Politics of rural development:The performance of Cotton co-operatives in Busia district, Kenya

Abstract

This study is essentially concerned with the contribution of a g ri.c u L t.u ra I c o+o pe r a t i ves to rural development in Kenya. It specifically singles out Cotton Co-operatives as one type of the various agricultural co-operatives set up in Kenya for developing the rural areas and evaluates the contribution to the realization of rural development goals in Busia district. The study hinges on two mflin objectives. First, to assess the performance of cotton co-operati v e s arid the implication of such performance for rural e- development. Second, to evaluate the policy outcomes of the c ur r e nL .i mpLe me n t.a t.Lo n of t.h e n ew 1988 Cotton Act provisions for the.performance of cotton co-operatives. Bo th secondary and primary data was used in this study. Secondary dAta consisted of co-operatives' documents lik~ Accounts Audit Reports, Balance Sheets ,"'scr.ies and membership records, loans ", ... .. and District Co-operati~Annual Reports. Primary records, etc. data was obtained through fieldwork conducted in Busia district b e t.w e e n January and April, 1992. A formal questionnaire was administered to a total of 92 respondents composed of ordinary members 0 f cotton co-operative societies, management commi ttee ,. members and s t.a f' f . The interviewer administered questionnaire had two sections; one for the co-operators and the other for co- operative management committee members and staff. It consisted of both closed-and open-ended questions. Besides this, informal discussions'were held with some respondents after administering the

v questfonnaire. To obtain the sample, co-operatives were sampled first. Two ; co-opprative unions were initially selected by purposive sampling method wh i 1e co- ope rat i v e soc i et ies were sampled by systematic sump] .i.ng technique. All the 18 (eighteen) cotton co-operative societies in Busia Jistrict were listed against the unions to which they are affiliated. In order to get a sa~ple of four co-operative societies, every fourth co-operative from the top of the list was s y s t.ema t.Lc a I Lv selected. Consequently, two co-operative unions and four co-operative societies were sampled for this study. 20 ( t.we n t.y ) co-operators were then randomly selected from each society, thus giving a sample of 80 (eighty) co-op-erators. The re mai ni ng 12 (t\l7el ve) rnanagernen t c o mm i t tee members and staff were .. selected by purposi v e sampling, whereby one member of the r1anagement Commi t tee (ei ther Chairman, Vice-Chairman, Hon-Secretary or Treasurer) and one member of... s~aff (e i ther Manager/Secretary¬'" t-janager, Accoun t a n t. or Book-keeper) •~~n each of the six co- opera ti v e s w e r e interviewed. Find in g a 0 f the study show t.hat t.h e performance of cotton co- operat.ives J n Bu si a district has been relatively poor over the years. This poor performance has been a result of some organizational and management problems. First, the legal arrangement which has tied the operation of cotton co-o~eratives to the provisions of the Cotton Act has been ; largely r'esponsibJe for the prevalent financial problems in these co-operatives. The 1967 Cotton Lint and Seed Marketing Act gave

v~ the'former Cotton Lint and Seed Marketing Board a dominant position in the cotton industry. The Board was declared the sole owner and the only legitimate buyer of cotton in the country. Consequently, cotton co-operatives only acted as agents of the Board in buying and'ginning of cotton. The Board paid them a meager commission as a compensation for their services. This rendered the participation i. of .c o t.t.o n co-operatives in the buying and marketing of cotton ineffective and thus reduced their ~ncome. I Second] y ,the co-operative leadership and management mode wbibh requires that leaders be elected by co-operators has contributed to the persistence of management weaknesses in these ins tit u t jon s . T 11 e 1 9 6 6 Co - ope l' at i v e Soc i e tie sAc t an d the 1 9 6 9 Co - operative Societies Rules which guide the leadership and management of co-operatives in Kenya do not provide the minimum qualifications of bwse to be e I ected into the leadership and management of co- 1 operntives. Consequently, lea~r.w;; are elected, not on the basis of "" -- educational standards or managerial e~ience, but on other bases lik~ po1jtical alliances and popularity at the local level. This has often led to the election of individuals with low educational i i standards and/or lack managerial experience into co-operative Le ad e rs h.i p and managerial positions. Upon the ir election, such Le a.d e rs l'lave frequently sought to. entirely control the management of these institutions, including the day-to-day management, to the ! d isiL'lu e Lo mne n t, of the competent staff. This has, in turn, occasioned the departure of qualified staff from the co-operatives, I lea~ing t.h e s e Ln s t i, tutions wi th low-calibre leaders and staff. I

i I This has v iI r e s u 1 t.e d 1.D leadership and management weaknesses, especially in cotlon co-operatives. The apparent r-e a Li z a t.Lo n by the Government that the 1967 Cott.on L1 nt and ::;('C'u ~larketing Act had adversely affected the development uf' the entire cotton industry resulted in the s u b s e q u e n t, decision to amend it in 1988. The major contents of the 1 n e wi 1988 Cotton Act are seed cot.ton buying, ginning and lint I mar~eting liberalization measures which have seen the monolithic I ! p owe r-s of the Cotton Board drastically reduced. The Board has been ! barred from b u y i tl.~ and ginning seed cotton. It has now remained a I regu1atory body in the co I~ ton industry, handling such responsibilities as the licensing of cotton buyers and ginners, fixing cotton prices in consultation with the Ministry of i Ag r.i c u Lt.u r e , regulating the quality of cotton, etc. A major con1:'equence of these measures which is of relevance to this study is that cotton co+ope r-a tivess •• have been empowered to fully I "- par~, i c i pat8;in the buying, ginn In g and~rketing of cotton on their i Oi .• HI!. ! This study has produced evidence showing that the current irnpaementation of the provisions of the 1988 Cotton Act is steadily I I improving the performance of cotton co-operatives in Busia I i distl'jct. Fj nding s of this study have also s h own that although cotton I co-mperatives have enabled peasant farmers to participate in the Pl'oductjon o f a cash crop, namely cotton, by providing planting I seeds and marketing the crop, there is evidence to the fact that theiy have been of little significance in increasing farmers' I

prqduc t.Lv i.t.y of the crop. This was found to be ma i nLy d u e to their 1 inridequate provision of farm inputs to the farmers, particuJ.arJ.y fe r t i 1 .i zers , pest i c ide sand e x t.e n s ion services diJmal management of credit facilities resulting I raJ,es. 1 i of I credit facilities in these co-operatives. 1 as well as the in high default The problem of default has, in turn, resulted in the lack A significant 1 con\sequence, particularly for peasant farmers, is that income from 1 co~ton has relnained too low to meet the co-operators' basic human I n e eri s . 111 These findings lead to the conclusion that the extent of the I Clvdl'al.l contribution of cotton co-operatives to the realization of i rur~l development goals in Busja district, and indeed in Kenya as i a ~hoJe, has been hampered by their relatively poor performance.