Assessment of Cooperatives in the Poultry Industry - 2013.pdf - Seda

Research Report: Addressing the Needs, Opportunities and Challenges of Cooperatives
and Collectively Owned Enterprises in the Poultry and Related Industries
representative highlighted that egg production is an easier market for entry by new farmers.
In order to further understand why a particular business type is chosen, the reason for starting a
cooperative is indicative. Many cooperatives interviewed reported that they formed their
cooperative in order to create jobs to address unemployment. Half of the cooperatives interviewed
stated this as one of the reasons for starting up their cooperative, amongst other reasons.
Cooperatives were asked why they had formed their business; out of all the responses, 41% started
their business in order to create employment with 47% indicating that they had identified a gap in
the market. Thus, more cooperatives have been
established due to a gap in the market. However, it
should be noted that of the non-operational
cooperatives, 100% were established due to a desire to
create employment. This may demonstrate that
cooperatives who start simply to create employment
50% of cooperatives interviewed
reported that they formed a
cooperative in order to create jobs
as a result of unemployment
do not always assess the potential need for their business in the market. Additionally, if a
cooperative is formed without market identification, the business may mirror what others are
already doing in a market that is saturated. A SEDA representative confirmed that this ‘tomato
syndrome’ has been seen amongst small businesses.
Other reasons cited by cooperatives for forming their business included government encouragement
or enthusiasm as a result of mentorship by a family member or friend with experience in the
industry.
Support for cooperatives is prominent during the start-up phase of the business. A SEDA
representative confirmed that many cooperatives request support where they see an opportunity
and would appreciate assistance in establishing the business. Based on this, the challenges faced by
cooperatives in this initial phase are key in understanding where support is most instrumental, as
perceived by cooperatives. The forms of support that cooperatives believe they require further
along in the business life cycle are discussed in Section 4.1.2.5 of this report under the heading
Support and Challenges.
Table 4-1 below indicates the challenges cooperatives reported facing at the start-up of their
business. Participants indicated all of the challenges faced at the start of their business and
therefore the percentages below represent the number of responses for each category as a
proportion of the total number of responses received.
The Table (4-1) below illustrates that a lack of basic start up equipment was the greatest problem
cooperatives experienced during the start of their business. This is closely related to a lack of
finances, which was the second largest concern reported by cooperatives.
41 | P a g e U r b a n - E c o n : D e v e l o p m e n t E c o n o m i s t s