Partnering between primary agricultural co-operatives and food retail companies in South Africa

Abstract

This study aimed to investigate partnering between primary agricultural co-operatives (PACs) and food retail companies (FRCs) in South Africa. The South African government views co-operatives as important vehicles for alleviating poverty, and encouraging equity and greater participation by Blacks, particularly communities from rural areas in South Africa. However, PACs throughout the world are facing major challenges as they respond to a more industrialised agriculture, globalisation, and freer trade, and the failure rate of PACs in South Africa is very high. Although some FRCs have a policy of sourcing local goods and supporting local producers, wherever possible, this, however, is balanced with consumer expectations of value, quality and price. As a result of the latter, FRCs tend to source the majority of the agricultural produce from large-scale commercial producers instead of PACs.

The study adopted the pragmatic world view, combining both positivist and interpretivist paradigms as the way knowledge was created, and adopted a mixed method approach, using the combined quantitative (structured questionnaires) and qualitative (focus group interviews and key informant interviews) approaches. The target population comprised of the 493 PACs and the 139 branches of the three largest food retailers in South Africa, namely, Shoprite-Checkers, Pick n Pay, and the Spar Group, that were located in three provinces in South Africa, namely, KwaZulu-Natal, Limpopo, and the Eastern Cape.

Some of the findings from the empirical study revealed that the primary constraints to partnering faced by PACs were limited access to finance; limited access to sustainable markets, as well as lack of governance, management and technical skills. Moreover, a lack of communication and participation by PAC members as well as weak linkages among the activities of the co-operatives pose challenges for FRCs to partner with PACs. By equipping PACs with essential infrastructure, inputs, and equipment, FRCs can assist PACs in improving the quality and quantity of their produce. In addition, partnerships based on shared vision and goals; mutual trust; long-term commitment; adequate resources - material, financial and human - are likely to be successful.

The study culminated in the development of a conceptual model for facilitating sustainable partnering between PACs and FRCs