Efficiency through Communication and Stakeholder Interrelationships in Emerging Poultry Farming Co-operatives in the North-West Province of South Africa

Abstract

This paper looks at the interrelationship between efficiency level, communication, and stakeholders in emerging agricultural cooperatives. We collected data from 24 emerging cooperatives, each with an average of 8 individual members, through purposive sampling, specifically targeting poultry cooperatives. We analyzed the data using Data Envelopment Analysis (DEA) and Social Network Analysis (SNA). Technical efficiency results found that, on average, emerging farming cooperatives in the province are 71 percent efficient. The implication is that cooperatives have a 29% window to improve their efficiency level and reduce waste to operate optimally. Furthermore, a TE score of 1 indicated the technical efficiency of six DMUs (3, 7, 10, 19, and 23). This finding suggests that cooperatives are optimally resourcing. However, SNA results revealed strong and frequent communication between input suppliers and emerging cooperative farmers. However, few net-chain players were involved in bird slaughter and feather removal (cleaning). The results also show that reliability between processors and farmers is weak due to poor communication. Furthermore, there are inadequate formal contracts between the net-chain stakeholders, leading to minimal cooperation between processors and consumers. The reason is that most consumers prefer to buy live chickens and eggs directly from farmers. This study revealed that most emerging cooperatives heavily rely on government support through skills training, extension support, and input supply. The government offers these services for free, resulting in a one-way relationship between government support and farmers, rather than a reciprocal one. This study demonstrated a formally poor relationship between emerging farmers and financial institutions, which confirms lower cooperation, communication frequency, and dependency of cooperatives in South Africa. For improved cooperative efficiency, the study recommends deliberate improvements in communication and interrelationships between farmers and other stakeholders