Improving Institutional Capacity:
Strengthening Farmer Organizations in the OIC Member Countries
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Business Laws) worked with the ILO to develop a uniform co-operative legal framework, in
force since 2011, and covering 17 African countries.
CLARITY
The Cooperative Law and Regulation Initiative (CLARITY), was established by USAID as a
means of enabling cooperative development through principles for legal reform. CLARITY
seeks to create and disseminate a set of principles for cooperative law reform based on the
collective experiences of member organizations.
The CLARITY framework notes that farmer organizations are often unable to comply with
regulatory frameworks designed to regulate large businesses or state-owned monopolies. In
this way, FOs are prevented from entering certain business areas and expanding their
economic influence for members. Thus, one core principle is that legal and regulatory systems
should thus be no less advantageous to cooperatives than other businesses in the same sector,
while their rights should be protected and sufficient sensitivity given to their mutuality. There
should also be reasonable incentives that enable cooperative forms of business within a sector.
It is recommended that regulatory systems be simple, predictable and efficient, while not
conflicting with or duplicating other laws. They should also accord due process of law,
including applicable rights to hearings, representation, and impartial appeals for state
decisions that affect cooperatives or their members. Finally, they should administer the state’s
role in law enforcement, dispute resolution, licensing, and promotion in a manner that avoids
undue influence and minimizes conflicts of interest. In such an environment, good governance
of the FO, including the provision of due process in administrative proceedings and the
minimization of lengthy bureaucratic processes, can flourish.
4.3.3. At a national level: Including FO-strengthening in national
agricultural transformation plans
While in most governments such regulatory systems are customarily the provenance of the
Ministry of Agriculture, institutional arrangements that supplement – and occasionally bypass
– traditional structures have often been integral in enabling FOs. For instance, agricultural
transformation agencies in Ethiopia and Malaysia have been tasked with working with farmer
organisations on initiatives and strategies aimed at developing agricultural institutions and
value chains and, consequently, improving the incomes and livelihoods of smallholder farmers.
These agencies are examined in detail below.
The Example of Ethiopia
In Ethiopia, where poverty and food insecurity continue to be a challenge in rural areas,
agricultural development is imperative; the poorest sub-sector of rural households are
chronically reliant on social safety net programmes and food aid. However, the country has
recently undergone a period of rapid growth within the agriculture sector. The government,
structured as a federal parliamentary republic, has committed to improving sector
productivity to ensure food self-sufficiency and has allocated more than 15% of its total
budget.102 Although a significant amount of this figure is dedicated to the Disaster Risk
Management and Food Security programme, many officials acknowledge the need to reform a
sector dominated by subsistence, low-input and minimally productive rain-fed farming and
102 Ethiopia Agricultural Sector Policy and Investment Framework 2010-2020. Ministry of Agriculture and Rural Development.
Draft Final Report, 15 September 2010