Recent history of cooperatives in Tanzania

Summary

 The summary shall deeply deploy the recent history of co-operative in our country. In Tanzania cooperatives were re-introduced in 1982. Although they had been abolished for a relatively short time, when they were reinstated they failed to recover their old vibrancy. The post-abolition crop marketing cooperatives have not performed well and most of them have been liquidated or gone under receivership (Banturaki, 2000; Maghimbi, 2006). Cooperatives which were liquidated or those which went under receivership after 1982 included many primary cooperatives that were collecting crops from members for marketing. Also included were large cooperative unions, such as Shinyanga Region Cooperative Union (SHIRECU) and Ruvuma Region Cooperative Union (RURECU). The pre-abolition cooperatives had price stabilization funds, but current ones lack this support. In 1960 marketing cooperatives which were the core of the movement were able to meet 33.5 per cent of the funds needed to purchase members’ crops, but in 1996 they could raise only 0.7 per cent of the funds (Banturaki, 2000).

Saving and credit cooperatives (SACCOs) were not as numerous as the crop marketing cooperatives in the pre-abolition period. However, SACCOs have grown rapidly since the 1980s and as institutions they have remained more stable than the crop marketing cooperatives. In the 1980s and 1990s when most crop marketing cooperatives collapsed, the SACCOs continued to survive (Maghimbi, 2006).

According to SCCULT, there were 4,524 SACCOs in 2007 with 758,829 members. In the same year it was recorded by the Cooperatives Development Department that there were 8,151 primary cooperatives in Tanzania mainland. The crop marketing cooperatives amount to 2,670 and the total number of members of registered primary cooperatives was 1,600,000 in June 2008. Thus, SACCOs are now the leading type of cooperative in terms of numbers of cooperatives and cooperative members. The current model of cooperatives in Tanzania can thus be described as Chayanovian cum Raiffeisenian. Nevertheless, it leans more towards the Chayanovian model because many of the members in both the crop marketing cooperatives and SACCOs are peasants.

The literature indicates that when cooperatives were re-introduced in 1982, they were allowed to form without share capital subscription in the strict and practical sense. Members of cooperatives were required to pay only non-refundable dues and cooperatives were thus unable to build up capital. The law was changed in 1991, but marketing cooperatives lacked crop buying funds (Banturaki, 2000:41).

When cooperatives were re-introduced in 1982, cooperative legislation placed the confederation under the patronage of the political party that was ruling the country. Membership was almost compulsory, but not clearly defined because every village in the country was supposed to be a political wing of the ruling party and a multi-purpose cooperative at the same time. With the 1991 cooperative law, membership became voluntary and peasants were not obliged to sell their crops to cooperatives. Cooperatives made attempts to make their members contribute to share capital and this resulted in low number of members (Mchomvu et al., 2002:33). Cooperatives failed to offer price incentives as had been the practice in the pre-abolition era, and thus they lost their traditional role in protecting peasants. In 2001 cooperatives in Tanzania mainland were reported to be in an appalling state. By May 2001 they owed banks TZS 17.8 billion. They had accumulated this huge debt despite the cancellation of their TZS 44 billion debt by the government in the previous ten years (Mchomvu et al., 2001:34).

After re-introduction, cooperatives were placed under the wing of the sole (ruling) party, Chama cha Mapinduzi – Swahili for “The Party of Revolution” (CCM) of the country as its mass organization. The movement was also merged with that of the Isles (Zanzibar). This was a forced “marriage” that ended in a bitter “divorce” in 1991 when the liberalization policies allowed multi-party politics. The cooperative movement under political patronage was not member-based. Government control and political patronage lowered members’ morale and negatively impacted on their attitudes towards cooperatives.

References

1. Maghimbi, S. (2006) The Organization Capacity of Cooperatives for Peasants and Small Farmers and Small Farmers: A View From an Outside, paper presented to REDET’s Training Workshop for Leaders of Cooperatives, Bwawani Hotel, Zanzibar 1st – 2nd February 2006.
2. Melnyk, G. (1985) The Search for Community: From Utopia to a Cooperative Society, Montreal & Buffalo, Black Rose Books.