Liberalization of policies distorting the dominant agricultural marketing co-operative enterprises in Lesotho

Liberalization

Co-operative development in Lesotho has been dominated by the state. This followed the classic Indian model whereby the state should guide and assist co-operatives until they had the strength in terms of business and democracy to be autonomous.

The “model” co-operative law was adopted in most of the then British colonies and gave extensive powers to the Registrar of cooperatives regarding the management and business practices of each society and then came liberalization where the government had to be out of the cooperative movement. Very unfortunately this top down blueprint approach still continues to this day in our Mountain kingdom.

Adjustment and liberalization have had dramatic effects on co-operatives and many have not survived. There may be possibilities for reform for those which have survived, which would hopefully see a return to basic principles.

There are examples of good practice for small self-help groups which had interest in co-operatives. Again, large farmers’ organizations found co-operative forms more appropriate. A key issue is the integration of co-operatives and other marketers to produce an effective market base for agricultural development.

Liberalization has also included the marketing of farm inputs such as fertilizers and storage insecticides, and the removal of fertilizer subsidies. However the predominantly small traders have not taken on input supply operations. Cooperative Farmers are faced with higher prices, higher costs of obtaining inputs due to lack of local supplies, and a lack of access to seasonal loans following the collapse of the block farming credit operations.

Structures of Cooperative Enterprise

As far as the cooperative enterprise is concerned, all members should have their own enterprises and the cooperative is there to enhance their efforts or help them to reach the magnitudes they would not achieve without collaboration. Therefore, there should be clear and effective communication flow between the two enterprises, meaning the cooperative enterprise and members’ enterprises.

This will help the members to know how the cooperative is planning to assist their enterprises and on the other hand, this will help the cooperative enterprise to merge effectively members’ enterprise strategies when developing the cooperative strategy in order to assist all members to meet their strategic plans which does not take place in Lesotho.

Effective communication involves two way method of communicating. The cooperative board takes mandate from the Annual General Meeting and put it in to action through the hired staff or management then later the cooperative board has to report back to the cooperative members on how it implemented the mandate. This will not only include the achievements but also the down falls if any as well as providing clear explanations as to why it failed to overcome those pitfalls. The board members also communicate with the management of the cooperative in as per organizational structure flow of hierarchy where the board provides plans of actions to the management in order to consider them in day to day operations.

As a result, the board also gets the report from management on day to day activities and approving some of the management proposed activities. By so doing, the cooperative management gets knowledge and well as the board members on what is taking place.

As far as cooperative history is concerned, there are so many events known which took place before liberalization as well as during liberalization, these is an existing knowledge about cooperatives as it includes successes and challenges cooperative met along the way in Lesotho.

Other cooperatives used this knowledge even after liberalization as the means of operating the cooperatives. This includes use of traditional management approaches which include vertical integration which was introduced by Britain to its colonies.

This model has proved itself to be not effective in the knowledge economy after liberalization but very unfortunately Lesotho remained with that approach and this is one of the reasons why cooperatives failed after liberalization.

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