Summary
Traditionally the type of cooperative that has been dominant in Tanzania mainland is the one that has focused on marketing of peasant’s agricultural crops. This kind of cooperative has been dominant in terms of members and volume of trade since the birth of cooperatives in the 1920s. The present day dominance of SACCOs is thus a recent phenomenon that started in the 1990s.
The dominant model of cooperatives in Tanzania has not been the Rochdalean model. This is the model associated with consumer cooperatives (Melnyk, 1985:3). Neither can the dominant model be described as a Raiffeisenian/Schulze-Delitzschian, the model which is dominated by rural cooperative credit cooperatives and cooperative banks (Akpoghor, 1993:8-15).
The cooperative model which thrived in the country from the 1920s to abolition in 14th May 1976 is what we can term the Chayanovian model. In this model peasant crop marketing cooperatives dominate. Similar models have been found in Russia before the communist revolution in 1917 and in India from the beginning of the 20th century up to present. In this model cooperatives have thrived well in large countries that are dominated by millions of peasants (Maghimbi, 2006).
Peasant cooperatives had no social base in Western Europe, as the time when cooperatives were invented, the Western European peasantry was almost extinct. Peasants were nevertheless numerically the majority in Russia during that period. A strong peasant cooperative movement was founded and thrived before it was destroyed by the communists after they took power in 1917 (Maghimbi, 2006). Russian scholars, such as S.N. Prakopovich, wrote serious scientific works on the organization of cooperatives in 1913. The most famous Russian theorist on the peasantry also formulated a theory of peasant cooperatives in 1919. This was Alexander Chayanov (Chayanov, 1991).
Prokoporich argued that any cooperative association represented a free and self-managing alliance of members enjoying full and equal rights. He argued that the modern cooperative system functioned under the conditions of the market economy and in accordance with its laws. Another Russian cooperative theorist, Tugan-Baranovsli, believed that cooperatives could do a great deal to defend and improve the peasant economy and even lead to its profound transformation (Chayanov, 1991: XIV-XIX).
The Chayanovian model of cooperatives is most relevant to Tanzania, as it considers situations of developing countries where peasants dominate. In 1919, the year Chayanov’s theory of peasant cooperatives was first published, this scholar was already then analyzing problems which Tanzanian peasants are now facing under globalization. Chayanov was interested in organizations and particularly how cooperatives would help the peasantry to not be overrun by large-scale production organizations. The problems of very large organizations associated with the threatening of small scale producers was well known at the end of the 19th century (Chayanov, 1991: XXIV).
Chayanov appreciated the importance of peasant cooperatives after studying the situation in Belgium where large firms were undermining small scale producers. He was particularly interested in the interaction between cooperatives, publicly organized agronomical facilities and state policy; in the process of the radical marketisation of agriculture, and in the conflicts between large-scale and small-scale forms of production (Chayanov, 1991: XXII).
According to Chayanov, the cooperative advantage is that it can advance the position of the poor without making any special changes in the economic equilibrium and without substantially destroying the organizational plan of the small-scale rural economy. He was of the view that cooperatives could organize some of the particular technical economic activities where large-scale production has an undoubted advantage. The cooperative can organize these production activities by technically detaching them and merging them with similar activities being undertaken by neighbours. Chayanov demonstrated that the cooperative can protect the small-scale peasant household under conditions of market competition in his theory of vertical integration (Chayanov, 1991: XXVIII; Chayanov, 1966; Maghimbi, 2006).
