Agricultural Cooperatives and COVID-19 in Southeast Africa. The role of managerial capital for rural resilience


By Francesconi N., Wouterse F., Birungi Namuyiga D. While the health impact of COVID-19 in most African countries appears modest, the impact of social distancing measures, closing of markets and reduced mobility is felt across the board. Domestic, labor-intensive and traditional food value chains and the smallholders they serve appear to be particularly affected. During a systemic shock where idiosyncratic risk coping strategies fail, collective or organizational resilience becomes of the essence to protect the livelihoods of smallholders. In this study, we have used pre- and during-shock data on agricultural cooperatives from Southeast Africa to understand how resilient these smallholder-owned organizations are. We find that many organizations could not countervail market-disruptions and fell into a state of dormancy during the pandemic. One reason for this is that collective decision-making was heavily affected by the banning of gatherings. Only a few organizations devised innovative solutions to maintain the market linkages of rural smallholders. The lack of resilience demonstrated by most cooperatives appears to be associated with organizational immaturity, large membership size, elite capture and limited business-orientation, which underscore a general lack of managerial capital.

Francesconi’s survey-based study on the effect of managerial capital on cooperative resilience towards COVID-19 found that farmers were most significantly affected by government restrictions, which prevented them from harvesting, buying and selling goods, and loss of income. Amongst farmer-owned organiaxtions, the limitations on mobility led to a decrease in meeting opportunities and services provided. In response, some organizations allowed for side-selling or the withdraw of shares, both seen as negative adaptation strategies. Francesconi determined that the lack of organizational resilience was associated with organizational immaturity, large membership size, elite capture, and limited business-orientation resulting from a general lack of managerial capital, leading to organizations to rely on social capital, which was hard to leverage due to social distancing measures. An increase in managerial capital investment – through hiring, training, digitalization of meetings and operations – will allow for the organizations to centralize and digitize decision-making processes and the handling of member outputs. You can visit the website by clicking here!

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