Thank you for your second set of comments. What you describe are massive cumbersome administrative procedures, not only to facilitate the initial project establishment but also to sustain it as a viable competitive business model, that will continue to serve the smallholder community well past any external financial support and advisory facilitation. Administrative producers create overhead costs that a usually greatly underestimated and rarely included in evaluations. For the cooperative business model to be sustainable these costs will eventually, after the initial donor assistance ends, have to be paid for by the farmers and come from the bulking differential you mentioned as the financial benefit of the cooperative model. Can that be done? I seriously doubt it and would expect the overhead cost will exceed the financial benefits you mentioned. When this happens relying on your cooperative model will only force the farmers deeper into poverty. Thus, my question to you is to take 30 minutes to an hour and do the detailed financial analysis to clearly demonstrate that the cooperative business model you advocate and can provide sustainable financial benefits to the smallholder farmers once the donor facilitation support ends.
I think this will be very difficult to obtain as the overall suppressed economy puts tremendous downward pressure on consumer prices to only 1/3rd to 1/5th that of the USA and seriously limiting the profit margins of most competing private service providers. Thus, your bulking advantage will be too small to cover the overhead costs associated with the more cumbersome administrative procedures required for running a cooperative. Disturbing to me is the continued promotion the financial benefits without ever mentioning how much that is and what the costs are to obtain it. This still does not address the inconvenience of consignment sales in a society in which the basic financial management strategy is to retain goods in-kind selling only what is needed to meet immediate cash needs but needing immediate cash. This also prolongs the marketing season to 10 months after harvest.
Please review the following webpages and provide the detailed cost accounting to clearly demonstrate your cooperative model is not only socially desirable but also competitive, sustainable past donor assistance, and relying on it will not force farmers deeper into poverty. You might also add a detailed cost of doing business comparison with the competing private service providers. Why these basic business parameters are not included in the evaluation process is a mystery to me. I do think when done it would prove embarrassing. It these parameters were insisted upon 30 years ago the evaluation process would have successfully identified the non-competitive failure of the cooperative model and guided the poverty alleviation effort to more effective means of assisting the smallholder farmers. Without such a business analysis I am inclined to conclude that the development community is more interested in imposing on smallholder farmers what might be a socially ideal business model that is more likely to push them deeper into poverty, despite the massive rhetoric to the contrary, then sincerely assisting them out of poverty.
RE: Supporting smallhoder agriculture: what are your experiences in using evaluation?
Paul,
Thank you for your second set of comments. What you describe are massive cumbersome administrative procedures, not only to facilitate the initial project establishment but also to sustain it as a viable competitive business model, that will continue to serve the smallholder community well past any external financial support and advisory facilitation. Administrative producers create overhead costs that a usually greatly underestimated and rarely included in evaluations. For the cooperative business model to be sustainable these costs will eventually, after the initial donor assistance ends, have to be paid for by the farmers and come from the bulking differential you mentioned as the financial benefit of the cooperative model. Can that be done? I seriously doubt it and would expect the overhead cost will exceed the financial benefits you mentioned. When this happens relying on your cooperative model will only force the farmers deeper into poverty. Thus, my question to you is to take 30 minutes to an hour and do the detailed financial analysis to clearly demonstrate that the cooperative business model you advocate and can provide sustainable financial benefits to the smallholder farmers once the donor facilitation support ends.
I think this will be very difficult to obtain as the overall suppressed economy puts tremendous downward pressure on consumer prices to only 1/3rd to 1/5th that of the USA and seriously limiting the profit margins of most competing private service providers. Thus, your bulking advantage will be too small to cover the overhead costs associated with the more cumbersome administrative procedures required for running a cooperative. Disturbing to me is the continued promotion the financial benefits without ever mentioning how much that is and what the costs are to obtain it. This still does not address the inconvenience of consignment sales in a society in which the basic financial management strategy is to retain goods in-kind selling only what is needed to meet immediate cash needs but needing immediate cash. This also prolongs the marketing season to 10 months after harvest.
Please review the following webpages and provide the detailed cost accounting to clearly demonstrate your cooperative model is not only socially desirable but also competitive, sustainable past donor assistance, and relying on it will not force farmers deeper into poverty. You might also add a detailed cost of doing business comparison with the competing private service providers. Why these basic business parameters are not included in the evaluation process is a mystery to me. I do think when done it would prove embarrassing. It these parameters were insisted upon 30 years ago the evaluation process would have successfully identified the non-competitive failure of the cooperative model and guided the poverty alleviation effort to more effective means of assisting the smallholder farmers. Without such a business analysis I am inclined to conclude that the development community is more interested in imposing on smallholder farmers what might be a socially ideal business model that is more likely to push them deeper into poverty, despite the massive rhetoric to the contrary, then sincerely assisting them out of poverty.
Thank you.
Webpages:
https://smallholderagriculture.agsci.colostate.edu/financially-suppressed-economy-2/
https://smallholderagriculture.agsci.colostate.edu/perpetuating-cooperatives-deceptivedishonest-spin-reporting/
https://smallholderagriculture.agsci.colostate.edu/request-for-information-basic-business-parameters/
https://smallholderagriculture.agsci.colostate.edu/loss-of-competitive-advantage-areas-of-concern/
https://smallholderagriculture.agsci.colostate.edu/financial-management-strategy-retain-assets-in-kind/
https://smallholderagriculture.agsci.colostate.edu/appeasement-reporting-in-development-projects-satisfying-donors-at-the-expense-of-beneficiaries/
https://smallholderagriculture.agsci.colostate.edu/mel-impressive-numbers-but-of-what-purpose-deceiving-the-tax-paying-public/
https://smallholderagriculture.agsci.colostate.edu/relying-on-cooperatives-taxpayers-expectations/