Understanding Incentives for Co-operative Membership
Incentives may be defined as any factor that drives, encourages, enables or motivates a particular course of action; incentives may be monetary (e.g. a higher price) or non-monetary (increased social capital, opportunity for future contracts, etc). In the context of co-operatives, it is helpful for development practitioners to understand the various incentives that drive individuals to join a
co-operative. Rather than being applicable across all contexts, an understanding of these incentives can be used by development practitioners to inform program design and implementation.
This technical brief will explore the following questions:
Insights from the Field
Global Communities invited EcoVentures International (EVI) to run learning workshops with its co-operative development programs in Rwanda, Uganda, and Mongolia. These are insights contributed by the Global Communities' field staff who work closely with co-operatives in the field.
What are incentives for individuals to join co-operatives?
What are lessons learnt regarding the formation of co-operatives?
What are incentives for individuals to remain in co-operatives?
What are incentives for individuals not to join co-operatives?
What drives individuals to leave co-operatives?
Extract from Huffington Post blog, "Want to Eliminate Poverty? Check Your Behavior" about the Global Communities and Birmingham Southern College assessment on what made individuals in the community of Bushenyi, Uganda willing to cooperate with one another.
... "We anticipated that economic factors would be the main driver for individual farmers to band together in co-ops. After all, farmer co-ops are primarily a business venture designed to improve incomes. We expected that any social benefits of cooperation would simply be an added bonus to the increased income. However, the Ugandan farmers had a different set of priorities. The initial survey found that economic benefits did not have a statistically significant effect on a farmer's willingness to join a co-operative. Instead, it was the social benefits that were the primary drivers of the farmers seeking to form co-ops. In the northern Ugandan community of Lira, which had a history of conflict with the Lord's Resistance Army, we anticipated that violence would have weakened social ties and negatively affected the desire to cooperate. A study of these participants indicated that, once again, social benefits were the single-most important driver for joining co-operatives.
What are these social benefits? For the Ugandan farmers, social benefits were defined as giving and receiving emotional support, meeting others who can provide help in times of need, and meeting others with whom to socialize. The farmers also sought to meet people with access to tangible goods, like tools and equipment, as well as intangible goods like knowledge and skills to help them meet other needs. And while social benefits were the primary motivator for individuals to join co-ops, participants did see their income rise, and saw them rise further after each harvest they collectively marketed. Forming co-operatives did help reduce poverty, but that was not why they formed them."