A cooperative is defined in the new Cooperatives Act (No. 14 of 2005) as “an autonomous association of persons united voluntarily to meet their common economic and social needs and aspirations through a jointly owned and democratically controlled enterprise organised and operated on co-operative principles”. Since 2002, many cooperatives have been set up in South Africa as a response to the ‘Cooperative Incentive Grant’, which provided R350, 000 per cooperative (Twalo, 2012). As a response to government legislation and incentives, registered cooperatives increased from 4 061 in 2007 to 43 062 in 2013 (Wessels, 2016).
Mayime Cooperative was established in 2003, at the suggestion of officials from Chris Hani Municipality and the Eastern Cape Department of Rural Development and Agrarian Reform.
Previously, the landowners were organized under the Masibambane Trust. In 2003 many of the primary cooperatives and the secondary cooperative at Keiskammahoek were also encouraged by government to reregister under the terms of the new legislation. However, in 2016 some reported not yet having reregistered their primary cooperatives.
In 2010 Eising and Shenxane (2011) found that a mere 2, 644 of 22, 619 registered cooperatives, could actually be regarded as functional, amounting to a failure rate of 88%. The key challenges responsible for this failure are government's failure to adequately grasp cooperatives ‘as a form of business’ and a lack of institutional capacity to support cooperatives (Wessels, 2016). Some of the governance challenges that are experienced by both the Seven Stars Cooperative and Mayime Cooperative are not contextually unique. They reflect a general failure in South Africa to adequately support and sustain the healthy functioning of cooperatives.
Keiskammahoek Seven Stars Cooperative
Seven Stars Cooperative is the structure that represents the Keiskammahoek landowners in the Seven Stars Trust. This ‘secondary cooperative’ is made up of six ‘primary cooperatives’, which represent the various units of land (units 1, 2, 4, 5, 6 and 8). The primary cooperatives are mostly dormant or not functioning. Many still need to be registered in line with the new Cooperatives Act. The name ‘Seven Stars’ comes from the six primary cooperatives, with the seventh being the secondary cooperative.
The committee for the Seven Stars Cooperative is made up of five primary members and six additional members. The members do not get paid to sit on the committee but sometimes get a stipend for travel. The members of the primary cooperatives elect a ‘board of directors’ for the secondary cooperative, which is commonly referred to as ‘the committee’. They can elect members from any primary cooperatives and thus not every primary cooperative is represented on the Seven Stars Cooperative board of directors. In fact, it is composed of three members from Unit 6 and two from Unit 1. All of the units are represented on the cooperative committee, although some only as ‘additional members’. Several key informants, however, noted that the unequal representation from across the units was creating power issues:
“The negative we've had is a power issue. The secondary coop members have more members on the coop board from unit six than the others.... So the board of directors on the trust is also not properly represented from all the land units. Primary coops should be equally represented on the secondary coop. There are power issues... the only reason people are happy is because they are getting money” (Respondent from Amadlelo Agri).
The cooperative committee has monthly meetings with its members, or sometimes more frequently if required. The production manager attends the monthly meetings, where he explains that they “give them a report of the targets that we have met, and what is happening on the farm and I ask for their assistance if needed”. As a result the landowners, who were neither members of the cooperative committee nor the trust, were much more aware of the status of the JV farm, as compared to Shiloh’s customary landowners, who must rely on trust members to report back to them.
Notably, female members from amongst the landowners at Keiskammahoek chair both the cooperative and the trust. However, this hasn’t necessarily led to an environment more
conducive to participation from other female members; some of who expressed concerns with the leadership style and fear of expressing their views in meetings. There are three female members103 and seven male members on the cooperative committee; hence the gender divide is still unequal. This is in part a reflection of the individualised private land rights, which in most cases are bestowed on male household heads. It was common for women in these households to be referred to as ‘wives of landowners’. The female chairperson of the Seven Stars Cooperative was a widower, and hence became ‘the landowner’.
Women in Keiskammahoek have allegedly played a prominent role in the life and management of the farm in the past. However, if you analyze the quote below, this speaks more to their role as ‘labour’ in petty commodity producing households, with the role of ‘capital’ played by their husbands. For example, Van Averbeke et al. (1998) note that:
“A study of the role of women involving the wives of farmers in Keiskammahoek Irrigation Scheme, revealed that nearly three quarters of the women were actively farming, and that women play an important role on the farm, especially when men are away on other business. The women indicated that men usually still did all the hard work.
Yet, tending to the vegetable garden, hoeing and harvesting of the fields, and herding of cows were functions mostly carried out by women (Williams, 1994)”.
There are some generational tensions emerging between older landowners on the cooperative committee and their younger kin. As noted by a key informant:
“At Seven Stars Cooperative, there are now some younger members of the coops that have economics degrees etc. and they are saying ‘get out the way’ to the older ones,
‘it’s time for us to run this business’ “.
However, as of yet there hasn’t been much of a shift of power to the younger generation. In most cases the first landholders, dating back to the time the scheme was run by Ulimocor, represent the affairs of the cooperative. These youngsters do, however, attend cooperative meetings to make themselves heard. There are also, however, many farmers that complained that their children were not interested in the affairs of the business, since they had more attractive opportunities in the cities. Many landowners thus expressed concern regarding the future handover of the business in the future to their kin.
There have been attempts to develop technical farming skills among the children of the landowners, in the hope they could manage the dairy farm in the future. Four youths from the households of landowners were selected for a training programme. It included two years of practical experience on the farm and two years at Fort Cox agricultural college. However, only one of the members finished the practical experience and managed to progress to go on to Fort Cox (Whytske Chamerlain, 2015).
103 Although one member abstained from being interviewed and said she no longer sat on the cooperative.
At the time of research, all of the interns on the farm and the senior farm managers were sourced from outside the community. This is an area of concern regarding the sustainability of the JV. The landowning households risk remaining in the position of labourers and passive recipients of dividends, with production and governance largely managed by outsiders.
The poor functioning of the Seven Stars Cooperative is also a key challenge to the sustainability of the farm. Chapter 10 will illustrate that there are individual farmers that are making good use of the dividends they receive to invest in their own farming enterprises and other businesses. However, the dysfunctionality of both the secondary and primary cooperatives, limits their members from working together to attract alternative income streams or government funding, and prohibits the possibility of marketing their produce together. Only Unit 6's primary cooperative had plans to start a nursery to sell seedlings and generate alternative income and jobs for the youth. When asked about some of the challenges in running the cooperative, the chairperson notes:
“The first challenge is the knowledge, we don't have enough knowledge to run the business but we try. There are courses that we have been given, we had some people from America that have helped us and Farm Vision has helped us as well with training on what a cooperative is and how to run the farm and its finances. Only the managers of the cooperative get on those courses, the top five or seven people. Sometimes the rest go on courses too. Our children also sometimes go on those courses”.
The Seven Stars Cooperative also does not have a business plan in place. Poor governance limits its ability to invest portions of JV profits into other productive activities. However, that said, interviews revealed that there were only a handful of households interested in extending the scope of the business. Households relying exclusively on pensions and JV dividends would unlikely be willing to divert their dividends into other investments.
Social differentiation among the landowners, thus also plays into the cooperative’s ability to come to an agreement on a way forward. In light of this, issues of unequal representation on the secondary cooperative should be addressed to ensure all interests are represented. The fact that unit 4 does not have a representative on the farm trust is particularly concerning.
Households from this unit were noticeably in a poorer position and some were headed by widows. Despite the fact that on the whole Keiskammahoek is running more smoothly than Shiloh and there are decidedly less tensions among the cooperative members, these various challenges don’t put the Seven Stars Cooperative in a secure position, should they one day want to manage the enterprise on their own.
Shiloh Mayime Cooperative
The Mayime Cooperative has a ‘committee’ comprised of 6 members in total, including the headman who is the chairperson. There are also a number of Mayime Cooperative committee members, who serve on the Shiloh Dairies Trust as well. This includes the chairperson of the
Shiloh Dairies Trust, along with two other members. This, along with the fact that the committee members have been the same since 2003, indicates the centralisation of power and decision-making, which was a common area of dispute.
There are some key differences between the roles of Seven Stars Cooperative and Mayime Cooperative in the JV farms. In the latter’s case they organise the sale of unpasteurised milk from the cooperative's offices and they also source workers for the farm104. In the former's case, the farm trust undertakes these tasks. This at least ensures some impartiality with worker recruitment and financial oversight of milk sales. A member of Mayime Cooperative notes:
“There was a cry from people that they don’t own this milk… so I suggested we need to let them buy 1 litre so they can feel this thing belongs to them. There is the Mayime office here that the community and schools buy from. We sell a litre of unpasteurized milk for R6”.
A representative at Amadlelo Agri, however, contends that this creates some challenges:
“The problem with Shiloh is that they actually do the business themselves on the side, for example selling the milk, whereas at our other farms we all share in this”.
Secrecy around the operations of the Mayime Cooperative and the inability to access any formal documentation, made it difficult to conclusively evaluate its governance structures.
However, the impressions of key informants were overwhelmingly negative, apart from those represented on its committee and the households aligned to them. I documented numerous claims of mismanagement and corruption. The want of a constitution, the absence of regular elections to select new committee members, irregular meetings with customary landowners, and the undemocratic leadership style of committee members, were all frequently mentioned as concerns. The chairperson of the trust and member of the Mayime committee notes about meetings that:
“The committee has meetings with the community just when there is something to take to the community”.
A manager at Amadlelo Agri also expressed concern regarding the governance and constitution of Mayime Cooperative:
“All of the cooperatives that we work with have a board of directors but at Shiloh they refer to ‘the committee’ and I’m not sure if they are legally constituted… A part of the weakness of our system is that we can't influence what goes on in the cooperatives. At Shiloh, we've been stonewalled in our ability to deal with coop leaders and governance...
At Shiloh, for example, (the headman) has kept us at arm’s length, which is not a good option, we prefer to work differently, to work directly with them”.
104 See Chapter 11 for a more detailed discussion on conflicts around JV jobs at Shiloh.
The fact that a traditional leader (the headman) is the chairperson of Mayime Cooperative also influences the character of decision-making on this cooperative. There appears to be a mismatch between the democratic and cooperative ethos that should drive the governance of a cooperative, and the authoritative ethos characteristic of the institution of traditional leadership.
For example, a member from a dividend receiving household notes:
“There is too much corruption here because in this village there are two parts, the first is the part of the headman and his supporters and the other is the opposition... If you talk the truth about what is happening and ask questions at the committee meetings they will just take you out. Some of us don't want corruption and those on the headman side are corrupt”.
Another member from a different dividend receiving household further commented about the character of decision-making and governance:
“When you are the leader of the people you must listen to them but the headmen just selects the committee. If the committee changes all the time then people don't get a chance to make corruption. But since the beginning they are the same people, for all of these years! I was on the side of those people who took the committee to court and we are still paying a lawyer for that. If they don't sort out the issue of reelection of this committee, we are going to have a problem with the running of this project. That lawyer found out that there is some corruption with Mayime”.
Allegiance to the traditional leader, however, appears not to be the only aspect that mediates participation in the affairs of the Mayime Cooperative. Whether or not one is a member of the Moravian Church was also noted as a key factor, as illustrated by the quote from a dividend receiving household below:
“I stopped going because I'm not satisfied about how they handle the meetings- you can't say what you think! It was the German missionaries that founded this land and the Moravian Church is still here in the village. The coop committee are from that church.
It is like that church is the ANC in this village and if you are not from that church they don’t want to listen to you. The Isibonda (headman) belongs to the Moravian church.
They have meetings in that church and they announce the committee meetings in the church”.
When asked about elections on the Mayime Cooperative, a member of the cooperative (who is also the chairperson of the Trust) disregarded them saying that the community was happy with the leadership and wanted them to continue:
“Since 2003 we have had the same committee because people say we must continue.
We are working, because they believe in us. We told people that the term has ended and we can reselect and they said they don't want to select a new one because they are afraid. We must carry on to rebuild this village”.
There was clearly a range of divergent perspectives on this. A member from a dividend receiving household and a member of the ‘opposition’ contends:
“The committee has been for over five years and we think they should be reelected for five years every time”.
Another member from a dividend and JV wage receiving household emphasised, however, that the unhappiness with the way the committee is run can be explained by a failure to attend meetings and to be informed about the JV project:
“People who are around the area, some don't like the way the project is being run by those who are running it on the committee, so it makes some problems. It makes it hard for us to work on the dairy when there is too much politics about the farm. The people that have a problem are the ones that don't come to the meetings, those who come to the meetings don't have a problem”.
This statement from a dividend receiving household, and others similar to it, seems to emphasise that there are indeed households that don’t attend meetings:
“I have no idea how the amount is decided. I don't even know if I'm a member of Mayime. I only go to the meetings when the amounts are paid.”
However, clearly the intragroup conflict and politics around the running of Mayime Cooperative also explains why some people do not attend the meetings, rather than disinterest.
In some cases, old age was also a reason why people were not attending, especially where younger members of the household were migrant labourers spending little time in their rural households.
Decisions regarding how Mayime Cooperative handles profits were particularly unclear.
According to members of the cooperative committee, the decision on what is distributed as dividends and what is saved or reinvested is meant to be decided at a general meeting of the Mayime Cooperative. A member of the Mayime Cooperative committee explains:
“We go to a general meeting with this money and report how much we have. We decide all of us as the landowners- this little must be kept in bank, and this must go to people.
We keep some in the bank so we can keep it for doing things as the business grows.”
However, most customary landowners had a very different perspective. They complained about not being informed about the total profits allocated to Mayime by the trust and not being party to the decisions regarding how much was paid out as dividends.
Another aspect of contention was how the income from the dairy JV and those from the vineyard project were distinguished. Amadlelo Agri is not involved with the vineyard
project105, which was set up in 2013 by Mayime through grants received from Chris Hani Municipality and the Eastern Cape Department of Rural Development and Agrarian Reform.
The EPWP programme pays for the 17 labourers working on the project and the seasonal labour sourced for harvesting and other informal work. Some landowners feared that their dividends from the dairy were being reinvested in the vineyards, without their knowledge or
The EPWP programme pays for the 17 labourers working on the project and the seasonal labour sourced for harvesting and other informal work. Some landowners feared that their dividends from the dairy were being reinvested in the vineyards, without their knowledge or