Services provided by second-tier cooperatives

Table 5.10 on the next page provides a list of services that should be provided by second-tier cooperatives in agriculture. The respondents were asked to indicate the service(s) they currently provide to their primary members. According to table 5.2, all respondents indicated that the main reason for their establishment was to provide inputs to their primary members, but table 5.10

132 indicates that only ninety percent (90%) of them are indeed providing this service.

All the respondents indicated that marketing of their members’ produce played a key role in their establishment and the study corroborated this as all the respondents are providing this service. However, only forty percent (40%) and twenty percent (20%) of the respondents have storage and transport facilities, respectively. These are key facilities necessary if second-tier cooperatives are to provide inputs and marketing services to their members.

Furthermore, only twenty percent (20%) of the respondents indicated that they provide value-adding services and assist members in interpreting labour laws, tax, auditing and procurement issues. In terms of capacity building, seventy percent (70%) of the respondents indicated that they are providing training and capacity building to their members.

Responses Percent of Cases N Percent $Q3a input supply 9 15.3% 90.0% marketing services 10 16.9% 100.0% storage facilities 4 6.8% 40.0% transportation of members' produce to the markets 2 3.4% 20.0% capacity building of members in both business and technical

issues

7 11.9% 70.0%

provide agro processing facilities/services 2 3.4% 20.0% facilitate preferential procurement deals for members 3 5.1% 30.0% leverage financial support for members 2 3.4% 20.0% set and maintain quality standards for members products 1 1.7% 10.0% encourage members to save 7 11.9% 70.0% negotiate discounts on behalf of members 4 6.8% 40.0% assist members in interpreting labour laws 2 3.4% 20.0% assist members with tax issues 2 3.4% 20.0% assist members with auditing issues 2 3.4% 20.0% assist members with tendering and procurement issues 2 3.4% 20.0%

Total 59 100.0% 590.0%

133 5.4. Levels of capacity in existing second-tier Agricultural cooperatives

One of the specific objectives of the study was to understand whether the second-tier agricultural cooperatives have the capacity to provide support services to their members or not. Again a list of services generally provided by second-tier agricultural cooperatives and facilities necessary to provide these services was provided and respondents asked to indicate their capacity by ticking either yes or no next to the service or facility indicated. The results are illustrated in the following tables 5.9 to 5.12.

Frequency Percent

Valid yes 6 60.0

no 4 40.0

Total 10 100.0

Table 5.11: Number of respondents procuring inputs in bulk for their members

Frequency Percent

Valid yes 40 40.0

Table 5.12: Number of respondents with storage facilities

Table 5.11 above show that sixty percent (60%) of the respondents are not assisting members to procure inputs. Only forty percent (40%) of the respondents have storage facilities as indicated by table 5.12. With regard to providing services such as assistance with tax, labour, auditing and preferential procurement only twenty percent (20%) of respondents indicated that they have capacity to provide this type of assistance to their members and they are supporting their members (table 5.10).

134 Frequency Percent

Valid yes 2 20.0

no 8 80.0

Total 10 100.0

Table 5.13: Number of respondents with agro-processing and transportation facilities

Although forty percent of the respondents indicated that they were established to provide among others value adding and agro-processing services (table 5.2), only twenty percent (20%) translating into two second-tier cooperatives have agro-processing facilities and are assisting their members in this regard (tables 5.10 & 5.13). However, it emerged during data collection that even those respondents that claim to have agro-processing facilities cannot claim ownership to these facilities and they (agro-processing facilities) belong to third parties. The cooperatives only have a relationship or agreement with the owners and utilise them as an when they have produce that need to be processed. The same twenty percent (20%) of the respondents have transport facilities (table 5.10 & 5.13). With regard to understanding issues of quality and standards as being critical to accessing markets, ten percent (10%) of respondents claim to have some form of knowledge of these issues (table 5.10).

Level of education Primary (grade 0 to 7) Secondary (grade 8 to 2) Tertiary (post matric) Number of board members 16 47 25

135 0 5 10 15 20 25 30 35 40 45 50

Primary (garde 0-7) Secondary (grade 8-12) Tertiary (post matric)

16

47

25 Levels of education in respondents' board members

Number of board members

Figure 5.3: Graphical representation of the levels of education of the board members

Collectively there are 16 board members with primary education, 47 with secondary education and 25 with post matric education (table 5.14 and figure 5.3. All local managers that participated in the study indicated that the second-tier cooperatives in their respective areas do not have capacity to provide services to their members. Generally, it could be concluded that the respondents in this study do not have sufficient capacity to provide the nature of services that drove their establishment (table 5.15).

frequency Percentage

Valid no 5 100.0

Table 5.15.: Capacity of the second-tier cooperatives to provide support services to their members (from local manager’s perspective)

136 5.5. Effectiveness of second-tier cooperatives in providing services to their members

To further understand the nature of the second-tier agricultural cooperatives in the country respondents were asked to respond to questions that sought to determine how effective they are in delivering support services to their members. Perhaps it would only be proper to begin by defining the word ‘effectiveness’. According to the business dictionary effectiveness is described as the degree to which objectives are achieved and the extent to which

targeted problems are solved

(www.businessdictionary.com/definition/effectiveness.html). In this regard questions such as the number of members assisted to sign formal market contracts, the ability of respondents to conduct skills needs analysis and provide the training required, number of members assisted to source financial support, number of members engaged in value adding services and number of members securing preferential deals with the assistance or support of the respondents. Frequency Percent Valid 0 5 50.0 3 1 10.0 5 1 10.0 6 2 20.0 20 1 10.0 Total 10 100.0

Table 5.16: Number of members securing formal markets with the assistance of respondents

According to the table 5.16 above, 50% of the respondents have not been able to assist any of their members to secure formal market contracts. There is only one respondent that has assisted 20 members to sign formal market contracts and this is in the poultry production commodity (broilers).

137

Frequency Percent

Valid no 60 60

Table 5.17: Second-tier cooperatives with storage facilities

Frequency Percent

Valid yes 4 40.0

no 6 60.0

Total 10 100.0

Table 5.18: Respondents with the ability to conduct skills needs analysis

Frequency Percent

Valid yes 5 50.0

no 5 50.0

Total 10 100.0

Table 5.19: Respondents that providing training to their members themselves Table 5.17 above indicate that sixty percent (60%) of the respondents do not have storage facilities which then makes it difficult if not impossible to store inputs or members’ products until prices shall have stabilised. So, even if respondents are claiming to be sourcing inputs in bulk and provide marketing services to their members, they might not be effective in doing that without any storage facilities. Forty percent of respondents have the ability to conduct skills need assessment to identify skills gaps (table 5.18) and fifty percent provide training to members themselves (table 5.19)

Frequency Percent Valid 0 6 60.0 5 1 10.0 20 1 10.0 Total 8 80.0 Missing System 2 20.0 Total 10 100.0

Table 5.20: Number of members assisted by respondents to source financial support

138 According to table 5.20 above 60% of respondents have never been successful in soliciting financial support on behalf of their members. Only 20% of the respondents have been able to assist 20 and 5 members respectively to secure financial support for their business operations.