FARMERS’ COOPERATIVES AND THE ROLE OF ELITES IN NEOLIBERALIZATION A CASE STUDY OF ULANGA DISTRICT, MOROGORO- TANZANIA

SUPERVISOR: PROF PAUL HEBINCK

Submitted by

Sylivia S.Lussumo

For the partial fulfillment of the degree of the MSc. Program

International Development Studies

Sociology of Development and Change

Wageningen University August 2015

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DECLARATION I, Sylivia S.Lussumo declare that, this thesis report is my own work and it has not been

presented at any other higher learning institution for the same or similar award.

…………………… SYLIVIA S.LUSSUMO Date: ………./………/2015

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ABSTRACT Farmer’s cooperatives have widely been acknowledged as a potential pathway out of poverty. It is a

significant mechanism to energize local farmer’s capacities and ability to utilize the local

resources in overcoming poverty. This has been realized as a vehicle for farmers to access

agricultural inputs and market which contributes to household and national income.

Many studies indicate that farmer cooperative have failed to meet the member’s expectations.

The policy shift in Tanzania from a communal farm under Ujamaa to a neo-liberal economy

restructured traditional farmer’s cooperatives. The new cooperative policy enlarged the control of

elites who appropriate cooperative to capture it resources for their own benefit and not for

member’s vested interest to improve their livelihood. Elites occurs in development process in

various institutional arrangement like government bureaucracy, political system, donor agencies

and the community.

This study was conducted to examine and recognize the meaning of farmers’ cooperative and role

of the elites in the cooperative movement specifically in Ulanga district, Tanzania. Two cases

were studied which are farmers’ cooperative and a women income generating group. The was a

qualitative study which involves capturing and ordering narratives from respondents. The in-

depth interview, focus group discussions and site visits for purposes of observation were

employed to extract the information. This study has shown that the community believes that

farmers’ cooperative may be helpful in rural development if effectively managed. However, to a

certain extent, elites are an impediment to the poor cooperative members’ progression out of

poverty.

Keywords, Farmers cooperative, elites, elite capture, neoliberal policy

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DEDICATION I dedicate this report to my son David, my mother, my relatives and my friends for their moral

and material support during my studies.

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Table of Contents DECLARATION........................................................................................................................................ i

ABSTRACT ............................................................................................................................................... ii

DEDICATION .......................................................................................................................................... iii

ACKNOWLEDGMENT ................................................................................................................................. ix

ACRONYMS ..................................................................................................................................................... x

1. INTRODUCTION ..................................................................................................................................... 1

1.1 Study background ................................................................................................................................ 1

1.2 Neoliberalism ...................................................................................................................................... 2

1.3 Farmer’s cooperatives ......................................................................................................................... 3

2. LITERATURE REVIEW.............................................................................................................................. 6

2.1 Introduction ......................................................................................................................................... 6

2.2 Cooperatives: General information ..................................................................................................... 6

2.3 Contemporary issues regarding cooperatives in Tanzania.................................................................. 6

2.4 Several examples of Elite capture in African Countries ...................................................................... 8

2.5 Conceptual framework ...................................................................................................................... 11

2.5.1 The relation between ICA principles, cooperatives and elites capture ........................................ 11

2.5.1.2 Voluntary membership ................................................................................................................ 12

2.5.1.3 Shares, autonomous and free ..................................................................................................... 12

2.5.1.4 Autonomous ................................................................................................................................ 12

2.6 Statement of the problem ................................................................................................................. 13

2.6.1 Objectives ....................................................................................................................................... 13

2.6.2 Main Research Question .............................................................................................................. 13

2.6.3 Sub- Research question .................................................................................................................. 13

3. RESEARCH METHODOLOGY ................................................................................................................. 14

3.1 Research Design ................................................................................................................................ 14

3.2 Research Unit .................................................................................................................................... 14

3.3 Study Area ......................................................................................................................................... 14

3.4 Ethical considerations and Informed consent ................................................................................... 16

3.5 Methods of Data Collection ............................................................................................................... 16

3.5.1 Site visit and observations .............................................................................................................. 16

3.5.1 In-depth interview .......................................................................................................................... 17

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3.5.2 Focus group discussion ................................................................................................................... 17

3.5.3. Key informants .............................................................................................................................. 17

3.5.4 Sampling and sample size ............................................................................................................... 17

3.6 Data Analysis ..................................................................................................................................... 18

3.7 The limitation of this study ................................................................................................................ 18

4. HISTORICAL BACKGRAUND .................................................................................................................. 19

4.1 Historical Background of cooperative movement in Tanzania ......................................................... 19

4.2 Independent period, in 1960s to the mid-1990s............................................................................... 19

4.3 Neoliberal and Structural Adjustment Program 1990s onwards ...................................................... 20

4.4 Other experience on Farmers’ cooperatives movements in neoliberal............................................ 21

4.5 Decentralization and political power ................................................................................................ 22

5. BUREAUCRATIC, SOCIAL AND ECONOMIC INTERACTIONS .................................................................. 23

5.1 Introduction ....................................................................................................................................... 23

5.2 Economic Activities in Ulanga district ............................................................................................... 23

5.3 Formal structure of Community Groups and Cooperatives .............................................................. 24

5.3.1 Membership and registration ........................................................................................................ 25

5.4 Informal structure and Social relations of Community groups and Cooperatives ............................ 25

knowledge. One member had this to say:.............................................................................................. 25

5.5 Interference of politics in cooperatives ............................................................................................ 27

5.6 The state of cooperative in Ulanga ................................................................................................... 29

5.7 Gender issues .................................................................................................................................... 31

5.8 Local Partner Organizations .............................................................................................................. 31

5.8.1 FINCA& PRIDE ................................................................................................................................. 31

5.8.2 CARE ............................................................................................................................................... 32

5.9.3 Conclusion ...................................................................................................................................... 32

6. CASE STUDIES ...................................................................................................................................... 33

6.1 Case Study 1: SONGAMBELE COOPERATIVE ..................................................................................... 33

6.1.1 The history of Songambele cooperative .......................................................................................... 33

6.1.2 Songambele membership ............................................................................................................... 35

6.1.3 Leadership ...................................................................................................................................... 35

6.1.4 Beneficiary Perceptions .................................................................................................................. 37

6.2 Case 2: MWAMVULI WOMEN INCOME GENERATING GROUP ..................................................... 41

6.2.1 Membership ................................................................................................................................... 43

6.2.2 Loan delivery process ..................................................................................................................... 44

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6.2.3 Community perception on WDF ..................................................................................................... 44

6.2.4 The general conclusion on two case study ..................................................................................... 46

CHAPTER 7 ............................................................................................................................................... 47

CONCLUSION ........................................................................................................................................... 47

REFERENCES ............................................................................................................................................ 49

Annex-1. .................................................................................................................................................. 54

Annex-2 ................................................................................................................................................... 55

Annex-3 ................................................................................................................................................... 56

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List of Tables

Table 1: The situation of Cooperatives in Ulanga up to December 2014………………………….…..29

Table 2: The report of women development fund (wdf) 2013/2014………………………………….….42

List of Figures

Figure 1: Ulanga District Council Map…………………………………………………………………………….….…15

Figure 2: Cattles and Sheep in Ulanga District………………………………………………………………….….…..24

Figure 3: Old granary…………………………………………………………………………………………….……………......34

Figure 4: New granary...............................................................................................………………...34 Figure 5: Beneficiary scenario …………………………………………………………………………………………….…..39

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ACKNOWLEDGMENT

I would like to express my sincere gratitude to the number of individuals who assisted me during my study. First of all, I would like to thank God the almighty who assisted me to accomplish this course. I thank my supervisor Professor Paul Hebinck of Wageningen University for the academic and

moral support throughout the process of this thesis. The consistent and refined contribution in

terms of advice, suggestions and constructive criticism which shaped this study are highly

appreciated. Sincerely appreciation to Hellen Kimanthi for supervising me during the absence of

my supervisor, your comments opened my mind to know the inputs I should add to my report.

Nereah, John Omare, your input in reading my work and commenting will not be forgotten in my

life.

I would like to express my deep and sincere gratitude to my sponsor the Dutch Government

under the Netherlands Fellowship Programme for funding my studies, my stay in the Netherlands

was possible with your support. My gratitude goes to the Ministry of Agriculture and

Cooperatives, and Ulanga district authority particularly to the Cooperative officer and

Community development officer for their contributions and consent to execute this study.

Although it is impossible for me to mention all the people, I appreciate the contribution of my

course mates, lecturers and friends for their advice and guidance during the duration of my

Masters programme.

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ACRONYMS

UDC Ulanga District Council

SAP Structural Adjustment Program

ICA International Cooperative Alliance

TASAF Tanzania Social Action Fund

PRIDE Promotion of Rural Initiatives and Development Enterprises

CARE Cooperative for Assistance and Relief Everywhere

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Overview of the Report Chapter 1 discusses the introduction of farmers’ cooperative and the purpose for this study followed by the definition of the key concept. Chapter 2 gives the literature review of farmer’s cooperatives and the role of the state in policy formulation. It is to indicate how the government instituted cooperative legislation and policies shift shape daily activities of cooperatives. It discusses about the cooperative policies and Act which have been developed by the government to conform International Cooperative Alliance which motivates elitism/ elite capture, hence to impede effective functioning of cooperative. It also discusses in details several examples of elite capture in African countries which shows how the recent policy shift to neoliberalism facilitated local elites to emerge. The conceptual frame work for this report is discussed by relating some ICA principles and elite capture. It is followed by the statement of the problem, objectives and specific questions. Chapter 3 is the methodology of the research. It gives a details on the methodology applied for the study including methods of data collection, study area, research units, limitation etc Chapter 4 explains the historical background of farmer’s cooperatives in Tanzania starting from early independence during communal farm and followed by post independent in liberalization period. It gives the experiences of farmer’s cooperatives from other countries since neoliberalism. The explanation about the decentralization and political power has given to indicate the system in which farmer’s cooperatives operates that lead to elite capture.

Chapter 5 it discusses bureaucratic, social and economic interactions in Ulanga District which shapes neoliberalism. It gives the meaning of cooperatives in formal and informal from the study area and how they are related to elite capture and neoliberalism. The overview and the list of cooperative have provided. The meaning of gender issues is given and the available local NGOs have discussed with the relationship to elite capture. Chapter 6 is the discussion about two case studies to answer the research question on how elites and elite captures emerge in Ulanga District including participant’s perceptions. Chapter 7 is the general research conclusion and the explanation of the finding on farmer’s cooperatives and the role of elite from the whole study.

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CHAPTER 1

INTRODUCTION

1.1 Study background

Farmer’s cooperatives have widely been acknowledged as a potential pathway out of poverty. A cooperative is a network of people intended to enhance the capacities and skills of individuals to exploit resources for the benefit of its members. A farmers’ cooperative is a social organization established in the agricultural sector of an economy and is being appreciated as an economic pillar particularly in developing countries. Farmers’ cooperatives are said to empower the economically dispossessed people to gain more control over their economic and political resources in a collectivity action. Farmer’s cooperatives involve collaboration between its registered members to maximize the benefits from their time, money and energy which they contribute to the cooperative (Domar 1966: 734).

Farmer’s cooperative has been an integral agriculture policy parameter and international and national development agenda. Since the ex-colonial countries gained the independence, the emphasis on economic growth and poverty reduction shifts to improve farmers’ cooperative in rural. The statistics of co-operative development globally are impressive; it indicated that, 800 million people globally are members of co-operatives. A current study in African countries has estimated that around seven percent of the population are cooperative members, and finds the cooperatives numbers are increasingly (Develtere et al. 2008).

In developed countries, co-operatives evolved freely according to the outgoing tide and current flow of social activities and economic relative gain, but in the developing countries cooperatives was a way of improving traditional economy by the nationalist government from colonial rules (Birchall 1997). Nearly everywhere in African countries, cooperative were controlled and supported by governments in a way it allowed to become truly equal member owned organization in rural development. In general, members came to appreciate as a development organization belongs to them and that delivered useful services (Develtere 1994).

The government patronage on cooperatives stopped from the 1990 onwards when it had to implement the structural adjustment program. Gradually the state adopted a neoliberalism stance towards managing the economy as the result of which many cooperatives and the apex union collapsed. In Tanzania for instance, in 1990 the number of primary societies decreased from nearly 9000 to 400 in 1994 (Birchall & Simmons 2010:479). Many findings indicate the new liberalization policies which was assumed to rehabilitate cooperative in member-owned and controlled businesses, has restructured the function of cooperative in a way members have shown little benefit. The experiences have led to doubt about the significance of cooperatives in poverty reduction particular in the rural population in African countries. The problem is that the government has continued developing neoliberal policies without deliberately measures to oversee how farmer’s cooperatives put into practice the policies and the encountered obstacles. There is an insufficient study on the cooperative membership, leadership and the distribution of

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resources and outcomes. It is hard to conclude to why cooperatives are not performing well since liberalization. The empirical study can stand in good stead to highlight the challenges in cooperative movements. This thesis sets out to explore what happened in cooperatives after the state began to be less involved in the daily management of the economy and cooperatives in particular. One of the questions is tries to answer is what kind of spaces is or are created in cooperatives for individual members and/or groups to defend their interests through being a member of a cooperative. Who then occupies that space? And what kind of relationships is developed between the members and the leadership of the cooperative. The broader literature on rural development seems to suggest with reference to the phenomenon of elite capture that rural elites seem to be best positioned to take leadership positions in cooperatives and to adjust the organization to their interests. The task this thesis has is to identify these elites and to explore their strategies to gradually take control of cooperatives. The study is done in one of a farmers’ cooperative and the women income generating group in Ulanga district, Tanzania. The two case studies were purposively selected and in-depth interview from cooperative members; non-members including key informants were conducted. The relevant police documents and several examples on elite captures in cooperative movements in African Countries have presented, and the history of cooperative in Tanzania is written.

Key Concepts guiding the study

1.2 Neoliberalism There is no universally accepted definition of neoliberal policy. The meaning of liberal philosophy remains paradoxical. The commonly used interpretations of neoliberalism are; financialisation, globalization ‘the world in the market ‘, privatization, and internationalization. Epstein (2005) explains it as a classical economic change from economic depression after the World War II in 1930s to 1940s. The period when Western countries and the World Bank through Structural Adjustment Program (SAP) began to regulate the government’s investment expenditures, and the reduction of high employment for ‘quick growth’ well known as ‘Keynesian revolution’. The interest behind of these changes was to emphasis the capitalism model of production which beliefs that the strong government regulations enable market economy to work effectively. The neoliberal aimed to reduce the government costs and to remain an institution overseeing the way the economy is being managed to meet the world market demands. Also it was to allow private investment in serving the community on behalf of the state. On the other hand it was to build individual self- help in production, marketing and profit making. Epstein elaborated that neoliberal policy was adopted all over the world from 1970s and onwards.

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Several discourses have been developed against neoliberal policy which is related to social economic inequalities, governmentality, and political changes. Kingfisher and Maskovsky (2008) analyses neoliberal has in one side removed the role of the state that potentially protects the marginalized and economically dispossessed community groups, alongside has empowered the state control in financial institution, social agency and rule of law. This is to mean that neoliberal is not only about the best market but also the social regulations tool. Kingfisher furthered, neoliberalism privileged private entrepreneurs in free market, in which capitalist class survives. In global economic context, neoliberal seen as universal capitalist empowerment, exploitation and exclusion of subordinated class. Keynesian perspectives have transformed the government into economized operation modality where the personal, family and the community production and risk have autotomized into the business model. Neoliberal has connected global economic with governmentality and political ideology. The globalization concept has created the economic and market relationship between the state and international arena. The local policies, regulations, and technocratic mechanism have developed as the governance mode to appropriate the global economy. The political system, international institution, local government and civil society in globalism networks have confronted the special function of the state. They are an integral part of the governmentality and horizontal organ of the state. Sometimes they act as the servants, opponents, watchdogs, parasites and continuing to operate in the local level under global phenomenon as Ferguson and Gupta (2002: 994) conceptualized. Pan and Christiaensen (2011) noted that neoliberal may be called privatization of ‘sovereignty’, the rise of different state actors and managers in decentralized settings into the globe networks.

1.3 Farmer’s cooperatives Farmer’s cooperatives have been defined as a voluntary, democratic and autonomous organization of the people with the common goal to meet social, economic and cultural needs (ICA 1995) Farmer’s cooperatives are actively constructed by community members merely arising from local settings. Cooperatives are networked people with different traditional, knowledge, beliefs, skills capabilities which are blended together as a social resource to determine the best useful of resources. Is a social organization which includes different sections of the society, men, and women, poor, rich, educated and uneducated with common goal of improving the livelihood. Thus, cooperatives are a heterogeneity society operates in a social environment in which the rules of cooperation and collaboration are shaped the norms and values of that society. Cooperatives are regarded to be independent and transparent in formation and electing leaders regardless of the amount a person has contributed (Ortmann & King 2007). In African countries farmer’s cooperatives operates in traditions and customs surrounded by patriarchy, recognition and ruling power which shapes the structure and the function of cooperatives in rural areas. The leadership, planning, decision making and management are frequently closely associated with social status. Such disparities and differential opportunities in rural areas have threatened the equal and effective participation in cooperatives for the poor (Mukandala 1998). For instance the distribution of land in rural are connected to the dominant class and tribe of mainland of China, western and northwestern of India and in Kikuyus tribe in Kenya Lele (1981) elaborated in his study. A social differentiation is noticeable when the ownership of means of production and other resources favors the people

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with political power, and social status in the community. A few rural elites control the cooperative through local participation and self -help phenomenon. The frequent shift of government cooperative policy in macroeconomic interlinked social-cultural life and formal which continuously has created the dominant power group in the rural areas to advantage in the new system. The neoliberal policy has removed the government autonomous over cooperatives and facilitated a few people who have social status in the community to dominate rural resources. They use the power in controlling cooperatives and its resources. The development intervention designed to alleviate poverty in rural areas, may create new society or disintegrating the old ones.

2.4 Elites and elite capture Higley (2008) described the meaning of elites from the old literatures of Gaetano Mosca (1858-1941), Vilfredo Pareto (1848-1923), and (Michels (1876-1936). Mosca defined elites as the people with skills in both leadership and control over financial and human resources, wealthy people who have access to information flows, and other roles of their wish. Pareto and Michel characterized elites as the intellectuals and talented people with unique characters other members do not have like persuasive words and supremacy. He also adds that elites are the group of people within a society who likes to be honored for their status and enjoys to exercises influential mechanism in controlling the society agency. Amsden, et al (2008) notes that the elite may have an impact on development in both positive and negative ways in this means; some of the elite’s desire to influence development in a positive way, so as to be honored and protect their positions. Thus they allocate resources in the way that should stimulate both production and employment to the people. For other elite development may convince them to take extra resources before they lose power. Elite capture happen when the resources intended to benefit the majority in the community benefit the few people who are commonly related to political power, literate, and economic power (Dutta 2009). Elite capture happens in the absence of democracy in planning, allocation of resources and distribution of the outcomes. In local level elite captures the resources for being connected and involved in capturing tactics by politician and educated people. The rise of donor’s aid, especially in developing countries, has increased elite capture in the decentralized state. Political players have increased and motivated to work in the local level where international donors prefer (Plateau 2004). Plateau also illustrated elite capture in funding chain that starts from Purveyor (P), donor Agency (A), local leader (L), and grassroots (G). He elaborated that miscommunication of donors directly to the local beneficiaries facilitates local leaders to manipulate the funds (Plateau 2004: 231). Elite capture discourse are in several factors such as political structure, decentralization, in programs and projects, and in sociology are community orderliness (Pan & Christiaensen 2011). In most African countries and Southern Asia, the participation of the poor in development activities in decentralized government accounts the government and political accountability for the local community. The concept of elite capture is common pronounced in local areas basing on the poverty criteria.

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The main areas where elite capture occurs or may occur in donor funded projects are the following:

1. Project identification, in many donor- funded projects the community participation approach have to be followed. They participate in analyzing and prioritizing the basic needs or project and select the project management committee. The logistics, criteria and professional language which are designed in the participatory approach, in most case illiterate people cannot easily understand and question. The local people are dragged by expertise and local leaders who use the opportunity to approve the projects of their interest, and select the committee members who are easy to deceive.

2. Project planning, due to low knowledge or unconfident of the local people particularly in Africa, it enables the few expertise, knowledgeable and influential people to get acknowledged in planning process which enables them in capturing the budget.

3. Project implementation and evaluation, in this stage elite oversees and conceal the budget to the community. In reporting the technique design and professional language are applied to the local people in a way that they cannot understand or ask.

Elite capture has been reported in various perspectives, in some place they have excluded the poor people in development outcomes and benefit the wealthy and other kinds of elites, while for other areas they have promoted the development and help the poor to lift out of poverty. This implies elite capture do not always lead in the negative impact, it depends on the intervention outcomes. They can capture the resources for the individual interest but still benefit the entire community. For example Mapila (2010) concurred that when famers’ cooperatives and any other social groups involve both elite and no-elite, poor, rich, illiterate and literate people it facilitates no-elite members to adopt new technology and intervention. The uses of role model like block farming motivates and lead to increase in membership. Also elites in the absence of local extension workers if they are well empowered, they link technocratic and farmers, and act as agriculture advisors. This would be possible with the existence of deliberate initiatives and close supervision from both practitioners and politicians particularly in local government which is close to the local community and the focus of aid agencies.

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CHAPTER 2

LITERATURE REVIEW

2.1 Introduction

A literature review serves to identify what the key issues are with regard to the experiences of cooperatives as well as to identify the analytical concepts needed for the study of cooperatives. This part gives the general information on the role of the government in constructing cooperative policies in which elite/elite capture excels, and to indicate the examples of elite capture. The conceptual framework defines the key concept and some of ICA co-neoliberal principles with regard to the topic of the study.

2.2 Cooperatives: General information

The role of the most African state in cooperative affairs has changed lately. Since structural adjustment and the political reforms to stimulate multi-party democracy, the state has retreated, at least in rhetoric, from managing the economy and the running of markets. The market has gradually been de-regulated and private sector has become the predominant actor in the economy. This shift in policy has been labeled in the literature as the neo-liberal shift and has a major impact on cooperatives and how they operate. In 1995 International Cooperative Alliances (ICA) effectuated the neoliberal shift by formulating what it referred to as the genuine co-neoliberal cooperative principles which are; (i) Voluntary membership (ii) Shared capital, economic participation and patronage refunds (iii) Training and member’s empowerments (ICA 1995).

Cooperatives exist in different forms and shapes. Barton (2000) explains the types of cooperatives including agriculture inputs suppliers, i.e, fertilizers, chemicals, seeds, financial support, marketing, utilities support, i.e contacts and telephone and electricity, services providers, i.e, irrigation, storage, processing, consumer goods cooperatives, and workers. Barton furthered that even though there is much different type of cooperatives worldwide, the most well-functioning and steady cooperatives are those of North America and Europe (Barton 2000).

2.3 Contemporary issues regarding cooperatives in Tanzania The positive image of cooperatives in Africa is fading. With many economic strategies it is argued that poverty alleviation has not been a very successful achievement of the cooperative movements. Liberalism policy and International Cooperative Alliance (ICA) principles were introduced to leave the government freely in financing and manage the cooperative movement, yet the governments have continued engaging in enacting cooperative policies, regulations and programs. In one way or the other it has inevitably supported the emergence of elitism and elite capture. The accusations of cooperatives as corrupt entities are many. The principles of voluntarism, autonomous and freely of cooperative have motivated few intelligent and key people into cooperatives especially in rural areas. They occupy the leadership position and using

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knowledge to dominate decisions and cooperative resources for personal benefit. Cooperatives members have not realized the benefit in collectivity action. Liberalization has also increased private Banks and local moneylenders (NGOs) which have twisted cooperatives into profit making agent which influences elite’s captures. In Tanzania, for example, in late 1980s the macro-economic policies were enacted to make cooperative member- based organization, aimed at introducing free market and trade liberalization policies. The Cooperative Societies Act of 1991 was passed to support the purpose. Since independence there was no Cooperative Policy, thus in 1997 Cooperative Development Policy was formulated to promote Cooperative legislations. It is argued despite the Act of 1991 and the policy of 1997 inefficient of cooperative persisted. The literature indicated the problems was due to; (i ) unclear structure about internal management of cooperatives where most are still operating under the control of the state; (ii) gender issues were not adequately included; (iii) it was not indicated to how the conflicting interests in cooperative leadership and mismanagement of resources could be addressed. In March, 2000 Presidential Special Committee was appointed to research on the performance of the cooperatives. The report pointed out the poor performance of the cooperatives which was related to corruption, irresponsibility, embezzlement, theft and poor management and inappropriate policy. The committee report indicated that in 1994 to 2000 about 262 cases on misappropriations of cooperative resources worth Tshs.5.75 billion (2380952, 38 euro) was reported to the police or in court waiting for the judgment (United Republic of Tanzania 2005:7).

In 2002 the new cooperative development policy was issued and Cooperative Societies Act No.20 of 2003 was enacted to improve cooperative performance on business viability, sustainability and strong member based organization in competitive economic. The act of 2003 emphasized on vetting the leadership conditions such as qualification, credibility of leaders and personal property. It also establishes the limiting tenure for cooperative board members, three terms for three years each which increased corruption in the movement (URT 2014). The Ministry of Agriculture and Cooperatives is responsible to register, support and supervises day to day cooperatives activities. Under the local government reform, the 2002 policy and Act have authorized the duty for the district council to oversee co-operative development in their areas of jurisdiction. They mobilize and form cooperatives, advice, and participate in cooperatives plans and donor lobbying. This has enclosed cooperative movement and political interests in decentralized system. However, the government is intended to help cooperatives in new policies; there is a feeling among cooperative members that it also intended to take control (Sizya 2001). Ongoing national policy shift has impacted the function of cooperatives by sustaining elite’s captures. In 2004 it was indicated the problem of misappropriate of resources was alarming, cooperatives had accumulated debts of Tshs 48.3billions (including 2.63bilions owed to farmers, 2.69billion owed to employees, and 2.26billions to primary societies) ( Birchall and Simmons 2010: 487).

Following the cooperative failure in 2014, the government by the support of the International Labor Organization (ILO) initiated cooperative reform and modernization Programe (CRMP). A team of 20 experts from NGOs, academics and the government attended several consensuses about how to transform the economy in new policies, law, strategies and plans. Tanzania’s poverty Reduction Strategy Paper (PRSP) well known MKUKUTA and Agriculture Sector

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Development (ASDP) were launched in link to the Tanzanian Development Vision 2025 (Birchall & Simmons 2010). The purpose was to transform cooperatives viable for economic and social enterprises and was referred to be larger and argent in reviving the economy. Also the other objectives of CRMP was (i) establish cooperative movement with appropriate structure basically with primary society; (ii) Promote good governance in cooperatives i.e. capable leaders in business manner and accountable to their members; (iii) Promote provision of education, training, knowledge and skills to the member (iv) Promote cooperative with economic viability and sustainability , joint venture and adaptation of the modern planning tools; (v) Support modernization by establishment of cooperative Banks (United Republic of Tanzania 2005: 4-5). Despite the many initiatives, it has claimed that the governments in most African Countries have remained in restructuring, formulation, officializing and legalizing cooperatives rather than member’s empowerment. Cooperative members have assumed a genuine participant in poverty reduction while the local poor remain in an extreme poverty. There is little freedom and democracy in cooperative movement and elite captures has risen.

2.4 Several examples of Elite capture in African Countries In this subsection, various examples on elite capture in African Countries are selected and discussed. That is to show to how the policy shift to neo-liberal facilitated local elites and elite capture to emerge in cooperative and other similar social groups.

The distribution of land for pastoralists in Savanna areas in Kenya point to elites capture through cooperatives as Thompson and Homewood (2002: 117-119) described in their research. In 1960s the Maasai pastoralists were living with livestock held around protected Savanna area in Tanzania and Kenya world-famous Serengeti –Mara Ecosystem. In 1980s with the imported westernized root and Structural Adjustment on Wildlife conservation, and the increase of access to land rights and revenue collection, community participation in conservation and local land use with less government enforce conceived to be beneficial. By the influence of the World Bank, the land was distributed to private ownership in group ranches. Who were allowed to become a member should be the head of the family with a long-term physical assets, permanent buildings and social influence. Those unable to assert the criteria become landless. The management committee of local elites (district and national governmental officials and outsider entrepreneurs) were voluntarily elected annual to decide and allocate the plots. It is claimed that the committee had operated continually for 20 years. Also the authors furthered that political representatives was also involved to control the access to the land, and sometimes among themselves they were developing business partnership using their power. The writer highlighted that getting a portion of the land was determined by social influence, knowledge in application techniques connection to the government administration, access to information and in some cases the knowledge in manipulation and documentation process. The powerful people owned big plots and started selling to other community members (Thompson & Homewood 2002). In this context, local cooperatives were subjected to various interest groups (Private, government and political) with potential power over resources in state bureaucracies. The dynamic and conflicting interest affect the operation of cooperatives as some wants to higher power of control, others to maintain what is existing and other aims at renovation. Most African state

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administrative structures are rigid in vertical bureaucratic systems that create autonomy over local resources and decision making ( Holmén 1990: 5-50).

Also Mapila et al (2010) reported the case in Malawi where in order to raise business unit, Agricultural extension workers mobilized farmer’s organization for the idea that business people were well equipped with knowledge and skills which could help to promote marketing through groups with the inclusion of small farmers. To make this group successful leaders had to be elected and among the rules on participation approach to elect office bearers was to know how to read and write. The reason behind was that leaders would be negotiating and discussing about marketing with different customers, therefore they should be knowledgeable people. These criteria created inferiorities for non-skilled members and begun to give power and domination for few elite’s .Capacities, skills and knowledge also became a determinant for leadership. The cooperative leaders were invited to attend various workshops. Other members were demotivated for seeing that cooperative was benefiting a few. Mapila explains further that elite captures in Malawi are culturally created; there is material elite, the well-off farmers’ with physical and financial resources. This has resulted from the criteria which have been created to identify poor and rich farmers in Malawi and in many rural of Sub-Saharan countries. For example among many others criteria includes; physical assets, human capital example education, and natural assets which implies the amount of land, and leadership position, employment, and political position. Mapila recounted that the distribution of services has been favoring the wealthy farmers. For instance, important business information, credit services and land are distributed in favor of elites with higher economic portfolios for the perception of having capacities to manage the resources. Also the number of women’s participation in decision making in development activities become low as the majority in rural areas are illiterate and poor. In this case women are more development victims as Prakash (2003) analyzed women in Asia. Prakash indicates in most developing countries women provide labor in agriculture production from land preparation, cultivation, harvesting, processing and marketing. Despite the higher contributions, they have little access and ownership of the means of production because of unfavorable tradition and patriarchal system that favors men. Platteau (2004: 226) also studied a case study in West Africa whereby elites captured donor funded project. Young school teachers and son of local chiefs created groups and donor agency through a rural participatory approach, the association nominated to get financial support to implement activities. After two years later, the association was to choose one defined and useful investment. A Special committee was selected to guide the best use of the fund. More training was given on managerial and technique issues in effective performance. However, this group considered to have no defined goal, rules, roles and reporting procedure. Unluckily, committee leaders misused funds by over drafting and the project was underperforming. The NGO ordered the leaders to be fired and punished on village assembly but in an unexpected situation they were re-erected by the community to take their position by illuminating that the punishment was from jealousy. The community members honor and fear elites and intellectuals and continue to be poor and being loaded with the promises of a better life.

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Arnall et al (2013) conducted research on NGOs and elite captures in community driven development in Mozambique and specified community participation in donor funded project has fallen upon state political elites and the ruling party. NGOs have turned to be social service providers where the government has minor reach. They have been engaging in advocacy activities with the aim of empowering local people in marginalized groups such as youth, and women in leadership position in which they channel resources. In many cases the resources benefits a few elites who penetrates in these groups. For example Buerger and Holzer (2015) gave experiences from Ghana Human Right NGO which uses groups and community participation for the project intervention. An NGO works in Ghana and advocates accessibility of social services through human rights education, capacity building and rights on community participation in development projects. The NGO was geared to influence the availability of water and sanitation through organization of youth groups. In order to get connected to the community, two youths nominated to volunteers for the NGO the researcher named them ‘Interstitial elites’. Volunteers were interlinked to NGOs, community, and local authorities. They were empowered with the knowledge and skills to influence community participation. In case of any information to be communicated with the community they had to distribute door to door invitation to all important people and local leaders who could have an influence in the public forum. They worked by relying on both NGOs interests to whom they were funded and rewarded and to the local power hierarchies. They had also spoken to the researchers about the meetings’ effectiveness if the women would attend because they were many and enthusiastic about the meeting. This indicates community inclusion promotes NGOs funding practices and project sustainability regardless of the active participation and the benefits for citizens. Rigon (2014) also described the elite capture in participation approaches in slum- upgrading in Kenya which is common to happenings during elections. The President ordered the people who lived in urban slum to be provided the land which was owned by the government. The powerful people organized themselves into a group and started claiming the land through an NGO to benefit out in upgrading process. In another way free market has advantaged the people with money power and lobbying strategy to buy products cheaply from small farmers. Cheating and renegotiation farmers in rural areas became a common trick for private company and big traders (Gibbon 2001). United Republic of Tanzania (2005:7) reported that the increase of donors and private sector in agriculture production, purchasing and marketing products has raised the price for both agricultural inputs and products. Small-scale farmers have been marginalized to the point that it has been harder to access factors of production such as land, financial credit, markets and other resources which could be more easily accessed through cooperatives.

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2.5 Conceptual framework This part discusses the International Cooperative Alliance (ICA) principles which have been adopted by the government in various policies to facilitate economic viability of farmer’s cooperatives. The principles shape the operation of farmer’s cooperatives and the role of elite since neoliberalism. Cooperatives and other social networks links people to organize their livelihood, however cooperative may divert from the designed goal. Long (2001:54) notes that network transform and change over time; they are no-static and dynamic. External and internal forces may change cooperatives at positive or negative outcomes. It has to be clear that positivity and negativities are embedded in cooperatives and conflicts and exclusion are reciprocal relationship. Thus, the policy shift may produce the elements that influence elitism and elite capture in the cooperative movement and advantage or disadvantage the members. Policy determines the way we live and act. It governs and regulates our action by rules and procedures that may affect a human being both severely and widely. Thus, policy affects almost every aspect of our lives. Policy is a principle of action deliberately proposed by the government, individual, party, business that provides guidance to address a certain problems in desired objectives. The appropriate policy formulation and implementation the better and development destination and the vice versa (Evans & Sewell 2013). By the early 1960s, Tanzanian adopted a socialist strategy in agriculture sector through village cooperatives system ‘communal farm’ in self-reliance policy. Cooperatives were organically mobilized in kingship tie, cultures, norms values for the shared goal of production and service the indigenous community under the state control (Ibhawoh & Dibua 2003). It was a compulsory program for every community members that aimed to disintegrate agriculture and capitalist techniques. Neoliberal economic reforms in the late 1980, and early 1990s and ICA principles legitimized cooperatives into competitive market economy. Incoherent cooperatives policies and regulations were adopted and designed in most Sub- Saharan countries that influences the dynamics of farmers’ cooperative movements and other similar social groups. The state continuing in formulating cooperative development policies and Acts of such kind in which a broader representation of elites and elite capture has revealed in authoritarian and political regimes. Privatization policy and decentralization reform also have raised the emergence of elite and elite capture in a formal channel on the local resources. Farmer’s cooperatives in developing countries are in dilemma for being contested by elitism domination and exclusion of the poor (Everingham 1997).

2.5.1 The relation between ICA principles, cooperatives and elites capture After the economic reform in 1990s, followed by the government's withdrawal in subsidizing cooperatives, in Keynesian perspectives of ‘rapid growth’, farmer’s cooperative was restructured as an institution for market access in fundamental membership rules, regulation and specified activities. The International Cooperative Alliance ICA (1995) developed co-neoliberal definition and principles to reshape co-operative into the market model. The

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definition states; cooperative is a voluntary and democratic autonomous association of people united to meet the common objectives without any kind of discrimination, whether by race, religion or sex. The principles are; freedom, autonomy, joint capital- which implies every member should contribute or buy shares, and one vote for one person. Neo-liberalization of the economy and elites capture processes is interlinked and strengthens each other. The dimensions and cooperative movements and elites capture will be discussed in several ICA co-elements of liberalization policy which has been promoted by the state in various Cooperative Policies and Acts.

2.5.1.2 Voluntary membership Burton (2004) referred the property and economic theory. He explained on heterogeneity members and capital contribution principles. He states that, Voluntary membership defeats proper operation of the cooperative in this way; it has idealized by combining all categories of people; poor, wealthy people, illiterate and literate, and in this mixture, some members may join the cooperative and behave as investors, supporter as well as users and overlap cooperative's resources. For example politician and well educated people in decentralized government are well knowledgeable on how the state system works; they are connected to the central government (ministries), big traders and private institutions including NGOs. They channel the resources through cooperatives whether for political purpose to motivate and preserve voters or for economic gain.

2.5.1.3 Shares, autonomous and free Also, Burton describes the common capital ownership, which is the bounded shared asset and in most cases are shares or membership fees. It may become a free ride for some elites on risk reduction when debt occurs. This is because elites know how to maneuver resources within the group. Moreover, this is contrary to a voluntary principle which allows inclusion of the poorest but shared capital limits the poor to pay fees or to buy shares and hence to favor the wealthy people. Likewise, the principle of autonomy on decision making is not clear to what extent has to be applied because in normal circumstances in rural is done in social environment. The community has the norms and cultures and they live by respecting each other, the leaders or influential person in the village cannot be opposed. Women are not allowed to argue and compete with men. This has given an opportunity for few elite to take control and decisions of their wish. Birchall and Simmons (2010:479) also noted that free and autonomous principles isolate cooperative from close supervision by the government and being used by a few people as a gap to register short term cooperative ‘pseudo-cooperatives’ for private purpose.

2.5.1.4 Autonomous Simmons and Birchall (2008) argued, autonomous cannot guarantee the freedom of cooperatives out of politics, international and state interference, because they are horizontally organ. Both central, local government employee and councilors are responsible for mobilizing farmer’s cooperatives, capacity building, supervision, lobbying and allocation of resources for the poor; this situation facilitates elites to mingle. There have been the successful stories for some cooperatives in less-developed countries, further studies are important to observe these

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successful stories. The NGOs have informally or formally achieved to networking the government bureaucracy, private sectors and other NGOs in development intervention. In practice, cooperatives may get networked globally in self-motivated elites who capture the resources for personal interest. However, this is not to conclude that cooperatives are not benefiting in global networks, but is vital to scrutinize how this network serves the interest of the entire members as Biggs and Neame (1994) emphasized.

2.6 Statement of the problem Farmer’s cooperatives in Tanzania have been promoted by several policies and programs including the 1991 Cooperative Society Act, followed by 1997 Cooperative Development Policy, 2002 Cooperative Policy and 2003 Act which was amended in 2004. All these Acts aimed at transforming cooperatives and member- owned organization for economic viability. The adoption of Structural Adjustment Program and Free Trade policies instigated by the IMF and World Bank in the 1990s influenced the Government of Tanzania to shift emphasis away from Ujamaa Village policy and formulated new cooperative development policies in line with neo-liberal policy environment. In this regard the Government has limited its interference in cooperatives creating space for local elites to emerge and to seek ways to gain control over the cooperatives and its resources. Farmers continue to encounter internal and external constraints resulting from such restructuring. Therefore it is imperative to investigate how Tanzanian government’s policy shift towards neo-liberalism has influenced and facilitated elites to emerge and capture cooperatives and how such a process shape the dynamics of cooperatives.

2.6.1 Objectives The general objective of this study is to explore the interaction between the neo-liberal policy shift and the emergences of local elites who have influenced the dynamics of cooperatives.

2.6.2 Main Research Question How and in what ways has the neo-liberal policy shift of the Tanzanian government facilitated elites to emerge and how such a process shape the dynamics of cooperatives.

2.6.3 Sub- Research question How does elite capture of local cooperatives manifests in Ulanga District, Tanzania? What does elite capture mean for the daily operation of cooperatives?

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CHAPTER 3

RESEARCH METHODOLOGY

3.1 Research Design

This chapter explains the entire process of how the data was collected. This study was conducted in Ulanga district council. Initial contact was made with the corporate officer and community development officer for the guidance on the procedures to be followed to get the respondents. It was a case study research and the communities in the village level were the main focus. More time was spending on active involvement with people’s narratives which made the study to be a qualitative research. Both primary and secondary methods of research were applied which included, in-depth interview, observation, focus group discussion, storytelling and collection of archives in order to explorer relating variables in this study.

3.2 Research Unit The study contained three segments, the community, public employees and the private sector. Krishina (1993) explains that the unit of study can be an individual, a family, an institution, culture, group or entire community. The community is a fundamental element bounded by these units. This study also involved the key informant who were local and ministry employees, local community members, extension workers, and influential people. Purposive sampling method was used because of the need to get the groups that are alive and active by the coordinators guidance. This was because many cooperatives and social groups in Tanzania are registered but do not exist.

3.3 Study Area This study was conducted in Mbuga village Mwaya division and Mahenge village in Mahenge ward as indicated by arrows in the map. This district has two voting constituencies.

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Figure 1: Ulanga District Council Map

Source: UDC land department 2014

The west constituency comprises Lupiro, Mtimbira and Malinyi divisions and the Eastern constituency where this study was conducted comprises Vigoi, Mbuga, and Mwaya divisions. The district has 7 divisions, 31 wards, 92 villages and 390 hamlets. The total area is 24,560 km2

equivalents to 2,456,000 ha. About 75% of this area is wilderness and forest with serous game reserve. About 614,000 ha (25%) of land is fertile and good for economic activities including agriculture. There are 40 rivers in the district, 34 rivers flow throughout the year and 17 rivers flow in the valleys and good for agriculture irrigation. The district is depending on a bi-modal rainfall pattern with long rains between March and May and short rains between November and January. The average annual rainfall varies between 800 mm and 1600mm every year. Most of the residents practice subsistence mixed farming food crops production such as Bananas, Irish potatoes, and beans, while only the minority produce cash crops including maize and rice. The

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community members are also engaging in livestock keeping, mining, fishing and charcoal production just to mention few.

The Ulanga district was chosen as the study area because of easy accessibility in both the location and the availability of the respondents. This study was conducted in two villages which were selected by the advice of the council staff. Before arriving in the study area, the corporate officer was asked a list of existing cooperatives in the district and two of them were selected for the study. After arriving in the district a corporate officer said that some of the group I selected he did not have the update information. So he advised to conduct the study with one cooperative in the village which he thought could give me a real picture of what I wanted to know. Also in order to get the second group that could help to make the comparison community development officer who is district women’s groups’ coordinator was communicated. The name of the case study group and the chairperson were identified. This study included 21 total participants both the cooperative and group members, non -members, the district and village government employees with highly gender sensitivity.

3.4 Ethical considerations and Informed consent

Given that this study was sensitive by touching the life and feelings of the people, confidentiality during the discussion was considered. First, some of the interviews especial the in-depth individual discussion was conducted in the conducive place at home, second, the respondents were well informed on the purpose of the research that was for acquiring academic degree and also to inform policy makers to make the intervention where it is necessary. The Pseudo-names are used in this report to ensure confidentiality of the participants. Some of the discussions were recorded by the consent of the participants. The principle of informed consent states that participants should not be persuaded to provide information against their will, but first they need to understand the topic and to have the freedom of decision whether to provide the information or not (Green &Thorogood, 2014). Therefore, in order to ensure the security of the respondents, this report has not used actual names of the respondents.

3.5 Methods of Data Collection

3.5.1 Site visit and observations This study applied both covert and overt observations. Green and Thorogood (2014) explains that in covert observation the respondents are well informed on the role of the researcher and they interact in daily activities and while observing. In overt observation the researcher is undercover, to live within the community and investigating without community knowledge. I had a time to live within the community observe and visit the agriculture fields and see how they organize the daily activities to generate income. I also had the chance to visit the granary which was prepared by the cooperatives for products storage. I participated in traditional ceremonies and often I was invited in some of the household and eating together. The time I spend with the community not only helped to observe community life but also to be close and familiar which makes respondent feel freely and open to give sensitive information of their life.

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3.5.1 In-depth interview In-depth interview involves story telling of the individual insight on the experiences that affects life. It helps to collect the huge information and offers the chance for the researcher to probe and get into deeper study of issues in different perspectives. Some participants had experience on cooperatives for many years since independence 1960s and 1980s hence the interviews needs attention. In-depth interviews allow to ask many questions and to collect multiple answers which are useful in relating several issues (Giddens 2006). Therefore, this study did not apply structured questionnaires and interview, probing and guiding questions to lead the discussion were applied. However the discussions were not limited to these questions. The in-depth interview was useful in collecting the information related to my study from couple of years which was not expected to come across.

3.5.2 Focus group discussion Focus group discussions are useful to study personal insights and to construct a significant amount of information from multiple participants in a short time. It also stimulates respondents to remember other relevant information that might be forgotten in an individual discussion. The focus groups discussions were guided by the topic list and possible question to start up the discussion. In order to provide a room for free expression, the homogeneous groups were formulated. This is because in most African culture, women are not freely allowed to talk in front of men. Therefore isolating women in the interview creates the free environment to speak out the life experience. Green and Thorogood (2014) defines this as discussing with a group of participants at a time.

3.5.3. Key informants

The key informants were the people with additional information related to this study. They were not the members of the group to be studied but they assisted in obtaining extra information. This study involved four key informant who were the village extension workers and community members especial those who were present during vijiji vya ujamaa ‘communal village’ and crop board from 1960s to 1970s. This information was very useful because it gave the real picture of the cooperative in previously years which assisted to compare with the current situation (Hammersley &Atkinson 2007).

3.5.4 Sampling and sample size This study used purposive sampling to select one cooperative registered in 2008 from Agriculture department and women income generating group which was registered in 2007 under the department of community development. The corporate officer and community development workers gave the information and organized the group members. Some employee in the district and the Ministry who were available were interviewed during the study. Considering time and updated information in many local governments especially in Africa, the purposive sampling was chosen to real deal with participants who could give much information as I wanted. Green and Thorogood (2014) outlined that purposive sampling technique includes information-rich cases for in-depth study.

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3.6 Data Analysis This study included qualitative data derived from participant’s narratives. The interviews were conducted in kishwahili language and were translated in English during the report writing. A translator in this study was not necessary since am a Tanzanian and I speak Swahili. The information was collected by using the guiding questions and a note book to write some points. It was not easy to write the all conversation, I asked for the concert to record some of the dialogue. In report writing I highlighted and coding some of the conversations that were relating to the study.

3.7 The limitation of this study Getting access to the participants and the information that is another common dilemma to researchers (Hammersley Atkinson 2007). The first challenge my respondents have the expectation for the solutions on their problems, being there, was their hope that the problems have come to an end. They described many problems and ask me to find them solutions. Though it facilitated to collect more information, but it was full of complaints which sometimes put me on emotions and even to lose the focus as a researcher. It was not easy to tell that I cannot help, the situation forced to give some possible solutions while I knew the problem could not be solved within a short time as they were expected. Also this study was touching people's interest and conflicts within a cooperative , it was difficult to get some documents for extra information because the chairman of the cooperatives after the problem has risen he hid all the documents in his home.

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CHAPTER 4

HISTORICAL BACKGRAUND

4.1 Historical Background of cooperative movement in Tanzania

The campaign on the movement of cooperative in Tanzania as in many African countries historically rose into two phases; after the independence period in the 1960s to the mid-1990s. The second phase was in the mid of 1990s during the economic crisis and neo-liberal market under the Structural Adjustment Program (Wanyama et al 2008:1).

4.2 Independent period, in 1960s to the mid-1990s Early before Tanzania’s independence in 1961 the country was disorganized and needed to be rebuilt. Farmer’s cooperative was recognized as a pillar that could influence economic and social development. It was given the priority in national development plans. The government considered rural cooperatives as capable organizations that could exploit resources and enhance both social and economic development local communities who are a majority (The First Five – Year Development Plan, 1964 – 1969). The president Mwl Nyerere declared to fight against poverty, disease and ignorance which were seen to be the three development enemies. The Development plan for Tanganyika 1991/1962- 1963/1964 was enacted with the indention that it could guide the rural community in fighting those aforementioned development enemies. A budget allocated with government’s close supervision to facilitate the efficacy of agriculture cooperatives among other sector (Kamuzora 2010:93). The rural cooperatives continued to be emphasized by the government as a suitable and primary carrier of developmental and social change. The government policies and programs put much emphasis on cooperatives as the best approach to pool resources together to improve the living standard, in a way that it could be built more in services delivery than market entity (Develtere & Wanyama 2008: 12-13).

Mruma (2014: 78) elaborates that after independence the people lived in scatted settlement in a way that could be difficult to unite efforts and fight poverty. The government declared the people to come close and establish communal settlements which were known as Vijiji vya Ujamaa “Communal Village”. This was a compulsory program to every community member and the expertise was responsible and dedicated to supervise and coordinate rural practices and service delivery. The government had also dedicated itself to promoting cooperatives in a communal village to improve the welfare of every rural poor. Vijiji vya Ujamaa and self-reliance approach were adopted in the Arusha Declaration in 1964 that could empower rural cooperatives and administrative bodies to work effectively in a recognized policy. The government’s intentions was to easily distribute social services, and to enhance the citizen capacity to overcome poverty on their own effort (Lal 2012). During this time the land was communal in used and not for renting. Nobody died of hunger, everybody was committed to work except special group like elders, children and disabled. The farmers in communal village

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worked together and the benefits were divided equally to each household. Furthermore, no classes of haves and have not’s could emerge and inequality and oppression among leaders and workers was forbidden (Cranenburgh 1990: 219). According to Maghimbi (2010: 4) it shall be known that in this period cooperatives flourished to a large extent. The report from the Ministry of Agriculture, Food and Cooperatives, indicated in 1960 registered cooperatives were 691 with 236,211 members and in 1965 registered cooperatives increased to 1,518 with 607,655 members. The categories were that, in rural areas all producers had to join farmer’s cooperatives and in an urban center consumers union were formed. Hyden (1975: 52) indicated that in 1961, 857 cooperatives was registered and increased to 1,533 in 1966 together with 33 unions. The appointed and responsible Ministry in registration had to ensure the cooperatives could increase at any possibility since the successful leaders were evaluated by the number of mobilized cooperatives .Vijiji vya ujamaa and self-reliance esteemed to be precious methodology out of inequality and community members enjoyed the outcomes of their efforts (Cranenburgh 1990: 219). Banturaki (2012:9-11) reported that in order to reinvent and speed up socialist spirit, the government formalized vijiji vya ujamaa through the registration act of 1975 which was enacted in a way that could enable villages to work as a multipurpose organization and with the aim of dissolving into market cooperatives. The reason was that the communal village had lost its nature in serving rural farmers and so it should be restructured into agricultural production and market under the government management. State parastatals, crop authorities and crop board were designated to buy products from farmers, processing and marketing. However the mission of the government to restore cooperatives quickly failed since cooperatives members started complaining about corruption, poor performance of crop authorities, miss management and non-cash payments for farmers’ crops. In the following years of 1982 cooperatives started demanding autonomy from the government agent’s monopoly on agriculture production and cooperatives movements. In this time the government restructured cooperatives to be registered in the regional union in multipurpose activities so that could facilitate the effectiveness in services delivery to its member Banturaki (2012:12).

4.3 Neoliberal and Structural Adjustment Program 1990s onwards This was the second phase during economic crises in many African countries due to political conflict, the rise in oil prices and in Tanzania it was also as a result of the Id Amin war in Uganda Republic. The IMF and the World Bank under the Structural Adjustment Program introduced free market to ensure developing countries focus on business than services to accelerate the economy. In this case farmer cooperatives were to be restructuring in a way that could fit in macro-economic context. The cooperative management was changed from the government monopoly over cooperatives to cooperative autonomy. The government was no more involving in supporting and managing cooperatives so that they could use their own capacities to improve the living standard. It was also to empower cooperatives members in a way that could operate as a business entity and establish business delivering spirit to meet global market demands (Develtere & Wanyama 2008: 12-13).The first Cooperative development policy of 1997 after 70 years of independence following that of 2002 and 2003 cooperative act, establishes the regulations in which cooperatives should operate to encounter free market policy. The

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government stopped supporting cooperatives in various areas such as audit, management and supervision and remains responsible in policy making, registration, and restructuring of legal framework. The government was controlling cooperatives from a distance in such a way that they complied with the rule of law ICA (1995). The Tanzanian cooperative policy of 1997 in conforming to ICA states that “ Since the government recognizes the potential of cooperatives in contributing to the solution of economic, social and environmental problems, it will observe and respect ICA cooperative principles which are: Voluntary and open membership, democratic members control, members economic participation, autonomy and interdependence, education training and information, cooperation among cooperatives and concern for community” (Ministry of Agriculture and Cooperative 1997:3).

In Tanzania, the effect of liberalization policy was devastating. Cooperatives were not in a better position to receive free market reform process, and had no alternatives to adjust in the new system, private traders overtook their business onwards. They had hereditary cooperative structures and attitudes that resulted to weak management of membership because of shortage of professionals which could not meet liberalization principles (Sizya 2001). Some primary societies began to rent facilities from private traders and operate as agents. Since 1991 the government has been formulating cooperative development policies and Act in liberalization approach which has developed the power to a few people to benefit in cooperative. Decentralized government system was established in 1990s for easy service economically subordinated person however the rules and regulations have given much on political powers to manage rural resources. Decentralization was also allied to multiparty politics which was introduced in 1990s and Cooperatives were changed in the political arena, party elite got space with neoliberal economic reforms (Banturaki 2000).

Liberalization was considered to have been introduced in improper time since Tanzania and many other African Countries were confronted with economic shock which made it harder for cooperatives to compete in the world market. Klein (2007) held that the introduction of free market by IMF and World Bank in many African Countries was a ‘Shock Doctrine philosophy‘ which stated that “free market” policies have come to dominate the world through the exploitation of disaster-shocked people and countries to achieve control by imposing economic shock therapy. Sometimes, when the first two shocks don’t succeed in wiping out resistance, a third shock is employed’.

4.4 Other experience on Farmers’ cooperatives movements in neoliberal In Asia during free market the focus was on establishment of agricultural research institute, technology innovation and extension financial facilities (Kelly & Gordon 2003). The countries started strategies to promote involvement of small farmers and local cooperatives into a modern supermarket and urbanization which has been sustained to the present. Private companies are connected and work with rural farmers to develop and establish modern markets using several approaches similar to those in Latin America, like farmers companies, market networks, market organizations and market center which are linked to urban supermarket (Reardon & Minten 2012). In addition Nongovernmental (NGOs) have been mobilizing and funding farmer’s cooperatives in rural areas where the supermarkets are connected to smaller farmers than big farmers. Reardon concurred that this modernity diffusion

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has raised penetration of traders union, banks, new retails and cooperatives have changed from traditional to modern ones with few members. Reardon explains that it has also increased landless people and small farmer’s constraints with competitive market; shortage of information, education and in all no favor is given from the government. In South Africa Ortmann and King (2007:220) noted that in 20th century agriculture cooperatives played a great part in commercial sector. The government was supporting cooperatives by providing subsides; tax and price control and cooperative became the government agency in supplying agriculture inputs to farmers and market control through boards. In 1990 to 1994 after SA had become democratic state, cooperatives were no longer agriculture agency, the government withdraws from financial support and cooperative market boards were abolished. Cooperatives converted into Investors Oriented Firm(s) (IOFs) characterized by competition among members and investors, and complexity structure with proper right conditions (Piesse et al 2003 & Cook 1995: 1156). The conflict for individual interest rose and inappropriate property right settings which favored members and non-members’ patrons, and appeared to be common for voluntary member’s organization. In 2005 the government signed the new cooperatives act to conform to International cooperative principles. However the land allocation was still related to chieftaincy authority and superiors. It constrains normal people to obtain credits for lack of land which is used as collateral by most financial institution like banks.

4.5 Decentralization and political power Before continuing it is better to understand the environment in which farmers cooperatives originate and operates. The aim is to describes local administration system, which in one way and another affects the development of cooperatives. Usually farmer’s cooperatives are the primary organization work under close supervision of local government. Decentralization forms bureaucratic and political authorities who cannot work independent of cooperative activities, they depend on one another to exist. Decentralization was established in several countries in Africa, Asia and some in Latin America to reduce the central government roles in the rural area. It was to enable effective and efficient distribution of services and the supervision of social, political and economic development. In Tanzania the local government was established in 1982. The development activities are managed by local employees in collaboration with councilors who are elected to represent the voices and choices of the grass-root. The function of the local government has to follow the manifesto of the ruling party, policies and other directives from technocrats and experts in the central government. Development issues should be discussed and evaluated through district assembly which includes councilors, political party representatives, District Commissioner and departmental representative’s employee. By law the councilors under the chairperson leads the meeting and have political power to advise and decide on some issues in the district (Crook 2003). The MPs and councilors are obliged to know and approve all tenders and development projects. In general in the government administration structure, political organ is not included it is embedded, however legally they have a strong decision-making in the local government. Local employees cannot make decisions without consulting the councilors before the final decisions to be executed at the grass root.

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CHAPTER 5

BUREAUCRATIC, SOCIAL AND ECONOMIC INTERACTIONS

5.1 Introduction This chapter explores the administration system and the functioning of the Ulanga council. This indicates the relations between cooperative, councils, and the private sector in which elites emanate from. It also discloses how the citizens interact with leaders, professionals, and donors in daily activities in their endeavor to overcome poverty. The farmer’s cooperative is an important link to the development actors in Ulanga district. The community has been mobilized to join together in the implementation of various government and donor-funded projects. This is not limited to cooperatives which are found in the districts but also there are other forms of groups such as Community Based Organization (CBO), Social Service Organization (SSO), User groups, Small - income generating groups, youth groups and disabled groups . However, in spite of its elitist weaknesses, it has proved to be the easiest and sustainable approach for the government support and aid delivering.

5.2 Economic Activities in Ulanga district Prior to the focus on the specific cases I would like to provide a broader description of the economic activities which are conducted by the residents of Ulanga district. These activities are carried out in line with the cooperative activities and groups. It indicates that people are not only conscripted into groups, but these are economic activities which add to the family income and District revenue.

Agriculture is the main source of income in the district and different programs are implemented. These are District Agriculture Development Programs (DADPs), Participatory Agriculture Development and Empowerment Programs (PADEP). Since 2005 the council has been working towards the Agriculture First the country slogan which is well known in Swahili as ‘Kilimo Kwanza’ for the purpose of promoting agriculture as a source of food and income. The main agricultural crops which are cultivated in the district includes rice, beans, maize, sorghum, cassava, sweet potatoes, paddy, finger millet, sunflower legumes and horticultural crops (tomatoes, cabbages, onions). The rearing of livestock has been significant in improving people’s welfare. The majority of the people keep cattle, goat and sheep that has contributed to the shift from hand-hoe farming into oxen driven farming, thereby increasing considerably the size of the farms and yield per plots. Mining and quarrying activities are also practiced in different sub-divisions of the District. The variety of minerals includes gemstones, gold, spinal and ruby. Ulanga inhabitants are traders and marketers as different communities are engaged in the activities of this sector at an individual level, through cooperatives and Non-Government Organizations. Some of the products are sold within the local markets while others are purchased by the wholesale traders from outside the district. Trade and commerce play an important role for the economic growth of Ulanga District. The Council promotes these businesses because they also benefit from the collection of revenue through fees and charges

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paid by traders at different transaction points. Other economic activities in the area are petty trading and small industrial activities such as carpenters, tailors and hand craftsmen. The district has the hunting blocks, tourism and recreation areas such as Serous game reserves which attracts tourists thereby increasing district and government revenue. The total area of the district is 2,456,000 ha and out of these, 1,842,000 ha are occupied by natural forests. Most rural communities exploit the forest for charcoal making which is an alternative source of income. Others use leaves, roots and barks to weave winnowing baskets and sleeping mats that they trade. The Ulanga District Census Report (2002) indicated that per capita income was estimated at 115,469.86 shillings, which is equivalent to (55 euros) per annum. The district GDP data is currently not known.

Figure 2: Cattles and Sheep in Ulanga District

Households or social groups keep cattle and sheep as a source of income to improve their livelihood. Some cattle are used as draught power.

Source: Ulanga; DLNRO-2009

5.3 Formal structure of Community Groups and Cooperatives All cooperatives and community groups in the District do not just exist out of community initiatives but are also created according to the national policies and legal procedures. Local authorities have the duty to mobilize and coordinate these groups through the relevant departments by taking into account the policies, principles and other directives from the Central

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Government. The departments responsible for the management of community groups in Ulanga District are; department of Community Development, Gender and Children sector and department of Agriculture through its Cooperative sector.

The cooperative sector is under the department of Agriculture which is decentralized from the Ministry of Agriculture, Food security, and Cooperatives Tanzania (MAFSCT). The cooperative officers in a decentralized government are tasked to coordinate and facilitate the formation of cooperatives. They also educate and supervise all activities including registration procedures. They are obliged to report to the Council on its function primarily in various Council meetings. They are also supposed to provide progress report to the Ministry. The cooperative officers in both Ulanga district and the Ministry explained that there are three types and levels of cooperative in Tanzania which are; primary cooperative in the grass-roots (village/ward), Secondary cooperative at the district level which unites primary cooperatives and the cooperative union (federation) in regional and national level which unites primary and secondary cooperatives. These cooperative societies often may operate with different objectives and each member performs activities in line with the main objective of the association. Lionel (1998) classifies forms of agriculture cooperatives as; i) purchasing and marketing members products ii) cooperatives for supplying agriculture inputs to the local community such as fertilizers, herbicides and seeds iii) cooperative which provides services to its members such as credits, irrigation services, insurance, cow bleeding and testing and, iv) cooperative that search, bargain and set standard market price on the members products. This study was conducted to the cooperative which purchase and market members products.

5.3.1 Membership and registration The nature of the cooperatives determines the number of members. According to the Tanzanian Cooperatives Development Act of 2003, the membership to a primary cooperative ranges from 20 to 30 and secondary membership starts from 20. Cooperative union (Federation) must be 10 registered secondary associations. Any member must be eighteen years old, fifteen years is allowed but not in the leadership position. Membership fee and ownership of half of the required shares are necessary. Cooperative leaders and board members are elected through the one person one vote basis. In order for the group to qualify for registration, the analysis or project proposal must be provided to verify the feasibility of the cooperatives. The constitution and enclosed application letter with member’s signature are necessary to be included for registration. The cooperative officer must also sign a letter of application for approval before the submission to the Registrar in the regional level. All cooperatives are to be audited by registered auditing board every four months. The regional Registrar works on behalf of the senior Registrar at the ministry level. At the district level cooperative officer oversees registration processes and approve before they submit to the regional Registrar for certification (URT 2014).

5.4 Informal structure and Social relations of Community groups and Cooperatives

Apart from the policies, laws and regulations stipulated for the formulation of community groups and their functions, in reality cooperatives and other related social groups in the District operates in a socio-cultural arrangement. The community has an informal way of living and

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relating to each other in which customs; tradition, norms and sanctions are respected from the ancestors and being practiced from generation to generation. These groups are formed in the form of kinship ties, family values, and sometimes people join the group because one of the group members holds political power or knowledge. One member had this to say:

This cooperative is called Songambele because the members are only the residents of this village. For example, this house and that one which you were looking for respondents belongs to a man who has two wives, both the wives and himself joined the cooperative. The Councilor who is the founder of the cooperative also lives here and he has been holding the same position for five years now that is why we knew he could help us to get financial support easily.

The community believes that by having elites in the cooperatives it would be easy to get external support in achieving economic goals. The leaders especially cashier are selected by scrutinizing who is honest in the community and is likely not to misuse the money. Women are more considered in this post because they believe women cannot be corrupt. However they also ruminate that women are easy to be manipulated therefore they need close supervision. On the other hand, it is assumed that women cannot hold higher positions like chairperson within a heterogenic group because they are said to be lacking confidence and they need permission from husband or partner.

One community member said many times in community projects when they want to select project committees at a village meeting in order to elect a woman as a leader she has to assure the public that she can manage the position without the restrictions of her husband. It is also because there are arrogant men who do not want their wives to be seen as the leaders simply because they feel that they will be despised. Some men prevent their wives from being elected by assuming that they will become too busy and forget to take care of the family. The people themselves know who among themselves has the qualities to be a leader, and one without any obstacles, so they often discuss this among themselves.

John, Cooperative member

“…that cashier woman in our cooperative was chosen just to fulfil the bank requirements and because she attended the secondary education, she knew little calculations and she has been holding the same position in other community projects, therefore she was approved to be honest enough to keep the money. But the fact is she was not involved in the whole process of the loan application and withdraws. She does not know anything about the loan because when the chairman of the cooperative wanted to withdraw the money at the bank he was going with the secretary, who is his friend. We tried to ask her how the chairman was using the money but she indicated that was just keeping the transaction records on books. She was given a little amount so as to stop her from exposing the issues to other members. That woman has conflicts with her husband, we don’t know if it was from the debt we have because after the debt had occurred the woman quit the group and she left the village with her husband, she is now living in another village.

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Even if the community sees this woman as ‘honest’ her profile indicates that she is also an elite since she is an experienced cashier, a post she has held in other community projects and is now accused of being involved in corruption. If she was to be honest she would have given the information to other cooperative members so that they might take action against their chairman early enough. The community confuses social-cultural values and elite. They continue believing that women cannot be corrupt and few elite women use that opportunity to benefit in cooperatives.

The existing cooperative policies which have been formulated at a macro level are underpinned on the neo-liberal ideology which encouraged the State to retreat from direct involvement into community economic activities. At the same time the community has its cultures and norms that influence the interactions of men and women, the rich and the poor, the knowledgeable and the less influential thereby providing space for elites to emerge and capture the scene and use it to drive the cooperatives for their personal gains and much less for the community. The neoliberal fundamental regulations which meet dominant social system in the ‘absence’ of the State continue to advantage a few elites which defeats the whole purpose of community poverty alleviation efforts of cooperatives.

5.5 Interference of politics in cooperatives The Cooperative Society Act of 2004 states that the District Cooperative Officers are responsible for mobilization and facilitation of the formation of cooperatives and managing the entire registration process. In other legislations the Local Government laws authorizes the Councilor to oversee and control the implementation of rural development activities and workers. This was indicated in the general functions and power of District Councils in the Local Government (District Authorities) Act of 1982, section 118 (i) (a) which states that; the Council formulate, coordinate and supervise the implementation of all plans for the economic, commercial, industrial and social development in its area of jurisdiction (b) to monitor and control the performance of the duties and functions of the Council by departments of the council and its offices and staff’ (URT 1982). In this contradicting of roles District employees in general and Cooperative officers in particular cannot take professional decisions that disadvantage the Councilors because the Councilors have the legal powers to fire and demote workers within their District. This means there are some cooperatives that are attached to political interests and some directly to Councilors but cannot be questioned by government workers. Alba and Navarro (2006:2) noted that decentralization has led to bureaucratic political administration and the emergence of the professional politician and professional public servant. The three co-features are reciprocity and sometimes disagreement may arise between technical efficiency and democratic responsiveness. Insofar multi-party system and decentralization reform broadened the political conflicting interest on the local resources in which they take control over cooperatives and social groups as to indicate the commitment to help the community. The political pressures among ruling elite to deliver electoral benefits for voters, has formed the political economy of donor aid and project intervention in agricultural policy and poverty alleviation programmers in local community (Harrison 2008). Most programs appear to be offered in political circumstance and being regarded as to increase citizen’s voice and responsiveness of the government. The

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donor aid has turned into the mechanism to serve the ruling elite. Neoliberalism and decentralization policies reform was also introduced without supportive environment for the growth of cooperative especially supporting staff and financial support. Experts do not have a budget to manage cooperative activities though they have delegated with these tasks. The result is the communication gap between government and cooperatives which creates a room for elites to take control of situation. Below are some of the narratives relates on this;

Cooperative officer from the District,

He elaborated that within the department registration process for new cooperatives are not a problem at all as long as the necessary documents are available. His problem was involving Councilors in everything that he does. First it prolongs the process and secondly their interference with the technical decisions of the department. At times they influence the outcome of the department’s decisions which he does not like. When problems occur it would then look like they are not doing their jobs properly. It seems there is no decision making without political blessings. Every plan and decisions have to be done with some one’s blessing. There is no sense of cooperative autonomy.

He also went on to say that the situation of cooperatives in Ulanga district is not good and many are inactive and most of them have been collapsing instead of growing. The first reason is that it is impossible for two cooperative officers to save the whole district. Secondly, the budget is insufficient all the time. There are no subsidies from the central government, and we depend on domestic local government revenue. They have to wait to be considered by the council to get facilitated in visiting and providing services to people in the village. It is not easy to use their own salaries to go in the village and collect data because it takes a long time to get repaid. “For example, the cooperative you want to study was registered in 2006, but I have not visited since 2009, now I don’t know if it is active or not. Because this was a pastoralist cooperative, in 2013 there was a land clobbering between farmers and pastoralists, it is possible that the cooperative has collapsed because pastoralists were dispossessed some cattle, maybe they have left!”

The responsibilities of monitoring cooperatives are now left to the local leaders and Councilors to supervise cooperative activities within the villages. They mobilize groups sometimes for their own interest and this is the reason why some cooperatives do not last for a long time, often when the political power of the Councilor ends the cooperative also collapses. Farmers’ cooperative have no support from the government, they depend on financial institutions therefore contributing to the challenges they face.

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5.6 The state of cooperative in Ulanga There is no cautious effort by the government to support cooperative. The government has continuing enacting laws which give much power for councilors. The politics has turned into professional in the local government. The councilor has come to be the cooperative mobilizer on behalf of the government employee. The private sectors like Banks and local NGOs have taken the role of the government in financing the cooperative members. A few elites, educated and well connected to these institutions are able to access the service and have a control in the cooperatives. It indicates the civil servants also have a little support from the government to supervise cooperatives. The results elites has infiltrated in cooperatives in a way that they capture the funds to benefit themselves. The importance of local people seems to mean when it approaches to the elections, it is to where the projects are directed to the citizens.

The cooperative officer in Ulanga district specified that there are 15 cooperatives doing various activities such as gemstone miners, livestock keeping, farmer’s cooperatives, exporters and distributors of farm inputs, and other with mixed Activities. He said the district is the oldest one it was established in 1986 but no existing old cooperative. He continued explaining it should be remembered that at that in 1980s cooperatives were emphasized from primary society up to the regional level such as Cotton producers cooperative and simsim producers. It was the time of parastatals and crop board and the district have some granary buildings that were in use by the board. Unlucky the district have only the most recent cooperatives registered from 2006, this is to indicate that cooperative do not last. Also the data in the table below indicates that women cooperative members are few compared to men. Cooperative officer explained that in most case the number of women leaders is small and often those in leadership positions are cashiers or secretary and not the chairperson. He said other challenges that hinder women to join cooperatives are shares and contributions. Most rural women don’t have reliable source of income even if they engage in doing business it is of small one of low capital, where they end on buying foods and other household consumption, that is why many women are defeated in joining the cooperatives or other social groups. The table below indicates the cooperatives in Ulanga district. The highlighted cooperative was a case study.

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Table 1: The situation of cooperatives in Ulanga District up to December 2014 NO NAME OF COOPS ACTIVITY REG. NO

"MGR" REG YR

MEMBERS CAPITAL LOAN MEN WOM

EN TOTAL SHARE

BALANCE

DEPOSIT TOTAL DIVIDED

REPAYED BALANCE

"000" "000" "000" "000" "000" "000" "000" 1 USHIRIKA WA

WAFUGAJI NGOMBO

LIVESTOCK

551 2006 17 5 22 440 0 0 440 0 0 0

2 USHIRIKA WA WAFUGAJI MKURUGIRI

LIVESTOCK

556 2007 46 0 46 920 0 0 920 0 0 0

3 BORESHA MAISHA COOP SOCIETY MWAYA

MIXED ACTIVTIES

557 2008 9 4 13 260 0 0 260 0 0 0

4 JITEGEMEE MINING COOP KITUTI

MIXED ACTIVTIES

558 2008 10 1 11 220 0 0 220 0 0 0

5 SONGAMBEL COOP

AGRICULTUR.

559 2008 29 36 65 325 0 0 325 0 0 0

6 TWENGWA TWANKUJER BEEKEEPERS

GENERAL 590 2009 12 9 21 210 0 0 210 0 0 0

7 MIPULULU LIVESTOCK COOPS SOCIETY

LIVESTOCK

591 2009 51 2 53 5300 0 0 5300 0 0 0

8 MWANKALI LIVESTOCK COOPS SOCIETY

LIVESTOCK

592 2009 19 0 19 1900 0 0 1900 0 0 0

9 MTAKUJA COOP AGRICULTURE

593 2009 N/A N/A N/A N/A 0 0 N/A 0 0 0

10 MALINYI AMCOS

AGRICULTURE

N/A 2011 N/A N/A N/A N/A 0 0 N/A 0 0 0

11 KINAU LIVESTOCK COOP

LIVESTOCK

601 2011 N/A N/A N/A N/A 0 0 N/A 0 0 0

12 ULANGA AGRO-EQUIP SUPPLIERS COOPS

AGRICULTURE

N/A 2011 N/A N/A N/A N/A 0 0 N/A 0 0 0

13 WACHAPA KAZI AGRIC & MARKETING COOPS

AGRICULTURE

N/A 2009 N/A N/A N/A N/A 0 0 N/A 0 0 0

14 MBENJA LIVESTOCK COOPS

LIVESTOCK

595 2009 57 0 57 N/A 0 0 N/A 0 0 0

15 MSHIKAMANO LIVESTOCK COOPS SOCIETY

LIVESTOCK

593 2009 26 0 26 2,600 0 0 2,600 0 0 0

TOTAL 0 0 0 0 0

Source: Cooperative Office Ulanga DC.

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5.7 Gender issues The department of Community development through its women and children departments coordinates and promotes gender based plan in the local level and at the workplace. Several donor- funded programs have been supporting gender issues in the district. For example; Japan International Cooperation Agency (JAICA) is a joint project established between the local government of Tanzania and Japan in technical support. The activities of the project among others are to empower the village leaders to prepare gender based plan and budget. Also in Ulanga district the Tanzania Social Action Fund (TASAF) was initiated in 2003 with the support of the World Bank which has been a good women agency. A district TASAF coordinator highlighted that during the village Participatory Rural Appraisal (PRA) women are encouraged to participate. In the focus group discussion, they are separated from men so as to participate fully. He defined this is because most African cultures and traditions do not give them a chance to express themselves in front of men. Even those who are confident to speak out in the public they are regarded as ill-disciplined women with poor childhood upbringing. Through project intervention, women have empowered to take the leadership positions whether in groups or public projects. He added the rules for TASAF program directed that in the leadership position, women should occupy 50%. This shows that most women in African countries live in the patriarchal system which does not empower them to be confident and independent. That is why many programs have been designed with gender issues package. Gender is the cross cutting issue which has to be considered in any studies. Women must actively participate and get involved in development issues which affect their wellbeing.

5.8 Local Partner Organizations There are several local partner organizations which support income generating groups and cooperatives. These local organizations such as Foundation for International Community Assistance (FINCA), Promotion of Rural Initiatives and Development Enterprises (PRIDE), and Cooperative for Assistance and Relief Everywhere (CARE). They function in a different way, some are involved in providing training and seminars that intended to build financial accounting and management skills to run projects. Some are centered on both credits provision and business training for groups to better utilization of the loans.

These agencies have been undertaking empowerment training and provide loans on behalf of the government. The result has been a wave of groups particularly for obtaining the loans. Influential people have gained access to these loans using the poor in groups for their private gain. This is because the government is no longer involved in managing private activities because of liberalization and surrendering the allocation of resources to the markets and private actors. The poor rural communities have no protection from the government and they remain the vehicle for channeling resources to the elites.

5.8.1 FINCA& PRIDE These are local micro-lending organizations. They have been engaging in poverty reduction initiatives by mobilizing groups and provide small loans. Before loan advancement, the groups are provided with training on rules and regulations to be followed, and how to prepare projects analysis and managements. The loan is not provided to an individual person; they must join the

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group and contribute some amount of money which guarantees the loan. The contribution system in banking word in Tanzania is well known as 'invest to be facilitated'. The intention of providing loans through groups is to ensure each person grantees a defaulter. It is like loan security by the unified credit.

5.8.2 CARE The oldest international organization (CARE) focusing on fighting poverty. In recent years the project have been scaled up and begun to engage in economic groups. CARE does not provide loans but mobilizes people into sub-groups often 30 members and give training on how members themselves may contribute and start revolving loan without relying on other outside institutions. In Tanzania is popularly known ‘Village Community Bank’ (VICOBA). In many areas both in rural and urban to differentiate with another kind of groups they call it ‘CARE- VICOBA'. By 2009, VICOBA has spread to 19 Tanzanian regions out of 25 with nearly 56,280 members ( Verhan & Magesa 2014).

5.9.3 Conclusion This section described the various economic activities that are carried out by inhabitants of Ulanga District. Cooperatives are another economic arrangement that people engage into for income generating purposes and poverty alleviation. These various economic activities are fused together with the socio-cultural values and the traditional norms of the people. The interaction of people is influenced by these norms which have always been in existence but the instigation of neo-liberal policies which causes the government to retreat has restructured how people organize themselves for economic gains. The influential people in the society have taken advantage of the vacuum created by ‘absence’ of the government and use their socio-cultural, traditional, kinship ties, Local Government and political connections to wield the power and drive the cooperatives in ways that benefit them at the expense of the community. These elites are an ambiguous people who at times foster development in their communities but at times enriches themselves more than the community. At the same time the organization of people into cooperatives is another sustainable approach that both the government and donor agencies support as a way to deliver economic assistance to the communities. Therefore cooperatives continue to rise and collapse as they struggle to survive in a neo-liberal environment were the government offers little protection and elites influence the dynamics of the cooperative.

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CHAPTER: 6

CASE STUDIES

6.1 Case Study 1: SONGAMBELE COOPERATIVE This chapter analyzes the experiences from field observation and narratives of the selected farmers’ cooperative at the village level. The aim is to indicate how elites strategize to capture the resources through cooperatives. This cooperative is known as agriculture and marketing cooperative, in rural word termed ‘Bank Products’ and marketing cooperative. The members have to pay the joining fee and buy shares to start up the project. The purpose of Songambele cooperative is to purchase and market members products (rice) and non-members where is necessary and store in the granary. They find an agent who would sell their produce within the same community in at retail prices which are affordable and agreed upon by the member. If the cooperative had taken a loan they repay the loan and the profits are distributed to all members or it may work as a revolving fund. Often the rice are being purchased during the harvest season from June until August and being sold from October to March when most farmers do not have many products in their home and when the demand is high.

6.1.1 The history of Songambele cooperative This cooperative was registered in 2008 after the phasing out of PADEP initiated by the government to support agriculture groups. The PADEP members group was 15 and a chairman was a council. Later a councilor began to mobilize the community to increase group members so that he could be able to register as a cooperative, and eventually they reached 63 members. They selected the leaders and again a councilor became a chairman with other 5 board members. Every member contributed Tshs. 2500 (1, 50 euros) and the group was registered as a cooperative. One of the extension workers said ‘around 20 members including the board were the relatives and close friends of a chairman’. Without notifying other cooperative members, a chairman applied for the loan from PRIDE and he loaned Tsh. 150 million. He began to purchase rice from other villages and put in the granary as a means of verification to donors that the money was used as it was intended for. Afterward, he brought the selling agents and the products were sold at higher prices. Also, he started doing other business for example; one member overheard ‘he bought a house in another village far away from here’. Unfortunately he got a loss and he failed to repay the loan of Tshs 49 million. In 2011 on his own, he changed the board members and his name is no longer appearing in the cooperative. Below are granaries found in Mbuga ward, at Songambele village. This place has been in use as the ward granary since the 1980s during the crops board and parastatals. The government was purchasing the products from producers, store and sell or distribute to the community during hunger. The purpose was to establish the internal market and to bring the service closer to the local people. The local government has been improving this building to help the farmers. Songambele Cooperative was planned to store crops in these place. A chairman was storing the products in a new granary.

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Figure 3 : Old granary

Figure 4 : New granary Source: Sylivia Lussumo 2014

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6.1.2 Songambele membership The cooperative principle of voluntarism remains questionable since the cooperative policy and Act of 2003 does not explain in which procedures cooperative members have to be organized together. The formation of cooperative rests in the traditional and social context in rural communities. It then creates an environment were a few people benefit in the process. The narratives below indicate to how Songambele cooperative members and leadership were organized.

Juma;

He started giving the history in this way, “an honorable councilor began to walk from house to house to mobilize the citizens to join the group. He gave promises on the future plans and success including loans from various institutions. Many people become interested in joining though some feared because of the past history when many cooperatives collapsed. My wife and I wrote our names to join the cooperative. Every member contributed the membership fee. Later he announced the meeting and we were informed that we reached 65 total members, women 36, and men 29”.

6.1.3 Leadership Neema;

“She started Looking up and down in fear”, and said, “in fact, I do not remember well because it is a long time these things have been done. But I remember in the meeting he said we could choose our leaders by raising up our hands in voting”. Another man interfered by asking the woman, “are you a real member that you don't even remember what happened”? She replied, “I remember he was a chairman and we selected a cooperative board of five people but later he informed us that he invited another person (councilor) from a neighbor village to join us and he became one of the board members. They reached 6 people, 3 women, and 3 men”. The man confirmed this, “that is true, but you have forgotten that we didn't vote, but he just mentioned board members name.

This is a clear outline as to how elites are influential in the local community and control the poor from a position of power. The community struggles to fight poverty, but few people use poverty as a weapon to exercise their power for the personal accumulation. The rural community in most developing countries particularly in Africa are marginalized and not broadly exposed to other institutions outside their village. In most cases, donor aid is not provided in transparent procedures. Due to limited awareness of citizens about various development issues, they are misguided by knowledgeable people who have access to information and are empowered by the policies and traditional values and use the opportunity to maneuver the local resources. In this case, the community members were encouraged to join the group since they were promised future success but they did not know the cooperative was going to satisfy the needs of one person or a few people. Women who are the highest number in the group even fail to understand and question what was going on in the cooperative. As illustrated in the narratives above, there was ambiguity in all processes from cooperative formation to the selection of the leaders. Even so the cooperative members were not even able to complain when they realized that only a few people were benefiting from this project. This shows how disempowered they

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are and the elites will continue to take advantage of them. It has been common for social groups mostly in rural areas to be used by elites for different purposes, such as for approving projects and financial gain or for the political mileage. Below are some examples from participant’s narratives to indicate how the cooperative functioned:

Local Employee explanations;

He explained that the founder of the cooperative is an honorable member of the ruling party. And he is the chairman of the group. It was the year of 2008 he came and asked me to write a proposal for applying a loan to PRIDE, I did as he requested. Then later I heard a group was loaned of Tsh. 150 ml (72000, 00 euros) he paid me only Tshs 10,000 (5 euros) as an appreciation. Later I heard the complaints of the group about loan debt. Surprisingly in 2011 he came to me again and gave me another list of the group members in which his name was no more appearing, and the name of leaders were changed. I did not know what was going on. But I had heard that he wanted to apply for another loan.

Hamis (member) started explaining that he was a leader of this village (local elite). An honorable asked him to join the group in order to mobilize the rural community for the development, but he didn’t involve them when he was applying for a loan. After he got the loan instead of loaning group members as it is shown in Songambele cooperative constitution, he started doing his own business. He purchased rice far away from the west constituent and put in the granary as a confirmation to loan providers. Then he brought agents and they started selling the rice in the village. Later they heard that he failed to finish repayment of the loan. The loan provider (PRIDE) brought them the reports that a cooperative owed a debt of Tshs.ml 49 (23,000. 00 euros). His group colleague and himself on behalf of other group members they wrote a letter of complaint to the district director but they didn’t get help. They went to the District Commissioner (DC) and they were not assisted and instead of they were told that they have to stop talking about that issue otherwise they could be arrested. Now they are forced to repay the debt but they cannot afford it. A district cooperative officer was asked to attend their meeting and listen to their complaints, but he sent a letter explaining that he did not have the money to come in the village maybe if they could be able to contribute to pay him per diem of Tsh. 200,000 (95, 00 euros) and they failed to pay him (see annex 1-2, letters of the feedback from district cooperative office). Later they had a meeting with extension workers to complain, but at the end extension workers were reprimanded by the Council for attending the meeting (see Annex 3 the letter for the meeting). They did not get any help till to date and still continuing to struggle with the debt issue. They are told that the debt has been canceled but they worry that the cancellation is just a temporary thing since there are elections in 2015 and this is just a political gimmick. They strongly believe that after these elections the debt issue will be revived again and they will have to pay.

This indicates that elites are able to organize the resources and help the community out of poverty, but when they use community groups for the personal gain, not only does it put the people into extreme poverty but also it creates discomfort. In this area, the cooperative members showed concern on the debt which was destructing their daily life. However they are still engaging in other economic activities as I indicated before but they know that any time they

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will be arrested. The Bureaucracy, particularly in Local Government, is also contradictory as it links public service and political organizationss. It is difficult for citizens to expect good governance in this complexity. Public servants are working within the political system which has authority over them and thus find themselves instead of helping the citizens they are trapped into the groups of elites. Mansuri and Rao (2004) explains that there are high expectation and perceptions from the international partners on community driven project that would be a quick and efficient mechanism to channel the development project and benefit majority poor. This idealization may not be correct, the community has diverse culture, genders, nationalities, leadership skills, and classes of both the rich and poor which may form differences and exclusion (Mathie & Cunningham 2003). Active community involvement in planning may become a threat to the elites in the way that a community member will be motivated to know and ask what happens. This creates an uncomfortable situation for elites and hence to try skipping some of the procedures as we can refer on what happened in this case during mobilization process and selecting leaders. The chairman did not want to follow the procedure so that he could be able to appoint the members to whom he approved and had close relations with. Cooperative in these days are regarded as the necessary workforce that makes poor people be a potential tool in transmitting projects on behalf of the few elites.

6.1.4 Beneficiary Perceptions The members and non-members explain that since independence there are immense changes in the performance of cooperatives. The old communal life has changed into individualism economic. They indicated the appreciation of vijiji vya ujamaa ‘communal village’ under the former and the first Tanzania president Mwl. Nyerere. One nonmember in focus group said, during communist period traditional and customs were much respected, leaders were committed in supporting the development of rural people. But now the traditional has lost the values, government leaders are coming are join by some of the people in the village and begin lie on citizens to join unbeneficial groups. And community members engage without knowing that the world has changed, everybody now is on economic business. This was also emphasized in the following narratives;

Mahuna (Non- member)

He explained that he was among the leaders of the communal villages during Ujamaa. In that time, each ten cell was compulsory to cultivate one communal plot and the harvests for all villages could be stored in one granary. The TANU party through the Indian company came and bought products and the profits were divided equally to all members. But now cooperatives have lost the meaning it is more business than service. That’s why he doesn’t involve me in groups. He said imagine with this kind of poverty you end up paying a lot of money like that? I’m telling you they will suffer and he will not get many voters the coming year of election

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Lijora (Non-member);

He commented that he was one of the representatives of the crops board in 1986. At that time everything was clear, we were required to give the weekly report to inform the community on the notes board by showing how many tons and cost we have used to buy crops from the farmers such as the cotton and sesame. Nowadays there is no transparency and the whole buyers come in the village without weighing machine instead they use cans to rob the citizens.

I had had a good time to share experiences with community members who were leaders during communal village and the government parastatals. Sometimes it was difficult for them to understand what economic liberalization means, but their in-depth information highlighted how the citizens are discouraged from the current government policies and cooperative movements.

The neoliberalism has changed the traditional norms and value into the easy way by elites to strategize the community in the economic project for private gain. It is difficult to conclude the specific purpose of elite capture since they change according to the situation and time, sometimes they seem to the patronage and other time they became the parasite. Some of the scenarios from the community member were that;

‘’’ He came here and he said our life would be better as the ruling party slogan which says the ‘a better life for every citizens’. He influenced us in that political language and we knew he could help us from this poverty. But the fact is that his goal was to make his business successful and I think he will feel shame for what he did, he cannot come again and ask for the citizen’s votes in the next election’’.

Mary (member)

She explained, we knew we could benefit in this group by having him, but now we ended in this trouble! Just look at it, in my family we were five people cooperative members, can I manage to pay this debt? Even if I sell anything that I have in my house I cannot get this amount of money.

The above scenarios indicated that the councilor was intended to help the community in the way of implementing the manifesto of the ruling party, though the aim was confronted with person economic gain. Though the neoliberalism assumed to retreat the government away from managing cooperative but in real practice, indirectly the state has the control over cooperative through policies and Act. For example, the cooperative principles allows everyone to have the right in joining cooperatives which has increased politicians, professionals, and key people in local areas to have the connection and control over primary cooperative. It is very clear that the government in macroeconomic policies continue to manage the cooperative and give an opportunity for a few people to infiltrate in the social- cultural system and initiate projects for the different purpose such as political representation and individual economic gain.

Since the independence of Tanzania, farmers’ cooperative was a livelihood option in accessing the basic needs. The community narratives show how cooperatives in the past were supportive. Currently, things have changed, corruption, robbing, and the black market is common especially in the rural place. In this village, many people are poor who are engaging in agriculture and often for food. They expected to be in groups will help to easily access agriculture capital,

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inputs, and the better market they ended on more poverty. They indicated how the government bureaucracy has enlarged elites and resulting on more difficult life for the rural poor. This shows how individual person now struggles in their own ways to get money. It also showed the relationship of the power position and wealth accumulation. One citizen was overheard saying this about the Councilor:

Hamis

He started we wondered, over the years he has become a leader we have not seen the changes he made to his own life and his family. You see that house? It has no status at all because we knew all the money which he had taken would do great things. Now we are tired of it and the next year is the national election he should no more expect to get votes!

This shows how the citizens continue to idealize cooperatives by connecting with political leaders. It has led to continuity for generations while they continue to remain in poverty. In this empirical study, this case addressed how the elites capture community resources. The cooperative is on paper portrayed as a tool to fight poverty and to improve the livelihoods of the community which easily attracts loans but in reality the community get poorer.

Figure 5: Beneficiary scenario (Picture Source: Sylivia Lussumo 2014)

Anna

Anna is married with four children. Their reliable household income and acquisition of the basic needs is from agriculture. In 2008, she joined the cooperative by expecting that she could access a loan to assist her family to invest more in agricultural activities. They agreed with her husband to sell some of their properties they had and they pay the registration fee to join Songambe cooperative. Unexpectedly this family benefited nothing and they ended up owing the debt. She was complaining of the difficult life that instead of finding the money to take care of their children they have to work hard to get the money to pay the debt. This family's is poor they eat one meal only in the evening, poor house, and unhealthy children and sometimes they

lack school fees for the children. Her situation is very desperate and she vowed never to join any social group.

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The performance of agriculture cooperative since 1990s is poor and corruption is widespread. There is no vested interest by the government to defend farmer’s cooperatives. The policies continue to reform cooperative mainly for national economic growth and no much focus on the rural and individual economic development. The results the people are doing whatever they want in the economic sector since the government is no longer involving in supervising private business. The primary cooperatives remain static and vulnerable for the increase of elitism in their function. The pressure from the World Bank on macroeconomic policies revealed that cooperative become the government economic development arm by being an easy means of organizing the citizens to implement the project. The cooperative has become an essential process and the basic link between community, government bureaucracy, politician and private sectors. This interlock has restructured the social- cultural interaction into mixed system in which personal economic accumulation has developed than it was before in communal village. In another word it can be called the ‘old has collapsed’ and intertwisted into global economy in which local poor has only experienced elitism and elite capture for the private purpose and not responsive to primary cooperative. One grandfather in the focus group said,

‘’’….In the past years corruption and misbehaving could not happen, it was not allowed to own extra property than others. Everything owned communally and divided equally in the village. There were no secret, the village income was open to all people and if a person became dishonesty serious legal actions were to be taken. But nowadays everyone is doing whatever he/ she wants and no action against them’’.

The mutual behavior of the community has changed into individuality because of the free market intervention. The knowledgeable local people now are connected to the external elite’s network in seeking capturing the resource.

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6.2 Case 2: MWAMVULI WOMEN INCOME GENERATING GROUP In 1996, the Ministry of Community Development, Gender, and Children (MCDGC) established the Women Development Funds (WDF). This is the revolving loan with the interest rate of 10% per year. The aim is to loan women and empower them to start the small business for poverty alleviation. The department of Community Development is responsible for mobilizing women groups and distributes these loans on behalf of the ministry. This group must have only 20 women members each. In order to qualify for a loan, they should have the constitution, analysis of the project and loan application letter with member’s signatures which are to be submitted to the department. The analysis of the project would show the joint project, but later they can divide the loan to each member for individual activities. Ulanga district has two electro constituencies East and West, the selection of women group to be loaned must give attention on political aspect; the loan is to be provided equally. For instance; if six groups are to be loaned, each constituent has to be given three groups. The final approval on the qualified groups is to be done through Councilor’s meeting. The table below is the list of women income generating groups which were loaned in 2013. After one year, new groups are approved and provided the loan, but other groups fail to repay the loan in one year. Community development officer explained a few things about this;

She said, you know here we are doing political roles, we must be careful to categorize the list of the groups before delivering to the councilors meetings because we are asked many questions. First we must know the total amount of money we have for the loan and how many groups to be loaned. Second we must select these groups equally in both East and West electoral constituencies and then we propose the amount for each group depending on the activities they are doing. Then we send these proposals at a councilors meeting they decide which group and for what amount to be loaned.

The table below shows a list of women groups loaned by the department in 2013 and they had to finish repaying a loan in 2014. The total loaned groups are twenty-two and each electoral constituent has 11 groups. The Eastern constituent are number, 1,3,7,9,10,11,12,14,15,19,21 and rest eleven are from West Ulanga constituent. The highlighted group was the case study which is found in Ulanga East.

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Table 2: the report of women development fund (WDF) 2013/2014

NO

NAME OF THE GROUP VILLAGE BUSINESS DATE OF

LOAN DEADLINE OF LEPAY

AMOUNT LOANED IN

Tshs

INTEREST

LOAN & INTEREST

PAYED AMOUNT

FROM APRILI/

JUNI 2015

DEBIT

1 Umoja

M/mjini Small

business 30/04 2014 4/30/2015 1,000,000 100,000 1,100,000 100,000 500,000 2 Changamoto Mbuga Agriculture 30/04 2014 4/30/2015 1,000,000 100,000 1,100,000 227,000 638,000

3 Mwanzo mgumu Uponera

Small business 30/04 2014 4/30/2015 1,000,000 100,000 1,100,000 0 0

4 Chinaoneka Mtimbir

a Bank

product 30/04 2014 4/30/2015 1,000,000 100,000 1,100,000 200,000 0

5 Umoja

Lupiro Small

business 30/04 2014 4/30/2015 1,000,000 100,000 1,100,000 132,000 109,000

6 Mshikamano

Kidugaro Agriculture-

rice 30/04 2014 4/30/2015 1,000,000 100,000 1,100,000 NIL 0

7 Tumaini Chaman

gi Small

business 30/04 2014 4/30/2015 1,000,000 100,000 1,100,000 100,000 100,000

8 Kumekucha

Milola Milling

machine 30/04 2014 4/30/2015 1,000,000 100,000 1,100,000 330,000 0

9 Kisasa group

Mwaya Agriculture/Coneflower 30/04 2014 4/30/2015 1,000,000 100,000 1,100,000 NIL 0

10 Mayamangami

Vigoi Agriculture/Coneflower 30/04 2014 4/30/2015 1,000,000 100,000 1,100,000 0 845,000

11 Mwavuli Mawasili

ano Small

business 30/04 2014 4/30/2015 1,200,000 120,000 1,320,000 NIL 0

12 Udeco women group M/mjini

Small business 30/04 2014 4/30/2015 2,040,000 204,000 2,244,000 0

1,714,000

13

Mtoni group Libenang

a

Agriculture/Livestock keeping 30/04 2014 4/30/2015 1,000,000 100,000 1,100,000 NIL 0

14 Wapo

M/mjini Small

business 30/04 2014 4/30/2015 1,000,000 100,000 1,100,000 100,000 700,000

15 Ngendehai

ilonga Agriculture/

Cotton 30/04 2014 4/30/2015 1,000,000 100,000 1,100,000 300,000 255,000

16 Muungano

Sofi Small

business 30/04 2014 4/30/2015 1,000,000 100,000 1,100,000 NIL 0

17 Upendo

Biro Small

business 30/04 2014 4/30/2015 1,000,000 100,000 1,100,000 0 480,000

18 Wanawake na maendeleo

Kichangani

Agriculture/ Rice 30/04 2014 4/30/2015 1,800,000 180,000 1,980,000 108,000 845,000

19 Jitegemee Isongo Pig keeping 30/04 2014 4/30/2015 1,000,000 100,000 1,100,000 500,000 0

20 Wajasiriamali

Lupiro Small

business 30/04 2014 4/30/2015 1,000,000 100,000 1,100,000 320,000 242,000

21 Twaweni gweka Lukande

Agriculture/ Coneflower 30/04 2014 4/30/2015 1,000,000 100,000 1,100,000 266,000 0

22 Chinaoneka Mtimbir

a Bank

products 30/09/2014 4/30/2015 1,000,000 100,000 1,100,000 200,000 900,000

Grand total I Tshs

24,040,000

2,504,000

26,544,000

2,883,000 7,328,00

0

Source: Ulanga Community Development Department 2015

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6.2.1 Membership MWAVULI was established and registered in 2007 and has 20 women members. They are involved in agriculture and small businesses in the shared and individual project. Women groups vary with cooperative; they are initiated with special government focus to support women with soft loans while cooperatives do not have any financial support from the government they have to find sources of funds on their own. The women loan has to be repaid with the interest rate and among the loan conditions the group must have started the business. The chairwoman of MWAVULI group explained how the group was initiated; Amina; She stated proudly that I was a chairperson of this village and later I was appointed to be a general secretary of the women in the ruling party. One day I attended the village assembly meeting, a community development extension worker announced that the ministry provides the loan for women but it is not provided to an individual person, they should be in groups. I was inspired by the message and I started mobilizing my fellow women who are able to run the business and we create a group of 20 members. Then we had the meeting and we selected the leaders by just mentioning names of whom they believe could manage to lead the group and I was selected as a chairperson. We are now registered in the department of community development. A chairperson of this group is also the women leader in the ruling party. She mobilized her fellow intelligent women and they created the group. The group beneficiaries have to pay the interest rate and failure to do that will put the whole group into trouble because the members grantees each other. For this circumstance there is a high selectivity of the group members and most of the women in such kind of groups are intelligent elites who have business skills and lobbying techniques and the poor and unskilled automatically are excluded. Not only having skills but also most women who succeed to get these loans are associated with the political system. In adding on this the community development described below; Community development officer; She complained that it is very challenging; we are in the dilemma because of pressures from councilors about groups. Some come here with their groups claiming they mobilized the citizens and so they need to be given the loan. This loan is to be returned to us with interest and it must be revolving to other women. The councilors formulate groups which sometimes does not have any activities or the status to be given a loan. The end of the day some groups have used the money for other things such as buying food, clothes, and other stuff instead of establishing projects and it has increased the loan defaulters. Sometimes these women groups are forced to give a councilor some money as a token of appreciation. Loaning women is a challenge; some women complained that when they get the loan, their husband stop buying household basic needs such food, to pay school fees for children and leave the woman to do all that. That is why they fail to repay the loan on time. This description contains two different meanings as I explained in previously part. Firstly the founding of these groups is rooted in exclusion because only women who are already engaged

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in businesses receive these loans. As a result, the poor are excluded from this loan. Secondly, the description indicates the women groups has been used by the politician as a social process to channel loans and projects for political interest often to motivate voters. The majority of the women group is formulated under political pressure during loan distribution while sometimes they don’t have specific planned activities, and unfortunately they spend a loan on consuming other things and that is why the projects do not last longer.

6.2.2 Loan delivery process The groups to be loaned are decided under political procedures. Political elites occupy a higher place in WDF since they have been empowered to take control. On the other hand, the local employee works for the central government, local government, and the politicians, in which they lack the final decision. Often WDF is used as a political protection for councilors and MPs. It was explained by the community development officers that when the groups accused by the department for loan defaulting, usually politicians intervene and defend in the meeting. This has been defined as to protect their voters from being disturbed. There are significant relationships between social groups, aid, and political system. The women groups and loan are regarded as the outcome of the good governance in women empowerment in the local level. The community development officer explained that, sometimes the politicians join these groups to access women loan, and when it comes to loan defaulters it is hard to prosecute them.

Community development officer (CDO)

She explained that in general the Department has no authority to approve loans for groups. The women coordinator analyzes and lists all groups that meet the loan criteria. Afterward, we prepare special councilors committee which legalized this fund. They discuss again and select the groups for loans. This will not end here; these groups should be presented again in a general council meeting for final approval. Legally they have the right to deny the approval. Then after this round the department provides training and loans for these groups. The coordinator is supposed to send the report to the Ministry and to the councilors on the progress of these groups including credit repayments.

6.2.3 Community perception on WDF There is dynamic discourse on women income generating groups and loans in the district. Some people and group members have appreciated being the vital economic strategies to empower women in raising household income. The politicians see women group as social process important in linking voters and aid support. It assists politician to get appreciated by the citizens on their leadership and continue preserving their power. Most people especially in African tradition they believe that African women are bigger contributors in public and domestic activities for taking care of their family and finding the home needs. They assume that when you educate or empower woman you educate the whole family. It has also been known in Tanzanian politics that, women are the good voters during election time, so if you facilitate few women are easy to convince other women. The following are the perceptions from WDF beneficiary and non-members;

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Sara (nonmember) She said this group has a political power, the chairwoman is very famous in the village and she is working for the ruling party. They have been loaned several times while other groups have attempted to apply for that loan often do not get it and if you ask, you are told this group has been performing well. But we have to put in our mind that, this are revolving fund other women should benefit on it. What I understand in this country if someone is connected with the government and political system, the life will be better. This loan obviously is for a political purpose, they give to intelligent women to influence their fellow in politics. In this circumstance, the rural poor women who do not even know what is going on can never benefit from this loan. Mary (member); She was proud, “we have been attending various seminars and exhibitions by the invitations from the government departments and other development partners. In fact, we are very skilled and we can produce various items such as statues from local material and sell to different people. Also, the group has a field of cassava and potatoes”. Community Development Officer (CDO); She said this loan is too little cannot help women to improve their livelihood. Another problem is that this fund is offered in political procedures and the government has some interest on it because no guidelines to clarify what should be done for defaulters since 1996 when this fund was established. We as a department have decided to prepare the contract between the department and loan receiver, however, is not powerful. I wish there would be a private and independent entity that governs this loan would be efficient otherwise we are not helping the target group who are rural poor women, but we are serving minority, elite women. For instance, one woman came here with a list of group members and she said we were mobilized by the council and we formulated the group and here is the loan applications letter, we need the loan. We told her we are not sure about this group because is new that needs clear verification on its viability. Surprisingly a council began complaining in the meeting that the department of community development is oppressing the women because of a loan. She said this loan as the public servants lead us into the difficult working environment by creating the conflict between workers, politicians and citizens. The women funds is surrounded by political and elitism from the formulation of groups to the distribution of the loan. In one way women entrepreneurs are stimulated in the district however the only problem is that elite women benefit for having a connection and communication of what is going on in the district. There is no deliberately system to help the poor women who cannot meet the criteria such as to have the business before application. This motivates wealthy and intelligent women to join together and exclude the poor who are regarded as the main target of this fund. This is because many policies seek to confirm liberalization policy without considering the actual circumstances of the people especially in rural areas. Politics has taken bigger chance in development programs than to reflect the reality of people’s lives. Since neoliberal the country resources are circulating between the elites, corruption, theft, embezzlement, and nepotism is common to experience. In most area it has reached the stage people would say every aid and projects are for political gain.

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6.2.4 The general conclusion on two case study The data demonstrated that cooperatives in the rural area during this neo-liberal environment have been overtaken by elites. The elites are able to capitalize on the retreat of the government from direct involvement in community development. They occupy the space provided by making use of the informal systems in the village such as traditional structures, kinship ties, community values and norms. At the same time they have access to the formal systems that influence social groups as well as their linkages to the Local Government and the political systems. Having all this they then recruit community members who have no power to question their decisions since the elites are very influential people. In this case the poor are only used to access resources that they are unlikely to benefit from. Since the government does not interfere into these issues the poor are being exploited in the name of poverty alleviation and community development. Therefore the social groups in a neo-liberal era are rooted in exclusion, exploitation and manipulation of the poor. As it indicated in first case the council used the position power and the trust which the community offered him by deceiving the citizens to join cooperative while he knew well that he wanted to apply for a loan for his own benefit. He also used his legal right, as it is shown in the policies and Act that cooperative is an independent, democratic and voluntarily agency in which every citizen has the freedom to join without any kind of exclusion. It is not clear to how and at what environment will ensure democratic especially in rural areas where people still live in socialist life. In practice, the neoliberal policies have not appropriate designed to help the poor. The policy has increased elitism and elite captures where the poor members and other social groups have remained to be an implementers of the government policies and programs to alleviate poverty in which themselves do not benefit. Many policies continue to give a few economically advantaged and intelligent people to dominate and benefit over cooperative resources. The poor are used as a bridge in collectivity action for the personal interest and not for helping the majority poor to move from poverty. Likewise, women's groups which are financed by the government, the rules, procedures and regulations provide the chance of a few women to benefit from the loans. Under normal circumstances mainly in Local Government, many women are poor who lives in a patriarchal system of relying on decisions and financial support from the men. In this situation, it is difficult for these women to have business to do and they fail to reach the criteria that wanted them to have the business before applying for the loan. Why not provide the loan to start the business? The loan is provided in the politics context, the councilors must be involved to prove on what group is to be given a loan. This opens the chance for a few intelligent women to form close ties with councilors to get a loan. Councilors and MPs have also used the loan as a way to show that they are responsible to the citizens and hence they deserve to be elected as the citizen’s representatives. In general both two studied cases indicates that political power are the central source of elitism and elite capture which links other elites and benefit through the rural poor.

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CHAPTER 7

CONCLUSION The objective of the study was to analyze in detail the functioning of cooperatives and other social groups in Tanzania in a neo-liberal environment. In particular the study explored the interaction between the neo-liberal policy shift and the emergences of local elites who have influenced the dynamics of cooperatives. This research has provided information that explores the functioning of cooperative during and prior to this neoliberal period. The literature review explains co-operative reform process which has been instituted by the government through its various policies and programs to fit in liberalization policy. This has seen the government retreating from its former roles creating gaps that are filled by the influential people. The emergence of elite capture as a result of the new policies has caused an increase in corruption, theft, embezzlement and misappropriation of funds. Examples of other elite capture scenarios from other African countries were provided. Theoretical concept has shown that the policy shift to free market economy has led to the restructuring cooperative in which elites emerge and make use of their social networks and linkages to control the cooperatives while ordinary members realize little benefits. A summary of the history of cooperative in Tanzania has provided in two phases. The general information of the bureaucracy, social -economic interaction of the district has provided followed by the description of two field case studies; (i) farmers’ cooperative and (ii) women income generating group in Ulanga District Council as the study area. Drawing on in-depth interviews, participant’s focus group and key informants discussions, the research identified several reasons to why the cooperative has not so far progressing or has been collapsing. Firstly, neoliberalism established without enough community empowerment and awareness as a result there is a combination of traditional and modern cooperative formation and function in which elites capitalize on the weaknesses of both systems. The government withdrew from managing cooperatives which is an advantageous opportunity for a few people who use their status in the community to mobilize people in different projects for personal gain. They use power or connection they have in rural and in the government to have control over local resources. Secondly, the cooperative policies which are enacted by the government to conform to global economy has facilitated political domination in cooperative operation. For example, one citizen commented that, ‘he came here with the political language of the ruling part which is ‘a better life for every citizen’s. This shows that the government in liberalization act to be far away from controlling cooperatives but in practice the policy favors political in the implementation of the ruling party plans to indicate the capability and responsiveness of the government and preserve their position. The result politicians and others who are connected to them have continued to capture the local resources for private purposes and keep promising a better life for the poor.

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This research identified that there is little autonomy of cooperatives, the policy shift and decentralization reform have restructured cooperatives in a way that has smoothen and progress the interests of politics and influential people in the community. We might call neoliberalism especially in African countries is the failure reform where the government remains pervasive in formulation of ‘new- style’ of cooperatives in which members have not really become autonomous (Birchall & Simmons 2010). One scenario, provided by cooperative officer, is that primary cooperatives rebuilt near political election and collapse when the political power ends. This indicates that, cooperatives are interlinked in economic and political interest. National and International Co-operative Alliance have provided the principles similar to that of the World Bank in which cooperatives members have experiences exclusion, corruption, incompetent and embezzlements. Cooperatives are an important device in poverty reduction in which its members are not benefited. Despite the strategies by donors in implementing poverty reduction projects, poverty in developing countries especially in rural areas is increasing. Many rural people earn little income in agriculture production which is the main source of the economy. I therefore conclude by indicating that cooperatives remain an important mechanism in improving the livelihood of the rural poor. In spite of this the government continues engaging in formulating liberalization policies and regulations and imposing to cooperatives without providing for checks and balances to supervise on how that works out in reality. This is because cooperatives are an autonomous private institution function differently than the traditional cooperatives that used to be spearheaded by the government. It is obvious the targeted poor rural inhabitants will continues to be the symbolic cooperative members for the benefit a few elites who join social groups for the private gains. It has to be known that in most African society’s social lives and economic systems operate within a socio-cultural and traditional system in which customs and values are considered. Respecting the powerful, the knowledgeable and the leaders is somehow rooted in the social norms and cultural values of the people which make it easy for elites to gain control of cooperatives and social groups. The free market policies continue to provide a powerful people within the community by being connected to the government and private institutions. The pro-poor poverty reduction programs have changed into mechanism to help the elites to get richer from the power and respect they are given in decision making and control in the grassroots. Nevertheless elites are not always an obstacle to development, in other way they are development catalyst in the community if they invest the positions to empower local communities’ in an effective and equal distribution of resources. The cooperatives and other social group will become efficient if all the members are freely empowered with real autonomy and active decisions.

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Annex-1 – 2 the letter from the Cooperative Department to Songambele cooperative which is asking the contribution to visit the cooperative.

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Annex-2

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Annex-3 the letter which indicates the agendas in the complaining meeting by cooperative members

Source : Sylivia Lussumo 2014