60 CHAPTER 5
percent indicated that the main benefits they gain from cooperatives relate to the commercialization of their output. According to data from ESCS (2005), 60 percent do not feel obligated to sell their product through the coopera- tive, and of this group 71 percent sold none of their past season production to the cooperatives and only 14 percent sold all of it to these organizations. A possible conclusion is that the marketing functions of the cooperatives are not the primary attraction for their members. Note that cooperatives are also involved in other types of activities: 74 percent were engaged in activities with no apparent direct link to marketing.
Cooperative Activities, Membership, and Marketing Performance In Table 5.2 we report the results of a series of tests of difference related to the activities undertaken by cooperatives and their marketing performance. The first three columns of the table relate characteristics of the coopera- tive to its portfolio of activities—economic only versus mixed economic and social. Cooperatives with mixed portfolios have a significantly larger number of members but a lower average landholding than specialized organizations have. Thus multiple activities tend to attract more members but with less individual potential for product aggregation. Multipurpose cooperatives are, on average, older than their specialized counterparts.
The last three columns of Table 5.2 show the results of similar tests of dif- ferences, this time between cooperatives that provided marketing services to their members over the 12 months prior to the survey and those that did not. Although there are no significant differences in terms of membership, aver- age landholding is greater for cooperatives providing marketing services. We further investigated whether large portfolios of activities may in part explain the apparently low marketing performance of cooperatives. Indeed, several studies have argued that by broadening their portfolio of activities, cooperatives often jeopardize their capacity to fulfill their initial purposes, especially when these activities are more diverse (Lele 1981; Collion and Rondot 2001). There have been two main explanations for this phenomenon. First, for a given size of organization, engaging in new activities increases management difficulties, which may negatively affect the quality of the service initially provided (Stringfellow et al. 1997). Second, for cooperatives spe- cialized in a given activity, an increase in the heterogeneity of membership can lead to increased coordination costs, offsetting the benefits linked to economies of scale (Stockbridge, Dorward, and Kydd 2003). The analysis here focuses on the impact on coordination costs rather than on general manage- ment problems.
The rationale is as follows. By providing extra services, marketing cooper- atives may become attractive to households that are otherwise uninterested
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