Did the conversion from cooperatives to companies really benefit the farmer?
Loading...
Issue Date
2009
Editor
Authors
van der Walt, L.
Lotz, O.
License
Subject
Abstract
Since the mid 1990s many agricultural cooperatives have been converted into companies. After a decade the question could be asked whether these conversions have really benefited the farmer. When the initiative started directors and management convinced farmers that it was the right direction to go and many reasons were stated to motivate this change. The reasons vary from political to business aspects. Fears that the accumulated member funds could be estranged with the new political dispensation after the 1994 elections gave momentum to the conversion process. More important, business motives were put forward to convince farmers that the cooperative as a business model was dated and that the company was the instrument to support them with their farming activities. The reasons for the conversion include free trading of shares, access to capital, utilization of accumulated member funds and favourable return on investments.