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The Inevitable Accident
Raghbendra Jha and Raghav Gaiha
Xiangping Jia, Yamei Hu and George Hendrikse
In recent years, China’s government promoted the emergence of Farmer Professional Cooperatives (FPCs) and anticipated restructuring the production system of agriculture through larger-scale operations more like those in Europe or America. Notwithstanding the immense initiative, there is insufficient knowledge about how this changes the governance of farmer cooperatives at the local level. Based on a national survey conducted in 2009, this chapter shows that decision-making of production and marketing within FPCs in China is retained by individual farmers. However, the decision rights of farming are decomposed into input procurement, output marketing, and production. While the rights regarding production stay with family farms, the decision rights regarding input purchase and output marketing tend to be committed to FPCs. The governance structure of FPCs presents hybrid forms of both hierarchy and family farming. The study also finds that product attributes (such as perishability, marketing frequency, and branding), heterogeneity of the membership, and agribusiness policies affect the decision rights within the FPCs in China.
This chapter argues that farmer collective action in developing countries is in a process of transformation. While traditional farmer organizations and cooperatives had social, political and economic functions, the new producer organizations (POs) are mainly focusing on improving the market access of their members. Providing market information, establishing quality control systems and improving logistics are some of the main functions of the new POs. As POs come in many kinds and sizes, the chapter first presents a typology, particularly distinguishing between market-oriented business organizations and other rural membership organizations. This chapter reviews the literature on the role of POs in vertical coordination, contracting and market access. Finally, it discusses the effects of the assumed transformation process on the inclusiveness of the organization, on the efficiency of the internal governance, and on strengthening member relations.
Edited by Jos Bijman, Roldan Muradian and Jur Schuurman
Concepts of agricultural transformation promote market liberalization and commercialization of small farms as strategies for growth and poverty reduction. But small-farmer participation in globalizing agricultural markets is risky. In OECD countries, farmer collective action has managed to reduce some of the risks of participating in the market by forming powerful vertically integrated cooperative organizations. This chapter discusses key issues in the discussion on pro-poor agricultural development and identifies the position and functions of rural cooperatives for a concept of pro-poor agricultural transformation. Differentiating between types of farmer-based organizations, concepts of rural transformation, determinants for successful collective action and dimensions of poverty, the chapter seeks to conceptually contribute towards explaining why cooperatives are often presented as tools for poverty alleviation although the results of analysing their effectiveness in alleviating poverty are rather mixed. The chapter draws conclusions for future research on the subject and for drafting group-based development policies.