National and international agroindustries regard cooperatives as a vital link to procure from farmers, as they help limit food imports and strengthen and structure value chains. Coops can compete with middlemen and traders who currently capture most of the value of final products. Unlike middlemen and traders, cooperatives tend to to redistribute added value among farmers.
NCBA-CLUSA representative Gabriel Sarasin believes that “There is huge untapped potential in Madagascar. Promoting and mobilizing cooperatives will help us move forward more quickly.”
Unveiling the model for a new generation of cooperatives
Farmers and cooperative leaders attending the Cooperative Leadership Forum spent the first three days learning about so-called ‘new generation’ cooperatives. The training was intended to familiarize participants with concepts that will enable them to move from a community or associative model to one where cooperatives operate as businesses that are fully integrated into their value chains.
Dr. Nicola Francesconi, senior technical advisor at CTA, said that this training was designed to mark a break with the old model of community-based cooperatives.
“Most of the cooperatives in Madagascar, as well as in other African countries, were originally led by colonial officials and then by the State. The word ‘cooperative’ still has negative connotations for many people, especially farmers. We want to change the image of co-ops in Africa and introduce participants to the idea that they can build successful businesses that create jobs while still honouring the underlying principles of cooperation. Producers will always be the principal owners and decision-makers in co-ops.”
The farmers’ voice
Co-op members also had the opportunity to share their concerns, discuss possible solutions to their problems and articulate how they expect the MIDSP, international donors, private investors, service providers and researchers to help develop cooperatives in Madagascar.
The spokespersons elected by members of participating co-ops, Tovo Aina Andriamampionona and Nirina Razafimanantsoa, reported that their main problem is still a lack of access to markets due to private and informal collectors who compete with cooperatives in procuring farmers’ agri-commodities. They suggested that this could be resolved by organising agricultural fairs that are value chain specific and Business-to-Business sessions for connecting co-ops with buyers through B-2-B. They also called for the creation of platforms for the actors involved in each value chain, and more up-to-date market information, especially on foreign markets.
Nirina Razafimanantsoa stated that “What we are advocating is the creation of a favourable environment that enables every co-op to get established in their supply chain and respond to market demands.” Tovo Aina Andriamampionona also highlighted concerns about the current tax system for cooperatives: “… there’s a risk with double taxation, because co-ops can be taxed on their revenues and producers also have to pay tax on what they earn, which means that members of cooperatives risk to be taxed twice over.”
After two days of discussions and debates between MIDSP officials, members of co-ops, development agencies and donors, ministry officials promised to prepare a new national policy and legal framework to develop cooperatives, in order to help them transform into inclusive and viable businesses with greater capacity for vertical integration into different value chains.
The Secretary General of MIDSP told participants that “Cooperatives can generate employment. Their activities are often limited to production but they could do a lot more with a little extra help. Therefore, the ministry plans to include co-ops in projects to industrialize agri-food value chains, and to facilitate coops’ access to credit.”
… and experts’ opinions
- See the Forum's impact on Malagasy media
- Photos of the Forum
- Presentations (in French)
- Twitter conversation #CoopMadagascar
- Forum's programme on 16 and 17 February (in French)
For further information
- Visit the site Enhancing Development through Cooperatives (EDC)
- Article : Towards a new generation of agricultural cooperatives in Madagascar
- Article : Cooperative Leadership Event in Lilongwe
- Article : Cooperative agribusiness, a new focus area for CTA