Success factors for agricultural farmers’ market organizations: empirical results from Ethiopia

University of Groningen, The Netherlands

Faculty of Economics and Business

April, 2016

Success factors for agricultural farmers’ market organizations:

empirical results from Ethiopia

Geerligs, M.

Article info Content

Preface:

This paper is written as part of a master thesis for Small Business & Entrepreneurship (SB&E) and International Business & Management (IB&M)

By means of eight case studies, this paper explores, identifies and describes success factors for farmers’ market organizations in Ethiopia.

Master thesis SB&E and IB&M

Keywords:

Author

 M. (Michel) Geerligs, University of Groningen

Student Small Business & Entrepreneurship (SB&E) and International Business & Management (IB&M)

m.geerligs@student.rug.nl/michel_geerligs@hotmail.com

Supervisors

 Dr. C.H.M. (Clemens) Lutz, University of Groningen

Associate professor in the faculty of Economics and Business c.h.m.lutz@rug.nl

Supervisor for SB&E

 Dr. B.J.W. (Bartjan) Pennink, University of Groningen

Assistant professor in the faculty of Economics and Business b.j.w.pennink@rug.nl

Supervisor for IB&M

Acknowledgements

The research on success factors for farmers’ market organizations has been made possible thanks to the following people and organizations whose contributions are herewith gratefully acknowledged.

Dr. Getaw Tadesse (IFPRI), Dr. Elias Zerfu (CGIAR), Oscar Geerts (SBN), Mascha Middelbeek (Agriterra), Ysakor Hailu (Agriterra), Getaye Kebede (Technoserve), Asnake Nigat (Technoserve), Dr. Linda Geerligs and Esther Hartholt for their feedback and advise on performing case studies on farmers’ market organizations.

Abstract

Table of content

Abstract ... 3

1. Introduction ... 6

2. Literature on agricultural cooperatives and FMOs ... 8

2.1 Farmers’ market organizations... 8

2.2 Agricultural cooperatives and FMOs in Ethiopia ... 9

2.3 Success factors for farmers’ market organizations ... 9

3. Methodological approach for identifying success factors for FMOs ... 25

3.1 Aim of the research ... 25

3.2 Case studies ... 25

3.3 Choice of cases ... 26

3.4 Interviews ... 26

3.5 Format of interviews ... 27

3.6 Data collection in the field ... 28

3.7 Data analysis ... 29

4. How are the FMOs performing in reality? ... 31

4.1 The eight cases on the map and general descriptions ... 31

4.2 Case reports ... 33

4.2.1 Chancho cooperative ... 33

4.2.2 Lelistu cooperative ... 34

4.2.3 Dekabora cooperative ... 36

4.2.4 Diban Diba cooperative ... 37

4.2.5 Duromina cooperative ... 38

4.2.6 Yachi Kachise cooperative ... 40

4.2.7 Kokit cooperative... 42

4.2.8 Kumer cooperative ... 44

5. Identifying the success factors for FMOs... 46

5.1 Type of membership ... 46

5.2 Decision making process ... 49

5.3 Transparency of management ... 52

5.7 Financial constraints ... 66

5.8 Size effect and capabilities ... 70

5.9 Members’ commitment and involvement ... 73

5.10 Strategic intent ... 75

5.11 Institutional environment ... 78

6. What can we say about the success factors for FMOs? ... 80

6.1 Conclusions on the success factors for FMOs ... 80

1. Introduction

Improvements in income levels and welfare in developing countries often depend on generating productive employment and value added opportunities from agricultural production (Anriques, 2007; World Bank, 2008). Efforts have been made to build up farmers’ production capabilities and to enhance their access to markets (Fischer & Qaim, 2012). Farmers’ market organizations (FMOs) or market-oriented cooperative organizations are considered to be helpful in this respect. While FMOs have re-gained popularity in the context of agricultural development (e.g. Narrod et al., 2009; Rao & Qaim, 2011), conflicting results have been found regarding the performance of these cooperatives. Performance in this respect is regarded as the degree of access to benefits for members of the FMO, which increases their competitiveness in the market.

Various examples have shown that agricultural cooperatives can be successful. For example Roy & Thorat (2008) have shown that marketing-oriented cooperatives in India have led to lower transaction costs and increased bargaining power of members relative to foreign traders. However, there are also many cases in which the performance of cooperatives was very poor. Tadesse & Lutz (2015) note that the performance of cooperatives in developing countries, and in particular Africa, is very modest. For example Bernard, Collion, Dejanvry & Rondot (2008a) found that benefits to cooperative membership in Senegal and Burkina Faso were very limited. In a similar vein, it is shown that most cooperatives in Ethiopia have not improved market commercialization and farmers’ welfare (Bernard, Taffesse & Fabre-Madhin, 2008b).

What are the success factors for farmers’ market organizations?

This article contributes to the literature by analyzing FMOs in the Ethiopian agricultural sector. Since 1998, the government of Ethiopia has made efforts to promote a new generation of cooperatives. Despite the intense research of scholars on FMOs in Ethiopia (e.g. Bernard, Gabre-Madhin & Taffesse, 2007; Francesconi & Heerink, 2010), there is no full understanding of the factors that contribute to the performance of FMOs. Such understanding would be helpful for practitioners to improve the efficiency and effectiveness of FMOs.

2. Literature on agricultural cooperatives and FMOs

2.1 Farmers’ market organizations

Cooperatives are organizations owned and operated by a group of individuals for their mutual benefit (Lutz, 2015). Many of these organizations operate within a specific region or village. Cooperatives can be found in various sectors, but are mainly present in the agricultural sector. A distinction needs to be made between market-oriented organizations and community-oriented organizations. The former organizations support the income-generating activities of their members (Lutz, 2015). Activities may concern the processing and marketing of agricultural products, animal husbandry, horticulture and irrigated crop production (Bernard et al., 2008a). The main idea of FMOs is to leverage the power of collective action. Community-oriented organizations strive to support the development of the community. These cooperatives focus on activities like cultivation of a collective field, casual labor exchange, maintenance of a cereal bank, management of the environment, water harvesting, social activities, potable water management or the distribution of fertilizers and seeds (Bernard et al., 2008b; Bernard et al., 2010).

The current study specifically focuses on market-oriented organizations/FMOs, but what is the relevance of these kinds of organizations? In order to improve the prospects of small businesses in developing countries it has been recognized that collective action is an efficient way to do so. FMOs, as a way of collective action, may help small firms to overcome growth constraints and be competitive (Schmitz & Nadvi, 1999; Audretsch & Thurik, 2001). As small farmers in developing countries are often resource constrained, FMOs might be instrumental in creating unique resources for their members. FMOs can create sources of competitiveness and assets that ascend from joint investment and production (Lutz, 2015). Without this kind of collective action it would be hard for these farmers to compete in a market with large players (Lutz, 2015). Thus, FMOs also improve competition within the market as a result of enabling small players to enter the market. FMOs are more helpful in this process than community-oriented cooperatives as they focus purely on improving competitiveness of member farmers in the market while community-oriented cooperatives aim to boost the community development.

2.2 Agricultural cooperatives and FMOs in Ethiopia

Since 1994, the government of Ethiopia has promoted the founding of cooperatives that were different from the cooperatives that were formed by previous regimes (Bernard, Abate & Lemma, 2013). The government intensely supports the establishment of agricultural cooperatives to eliminate access-barriers to markets (Francesconi & Heerink, 2010). According to the state, individual farmers should act through cooperatives because this helps them to scale up production and gain market power. Between 2008 and 2013 the number of cooperatives in Ethiopia grew by 87.4 percent (Bernard et al., 2013). In 2012 there were a total of 43,256 cooperative organizations with approximately 6.5 million members. Agricultural cooperatives accounted for 26.5 percent of the total cooperative organizations in Ethiopia. As of 2012, 36 percent of smallholder farmers in Ethiopia were member of an agricultural cooperative (Bernard et al., 2013). Agricultural cooperatives in Ethiopia serve as a channel to gain access to subsidized agricultural inputs, training and donations from the state or NGOs (Spielman, Cohen & Mogues, 2008). In some occasions they also organize collections and sales of members’ supplies to support output marketing (Francesconi & Heerink, 2010). Sporadically cooperatives provide services like storage, transportation and manufacturing.

2.3 Success factors for farmers’ market organizations

Even though there is no conclusive agreement about the key elements that determine the success of an FMO, some factors have been linked to the success of FMOs. We will shortly describe recent developments on the most important factors associated with the performance of FMOs. The case study that will be performed serves to identify success factors, and their importance in practice. Therefore, some of the factors that are mentioned in the literature may not be identified in our case studies. The case study might also be helpful in exploring success factors that have received little to no attention in the current literature.

2.3.1 Type of membership

FMOs have either an open membership policy or a closed membership policy. Open membership means that anyone who wants to join the FMO can use its services to do so (Williamson, 1998). There should be no discrimination on social, political, racial or religious ground. Closed membership implies that the number of members is limited to the people it can and wants to serve by implementing criteria. Lutz (2015) argues that most FMOs who embed open membership share the same principles as community-oriented organizations. For these organizations community benefits are crucial, while strategic positioning and willingness/capability to invest receive little attention. It is found that these organizations perform rather disappointingly (Bernard et al., 2010). Furthermore, with open-membership policies, FMOs attract new members with different levels of interest (Bernard et al., 2010). This leads to an increase of members as well as the heterogeneity among the members, which consequently raises the coordination costs1 of the FMO (Bernard et al., 2010). Those new members often contribute less than the original members or they do not contribute at all. As a consequence, this negatively affects the returns offered by the FMO, which also discourages initial

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members from further involvement. Most cooperatives in Ethiopia declare that they enhance an open membership policy (Bernard et al., 2010). However, members often need to satisfy particular criteria (financial criteria in most occasions) in order to become a member. Bernard et al. (2010) state that cooperatives may choose to explicitly or implicitly enhance some degree of exclusion in order to reach a certain degree of homogeneity of members interest and commitment which subsequently ensures effective performance.

The relationships between closed membership and FMO performance:

Proposition 1a (red): Closed membership policy positively relates to the willingness of new members

and initial members to invest. Performance of an FMO improves when members have a higher willingness to invest.

Proposition 1b (light blue): Closed membership policy positively relates to the homogeneity of

members in interest and commitment. Lower coordination costs, resulting from homogeneity of members, improves the performance of an FMO.

2.3.2 Decision making process

Research of Bernard et al. (2013) has shown that members often do not feel involved in the decision making process of the cooperative. However, surprisingly, they do not insist on being more involved in this process. When all members need to reach an agreement in order to make a decision, we call this participatory decision making. The coordination costs associated with participatory decision making increases when it concerns a large and heterogeneous group (which is often the case with FMOs enhancing an open membership policy) (Bernard et al., 2010). Several authors indicate that coordination costs can be decreased by reducing the number of individuals who are involved in the decision making progress (e.g. Tendler, 1983; Bianchi, 2002; Bernard et al., 2010). Before we continue, it is important to make a distinction between decisions that concern daily operations and decisions that are focused on the strategy of the FMO. Members’ participation in making strategic

Closed membership (P1a, P1b)

Fig. 1: Causal model of the association between closed membership and FMO performance

effectiveness of the cooperative (Grootaert, 2001). However, we should keep in mind that these authors did not make a distinction between marketing-oriented cooperatives and community oriented cooperatives when addressing their arguments. Participatory decision making regarding strategy might be more important for community-oriented cooperatives since this practice of decision making can result in outputs that are desired by greater number of people (Foster & Rosenzweig, 2001). When looking at decisions that are focused on the daily operations of the FMO we can argue that participative decision making has a negative influence on the swiftness and flexibility of decision making as a greater number of people is involved in this process. This can have a negative influence on the performance of FMOs because they need to be able to make rapid and flexible decisions to compete in the market. Moreover, some authors argue that, too much participation in making operational decisions by inexperienced members may limit the capacity of the group to be competitive (Tendler, 1983; Bianchi, 2002). It is to be expected that strong leadership with decentralized decision-making processes on day-to-day issues will result in higher organizational performance since strong leaders embed technical expertise, drive and continuity. However, when decisions on daily operations, as well as strategic issues, are made by a restricted number of people, it is essential that other members respect these decisions since FMOs are there to meet the needs of members (e.g. Tendler, 1983; Bianchi, 2002; Bernard et al., 2010). In accord with the previous arguments we might expect that participative decision making has a positive effect on the performance when it concerns strategic decisions and a negative effect on the performance when it concerns operational decisions.

The relationships between different types of decision making processes and FMO performance: Proposition 2a (red): Participatory decision making increases coordination costs which negatively

relates to the performance of an FMO. This is especially the case when participatory decision making is done by a large and heterogeneous group.

Proposition 2b (light blue): Participatory decision making regarding strategic issues improves

effectiveness and sustainability by taking into account local conditions. Consequently, improved effectiveness and sustainability has a positive effect on the performance of an FMO.

Proposition 2c (green): Participatory decision making regarding strategic issues increases feelings of

ownership, and likewise trust in the effectiveness of the FMO. Feelings of ownership and trust in the organization improve the performance of an FMO.

Proposition 2d (orange): Participatory decision making on daily operations reduces the speed and

flexibility of decision making. Slow and inflexible decision making has a negative impact on the effectiveness and efficiency of daily operations, and thus negatively influences the performance of an FMO.

Proposition 2e (dark blue): Participatory decision making on daily operations may involve

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Proposition 2f (purple): When FMOs do not enhance participatory decision making on daily

operations or strategic issues, it is a prerequisite that other members respect the decisions made by the restricted number people. If this is not the case, this type of decision making will have a negative impact on the performance of an FMO.

2.3.3 Transparency of management

Another important factor linked with the performance of an FMO is the transparency of management. Transparency of management may concern the information exchange to members and other stakeholders on strategic goals and plans, performance reports, legal status, governance and management arrangements, rules of the FMO, duties and responsibilities of members, board of directors, financial information and contact information. The performance of an FMO largely depends on the involvement of members and their willingness to invest (Ruben & Heras, 2012). To achieve this it is important that FMOs stimulate trust, open information exchange and long term commitment in their organization. Stellmacher & Grote (2011) show an example where limited transparency in management reduces the loyalty and involvement of members in a cooperative. Members of an Ethiopian coffee forest cooperative complained that they did not get their benefit, but the cooperative noted that there was no profit. Even committee members did not receive transparent information about the benefit and costs. When transparency of management is limited, there is a potential for power abuse of leadership. Also, when decision making is primarily vertical, it follows that external actors can easily threaten the FMO by manipulating people who are authorized to make a decision (Putnam, 2000; Ruben & Heras, 2012). Additionally the World Bank (2007) notes

Participatory decision making regarding strategic issues (P2b, P2c)

Fig. 2: Causal model of the association between decision making processes and FMO performance

Performance of FMO Coordination costs

(P2a)

Effectiveness and sustainability (P2b) Feelings of ownership and trust in the FMO (P2c)

Decentralized decision making not accepted by other members (P2f)

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Participatory decision making by large and heterogeneous group (P2a)

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Participatory decision making regarding daily operations (P2d, P2e)

Decision making involves inexperienced members (P2e) Inflexibility and slowness of decision making (P2d)

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Some people even refrain from becoming member of an agricultural cooperative because they are afraid of corruption (Wold & Gebre, 2014).

The relationships between the level of transparency of management and FMO performance:

Proposition 3a (red): Low transparency of management reduces trust, loyalty and involvement of

FMOs members. Limited trust, loyalty and involvement negatively relates to the performance of an FMO.

Proposition 3b (light blue): Low transparency of management induces the potential of power abuse

of leadership. Performance of an FMO decreases when this leads to reduced trust among members, people refraining from becoming member, internal conflicts and corruption.

Low transparency of management (P3a, P3b)

Fig. 3: Causal model of the association between the level of transparency of management and FMO performance

Performance of FMO Potential of leadership

power abuse (P3b) Low trust, loyalty and

involvement of members (P3a)

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Reduced trust among members (P3b)

People refrain from becoming member (P3b)

Chance of internal conflicts (P3b)

Chance of corruption (P3b)

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2.3.4 Services provided by the FMO

An FMO can choose to provide its services to members as well as non-members. In this case the whole community can benefit from the services provided by the FMO. The FMO can also choose to exclude non-members from the services organized, which implies that services offered by the FMO are only created to improve the competitiveness of its members (Bernard & Taffesse, 2012; Torre, 2006). Farmers are willing to collaborate voluntary when the benefits of gaining access to services exceeds the individual costs, even if it allows other members to extract benefits from the services as well (Olsen, 1965). However, when FMOs provide services for members as well as non-members, members’ motivation to invest money and time will be rather low since membership serves no exclusive benefits (Tadesse & Lutz, 2015). This might be problematic because FMOs need (financial) resources in order to be competitive. Surprisingly, in the study of Bernard, Gabre-Madhin & Taffesse (2007) it seemed that 74% of the marketing-oriented cooperatives they investigated in Ethiopia were engaged in social activities which are provided to members as well non-members. External pressures from the state, foreign donors, non-governmental organizations (NGOs) or interest groups often push FMOs to provide social activities to the whole community (e.g. consumption, HIV prevention, literacy training or public infrastructure) (Bernard et al., 2010; Chirwa et al., 2005). In the event that FMOs provide access to services to people who are not members of the organization, it often has to do with gaining social acceptance and establishing legitimacy in the community (Bernard et al., 2010). The World Bank (2007) notes that a conflict may arise when FMOs provide access to services to the complete community: they have to balance community norms with business norms. Those FMOs often provide access to services that focus on improving the competitiveness of members as well as socially oriented services (e.g. Bernard et al., 2007). Several cases have highlighted that cooperatives should not engage in a wide scope of activities because this comes at the expense of the economic performance (e.g. Chirwa et al. 2005; Delion, 2000; Stringfellow, Coulter, Lucey, McKone & Hussain, 1997). This is especially the case when these activities are highly different from each other. This negative effect on the performance is caused by the high burden managers have to face when organizing such a wide array of activities. Furthermore it makes it more difficult for FMOs to specialize in a few specific activities.

The relationships between services provided by the FMO and the performance of an FMO:

Proposition 4a (red): An FMO providing access to services to members as well as non-members

decreases the motivation of members to invest time and money in the FMO. This reduced motivation negatively relates to the performance of an FMO, as it needs resources to be competitive.

Proposition 4b (light blue): An FMO engaging in a wide scope of activities creates a high burden for

2.3.5 Origin of the FMO

Two types of FMOs can be distinguished; top-down cooperatives and bottom-up cooperatives. Top-down cooperatives refer to organizations in which governmental actors and/or other external actors play a dominant role (Zhang, Wang & Cai, 2007). In bottom-up cooperatives it is the farmers themselves who play a fundamental role in the organization. Agricultural cooperatives in developing countries are often established on the basis of political criteria by external agents as a part of public investment strategies or rural development plans launched by international agencies (Ruben & Heras, 2012). When governmental actors exercise a lot of control over these top-down cooperatives they can easily manipulate the committee. Goals of the government are often not in line with the goals of the cooperative. As a result there is a high level of distrust amongst cooperatives in Ethiopia. In the end this creates major constraints to become effective in improving market commercialization and farmers’ welfare (Bernard et al., 2007). Another share of the Ethiopian cooperatives is created by NGOs and donor agencies. It is often the case that the only aim of top-down cooperatives is to receive public subsidies (Francesconi & Ruben, 2008). As a result, these cooperatives lack competitiveness and are ineffective at improving the welfare of farmers. An example is given by Bernard et al. (2007) who showed that a cooperative in Burkina Faso was created to obtain their legal status in order to receive external funding from an external partner who was willing to work with them. Before finding this external partner they would not undertake any action. The article of Francesconi & Heerink (2010) shows that top-down cooperatives perform better than bottom-up cooperatives at the initial stage. However, the authors also show that cooperatives that are under a constant control of governments or other external actors lose competitiveness over time. Contrarily cooperatives created by farmers themselves are able to sustain business on a longer run. They are able to operate more successfully in the longer term because of effective leadership (Bernard et al., 2007). Member-created cooperatives show more effective leadership because they are able to develop independently of exogenous policy targets. Therefore Francesconi & Heerink (2010) suggest

FMO provides access to services to members as well as non-members (P4a) Performance of FMO Burden for managers to

organize activities (P4b) Motivation of members to invest time and money in the FMO (P4a)

FMO engages in wide scope of

activities (P4b) Difficulty for managers to specialize in certain activities (P4b)

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Fig.4: Causal model of the association between services provided by the FMO and FMO performance

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that bottom-up cooperatives should not interact with the government or external actors concerning management or adaptation of the organization.

The relationships of top-down FMOs and bottom-up FMOs with FMO performance:

Proposition 5a (red): Governmental actors can exercise high control over top-down FMOs which

enables governmental actors to manipulate the committee. This creates distrust among members in a top-down FMO, and eventually leads to constraints to perform successfully.

Proposition 5b (light blue): Top-down FMOs can be created in order to receive public subsidies. Such

FMOs are ineffective in improving competitiveness of their members, which implies that these FMOs are not able to perform successfully.

Proposition 5c (green): Bottom-up FMOs show higher effective leadership in the long run. Effective

leadership, induced by the independency of external policy targets, positively relates to a higher performance of an FMO in the long run.

2.3.6 External support

Tadesse & Lutz (2015) have addressed the problem that FMOs are seriously resource constrained. Managerial capacities of cooperatives are frequently very limited because of lacking financial resources and low involvement of members (Bernard et al., 2007; Tadesse & Lutz, 2015). In order to improve professional leadership of cooperatives governmental actors can play an important role (Ruben & Heras, 2012; Francesconi & Ruben, 2008). For instance, in 1988 the Ethiopian government provided technical and financial support to cooperatives. This has helped to address the lack of

Performance of FMO Governmental actors

can manipulate the committee (P5a) Top-down

FMOs (P5a,

P5b) _{FMOs can be created} to receive public subsidies (P5b)

Fig. 5: Causal model of the association of top-down FMOs and bottom-up FMOs with FMO performance

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that the government should focus on supporting cooperatives on management capacity building. Such support would help the cooperative to face the challenges coming from the marketplace. FMOs can as well be supported by donor agencies or NGOs. In 2000 a total of 368 NGOs were operating in Ethiopia to work on issues related to sustainable agriculture and rural development (Rahmato, 2002). For example, Fischer & Qaim (2012) illustrated that NGOs supported the creation of cooperatives in Kenya to gain access to new technologies, related technical extension and output markets. These cooperatives functioned as important facilitators for innovation adoption and upgrading of production systems. Consequently these conditions helped the members to be more competitive in the market. Still most FMOs are not able to get external financial support (Lutz, 2015). As a result, most FMOs need to gain resources by receiving membership fees. As noted earlier, cooperatives that were able to develop independently from external support often show more effective leadership (Bernard et al., 2007).

The relationships between external support and FMO performance:

Proposition 6a (red): An FMO can improve its operational efficiency by receiving technical and

financial support from the government. Operational efficiency is positively related with successful performance of an FMO.

Proposition 6b (light blue): The government can support management capacity building of an FMO.

Improved management capacities of FMOs relate positively with the performance of an FMO as it is better able to face challenges on the market.

Proposition 6c (green): NGOs can support FMOs to gain access to new technologies, technical

extensions and output markets. Consequently these FMOs can act as catalysts for innovation adoption and upgrading of production systems. These conditions are positively related with successful performance of an FMO.

Fig. 6: Causal model of the association between external support and FMO performance

Performance of FMO External support from the government (P6a, P6b) Technical and financial support (P6a) Innovation adoption and upgrading of production systems (P6c) Management capacity building support (P6b) Operational efficiency (P6a) Management capacities (P6b) External support from NGOs (P6c)

FMO gains access to technologies, technical extensions and output markets (P6c)

2.3.7 Financial constraints

Several cases show that the created benefits of cooperatives are rather poor (e.g. Bernard et al., 2007). Leaders and members of the cooperative state that this is mainly due to a lack of financial resources (Bernard et al., 2013). What follows is that FMOs are more effective in providing services that require minimal financial resources (e.g. training or information) than services that require a lot of financial resources (e.g. credit loans, infrastructure or inputs). For instance, due to financial constraints, some coffee cooperatives in Ethiopia limit the amount of coffee they purchase from farmers (Kodama, 2007). Even though the farmers are satisfied with the price offered by the cooperatives and are willing to sell more to them, the cooperatives are not able to buy all the volume of coffee the farmers produce. Consequently the farmers have to look for private traders to sell the coffee to. FMOs have two options in order improve the financial resources of the organization: externally (banks or institutions) and internally (membership contributions) (Ruben & Heras, 2012). However, as noted earlier, most of the FMOs are not able to extract financial support from external actors (Lutz, 2015). Moreover this solution does not offer a sustainable solution. Tadesse & Lutz (2015) note that a better alternative is to design a special form of incentive mechanism for members to invest in FMOs. Furthermore Lutz (2015) highlights that committed members are necessary for the required investments. An important remark is that such investments do not only refer to financial means but also to sharing information and knowledge, and putting effort into organizing the cooperation (Lutz, 2015).

The relationships between instruments to cope with financial constraints and FMO performance: Proposition 7a (red): A financial deficient FMO operates more successfully when it focuses on

providing services that require minimal financial resources.

Proposition 7b (light blue): An FMO that has a financial deficiency can improve its performance by

creating an incentive mechanism for members to invest in the FMO. Such a mechanism creates a durable method to receive investments by members. It follows that such an FMO is better able to perform successfully.

Proposition 7c (green): An FMO that is financially constrained can face this problem by focusing on

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2.3.8 Size effect and capabilities

Another important issue addressed by several studies is the weak management capacities within cooperatives (Bernard et al., 2007). Especially for FMOs, management capacity is crucial for the extraction of resources and the ability to manage them. This is less important for community-oriented organizations as their main goal is to redistribute public goods. Indeed evidence from Senegal shows that greater management capacity leads to better performance of FMOs (see Bernard et al., 2007). Membership in agricultural cooperatives can be helpful for farmers to increase their productivity by gaining access to technology and by improving their technical efficiency (Abate, Francesconi & Getnet, 2013). Although membership in cooperatives leads to a higher technical efficiency of farmers, the effect remains small. This is often due to weak technical capacities of cooperatives (Bernard et al., 2013). Another issue related to the performance of FMOs concerns economies of scale. While we mentioned earlier that heterogeneity of membership increases the coordination costs, it is also the case that a higher number of members positively influence the benefits linked to economies of scale (Stockbridge, Dorward & Kydd, 2003). However, members of cooperatives often mention that their organization is not able to perform successfully because members (i.e. the farmers) are too small or the number of members is too low (Bernard et al., 2013). As a result, the advantages of economies of scale are regularly limited as FMOs are commonly small sized.

The relationships of size effect and capabilities with FMO performance:

Proposition 8a (red): Weak management capacities are negatively related to the performance of an

FMO.

Fig. 7: Causal model of the association between instruments to cope with financial constraints and FMO performance

Performance of FMO FMOs with financial

constraints adapt operations to face this problem (P7a, P7b, P7c)

FMOs can provide services that require minimal financial resources (P7a) Investments made by members (P7b, P7c)

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Members’ willingness to invest (P7c) FMOs can create an

Proposition 8b (light blue): Weak technical capacities are negatively related to the performance of an

FMO.

Proposition 8c (green): An FMO, which is small sized, benefits less from the advantages of economies

of scale. Consequently small size of an FMO relates negatively to the performance of an FMO.

2.3.9 Members’ commitment and involvement

We described earlier that committed members are necessary to tackle financial constraints within an FMO. Yet, another important problem is that members often show low involvement within the cooperative (Bernard et al., 2013). Farmers do not show a profound interest in the functioning of the cooperative which they are member of (Bernard et al., 2007). Several farmers note that they don’t participate actively or not at all because the benefits are too limited for them. One example was given in Bernard et al. (2007) where they illustrate that a women stopped participating in a cooperative after nine years because she had derived no benefits from the membership. These problems show a vicious circle as membership involvement and commitment are needed for the required resources to increase the benefits for the members of an FMO. However, the perceived benefits of membership is not the only factor that influences membership commitment and involvement. Ruben & Heras (2012) note that the commitment is based on mutual trust and reciprocity among members. Thus the performance of FMOs also depends on the ability of the organization to create trust between members. Two factors that are said to enable trust and commitment among members are joint-decision making and access to information (Gilson, 2003; Reynolds, 1997).

The relationships of members’ commitment and involvement with FMO performance:

Proposition 9a (red): Members of an FMO who expect small benefits from membership display low

commitment and involvement. This negatively relates to the performance of an FMO as members’

Weak management capacities (P8a)

Weak technical capacities (P8b)

Small sized FMOs (P8c)

Fig. 8: Causal model of the association of size effect and capabilities with FMO performance

Proposition 9b (light blue): Members’ commitment and involvement depends on the ability of an

FMO to create trust among members. Hence the ability of an FMO to create trust among members relates positively to the performance of an FMO as members’ commitment and involvement is needed to improve the amount of financial assets possessed by the FMO.

2.3.10 Strategic intent

In the previous subsection we discussed the importance of committed members. Members’ commitment, however, is based on the goals and vision of the FMO (Lutz, 2015). These goals and vision are encompassed in the strategic intent of the FMO. FMOs differ regarding their strategic intentions, and organize their activities accordingly. According to Hamel & Prahalad (1990) strategic intent conveys of a stretch, as the present situation offers unsatisfactory perspective. Consequently strategic intent consists of goals that surpass the current state of the FMO. The strategic intent, by means of a strong vision, aims to bridge the gap between the current situation and the desired situation. Francesconi & Ruben (2008) note that agricultural cooperatives in developing countries are often not able to sustain performance over time. Initially FMOs produce and sell at lower prices than market competitors, which results into a period of successful performance. However, over time market competitors are likely to modify their strategic behavior. FMOs are often not able to re-adjust and upgrade their organizations, and consequently the FMO loses competitive advantage. Francesconi & Ruben (2008) identify that cooperatives in developing countries are not able to adjust their organizations because of the absence of a common vision and a lack of managerial capabilities. Moreover, Pagano (1993) suggest that cooperatives face difficulties in reforming their organization because of lacking financial resources. It becomes clear that FMOs often lack a clear strategic intent. Even if this is not the case, it seems hard for the FMO to empower people in the organization to bridge the gap between the current situation and the desired state of the FMO because of lacking capital and managerial capacities. Indeed, Hamel & Prahalad (1990) note that management must empower both individuals and groups within an organization and maintain awareness of the strategic

Fig. 9: Causal model of the association of members’ commitment and involvement with FMO performance

Performance of FMO FMO members expect

low benefits from membership (P9a)

Financial resources of FMO (P9a, P9b) Members’ commitment

and involvement (P9a, P9b)

+

Ability of the FMO to create trust among members (P9b)

+

-

intent. They further mention that management should communicate the rewards to be gained from the attainment of the goals pursued by the organization. Gebrehiwot (2008) shows that cooperatives fail to clearly communicate their missions, strategy and business objectives to members. What might be even more problematic is the case that members do not feel that the business goals of the cooperative will benefit them (Gebrehiwot, 2008). Thus it seems that the cooperative is not able to convince them of the benefits to be derived when business goals are met. To conclude this section we suggest that performance of FMO is improved when the organizations is able to clearly articulate goals, improve awareness of the strategic intent with its associated benefits and empower people in the organization to act in the interest of the specified goals.

The relationships between strategic intent and FMO performance:

Proposition 10a (red): The management of an FMO improves organizational performance when it

communicates the benefits of attaining pre-defined goals which are allied with the strategic intent.

Proposition10b (light blue): The performance of an FMO is improved when it is able to empower

people within the organization to reach the pre-defined goals which are allied with the strategic intent.

Proposition 10c (green): The management of an FMO improves organizational performance when it

improves awareness of the strategic intent within the FMO.

Performance of FMO Ability to convince

members of the benefit(s) aligned with the pursued goal(s) (P10a)

Awareness of strategic intent within the FMO (P10c)

Capability of achieving pursued goal(s) (P10b)

+

2.3.11 Institutional environment

Developing countries like Ethiopia often have to deal with situations where weak or absent institutional arrangements prevent poor people from participating in market activities. These poor institutional environments hinder economic and social development. Generally spoken the government or state is responsible for the initiation and development of an institutional environment that supports market-induced entrepreneurship and a proper functioning of the market (Dercon, Gilligan, Hoddinott & Woldehanna, 2008; Ruben & Pender, 2004; Fligstein, 1990; Hooks, 1990). However, in developing countries, the government often fails to fulfill this objective. In such occasions encouraged entrepreneurial actors might step in (Mair & Martí, 2009). Several studies have shown that local intermediary organizations actors (e.g. NGOs) can play an important role in improving the conditions for markets to be more productive, inclusive and effective (e.g. Mair & Martí, 2009; Mair, Martí & Ventresca, 2012; McKague, Zietsma & Oliver, 2015). For example Mair & Martí (2009) described how an NGO filled in an institutional void by allowing the formerly excluded to participate in the market. FMOs initiated by NGOs, donor agencies or by farmers themselves can also be viewed as institutional entrepreneurs to face institutional voids. As developing countries are characterized by market imperfections and government failures, FMOs have a key responsibility in improving competitiveness and organizing agricultural production (Lutz, 2015).

Fischer & Qaim (2012) note that these cooperatives may take over responsibilities for gaining access to agricultural extension, input provision and supply, bulking, grading, trading and processing. While the attention of Fischer & Qaim (2012) on spillover effects (secondary effects that follow from primary effects) is mostly directed to non-members, we can also argue that FMOs can create spillover effects for each other. We refer to this as cluster spillover effects, whereas a concentration of rivals and related businesses in a particular region can result in advantages for organizations that are difficult to tap from a distance (Porter, 2000). Porter (2000) argues that this is a positive-sum view of local competitiveness coupled with their ability to create helpful actions. Examples of advantages created through spillover effects are; special access to resources, unique relationships and better information. A demonstrative example comes from Bernard et al. (2010), who state that if an agricultural FMO effectively bargains for higher prices of members’ output, local commodity prices that are offered to non-members may also rise as a result. These findings implicate a positive spillover effect towards non-members, but we can also argue that other proximate FMOs, which operate in the same sector, also benefit from the increased local commodity prices. Next to the given example, we can also think of other positive cluster effects, like relational rents (e.g. two FMOs cooperate in order to make a specific investment), the exchange of technical knowhow (e.g. FMO leaders exchange information on productive farming practices) and access to resources (e.g. FMOs buy agricultural inputs from each other). Thus the performance of an FMO partly depends on the fact whether it can benefit from a geographical concentration of related organizations.

tensions, while others face difficulties in coping with the complex institutional environment (Olthaar, 2015). The study of Olthaar (2015) demonstrates that FMOs can exploit the institutional tensions by spotting the room existent in institutional fabrics to play the environment. For example, he described that, according to informal institutions, only one cooperative per village is permitted. The founders of a specific cooperative found a way to play this tension and started their own cooperative with their own governance style, refusing new members, but enjoying high profits. Considering the above it becomes clear that the institutional environment has an important impact on the performance of FMOs.

The relationships between the institutional environment and FMO performance:

Proposition 11a (red): The density and proximity of other cooperatives in a particular region results in

advantages for an FMO. This spillover effect positively relates to the performance of an FMO.

Proposition 11b (light blue): An FMO that enhances a strategy to exploit the tensions within an

institutional environment performs more successfully than an FMO that is not able to deal with a complex institutional environment.

In the next chapter we will work out how to apply these expectations in the world of farmers’ market organization in Ethiopia. This implies that we develop a research method to investigate whether we can find evidence for our propositions. This research method also has to give us the chance to discover success factors are not identified in this literature review.

Density and proximity of other cooperatives (P11a)

+

Spillover effect (P11a)

Fig. 11: Causal model of the association between the institutional environment and FMO performance

3. Methodological approach for identifying success factors for FMOs

3.1 Aim of the research

In order to reach inter-subjective agreement on research results, it is required to make research controllable (Van Aken, Berend & Van der Bij, 2012). Controllability is a prerequisite for the evaluation of validity and reliability. To make the research results of this paper controllable we provide a thorough explanation of the approach taken to generate the research findings. As mentioned, the aim of this paper is to develop a better understanding of the factors that are important for the success of farmers’ market organizations. As the current insights on the performance of FMOs are lacking, exploratory research fits best to the aim of this paper. We want to know what we can learn from successful cases by comparing them to unsuccessful cases. As this research approach is less restrictive than quantitative research, it can lead to a multitude of different insights on the factors that are important for the performance of an FMO (Flyvbjerg, 2006). First, it gives us the ability to evaluate the propositions developed in the literature review. Second, exploratory research is a useful method in identifying new success factors which have received little to no attention in the current literature on agricultural cooperatives.

3.2 Case studies

The research design taken was a multiple-case study which allowed us to treat cases as independent experiments that confirmed or disconfirmed the (emergent) theory (Yin, 1984). We studied eight cases of FMOs in the agricultural sector of Ethiopia (see table 1). This was not a random process, but one that was based on theoretical sampling (Eisenhardt, 1989). We aimed to focus on four FMOs that were successful and four that were not successful. However, one of the FMOs was less successful than we had expected. We had to classify their performance as moderate instead of successful (the method used to form this classification will be explained later in this chapter). Thus, we ended up with four successful FMOs, one moderate performing FMO and 3 unsuccessful FMOs. Further, we wanted to concentrate on FMOs that were active in four different sectors: dairy, grain, sesame and coffee. By focusing on FMOs in different sectors we were able to control for potential situational bias.

Table 1: Location, sector and performance of cases

Case Location

(town and region)

Sector Performance

Case 1 Chancho, Oromio Dairy Moderate

Case 2 Sululta/Chancho, Oromio

Dairy Unsuccessful

Case 3 Modjo, Oromio Grain (wheat, lint, pea and teff) Successful

Case 4 Modjo, Oromio Grain (wheat, lint, pea, teff and lentil) Unsuccessful

Case 5 Agaro, Oromio Coffee Successful

Case 6 Agaro, Oromio Coffee Unsuccessful

3.3 Choice of cases

We made use of the professional insights of experts to select appropriate farmers’ market organizations. We informed the consulted experts that we only wanted to study cases in which we could term the cooperative as a farmers’ market organization instead of a community-oriented cooperative. Thus, the majority focus of the cooperative had to be that it tried to improve the income-generating activities of their members (Lutz, 2015). Furthermore, we specifically instructed them that the level of performance in this context refers to the extent to which the organization is able to improve the competitiveness of its members. The consulted experts were part of the following organizations: the International Food Policy Research Institute (IFPRI), Selale Dairy Cooperative Union (SDCU), Lume Adama Farmers’ Cooperative Union (LAFCU), Metema Farmers’ Cooperative Union (MFCU), Technoserve, Sesame Business Network (SBN) and Agriterra. In table 2 we have made an overview of what expert(s) have recommended us to study each specific case.

Table 2: Farmers’ market organizations recommended by experts

Case Farmers’ market organization Proposed by expert(s)

Case 1 Chancho cooperative IFPRI and SDCU

Case 2 Lelistu cooperative IFPRI and SDCU

Case 3 Dekabora cooperative IFPRI and LAFCU

Case 4 Diban Diba cooperative IFPRI and LAFCU

Case 5 Duromina cooperative Technoserve

Case 6 Yachi Kachise cooperative Technoserve

Case 7 Kokit cooperative SBN, Agriterra and MFCU

Case 8 Kumer cooperative SBN, Agriterra and MFCU

3.4 Interviews

cooperative. The expert from SBN noted that the information we collected was correct. Furthermore, not all respondents were as reliable as we had hoped. Some interviewees were too positive about the FMO and avoided talking about problems within the FMO. We have added a clarification on the reliability of the respondents in each case description.

Table 3: People interviewed for each FMO

Farmers’ market organization

Number of interviews

Functions

Chancho cooperative 4 Assistant chairman, member, union manager and

external accountant

Lelistu cooperative 3 Chairman, member (also functions as casher) and union manager

Dekabora cooperative 2 Financial manager and member (also functions as storekeeper)

Diban Diba cooperative 2 Chairman and member (also functions as storekeeper) Duromina cooperative 2 Chairman and expert (business advisor of Technoserve) Yachi Kachise cooperative 2 Chairman and expert (business advisor of Technoserve)

Kokit cooperative 3 Manager, chairman and union manager

Kumer cooperative 3 Chairman, member (also functions as accountant) and union manager

3.5 Format of interviews

The interviews in this research were semi-structured. Characteristics of semi-structured interviews are that they have a flexible and fluid structure, unlike structured interviews (Lewis-Beck, Brymand & Liao, 2003). They comprise a structured sequence of questions to be asked in the same way of all interviewees. The advantage of semi-structured interviews are that they provide more rich data than other data collection methods, while giving the option to spontaneously ask additional questions to clarify specific aspects (Eisenhardt, 1989).

In order to structure the interview questions we have developed an interview guide. This interview guide was structured according to a method created by Emans (2002). The interview guide can be found in appendix 1 and 2. With this interview guide we translated conceptual variables into raw variables. We investigated the literature on agricultural cooperatives and FMOs on how to convert conceptual variables into raw variables. With this method we also looked at the values used in this literature to measure (i.e. the set of values) these raw variables. In some occasions supporting literature was not found. In these cases we created raw variables and relating values ourselves. To guide the interviewer, we developed the format for answering the question for each raw variable (e.g. open question or closed question). In addition we also included the format for making notes for each raw variable (e.g. key words and/or marking in a list). Last, we constructed questions for each conceptual variable.

assessments by interviewees. Membership growth serves as a measurement tool for performance as it indicates the size of the FMO. The extent of activities, the business volume and the amount of cash flow are likely to decline or grow parallel with the number of members. Output and input volume were measured as an indicator for the volume of transactions made by the FMO (Churchill, Ford, Hartley & Walker, 1983). Output and input volume growth is a particular appropriate measure of performance in this setting since output marketing and provision of agricultural inputs are core activities of Ethiopian FMOs (Bernard et al., 2010). Economic performance was measured by growth of total capital and growth of total assets (e.g. Bourgeois, 1980). We were not able to use other renowned indicators (e.g. return on assets) to measure economic performance due to poor bookkeeping practices of many FMOs in Ethiopia (Benson, 2014). Further, we focused on goal achievements to measure the success of an FMO in achieving their planned goals (e.g. Deepen, Goldsby, Knemeyer & Wallenburg, 2008). Furthermore, with the subjective assessments by interviewees, we chose to concentrate on improved competitiveness of members, increased economic welfare of members and the level of satisfaction among members (Hansen, Morrow & Batista, 2002). Also, opinions of managers on the performance of their organization were taken in to account. Unfortunately, we were not able to collect data on each indicator. A reason for this was a lack of knowledge and awareness by respondents. Further, interviewees were not always willing to be transparent on each question. To alleviate this data gap we made a summary of all the available indicators per FMO to make an overall review of the performance for each FMO.

We made different interviews for managers (or chairmen) and members of the FMO. We did this because we expected that the level of knowledge and the level of objectivity, depending on the topic, would be different between managers and members. The interview for managers first consisted of 93 questions. In consultation with several researchers of IFPRI we reduced the number of questions to 73. The main reason for decreasing the number of questions was because it was to be expected that managers would be reluctant to answer too many questions. Moreover, we expelled some interview questions for managers because we expected that managers would not give an objective answer to these questions (e.g. on transparency issues). Instead we asked those questions to members to get a more objective answer. Through discussions with researchers of IFPRI we also reduced the number of questions for members, from 53 questions to 51 questions. We did this because some questions focused on areas which members would be likely unaware of. The discussions with the researchers also led us to adapt some questions of both interviews slightly to be sure the interviewees would understand the meaning of the questions. Last, after the first interviews, we resolved some minor issues in both interviews which were detected during the first interview.

3.6 Data collection in the field

our expectations, the person who supported our research on Kokit cooperative and Kumer cooperative was less competent in transcribing than the other two translators. Hence, some information on these FMOs might be less trustworthy due to possible wrong interpretations.

Before starting with an interview, the translators would give a brief introduction on the purpose of each interview. During the interviews the translators asked the questions which were in the interview guide. The interviews itself started with introductory questions to enhance the interviewer-interviewee interaction. Another reason to start with these types of questions was to explore the context of the FMO. These questions were followed by informative questions, which did not yet deal with issues which required trust of the interviewee. After this we focused on more critical subjects, as we expected to have gained trust of the interviewee. Towards the end of the interviewee we asked the interviewees about their opinion on the performance of the FMO. We ended every interview with questions that dealt with their opinion on critical factors for the performance of their organization. When the translator felt he had a satisfactory answer on a question, he would translate the answer in English. When we felt that the answer was not complete, we asked the translator to probe in order to get a better understanding of the subject. Frequently the interviewees felt uneased by the length of the interview. As a response to this we gave a small gift at the middle of the interview to keep the interviewees motivated to continue their participation in the interview. When we felt that the data was not complete after finishing an interview we would ask additional questions by means of a phone call, or we would schedule a short interview with an external knowledgeable person (e.g. union manager).

3.7 Data analysis

propositions. Last, if there was no evidence to be found for a proposition, we eliminated it. This resulted in a list of success factors for FMOs (see chapter 6, table 52). Thus, in conclusion, partly the aim of the study was to evaluate our expectations and partly it was to develop new expectations. Especially for the newly developed propositions, it is interesting to translate them into hypotheses to make them testable for a larger sample of FMOs.

4. How are the FMOs performing in reality?

This section serves to provide extensive information on the FMOs which have been studied. In order to visualize the location of each studied FMO, we begin with showing a map of Ethiopia which illustrates where each FMO is situated. Next to that we provide a table with summarized information on all of these FMOs. The majority of this section will be devoted to describing each case comprehensively.

4.1 The eight cases on the map and general descriptions

As we can see in figure 12 and table 4, we have studied FMOs in different regions of the country. In each region, we studied two FMOs, one strong performing FMO and one weaker performing FMO. The two FMOs per region are also active in the same sector(s).

Fig. 12: Map of Ethiopia with locations of the studied FMOs

See table 4 for legend

Table 4: summarized information on the investigated FMOs

Name Sector Age Members Performance Summary

Case 1:

Chancho cooperative

Dairy 19

years

189 Moderate Chancho cooperative ambitiously tries to improve economic welfare and competitiveness of its members. Though, fraudulent activities by committee members undermine the performance of the cooperative. Case 2: Lelistu cooperative Dairy 10 years

38 Unsuccessful Due to the small number of members, Lelistu cooperative is not able to perform well. The fact that many members omit to sell their output to the FMO further downsizes the benefits of economies of scale. Case 3: Dekabora cooperative Wheat, lint, pea and teff 38 years

773 Successful Dekabora cooperative successfully focuses on improving the benefits to receive from membership without losing the attention of the whole community. Case 4: Diban Diba cooperative Wheat, lint, pea, teff and lentil 39 years

700 Unsuccessful Diban Diba cooperative is not able to perform successfully, mainly due to governmental constraints and fraudulent activities by the previous committee. Case 5: Duromina cooperative Coffee beans 6 years

223 Successful Duromina cooperative is the most successful FMO of our database. Support of Technoserve has contributed significantly to their high performance. Case 6: Yachi Kachise cooperative Coffee beans 6 years

125 Unsuccessful Performance of Yachi Kachise has been negatively influenced by fraud and mismanagement of the previous committee. Technoserve has supported the cooperative to alleviate the consequences of these occurrences. Case 7: Kokit cooperative Sesame, cotton and sorghum 21 years

2335 Successful The high performance of Kokit cooperative is primarily the result of its capable management. The organization feels that it is highly responsible for fulfilling the needs of its members and its community.

Case 8: Kumer cooperative Sesame, cotton and sorghum 20 years

4.2 Case reports

All of the investigated FMOs will be described comprehensively to gain a better understanding of them. We begin with providing basic information on the FMOs, which contains the location, the sector(s), the age, the origin and the number of members. Subsequently we shortly discuss methodological issues for each case, which involves, amongst others, the trustworthiness of the data. The next row focuses on performance indicators, which gives us the opportunity to make conclusions on the performance of each FMO. The last part of the table aims to give an extensive description of each case, which is tightly linked with the suggested proposition in the literature review. In case we identified matters that seemed to be important for the success of that FMO, we included information on these issues as well.

4.2.1 Chancho cooperative

Table 5: Descriptive information on Chancho Cooperative

Location Chancho, Ethiopia

Sector(s) Dairy

Age 19 years

Origin Governmental officials brought up the idea to establish an FMO. Farmers in Chancho felt that this was a good method to increase the price for milk. They thought that setting up an FMO would improve their market power as a consequence of collective action.

Members 189

Activities Output marketing service, dividend, training, renting containers & shares in a milk processing factory

Methodology explanation

As explained in the methodology section, the aim of the research was to investigate 4 cases of successful FMOs and 4 cases of unsuccessful FMOs. The consulted experts expected Chancho cooperative to be successful. However, unfortunately, this FMO turned out to be less successful than expected. This will be clarified more in detail in the next row. For this FMO we interviewed the assistant chairman, a member, an external accountant and the union manager. During the interviews we discovered that the assistant chairman engaged in fraudulent activities, which significantly undermines the trustworthiness of his responses during the interview. Furthermore, the other respondents often gave dissimilar information than the assistant chairman. Consequently, we hardly focused on the data collected by interviewing the assistant chairman when analyzing the data for Chancho cooperative.

Performance The number of members has grown gradually since 1997, from 145 to 189. Total capital has grown significantly in the last five year from 25.000 birr3 to 250.000 birr. The FMO owns 49 shares in the union (worthy of 245.000 birr). The FMO has unpaid duties with the bank, of which its value is unknown. The vice-chairman feels that the FMO is one of the best performing cooperatives in its sector. Though, the member notes that since the new committee was elected, performance of the FMO

3