…The case of agricultural cooperatives in Namibia
By Hilary Mare
AGRICULTURE in Namibia contributes around five percent of the national Gross Domestic Product though 25 percent to 40 percent of Namibians depend on subsistence agriculture and herding with the primary products inclusive of livestock and meat products, crop farming and forestry.
Under this pretext, it is imperative to realise that agricultural cooperatives provide avenues to redress this and offer people distinct advantages in addressing a variety of market situations and issues thereby enabling producers to realize economic benefits which they could not otherwise achieve alone.
A cooperative is an autonomous association of women and men, who unite voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly owned and democratically controlled enterprise. It is a business enterprise that seeks to strike a balance between pursuing profit and meeting the needs and interests of members and their communities.
In a meeting held on 30 August 2016, the president of the Namibia Agricultural Union, Ryno van der Merwe explained, to a hall full of people on the farm Neu-Otjisaouna that the profitability of cattle and sheep farming is not close to what it should be. He explained that the expenses greatly outweigh the income made by this industry, and that the productivity of cattle and sheep farming has to increase by respectively 7.8 percent and 2.7 percent in order to break even.
Without doubt, farming in Namibia faces a lot of challenges whether it be insufficient rainfall, land not being fruitful or the struggling economy.
Statistically, only 2 percent of Namibia’s land receives sufficient rainfall too grow crops. All inland rivers are ephemeral, meaning they only flow following heavy rain, so irrigation is only possible in the valleys of the rivers that form the Namibian Boarders, namely at the Orange, Kunene, and Okavango rivers.
The rain season starts in October and carries on till March or April. Rainfall for Windhoek measured a mere 197,0mm in 2015 whereas it is currently measuring 273,2mm for 2016. The Green Scheme Project, an initiative conducted by the then Minister of Agriculture, Water and Food , John Mutorwa, was designed to encourage development of irrigation along the maize triangle (Grootfontein, Tsumeb and Otavi), as well as in the north central and north eastern regions using the Kunene, Kavango and Zambezi rivers. It also serves to promote agro-projects in the South using the Orange River, and dams such as the Naute and Hardap Dams.
In light of all this, Agricultural cooperatives enable producers to realize economic benefits and improve their bargaining power in the marketplace, reduce costs by pooling capital and resources through cooperative enterprises, and make expensive services, such as marketing, that are unavailable to individuals accessible. Through cooperatives, farmers can achieve economies of scale, by reducing the unit costs of inputs and services, enabling farmers to focus on producing goods rather than finding buyers and suppliers. Cooperatives also enable farmers to improve product and service quality and reduce risks. Agricultural cooperatives can allow farmers to address common problems, develop new market opportunities or expand existing markets. Agricultural cooperatives empower farmers and improve their position in the marketplace.
Forming or joining cooperatives can help smallholder farmers increase their access and improve their negotiating power with respect to acquiring a wide range of services including: knowledge and extension services; productive assets such as seeds and tools; and marketing information and skills to capture greater value from the sale of their products. They can also improve empowerment by facilitating smallholder participation in decision-making processes, support them in securing land-use rights, and negotiate better terms for engagement in value chains or contract farming. The challenge remains to scale up successful projects. It may be necessary for farmers to develop alternative institutional and management structures and learn from the experience of successful smallholder farmer organisations. This may ensure that the benefits of cooperation materialise on a wide scale.
Collective action is the core resource of agricultural cooperatives. Cooperatives create social relations that enable individuals to achieve goals that they may not otherwise be able to achieve by themselves. For example, cooperatives can help farmers benefit from economies of scale to lower their costs of acquiring inputs or hiring services such as storage and transport. Agricultural cooperatives also enable farmers to improve product and service quality and reduce risks. They may also empower their members economically and socially by involving them in decision-making processes that create additional rural employment opportunities, or enable them to become more resilient to economic and environmental shocks.
The Okangoho Multipurpose cooperative with over 250 members is a good example of a communal cooperative. In April, the cooperative through the Meatco Foundation hosted its first permit day at the recently refurbished crush pen. The cooperative normally hosts an auction every second month, which translates to six auctions per year.
Auctions usually attract anything between 80-200 cattle; however, the co-operative is hopeful that the number will increase to 300 because of the new facilities.
Treasurer of the cooperative, Abiud Katuutja, said the cooperative was a step in the right direction as the fruits of their unity are now tangible. “The crush pen will improve socio-economic conditions of the community, because on auction days not only livestock owners come here, but other individuals who sell other products, so it is a welcome development,” Katuutja said.
Okangoho is a rural settlement located 46km northeast of Okakarara at an intersection leading to places such as Otjituuo, Coblenz and Okamatapati.
It is pivotal to note that co-operatives are financed by the people who use the services provided by the business. Investing risk capital in a co-operative business is a basic member responsibility and a function of owning the co-operative. In a corporation, anyone with capital to invest may become an investor, regardless of whether or not they use the services provided by the business. Similarly, anyone may establish a sole proprietorship or participate in partnerships, regardless of whether or not they use the services provided or patronize the business. Sole proprietorships, partnerships, and corporations are often referred to as investor-owned firms when compared to co-operatives, which are member-owned, and, in the case of agricultural co-operatives, producer owned.
According to the Food and Agriculture Organization of the United Nations (FAO) and in affirmation, agricultural cooperatives play an important role in supporting small agricultural producers and marginalized groups such as young people and women.
“Smallholder producers can secure their livelihoods and play a greater role in meeting the growing demand for food on local, national and international markets, thus contributing to poverty alleviation, food security and the eradication of hunger,” notes the organisation.
Conclusively and despite its marginal contribution to Gross Domestic Product (GDP), the agriculture sector remains central to the lives of the majority of the Namibian population. Directly or indirectly, it supports over 70 percent of the country’s population. The sector can be divided into two distinct sub-sectors: the capital intensive, relatively well developed and export oriented commercial sub-sector; and the subsistence-based, high-labour, low-technology communal sub-sector.
The commercial sector covers about 44 percent of the total land, though it accommodates only 10 percent of the population, while the communal sector covers 41 per cent of the total land area and accommodates about 60 percent of the population. Agricultural production – and subsequently income – is low in the subsistence sector for a number of reasons, including limited access to markets and agricultural cooperatives could provide reprieve in this regard.
Confidente. Lifting the Lid. Copyright © 2015