Cooperatives are ‘democratic organisational structures’ or institutional arrangements created for efficient and equitable resource management while contributing positively to social capital growth, poverty reduction, logistical support, market access and sustainable social transformation (Spear 2000; Streifeneder 2015: 1). A cooperative is defined as a democratic and voluntary autonomous institution designed to meet mutually shared social, cultural and economic targets of its members (Allahdadi 2011; FAO 2012). They are distinguished from investor-owned businesses by control and ownership by their members and democratic governance (Mellor 2009). Institutions such as cooperatives draw on collective action theory and social theory to sustainably manage resources and collective production (Ostrom 1990; Dietz, Ostrom, and Stern 2008; Streifeneder 2015; Singleton 2017). In developing countries, as part of efforts by governments to ‘democratically decentralise’ administrative, political and fiscal governance (Wittenberg 2006), cooperatives have often been employed as platforms to collectively manage productivity, particularly in agriculture.
Social and territorial capital, and equally public policy or institutional support are key in the effective functioning of cooperatives i.e. strong member engagement, efficient apex organisation support, policy or actor networks, and facilitating local and regional context (Barham and Chitemi 2009; Mellor 2009; McGinnis 2011; Streifeneder 2015). Apex organisations are second tier organisations that support, promote, unite and develop co-operatives. Competing or conflicting interests, poor management skills and untenable power relations in cooperatives can result in disparities in resource allocation between differently positioned members (Cook 1994), with benefits often accruing to a small number of actors who have authority and power, through the process of elite capture (e.g. Olowu 2003). Understanding how this form of decentralisation is vulnerable to elite capture is important in efforts to improve cooperative governance. Importantly, this process cannot be perceived to be entirely a result of inadequate ‘checks and balances’ within institutional structures, as actors who are socio-politically advantaged may sometimes be democratically elected into positions of power due to the perceived benefit that their ‘connectedness’ brings to a cooperative, through so-called ‘benevolent’ elite capture (Arnall et al. 2013). The outcome of the decentralisation process is dependent on how trust and power relations; rules and regulations or sanctions; group inter-connectedness; and internal accountability (Olowu 2003; Ribot 2004) are structured in the cooperative. Of key importance in determining the performance of these institutions are the elements of leadership, legitimacy and governance structure.
Decentralisation, defined simply as ‘bringing government closer to the people’(Wittenberg 2006: 4) or ‘accountability of state to society’ (Ribot 2004: 18), refers to the devolution of political, administrative and fiscal functions from central state to local institutions, and is a key component of socio-economic development that enhances downward accountability, participation and democracy. Democracy and accountability are interlinked, democracy being defined as ‘leadership that is accountable to the people’ while ‘governments are accountable if citizens can sanction them appropriately’ (Ribot 2004: 17). Democracy and accountability are key to participation, representation and empowerment of local actors and democratic decentralisation is defined by strong electoral mechanisms that enhance downward accountability. However, it has been argued that in many parts of Africa, effective democratic decentralisation and downward accountability, have not been adequately achieved (e.g. Olowu 2003; Wittenberg 2006; Koelble and Siddle 2014). Indeed, there has been a general lack of willingness by African governments to fully ‘decentralise’ political power, instead maintaining central power structures that are characterised by ‘elite capture’ (Olowu 2003). Smoke (2003) and Cabral (2011) argue that decentralisation in Africa often takes forms of privatisation or de-concentration instead of devolution, such that transfer of power is to central government agents locally rather than to local people. To this end, accountability and power relations remain key institutional and political challenges to democratic decentralisation in African local governance structures.
This is particularly true of South Africa where efforts to decentralise have been ongoing in some form since the Union of South Africa was created in 1910 (Wittenberg 2006; Koelble and Siddle 2014). In many former homeland areas of South Africa, these decentralisation efforts have been particularly vigorous in the post-apartheid period, attempting to create effective local governance systems to fill the institutional vacuum left by the demise of previous traditional governance structures. However, although a model framework for the creation of a democratic, decentralised governance system is enshrined in the 1996 constitution e.g. CPA Act No. 28 of 1996, Koelble and Siddle (2014) suggest that this remains largely unrealised due to a lack of institutional capacity amongst the local provincial governments mandated to deliver it, particularly so for cooperatives which remain dependent on state support for service delivery or some level of state control. The increasing resurgence of traditional authority i.e. chiefs or traditional leaders, in rural South Africa has also served to undermine efforts to achieve democratic decentralisation in former homeland areas (Ribot 2002; Bennett 2013; Bennett, Ainslie, and Davis 2013).
In South Africa, the primary role of cooperatives is now focused on enabling socio-economic development through income generation, employment creation and broad-based black economic empowerment. Cooperatives are legal entities in South Africa under the Cooperatives Act no.14 of 2005, amended by Cooperatives Amendment Act no.6 of 2013 (RSA 2013) and are encouraged to be ‘viable, autonomous, self-reliant and self-sustaining cooperatives’ (Chibanda et al. 2009: 294), for the specific purpose of enabling producer groups to access state support for agricultural production. Here, the state plays a key role in provisioning services through cooperatives, cooperatives often being setup to be ‘funnels’ for government service delivery rather than operating on an independent ‘sound business practices’ and principles basis (Mellor 2009: 24). Cooperatives have thus been designed as the primary conduits for the delivery of agricultural improvement programmes to their members, which brings into question their independence from the state, as decreed by the government’s own guiding principles of good governance for cooperatives. These principles include, amongst others, voluntary participation; autonomy and independence; and cooperation among cooperatives (RSA 2015). Another unfortunate corollary of this focus on cooperatives as the primary locus for agricultural service provision is that although membership is voluntary, non-members are effectively excluded from accessing government-disbursed programmes and benefits (Ortmann and King 2006; Kanyane and Ilorah 2015). Furthermore, the degree of local government support received by cooperative members is largely dependent on how effective their cooperative is in accessing and distributing these programmes and benefits (Streifeneder 2015) i.e. it is not a level playing field either within or between cooperatives. This stems partly from a lack of adequate capacity within local government to deliver services to communities (via cooperatives) and a resultant tendency for them to prioritise those who can make their case most strongly. Therefore, questions remain as to the extent to which these decentralised institutions can deliver benefits to local recipients in an equitable and democratic manner, as well as the transparency of the processes cooperatives are employing to access these programmes in the first place. To what extent might the political prominence of cooperative leaders have a bearing on the amount of resources they can access? Does this then influence which actors cooperative members are willing to elect to such positions and how their behaviour is held to account? This sets up a potential tension between cooperative performance in terms of delivering the programmes they were designed to engage with and upholding the democratic principles of their constitutions.
In Eastern Cape Province, South Africa, cooperatives have been created to facilitate commercialised smallholder livestock production, as part of the broader aim of delivering agrarian reform through land redistribution (Mtero 2012). To achieve this, agrarian reform has redistributed land to ‘emergent’1 livestock farmers on either a freehold or leasehold basis, and these farmers are clustered into cooperatives organised around custom feeding programmes (CFPs), a market-oriented initiative designed to add value to livestock (Sotsha et al. 2017). In Elliot, these ‘emerging’ livestock farmers are clustered into five primary cooperatives under an umbrella secondary cooperative. Using the five cooperatives as case studies, this article aims to examine some of the key questions that pertain regarding the performance and function of cooperatives in relation to both their service delivery and democratic remits and whether democracy is a necessary precursor for them to be able to deliver benefits to their members in an inclusive way. Specifically it aims to: i) outline the differential performance of the five cooperatives in relation to securing benefits from government and disbursing these to their membership; ii) analyse the key factors that might be affecting this performance and thereby their ability to function democratically; and iii) draw on best practice from within the cases and beyond to develop recommendations for cooperative structure and function that help to balance both accountability and effective service delivery. The article also makes a theoretical contribution by drawing on the central ideas of legitimacy, power relations and accountability, developed by scholars to frame the structure and function of decentralised institutions (e.g. Borrini-Feyerabend et al. 2004; Ribot 2004; Chibanda, Ortmann, and Lyne 2009; Lawrence 2016; Martins et al. 2017) and applying these as a theoretical lens to analyse the performance of the five cooperatives in the study. Finally, the article seeks to contribute to the broader scholarship in South Africa on decentralisation (e.g. Wittenberg 2006; Koelble and Siddle 2014), in particular the currently limited understanding of how democratic decentralisation and effective governance of institutions can be realised within rural development policy.
The study was carried out in Elliot (31° 31’ 30” S, 27° 83’ 70” E) located in Sakhisizwe Local Municipality, Chris Hani District, Eastern Cape Province, South Africa. Chris Hani District has pioneered collective marketing initiatives in the form of cooperatives and CFPs (NAMC 2013) for livestock marketing, servicing the relatively large community of emerging livestock farmers. The article draws on in-depth interviews, key informant interviews and focus group discussions (FGDs) done between 2016 and 2017 with emerging livestock farmers who are organised into five cooperatives, anonymously designated here by the codes TVPC, BKPC, CNPC, ITPC and UMPC (summarised in Table 1), which are further clustered under a secondary cooperative. Two FGDs involving 6–10 farmers were held with each primary cooperative (n = 10), to broadly discuss the governance structures and performance of the cooperatives. Based on the FGDs, 12 farmers were purposefully sampled from each primary cooperative (n = 60) and in-depth interviews conducted. Key informant interviews (n = 12) were also held with the secondary cooperative board members, extension officers, veterinary practitioners, DRDAR (Department of Rural Development and Agrarian Reform) and DRDLR (Department of Rural Development and Land Reform) staff and local authority staff.
|Number of farmers (n = 155)||34||28||28||35||30|
|Mean cattle (±SEM)||79 ± 6.5||38 ± 4.9||77 ± 13.5||51 ± 7.9||69 ± 7.9|
|Min–max cattle numbers||10–250||9–115||4–398||5–185||11–168|
|Mean sheep (±SEM)||126 ± 20.1||70 ± 13.5||114 ± 31.6||44 ± 13.7||28 ± 21.5|
|Min–max sheep numbers||0–486||0–350||0–700||0–328||0–425|
|Mean land size (ha ± SEM)||457 ± 41.2||310 ± 23.8||429 ± 49.1||442 ± 61.3||433 ± 43.6|
|Min–max land size (ha)||9–850||120–520||315–1200||4–1600||179–839|
To describe and understand the differential performance of the cooperatives, and how these are related to legitimacy, power relations and accountability, the analysis draws on the principles of democratic decentralisation and governance of institutions (Agrawal and Ribot 1999; Ribot 2004). We base our analysis on the premise that ‘…an understanding of the powers of various actors, the domains in which they exercise their powers, and to whom and how they are accountable’ is critical to understanding democratic decentralisation (Agrawal and Ribot 1999: 476). We further contextualise the outcomes by drawing in places on the principles for good governance of cooperatives (RSA 2015) developed by the government of South Africa.
From the focus group discussions, a farmer’s inclusion in, or membership of a cooperative was understood to be based on the location of their farm in terms of the geographical boundaries of the cooperative. This meant that a farmer who had multiple farms under different cooperatives, was entitled to access programmes and benefits from all of these cooperatives. The few farmers who had access to or owned multiple farms, were usually part of a well-connected elite (Table 2). Their socio-political influence stemmed from them having considerable financial capital; strong social and political networks; and commanding positions of power in the hierarchy of the cooperative committees (Gwiriri et al. 2019). There are three farmers, who were originally members of a particular cooperative by virtue of their primary farm locations, but who have deliberately targeted the lease of additional farm(s) in a more ‘effective’ cooperative (in terms of distribution of benefits to members) because they knew that the benefits from being part of this cooperative would be greater. This is a shrewd strategy as it enables them to make use of the additional equipment and infrastructure secured from this cooperative on any of their farms. In essence, these influential farmers, are able to ‘play the system’ to their advantage and simultaneously access resources and programmes from the cooperatives under which they lease a farm as well as their original cooperatives.
|Membership||Cooperative membership officially determined by farm location, but some socio-politically connected actors are also members of other cooperatives.||Cooperative membership officially determined by farm location. Some socio-politically connected actors have also benefitted from programmes from other cooperatives.||Membership of cooperative based solely on geographic location of farm.||Membership of cooperative based solely on geographic location of farm.||Membership of cooperative based solely on geographic location of farm.|
|Access to services and benefits by members||Overall there was equitable access to resources and programmes by members. Members participated in the process of selecting those who benefitted from each programme||Committee members capture most of the benefits and services (multi-programme access). Members participate in selecting beneficiaries, but this is not honoured by the committee.||The committee and members who are closely linked to the committee members accessed most of the programmes.||Committee members captured most of the programmes. Some members were unaware of some of the programmes that the cooperative benefitted from.||Committee members accessed most of the few programmes that the cooperative engaged with. The cooperative accessed fewer programmes than the other cooperatives.|
|Selection of leaders||Leaders are selected by regular elections. Term lengths are adhered to. Non-performing leaders can be recalled by members||Leaders are selected by regular elections. Term lengths are not adhered to. Members do not have ability to recall leaders.||Elections and term lengths are irregular. Elections were poorly participated in by members. Members do not have power to recall leaders.||Elections are attended poorly attended and were irregular. Term lengths are irregular and variable. Members lack power to recall leaders.||Leaders are selected by elections. Elections and term lengths are irregular. No record of members recalling committee members|
|Democratic member control||Cooperative meetings held regularly. Constitution and rules amended by those who attend meetings, but this often does not include more marginalised members. Disciplinary procedures are implemented but outcomes are not always enforced.||Meetings are irregular. Constitution and rules amended by those in attendance at meetings. The members do not have the power to enforce disciplinary procedures.||Meetings are irregular. Attendance at meetings is poor, hence constitution and rules amended by the few who actually attend the meetings. There are no records of disciplinary cases.||Meetings are regular, but poorly attended. The committee amends the constitution and rules with minimum consultation with members. Members disregard disciplinary action; the committee does not have power to enforce procedures.||Meetings are irregular and poorly attended. Crucial decisions are made by committee members without consultation of members. No record of any disciplinary procedures.|
|Leadership value and legitimacy||Members respect power of leaders. Leaders were able to deliver multiple programmes. Financial and administrative powers are separated and delegated to non-committee members i.e. the role of the committee is transparent.||Leaders have limited legitimacy amongst membership and a generally poor record of programme delivery. Financial and administrative powers are controlled by the committee, and rarely delegated. Limited delegation of power and responsibilities to other members||Members do not respect power of leaders. Leaders had a poor record of programme delivery. Power and responsibilities lie entirely with committee members; hence committee is not transparent.||Members do not respect power of leaders. Leaders performed poorly in delivering programmes. Power and responsibilities centralised in leadership. Administrative and financial functions are not separated.||Members do not respect power of leaders. Members did not expect programme delivery from leaders. Administrative and financial functions are centralised and controlled by committee members. No functions are delegated to other members.|
|Responsibility||Multiple accountability layers: Financials are audited regularly. Committee provides members access to financial and audit records. Members are involved in decision making. Each committee has clear key assigned roles and duties, and members have the power to recall committee members who do not perform.||Accountability was partial, limited to financials only: Financial records were available but not audited regularly. Members had no knowledge of financial matters. A few selected members were involved in decision making. Duties and roles for committee members were not clearly defined. Members did not have the power to audit committee member performance or recall non-performing committee members.||There were no accountability measures in place. Financials were controlled by committee and no records of audits were available. Committee roles were not clearly defined, and members did not have the power to recall non-performing committee members.||Financial transactions were not transparent and there were no records of audits. Members could not hold the committee accountable e.g. in terms of suspected financial or resource distribution irregularities.||There were no mechanisms for members to hold committee members accountable. Financial control was limited to committee members. No records of audits were available.|
Inclusion in a cooperative is based on payment of a2 ZAR2–3000 (US$146–219) fee annually, which entitles the member to: training; utilisation of the CFP for cattle marketing; use of cooperative equipment and implements and cattle and infrastructure programmes channelled through the primary cooperative from DRDAR or the secondary cooperative. This means that, about 20 poor and marginalised emergent farmers who cannot afford membership fees are excluded. The premise underpinning service delivery to emergent farmers in South Africa is that all government programmes should be channelled through cooperatives, and farmers can only benefit from a programme if they are a member of a cooperative. Thus, even though membership appears to be non-discriminatory – termed ‘voluntary and open membership’ (RSA 2015) – most members indicated that they continue with their membership because they feel they have to be to in order gain access to government programmes, even though in some cases they have seen relatively little benefit, as illustrated by one BKPC farmer:
The cooperative is not helping me at all, and I have been subscribing for years. I just subscribe because even though I have not yet benefitted from any programme, I will have lost out if I leave without having benefitted anything from my money. I am not sure I will get anything, because those who benefitted keep benefitting, we are always left out.
Thus, some emergent farmers are completely excluded from joining these cooperatives and accessing agricultural support simply because they cannot pay the membership fees, and even those who can afford membership fees often feel that cooperatives bring them relatively little benefit. Poor service and benefit delivery seemed more pronounced in CNPC, ITPC and UMPC, where resources were more likely to be captured by elites. In contrast, in TVPC, members appear to have experienced better service delivery and access to benefits. For this reason, as indicated earlier, the more influential members strategically leased farms under TVPC and BKPC. The level of perceived benefit and probability of fairness in benefit distribution from cooperative membership, can be a strong determinant in members’ participation a cooperative (Machethe 1990).
Actors who possess, influence or control certain powers, in this instance cooperative leaders, become elements of an accountability system, beginning with how they are elected. For electoral processes to encourage participation and downward accountability, the processes need to be analysed for suffrage; how candidates are chosen; lengths of terms; and means of recall of elected officials (Ribot 2004; Mohammed and Inoue 2013). With the exception of TVPC and BKPC, the committee election process does not seem to effectively include all members of the cooperative (Table 2). Despite suffrage being based entirely on residency and membership within each cooperative, leadership elections were consistently poorly attended in CNPC, ITPC and UMPC, as members indicated that they believed their vote would not influence the outcome of the process. Committee member elections involve a member being nominated or self-nominating for a position and winning by garnering the highest number of votes. They then serve on the committee for a period of two years. In three of the five cooperatives, the current committee had served two consecutive terms (of two years), and committee members were generally the most socio-economically advantaged who had financial capital from non-agricultural businesses they were involved in. The committees were ideally supposed to serve for two years, but in some cooperatives, elections were not regularly held, and committee members served for a longer time.
Generally, members felt they were powerless or did not have the required understanding of the process to recall ineffective committee members. Even though constitutions provided for procedures to recall non-performing members, there was, with the exception of TVPC, no clear indication of the roles and duties of each committee member against which performance could be evaluated. This has been the basis for poor accountability in these institutions. Furthermore, the process for removal of a committee member is a difficult and slow process, which requires a thorough understanding of the cooperative constitution to implement. After the successful recall of the chairman at TVPC, spearheaded by a member who had knowledge of constitutional procedure from their previous employment role, the constitution of TVPC was amended by its membership to expedite the process of leadership recall, as well as clearly outlining the key roles and responsibilities against which leaders can be evaluated. This process has not been followed by the other cooperatives. In the other four cooperatives, members felt that they did not have the power to hold the committee accountable. Communities often lack power; information and procedures to hold actors occupying positions of power accountable (Olowu 2003). Fulton & Giannakas (2007) argue that members often do not possess power over actors once they are elected. Ribot (2004), argues that although ‘single-purpose’ or ‘narrowly-focused’ institutions can be democratic, some studies indicate that they are less likely to be accountable and transparent than multi-purpose institutions. The RSA (2015: 8) cooperative principles indicate that governance of cooperatives should include ‘fairness, participation, accountability, responsibility and transparency’, elements which are present to some extent in TVPC but weak in the other four cooperatives.
Members were governed by rules in the cooperative constitution, meant to be regulated or enforced by the committee. The secondary cooperative drafted a basic constitutional template for all the primary cooperatives, which each primary cooperative adapted and modified according to their local needs. In the cooperatives, modification of rules is done through a general meeting, where rules are ratified, and voting by members confirms the amendments. According to Ostrom (1990), democratic institutions enable individuals affected by the rules to participate in their modification, although this does not seem to be apparent for most of these cooperatives. Except for TVPC, which has regular general meetings to discuss financial performance, administrative issues and ratifications to rules and the constitution; members indicated that meetings were poorly organised, irregular, poorly advertised and thus poorly attended. Furthermore, when meetings did occur rules were modified by the respective committees in the absence of most or all members, even though the rules in the cooperatives’ constitutions required a minimum number of members (usually a minimum of five non-committee members) to be present to vote on any amendment. Thus, it can be argued that the extent of ‘democratic member control’ (RSA 2015) is weak in these four cooperatives. In South Africa, cooperatives where crucial decisions are made without the participation of members often result in poor accountability by leaders to members (Machethe 1990). In one FGD at ITPC it was suggested that:
We hold meetings here and there, the last one was two years ago. Some of us cannot read and write, so we do not normally attend. Sometimes we do not hear about when and where the meetings are being held, and most of us do not have transport or the money to attend the meetings. They are mostly held in Elliot and we cannot go.
Unlike the other four cooperatives, meetings at TVPC were better organised and a larger proportion of members attended the meetings. However, even here poorer members of the cooperative often failed to attend the meetings due to lack of transport and funds. Thus, all five cooperatives lack effective mechanisms for the inclusion of marginalised members in decision-making processes, and this inability to capture the ‘voice’ of these marginalised members is problematic in terms of their recognised democratic function (German et al. 2018).
To prevent elite capture, multiple accountability measures and efforts to ensure that they operate as transparently as possible are critical in institutions (Olowu 2003; Ribot 2004; Mohammed and Inoue 2013). One way for institutions to achieve this is to clearly separate judicial, legislative and executive powers, such that different groups of actors are responsible for each. However, in local institutions with polycentric tendencies, these powers are often not separated, but rather all vested in a single actor or a small group of actors. In these cooperatives, with the exception of TVPC, all three of these power components were controlled by the committee leadership, which severely limited the ability of the membership to hold these actors accountable.
The amendment of the constitution at TVPC enabled the membership to hold the committee accountable for the decisions they exercised as part of their executive power, through two important processes. Firstly, the membership influenced the constitutional amendment process i.e. legislative powers. Secondly, the membership were empowered to recall poorly performing leadership i.e. judicial powers. Thus, following reform of the TVPC constitution, the judicial and legislative components of power became controlled far more by membership. As an added level of accountability, TVPC further decoupled the executive power of the committee, such that they continued to hold primary responsibility for securing benefits and programmes on behalf of the cooperative but retained no power over how these were distributed within the cooperative. This distribution role was given to an independent administrator, who was not only accountable to the membership, but was also monitored by an ordinary member who was appointed on a rotational basis. Further, TVPC cooperative members were able to monitor who benefitted from the programmes through the freely-accessible beneficiary register kept at the offices.
This might explain why a larger proportion of TVPC members participated in election processes and were able to access benefits (see Table 3), as they realised that their participation had an influence on how benefits were distributed. This has had a positive effect on the legitimacy of the committee, reflected in TVPC members recognising the roles, functions and power vested in the committee members and being more confident in the accountability of the committee to them. Accountability and transparency are enhanced when powers are devolved to lower-tier members or actors, particularly if this is accompanied by clear measures for holding actors accountable (Mohammed and Inoue 2013). Thus, when internal accountability is promoted, such institutional reforms can promote participation, transparency and reduce elite capture. As Olowu (2003: 46) suggests, ‘…the key is to create an institutional framework that provides opportunities for the elite while constraining them from exploiting the system of local governance for their private interests’.
|Number of programmes accessed||Eight programmes||Five programmes||Four programmes||Four programmes||Four programmes|
|Level of programmes accessed||National, provincial and local programmes||Only local programmes||Local programmes only through secondary cooperative.||Only programmes through secondary cooperative were accessed by the cooperative.||Cooperative accessed local programmes only|
|Access mode||Programmes were accessed through ‘connections’ of the leader to national unions i.e. leadership utilised socio-political ‘connections’ to access programmes.||Programme access was based on socio-political ‘connections’ of the leader i.e. chieftaincy, and his active lobbying for programmes||Leaders were socially connected, but this had no political influence on access to programmes||Leadership had no socio-political influence and did not lobby independently for programmes||The cooperative leadership did not independently lobby for any programmes and had no socio-political connections.|
|Beneficiaries||58% of interviewed members benefitted from programmes. At-least half of the beneficiaries were ordinary members.||41% of interviewed members benefitted from programmes. Most beneficiaries were committee and other influential members of the cooperative||33% of interviewed members benefitted from programmes. Most beneficiaries were committee members||29% of interviewed members benefitted from programmes. Most beneficiaries were committee members||About 25% of interviewed members benefitted from programmes. Most beneficiaries were committee members|
In BKPC, CNPC, ITPC and UMPC, the members indicated that they had limited confidence in their committee, citing challenges linked to poor accountability and transparency. Most notable here was the perception of skewed allocation of programmes and benefits in these cooperatives. These programmes included cattle loan schemes, e.g. the Livestock Improvement Scheme (LIS), Accelerated and Shared Growth Initiative of South Africa (AsgiSA) programme and the Abroad Spectrum Trading (AST) scheme; stock fence and farm implements from Department of Rural Development and Agrarian Reform (DRDAR) and the Biomass Fodder Production Assistance (BioMASS) programme. Most of these programmes were accessed by the committee and the more influential members, with many of them benefitting from multiple programmes, while the less influential members were consistently excluded. One BKPC member indicated that:
In our cooperative, we got fence from the DRDAR. The chairperson gave it to farmers whom he knows, and these farmers already had fence. The same people who got the fence, are the ones who got AST cattle last time. These people are already rich, and they do not need the fence. The government should come directly to the farms and assist, through the cooperative people like me will never get anything.
Even though BKPC has a register of beneficiaries, double-dipping by the elite (DAFF 2018) remained a challenge in the cooperative. Thus, the process for disbursement of benefits to members was not being effectively controlled to ensure that it was fair, it was simply being documented (i.e. administration without power of control). In contrast, TVPC was able to effectively combine these two processes.
Financial transparency was also a key factor for cooperative members in determining the accountability of cooperative committees. Unlike TVPC which has financial control measures that are regularly audited, the other cooperatives lack financial transparency and are rarely audited. TVPC employs a secretary who doubles as a book keeper and keeps records of most financial transactions. The committee audits these financial records, giving it a degree of fiscal accountability, and non-committee members of TVPC can also request to look at the financial records at the cooperative offices.
Cooperative performance can be influenced by its governance structure and may also be strongly dependent on the socio-political capital of its leadership. Cooperative performance can be assessed both in terms of the number of programmes accessed and the proportion of members who benefit from these (Table 3). The effective performance of a cooperative and the participation of its members can be influenced by resource allocation decisions made by leaders (Liverpool-Tasie 2014; Fulton and Giannakas 2007), which reflect the dynamics of power relations and influence (Fiedler 2008). This is illustrated by the performance of TVPC following the constitutional amendments it enacted. The case study below highlights the case of TVPC:
The newly elected TVPC leader, was Mr X. Based on Mr X’s knowledge and influential previous roles in the South Africa Farmers Union (SAFU) and National Association of Farmers Unions (NAFU), he was very familiar with the processes involved in rural service delivery and was ‘connected’ to the DRDAR, DRDLR, Eastern Cape Rural Development Agency (ECRDA), Eastern Cape Development Cooperation (ECDC), SAFU and NAFU. He utilised these socio-political connections to access government programmes such as the LIS, AsgiSA and AST schemes; DRDAR farm implements and BioMASS, at national, provincial and local level. Through these programmes, TVPC members received tractors, tillage equipment, fencing and livestock production equipment, chainsaws, cattle (through loan schemes), transport (in the form of a lorry) and an office in Elliot. TVPC was the only cooperative that accessed a lorry, tractors and equipment, and they were able to generate income from hiring out the tractors and the lorry to other cooperatives. Due to access to these resources, the farmers had improved productivity. Eight of the 12 farmers interviewed in TVPC indicated that they had benefitted from infrastructure or training in the cooperative.
Fulton & Giannakas (2007) argue that cooperatives that provide a conducive environment for leaders to enhance member benefits, are likely to elect a leader with such a focus and enable more members to participate in the selection process of that leader. This environment is encouraged in democratic cooperatives where the community capitals i.e. political and social capital, are enabled (Kaswan 2014).
The story is different for the other four cooperatives. For example, BKPC elected their chairperson, Mr Y, due to his chieftaincy position and thus his perceived ability to realise service delivery through his political connections. Mr Y was able to mobilise the cooperative to develop their own cattle fattening programme, and the cattle were later marketed through the secondary cooperative, generating funds internally. Mr Y was also able to access the local cattle programmes cascaded through the secondary cooperative, farm implements from DRDAR, while also accessing local government programmes earmarked for chiefs. However, it was suggested that Mr Y was not transparent in the distribution of the materials secured through these programmes, with members alleging that some equipment accessed through the cooperative was distributed to Mr Y’s home village to help garner support for his chieftaincy. One BKPC member indicated that:
As a chief, our chairman is very powerful and is ‘connected’ to top people. But we do not benefit from that. Actually, we got some fence in the cooperative, but the chairperson also distributed some of the fence to his village where he is a chief. We raised the matter with the secondary cooperative, but our chairperson also sits on that board, so nothing came out of it.
Mr Y’s service delivery focused primarily on organising the fattening programme within BKPC, but his delivery of external programmes to BKPC was compromised by the need to also benefit the rural village he represented as Chief. Mr Y was effectively trying to deliver benefits to both sets of beneficiaries he is accountable to. While the members should have utilised the power enshrined in the constitution to hold Mr Y accountable, it became clear they lacked knowledge of how to do this. Others felt that their power was inadequate and opted to escalate the matter to the secondary cooperative, which did not take any firm steps towards dispute resolution, largely because it might have lacked the institutional structures to hold powerful individuals such as traditional leaders accountable. Thus, the constitution of the primary cooperative could not hold Mr Y downwardly accountable to his members, which was exacerbated by the reluctance of the secondary cooperative to hold him upwardly accountable – a classic case of power without accountability (Ribot 2004). In reality, it appears that Mr Y’s upward accountability is primarily to traditional leadership within the area. He is also attempting to serve the interests of multiple membership groups and is thus compromised in his ability to represent any of these particularly effectively. On this basis it is questionable if Mr Y is best placed to achieve the level of service delivery that the BKPC membership is expecting. Ribot (2002) demonstrates how the vested interests of customary authorities pose a threat to effective decentralisation.
In contrast, members of the other three cooperatives indicated that their chairpersons were either not ‘connected’, or in the case on CNPC, were connected but did not utilise these connections effectively, resulting in them only accessing local programmes channelled through the secondary cooperative. This was explained by an ITPC member who suggested:
We made a blunder, we should have chosen Mr Z as chairperson. He is successful and is connected to some relevant people. Our chairperson does not know anyone, and this is why we don’t have resources like TVPC. These committee members only look after their own welfare, they are content with the few programmes that come up because they benefit from them, therefore they do not make efforts to go to the higher offices to get more programmes so that there is enough for everyone to get a chance.
The key point in these examples is that the political power and perceived ‘connectedness’ of the chairperson of the cooperative is considered by members as being of fundamental importance in accessing and delivering services to the cooperative, despite the clear risks of enshrining responsibility in an actor who is already so powerful.
Cooperatives in South Africa are the primary conduits for resource delivery to rural farmers to help facilitate agricultural development. Essentially, they are setup to be reliant on the state for functional support, rather than as independent business entities that add value to the members through their functional roles. This means that even though the state might not directly control cooperatives, there is still a requirement for state involvement, which necessarily limits their ability to be independent of the state. However, given the limited capacity of local government to reach ‘down’ to rural communities through extension officers who can help link local cooperatives to available programmes, it becomes incumbent on the cooperatives themselves to use their own networks to reach ‘up’ to local government and associated governmental organisations to secure service delivery. Due to poor extension services and programme structure, government programmes such as the Comprehensive Agricultural Support Programme (CASP); Micro-Agricultural Financial Institution of South Africa (MAFISA); Recapitalization and Development Programme (RADP); and Accelerated and Shared Growth Initiative of South Africa (AsgiSA) have been poorly accessed by most cooperatives and their impact has been limited (e.g. see Cousins 2013; Sikwela and Mushunje 2013). In 2010, only eight percent of cooperatives in South Africa accessed funding from the Department of Agriculture, Forestry and Fisheries (DAFF 2010) and only 10 out of a total of 106 cooperatives in the Eastern Cape province accessed MAFISA loans (DAFF 2010). Studies by Devkota et al. (2016) in India and by James and Joshua (2014) in Nigeria have also attributed poor service delivery to weak local institutional capacity. This suggests that under current conditions not having ‘connectedness’ via leadership really limits the degree of service delivery possible to smallholder farmers in South Africa, a conclusion borne out by the current study. The importance of such connections in securing service delivery is also supported by Banerjee et al. (2001: 145), in their study in India, who reported that cooperative leaders were often larger farmers who had ‘connections’ in government that enabled them to have advantageous access to resources.
However, this study also shows that even where cooperatives in rural South Africa have leadership that is ‘connected’, this does not guarantee that these leaders will act to disburse the benefits it secures in a transparent and fair way to members (as in the case of BKPC), or that they will utilise their ‘connections’ to gain access to an effective range of programmes, as in the case of CNPC (Table 3). Rather, it may encourage elite capture of resources by leadership to further their own ends and subvert the process of democracy to ensure they remain in power. Specifically, the persistent danger in countries such as South Africa, of electing traditional leaders into leadership positions within cooperatives lies in the difficulty of them being held accountable because of the power vested in them through their (unelected) traditional role. In many post-colonial countries in Sub-Saharan Africa, traditional leaders have been given formal powers over local governance (Holzinger, Kern, and Kromrey 2016), and in South Africa this is legitimised by the Traditional Leadership and Governance Framework Act 41 of 2003 (DCGTA 2018). This creates a challenge of ‘institutional multiplicity and competing claims to social and political legitimacy’(Beall and Ngonyama 2009: 1) or ‘institutional layering’ (Bennett, Ainslie, and Davis 2013: 34), which arises from the contentious duality of state actors and traditional leadership (Ntsebeza 2005). As Ribot (2002) points out, electing traditional authorities into positions of power in cooperatives undermines democratic processes. The South African government acknowledges the problem of elite capture of resources by a few individuals (DAFF 2018), and poor coordination between government departments that are mandated to support cooperatives (DAFF 2010), but its policies remain unclear on how to deal with these challenges.
Moreover, we would argue that linking (albeit inadvertently) service delivery for emergent farmers to the political and social capital of a cooperative’s leadership is also fundamentally opposed to the process of democratising service delivery in South Africa in the first place. How democratic can the overall process of agricultural service delivery be if it is premised on competition between devolved cooperatives and results in those with the most powerful and ‘connected’ leaders securing most of the benefits? This also runs counter to principle six (cooperation among cooperatives) of the principles of good governance for South African cooperatives (RSA 2015). We suggest that if the capacity of the state was built sufficiently to enable it to ‘reach down’ to these cooperatives more effectively, for example through establishing embedded ties between local or provincial agricultural extension officers and apex organisations, who can link cooperatives with available programmes, then the need to vest leadership in powerful actors and risk compromising accountability and egalitarian service delivery would be reduced. In this, the state assumes coordination of the policy or actor network as discussed by Mcginnis (2011). Further, the role of cooperative apex support organisations, such as the secondary cooperative, can be strengthened to put in place structures to support a democratic leadership selection process and facilitate development of management and leadership skills through training in primary cooperatives, promoting good governance (Mellor 2009). The secondary cooperative should also couple this with structures to hold powerful individuals accountable. This might also give cooperatives the opportunity to entrench rules that enable them to select leaders who are more inclined to be transparent e.g. through a level-shifting strategy (McGinnis 2011). The increased use of apex organisations rather than direct government involvement might help to reduce the risk of state patronage and promote good governance, an opportunity that is currently missed.
However, if the current situation demands strongly connected and powerful leaders to access resources, then we suggest that this must also be aligned with strong democratic processes within cooperatives to ensure fair disbursement of benefits to members and try and mitigate the potential for capture by elites. The cases we analyse, particularly that of TVPC, suggest a linkage between democratic governance and effective service delivery to cooperative members. As Table 3 indicates, TVPC was able to deliver programmes to a larger proportion of its members, which we believe is directly related to the strong accountability and legitimacy of its leaders. It is largely accountable to its membership which ensures that it operates in a transparent and fair way in the disbursal of benefits and helps to legitimise its leadership. Thus, there was evidence of representative and participatory democracy (Kaswan 2014) in TVPC, which was lacking in the other cooperatives. A higher proportion of TVPC members also tended to participate in elections. Kaswan (2014) argues that member apathy in participation is an indication of a weak democratic ethos. Importantly, TVPC was also able to separate power elements within the committee structure, effectively separating the role of securing resources from that of disbursing them. This holds wider potential as an effective way of encouraging accountability in other cooperatives.
Based on this analysis, we suggest that for smallholder cooperatives in South Africa to adhere to the principles of good governance and be effective in delivering to their membership, the single most important factor that must be addressed is power relations. Autonomy, voluntary member participation and democratic member control all depend on the power relations in cooperatives. To achieve this balance of power relations within rural cooperatives in South Africa requires three main issues to be addressed. Firstly, ensure that cooperative leadership is strong but fully and solely accountable to its membership. Part of this will involve putting in place checks and balances to ensure that individuals cannot be elected if they already hold similar roles, such as in traditional leadership, which might constitute a conflict of interest and institutional multiplicity. This will minimise the chance for external vested interest to compromise how cooperatives function. The national good governance principles for cooperatives in South Africa need to explicitly address this issue and each cooperative constitution should include a clause that prevents those who already hold leadership positions that represent a potential conflict of interest, from running for leadership elections. Further, opportunities for training in management and leadership skills are key areas of intervention (Cook 1994; Mellor 2009), a role that can be facilitated by the state or apex organisations.
Secondly, ensure that democratic process is observed in all aspects of the functioning of cooperatives but particularly in the process of benefit sharing amongst members. This will require a careful focus within cooperative structures on the separation of executive, judicial and legislative power such that only the former becomes the main prerogative of leadership. Important also here will be measures to separate the individuals involved in the securing of benefits from those involved in their disbursement to try and ensure greater transparency in the process and avoid the problem of elite capture.
Thirdly, greater effort is required by the state to develop connections between extension services and apex organisations that can effectively connect rural cooperatives to the government programmes that are available to them. Currently, the limited role of the secondary cooperative in enabling good governance and dispute resolution presents a missed opportunity. It is difficult to service the heterogeneity of farmers (smallholder, emergent and large commercial farmers) using a single extension approach, hence building state service delivery support might require a balance between current diffusionist approaches and the adoption of more flexible and demand-driven pluralistic territorial approaches (Yang, Klerkx, and Leeuwis 2014; Klerkx, Landini, and Santoyo-Cortés 2016). Multi-actor and inter-institutional approaches that effectively connect institutions and actors at the local level to higher level institutions have enjoyed a degree of success in Latin America (Klerkx, Landini, and Santoyo-Cortés 2016). Strengthening extension capacity and the role of secondary cooperatives would help to minimise the current focus in cooperatives on electing leaders who are politically connected and thus not only help to level the playing field between cooperatives in terms of the programmes they access but also minimise the possibility of connected leaders being less accountable to their membership.
Finally, the setting up of cooperatives to function as funnels of government programmes rather than as fully independent business entities presents a serious limitation. These cooperatives should be setup on a business footing to begin with, based on sound business operations, competitive service provision and management underpinned by financial stability, comprehensive insurance and asset growth (Mellor 2009). With viable business plans, these cooperatives may be able to access financial loans and also form strategic partnerships with the private sector. This will reduce the reliance of the cooperatives on the state and promote independence and sustainability. However, cooperatives might still be inclined to appoint powerful leadership (based on the perception of them bringing benefits to the cooperative), which means emphasis has to be on the cooperatives putting structures in place that are able to mitigate the misuse of this power. As suggested earlier, separating powers between sourcing resources and how they are disbursed remains key. Further, this will be dependent on unique management skills required to deliver on socio-economic services.
1‘Emergent’ farmers are defined as farmers who engage in agricultural capital accumulation from below, transitioning from subsistence production to varying levels of petty-commodity and small-scale commercial production (Gwiriri et al. 2019).
2ZAR is the official South African currency, the South African Rand. The current official exchange rate (as at 01 February 2019) of 1 South African Rand equivalent to 0.073 United States Dollars was used to convert ZAR to US$.
The authors have no competing interests to declare.
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