A Strategy for Sustainable Development of Cooperatives in Developing Countries: The Success and Failure Case of Agricultural Cooperatives in Musambira Sector, Rwanda

Round 1

Reviewer 1 Report

Dear Authors,

I have now read your manuscript (sustainability-930356), which was submitted for publication in Sustainability. The paper addresses a timely and interesting issue, namely, the factors that led to the success and demise of two Rwandan agricultural cooperatives. The paper is well written and informs the theory and practice of rural cooperation in developing countries. A few minor issues that would improve your paper are listed next:

1. Introduction: adding a short, closing paragraph that provides a brief outline of the paper’s sections would be helpful to the reader.
2. 1 Literature review: several classics from the agricultural economics literature on agricultural cooperatives (particularly on organization and governance) are missing from your literature review. Please consider adding them as they will highly inform your analysis. Reviews of this extensive literature can be found, e.g., in Staaz (1989), and Cook et al. (2004). By incorporating this important literature, you will also be able to list many more economic-justification reasons for agricultural cooperative formation than you currently do.
3. Page 3, 2.2 Research methodology: It would be very interesting to also provide a list of the positive strengths on which they can build. Obviously there exist such positive things, at least in the case of the rice cooperative.
4. Page 4, line 137: please explain convincingly why a landlocked country has, necessarily as you imply, few natural resources. Otherwise, consider rephrasing the corresponding sentence.
5. Page 5, Table 2: some of the bullets refer to symptoms and some to underlying causes. As a result, the reader is somewhat confused. Please address this.
6. In your description of the case study cooperatives, you do not describe their organizational design (ownership, governance, measurement of performance metrics, etc.) However, this is a critical factor of success/failure. Research in western countries has revealed that there exists a direct relationship between the time and quality cooperative members invest in designing their organization and the longevity of the cooperative. Is there any reason to believe that this is not applicable to your case cooperatives in Rwanda? Please explain or add the organizational design dimensions to your analysis.
7. Please explain in your paper why the duration of the support programs was different for the two cooperatives and why the agencies failed to provide cooperative training to board members and farmer-members of the cooperatives.
8. Page 13, Figure 4: The term “low profit” is rather confusing. Agricultural cooperatives, unless they transact with non-members (in that case we can talk about profit), have surpluses, not profits, which are distributed to members as higher/lower price and/or are kept by the cooperative to cover its expenses and invest in future projects. Please clarify this term as it is confusing to people who understand cooperatives. Did the banana cooperative have bananas supplied to it also by non-members (what %? Of the total value of bananas?) What percentage of the bananas were supplied by members? The same for inputs bought by the cooperative. This will clarify the abovementioned term.
9. Page 14, Table 5: this is a rather difficult to understand table. Needs simplification/improvement.
10. Page 14, lines 505-506, “Despite the … properly.” It is not clear what you mean by this sentence. Please consider clarifying/improving.
11. Page 15, line 550: The use of the word “but” is confusing. Please consider rephrasing.

I hope my comments are helpful to you.

Sincerely,

The Reviewer

Author Response

Reviewer 1

1. Introduction: adding a short, closing paragraph that provides a brief outline of the paper’s sections would be helpful to the reader.

The contents and flow of the study were introduced in the last paragraph of the 2.2. Research methodology part (lines 128-137), and a brief outline of the paper’s section was added to the introduction chapter on page 2, lines 63-68 as you commented.

2. 1 Literature review: several classics from the agricultural economics literature on agricultural cooperatives (particularly on organization and governance) are missing from your literature review. Please consider adding them as they will highly inform your analysis. Reviews of this extensive literature can be found, e.g., in Staaz (1989), and Cook et al. (2004). By incorporating this important literature, you will also be able to list many more economic-justification reasons for agricultural cooperative formation than you currently do.

I am grateful for the insightful comment from the reviewer, and through the paper review you gave, I was able to get to know a wide range of theories about cooperatives. It was thought that there were key suggestions that supported the content of my paper, so I quoted it in the Result chapter on page 15, lines 541-543.

3. Page 3, 2.2 Research methodology: It would be very interesting to also provide a list of the positive strengths on which they can build. Obviously there exist such positive things, at least in the case of the rice cooperative.

The benefits provided by rice cooperatives to members are briefly presented on page 17, lines 613-621

4. Page 4, line 137: please explain convincingly why a landlocked country has, necessarily as you imply, few natural resources. Otherwise, consider rephrasing the corresponding sentence.

The sentence meant "Rwanda is a landlocked country and lacks natural resources," but the meaning was misrepresented due to a writing mistake. I changed it to “Rwanda, a landlocked country, has few natural resources, and the economy is based mostly on agriculture,” on page 4, lines142-143.

5. Page 5, Table 2: some of the bullets refer to symptoms and some to underlying causes. As a result, the reader is somewhat confused. Please address this.

Page 5, Table 2: Classified the items of weakness into weaknesses in the causal aspect and weaknesses in the consequential aspect

6. In your description of the case study cooperatives, you do not describe their organizational design (ownership, governance, measurement of performance metrics, etc.) However, this is a critical factor of success/failure. Research in western countries has revealed that there exists a direct relationship between the time and quality cooperative members invest in designing their organization and the longevity of the cooperative. Is there any reason to believe that this is not applicable to your case cooperatives in Rwanda? Please explain or add the organizational design dimensions to your analysis.

A brief description of the cooperative structure and membership was added to page 10, lines 351-359 (figure 3. Organizational structure of KOPABUGI was also added on page11). And I agree with the idea that organizational design is a critical factor of success, but this banana cooperative did not have proper organizational design such as governance and performance measurement, which led to failure. I described this briefly on page 14, lines 484-498.

7. Please explain in your paper why the duration of the support programs was different for the two cooperatives and why the agencies failed to provide cooperative training to board members and farmer-members of the cooperatives.

The reason for “why the duration of the support programs was different for the two cooperatives” was added on page 8, lines 269-278 and lines 282-284

And as we added the explanation to the text on page 14, lines 497-502, it is difficult to say the reason for “why the agencies failed to provide cooperative training to board members and farmer-members of the cooperatives.” Please understand that we cannot explain exact reason. This study attempted to explain the cooperative failure due to the lack of training and lack of capacity of member, and to suggest the development plan.

8. Page 13, Figure 4: The term “low profit” is rather confusing. Agricultural cooperatives, unless they transact with non-members (in that case we can talk about profit), have surpluses, not profits, which are distributed to members as higher/lower price and/or are kept by the cooperative to cover its expenses and invest in future projects. Please clarify this term as it is confusing to people who understand cooperatives. Did the banana cooperative have bananas supplied to it also by non-members (what %? Of the total value of bananas?) What percentage of the bananas were supplied by members? The same for inputs bought by the cooperative. This will clarify the abovementioned term.

The order of the existing figure 4 was changed to figure 5 by adding a picture of the cooperative organizational structure, and since the word profit can cause confusion, it was changed to margin.

The word “profit” in the title of table 4 was changed to “income” as well.

The bylaws of the Banana cooperative and the amount of bananas supplied to the banana beer factory were added on page 14, lines 484-498.

9. Page 14, Table 5: this is a rather difficult to understand table. Needs simplification/improvement.

Since it is difficult to simplify the table itself, explanations have been added to help the reader's better understanding.

10. Page 14, lines 505-506, “Despite the … properly.” It is not clear what you mean by this sentence. Please consider clarifying/improving.

The sentence was revised as followed. “In the last year of the SMU ODA program, KOPABUGI was in desperate need of assistance from the aid agency for capacity building, soft infrastructure building, operational management, and marketing, and although aid agencies were able to provide such assistance sufficiently, the assistance that they really needed was not provided.” Page 16, lines 557-560.

11. Page 15, line 550: The use of the word “but” is confusing. Please consider rephrasing.

The sentence was revised as followed. “The cooperative members were upset by the facts that had been revealed, but at the same time confused as to how to resolve them.” Page 17, lines 603-604.

Reviewer 2 Report

The article is quite interesting and was prepared correctly. I don't see any circumstance limiting the exclusion of the article from the publishing process. I have some concerns about the limitations of the research which wasn't fully stressed in the paper.

Author Response

Reviewer 2

The article is quite interesting and was prepared correctly. I don't see any circumstance limiting the exclusion of the article from the publishing process. I have some concerns about the limitations of the research which wasn't fully stressed in the paper.

We totally understand what reviewer concerned, therefore, we emphasized the limitations of this study's narrow scope of research once again on page 22, lines 798-801.