Efficiency in he Performanceof Co -operativesLangata, Nairobi 29 No~ - 4 Dec. 1971

Scandinavian Institute of Mrican Studies

EFFICIENCY IN THE PERFORMANCE OF CO-OPERATIVES

A Seminar organised by the Scandinavian Instituteof African Studies, Uppsala, Sweden and The Inter­national Co-operative Alliance's Office for Eastand Central Africa, Moshi, Tanzania, at the Co­operative College, Langata, Kenya, November 23 ­December 4, 1971.

73

INTRODUCTION

The Scandinavian Institute of African Studies has held twoseminars on co-operative problems in Eastern Africa. Thefirst seminar was held at Uppsala in the spring of 1970,and the papers were subsequently published (Co-operativesand Rural Development in East Africa. Uppsala:1970).

In co-operation with the International Co-operative AlliancelsOffice for East and Central Africa the Institute organized afollow-up seminar at Langata, Nairobi in December 1972, thepapers from that seminar were published later the same year(African Co-operatives and Efficiency. Uppsala:1972).

During this seminar, "Efficiency in the Performance of Co­operatives, members of the co-operative movement, at a varietyof levels, were brought together to discuss efficiency problemswith some of the research workers that had been present at thefirst seminar at Uppsala.

The seminar, partly financed by the Scandinavian GovernmentalAssistance Organizations, was organized in eight differentworking groups, each discussing different topics and therecommendations of the groups were later discussed in plenarysessions.

The members of the Institute felt that this was a very use­ful undertaking and in line with the Institutels policy oftaking up topics which after discussion on a theoreticallevel later can be discussed operationally with persons in­volved practically in the problems. (Such a seminar was theone the Institute organized on African Refugee Problems in1966 which later was used as the basis for discussions at alarge seminar organised jointly in Addis Ababa by the ECA,the OAU and the Dag Hammarskjöld Foundation).

For a variety of reasons, the working material from theLangata conference has not been reproduced until now. Iwould therefore like to offer our sincere apologies, tothose present at the seminar, for the delay.

However, the problems discussed at the seminar and reportedon in this collection of reports from the working groups arenot solved overnight, and I feel that many of the very goodideas which are presented in this collection, are not out-of­date but are still valid and useful.

I have also included a report on the seminar by Mrs. LeonoraStettner, Research Secretary of the International Co-opera­tive Alliance in London. The Insti very grateful toMrs Stettner for her help in many matters. We should alsolike to extend our thanks to the ICAls Moshi andthe s f of the Co- ive College at Langata, Na.LLVlJ·~

il 1973

4

Mrs. L. Stettner:

Report on the seminar "Efficiency in the Performance ofCo-operatives", Langata 29 November - 4 December 1971

The cooperative research seminar held in Nairobi, Kenyasucceeded in bringing together two groups of people whoseldom meet - academicians in colleges, universities andresearch institutes who are engaged in research on coopera­tives in East Africa and leading cooperators in that areafrom movements and government cooperative departments.

Seminars have become an increasingly prominent feature ofmodern professionalism. This is true not only for highlyindustrialised nations but also in the less developed count­ries where technology transfer and exchange of informationand ideas are basic to the development process. Even so, thisparticular seminar was probably unique, both in compositionand in purpose. Financed by the Scandinavian Institute ofAfrican Studies and the Joint Nordic Projects in Kenya andTanzania, it was organised by the Institute and the Interna­tional Cooperative Alliance's office for East and CentralAfrica. The discussions took place at the Cooperative Collegeof Kenya from November 29th to December 4th, 1971 on the theme" iciency in the Performance of Cooperatives".

The organisers of the seminarwould be useful in:

lt that such a II confrontation lf

- stimulating exchange of information and cross fertilisationof ideas,

- translating the results of academic research into theoperational terms required for use by practical administra­tors,

identifying major areas for further research,

achieving better coordination of research efforts in orderto avoid duplication and waste of resources, and

- exploring ways of making research more relevant and useful.

The countries represented at the seminar were Kenya, Uganda,Tanzania, Zambia, Mauritius and Botswana. There were fifty­three participants, including sixteen top officials fromcooperative unions, fifteen cooperative officers from govern­ment departments, seven principals or tutors from cooperativecolleges nine "academicians" and s representatives of

onal organisations. An introductory plenary sessiont day was followed by two days d cussion in

working groups. On the fourth day conclusionsrecommendations of each the Work Groups were presen-and discussed a plenary session.

5

all practical. The objective is to make available to coopera­tives, aid administrators, governments and others interestedin promoting cooperatives detailed information on local eco­nomic, social and political factors which influence cooperativedevelopment and to underline the lessons to be drawn from pastexperience in cooperative promotion elsewhere in the world. Itwas recognised that such information is essentiaI for realisticprogramming of cooperative development efforts and avoidingrepetition of past mistakes. It provides the basis for deci­sions as to whether the cooperative form of organisation isthe most effective Hay of meeting particular needs and on thetypes of cooperative activity best suited to these needs. Andit facilitates identification of bottle-necks and determina­tion of priorities for action programmes.

It was accepted that cooperative " e fficiency" is meaningfulonly in relation to a specified goal which must necessarilyinclude social as weIl as economic objectives. It was als oagreed that it should always be measured in comparative termsrelative to the efficiency of alternative approaches, includingstate enterprise and private profit enterprise.

As indicated in the individual reports of the Working Groupswhich folloH this summary, the substantive issues dealth Hithby these Groups covered cooperative efficiency in relation togovernment control; externa l aid; education; credit andfinance scale, size and organisationaI structure; socialstrati cation and democratic control; management problems;and legislatian. The discussions were lively and competent,and the conclusions and recommendations resulting from themprovide useful materi for follow-up action.

MEASURING EFFICIENCY

iencyl! is meaningful and measurable~~~~~~~~~~~~~~~~~.Therefore it is important for

mobilising initiative and resour­towards efficiency to agree on what those

was recognised that goals as formulated by governments oroutside sponsoring organisations may differ from those of thecooperators directly involved at the level of the primarysociety. For this reason it is vital that those cooperatorsshould participate in formulating cooperative objectives andin the planning of cooperative programmes designed to meetspecific local situations and needs. There was general agree-ment that the broadest terms such programmes should aimat increased output more partie ion workers and consumers

the decis related to output and asedequa ty in distribut on output.

relative

DIlI'()aCDle S

6

farms, or development corporations, or marketing boards orfarmers' unions or other forms of State and/or private enter­prise.

INTERNAL COOPERATlVE EFrORTS TO INCREASE EFFICIENCY

A. Motivation

It was recognised in all of the working groups that develop­ment, including cooperative development, will not take placeuniess individuals in rural areas can be convinced that changeis possible. Underdevelopment is a compound of poverty, in­equality, low productivity, illiteracy, apathy, illness, un­employment, lack of amenities, tradition, ignorance andresistance to innovation. Most of all, it is a situation inwhich the majority of the population are literally hopeless.They are without hope because they have had no evidence thatit is possible to improve their situation.

Thus the challenge with which cooperators are confronted isto find ways of making contact with people at the grass rootsand of convincing those people of the perceptible benefitsfrom pooling their efforts - perceptible in the not toodistant future. Several ways for attempting to do this werediscussed; they include member education, the demonstrationmethod, involving members in participation and controi andthe development of tangible incentives related to performance.

B. Structure

The structure of a cooperative has both an indirect and adirect bearing on its efficiency. Indirectly it influencesthe e ctiveness of the democratic process through whichcooperative members themselves determine the objectivesagainst which efficiency is measured and the policies de­signed to achieve those objectives. And it directly influen­ces the ability of the cooperators successfully to pool theresources in such a way as to maximise e iciency.

l. Democratic ControI

Discussion of organisationai structure at the primary levelcentred on efforts to balance the need for units small enoughfor personal participation and involvement of members with asize large enough for economic viability. It was noted thattribal factionalism sometimes constitutes a constraint onoptimum size. Mu purpose cooperatives were accepted asbeing on balance more economic and eff ient, but wherethese necessitate larger primaries, it was felt that thesmal branches required as collecting points can serve asfocal points for exchange of information and channelling ofservices

st f.lon.

the

controi wille and

other; henceshouldobject

be responsby

democraticbetween

s on theshou be clear dmembers formulatthe soc o it

implementation ispurposes must have access

It was reupon relati

one handtions, whichviews of the

7

In order to ensure both continuity and rotation in Committeemembership, it was recommended that one-third of the Committeeshould retire each year but should be eligible for re-election.

It was accepted that at the secondary level representationmust necessarily be indirect, and discussion centred on waysof making this representation more effective. Suggestionsincluded advance discussion of agenda at the primary level- even at branch meetings where the primary society is toolarge; adequate briefing and debriefing of representatives;and simple, graphic presentation of reports and balance sheets.

2. Economic Efficiency

The major implication of cooperative structure in relation toeconomic efficiency is the need to ensure the channelling ofbasic technical services from the secondary organisation toprimary societies. It is only by pooling of resources at thesecondary level that cooperatives can accumulate the specia­lised expertise and the capital needed to make available totheir members the advantages of large scale operation. Thekinds of services which can be offered in this way includetechnical knowhow, training facilities, member education,legal advice, joint use of machinery and equipment, accoun­ting, auditing, purchasing storage, processing and marketingservices, banking and credit facilities and centralisedresearch and information.

C. Le-------"-

Several of the working groups considered the issues of stratification and factionalism arising from the tendency for leader­ship of cooperatives to Il into the hands of the villageelite ~ that is, local traders, priests, politicians or tribalheadmen or chiefs. It was agreed that the danger which thisposes in terms of corruption and protec on of vested interestsmust be constantly combatted through education and training asweIl as with appropriate statutes and by laws for safeguardingdemocratic control.

At the same time it was recognised that there are advantagesin working through leaders who are the richer, better educatedand more influential members of the community. Such leaders,it was felt, more often than not are honest if for no reasonother than personal prestige, and they can make a substantialcontribution by virtue of their links with the outside world,their superior education and receptivity to innovations, andtheir capacity to recruit members, to underwrite the resourcesof the cooperatives and to represent them vis a-vis the govern­ment. Moreover Cooperation provides unique machinery for identifying "natural leaders ll and giving them an opportunity todevelop new iat s and to challenge the trad ional

s led towhich was seen as rele

control, to e ve leaders committeemen tocareer s

ical every lssues ss on the importancevant to motivat

p, to c d~H~u.~ial management

8

Specific recommendations included:

- more research into simple teaching techniques and theuse of audio-visual aids, radio, newspapers, corre­spondence courses and study circles;

- increased production of teaching materials at thenational level and exchange of experience betweenEast African movements;

- mobilisation of finance for educational buildingsand equipment;

- orientation of overseas training to local needs;

- increased research into high level manpower needs,management training and the availability of consul­tancy services; and

- the extension of schemes like that in Tanzania for anational cooperative career service involving standar­dized job descriptions and terms and conditions ofservice; a promotionaI ladder with appropriate salaryscales; centralised recruiting; continuous educationof staff; and development of yardsticks for evaluatingperformance and for recruitment.

E. Credit

It was generally accepted that supervised or guide d credit isbasic to cooperative development and that multipurpose societies which combine credit with agriculturaI production,chasing, marketing, precessing, storage and consumer storesoffer the best prospect for financial viability. Recommenda­tions centred on the promotion of cooperative banking; themobilisation of savings through thrift and credit societies;and the need for research on such issues as the components offinancial viability, the appropriate use of consumption loans,techniques of llsupervised credit", the reasons why somefarmers utilise credit more effectively than others, and thepotent l increase of financial resources through partnershipwith private enterprise.

EXTERNA L SUPPORT FOR COOPERATIVE EFFICIENCY

A. l

l. General

The point was made that many of the problems with which cooperat s have to contend would also confront any alterna­tive approach which might be suggested. There are certainbasic reforms on the part of governments - and some casesthe rnational communi - which are to coop ve e iciency.

Coopstratievenby divertpos

ves can do a lot to combat the qualiton wh obstruct economic growth

cooperat s underrnine thesurp es te a leged whoauthority w erative.

ss

9

only part of a more general problem of inequality and strati­fication in the economy as a whole, and primary responsibilityfor combatting it rests with the government through its powersto tax, to subsidise, to legisIate land reforms and to allo­cate public funds to providing the people with educationalopportunities, public facilities for health, sanitation,cOJITmunications, roads, transport, storage, marketing, bankingand credit facilities and power for heating and lighting.It is only in a framework of adequate infrastructure of thiskind that cooperatives can be expected to operate efficiently.

2. Specific Government Support to Cooperatives

In addition participants of the seminar felt that there area number of fields in which cooperatives, as major instru­ments of development, deserve specific support from theirgovernments; these include financial assistance (grants orsoft loans , trade concessions, etc.), extension services, andtechnical information and advice. Also appropriate coopera­tive legislation is implied. Cooperatives must operate withinthe framework of the cooperative legislation prevailing inparticular countries and their development is to an importantextent conditioned by the nature of that legisIation. Becauseof the rapidly changing circumstances in developing countries,existing legislation is in many cases outdated and needs re­vision to ensure that it conforms to the social and economicobjectives of cooperators and governments in those countries.A major concern is the independence of cooperatives and theneed to ensure that cooperative legislation does not permitarbitrary, undemocratic and discriminatory encroachment bygovernment officials on the autonomy of cooperatives.

3. Cooperative Autonomy

The working group discussions revealed an East African patternaccording to which cocperatives tended to mushroom followingIndependence with the encouragement of over zealous governmentswhich tended to register societies without appraising theviability. Subsequent f lures, abuses and mismanagementforced the governments to intervene by drastically increasingthe powers of Registrars. Although the need for governmentfinancial and technical support and training and extensionfacilities was fully accepted, many of the seminar partici­pants felt that intervention had been carried too far to thepoint of stifling cooperative loyalties, initiative and inde­pendence.

Accordingly a number of constructive suggestions were putward for bringing the situation into better balance. Theseincluded:

more thoroughsocieties;

st fore iste

extension the stem ional istration;

sett up anOmbudsman;

arbi ter, l or

isation toReg trar;

Dis c level ons

10

- more adequate and better trained and equipped govern­ment field staff for inspectorate and extension servi­ces;

formulation of specific criteria for exempting societiesfrom emergency controI by Registrars; and

- incorporation in government legislation of a schedulefor tapering off controls over cooperatives.

B. Foreign Aid

The discussion on international assistance to cooperativesin East Africa was strongly coloured by a concern for thecooperative principle of self-reliance and the need forcooperators themselves to participate in aid negotiations andfor aid to be tapered off as quickly as possible. An increaseof mutual aid among developing countries was also urged.

On capital aid it was stressed that the cooperators themselvesshould try to mobilise savings to supplement externa l aid, thataid should not be tied, and that aid should be on favourableterms. With respect to technical assistance from abroad, theemphasis was on education and training of counterparts. Alsoit was urged that experts should be weIl br fed in the localsituation and should remain for a minimum of two years andpreferably four.

The Nairobi meeting was essentiaIlya earch seminar. sprimary purpose was to identify the or areas in which moreresearch is required and to find ways of making that researchrelevant and fruitful in terms of increased efficiency.

The reports of the Working Groups which follow constitute avaluable set of specific proposals for further research of thiskind, and as such they more than justify the efforts involvedin arranging the seminar. In addition, however, the participantsconcerned themselves with the machinery for research, and attention was given to the need to build up local cadres of coopera­tive researchers. To this end proposals were made for attachingresearch units both to cooperative unions and to CooperativeDepartments of governments, and for directing external technical assistance to the training of such local research workers.Finally it was urged that East African cooperators themselvesshould determine research priorit s and carry out the resul­ting investigations.

a maJor con­collaboration

mutual reportes, J

results and con­ons s from

All in l there is good reason to believese of the seminar will be cont~",'U.~Hk

ween cooperators and ac ians in termsresearch act s rese

res projects mutual researchsUltation on ofresear

11

EFFICIENCY AND GOVERNMENT CONTROL

Report from Group No. l

Chairman: H. KinyuaRapporteur: P. BatarinyebwaDiscussant: G. HydenMembers: ~~Ochleng, N. Mogire, J.S. Galabuzi,

G. Kagaruki, A.L. Mfinanga, M. Mushi,B. Chimanga, G.M. Oteng, H. Ramdin,L. Stettner, J. Kuhn, S.A. Kahewanga

The topic has been popular in Kenya Slnce the enactment of1966 Co-operative Societies Act in Kenya. Examination of theextent to which the Co-operatives were started by Governmentvis-a-vis the laissez faire spontaneously springing of co­operation on voluntary basis was first discussed. This hingedon pre and post independence era.

The meeting agreed to tack le the subject by requesting back­ground information on each country represented at the meeting.

l, Zambia

Prior to independence, the movement was more independent fromgovernment control than now. Government supervised, advisedbut did not actually control. Bias was on the spontaneityconcept provided this did not operate outside the said Act.

After independence, funds and staff were leased to the movementby government and this seemed to call in government control tosafeguard the interests e.g. appoint government officials onboards and committees.

2. Botswana

The co-operatives did not start until 1964. After 1962 co-opera­tive legislation was enacted together with the formation of aco-operative department. The only 8cope for government inter­vention is a request from the Registrar for occasional reports.Overseas grants from organisations like OXFAM and SIDA havehelped to develop Co-operatives. The view of the government lSthat the movement is Il se lf liquidating ll and must manage itsown affairs to justify its existence.

3. Tanzania

The first Co-operative Act was enacted in 1932 without theDepartment of Co-operative Development but under a Mines Depart­ment on the Indian Co-operative Act model. A Registrar andCommissioner was appointed Head of Department. In 1961 RuralDevelopment was entrus to Co-operatives and the Minister wasgiven full . In 1962 co-operatives mushroomed at the

of ability. In 1966 a Presidental Commission reduceds al powers and put them on the Registrar. A new Act

was enacted 1968 Unified Service Commission was propos edto control cond and terms of service of co-operative s

As government took much st, developed among thepeople has now been realised governmentthis st good s commitment to develop

12

4. Maur lUS

Co-operatives started in 1913 on Indian pattern right from thetop. The Department was in full contro1. In 1945 - a new Actafter an inquiry in all co-operatives both primary and secon­dary. The apex was made to be chaired by the Registrar. In1971 an amendment was made to hand over the apex to the peop1e.Apart from routine supervision and inspection, people aresatisfied with the running of their own co-operatives especia11ythe secondary societies.

From 1964 the Department is integrated with the Ministry. Sopowers are at the disposa1 of the Minister who may not waitfor opinion from below.

5. Uganda

Farmers attempted to form groups as far back as 1913. A depart­ment was formed in 1946 to supervise the societies and advisethem. In due course secondary societies to market farmers' co­operatives were formed. The Government guaranteed 10ans frombanks for acquiring processing equipment. The Committees weregiven full powers. This was risky regarding government inter­ests, hence the Registrar took over powers. Government staffwere diverted to the movement in the initial stages.

Post independence rura1 deve10pment was priority and the govern­ment instituted a new scheme in 1961 for agriculturaI credit.Money was invested in this scheme and 7here was need to increasethe grip to safeguard efficiency. Where efficiency continued tolack, the increased powers were invoked to appoint governmentofficers as Supervising Managers. The scope of government con­trol has been enhanced by the need to promote the interests ofthe farmers who constitute the nation. The amount of investmentput in rural development is a vand effective way so farexperienced to develop the people and the nation.

6 .

Co-operative members looked to government for advice, super­vision in order to survive liquidation. After independence,more societies rushed up and quickly conceived the idea ofbuying land. This was without consultation with other memberswho consequently got disheartened. The 1966 Act gave theRegistrar power to direct the affairs of near collapsing co­operatives. These are checks to safeguard the interests offarmers. The government is contributing to efficiency througheducation and training. The impact is now being felt and re­sults are rewarding. The Act was first limited to certainlands and there is relaxation now

The Co-oper'ative Bank has rallied interest in members towardsfinancial assistance. This supervision by the departmentlooked at as a safeguard to efficiency Co-operatives.

(i)

served as background material the Gisthe proceed s the Working Committee.

s were f

supported organisationsthen colonial governments

(ii) t s l ma

13

tained and formed hurriedly co-operatives which in theend were found economically viable.

(iii) Present stage when lagislation appreciated the greattask of co-operatives in development and tiphtenedthe grip like the 1966 Act in Kenya, 1968 Act inTanzania, 1970 Act in Uganda.

Government control of Co-operatives with respect to efficiencyraised observations: There are national objectives on one handand co-operative objectives with respect to the peasants onthe other. These objectives differ to a certain extent. Asvehicles of the national development, co-operators are expectedto increase output. The peasants on the other hand expectmaximum return individually and quotably in general. The posi­tion of the manager becomes intricated with respect to the twopossible areas of allegience. Should he bend towards the pea­sants' objectives, who are the true owners of the co-operativesor should he honour the objectives of the government in thenational interest. This is a point that should lead thefollowing discussion.

The next observation was the impact of ideological effects ofgovernment control as opposed to the technical effects of thesame control. People realise that government instituted the co­operative idea for their general benefit. Provided, these ideaswere realisable, there is no apathy expected in reaction. It isclear to the peasant too that government can better providetechnical advice although this may not be readily realisedowing to a number of factors discussed below.

It was finally observed that the event of a head on clashbetween government interest some independent arbitrator wouldbe necessary. In Kenya, the idea Ombudsman points to suchan arbitrator and in Tan the idea of a Permanent Commission of Inquiry would suit nicely. is important that sucha safeguard be entirely independent. Perhaps in the name ofe iciency in co-operatives, such possibili s should besubjected to intensive research.

These observations gave rise to five questions which wereused as a basis for the discussion recorded below.

l. Is sufficient study and preparation made before strationsare made for co-operators with a view to subsequent ef cientmanagement?

2. To what extent is governmentowners of the co-operat sas a take-over by governmentdetriment of peasants?

control acceptable to theregard the controlco to the

3 How do f sexecute the machinerymanagement co-nno~~

ent

4

5 lStween

to slon

14

pendent governments?

Mauritius has experienced handover of co-operatives to themovement. The Registrar was, prior to 17/11/71, also chairmanof the apex co-operative organisation but as from that date,the powers have been handed over to the movement proper. TheRegistrar of Mauritius Co-operatives was requested to lavishhis experience to the Working Committee.

(l) It was asked if sufficient study and preparation is madebefore registration. In Kenya experience shows some werehurriedly formed, e.g. Farm Purchase. Some political deci­sions affect the set up. Most unviable societies existall over Kenya. Government gets commited to serve thefarmers with a view to freeing them from middlement thathave tended to exclude them from the national participa­tion in development. This causes political enthusiasm.Hurried registration overIooked the prerequisites of co­operative business and ended up in mismanagement as samefarmers came in to reap quick financial privileges.

Delayed stages may discourage formation of co-operativesand give way to companies with limited liabilities. Thereis need to prepare the groups before full registration.The Uganda experience of registrating on probationery basissocieties which have overcome the test of feasibility doub­ly ensures that efforts will be made to work harder toqualify for permanent registration. The period of probatianis 18 months. This is on similar lines with Ujamaa Villagesin Tanzania.

(2) It was posed as to what extent government controI isacceptable to the farmers vis a-vis the idea that co-opera­tives have been taken over by government from their right­ful management. In Kenya, this latter view prevailed butright now, there are mixed elings and even some arequiet, giving the impression that controI is doing a goodjob and is ipso facto acceptable. In Tanzania, members preferred government inspectors to their own inspectors. KNCUinspectors being local people have been in service, knowofficials and can easily be manouvered by the management.In this way, government inspectors are welcome, providedthey serve the purpose better than movement inspectors.

Government controI is mostly resented by beneficiaries ofone kind or the other. But experience tends to show thatthe result of this action leads to e iciency. GovernmentcontroI must, however, come in at the time it is appropri­ate and after enough explanation has been given to the contending parties. In the period of intervention correctivemeasures should be taken order to hand back what hasbeen taken over. Government must be on standby to salvageany s ion that gets out hand given the fact thatthere are so many tors wh are part society thatattribute to fficiency. It is recommended that controI

tern be tuted such that government intervention isJlu.iLLJllul. This will have to demand research.

government provides machinerysupervand control. The questionstaff execute these , adeIt was general

eflexibly.

(3) More of tenc

15

have physical limitation so that the provided machineryturns more literary than practical. Government extensionofficers are too few, financially constrained regardingmeans of transpcrt and sometimes lack methods of approachin public relations. In some cases, government has notprovided enough protection for field staff when the latterare using instruments of efficiency. It is recommended thatapart from technical subjects aspirant extension officersneed to be field oriented through induction courses to pre­pare the staff for public relations in extension work.

(4) To be efficient, there must be sufficient skills at thedisposal of field staff. The question posed was to whatextent this is applicable in the countries represented atthe seminar. There are diverse activities in Co-operativesthat sometimes too much is expected of field staff. Specia­lised sections in departments must be stepped up. Exchangeof personnel between the department and the movement shouldbe encouraged to exchange experiences.

Experience in Tanzania points to successful relations. Ob­servations were also made that too frequent changes ofaccounts have tended to delay acquaintance among thegovernment of ciaIs. Old systems being mixed up with newones leave a lot to be desired. Sufficient time shouldalvJays be allowed for the systems to be tested for effi­ciency. A suggestion was put forward that other relateddepartments could be used for specialised knowledge likepoultry co-operatives and the veter department. Thismay improve same technical e iency.

(5) There was a general feeling that to compare Europeanfield staff to the present indegenous field stafi mightbe a little out of top and of very ttle practicalapplication to present eff iency problems in co-opera­tives, A dose of compromise was reached and a discussionensued. Although opinions tended to differ, a few trendsof thought were noticeable; (a) Ceteris paribus, there isnot much difference in reaction provided proper admini­stration of policy is effectively carried out. Emphasiswas put on different conditions that exist in the circum­stances. (b) Others thought that the socio-cum-politicalframework today tends to show that the pockets of societyregard themselves close associates of power within govern­ment. There is, consequently, a tendency to take fieldstaff advice less seriously. At times, political influenoeinfiltrates into the work of the civil servants as observedin question (3) above. (c) Some observed that more atten­tion is given to expatriates mainly because of the apparentbrainwashing that took place during the colonial era. Ob-servation (a) above carried the greatest ian of thegeneral consensus of opinion.

seemed to have sseds to the movement

go beyond Stage 3 ady mentioned. exposlby the part ant revealed

iII ly 10w and thele ely return areas. This enhancesghtened le to vo

the movement which is notthe ng.

Mauritiushandingtended tot silieeducatedavailableservice to

( 6 )

16

with the gesture of returning to rural areas, severalindividuals are self-educated and have consequently acquiredstandards and skills like the London Chamber of Commerce incertain subjects, Institute of Book-keepers and so on. Sucha picture obviates the readiness with which a Registrar cansurrender his powers to the movement without risking entry ofinefficiency.

17

EXTERNAL AID AND EFFrCIENCY

Report from Group No, 2

Chairman:Rapporteur:Discussant:Members:

J.J. MusundiA. KimarioS, Odeder. Mtingwa, L. Mmayi, A. Mwangamila, K. Oigara,A. Ssingo, H. Stoffregen, J. Wekesa

r. rNTRODUCTION

l. By External Aid is meant aid in the form of capital ortechnical assistance which is given by developed countriesto developing countries for the purpose of improving effi­ciency performance in the co-operatives.

2. The group observed that co-operatives were essentiallyinstitutions which should develop to attain self-reliance.This depended largely on the efforts of the members fortheir existence. However, because of the apparent deffi.-

encies in co-operatives, it was the view of the groupthat External Aid was necessary as a tool to improve andmaximise efficiency in co-operative activities. rt wasemphasised however, that external aids should essentiallyaim at enabling co-operatives to achieve and enhance SELF­RELIANCE. It was also agreed that the aspect of externalaid was therefore secondary. The group further observedthat while external aid was appreciated, it should bebas ed on the concept of MUTUALITY between the donor andthe receipient countries.

II. TYPES OF AIDS

1.

The group noted that since Co-operatives aimed at strength­ening the feeling of self-reliance among its members, itwas of vital importance that the initial capital should besubscribed by the members themselves through their ownefforts. However, in view of the increasing needs of thegrowth and expansion of the co-operative movement, itbecame necessary that external aid should be sought toaugment and supplement local resources.

It was recommended that externa l capita l should be madeavailable in the following ways:

(a) ln form of cash; and/or(b) kind

cash,purpose for

recepientin de ing

is to bected -to thekind, the

choiceor

The group recommends that if theshould be accounted and d

wh it was requested. If iscountries ould be allowed freedomwhere to obt cular ipmentmutual unders the donor c

group recommendsre tofavourable terms

at asaidout

ans

18

It is also reeommended thnt eo-operative movement in thereeepient eountries should be involved in the negotiationmaehinery for external aid.

l Aid3. Te----------------The group views that teehnieal aid is neeessary as a toolto improve efficiency and recommends that this aid shouldbe in the form of technieal and personnel.

The group furtheI' recommends that:

(a) Co-operatives in the recepient countries should begiven the opportunity te recruit externalteehnicians.

(b) The external technieians should be truly experiencedand experts in their relevant fieIds.

(c) The role of the external technieians should be ofexeeution of policies already laid down by the rece­pient organisations.

(d) In order to promote seIf-relianee within the co-opera­tives, the role of the externa l technieians shouldmainly be educatianal, i.e. they should be involved inthe edueation training of Ioeal cadres to take up theirpositions when their eontracts expire.

(e) The terms of service should be such that they serve aminimum of two years and a maximum of at Ieast fouryears.

is furtheI' recommended that Iocal personnel should begranted opportunities for overseas studies in order tobroaden and widen the seope of understanding of theirduties.

III, SOURCES OF EXTERNAL AID

The group examined which were the possible venues for externalaid and eame to a conelusion that aid could be obtained fromthe under mentioned bodies:

(i)

(ii)

(iii)

(iv)

(v)

International Ca-operative Al anee;

United Nations Specialised Agencies (FAO; ILO;UNESCO; etc.) -

Governments

Co-operative Movements;

Any other Institutions.

reeommends that between developed countr s andcountries should be ased, However, the groupthat the trend the future should be for thecountries to increase mutual them-

The groupdeveemphas sesdevelopingselves.

IV. OF AlD

whieh d could beareas:

lIed were d ided

19

l. Management and Administration

2. Planning Research and Statistics

3. Education and Training

l. Management and Administration

The fields of Management and Administration covers manyareas, e.g. Planning, Audit and Accountancy, Finance,Statistics, Administration, etc.

The group observed that aid could be channelled to any ofsuch fields both in the co-operative movement and in theDepartment. However, the group observed that aid in any ofthe referred fields should be taken onlyas a temporary so­lution. A long term solution can only be achieved throughtraining of personnel involved in these fields.

2. Planning Research and Statistics

The group observed the importance of research as an instru­ment for detecting failures and weaknesses in the co-opera­tive movements. It was therefore agreed that research wasnecessary and should be undertaken.

The group recommends that:

(i) Research Units be formed in the Co-operative move~

ments, in the Department of Co-operative Developmentand in co-operative institutions.

(ii) Research priorit s should be worked out by the Co­operatives themselves.

(iii) Research must be problem-oriented and must produceresults which must be implemented in helping to solveproblems.

(iv) Local researchers should as as possib be pewho are already familiar with problems within the co­operative institutions and should therefore be co­operators.

(v) Technical aid should assist in training local resear­chers in the techniques of carrying out research andthereby helping to reduce the dependence on foreignresearchers.

3 •

The group was of the opinion that education and trainingshould be considered as catalyst for development and efficlency this context, it was agreed that should belooked at from a broader view-point, i.e. to cover as manyaspects connected with co education andas possible to lude:

Construction co-operative tra t

~~~'7'sion teaching materia

onnel

l, etc.

that schomade availablecountr s, s

20

should be oriented to meet the local needs. In this con­nection, overseas training should be in specialised fieldssuch as teaching, financial management, leadership, etc.As far as training of educators and trainers in concerned,the group recornrnends that there should be a two way traffic,i.e. overseas teachers should be given opportunities toteach in developing countries and an educator in the deve­loping country shol,ld have possibilities to get trainedoverseas.

MARKETING BOARDS

The group observed that the subject was very broad and compli­cated as it involved certain government policies in thecountries of the region and secondly, because no thorough studyhad been undertaken prior to this seminar.

While appreciating the existence of Marketing Boards in hand­ling agriculturaI produce, it was the view of the group that:

Ca) Areas of operation between Marketing Boards and Co-opera­tives had to be streamlined

(b) Co-operators are very much concerned with the profitmargin returned to the producers

(c) A study should be undertaken in the countries concerned toestablish relations between Co-operatives and MarketingBoards and how the efficiency of the Co-operatives shouldbe improved.

EDUCATIOl',: CO VE EFFICIENCY

21

Report from Group No. 3

Chairman:Rapporteur:Discussant:Members:

A. KyamulesireD.O. ArendeA. HolmbergJ.C. Mukule, L. Cliffe, E.A. Sabuni, E. Chirwa,P. Mauremootoo, R. Edyangu, N.M. Kiara, H. Preuthun

The group resolved to discuss Eurpose content and method ofeducation and training as related to the general members, com­mittee, and staff and agrees that the determination of the--­areas of strategies and priorities are each country's internalplacement. The committee noted that their term of referenceexcludes education of the general public and potential memberswho should, however, receive some defined form of education.

r. MEMBERS EDUCATrON

Purpose

l. To ~ovoke the perception of the value of co-operation. rtwas noted that the relative lack of consciousness of thevalue of co-operation is a handicap in the motivation andmobilization of members.

2. To instill in the minds of the members the identity of theirco-operative and therefore the responsibility towards theco-operative and an ideological commitment to the notionthat the co-operative belongs to them and is not any otherbus s organisation whose purpose does not go beyond payout. To convince the movement of the benefits they arecapable of deriving from their co-operatives both in thelong and short run and that the benefits depend on theactive participation to . fend their interests.

3. To underline the importan,:e of self-help, se -re-,"-'-U-'J,'-'-' andself-confidence: the feeling that the problems must besolved by them: potent ls for new areas of operation tosolve their problems.

c s

l. rdenti cation and solution of co operative problems

2. Marketing System. mechanics fluctuations etc

3. Production - case of agricultural coops, use of moderncu husbandry and use distribution of agricultural

inputs. icultural year comb th co-operative year

4. fields improvement the soc economic environ

s how can be achieved and

the by-

tructure the movement

lce 0- s

Methcds

l. General Meetings

2. Man to man education

3. One day courses

4. Various combination III radio education

5. Study groups

6. Visual Aids

7. Linking of co-operative education with agriculturaleducation and other related fields

II. COMMITTEE EDUCATION

Purpose

l. To teach management to part knowledge

2. To teach liaison (co-operation compromise, board­room procedure)

3. To teach the importance of honestyand integrity whilestressing the importance of being answerable to theirconstituents, knowledge responsibility and good judge­ment

22

s

l. Same contents as for member education

2. Range of existing and potential activities for boththeir own society and the union

3. Guidelines as to the range of decision to be made bythemselves and the members

4. Encourage concentration on the broader areas ofplanning, co-ordinating control and motivation.Uae ccn~rol tools

5. Certain skills pertaining to the operation of thesociety such as accountancy etc

6. Human relations

Methods

l. On the job training

2. One week long courses

3. Study group

4 Co operative Journals and Magaz s

5 ~'o way communication between committee and members

III, EDUCATION

l, To lncrease

2 To improve the necess

3 p them

lls

co~ ve

4. Prepare

Contents

to c:'!2.ble bring about development

23

l. Teach practical technical skills involving technical opera­tions as weIl as office skills

2. Yeaching staff to teach the other two groupscommittees

3. Teaching of Co-operation

4. Problem-oriented courses

5. Human relations

Methods

members and

l. On the job training

2. Institutional training

3. Practical training

4. Follow-up

5. Step by step system where the facts studied at home andin colleges are made problem oriented

Such a system should be limit in the entire career. To implement this it is necessary to }roduce study material and asystern of courses and conferences on local district and natio­nal levels. In the circumstances, the group observed the needfor using practitioners in step by step education but notedthat they (the tioners) must be taught how to teach

IV. RECOMMENDATIONS

l. The group having noted that there is plenty of jargon inthe literature and mat~rial used by the co-operatives re­cornmends that an investi ion be proved into employmentof simple skills or technique in imparting know-ledge regarding the on of the societies and thatsyllabi be reviewed keep in touch with practical reali-ties.

2. The group having noted the serious shortage of teachingmaterial and s recommends that appropriate teachingmaterial and aids be produced at Nationallevels forteaching at week ~ong courses.

3. Having observed that there is no data to confirm theeffectiveness of the methods being used in the educationof members by rad ,newspapers, visual aid severalcountries the recommends that an investigation andevaluation of the systern be done to estab sh the useful-ness e veness of the methods.

4 Hav observed there is no uniform Bcheme of s ceco-operative oyees various s the group

recommends a working party be set to exarnine criticathe estab shment a model scheme of s ce co-operat sonnel to serve as line jObtion, job title, terms and condi ons serv ,careerdevelopment etc. account the preservation ofvoluntary nature and member elected rement.

24

CREDIT AND FINANCE PROBLEMS AND EFFICIENCY

Report from Group No. 4

Chairman:Rapporteur:Discussant:Members:

S. EsiromoB.L. NalubambaA. AhlstedtJ.L. Murungi, A.S. Mwansasu, V.H. Doshi,J.B. Yawe, C. Trapman, G.M. Sila

l. Intensive research by the Department of Ca-operativesmust precede the formation of a Ca-operative businessto allow for possible effective utilisatian of credit.Research findings must determine the viability or non­viability of any Ca-operative project where public invest­ments are to be sunk for efficient operations. Parties con­cerned (may they be Politicians, Co-operators, Social andTraditional dignitaries), should be prepared to sink theirpride by accepting the recommendations by the Co-operativedepartment, which recommendations are to be based on athorough and intensive research. In other words, needs foreconomic viability should supercede needs for prestigeousdisplay.

2. Government should be the financier rather than a partnerin a Ca-operative. The Government should, where possible,encourage a 50-50 partnership between private businessmenand Co-operative societies. The partnership should beframed in a way ch would compel agradual take-overof business co-operative by co-operative society. Tanzania'ssuccess in this exercise is a case study.

3. The group recommends that Co-operatives should uti e credit to expand their act s vertically. The group alsofeels that horizontal expansion of ca-operatives should beencouraged only in fields directly related to the needs ofthe co-operative members.

4. Effective credit should be provided to Co-operatives bythe Co-operative Bank where such institution is in opera­tion. Commercial banks should shoulder such responsibili­ties in countries where co-operative banks have not yetbeen set up. Government financial aid to co-operativesshould be channelled through any of the above institutions,as the case may be. This procedure would possibly kill thethinking of co operative members that government loansare not credits but g or rewards for the part taken inthe struggle for independence. To re the Bank's interestfor a close follow-up of stments financed by them,out limiting lend to full-proof investments only,the risks for llDevelopment Credit" should be shared between

Government and the Bank.

5 groupstraint tothe

of credalone will not

l if credhow to make

ass t s fdo rnore harm

con

estab

25

has used credit more efficiently than the other.

6. Payment of interest on loans to primary societies would doa great deal towards making them realise that a loan is nota gift. This realisation may make for efficient use ofcredit. Payments of levies by both borrowers and non­borrowers is pretty unfair to the non-borrowers who arecompelled to pay for loan services they have not takenadvantage of.

7. The group recommends that allowance is made for a fractionof production loans to be used for consumption purposes.The funds for this purpose should be allocated from theSocieties' own funds.

8. The group recommends that saving facilities be createdamong the lower income group because research has annulledthe assumption that people in lower income group cannotafford to save. In fact they can save; and in some cases,even better than those in high income group.

9. The group resolves that promotion of saving and creditsocieties should occupy a central position in the mobili­sation of local savings. It is felt that when aSavingsand Credit Co-operative creates a pool of savings, itcould be used to supplement small agricultural credit toindividual farmers. And the whole thing could be a healthexercise in the hab thrift.

10. Finally, the group considers expected crop delivery, twoguarantors or co-makers, and the characters of the loan­applicant to be sufficient security for reasonable Co­operative Cred

l. Are multipurpose-multicrop Societies more efficient thansinglepurpose-singlecrop Societies?

2. Substantial investments in co-operative development shallbe based upon a research into the viability of the Projectrather than upon political reasons.

3. Before short term Production Credit is introduced in anarea, research should be carried out to recognise andremedy any other problems that together with lack ofCredit form the constraints to development in the area.

4 Who shall employ the extension s to make them moste ent and who shall meet the costs their employment?

26

SCALE, SIZE, ORGANISATIONAL STRUCTURE AND EFFICIENCY

Report from Group No. 5

Chairman:Rapporteur:Discussant:Members:

R. EdyanguS. KahewangaL. CliffeJ.J. Musundi, S. Esiromo, E. Sabuni, J. Kuhn,J.B. Yawe, I.H. Mtingwa, A.S. Mwansasu,H. Preuthun, S. Odede

INTRODUCTION

The above group was assign to discussing the Scale, Size,OrganisationaI Structure and Efficiency of a co-operativeorganisation.

The discussant introduced the subject with a suggestion as tohow it could be approach ed or dealt with:

(a) whether a co-operative be a large unit or a small unit;and

(b) whether at primary level the operations should be basedon single or multi-purpose. The discussant also pointedout the danger of large size units in the memberslfarmers would feel that they were so remote and lookedat the society as something not of their own.

It was agreed that the subject should be tackled separatelyat primary and secondary leveIs.

PRIMARY CO-OPERATIVE

In the course of discussions the following were observed:

pOliticalproblems,outside

tror

(i)

(a) The social and economic aspects as they affect the sizeand e iciency of a co-operative society.

(b) Small size unit is better suited as a solution to socialproblems.

(c) The economic aspect is more essentiaI and should not beoutweighed by the social influence.

(d) Economics of scale are applicable in certain activitiesto aleveI beyond which the results would be adverse ones,

(e) Tribal problems are constraints in determining an optimumor economic size of a society. These could be overeorne byconstant education and training.

(f) Factors would hinder or growth a co-in relation to

(ii) distances

(iii)

27

Recommendations

The group agreed on the following solutions:

(l) Since it is essential for the farmer/member to partici­pate in the affairs of ones society, and bearing in mindthe mode of living, it is considered necessary that asociety should be small enough for the member/farmer tobe able to participate easily, at the same time the unitshould be economically viable i.e. capable of realisingsurpluses to be able to pay out dividend and create ownreserves.

(2) Social aspects or interests should be resolved but notencouraged or recognized.

(3) Research should be conducted to find ways and means ofresolving tribal, clan or locality differences in orderto form or maintain more viable economic units.

(4) There is need for research to be conducted in the educa­tional structure so that it is geared towards achievingthe members/farmers desired goal i.e. raising theirstandards of living.

(5) Research should be conducted to provide some guidance inthe establishment of viable units and operations of acti­vities such as processing etc.

MULTI-PURPOSE AS SINGLE-PURPOSE UNIT

The developrrlent of a co-operative from single to multipurpose unit could come about in two ways:

(a) Introduction of other activities of different typese.g. supply, ered ,eonsumer etc.

(b) Through or by divers cation of crops.

Howerver the group observed that:

(a) Not all the farmers in a eertain area growoI' producethe same single erop, say eoffee. Therefore a societyestablished to handle such crop would serve only a fewfarmers.

Cb) Due to the limited area at the disposal of the smallfarmers coupled with other factors affecting agrieulture,there would be need for diversifieation.

(c) The level at which prices are fixed - Union, Society orStatutory Board has some influence the operat le eiency of a society.

(d) Where a society undertakes several activit s (mu l

purpose) the number of members should be decreasedorder to better controI the ss and

ase ney.

(e) Due to subsistanceto

ased.

alsos d s mu un s were

28

Disadvantages

(l) Surpluses made in one activity may be absorbed by los sesin another activity, thus creating dissatisfaction amongmembers.

(2) Management problems ~ complexity, multiplicity and lackof required know how.

(3) Book Keeping and accounting problems.

(4) Where members are recruited from both farming and workinggroups, or the crops being handled are incompatiblecomplaints or apathyare bound to occur.

Advantages

(l) Better utilization of manpower and facili es.

(2) Better distribution of activities over the year.

(3) Efficiency in one activity can be increased by inclusionof others; similarly one activity can be a source of un­provement of another.

(4) Better chances for selection of capable people to thecommittee.

Recommendation

In consideration of the foregoing and a number of other pointsnot mentioned in this report, it was agreed that

(a) Mu -purpose co~operatives seem more economical andefficient as opposited to single-purpose ones. Butdecision to establish such society should be taken onmerit if it is to operate e iciently and should not betaken for granted that thus is the only best way. Elsewhere a single-purpose one may serve the members in abetter and efficient way.

(b) The different activ ies undertaken should be those whichwould directly benefit the member farmers.

(c) Where investment of surpluses or reserves on capitalprojects is desirable, priority should be given to thosehaving a direct connection with the members. In suchcases the members decision should be first sought.

COUNTRYWISE PRIMARY SOCIETIES

The group noted that in the Republic of Kenya, societies ofthe type mentioned above were in operation.

lt that such sac ties may enjoy certain economicwith some degree of e ciency. But what about the

ctive partic ian other than de ing themrece ing s ces? some discussion theto answer decided to seek the

ONDARY ORGANISATIONS

8 •

discuss this the llow l s were s s(l) zat

29

(2) How the secondary level organisations effected theprimary level ones - i.e. relations

(3) What are the means of ensuring representation

(4) Connection between secondary level coops and otherinstitutions

(5) To what extent specialization could be exercised atthis level in relation to efficiency.

Observations

(l) Elements that would influence size:

(a) Volume of business

(b) Membership

(c) Number of employees

(d) Number and type of activities

(e) Geographical considerations

(2) Operational advantages of specialization should beexamined.

(3) Where special nature of a product perrnits or the technica­1ities in handling a certain crop so demand, branches canbe established within an organisation.

(4) Where Government spends money on a project, it has theresponsibility to ensure success through proper contro1.

(1) Certain functions require large amount of capital investment and high level skill or technical knowledge. Thereis therefore a need for an org sation at the secondaryleve1 which can afford to shoulder this.

(2) Co-operatives should be left to undertake any activitiesthey wish done provided they have the required abi1ityand can do them we11 and efficient1y.

(3) At the secondary level there shou1d be some kind ofspecialization either within the same organisation orby division where the nature of the activities are morefavourable and provided that by doing so the degree ofefficiency and the degree of efficiency and the economicbenefits will not be adversely affected.

(4) Where it is desirable that a co-operative takes over abusiness from a private sector or state owned firm, itis considered important s is done through astage of partnership This way the co-operative wouldhave the opportunity to experience and financ lgrowth before the bus ss is wholly owned run by it.

(5) order to the recommended or accepted structurethere is need member ion to ive them tos the role the organisation how they are re

ce outs ers who may beonal sts could be avoided.

memberce.

as to

entation of membersproduction pend

e somebody should work outbest done

( 6 )

30

cipant farmers or members.

APEX ORGANISATIONAn apex organisation would serve a good purpose in functionslike education, book-keeping, printing, legal and insuranceetc. AIso act as a spokesman of member organisations in inter­national affairs. These functions cannot be weIl done by thesecondary organisations at district or regional leve. It istherefore necessary to have an apex organisation.

31

SOCIAL STRATIFICATION, DEMOCRATIC CONTROL AND EFFICIENCY

Report from Group No. 6

Chairman:Rapporteur:Discussant:Members:

A. SsingoG.E. KagarukiS. Migot-AdhollaL. Stettner, A.H. Ochieng, A.M.B.L. Nalubamba, J.B.M. Wekesa

Kimario,

INTRODUCTION

In order to facilitate discussion on this issue it wasdecided to divide its examination into two parts

A. The Historical Development Aspects in organising Co­operative Societies

B. Means of Facilitating Egalitarian Distribution

PART ONE

THE HISTORICAL DEVELOPMENT ASPECTS

Tt was observed that one of the major factors which promptedco-operative action amongst the african peasant farmers duringthe colonial era was a struggle against both colonialism andthe domain of Asian traders over the african economy.

was also observed that leadership for the farmers emergedfrom amongst the members of the community who belonged to thehigher social order other than from amongst the ordinary pea­santry, e.g. the village-farmer-trader, the politician, theteacher or the village headman or chief. These were the personswho came out to lead the people from the exploitation of theAsians or the middleman exploiter. Therefore as on one handthe vertical foreign social economic stratification was beingremoved it was on the other hand being replaced by an inde­genous one among the peasantry themselves.

Tt was further observed that another important feature in theearly days was the horizontal stratification in that the co­operatives were being formed among people who had the closestconnections, e.g. the same village, same tribe or languagegroupings as against national and political groupings.

Arising from the above observations the followingwere raised

stions

(l) Did e ction from members of highersocial order the community benefit co-operativemembers name of e ciency?

(a)

(b) S

agreedmembers as under:

more secure.

soc 1

of

32

(c) The leaders themselves were generally honest and werecareful not to engage in embezlements for purposes ofmaintaining the community respect and their personalprestige.

(2) Was the practice of paying the leaders honorarium as partof the distribution of surplus in the interests of themembers or was this a form of exploitation?

It was agreed that the leaders benefitted better from theca-operative societies than the farmers. 8ut it was alsoagreed that there was no evidence to indicate elementsof exploitation in this practice. It was observed thatduring the early days embezzlements and thefts if any wereminimal and therefore the leadership had carried out theirduties efficiently as members reaped better benefits thanbefore co-operatives were formed and over and above soeie­ties were able to generate surpluses. Thus besides lookingafter the business weIl the leaders had also promoted loyal­ty in the societies. For this reason it was fair that themembers voted honorarium to the committee and the employedstaff as a way of offering incentives and for showingappriciation. Secondly it was noted that the honoraria werepaid in accordance to the co-operative law and by-Iaws af~er

essentiaI and statutory provisions had been made from thesurplus.

(3) Was there any need to review the payment of honoraria andbonuses after independence?

It was noted that although the payment of honorar to com­mitteemen and bonuses to staff should be encouraged forpurposes of efficiency, was feared however that therehad been tendencies for the committeemen to regard hono­rarium as a matter of right and not as a privilege so muchthat it became their main pre on as opposed tothe primary duty of ensuring maximum return to themembers. Examples were cited which had in fact promptedpolitical and government intervention culminating in totalbanning of honoraria payment to committees of secondaryorganisations (unions),

It was pointed out therefore that honoraria and bonuseswere to effectively promote efficiency in the performanceof co-operatives such payments should be based on a scien­ti c formula so that they are related to productivity andmaximum return to the members. It was therefore strongfelt this was an important area for further research.

MEANS OF LITATING UR STRIBUTION

33

as the leadership total committment into co-operative ideo­logy. In order therefore to bring about sueh total committ­ment two conditions were seen as necessary

(l) Conducive and clear government policies for co-operativedevelopment i.e. which allow co-operatives to operateeffectively, and whereby they are able to pay to themembers tangible benefits.

(2) Intensive co-operative education before and after theformation of co-operative societies.

PART TWO

DIFFICULTIES OF DEMOCRACY AT DIFFERENT LEVELS

At Primary Society Level

An effective democracy requires that

(l) the members are sufficientlY enlightened

(2) the members are given adequate information and thatthis information is proper ly presented to the membersso that they can understand

Equally the following were factors which could reduce thedegree of democracy:

(l) The level of members enIightenment.

(2) The amount of information and the method with whichit is put across to the members.

(3) The size of the society.

(4) The risks of electing unsuitable Ieaders due to lack ofsufficient personal knowledge by the members of thosecontesting for election as a result of too large an areaof operation of societies.

Therefore in order to strengthen democracy at the base it wasrecommended that an adequate member education programme bepersued; that they be presented adequate information and ina facilitated manner; and if the area of operation a largeone, arrangements be undertaken to organise branch meetingsto enabIe more members to participate. The risks of memberselecting unsuitabIe leaders eould be minimized by limitingthe size of the society in terms of area or could be eliminatedby forming sueh societies where members l and work together!

This systems

controI was ticed through aa proportionate number of dele­

liated were e ted to the general meetingwhich meet ele Union Committee. Thi

found eab and ty wi univer-tice.

However observations were made:

(a) Pr s

members

34

In order to improve this situation it was recommendedthat the agenda of the General Meetings of Unions becirculated to its affiliates for general discussion inadvance.

(b) The Unions' accounts and budgets were of too complex anature to be easily digested. It was thus felt that bothcommittees and delegates to the Unions do not sufficientlyunderstand these so as to effectively discuss them forpurpose of efficient decision. It was therefore recommen­ded that simpler methods of presentation be investigatedand applied.

35

MANAGEMENT PROBLEMS AND EFF1C1ENCY

Report from Group No. 7

Chairman:Rapporteur:Discussant:Members:

M.M. MushiP. MauremootooH. StoffregenA.G. Mwangamila, A. Ahlstedt, J.T. Othieno,A. Oriekot, K.J. Fogelström, A. Holmberg,L. Mfinanga, E. Chirwa, H. Kinyua, G.M. Sila

1t was resolved to split the subject into two components:

A. Management problems concerned with persons

B. Management problems concerned with functions

MANAGEMENT PROBLEMS CONCERNED WITH PERSONS

The subject was further sub-divided into

(a) Committee members; and

(b) Paid employees

e Members

(l) Election of Committee Members:It was felt that the election system should ensure bothcontinuity and a possibility of change. The most favouredformula is that one third of the committee retire everyyear but re-changeable for election. However, some mem­bers of the group were of the opinion that a time limi­tation on tenure of office even if temporary should beimposed so as to make room for new blood.

(2) Basis for election:Presentation to be on the basis of constituencies or overthe whole area of operation of the society.

Primary level: General basis.

Secondary level: Candidates put up by different regionsto be elected by the whole assembly.

(3) Qualification of Comrrlittee Members:Primary and Secondary level:It was not deemed to insist on qua fications, as quali­fications laid down may not be available locally.

However, education must be continously provided to upgradetheir performance by providing further knowledge, givinggreat responsibility and loping judgement. Also important is the development of a spirit of understanding,tolerance to prevent members from adopting untheme posi

(l) C ar j1 sto whom

s is towas necess

36

done by some centralorganisation or national federationor union. It was urged that a condition necessary forefficiency was the provision of continuous education tostaff, particularly in the field of modern managementtechniques. For lower cadres, according to yardstrickspreviously supplied, a centralorganisation.

(2) Standards of qualifications be attached.

(3) Proper recruiting procedures be followed.

Relations between Committee and employees

It was agreed to have clear definitions of the fields orresponsibilities of each group.

The functions of the Committee should be confined to determinethe reached objectives of the Society and later to ascertainwhether such objectives are being carried out.

The Manager should be responsible for execution and shouldbe given free hand to decide on the operational measures toattain such objectives.

MANAGEMENT PROBLEMS CONCERNED WITH FUNCTIONS

The group was of the opinion that such functions shouldconsist of Planning, Executing anc Controlling.

For the Manager to plan e ciently he must leave availableup-to-date and the right kind of information, related to thevaried activities and operators of his society. If needed in­centives could be offered to the staff concerned to provideprompt correct data,

For purposes of controI it was found to be of vital importanceto have similar information available to influence decisionmaking and to adopt correc on measures. Also necessary, asystem of internaI aUditing should be devised and implemented.Savings on adequate manpower for the compilation and processingof these data was considered to be a source of inefficiency.

Finally the group recommends that research be carried out lnthe following fields in order to contribute to greater Clency in the performance of co-operatives:

(l) Indirect democracy

(2) A demarcation line between committee and staff tasks(primary and secondary). Such resources should not onlybe descriptive but should also aim at formulating posi­

recommendations.

icators on the businessManagers and Committees

ciency It was notedaccounting could enable

performance

led if ion of keyside to be made available to bothas guide s to measurements

this res t centralizedmeasure ison

s .

( 3 )

37

PROBLEMS OF LEGISLATION AND CO-OPERATIVE EFFICIENCY

Report from Group No. 8

Chairman:Rapporteur:Discussant:Members:

J.S. GalabuziS. MshiuF. NewrojeeN. Mikiira, G. Oteng, J. Mukule, H. Ramdin,A. Kyamulesire, L. Mmayi, D. Arende, B. Nalubamba

The group having noted the many problems associated withrestrictions imposed on co-operatives, particularly in caseswhere payments by soc~eties must be approved by the Registraror his subordinates regardless of the status, performance orefficiency of the society concerned, RECOMMENDS that

The Commissioner indicates the criteria of efficiencyby which a co-operative could qualify for exemptionfrom the various restrictions at present imposed onco-operatives according to the existing law.

The group feels that more facts in the form of Research arenecessary in order to establish whether conditional (Provi-sional) istrat has achieved its objectives and promoted

ciency in new co-operatives.

The group having noted the various problems posed by restric-tions to members ing to withdraw their shares from a co-operative society, OMMENDS that

The question of Share Trans and Share withdrawalbe investicated so as to determine the extent to whichthe present provisions in the acts may have affectedthe rate of cap al accumulation in co-operatives.

The group having explored the many complications and d satisfactions arising from the present system applied in settle­ment of disputes, and having sought alternatives which havebeen considered to be more convenient for the purpose ofefficiency - both in the movement as well as the Co-operativeDepartment, RECOMMENDS that

(l) Research be carried out to look possiof t a co-op tribunal comprisgovernment members for the purpose settl

(2) A periodvJhich a disthe acts

bere

the time withinRe trar under

38

The group feels that the section in the Co-operative Actsproviding for powers of the Commissioner to surcharge officersof a registered society is not being fully used, and therefore,RECOMMENDS that

More use be made of the surcharge provisions in theact so as to reinforce the human element in co~opera­

tives instead of resorting to the law which has atendency of demoralizing co-operative members and thepublic as a whole.

The group having considered the strain imposed on co-opera­tives by taxation laws, and having noted that such strain ismainly attributed to the inadequate framing and wording ofthe co-operative by-laws, RECOMMENDS that

In draf ting by-laws of co-operatives, considerationshould be given to design by-laws in a manner thatwould make them flexible so as to accommodate thevarious exemptions and benefits in taxations laws.

The group having noted the intricacies caused by obscurityin the definition of officers as appearing in the acts,feels that

The def ion of officers where includes employedstaff may bring complications contributing to lesse ciency in the management of co-operatives.

Therefore the group RECOMMENDS that

The term Officers should only imply the committee oroffice bearers a co-operative as distinguished fromemployed, salaried staff.

APPENDIX

List of Partic~pants

Botswana

Mr. G.M. OtengCo-operative Development CentreGA30RONE

England

Mr. L. CliffeUniversity of SussexInstitute of Development StudiesBRIG:r-ITON

Mrs. L. StettnerInternational Co-operativeAllianceLONDON

Mr. H. KinyuaKenya National Federation ofCo-operativesNAIROBI

Mr. N. M'IkiaraMeru Central Co-operativeUnionMERU

Mr. L. MmayiDepartment for Co-operativeDevelopmentNAIROBI

Mr. N. MogireKisii farmers' Co-operativeUnionKIS1I

Mr. D.O. ArendeDepartment for Co-operatDevelopmentNAIROBI

Mr. H. StoffregenInstitute for Co-operationin Developing CountriesMARBURG/LAHN

Ken~a

t'lr. A. Ahlstedt/Department for Co-on~I"FlT'1

\/ Deve lopmentNAIROBI

Mr. J. MukuleCo-operative College of KenyaNAIROBI

Mr. A.O. Ochiengf or t") -t")rl,Q'r'.:I

lopmentNAIROBI

Mr. P. NowrojeeMessrs. Nowrojee & NowrojeeNAIROBI

Mr. J.J. MusundiKenya National FederationCo-operativesNAIROBI

Mr. J.L. MurungiAccd Development andDepartment for Co-operativeDevelopmentNAIROBI

Co-operationCountries

Germany

Mr. J. KuhnInstitutein DevelopingMARBURG/LAHN

Hr. J.G. AyugiCo-operative ColNAIROBI

DevelopmentNAIROBI

Maurit

Mr. P. MauremootooMauritius Co-operative Union Ltd.PORT LOUIS

Mr. H. RamdinAg. Registrar of Co-operativeSocieties MauritiusPORT LOUIS

Sweden

Dr. M. BonowThe Swedish Co-operative CentreSTOCKHOLM

Mr>. A. HolmbergThe Swedish Ca-operative CentreSTOCKHOLM

1'11". K.E. EricsonThe Scandinavian ofAfrican StudiesUPPSALA

Mr. T. RidaeusThe Scandinavian Institute ofAfrican StudiesUPPSALA

Mr. A. KimarioCo-operative CollegeMOSHI

Mr. A.L. MfinangaCo-operative Union of Tanganyike,Ltd.DAR ES SALAAM

Mr. S. MshiuInternational Co-operativeAllianceMOSHI

Mr. I. MtingwaNyanza Co-operative UnionMWANZA

Mr. 1'1.1'1. MushiKilimanjaro Native Co-operativeUnion Ltd.MOSHI

Mr. A.G. MwangamilaCo-operative DevelopmentDivisionDAR ES SALAAM

Mr. A. MwansasuMbeya Region Co-operative UnionMBEYA

Mr, C.G. WidstrandThe Scandinavian InstAfrican StudiesUPPSALA

of. D.J. Nyanjom

International Co-operativeAllianceMOSHI

Tanzan

Mr. V.H. DoshiCo-operative Development DivisionDAl~ ES SALAAH

. R. ForsbergInternational Co-operative AllianceHOSHI

Mr. S. OdedeDepartment of Po cal ScienceUniversity of Dar es SalaamDAR ES SALAAH

Mr. E. SabuniCo-operative College~10SHI

Hydenity of

DepartmentDAR ES SALAAM

Dar es SalaamPo cal Sc

/

D s

Mr. P. BatarinyebwaUganda Co-operative AlKAMPALA

Mr. RDeDevelopmentKAHPALA

ofDevelopment

ance

Mr. A. KyamulesireUganda Co-operative CollegeBOMBa

Mr. J. OthienoLango Co-operative UnionLIRA

Mr. A. SsingoDepartment for Co-operativeDevelopmentKAMPALA

Mr. J.B. WekesaMasaka Co-operative UnionMASAKA

Mr. J.B. YaweWest Mengo Co-operative UnionKAMPA LA

United s

Mr. S.E. Migot-AdhollaDepartment of AgriculturaIEconomicsMichigan State UniversityEAST LANSING

Zambia

Mr. B. ChimangaDepartment of Co-operativesLUSAKA

Mr. E. ChirwaEastern Province Co-operativeMarketing AssociationCHIPATA

Mr. M. LunguNational Co-operative DevelopmentCommitteeLUSAKA