19 December 2012

Egypt: Farmer Co-Ops - Agents of Change in Egypt

Photo: This is Africa
Egyptian citizens

The agricultural cooperative movement, started in 1908, helps small-scale producers and farmers build bargaining power, and be equal partners within supply chains. They need access to information, skills and resources.

Farmer associations (FAs) are a great solution, but unfortunately, Egyptian laws hinder their progress. A little background: in Egypt, these associations are either cooperatives (co-ops), or NGOs. They are present in Egyptian villages as agents of change. They are instrumental in building confidence and trust and nurturing loyalty. Yet, they are in serious need of support.

The obstacles that hinder FA's effectiveness include structural and historical barriers such as organizational, administrative and legal factors. There are also cultural barriers, such as mistrusting the State, inability to work in a team, individualism, and lack of law enforcement.

However, laws have impeded the movement's ability to have proper impact. The results of these laws are as follows:

1. Most agricultural co-ops have strained budgets.

2. The majority of reasons for constraining the role of co-ops are legislative, such as prohibiting the establishment of, or even participating in, companies; importing and exporting agricultural products; and/or establishing funds to finance procuring production inputs.

3. Finally, most of these co-ops do not apply principles of good governance, which often leads to institutional weaknesses and limitations.

4. Many FAs, meanwhile, have been registered with and supervised by the Ministry of Social Solidarity according to Law 84/2002. They provide social services and agricultural guidance to members, which modernizes agricultural practices and improves income. However, they mostly refrain from any entrepreneurial activities, because of an article in the law that prohibits them despite the fact that the same article allows business practices to pursue financial sustainability. The main problem is not the law alone, but the inability of farmers to deal with government regulations and measures due to lack of understanding them. Plus, they have a historical mistrust of government bureaucracy.

In both co-ops and NGOs, there are some concrete examples where farmers were successful in making business and gathering their resources and powers despite the restrictive limitations of the law. This was mainly achieved through forging a good relationship with the local administration and with the community of farmers at the same time.

The Pro-poor Horticulture Value Chains in Upper Egypt (SALASEL), of which I am a project manager, addresses not one single issue, as is common of the development programs, but a whole spectrum of processes in the horticulture sector since they are closely related and directly affect one another.

SALASEL is an MDG-funded Joint Program designed to improve the efficiency of the horticulture and agribusiness sector in Upper Egypt as a solution to combat poverty. The program, which involves four leading UN organizations: UNDP, UNIDO, UN WOMEN and ILO in a partnership with the Egyptian Ministry of Industry and Trade and the Ministry of Investment, aims at improving the position of the small farmers in export and domestic markets. This should lead to the creation of productive employment in the region.

Another outcome of the program deals with policy and regulatory measures that provide incentives and business support services that will assist small farmers to join hands and establish small to medium entrepreneurial forms. On the policy level, the strategy is mainly focusing on public policy discussions, forging alliances with the private sector and the government to introduce amendments to the current laws. Already, the program has national and international consultants working closely with farmers, government and major stakeholders to initiate dialogue, study the current situation and advise on policy amendments.

Parallel to their efforts, there is another dimension that builds capacity for farmers to deal with laws and regulations, to benefit from potential opportunities and incentives offered by the government, to help them organize as business partners in companies and business development units, as well as restructuring their own farmers' association to be more effective in serving the community. This is done by organizing training workshops that involve training, as well as bridging the gap of mistrust of government bureaucracy and helping farmers forge strategic alliances with the local authorities.

This is very important, since it links directly to the sustainability plan, where farmers' ability to handle government regulations, and both deal and cooperate with local authorities should last long well beyond the life of the program.

Wael Rafea is Joint Programme Manager of Pro-Poor Horticulture Value Chains in Upper Egypt for the United Nations Development Programme (UNDP)

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