Academic literature on the topic 'Tobacco industry Cooperative marketing of farm produce'

The aim of this qualitative study is to explore the perspectives of current members of the cooperative regarding the role of social capital in the success of the Heiveld Cooperative on the Suid Bokkeveld in the Northern Cape, South Africa (SA). This cooperative has been cited by several researchers as being successful for various reasons, including the existence of a marketable resource, a steady increase in production, and certification through Fairtrade, resulting in an export market. Social capital, as a contributing factor to the success of the cooperative, has not however previously been investigated in depth. In light of the unique success of this cooperative, it is important to obtain an in-depth understanding of the role of social capital, if any, in its success, particularly in the formation and day-to-day operation of the cooperative. With a particular focus on the members’ perspectives of the cooperative, this qualitative research adopted a case study approach to explore and to gain multiple and subjective understanding of the role played by social capital in the success of the Heiveld Cooperative. This may assist the organisation under study, as well as similar initiatives, in strategically harnessing the benefits of social capital as a resource in future. This report has three interrelated sections. The first part is an academic paper, which includes a condensed literature review, research methods, results and discussions. The second part is an expanded literature review, while the third section details the research methods. It is vital to note that these sections are separate, but interrelated. Convenience sampling was used to identify current members of the cooperative who participated in this exploratory qualitative study. Four heterogeneous focus group discussions, with a total of 44 members of the Heiveld Cooperative in the Suid Bokkeveld, were conducted. The focus groups were heterogeneous, as they included ordinary members, founding members and committee members. A guideline with questions based on the theory of social capital was developed, and used to initiate or stimulate discussion among the members of the cooperative in order to address the key research question, namely: What was the role of social capital, if any, in the success of the Heiveld Cooperative in the Northern Cape as perceived by current cooperative members? The primary source of data was collected through focus group discussions, while secondary data was obtained from documents in a form of internal reports and papers written for the Heiveld Cooperative. Data was analysed using open coding and constant comparison techniques in order to induce emerging themes from the data. Findings of this study revealed that social capital played a major and influential role during the inception and also in the successful operation of the Heiveld Cooperative, by bonding and bridging not just between individual members, but also between communities, trading partners and other collaborators. Another key finding of this study is that social capital was also critical in enhancing supportive knowledge sharing, and the promotion of pride and shared identity, which the study identifies as aspects of cognitive social capital. Interestingly, the cognitive dimension of social capital in the Heiveld Cooperative has contributed to the weakening of social capital, as evident in claims related to lack of transparency and procedural injustice. Last, but not least, leveraging the sense of community has also been useful in promoting collective efficacy, strengthening familial togetherness, and enhanced democratisation of decision-making. Diminished trust, based on perceived oligarchy and nepotism is gradually weakening relational social capital. Findings in this study are illuminated using the social capital theory described by Nahapiet and Ghoshal (1998) to depict the social, cognitive and relational aspect of social capital that are at work at Heiveld Cooperative. Additionally, the social network theory by Hoppe and Reinelt (2010) is used to highlight the systemic view of social capital, which embraces the structural, relational and cognitive nature not only internal to but also between networks of the cooperative. Recommendations are provided to ensure social capital is harnessed, rather than undermined. These include the need to promote the processes of learning, monitoring and discussion that have been implemented; harnessing the benefits of bonding and bridging social capital; leveraging the sense of community and applying a more systemic view of social capital; and addressing perverse aspects of social capital such as nepotism and oligarchy that have been identified.

Marketing cooperatives play an important role in agricultural activities. Institutional support for cooperatives is based on the idea that, collectively, farmers can achieve benefits than, individually would be difficult to obtain. Head lettuce in the Lower Mainland region of British Columbia is marketed and distributed by a central selling agency which is organized as a producer cooperative. Members of the cooperative are subject to regulations, in the form of market quota allocations which control the quantity of head lettuce they can sell through their cooperative. This study describes and analyses the market structure of the head lettuce industry in British Columbia to ascertain and quantify the source of benefits to producers from cooperative marketing within a regulated marketing environment. A model of the industry is constructed to characterize the market for head lettuce in B.C. The parameters which affect consumer demand and farm supply are estimated with econometric equations. A feature of supply is that current production decisions are influenced by the producer's market quota allocation which, in turn, is determined by the producer’s past sales. The market quotas are believed to have constrained supply response and this is borne out by the empirical results which indicates a highly inelastic supply curve. The demand for head lettuce is also estimated to be inelastic. This result is not surprising since head lettuce is regarded as a basic commodity by consumers. The estimated supply and demand elasticities are used to derive linear supply and demand curves at the cooperative and wholesale levels. These are used with the observed 1990 price and quantity levels to calibrate a model of the B.C. head lettuce industry. A counterfactual model is then formulated to simulate a market with no controls on output. Given an inelastic wholesale demand, the simulation results indicate that for very small increases in cooperative output, large decreases in price occur. Consequently total revenues decline at every alternative assumption of supply increase. This result supports the hypothesis that output restrictions by the cooperative have the potential to increase members' output prices. It is concluded that while the market quotas have in the past provided positive benefits to cooperative members, the quotas may now be hindering the process of adjustment to the loss of tariff protection and changing market conditions by making producers less price responsive.

In recent years the three Prairie Pools have actively expanded their primary operations to include a number of investments both within and outside of the agricultural sector. The Pools' investment strategies are economically interesting because they are being pursued within the context of a co-operative organizational structure which requires that the users of the cooperative business also own, control, and benefit from its operations. This thesis examines the possible economic incentives agricultural co-operatives may have to invest in vertically integrated and diversified activities using the case of the Western Canadian co-operative elevator companies as an example. The analysis undertaken in this thesis is structured in two ways. First, the economic literature regarding co-operative formation and conventional firm expansion is surveyed. This analysis suggests that an important difference between vertically integrated investments and diversified investments is that they are motivated by the realization of distincly different sets of economic benefits for the co-operative firm and its members. It is argued that co-operative vertical integration can convey benefits to members indirectly through the market, in the form of increased producer margins and improved market access. However, these benefits may not impact the "bottom line" of the co-operative firm. Diversification can, on the other hand, provide a co-operative with direct monetary benefits in the form of improved financial performance and increased profits, which can translate into increased patronage refunds available to members. The second component of this analysis involves the development of a simulation model to examine the implications of an additional hypothesis proposed to explain co-operative expansion. The proposed hypothesis is based on the notion that perhaps the indirect market benefits from cooperation and co-operative expansion are being undervalued. This undervaluation can result in a preoccupation with the monetary benefits from co-operative business, and may therefore cause a bias towards diversified investments. The model developed in this thesis illustrates that, although such a bias may improve a co-operative's rate of return, it may also result in significant opportunity costs for agricultural producers due to a decrease in a co-operative's pro-competitive effect on primary markets.