M. Yassin, Sulaiman

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A STUDY OF INDICATORS FOR KlNITORING ANDEVALUATION OF MALAYSIAN FARMERS' COOPrnATIVESbySulaiman M. Yassin, Ph.D.CIRDAP WORKSHOP ONDEVELOPMENT AND MONITORING AND EVALUATIONMECHANISM FOR IMPACT OF COOPERATIVESSEPT 12 - 15, 1989HANOI, VIETNAMA STUDY OF INDICATORS FUR. MJNITORING ANDEVAIlJATION OF MALAYSIAN FARMERS' OOOPmATIVESby2Sulaiman M. Yassin, Ph.D.INTRODUCTIONThe cooperative movement in Malaysia was initiated in 1922by the British Colonial Government in Malaya as a responsetowards meeting the growing financial needs of the rural farmersand government servants, who were heavily indebted to moneylenders and land owners. Since then, the cooperative movemen~has been regarded as a benevolent institution to alleviate thesocio-economic conditions of the under-priviledged population.In 1984, the government revised and enacted the Coopera tiveSocieties Act in order to establish a more consistent, systematicand standardised approach to the development of cooperativesthroughout the country. The early cooperatives in Malaysia weremainly involved in unifunctional activities and thus were single-purpose cooperatives specialising in activities such as thriftand loans. However, since 1966 many of these cooperativesdiversified their activities, thus evolving into multipurposecooperatives.,--------------1. Paper presented at CIRDAP workshop, Hanoi, Vietnam, Sept. 12- 15, 1989.2. Project coordinator Malaysia,Universiti Pertanian Malaysia.Deputy Vice-Chancellor,1For the cooperatives located in the rural areas andassociated with the farmers and their fishermen, new laws wereenacted which included the Farmers' Organisation Act 1973 and theFishermen's Act 1971. These laws made provisions for theestablishment of farmers' and fishermen's cooperatives and thesupervision of existing agro-based cooperatives. Thus twostatutory bodies namely the Farmers' Organisation Authority (FOA)and the Fishery Development Authority (LKIM) were set up to playthe role of registrar, controller and developer of thesecooperatives.Currently, the Malaysian cooperatives can be classified intothree broad categories they being :i) non-agro'ba.sed cooperatives which are mainly in theurban areas (supervised and controlled by theCooperative Development Department, Malaysia);ii) agro-based cooperatives and farmers organizations(supervised, controlled and developed by FOA,Malaysia) ; andiii) fishermen's cooperatives (supervised, controlled anddeveloped by the LKIM, Malaysia)ITable I shows the present status of the various categoriesof cooperatives.2Table I Basic De.ta On Cooperatives in MalaysiaNumber of Number of Total shareTypes of Cooperatives cooperative members capital{M$)Farmers' organisations 271 455,992 19,541,293Agro-based societies 788 109,815 15,145,071Fishermen associations 39 14,308 1,028,296Non-agrobased societies 2,825 3,089,600 1,482,657,000Total 3,923 3,669,715 1,518,371,660Based on the above statistics, the bulk of the cooperativemembership stem from the non-agrobased cooperatives. However, interms of sectors, the non-agrol::e.sedcooperatives only representabout 43% of the total potential members within that sector whilethe farmers organisations and the agrobased cooperativesrepresent approximately 73% of the total farm families. Thefarmers' organisations in themselves represent about 65% of thetotal farm families.In view of the fact that the farmers' organisationsrepresent two-thirds of the total families in the country thisstudy purposively focussed its attention on these types ofcooperatives.3At present, 271 farme~s' organisations have been establishedin Malaysia. They operate on a 3-tier system, having 257Farmers' Organisations at the area level (AFO), 13 State Farmers'Organisations at the state level and a National Farmers'Organisation (NAFAS).As at 31st December 1988, the AFOs had a total individualmembership of 455,992 farmers. These individual farmers areorganised for the purposes of administration and operations intosmall Farmers' Units which usually cover the organic area of oneor two villages. Currently, there are 4,583 farmers' unitsthroughout the country. The 788 agrobased cooperatives are alsotaken as farmers' units and come under the jurisdiction of theAFOs.The activities of the AFOs include the following (accordingthe importance of the activities) :i) supplies of agr:i.culture inputs and trading inagribusiness activities;ii) farm production projects (assisting members in carryingfarm production projects on a commercial resis);iii) marketing and processing of members' produce;Lv) providing credit for agrobased activities to membersand encouraging savings;4v) providing facilities and services such as tractors,harvesting and contract services; andvi) providing social activities which include training ofmembers.The SFOs and NAFAS provide agricultural inputs and servicesthat are not possible to be provided by the AFOs.THE STUDY IN MALAYSIAFour AFOs were selected for the study representing an AFOwith good performance, another with poor performance and two ofaverage performance. Respondents were drawn from thegeographical areas - of these selected AFOs. rata was collectedthrough the use of questionnaires in June - July 1989 andpreliminary analysis completed in August 1989.Objectives of Study1. To review the existing management information system atgrass-root level cooperatives;2. Toi)ii)iii)iv)obtain information on cooperatives with regards toimpact on members,organisation dimension,operations,members partiCipation,5v) inter-relationship with secondary cooperatives,vi) external influences,vii) existing and proposed status of training and education,andviii) total impact.3. To determine possible indicators for developing a monitoringand evaluation mechanism for impact of cooperatives.Selection of Respondents (Farmers)A total of 200 respondents were selected from within theoperational areas of the 4 AFOs that is :i) 40 members from each of the 4 AFOs andii) 10 non-members from each of the 4 AFOs operationalareasThe sample of 160 respondents (members) were taken based onthe AFOs membership register and relisting of the recordsaccording to income that is :i) Big farmers (income exceed M$600 per month)ii) Medium-size farmers (income between M$300 - $600 permonth) ,iii) Small and marginal farmers (income less than M$3oo permonth) .The sample of 40 respondents (non-meaber-s) were takenrandomly based on house lot numbers and using the abovesegmentation.6SURVEY RESULTSA total of 39 non-members and 159 members of the FOAin theareas selected were finally interviewed in the survey. Thefollowing are the highlights of their responses.Status of Non-members (N = 39)Most of the non-members interviewed were male (89.7%) andslightly more than half the number were more than 40 years old.Most of them were functionally literate, having had some formalschooling, with only 10.8% who did not attend any schooling atall.Most non-members (94%), owned less than 5 acres of land andwere either owners (48.77%) or tenants 05.9%). More than half(53.2%) cultivated rice while a substantial number (18.7%) wereinvolved in cocoa and coconut cultivation. Only 32.4% of thenon-members were full-time farmers, many of whom had(37.9%) and performed other agricultural activitiesodd-jobs(27.6%).Sixty percent of the non-members had incomes of less than M$400per month from farming, while earning from M$100- M$200 fromother sources. Out of this total income, most non-members spentabout M$70 on basic utilities and M$100 to M$400 annually ontheir children's education.Non-members cited "personal dislikes" . (41.0%) and theirbelief that "the cooperative as non-beneficial" (53.8%) as their7reasons for not joining the Area Farmers' Organization. Sllghtlymore than half (55.3%) mentioned that the distribution ofbenefits from the cooperatives has not provided any advantage tothem and most of them (70.3%) did not have problems acquiringtheir agricultural supplies or services from other sources.However, most non-members (71.1%) indicated their intention tobecome members citing reasons of "getting services" (48.3%) andbeing "attracted to the progress of the cooperative" (20.7%).Status of MembersMost of the members interviewed (8.8%) were male with 62.3%of them being more than 40 years old. Most of them werefunctionally literate (94.9%).More than half (55.2%) owned less than 5 acres of land while(34.4%) owned 6 to 11 acres. Interestingly 10.4% of membersowned more than 11 acres. Occupationally similar to the non-members, 45.8% cultivated rice and 25.2% cultivated cocoa andcoconut. Unlike the non-members' group, more members (60.5%). were full-time farmers. Only about 47 percent of farmers ~dincomes of less than M$400 and a larger number earned substant~alincomes from non-farm operations (51% earned M$200 - M$400).Most members spent more than M$200 on food per month and M$70 onbasic utilities and M$100 to M$400 annually on their children'seducation.8Regarding their motivation to join the Farmers'Organization, farmers cited reasons such as to obtain "farminputs and marketing" (36.1 %), followed by "for farm inputs"(18.1%) and "for credit facilities" (15.5%). Most membersresponded positively that the cooperatives were meeting theirneeds while be~~g aware and concerned about the running of thesecooperatives. They further reported that the AFO's benefits weredistributed fairly and that the supplies and services weresuperior in quality. To the members, discriminatory practiceswere almost absent and that the managers and office bearersplayed their roles judiciously.It is very interesting to note that members felt that theywere not able to participate in most managerial functions such asthose of decision-making (87%), planning (84. 1%) and strategyformulation (89.3%). However, the relationship and communicationbetween members and officials were reported as good. As regardsthe change process, members felt that they could provide moralsupport in the change process, which should be directed at"increasing 9.griclilturalproduction" (36%), "changing attitudes"(21.6%) and "enhancement.of agricultural economic activities"(12.2%). They reiterated that change could occur wi.th"underatandang" :31.5%), "working gradually in stages" (28.3%)and "through the implementation of viable activities" (27.5%).Most members als8 felt that a process of change has taken place(86.9%) and they contributed by participating in AFO actdvf.t.Les;9Members also suggested that higher growth can be .procurred ifthere are more concerted efforts to include more members in theprocess, with proper planning as the provision of necessaryinputs.In managing change, members felt that the AFO agents canprovide adivisory services (23.4%), supply the agriculturalinputs (26.2%) and provide agricultural machinery (27.9%). Theyfurther felt that the AFO or the Agriculture Bank could offerthem credit protection. Members further felt that the extensioneduction efforts were good (57.5%) and that training should beprovided on a continuous baai.s (68.7%). On a wider perspecti ve,members felt that the role played by secondary organisations andgovernment functionaries have been good and encouraging and thatthe rural society in general, has been well managed.Conclusions and Implications:::tcan te concluded that there are certain specificdifferences in the predispositions of members and non-memberswith regard to their socio-enonomic backgrounds that may haveinfluenced their membership behaviours. However, the surveyfurther elicited that the non-members were not convinced of thebenefits of joini.~g the AFO's or that they saw no obviousadvantage of being a member. This credibility problem should bea concern that needs attention.10On the other hand, members were quite satisfied with theservices and benefits accruing from the AFOs and perhaps thistestimony has not been fully capatilized upon in informationcampaigns directed at non-members. More of the members werefull-time farmers and thus had more valid reasons to becomemembers of AFOs.The lack of effective participation in the management ofAFOs that they were members of, was an important concern for themembers and this can perhaps be explained by the structure of FOAin the country. This could be an important aspect to bemonitored because it can become both a source of disenchantmentand a stumblL~g block for the continued growth of the AFOs.Nevertheless, members felt that there was a general sense ofachievement in the work of the AFOs with regard to promotingchange in the rural society.In sum, it can be seen that AFOs can be continually monitoredwith respect to several of its characteristics. Firstly, is thegrowth ~~d functioning of the AFOs themselves which can includeits range of activities, capital build-up and support fromme:nbers. Se(~oY"!dly, is wi th regard to the transfcrmation ofco~trol of management and the participation of members in therunning of the AFOs. Mismanagement and loss of support could beregressive for the cooperative movement. Thirdly is theevolution of the cooperative-members relationship itself,especially with regards to the benefits, support, protection andthe empowerment of the members themselves.11

A study of indicators for monitoring and evaluation of Malaysian farmers' cooperatives

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A study of indicators for monitoring and evaluation of Malaysian farmers' cooperatives

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