IDEAS home Printed from https://ideas.repec.org/a/ags/agreko/37551.html
   My bibliography  Save this article

South Africa’s new Cooperatives Act: A missed opportunity for small farmers and land reform beneficiaries

Author

Listed:
  • Lyne, Michael C.
  • Collins, Ray

Abstract

Agricultural cooperatives are often viewed as appropriate vehicles to facilitate vertical coordination with, or horizontal integration between, small farmers who would otherwise be excluded from value-adding opportunities and discerning markets. In South Africa, renewed interest in development-oriented cooperatives saw the introduction of a new Cooperatives Act in 2005, along with support measures dedicated to ‘emerging’ cooperatives. This paper contends that the architects of the new Act discounted important trends in international legislation that would have made development-oriented cooperatives more versatile and given their members better access to capital and expertise through equity partnerships with private agribusiness firms. It is concluded that the new Act should be amended to admit non-patron investors as members, and to allow for non-redeemable and hence appreciable and tradable shares. Such innovations are emerging internationally, usually with a cap on non-patron voting power.

Suggested Citation

  • Lyne, Michael C. & Collins, Ray, 2008. "South Africa’s new Cooperatives Act: A missed opportunity for small farmers and land reform beneficiaries," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 47(2), pages 1-18, June.
    • Handle: RePEc:ags:agreko:37551
    DOI: 10.22004/ag.econ.37551
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/37551/files/2.%20Lyne%20and%20Collins.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.37551?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Harris, Andrea & Stefanson, Brenda & Fulton, Murray E., 1996. "New Generation Cooperatives and Cooperative Theory," Journal of Cooperatives, NCERA-210, vol. 11, pages 1-15.
    2. Hendrikse, George W. J. & Veerman, Cees P., 2001. "Marketing cooperatives and financial structure: a transaction costs economics analysis," Agricultural Economics, Blackwell, vol. 26(3), pages 205-216, December.
    3. Michael E. Sykuta & Michael L. Cook, 2001. "A New Institutional Economics Approach to Contracts and Cooperatives," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(5), pages 1273-1279.
    4. Claude Ménard (ed.), 2000. "Institutions, Contracts and Organizations," Books, Edward Elgar Publishing, number 1921.
    5. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    6. Royer, Jeffrey S., 1999. "Cooperative Organizational Strategies: A Neo-Institutional Digest," Journal of Cooperatives, NCERA-210, vol. 14, pages 1-24.
    7. Michael L. Cook, 1995. "The Future of U.S. Agricultural Cooperatives: A Neo-Institutional Approach," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 77(5), pages 1153-1159.
    8. Porter, Philip K & Scully, Gerald W, 1987. "Economic Efficiency in Cooperatives," Journal of Law and Economics, University of Chicago Press, vol. 30(2), pages 489-512, October.
    9. Ortmann, Gerald F. & King, Robert P., 2006. "Small-Scale Farmers in South Africa: Can Agricultural Cooperatives Facilitate Access to Input and Product Markets?," Staff Papers 13930, University of Minnesota, Department of Applied Economics.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sparks, Garreth D. & Ortmann, Gerald F. & Lyne, Michael C., 2011. "PR - An Analysis Of Cooperative Biodiesel Production By Smallholders In Kwazulu-natal, South Africa (p444-462)," 18th Congress, Methven, New Zealand, 2011 345597, International Farm Management Association.
    2. H. S. R. Rosairo & M. Esham, 2021. "Pitfalls of External Institutional Facilitation of Farmer Organizations: Insights from Farmer Companies in Sri Lanka," Millennial Asia, , vol. 12(3), pages 367-389, December.
    3. Nothard, Brendon W., 2011. "NPR - The Need To Promote Co-operation Between Small-Scale Growers And Their Contractors In Rural Kwazulu-natal, South Africa (p307-315)," 18th Congress, Methven, New Zealand, 2011 345628, International Farm Management Association.
    4. Allison Benson & Jean-Paul Faguet & Maria del pilar López Uribe, 2020. "Increasing Access to Agricultural Credit: The Heterogeneous Effects of Collective Action," Documentos CEDE 18347, Universidad de los Andes, Facultad de Economía, CEDE.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Grashuis, Jasper & Cook, Michael, 2016. "Capital, Ownership, and Governance: Analyzing the Structure of U.S. Farmer Cooperatives," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235677, Agricultural and Applied Economics Association.
    2. Salazar Idana & Galve Górriz Carmen, 2011. "Determinants of the Differences in the Downstream Vertical Integration and Efficiency Implications in Agricultural Cooperatives," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 11(1), pages 1-26, February.
    3. Evans, Lewis & Meade, Richard, 2005. "The Role and Significance of Cooperatives in New Zealand Agriculture, A Comparative Institutional Analysis," Working Paper Series 18942, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.
    4. Jasper GRASHUIS & Michael COOK, 2018. "An Examination Of New Generation Cooperatives In The Upper Midwest: Successes, Failures, And Limitations," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 89(4), pages 623-644, December.
    5. Lemeilleur, Sylvaine & Codron, Jean-Marie, 2011. "Marketing cooperative vs. commission agent: The Turkish dilemma on the modern fresh fruit and vegetable market," Food Policy, Elsevier, vol. 36(2), pages 272-279, April.
    6. Michael L. Cook, 2018. "A Life Cycle Explanation of Cooperative Longevity," Sustainability, MDPI, vol. 10(5), pages 1-20, May.
    7. repec:vuw:vuwscr:18942 is not listed on IDEAS
    8. Ortmann, Gerald F. & King, Robert P., 2006. "Small-Scale Farmers in South Africa: Can Agricultural Cooperatives Facilitate Access to Input and Product Markets?," Staff Papers 13930, University of Minnesota, Department of Applied Economics.
    9. Evans, Lewis & Meade, Richard, 2005. "The Role and Significance of Cooperatives in New Zealand Agriculture, A Comparative Institutional Analysis," Working Paper Series 3847, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.
    10. Benmehaia, Mohamed Amine & Brabez, Fatima, 2016. "The Propensity To Cooperate Among Peasant Farmers In Algeria: An Analysis From Bivariate Approach," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 4(4), pages 1-14, October.
    11. Szabó G., Gábor & Bárdos, Krisztina, 2007. "Szerződéses kapcsolatok az élelmiszer-gazdaságban. A tejellátási lánc empirikus kutatása [Contract relations in the food economy. Empirical research into the milk-market supply channel]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(5), pages 459-480.
    12. Cook, Michael L. & Tong, Leland, 1990. "Definitional and Classification Issues in Analyzing Cooperative Organizational Forms," Cooperatives: Their Importance in the Future Food and Agricultural System - FAMC 1990 Conference 265915, Food and Agricultural Marketing Consortium (FAMC).
    13. Gelo, Dambala & Muchapondwa, Edwin & Shimeles, Abebe & Dikgang, Johane, 2020. "Aid, collective action and benefits to smallholders: Evaluating the World Food Program's purchase for progress pilot," Food Policy, Elsevier, vol. 97(C).
    14. Peter ADAMISIN & Rastislav KOTULIC & Ivana KRAVCAKOVA VOZAROVA, 2017. "Legal form of agricultural entities as a factor in ensuring the sustainability of the economic performance of agriculture," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 63(2), pages 80-92.
    15. Franken, Jason & Cook, Michael L., 2022. "Cooperatives’ Role in Farm Risk Management," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322116, Agricultural and Applied Economics Association.
    16. Cheng, Yuxi & Katchova, Ani, 2018. "Cooperatives capital structure adjustment during the agricultural downturn," 2018 Annual Meeting, August 5-7, Washington, D.C. 273788, Agricultural and Applied Economics Association.
    17. Eeva ALHO, 2019. "Farmers’ Willingness To Invest In New Cooperative Instruments: A Choice Experiment," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 90(1), pages 161-186, March.
    18. Jan Falkowski & Pavel Ciaian, 2016. "Factors Supporting the Development of Producer Organizations and their Impacts in the Light of Ongoing Changes in Food Supply Chains: A Literature Review," JRC Research Reports JRC101617, Joint Research Centre.
    19. Cadot, Julien & Féral, Arnaud, 2022. "Good Co-ops, Bad Co-ops : Financing Cooperatives in Asymmetric Information," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322550, Agricultural and Applied Economics Association.
    20. repec:ags:aaea22:335976 is not listed on IDEAS
    21. Russo, Carlo & Sabbatini, Massimo, 2005. "Incentives to Efficient Investment Decisions in Agricultural Cooperatives," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24455, European Association of Agricultural Economists.
    22. Amiquero, K. (Katty) Sanchez & Wubben, E.F.M. (Emiel) & van Dam, Y.K. (Ynte) & Trienekens, J.H. (Jacques), 2023. "Success and failure factors in agricultural cooperatives," International Journal on Food System Dynamics, International Center for Management, Communication, and Research, vol. 14(01), January.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:agreko:37551. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/aeasaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.