Is the Success of Rural Cooperatives Conditioned by the Group Characteristics and Their Value Chain? Evidence from New Farmer Groups in Georgia

Abstract

After the collapse of the Soviet Union, most of the agricultural land in Georgia was fragmented into small pieces, affecting agricultural production and rural development. However, the cooperative movement is changing this phenomenon, and has attracted the attention of national government and international donors to support the re-establishment of new farmers’ groups. Using cross-sectional data collected from 37 cooperatives, this paper analyses the factors influencing the success of donor supported agricultural cooperatives by ordinal logistic regression model. The results indicate that new groups are rather small but homogeneous. Members agreed that more non-economic, rather than economic, benefits are currently derived from collective action. Determinants of success include the size of the cooperative, the proportion of women in the cooperative, the proportion of nuclear families, active participation in the cooperative and the type of product cultivated. However, the results are conditioned by respective value chain and influenced by the strategies of non-governmental organizations during the establishment of cooperatives.