Category: Distributing Profits

Maraba, Karaba, and Gashonga coffee cooperatives

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By , July 8, 2012 8:45 am

The Context
Three Rwandan coffee cooperatives, (Maraba, Karaba, and Gashonga coffee cooperatives), have been involved in a USAID led project on strengthening managerial capacities, called the PEARL project. Quality improvement in production achieved higher prices, but this also entailed a rethinking of the governance relation between farmers and the cooperative. In order to strengthen the relations with producers, the cooperatives were in need of management practices that would contribute further development of the cooperative.

The Mechanism
As part of the improvement of management practices, the cooperative implemented as system of  profit sharing according to the quantity and quality that was supplied by each individual member,

The Outcome
In a survey (in the mentioned reference), farmers believed that the benefit sharing mechanism (i.e., the sale of coffee cherries at the coffee washing station and the profit- sharing patronage dividend based on quantity and quality supplied) is fair

The profit sharing mechanism was amongst the measures implemented to strengthen relations with farmers. This has contributed to the perception of the members that they are treated equitably, and thereby has strengthened the sustainability of the cooperative as an organization.