Step by Step Procedure of how to form the best and most efficient Cooperative Societies in Kenya
This is a follow up of the lesson No. 1 that we learnt in my previous article titled Kenya Will Never Develop Again until this Happens. In that article I explained why we need to form Cooperative Societies in Kenya, if at all we need to transform Kenya into a middle income country through our Vision 2030 strategy.
The lower middle income status that was announced by the Kenya Government and the World Bank in the year 2015 was not a real one, it was a perceived one. Yes, the economy has expanded but only to a selected few in the urban centers and few, if not none, in the rural areas.
But How comes that the Kenya Economy had expanded but only a few felt it? It is because some sectors of the economy had expanded so rapidly, fast and furious, and made it look like Kenya as a whole has developed. These sectors are like
- ICT Sector
- Financial Sector
- Real estate sector etc
Most of the above named sectors are controlled by a few individuals and companies who understand this wise saying, ‘If you want to walk fast, walk alone. If you want to walk far, walk together.’ The real estate sector players have embraced this saying and are smiling all the way to the bank. Look at how the Saccos and Investment Cooperatives in Kenya are progressing well. It is the power of a united people with a common purpose.
Why should Kenyans adopt the model of Development through Cooperative Societies
According to Food and Agriculture Organisation – FAO, –Agriculture is key to Kenya’s economy, contributing 26 per cent of the Gross Domestic Product (GDP) and another 27 per cent of GDP indirectly through linkages with other sectors. The sector employs more than 40 per cent of the total population and more than 70 per cent of Kenya’s rural people.
According to the above report, Agriculture contributes only 26% of Kenya’s GDP and according to World Bank, 74% of Kenyans in 2016 live in rural areas. This means 33 million Kenyans live in rural areas and out of these 33 million Kenyans, only approximately 13 million Kenyans eke a living out of Agriculture. And whatever they produce is just 26 % of the GDP. Don’t forget that this 26% can be linked to the GDP by Multinational Agricultural companies.
These 74% bucolic Kenyans have access to land whether big, small or just a tiny plot but do not utilize it for agribusiness. They just use it for subsistence agriculture if they are lucky to have some farm inputs.
Now, Formation of Cooperative Societies by these farmers can help them move from subsistence agriculture to profitable agribusiness.
Through Cooperative Societies the farmers can get
- Affordable farm inputs
- Ready market for their produce sourced by the Cooperative Society’s network.
- Outreach services from the County Government because Agriculture is a fully devolved sector.
- Affordable financial help from the Sacco formed through the Cooperative Society or Aid fund from either the County Government or National Government.
- Frequent education and training organised by the Cooperative Society or the County Government on how to better do their agribusiness.
- Fast and immediate help from County Government or National Government in case of a disease or pest problem affecting their crops.
- Savings and Investment mechanisms proposed by the Cooperative Society through the members.
- Any other benefits not highlighted here.
Farmers and other working Kenyans, For your information, The Government, Donors and Strategic Investors fall in love with organised groups like Cooperative Societies. This is because they are sure that if they release any help whether funding or important information, it will trickle down promptly to the bottom most person in the ladder.
The government can even comfortably look for foreign markets because they are sure that the quality and quantity of that produce is good.
The problem of the current composition of Cooperative Societies in Kenya
There are some Cooperative Societies in Kenya which have flourished and benefited members. These Cooperative Societies are mostly formed by members or employees of certain Companies who have a goal of saving and investing their disposable incomes.
The reasons as to why they flourish is because first and foremost the members have been brought together by employment. While in employment, these employees caucus and decide to join hands and form a Sacco and an Investment Cooperative Society to deal with their similar problems like Housing and Strategic Investment of their savings. Most importantly, these employees know each other especially at the departmental level and so in case of a problem they can collectively agitate for that problem to be solved and indeed it gets solved amicably.
So, the lesson above is that for any Cooperative Society to be formed
- The members have to know each other.
- Members have to communicate with each other to know if they have a similar problem to solve.
- The members must have a common goal and purpose
- The members have to be bound by a certain ‘cord’ or ‘chain’ that makes them to be their brothers keeper.
- Each member should have the resources, whether Monetary Capital, Intellectual Capital or Human Resource Capital to contribute towards building the Sacco or Cooperative Society.
So from the above explanation, what is the problem with the current moribund Cooperative Societies in Kenya? The problem is that they lack most of the above qualities and characteristics especially the conflict resolution mechanisms.
Members start to pull out of or sabotaging the Cooperative Societies or Saccos after realizing that they have no one to help them when problems arise since they joined alone and do not know anyone inside there and help from the officials or state authorities is not forthcoming.
How to solve the problem of Cooperative Societies in Kenya
How to form a Cooperative Society from Scratch
In this article I will use an example on how to form a Maize Farmers Cooperative Society in Trans Nzoia County in Kenya, lets call it Trans Nzoia County Maize Farmers Cooperative Society. The formation of such cooperative society can be replicated elsewhere in other counties, in the same model.
We will take the assumption that most if not all residents of Trans Nzoia County are interested and have a passion for maize farming.
The other assumption is that, we do not have an already existing Maize Farmers Cooperative Society in that county.
Note: If there is an already existing Cooperative Society, just communicate with your Nyumba Kumi Initiative members so that you can join as a group.
Form a ‘Nyumba Kumi Initiative’ – This Nyumba Kumi Initiative will be a very, very, very important integral part of the Cooperative Society’s formation and sustainability. Well, we know that the Nyumba Kumi Initiative has all along be used for security purposes, but that can also be replicated to all other aspects of our life! We have to be our brothers keepers in all our aspects of life!
Now, this Nyumba Kumi Initiative will be used like a ‘department’ in a company setup as explained above. Farmers will use it to caucus, debate, brainstorm and bond together so that when they each go to form the Cooperative Society they will know that they have people who can come to their rescue when things go south.
I know that these Nyumba Kumi Initiatives have already been formed, so it is just communication within the members that is required.
Within the Nyumba Kumi Initiative, you of-course have leaders. Through these leaders, members can choose and elect a development team of leaders to spearhead this development journey. These leaders will share that idea with leaders from other Nyumba Kumi Initiatives within the Sub-County. From here, things will start taking shape. The farmers through these leaders, will approach the County Government and will be assisted to form the Cooperative Society through KUSCCO. After its formation, the Cooperative Society’s procedures, rules and regulations will guide other Maize Farmers who would like to join them.
The elected officials can be told that their remunerations can be honoured after sale of their harvest. So elect patient and servant leaders who will be able to sacrifice themselves and diligently work without pay till harvest time. But you must have a framework of calculating their remuneration and petty cash expenditure until when money starts trickling in. After money comes you can employ professionals to handle the operations of the Cooperative Societies. There is no other way to go about this! There is no Rocket Science!
After forming the Cooperative Society, your names and identification numbers are on paper, so what next?
At this stage, the farmers may think that miracles will happen and maize will sprout in their farms an Hurray! They are rich! Sorry to disappoint you, No! It doesn’t work that way. This is where the rubber meets the road. Or this is the time your baby has been born! You exactly know the work that waits you ahead!
Take an example, you as an individual, have finished forming the Cooperative Society, you are seated in your house and you don’t even have a coin in your Mpesa Account to even start tilling your land, what do you do? So what next?
This Cooperative Society that you have formed doesn’t have a coin in its Bank Accounts, so you cannot tell the Cooperative Society to help you to till your land. My friend, you have to wake up in the Morning, Grab your Jembe and Panga and physically go to the shamba and start digging! There is no rocket science here, you have to sweat and make your hands dirty!
Then you have finished tilling your land and you don’t have money to buy fertilizer and certified maize seeds from Kenya Seed Company, What do you do?
Simple! You have the strength! How? Because you are not alone! When you talk to the other members of your Nyumba Kumi Initiative, you will realize that no one has that money. So the needy number of members will increase as you continue communicating with each other and thereafter the whole Cooperative Society finds that they all need the seeds and fertilizer.
So, what do they do? They go to the County Government for help! Period. The key word here is COMMUNICATE with each other. Don’t suffer alone with your problems! A problem shared is halfway solved! (Note: This is benefit no. 1 of Cooperative Societies in Kenya)
When the County Government hears that there is a Cooperative Society with a sizeable number of farmers, lets say 200 farmers who needs such help, I tell you most solemnly, they will factor that in the County budget and you will get the Seeds and Fertilizer.
Now that you have seeds and fertilizer, go plant them after rains come. Here you will not necessarily need anyone’s help.
Weeding: Here you will not necessarily need anyone’s help.
Top Dressing: County Government,through the same help process, Chips in with the required fertilizer.
Pest and diseases: In case of pests and diseases the Cooperative Society officials, by the fact that it is recognized by the County Government, will obtain help from relevant Research Institutions like Pest Control Products Board – PCPB, and/or other companies listed in this Document (Disease and Pest Control Companies in Kenya) (Note: This is benefit no. 2 of Cooperative Societies in Kenya)
Harvesting. Now, it is during harvesting that the Cooperative Society will start minting it own money.
At this time, the Cooperative Society members should have done the following as they await harvest time.
- Looked for a lucrative market for the produce.
- Prepared a store or warehouse to store the produce if it is appropriate.
- Prepared the books of account for each member for the purpose of deducting contributions and other statutory deductions.
- Prepared for action, any other essential, regulatory and mandatory requirements like cess rates payment, etc
Now, the members of Trans Nzoia County Maize Farmers Cooperative Society have maize in their granaries. How does this maize now come to Trans Nzoia County Maize Farmers Cooperative Society for sale?
At this point, the farmer can chose to thresh his/her own maize manually or using a machine if there available fund for that. Then store the maize or take it to the Cooperative Societies Warehouse if it is available. Then communicate to your officials of the quantity available.
Sale of Produce: All 90 Kg maize bags are collected to one point and the Cooperative Society then invite the selected Miller or Buyer and the transaction is completed. Money is deposited into the Cooperative Society’s Bank A/C.
The benefit of selling this way is that you get the best price and Post harvest losses are mitigated and chances of being conned are eradicated. (Note: This is benefit no. 3 of Cooperative Societies in Kenya)
Now, you get a proportional share of what is due for you and your path to wealth takes shape.
Summary of Best Way for People to Form the Best Cooperative Societies in Kenya
Cooperative Societies in Kenya is the best way of doing things and the most rewarding way to go for all Kenyans.
Kenyan Farmers and other self-employed workers, have the power in their hands to unlock their potential through Cooperative Societies
All they need is to come together and communicate with each other with a purpose of progressing and the above processes will start to take shape.
Kenyan leaders should start championing for farmers and all people to embrace Cooperative Movement and see the potential that will be unlocked.
County Governments should budget for such eventualities that farmers might require monetary, capacity and informational help from them.
Kenyans, which is the other surest way to empower our farmers if not through such Cooperative Societies?
The message of Development in Kenya Through Cooperative Societies an be amplified by our leaders as explained in This Article
If all other farmers around the country form Cooperative Societies for their respective crops and animals, would we ever have lack of food? I assure you that any crop that can be grown in any part of Kenya will be planted and we will experience a surplus for export, farmers will have disposable income to move into the next phase of development that I will elaborate in my Next Article.