By Joshua Kato
Cooperatives in Uganda can be traced in Mubende district where in 1913, four farmers decided to market their crops collectively. They became known as ‘The Kinakulya Growers’.
They cooperated as a result of a response to the poor prices that Asian produce buyers gave to peasant farmers.
The benefits of cooperating had been seen, hence more farmers joined to start their own cooperatives.
“In 1920, five groups of farmers in Mengo met in Kampala to form the “Buganda Growers Association “whose supreme goal was to control the domestic and export marketing of members’ produce,” says Fred Ahimbisibwe, who works with the Ministry of Trade, Industry and Cooperatives.
By the 1940s, there were more cooperatives, now scattered around the colonial territory. Counterparts in other parts of the country shared this vision and acted accordingly.
A cooperative movement was thus born to fight the exploitative forces of the colonial administrators and alien commercial interests, which were thought to monopolize domestic and export marketing.
In 1946, a cooperative ordinance was enacted by the Colonial government to regulate their operations.
According to the Ministry of Trade Industry and Cooperatives, there are about 30,000 cooperatives and associations in Uganda, serving about 5.6 million farmers.
However, many of these are either inactive or affected by several management challenges.
Major Challenges faced by Cooperatives at a glance
-Poor leadership and governance generally which leads to making poor decisions.
-Inadequate capitalization which stops them from undertaking large projects, for example, constructing modern storage facilities or value-adding factories.
– Lack of access to reliable markets that pay competitive
prices which force them to make little profits or even losses.
– Inadequate storage, post-harvest handling and agro-processing infrastructure, for example, large silos, which means that they sell off products early.
-Massive fraud by management staff and committee leading to losses. Currently, there are cases going on in courts involving fraud in cooperatives.
– High level of dishonesty and lack of transparency on the part of committees which leads to disorientation by members.
– Lack of cooperative member education in what is expected of them as cooperators.
-Some level of political interference from the local politicians leading to divisions among members. Politicians use cooperatives to attract voters but in the process creating divisions.
-Insufficient loanable funds to handle big demands, as membership grows also the demand for big money increases.
-Members don’t save but demand for loans. Most of the members stop at paying the registration and membership fees but do not save enough.
Tips on making cooperatives work
-Create a cooperative based on common interests, for example, coffee, cotton, tea, oranges etc.
-The Memorandum of Understanding must be agreeable to all the members.
-Transparency is the key to the success of cooperatives; make sure you are as transparent as possible in your activities. Transparency involves members openly discussing key decisions before they are passed.
-Strong cooperatives base their leadership from bottom upwards, by making sure that issues are discussed bottom up before decisions are taken. Regular meetings should be held.
-Avoid politics in the cooperative because this has caused divisions and death of many cooperatives.
-Agree to separate roles and avoid unnecessary interferences.
-When you get a market for the coop produces, be strict on adherence to quality and quantities required by the customer. Failure on this has led to the collapse of many coops.
