1.1. BACKGROUND OF THE STUDY
Cooperative as a business organization is owned and operated by a group of people for their mutual benefits. Cooperative is owned and equally controlled by the people who use is service or work with cooperative enterprise. Agriculture in the post-independent era was the mainstay of Nigeria's economy but suffered serious neglect due to the oil boom in the 1970’s. Agricultural production which then contributed about 80% to Gross Domestic Product (GDP) declined to less than 3% in the 1990’s and 2014’s. In order to redirect the situation, multitudes of programs were initiated which were not able to meet the objective for which they were designed to achieve. This scenario was further constrained by the nation’s agricultural sector which is characterized by small farm holdings (Olayide, 2011). He stated further that the peasant farmers produce over 90% of the food crop grown in Nigeria using traditional methods coupled with obsolete farming implements. Olayemi et al. (2011) opined that the structural transformation of the present agricultural economy is inevitable for Nigeria to be food secure in the future. This needed transformation could only be achieved through virile extension services because of its vital link between research stations and farmers. Olayide and Ogunfiditimi (2011), suggested agricultural cooperative as a means to shorten the gap as well as the rural transformation of the agricultural sector as part of dynamic social order. In addition, Mc Bride (1986), was of the opinion that education of the cooperative members and leadership development are important for the viability of the cooperative society since extension service has not been able to reach out to all rural farmers, hence the need to use agricultural cooperative to complement the effort of extension workers in conventional agricultural development and bring about increase innovativeness in the farmers. In line with the above, Oshuntogun (2011) is of the view that cooperative will enable the removal of the element of old social order which impede development and bring about an increase in food production among the smallholding farmers. In Nigeria, the major problem of agricultural development is that of developing appropriate organizations and institutions to mobilize members of the rural sector to a greater productive effort (International Cooperative Alliance (ICA), 2010). Rural farmers are characterized by low income, small farm holdings, low resource utilization and scattered nature of farmland find it difficult to pool their resources together in order to raise their farm income and also substantially improve their living conditions. In such situation, cooperatives represent a strong and viable economic alternative. International Cooperative Alliance (2010) defines cooperative society as an autonomous association of persons unified voluntarily to meet their common economic, social and cultural needs through a jointly-owned and democratically-controlled enterprise. It is a business voluntarily owned and controlled by its member patrons and operates for them and by them on a non-profit basis. It is also a business enterprise that aims at the complete identity of the component factors of ownership control and the use of services (Nweze, 2014). Cooperative societies are very common in Nigeria. There are traditional and modern cooperative societies. The New or modern cooperative societies started in the country as a result of the Nigerian cooperative society law enacted in 1935 following the report submitted by C. F. Strickland in 1934 to the then British colonial administration on the possibility of introducing cooperatives into Nigeria (Onuoha, 2014). Many rural and small-holder farmers feel powerless to change their lives in today’s era but co-operatives can serve as a strong, vibrant and viable economic alternative. Agricultural co-operative societies encourage their members to engage in joint cultivation of food and cash crops, purchase farm inputs at a subsidized price and create better producers’ prices for their farm products (Poulton, et al 2015). Despite the low financial capacity and high level of under-development, an individual or rural farmer cannot achieve the desires for large-scale production. It is therefore in the farmers’ interest that resources are pulled together so as to gain an incredible collective advantage and thus widening the commercial base of the economy and also the management techniques (Epetimehin, 2015). Agricultural co-operatives are formed to usher in more agricultural inputs and merchandise marketing services to members, increase competition within the agricultural service sector and provide savings and supply credit to members, among many other functions. Rural farmers stand a better chance with the formation of agricultural co-operatives because there are established by like-minded persons to pursue mutually beneficial economic interest and to provide a unique tool for achieving one or more economic goals in an increasingly competitive global economy. Some of the goals as highlighted by Adedayo and Yusuf (2012) includes: achieving economy of size, purchasing in bulk to realize lower prices, improving bargaining power when handling other business, and obtaining products and services otherwise unavailable. Cooperatives are seen as a medium through which services like farm implements, farm mechanization, provision of farm input, agricultural loans, agricultural extension, members education, marketing of members farm produce and other economic activities and services are rendered to members (Akinwumi, 2015; Bhuyam, 2016)). Also, being grounded in theories of social cohesion and social capital, agricultural co-operatives provide rural farmers with economies of scale by facilitating cheaper and improved production techniques, more efficient access to inputs and data about markets.
1.2 STATEMENT OF PROBLEM
Small-holder farmer including Nigeria has accounted for over 90% of all agricultural output in Nigeria (World Fact Book, 2011). The farmers are burdened with high cost of farm inputs, insufficient farming techniques, inadequate infrastructure, poor producers’ prices and heavy constraints in obtaining credits and insurance. Benson (2012) remarked that the situation is further compounded by the general economic downturn and governments drive to remove all subsidies on inputs such as fertilizers, vaccines and foundation stock. Consequently, the cooperative option comes into focus as viable way to effectively mobilize farmers to form groups and pool resources so as to become more effective in agricultural production. In addition to the values and principles of cooperatives, Veerakumaran (2011) explained that cooperative serve as fundamental tool for achieving food security at household level. Cooperatives are the best institution invention for attaining food security in any country. Development is one of the main goals that all farming communities try to achieve in order to improve their living standards (Mohammed 2012). Agricultural cooperative have played an important role in rural development through development of agriculture. Agricultural cooperatives are considered to be the most important organization that pay attention and try to support rural development in general and agricultural development especially through the activities and services achieved for the sake of farmers (Agbo, 2010) Agricultural cooperatives are considered as one of the important economic and social organization in rural communities. They play very important roles in agricultural development by providing the farmers with production input, such as fertilizers, seeds, other chemical substances, etc. They also provide farmers with the necessary knowledge and skills. These are about the agricultural new methods that aim at increasing the agricultural production, and therefore, promoting the rural societies. Cooperatives globally, play major role in the rural society. They play major role in the agricultural food industries in various sectors and local setting of Nigerian rural Communities. Despite these advantages, the problem identified is that contributions of Agricultural cooperative Societies in Gwer-west local Government Area of Benue State, Nigeria have not been document and hence this study.
1.3 RESEARCH QUESTIONS
1.4 AIMS OF THE STUDY
The major purpose of this study is to examine the impact of agricultural cooperatives among rural farmers in Nigeria. Other general objectives of the study are:
H0: There is no significant impact of agricultural cooperatives on rural farmers output.
H1: There is a significant impact of agricultural cooperatives on rural farmers output.
H0: There is no significant relationship between agricultural cooperatives and agricultural production.
H1: There is a significant relationship between agricultural cooperatives and agricultural production
1.6 SIGNIFICANCE OF THE STUDY
The study will be of good help to policy makers, the government and those who are interested in improving agricultural activities or forming agricultural cooperative activities by which people take place in formalized long-term, deliberate and to great extent, specified form in the social and especially economic share of human endeavour. This study seeks to contribute to the emerging body of knowledge on how best to make agricultural cooperative to be more productive, it will deepen the understanding of the values and principles of cooperatives, incorporating them into competitive strategies relying on cooperation, trust loyalty as coordinating forces of economic activities and as sources of competitive difference in agricultural system. The underlying argument of the study is that cooperatives, based upon some principles represent a unique third way of social organization that enhances technology development and extension markets information and organization, and government policy, it is particularly useful in cases of simultaneous markets and government failure to assure adequate credit, input delivery, technology training, output delivery and social development in poor areas of Africa. The findings of this study will help to suggest to government and non-governmental agencies how social institutions like agricultural cooperatives could overcome the problem of low agricultural productivity and betterment of living condition of the rural farmers.
1.7 SCOPE AND LIMITATION OF STUDY
The study is based on the impact of agricultural cooperatives among rural farmers in Gwer-west L.G.A, Benue state, Nigeria.
Financial constraint- Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).
Time constraint- The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.
1.8 DEFINITION OF TERMS
Impact: A possible future effect or result, something that is suggested without being said directly. The fact, state of being involved in or connected to something.
Agriculture: This is the process of producing food, feed, and fibre by cultivation of certain plant and the raising of domesticated animal. It is a general term per productive activities like growing as crops raising of animal (including poultry) fishing and forestry.
Agricultural Cooperatives: Co-operatives involved in agro-allied activities. The agricultural cooperatives are considered to be economic and social units that aim at the agricultural development
Farmers: An individual whose primary job function involves livestock and/or agriculture. A farmer takes all the necessary steps to ensure proper nourishment of the items that he/she raises and then sells the items to purchasers. Some farmers have been able to capitalize on the need for high-demand products that they produce, such as organic vegetables and livestock.
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