Following discussions between the ENPARD South Support Programme team, the Algerian think tank and the Ministry of Agriculture, Rural Development and Fisheries (MADRP), it was decided to launch a study on cooperatives in order to carry out a diagnosis of the Algerian cooperative system, to analyse the main obstacles of their development and propose recommendations to decision-makers.

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This study was presented at the MADRP during a restitution workshop held on 7 February 2017. Olivier RIVES, a French expert on cooperatives in charge of the study, presented this diagnosis of the cooperative system in Algeria to an audience of representatives of cooperatives from each of the wilayas as well as chiefs of the MADRP.

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After having introduced and illustrated the concept of agricultural cooperative, Olivier RIVES focused on presenting the Algerian cooperative environment, the main obstacles hindering the development of cooperatives as well as the expectations of the representatives of cooperatives and producers based on testimonies and investigation. In conclusion, the expert outlined a set of measures and recommendations aimed at making the Algerian cooperative system more efficient, fitting to producers' demands and on a wider perspective to increase production, better organise value chains and enable territorial development dynamics.

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The main obstacles and challenges identified by Olivier RIVES through his diagnosis of the cooperative system are:

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• A negative image of the cooperatives related in particular to their lack of autonomy, to the complexity of the current system and to the near absence of a cooperative economic culture. All of this leads to a weak sense of adhesion to the cooperative system;

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• The very low ratio of truly effective structures, providing efficient services and meeting internationally accepted standards (less than 10% according to the study);

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• The absence of a central directorate for co-operatives within the ministry, the lack of up-to-date data on the cooperative system and the relegation of producers' organisations in the previous agricultural development policies (PNDRA, PRAR...);

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• The misunderstanding of certain cooperative principles among farmers: inequality in the number of shares; the interest on members' shares; redistribution of surpluses on the basis of the amount of turnover achieved with the cooperative and not on an equal basis ; decoupling between the number of shares and the number of votes...;

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• The undercapitalisation of cooperatives related in particular to the refusal of many producers to pay the shares at the market interest rate but also to difficulties in accessing bank loans;

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• A lack of skills among cooperatives’ managers and members (managerial, accounting, inventory management and finance abilities but also a lack of knowledge of regulatory texts). Moreover, few cooperatives offer training for their members;

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• Poor level and low diversity of services provided. Moreover, cooperatives are competing in the services they perform with informal private enterprises, notably in the distribution of inputs;

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• The rules of management of cooperatives are hardly respected and the internal functioning is not necessarily democratic and participatory;

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• The virtual absence of cooperation between cooperatives.

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To conclude, the expert in cooperatives made several recommendations, including ones from meetings with cooperatives members and field surveys:

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1. Reorganise the cooperative system in order to keep only effective cooperatives that comply with cooperative regulations and principles. This work could be carried out by cooperative auditors who will be in charge of performing audits. At the same time, fight against the informal system by increasing control over trading companies that capture a major share of value at the expense of producers;

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2. Reenergize the cooperative movement by focusing on marketing and enhancing the organisation of the national market but also by promoting products on international markets by taking advantage of Algeria's natural assets (early-ripened products, organoleptic quality, naturalness, biodiversity, etc.);

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3. Provide priority to the development of the cooperative system by creating a dedicated ministerial department and a position of advisor specialised on the cooperative economy directly attached to the Minister's office for example;

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4. Launch a wide-ranging awareness-raising campaign and create incentives to revitalize cooperative culture in Algerian agriculture;

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5. Encourage access to credit through multi-banking;

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6. Organize training plans for senior executives and members of cooperatives with the assistance of the chambers of agriculture and the academic sector;

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7. Relying on cooperatives to strengthen the agricultural extension system and enhance a better implementation of good agricultural practices and new technologies in Algerian agriculture;

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8. Organise meetings, exchanges and professional study tours between the cooperatives of the South and the North of the Mediterranean but also between cooperatives of the South in order to encourage the transfer of skills and the sharing of experiences. Within this framework, organize the General Assembly of the Algerian Agricultural Cooperation;

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9. Establish effective cooperative federations to improve cooperation between cooperatives and increase their bargaining power in negotiations with suppliers for example.

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In order to continue this work on cooperatives and to benefit from this study, a collaboration project between Algerian flagship cooperatives, which will play the role of drivers, and inefficient structures is planned in three wilayas to promote exchanges and skills transfer.

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You can download the complete study in French by clicking on this link.