Assessing the role of agricultural co-operatives in contributing to Local Economic Development (LED): a case of waterloo township.

Abstract

The co-operative movement is one of the strategies adopted by the South African democratic government to address the triple challenge of poverty, inequality, and unemployment. To that extent, co-operatives have been widely recognised as catalysts for economic development and have been prominently featured in national, provincial, and local development strategies for inclusive growth. While there are many forms of co-operatives in South Africa, the majority focus on agriculture. Agricultural co-operatives have been widely promoted as a vehicle for smallholder farmers to directly participate in the mainstream economy of South Africa. Despite the optimism on the potential of co-operatives, research studies which documents their successes in South Africa suggest that their performance yields 'mixed results,' with insufficient statistical proof of their ability to generate substantial revenue or jobs. These co-operatives have been supported and established as part of the national, regional, and local economic development strategy. Despite this effort, evidence from previous research has suggested that the performance of co-operatives is below what is expected considering that they receive assistance from the government. This study uses a qualitative approach to interrogate the extent to which agricultural co-operatives contribute to Local Economic Development (LED) using Waterloo township as a case study. A total of 15 members from five different agricultural co-operatives based in Waterloo township were interviewed. Using purposive sampling, this study draws on findings collected from participants who are agricultural co-operatives members located in Waterloo township. The study findings emphasised lack of access to the market, insufficient resources, including other underlying internal and external factors as the main factors influencing the limited contribution of Waterloo agricultural co-operatives. In contrast, some other co-operatives were found to empower, utilise resources, sustain livelihoods and create job opportunities. Moreover, this study found that some agricultural co-operatives in Waterloo may support the livelihoods of its members; however, there is still a significant limitation in these cooperatives' contribution to local economic development initiatives. Subsequently, this suggests that the Waterloo township economy is less affected by these. This study has noted that although there are many existing active co-operatives in the eThekwini Metropolitan Municipality area, their impact and contribution to LED initiatives remain largely unreported publicly. Therefore, very little is understood about co-operatives in townships and theirability to help smallholder farmers leverage existing resources and maintain livelihoods in a township setting. However, the study showed that despite many internal and external challenges encountered by agricultural co-operatives in South African townships, they still demonstrate a strong potential to significantly impact the local economy and assist local people in sustaining their livelihoods. Furthermore, this study argues that there is too much government interference in the cooperative development programme, which causes confusion among ordinary people. Thus, the study recommends that the development of co-operatives should be autonomous, and to enhance the economic contribution of smallholder farmers, there is a need to intensify educational support and lessen government involvement in initiating co-operatives projects.