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Capital Formation in Kenyan Farmer-Owned Cooperatives. A Case Study. PP 12









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    Empowering farmers and their organizations through the creation of social capital
    Bond learning guide for trainers
    2020
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    Social capital is a key factor that concerns the ability of people to cooperate for common goals. What we have learned over the past decades, from organizational experiences in developing countries and countries in transition, is that physical and human capital accumulation by itself is not sufficient to induce development. Investments in physical capital (infrastructure and equipment) and human capital (skills development) are necessary conditions, but they are far from sufficient; they need to be complemented with the development of social capital (Stiglitz, 1998). This Learning Guide for Trainers focuses on “Empowering farmers through the creation of social capital,” recognizing the fundamental role that social capital plays for healthy and sustainable organizations. Encouraging farmers and their groups to form associations or federations enhances their capacities to learn from each other, exchange reliable information about what works and what does not work, and monitor the accountability of their members.
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    New strategies for mobilizing capital in agricultural cooperatives 2004
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    Capital accumulation in cooperatives is often difficult. It is shaped, and to some extent constrained, by a unique set of principles that define the cooperative identity and set it apart from other businesses. While its egalitarian rule of "one member, one vote" and its anti-profiteering precept of "limited return on capital" make the cooperative form of business appealing to a broad audience, these features can create genuine problems in mobilizing capital for growth. Despite this, cooperat ives in many developed countries have found innovative ways to mobilize capital from their members, while retaining important elements of their cooperative identity. Unfortunately, efforts to mobilize member capital have been less successful in developing countries where conditions are less favourable. This is particularly true for agricultural service cooperatives, which were often established by newly independent governments to meet nation-building goals and therefore relied on government support and subsidies. New donor and government priorities, plus changed global conditions have led to "downsized" government budgets and to liberalized markets. Subsidies for agricultural cooperatives are fast disappearing. To survive and grow in an increasingly competitive business climate, cooperatives must raise more capital from their members and also possibly from commercial sources. The aim of this booklet is to highlight some of the issues that cooperative leaders must confront in meet ing this challenge and to provide suggestions about how capital, especially member capital, can be mobilized in more effective ways.
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