, Y., G. Qi, Y. Zhang, and R. Vernooy (2013). Farmer cooperatives in China: Diverse pathways to sustainable rural development. International Journal of Agricultural Sustainability, Doi: / , accessed 8 February Zeuli, K. (2002). The Role of Cooperatives in Community Development. Bulletin No. 3. University of Wisconsin, Center for Cooperatives. Zheng, S., Z. Wang, and T. U. Awokuse (2012). Determinants of producers participation in agricultural cooperatives: Evidence from Northern China. Applied Economic Perspective and Policy, 34(1): Dol: /aepp/ppr 044; accessed 8 February 2014.