Analyzing Agricultural Cooperatives: A German Economics Case Study

This case study examines the role of agricultural cooperatives in improving the income of rural farmers, specifically focusing on the German context. The study highlights the importance of sustainable agricultural practices in reducing soil degradation, improving productivity, and combating food insecurity and poverty. It explores how agricultural cooperatives facilitate the adoption of sustainable practices by providing a collective voice for farmers, enabling access to affordable services, and creating economies of scale. The analysis emphasizes the benefits of cooperatives in extending microloans, fostering social relations, lowering input costs, and empowering members through decision-making processes. The study references several academic papers to support its findings and provides insights into how cooperatives can play a crucial role in poverty alleviation, employment generation, and food security within the agricultural sector. The case study underscores the advantages of cooperatives in helping farmers capture a larger share of the value added in the food supply chain, ultimately improving their economic outcomes.

Running head: ECONOMICS
Economics
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ECONOMICS
“Role of Agricultural Cooperatives in improving rural Farmers income”. A case
study of German farmers
Practicing sustainable agriculture is quite important for reducing degradation of soil
erosion, improving productivity as well as reducing food insecurity and poverty. However the
adoption rate of sustainable agriculture practice remains low in most of the countries (Ma &
Abdulai, 2016). For this reason, it is very important to find a proper mechanism for
increasing their implementation. It have been found out that agricultural cooperatives has a
strong correlation with the sustainable agricultural practice adoption rates since they are
dependent in the natural resource based activities. The agricultural cooperative is an
organization where many small farms work together as a business in order to help each other
for selling their crops. The farmers who are known to be effectively organized can form a
collective voice for advocating their needs and also access services at affordable prices which
will help in increasing their yields, profits as well as sales. The cooperatives are known to be
present in most of the countries and almost in all sectors. The agriculture can be termed as
the engine of economic growth in most of the developing countries. The farmers will be able
to overcome many difficulties in the presence of strong cooperatives.
More than 20 million people in Germany are known to be the member of
cooperatives. The cooperatives in Germany are known to extend microloans to farmers on
good condition by providing help (Tefera, Bijman & Slingerland, 2017). The cooperatives
are also known to create social relations which will be enabling the individuals for achieving
goals which they might not be able to achieve by themselves. It can also help the farmers
benefit from the economies of scale for lowering their costs of acquiring inputs. The problem
of low productivity as well as low production of agriculture is known to be universal in
nature. It have been found out that agricultural cooperatives has a strong correlation with the
sustainable agricultural practice adoption rates since they are dependent in the natural

ECONOMICS
resource based activities. The agricultural cooperative is an organization where many small
farms work together as a business in order to help each other for selling their crops (Mojo,
Fischer & Degefa, 2017). The agricultural cooperatives are known to have advantages for
tackling the problems of poverty alleviation, employment generation as well as food security.
The major objectives of the primary agricultural credit service societies are to supply
agricultural credit to meet the requirements of funds for agricultural production. The
cooperatives are known to play an important role for helping the farmers for capturing a
higher share of the value added in the food supply chain. The cooperatives can help farmers
like by lowering their input cost or by hiring services like storage and transport. They can
empower the members economically by involving them in decision making process which
can create opportunities of rural employment.

ECONOMICS
Reference list
Ma, W., & Abdulai, A. (2016). Does cooperative membership improve household welfare?
Evidence from apple farmers in China. Food Policy, 58, 94-102.
Mojo, D., Fischer, C., & Degefa, T. (2017). The determinants and economic impacts of
membership in coffee farmer cooperatives: recent evidence from rural Ethiopia. Journal of
Rural Studies, 50, 84-94.
Tefera, D. A., Bijman, J., & Slingerland, M. A. (2017). Agricultural co‐operatives in
Ethiopia: evolution, functions and impact. Journal of International Development, 29(4), 431-
453.
Hart, A. K., McMichael, P., Milder, J. C., & Scherr, S. J. (2016). Multi-functional landscapes
from the grassroots? The role of rural producer movements. Agriculture and Human Values,
33(2), 305-322.