Factors affecting the value added by agricultural cooperatives in Saint Lucia: An institutional analysis

Abstract

This study examines the institutional, governance, group and management attributes of agricultural marketing cooperatives in Saint Lucia and assesses their impact on value added. Theoretical propositions linking these attributes to the level of value-adding observed were tested using a qualitative, multiple-case study approach. Four cooperatives with different levels of value-adding were purposefully selected for in-depth study. The findings indicated that all four cooperatives were burdened with conservative institutional arrangements that constrained their ability to finance and sustain value-adding activities. Value-adding performance was highest in the cooperative that marketed a single product, and lowest in the cooperatives that were unable to hold managers accountable for poor decisions, and which had not benefited from grant funding. Saint Lucia’s cooperative law should be amended to encourage investment in value-adding activities. Successful models that have emerged in other countries allow cooperatives to issue tradable delivery rights and investor shares that carry no or limited voting rights. It is also recommended that directors nominated and elected by shareholders should constitute a voting majority on the board, and the board should have full authority to hire and fire managers. Operational and strategic decisions should be centralised in the hands of accountable managers and directors.