Marking 100 years of cooperatives in Uganda
Many cooperative unions prospered and owned several assets. Following the times when several collapsed and some like Masaka Cooperative Union limped, there is need for government support to revamp them. Photo by Michael J. Ssali.
What you need to know:
The cooperative movement has been in Uganda for a century now. And during that time, it has been through good and bad times. Here is a perspective on why cooperatives are still relevant.
The idea of people engaged in the same economic activity coming together to increase production and profits, has been with us in Uganda since 1913. So, in September this year, we marked 100 years of the cooperative movement.
However until the end of Second World War, cooperatives were not as recognised by the government as they are today, according to Mr Lawrence Kyazze, who was instrumental in the amalgamation of present-day Masaka Cooperative Union (MCU) in the late 1960s.
They were mostly agricultural cooperative societies formed by coffee and cotton growers and they became very prosperous as the country moved towards independence, providing employment to thousands of people besides offering scholarships to students and engaging in other social support and development activities.
Advantages
Among those that stood out as particularly vibrant were Banyankole Kweterana Cooperative Union (BKCU), MCU and Bugisu Cooperative Union (BCU), all of which were mainly made up of smallholder coffee farmers. Groups of coffee farmers—about 300—formed cooperative societies, which were members of cooperative unions.
At the village level, the farmers put together their harvested coffee, which would be transported to the cooperative union headquarters for marketing. Most cooperative societies were based on agricultural activities although some were in other fields such as savings, transport, and trading.
The advantages were many especially for the smallholder farmers. They managed their crop and ensured it was of good quality, which made it more competitive on the world market.
And since they sold in bulk, they could be depended upon as regular suppliers of large quantities of the crop by the multinational companies that bought the crop.
The smallholder farmers shared transport costs between themselves, which was cheaper and made operations smoother. They would also buy farm inputs such as tools, pesticides, fertilisers, in bulk and therefore cheaply, thus increasing profits. Some would pay cash or purchase the inputs on credit and pay later when they sold the coffee. And since they were all shareholders, they earned dividends periodically.
The cooperatives built unity, trust, and organisational skills among farmers and they were also an efficient channel of information between government and farmers at the grassroots.
We mark 100 years of cooperatives in Uganda at the time when the government is trying hard to revive them while at the same time, it is widely criticised for destroying the once vibrant co-operative unions such as BKCU, BCU and MCU.
Hard times
On its website, BKCU clearly states that its activities were greatly disrupted by the wars.
It incurred huge debts amounting to billions of shillings and it is only early this year that it acquired €100,000 (Shs343m) from MSCL with the help of government, which it intends to use in partnership with Agriterra to revamp its operations.
MCU’s secretary general, Emmanuel Ssenyonga, points out:
“We lost assets such as vehicles and coffee itself which were used to support the liberation war. Well, technically, payment and compensation finally came. But it came late, nearly 15 years later, when the value of the shilling had greatly reduced. Right now, we are trying to revive the union but we need the kind of financial assistance that Banyankole Kweterana and Bugisu Cooperative Union have received. We have repeatedly appealed to the government but we are yet to be helped.”
BCU also suffered extreme indebtedness—to the tune of almost Shs4b but it was bailed out a few years ago by the government, which injected Shs3b that was carefully managed. Today, the union has began to make profits.
Remain key
It must, however, be observed that other factors such as mismanagement and the liberalisation of markets led to the collapse of many cooperatives. Individual farmers begun to sell their products to middlemen who induced them with cash payment while cooperatives normally paid after certain periods.
Nonetheless, cooperatives still remain key and it is the reason why the government is putting emphasis on revamping the cooperative movement.
A year before independence, government established the Uganda Cooperative Alliance whose main function was to advise, regulate and revamp all dormant or weakening cooperatives.
Improving lives
Last year, 2012 was the International Year of Cooperatives and the Food and Agriculture Organisation (FAO), the International Fund for Agricultural Development (IFAD) and the World Food Programme (WFP) came up with a joint statement that stated:
“The importance of agricultural cooperatives in improving the lives of millions of smallholder farmers and their families cannot be overstated.
Empowered by being a part of a larger group, smallholder farmers can negotiate better terms in contract farming and lower prices for inputs like seeds, fertiliser and equipment.
In addition, cooperatives offer prospects that smallholder farmers would not be able to achieve individually such as helping them to secure land rights and better market opportunities.”
