A Comparison of the Cooperative Structure in Indonesia and Hungary

Abstract

Agriculture cooperatives have a unique organization structure in which the main focus is to benefit the members who act also as owners. However, organizational and management problems exist in agriculture cooperatives. In some European countries, the formation of agricultural organizations has made a significant contribution to the development of agriculture over the last century. These cooperatives were usually initiated by small-scale farmers, as a response to their weak position in the market. By joining forces, farmers have the advantage of improving their position to obtain better prices and services for the purchase of inputs and the marketing of farm produce. In developing countries, the experience has been more mixed. Most failure stories usually come from the misuse of the cooperative concept for ideological or political purposes, resulting in poorly developed or unsustainable cooperatives. However, current trends in market-oriented reform, privatization, decentralization and participation, cooperatives are rediscovered as a suitable organizational structure for farmers to improve their livelihoods and welfare. Agricultural unions in which the members both participate and contribute can become powerful instruments for the development of the rural economy.