COOPERATIVES AND AGRICULTURAL DEVELOPMENT IN ELGON REG LION A CASE STUDY OF BUGISU COOPERATIVES UNION (BCU) BY WESUTA ANTHONY BEC I 20007 I 82 I DU RESEARCH THESIS SUBMITTED TO THE SCHOOL OF ECONOMICS AND APPLIED STATISTICS IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE A WARD OF BACHELOR OF ARTS IN ECONOMICS OF KAMPALA INTERNATIONAL UNIVERSITY SEPTEMBER, 2012 DECLARATION I WESUTA ANTHONY registration number BEC/ 20007I DU; here by declare that this thesis is my own original work. Its not a duplication of similarly published work of any university or other institution of higher learning for the award of a Degree or Diploma. I also declare that the materials cited in this paper which are not my own have been fully ::::t:~ .~ ................ Wesuta Anthony Date; . .1.?:-:J~. ~J~. ~~ .......... .. APPROVAL This is to certify that this research paper has been submitted for examination with my ::::~~eas. ~::;;te~lS~'·.. Ssekajugo Derrick Supervisor I Date: ...... /J ..I~ .1..... ffi. ~ 11 DEDICATION This work is dedicated to Mr. and Mrs. Wambi Mukhwana Moses, without whom I would have not been what I am today. lll ACKNOWLEDGEMENTS I wise to acknowledge with pleasure the contributions and assistance accorded to me in form of critiques, comments, and advice from various professionals while writing this thesis. Special thanks goes to my supervisor Mr. Ssekajugo Derick for his advice, guidance and more so for offering his valuable time to assist me at the time of difficulty. Deep appreciation and gratitude go to my parents Mr. Mukhwana James and Zitta Wakooli, my brothers especially Mukhwana Godfrey Friday my friends Maniku Simon and Ahemd Mohamed for their financial and moral suppmi offered. My indebtedness also goes to the staff of BCU and all coffee farmers from Elgon region who accepted my request and willing answered my questi01maires. Finally, I salute my girl friend Mary Nandutu who was by my side through thick and thin and for her continuous moral support and encouragement when I felt desperate and lacked the moral to go on. IV ABSTRACT This repmi presents the findings of BCU aimed at assessing the role of BCU towards agricultural development in the Elgon region. Its major findings are three; First BCU has attained 36 percent on average of its endeavourer to attain agricultural development through training of farmers, development of infrastructure, increasing the saving culture, sharing of profits (Bonus), determining the price and income generation ,distribution and redistribution. Secondly the problems facing BCU towards agricultural development in the Elgon region such as low capitalization, political interfere, poor storage facilities and other infrastructure, unfair business practices and governance and leadership gaps are a result liberalization of the economy as this has affected both the quality and quantity of coffee handed by the union (BCU) As possible solutions, there 1s need to rev1ew the cooperative lows as regards liberalization of agricultural sector, reduce government involvement in the daily affairs of the union and increase government financing through reducing the interest rates. Finally, the cooperative union should carry out both vertical and horizontal restructuring so as to adopt to the rapidly changing economic environment reflected in increase globalization and agricultural industrialization if there are benefit members and should operate as organization not as a firm as advocated by (Heimberger and Hoos 1962) but as an organization (Emellant 1942, Robotka, 1947 and Philip 1953). v LIST OF ABBREVIATIONS BCU .Bugisu Cooperative Union ICA International Cooperative Alliance NAADS National Advisory Agricultural Development Service NCP National Cooperatives Policy KIU Kampala International University NRM National Resistance Movement's FDC .Forum for Democratic Change UCDA Uganda Coffee Development Authority I' I I VI TABLE OF CONTENTS DECLARATION ..................... .................... .. ..................... ................. ................................ i APPROVAL ........ ...................................................................... ......................................... ii DEDICATION .......... .. ... .................................................................................................... iii ACKNOWLEDGEMENTS ....... .................. .. ....................... .... ......................................... iv ABSTRACT ..................................................... ................................................................... v LIST OF ABBREVIATIONS ................... ...................... ................................................... vi TABLE OF CONTENTS ..... .. ............ ............. .................................................... ............. vii LIST OF TABLES .............. .......... .. ... .. ...... ......... .. ............... ...... ..... ................... ... .. ............ X CHAPTER ONE ...................................................................................... .......................... 1 THE PROBLEM AND ITS SCOPE ................................................................................ 1 1.0 Background of study ...................................................................................................... 1 1.2 Statement of the problem ....................... .......... ...... .. .......... ... ......... ........... .......... ... ........2 1.3 General objective of the study ....................................................................................... 3 1.4 Specific objectives of study ...........................................................................................3 1.5 Research Questions ........................................................................................................ 4 1.6 Scope of study; ......................................... ..................... .' ......... ................................ ...... 4 1.6.1 Content scope... .. ................. .................................... .. .. .................................... ............. 4 1.6.2 Theoretical scope... ................................................ ......... .......... ..................... ............. 4 1.6.3 Geographical scope ............................. ........................................................................ 4 1.7 Significance of study . ..................................................... ............................................... 5 CHAPTER TWO .. .............. .. ..................... ... .. .. .. .. .. ......... ... .. ..................... ........................ 6 REVIEW OF RELATED LITERATURE ...................................................................... 6 2.0 Concepts, ideas and opinions from authors ............ ....................................................... 6 2.1 Cooperatives and Agricultural Development ................. .................... .......... ..... ............ 6 Vll 2.2 Theoretical perspective .................................. ....... ....................................................... 13 2.3 Related studies ............................................................................................................. 15 CHAPTER THREE ..................................................... .................................................... 16 METHODOLOGY .......................................................................................................... 16 3.1 Research design ........................................... ..................................................... ........... 16 3.2 Population and sampling .. ................... ...... ................................................................... 16 3 .2.1 Target population ...................................................................................................... 16 3.2.2 Sample size ................................................... ............................. ............................... 16 3 .2.3 Sampling techniques. .... ...... ........................................................................... ... ........ 16 3.3 Data collection instruments ......................................................................................... 17 3.3.1 Questionnaires .......................................................................................................... 17 3.3.2 Focused group discussion ......................................................................................... 17 3.4.0 Data processing ......................................................................................................... 18 3.4. 1 Data analysis ..... .. ...... .......... ..... .... ....... .. .................................................................... 18 3.4.1 Editing and spot checking ......................................................................................... 18 3.4.2 Coding ... ........................................................................................................... ......... 18 3.5 Reliability and validity ................................................................................................ 18 3.6 Ethical considerations .................................................................................................. 19 3.7 Limitations ofthe study ..... .......................... ................................................................ 19 CHAPTER FOUR ................................................................................20 DATA PRESENTATION ANALYSIS