Making markets work for the poor : a case study of the Yebo Cooperative in South Africa

Abstract

The objective of the study was to evaluate the effectiveness of the cooperative model as a form of intervention to overcome barriers to markets (labour, financial and commodity market) and facilitate market operations for development, using the Yebo Cooperative as a case study. The study was conducted in 8 South African provinces where the cooperative operates, namely Limpopo, Free State, Gauteng, Mpumalanga, North West Province, KwaZulu Natal, Western Cape and the Eastern Cape, using data collected from focus group discussions with cooperative members, key informant interviews with Yebo employees and leaders of the participating cooperative groups, and a questionnaire. The research found, firstly, that more than half the participants that were not employed or involved in any income-generating activity prior to joining the cooperative, became self employed after joining Yebo. Not only did joining the cooperative provide opportunities for self employment to its members, but it also increased their income generating capacity. Secondly, participation in the cooperative resulted in increased access to financial services, with members opening bank accounts, saving, and in some cases, access to non-secured credit facilities provided by DGRV which they did not have access to before becoming members. Lastly, as demonstrated by the cooperative involved in baking, being members of the cooperative improved business operations. Members benefited from economies of scale in the purchase of supplies and marketing of their produce. Thus, Yebo enabled its members to alleviate poverty. Although not all members of Yebo were poor prior to joining the cooperative, for those who were, Yebo transformed their lives significantly. Even for those considered “well-off”, being members of the cooperative improved their income, thus improving their standard of living. The research found, however, that there was need for more training and education of cooperative members. The research concludes that the cooperative model can play a key role in the economic, social and cultural development of a community. Cooperatives are able to contribute positively towards job creation, income generation, resource mobilisation, marketing and broad-based economic empowerment, thereby enhancing sustainable human development within an economy. Although there are many benefits to cooperative there are also some drawbacks. No intervention comes without a certain degree of weakness, and this is the same for cooperatives. In certain situations cooperatives does not solve all their problems and sometimes does not work well due to differences and conflict between the members. With all the problems associated with cooperatives it remains a major intervention to overcome barriers to markets.