Abstract
It is widely recognised that small disaggregated producers need to come together and work as a collective enterprise. The performance of these organisations has been mired in a variety of constraints. This chapter argues that these collective enterprises work within some (i) Economic Conditions defining the business model; (ii) Organisational Design Conditions for efficient functioning and balancing governance; (iii) Socio-Economic Conditions and (iv) Institutional Conditions. An appropriate balance of all these conditions is necessary for these collective enterprises to function.
Emphasising the need for local entrepreneurs to take charge of these organisations, this chapter argues that leading a producer collective requires the ability to strike commercial deals rapidly and lead diverse producer groups. The chapter argues that this requires entrepreneurial ability in addition to leadership. Often in the process of ‘promoting’ FPOs, the ability of the local leader-entrepreneur is not allowed to flourish.
Sankar Datta, Retired Professor and Head, Livelihood Initiatives, Azim Premji University, Bengaluru, Karnataka, India; Email: dattasankar@rediffmail.com
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Notes
- 1.
Datta (1994a) argued that there were several additional transaction costs of taking a collective action. Co-operative societies performed better where the co-operatives were led by farmers who had high social acceptability (in present-day terminology, maybe close to ‘social capital’, though the author does not use the term) and such additional costs could be absorbed.
- 2.
Evolution of Co-operatives in India, Government of India; at: http://pib.nic.in/feature/fe0299/f1202992.html.
- 3.
See Mishra (2010); at: http://www.ncui.coop/pdf/indian-cooperative-movement-a-profile-2012.pdf for data on co-operatives in India.
- 4.
See Kenneth J. Arrow’s ‘Impossibility Theory’ (1985) and Amartya Sen’s ‘Theory of Social Choice’ (1986).
- 5.
International Cooperative Alliance: “Statement of the co-operative identity”; at: http://www.wisc.edu/uwcc/icic/issues/prin/21-cent/identity.html (1995).
- 6.
See also the presentation by Chris Cooper, The UK Co-operative College: “Co-operative Values as a Driver for Business”.
- 7.
Market failure leading to emergence of the need for co-operatives has been discussed extensively by Datta (1992); Pestoff (1992); Gunn (2004); Zuidervaart (n.d.). The economic rationale of emergence and therefore the characteristics of such third-sector organisations, especially the non-measurability of their outputs, and smallness of some of their outputs, requiring a different system of management has been presented in Hansmann (1987) and Datta (1994b).
- 8.
Here I refer to ‘Multi-State Co-operative’ or ‘Mutually Aided Co-operative’ as new generation co-operatives.
- 9.
“Training for Community Mobilization”, by Pan African Christian AIDS Network; at: http://teampata.org/wp-content/uploads/2017/06/Training-for-Community-Mobilisation-for-ART-in-resource-limited-settings.pdf.
- 10.
Many of these issues arising from various theories that explain problems of collective action have been summed up by Gillinson (2004).
- 11.
There are several different ways in which performance of a co-operative has been assessed. Some looked at their economic performance only, while some others at their socio-political purpose as well. These have been reviewed in Datta (1994a). But for the purpose of this research, I will stick to a simple definition of performance: any co-operative which has been able to generate profit ten years after its inception is considered to be a performing co-operative. If it could not deliver on either the economic or socio-political purpose of the organisation, it would have been closed either by the members or by the bad business itself.
- 12.
- 13.
As defined in the online business dictionary, an entrepreneur is someone who exercises initiatives by organising a venture to take advantage of an opportunity and, as the decision-maker, decides what, how and how much of a good or service will be produced, supplies risk capital as the risk-taker, and monitors and controls the activities on the enterprise. http://www.businessdictionary.com/definition/entrepreneur.html.
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Datta, S. (2019). Producer Collectives: What Are We Missing Out?. In: Nayak, A. (eds) Transition Strategies for Sustainable Community Systems. The Anthropocene: Politik—Economics—Society—Science, vol 26. Springer, Cham. https://doi.org/10.1007/978-3-030-00356-2_22
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