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
The majority (85%) of cooperatives who kept financial records did this through bookkeeping. Only
one cooperative surveyed used a computer spread sheet to track their spending and earnings. If
more cooperatives had made use of spread sheets it would have been a positive indicator that
cooperatives are able to use computer skills to assist their budgeting and to track their spending.
Another more sophisticated method was the appointment of an auditor to assist with the existing
bookkeeping. The appointment of a financial advisor is, however, a costly exercise and is not viable
for many small cooperatives. Other methods used included the use of receipts or the use of books
alongside receipts.
Due to the lack of accurate and up to date record keeping it is difficult to gain information from
cooperatives about the business turnover, income, expenses and profit overall. Due to this
constraint, cooperatives were instead asked how profits are dealt with in the business.
The figure below (Figure 4-10) illustrates how cooperatives deal with profits. Approximately 41% of
respondents stated that profits are distributed amongst the members of the cooperative, with 28%
reinvesting their profits back into the business. Some 14% of cooperatives indicated that they were
not making any profits.
The way in which cooperatives deal with profits indicates a great deal about where they are placing
priority within the business. The high number of cooperatives who distribute profits amongst
members indicates a lack of long-term planning within the business. It is likely that certain
cooperative members are facing harsh financial times and thus need the profit in order to support
themselves and their families. However, if money is not reinvested into the business, there is little
scope for growth. Positively, 45% of respondents either reinvest the profits or put the money into
the bank. This means that almost half of the cooperatives surveyed are creating an investment in the
long- term success of their business.
Figure 4-10: Application of Profits in Cooperatives
14%
17%
41%
Distribute
Re-invest
Save/ Bank
No profit
28%
50 | 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
Source: Urban-Econ Survey, 2013