Demutualization and its Problems

Over the last three decades cooperatives experienced acceleration of institutional innovation with the introduction of many variations to the reference model. It is certainly not surprising that coops changed their organizational structure over time to face the challenges of world. In the United States and in Canada they are commonly referred to as New generation cooperatives, in Italy and Spain as cooperative groups or network of cooperatives. One of the main feature of these new organizational structures is their attempt to take some advantages of the investor oriented firms (above all in capital raising activities) while retaining the mutual/cooperative status. Many of these changes have been undertaken to facilitate the growth of the enterprises both in domestic market and abroad. Due to the wideness of the phenomenon we could name the last three decades the age of hybridization. However in some cases the search for new structures went further and assumed the aspect of conversion of mutuals into stock firms. Our paper will deal with this latter part of the story, focusing on cooperatives that preferred conversion or demutualization to hybridization. The paper describes the chronology and the geography of demutualization and analyses the forces that drove it over the last decades. The main conclusion is that demutualization provided solutions for real problems, as hybridization did, however the choice between these two options seems to have been more a matter of ideology than of efficiency.

Agrarian Reform in the Philippine Banana Chain

The Comprehensive Agrarian Reform Program (CARP) of 1986 had been the most far reaching postwar institutional change in rural Philippines. To evaluate the dynamic impact of CARP in the banana sector, we have compared the development of smallholders in both the domestic market and export chains. For exports the reform introduced contract agriculture between cooperatives of small Cavendish banana growers and export firms. Small farmers of banana cultivars like Lakatan supply the crop individually to open domestic market channels. Incomes and living conditions of reform beneficiaries improved significantly compared to former plantation workers wages, but remained below the official family living wage rate. Per Kg. of bananas the income of non-reformed domestic market growers has been of the same magnitudes as for the export chain. However, the percentage of the latter has been much lower in terms of the final consumers' prices. The farmers of the domestic market have also more upgrading opportunities to organize cooperatives and reduce production and transaction costs. The export contract growers have already cooperatives and for upgrading will need the consent of powerful downstream agents in the chain. The reason for the limited impact of CARP is the power concentration by five multinationals and four influential Filipino families, which dominate the profitable wholesale supply and export stages of the banana chain.

HELPING PEASANT FARMERS IN NIGERIA THROUGH AGRICULTURAL COOPERATIVES: LESSONS FROM JAPAN AGRICULTURAL COOPERATIVE MODEL

Japan agricultural cooperative known as JA in Japan is the citadel of small farmers’ livelihoods. For almost 60 years, JA was the driving force behind small farmer-supportive policy in Japan. The reverse is the case in Nigeria where agricultural cooperatives are not tailored towards organized support; therefore Nigerian farmers face the brunt of the market, policy and economy. While there are emerging challenges for JA, its relevance remains undaunted in marketing, farm guidance, credit, insurance, and subsidy among others. The paper examines the need for adapting the JA agricultural cooperative model in Nigeria and the needed institutional contexts. Alleviating rural poverty in Nigeria requires building farmers capacity through cohesive farmers’ organizations that will act as channels for introducing agricultural technologies for production and processing, gaining access to quality inputs, credit and technology, reduce farm gate losses and enhance harmers access to market and generally improving their capacity for negotiating better deals in the political system and gaining more control over their socioeconomic position in the Nigerian social system. The JA model of agricultural cooperatives is a relevant case study to building an organization that would meet farmers’ needs and help in agricultural development. &nbsp