Why revival of cooperative societies is critical

Before we explore cooperative societies and the pressing necessity to revive them, it is essential to ask a significant question: what went wrong?

Cooperative societies once formed the bedrock of daily income and economic resilience for our grandparents. They were engines of local commerce, a source of affordable credit, and a communal safety net. This narrative, however, has profoundly changed over the decades.

Historically, Uganda’s landscape was dotted with powerful cooperatives, including iconic unions like the Bugisu Cooperative Union for coffee, the Uganda Farmers’ Cooperative Union, and the Ankole Dairy Union, alongside numerous primary societies for cotton, coffee and cereals. A keen look at the present day reveals a starkly different picture.

Many of these pioneering cooperatives have disappeared, falling defunct due to mismanagement and political interference, while the strongest remnants are primarily concentrated in Western and Southwestern Uganda, showcasing a regional disparity.

The cooperative movement in Uganda did not arise organically from the grassroots; rather, it was established by the British colonial authorities to fulfil particular economic objectives, primarily the cultivation of cash crops for export.

The inception of the first cooperatives can be traced back to the 1910s and 1920s. African farmers, especially those involved in cotton production, expressed their dissatisfaction with the exploitative tactics employed by Asian and European intermediaries.

In response, they began to form informal groups to collectively market their cotton and secure better prices. The global economic recession led to a significant drop in crop prices, worsening the exploitation faced by farmers. This scenario triggered widespread unrest and riots in 1931.

In response, the government launched investigations, including the 1933 Wright Report, which vehemently recommended the creation of cooperatives to protect the interests of farmers. This initiative resulted in the enactment of the Cooperative Societies Ordinance in 1946, marking the official beginning of the organised cooperative movement in Uganda.

The primary focus was on marketing cooperatives for vital cash crops, particularly cotton and coffee. The cooperative model achieved significant success. It enhanced farmers’ earnings, stabilised the marketing of crops, and evolved into a major economic force.

By the time Uganda gained independence in 1962, cooperatives were accountable for marketing more than 50 per cent of the country’s cotton and coffee. The first decade following independence marked the peak of the cooperative movement.

The administration under Prime Minister Milton Obote regarded cooperatives as a vital driver of national development. By the early 1970s, cooperatives had evolved into the largest agricultural marketing system and one of the leading employers in the country.

Nevertheless, this flourishing period was suddenly disrupted. The expulsion of Asians in 1972 inflicted a significant setback. Asians had played a crucial role in the management, logistics and financing of the cooperative export chain.

President Idi Amin’s military officers were appointed to supervise cooperative unions, leading to severe mismanagement, embezzlement and a deterioration in professional standards. The breakdown of international relations disrupted export markets.

The subsequent civil conflict further ravaged infrastructure. The second Milton Obote administration continued to politicise cooperatives, using them as tools of patronage. By 1986, when the National Resistance Movement assumed power, the once respected cooperative movement had deteriorated into a mere semblance of its past glory.

Initially, the government attempted to restore the former cooperative model; however, this endeavour was unsuccessful. In line with the Structural Adjustment Programs (SAPs), the Ugandan government abolished the monopoly marketing boards for coffee and cotton during the financial year 1991/1992.

This decision ultimately dealt a decisive blow to the traditional cooperative system. Cooperatives were now obligated to compete with private businesses. Deprived of their monopoly benefits and in a weakened state, most of them completely failed. The cooperative movement in Uganda demonstrates significant regional disparity.

The Western and Southwestern regions, renowned for their vibrant and successful cooperatives, have rightfully become models of collective economic action. These include powerful dairy cooperatives like the West Ankole Dairy Cooperative Society and prolific agricultural cooperatives for Irish potatoes in Kabale.

Another illustrative case was the Dutch-Uganda Dairy Development Program, a milk cooling initiative financed by the embassy of the Kingdom of the Netherlands. The targeted area in Western Uganda specifically encompassed the Ankole sub-region.

However, in various parts of Uganda, a markedly different situation emerges; the cooperative movement struggles, not due to a deficiency in potential but, rather, a lack of attention.

This widening gap poses a significant threat to the principles of equitable development and national economic stability. The story is similar with coffee. While initiatives appropriately promote the robusta from Ankole and the Arabica from Mount Elgon, the opportunity for high-quality coffee in other areas remains predominantly unexploited.

This regional favouritism is a strategic error for Uganda. Lobbying and policy should transition to a national viewpoint. The answer does not lie in ceasing support for the successful cooperatives in the West but, rather, in intentionally replicating their model through deliberate, policy-driven efforts across the entire country.

It is the government’s responsibility to foster equitable development throughout all regions. Each region has its own distinct comparative advantages; for instance, the extensive arable land in northern Uganda is well-suited for large-scale cereal cooperatives, whereas the livestock potential in Karamoja remains largely untapped.

Overreliance on a limited number of regions for essential commodities renders the national economy susceptible to localised disruptions. Establishing a diversified cooperative sector across various regions contributes to a more robust national economy.

The prevalence of poverty and unemployment, especially in post-conflict areas like northern Uganda, poses significant national security challenges. Promoting cooperative development in these regions has been demonstrated as an effective approach to generating inclusive economic growth.

A comprehensive national strategy would generate jobs in the areas where they are most needed. By deliberately promoting cooperatives in underdeveloped areas, Uganda can guarantee that the advantages of economic growth are distributed more equitably.

The role of political influence should be to champion a national cooperative development policy that replicates this success story everywhere in Uganda.

The writer is a political analyst.