Towards a framework for effective performance of smallholder agricultural cooperatives in Limpopo Province, South Africa

Ph.D. (Agricultural Economics)

Department of Agricultural Economics and Agribusiness

The high attrition rate of cooperatives in Limpopo Province is a great concern considering that cooperatives globally and in South Africa have been esteemed to play a role in rural development and poverty reduction. The problem of attrition is a threat in the development of our societies. In response to this, the study investigated the formation of cooperatives, influence of social, human capital and household characteristics. The study also assessed the differences that can be used to discriminate cooperatives earning monthly income and those without a monthly income. The main aim of the study was to develop a framework that could be used to create sustainable cooperatives in the future in Limpopo Province. The study was conducted in five districts of Limpopo Province namely: Sekhukhune, Waterberg, Mopani, Capricorn and Vhembe. Data was collected using a structured questionnaire from 146 cooperatives. Key respondents were cooperatives leaders. Focus group data from Mopani district cooperatives was used to provide a background to the researcher in the development of the framework. Focus group discussion information was only used by the researcher in order to understand the cooperative member’s views. Purposive sampling was used to select a sample of 146 cooperatives due to the availability and accessibility of the cooperatives. SPSS analytical tool was used to analyse the data. Models used in the study were Binary logistic, Multinomial and Discriminant analysis. The findings of the study revealed that household characteristics such as gender, member affiliation affected the formation of legitimate cooperatives. Social capital indicators such as access to information and benefits derived by relatives encouraged the need for funding. However human capital indicators were found not to influence the need for external funding. The study also discovered that there were major differences between cooperatives earning a monthly income and those without the income. There were various benefits derived from the cooperatives by members. The study concluded that for cooperatives to be sustainable, focus should be on human capital, extension services and improvement of the level of education. The notion is that an informed, trained and educated cooperative society is the future.