The Role of Agricultural Cooperatives in Poverty Reduction: A Case Study of Selected Cooperatives in the Four Local Municipalities of Vhembe District Municipality, Limpopo Province, South Africa

Abstract

Poverty and unemployment are the main problems facing many people in the Vhembe District Municipality. Due to these main problems, most people turn into farming as a tool to reduce poverty, ensure food security and create employment in their rural communities. Because of high production and marketing costs, farmers often find it difficult to pool their resources together in order to raise farm income and substantially improve their living conditions. In order to deal with this problem, farmers form cooperatives to pool their resources for increased agricultural productivity, employment creation and poverty reduction. The study assessed the role of agricultural cooperatives in poverty reduction within the rural communities of the Vhembe District Municipality. The research study was a combination of both qualitative and quantitative research method. There are 70 agricultural cooperatives producing field crops and vegetables in Vhembe District. A clustered random sample of the 4 Local Municipalities within Vhembe District Municipality was employed. It involved the selection of 9 cooperatives from Thulamela, 3 cooperatives each from Makhado and Mutale respectively and 1 cooperative from Musina. Relevant data was collected from both primary and secondary sources. Descriptive and Binary logistic regression modelling was used to analyse data. The study revealed that socio-economic characteristics of respondents have an impact on the role agricultural cooperatives play in reducing poverty. The study further showed that agricultural cooperatives play a significant role in reducing poverty and ensuring food security to members’ households. The respondents showed a positive response in the effectiveness of cooperatives in poverty reduction. The study also showed that cooperatives have a significant role in creating employment opportunities. Cooperatives were also faced with various challenges which hinder their success in poverty reduction. Some of the challenges include; market access, lack of funding, conflicts within cooperatives and high electricity costs. The study concludes by recommending different strategies which will enhance the success of cooperatives in poverty reduction. Further studies concentrating on poverty reduction, food security and employment creation need to be carried-out which will help cooperatives respondents to eradicate poverty in their households and communities.