Factors of success and challenges in agricultural cooperatives : a case study of two Bolivian cooperatives : a thesis presented in partial fulfilment of the requirements for the degree of Master of Agribusiness at Massey University, Manawatu Campus, New Zealand
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Date
2021
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Massey University
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Abstract
Agricultural cooperatives in Bolivia have played a significant role in reducing the negative effects of subsistence farming among small-scale farmers. However, despite this effect, little has been written about the factors that drive their success and the challenges they face under the changing environment that the country has been facing over the last decade. This study aims to analyse the factors of success and challenges for agricultural cooperatives in the country. For this purpose, two of the most representative agricultural cooperatives in Bolivia were studied and the results were compared and discussed with the existing literature on cooperative success. Seven factors for success were identified as the most relevant for the two cooperatives studied. These factors are training and leadership development, economic incentives for members, strategic management, member services, member control, a strong sense of ownership by members, and a common cultural background. Despite both cooperatives having different approaches to the implementation of these factors of success, common characteristics can also be observed among them. A strong member control structure paired with leadership development initiatives and a strategic ethos help to minimise the agency costs in the cooperatives and increase the efficiency of the management process. However, a bottom-up approach to the implementation of the cooperative structure generated by a common cultural background and a strong sense of ownership considerably increases the willingness of members to cooperate. The adaptation of ethnic-based dynamics across the cooperatives increases the alignment of the members’ and the cooperative’s objectives and drives the efficacy of policies. The main challenges that the two cooperatives face relate to internal and external factors. The possibility of free-rider problems generated by the lack of market mechanisms for membership share prices can affect the implementation of expansion projects in the cooperatives. Additionally, increasing complexities generated by the growth of the cooperatives create the need for better prepared management staff. The external challenges created by the changes in legislation, political instability, and a lack of support from institutions also affect the development of cooperatives in the country. The analysis of these factors and challenges will provide useful insights into the drivers for agricultural cooperatives in Bolivia.