Cooperative Farming
Senior 3 · Agriculture
Cooperative Farming
Lesson 2 of 3
22 min
Let's begin
A coffee farmer in Huye, a dairy farmer in Nyagatare and a fisher on Lake Kivu may all belong to cooperatives, but not the same kind. Rwanda's Law N° 057 of 2024 governing cooperatives lists the types of cooperative a group may form, how cooperatives join together into bigger bodies, and the seven principles every cooperative must follow. These rules protect members and keep the word "cooperative" for organisations that really are owned and run by their members: under the law, only a cooperative with legal personality may use the name.
Definition
Union: a secondary cooperative made up of at least two primary cooperatives working in the same area of business.
Federation: a tertiary cooperative made up of at least two unions.
Confederation: an umbrella cooperative made up of federations, which represents the cooperative movement nationally and internationally.
Legal personality: recognition by law as an organisation that can own property, sign contracts and sue or be sued in its own name, granted after registration with the national agency in charge of cooperatives.
Cooperative principles: the rules by which cooperatives put their values into practice.
Article 4 of the law lists these types (a Ministerial Order may add others):
| Type | Example of what members do together |
|---|---|
| Agriculture cooperative | grow and market maize, rice, coffee, tea or vegetables |
| Livestock cooperative | keep dairy cows, poultry, pigs or bees; run a milk collection centre |
| Fishing cooperative | fish in a lake or run fish ponds |
| Production and agro-processing cooperative | mill rice, make cassava flour, process honey or fruit juice |
| Financial service cooperative | save and lend money to members, such as a savings and credit cooperative (SACCO) |
| Traders' cooperative | buy and sell goods together |
| Consumers' cooperative | buy goods in bulk to sell cheaply to members |
| People and goods transportation cooperative | moto, bus or lorry transport |
| Handicraft cooperative | make baskets, pottery and other crafts |
| Mining, quarrying, mines and gas extraction cooperative | extract minerals or stone |
| Construction cooperative | build houses and other structures |
| Service cooperative | provide a service, such as cleaning or repairs |
| Multipurpose cooperative | carry out several of these activities, for example growing crops, keeping livestock and running a shop |
The law also groups cooperatives into categories according to their capacities, share capital and numbers of members and employees.
Figure 22. The levels of the cooperative movement (Law N° 057 of 2024, Articles 2 and 9).
Joining a primary cooperative. Under Article 11, a person who wishes to join must, among other things, be at least 16 years old, apply in writing, not run a business that competes with the cooperative's, pay their share as the bylaws require, and be committed to working with the cooperative.
Article 3 of the law sets out the principles governing a cooperative. They match the seven principles of the International Cooperative Alliance.
| Principle (Law N° 057 of 2024, Article 3) | Meaning | In a farmers' cooperative |
|---|---|---|
| (a) Voluntary and open membership | anyone who meets the conditions may join or leave freely, without discrimination | any rice grower in the marshland may apply, whatever their sex, religion or background |
| (b) Democratic control | each member has one vote, and all votes are equal | members elect the board at the General Assembly, one member, one vote |
| (c) Member's economic participation | members contribute capital fairly and share surplus in proportion to their use of the cooperative | a member who delivered more milk receives a larger share of the surplus |
| (d) Autonomy and independence | the cooperative is controlled by its members, not by government, donors or buyers | a loan from a bank does not give the bank control of decisions |
| (e) Education, training and information of members | members, leaders and staff are trained, and the public is informed | training in record keeping, post-harvest handling and the bylaws |
| (f) Promotion of cooperation among cooperatives | cooperatives work together locally, nationally and internationally | several rice cooperatives form a union to run a mill |
| (g) Commitment to the development of the community | the cooperative works for the good of the community where it operates | it helps repair a feeder road or supports a school garden |
Under Article 24 a cooperative has four governance organs: the General Assembly, its supreme organ, made up of all members (in a primary cooperative of more than 100 members, of elected representatives); the Board of Directors, which runs its affairs; the Supervisory Committee, which checks the board and the accounts; and specialised committees.
Worked example 1: sharing the surplus fairly
Problem. A rice cooperative's members delivered 24,000 kg of paddy in a season. The General Assembly decides to share a surplus of 1,200,000 Frw in proportion to the paddy each member delivered (illustrative figures). Uwase delivered 600 kg. What is her share?
Solution.
Answer: 30,000 Frw. This is the principle of member's economic participation: surplus follows use of the cooperative, not the number of votes.
Worked example 2: the smallest federation
Problem. Using the minimum numbers in the law, what is the smallest number of people who could belong, through their primary cooperatives, to a federation of ordinary cooperatives?
Solution.
Answer: 40 people. In practice, federations bring together thousands of members.
Warning
Common mistakes. (1) Writing "one share, one vote": in a cooperative it is one member, one vote. (2) Confusing autonomy with refusing all help: a cooperative may accept loans, grants and training, as long as its members keep control. (3) Calling any group a cooperative: only a registered cooperative with legal personality may use the name.
Tip
Memory hook for the seven principles: "Open door, one vote, fair share, free hand, learn more, work together, care for all."
Irish Co-operative Learning Academy: "The 7 Principles of Co-operation". Match each principle described with one of the seven in the table above.
Practice
Key points
Sources and credits
Written by Ganzaa: the text, the tables, Figure 22 and the worked examples. Figures in Worked example 1 are illustrative.
