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The renewed case for farmers' cooperatives: Diagnostics and implications from Ghana

  • Francesconi, Gian Nicola
  • Wouterse, Fleur

This study presents a stylized but insightful diagnostic of the problems limiting collective action in Ghanaian farmer-based organizations (FBOs). In our analysis, we use a structure-conduct-performance framework, econometrics, and new primary data for 500 FBOs collected through surveys and games. We find that most Ghanaian FBOs are inactive, failing to mobilize their members into any sort of collective action. To understand why this is so, we postulate that in rural Ghana, four typologies can be used to classify FBOs and to distinguish them on the basis of their membership structure and rules of conduct. We then show that FBOs fail to mobilize collective action whenever their structure and conduct are not aligned. In particular, misalignment leads mainly to problems of access to external credit and to a lesser extent to problems of internal cohesion. To maximize collective action, this study recommends the diversification of policy through recognizing the four different types of FBOs, each facing particular and to some extent opposing problems.

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Paper provided by International Food Policy Research Institute (IFPRI) in its series IFPRI discussion papers with number 1129.

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Date of creation: 2011
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Handle: RePEc:fpr:ifprid:1129
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  1. Onumah, Gideon & Davis, Junior & Kleih, Ulrich & Proctor, Felicity, 2007. "Empowering Smallholder Farmers in Markets: Changing agricultural marketing systems and innovative responses by producer organizations," MPRA Paper 25984, University Library of Munich, Germany.
  2. Kostas Karantininis & Angelo Zago, 2001. "Endogenous Membership in Mixed Duopsonies," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(5), pages 1266-1272.
  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. Francesconi, Gian Nicola & Ruben, Ruerd, 2008. "The Life Cycle of Agricultural Cooperatives: Implications for Management and Governance in Ethiopia," Journal of Rural Cooperation, Hebrew University, Center for Agricultural Economic Research, vol. 36(2).
  5. Salifu, Adam & Francesconi, Gian Nicola & Kolavalli, Shashidhara, 2010. "A review of collective action in rural Ghana," IFPRI discussion papers 998, International Food Policy Research Institute (IFPRI).
  6. Alexander E. Saak, 2012. "Collective Reputation, Social Norms, and Participation," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 94(3), pages 763-785.
  7. Gian Nicola Francesconi & Nico Heerink, 2011. "Ethiopian Agricultural Cooperatives in an Era of Global Commodity Exchange: Does Organisational Form Matter?," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 20(1), pages 153-177, January.
  8. Tanguy Bernard & Alemayehu Seyoum Taffesse & Eleni Gabre-Madhin, 2008. "Impact of cooperatives on smallholders' commercialization behavior: evidence from Ethiopia," Agricultural Economics, International Association of Agricultural Economists, vol. 39(2), pages 147-161, 09.
  9. Kugler, Tamar & Bornstein, Gary & Kocher, Martin G. & Sutter, Matthias, 2007. "Trust between individuals and groups: Groups are less trusting than individuals but just as trustworthy," Journal of Economic Psychology, Elsevier, vol. 28(6), pages 646-657, December.
  10. Futoshi Yamauchi, 2012. "Prenatal Seasonality, Child Growth, and Schooling Investments: Evidence from Rural Indonesia," Journal of Development Studies, Taylor & Francis Journals, vol. 48(9), pages 1323-1341, September.
  11. Stelios Michalopoulos & Elias Papaioannou, 2011. "Divide and Rule or the Rule of the Divided? Evidence from Africa," Economics Working Papers 0099, Institute for Advanced Study, School of Social Science.
  12. Bernard, Tanguy & Spielman, David J., 2009. "Reaching the rural poor through rural producer organizations? A study of agricultural marketing cooperatives in Ethiopia," Food Policy, Elsevier, vol. 34(1), pages 60-69, February.
  13. Hoff, Karla & Stiglitz, Joseph E, 1990. "Imperfect Information and Rural Credit Markets--Puzzles and Policy Perspectives," World Bank Economic Review, World Bank Group, vol. 4(3), pages 235-50, September.
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