The Health of Farmer-Based Organisations in Ghana: Organisational Diagnostics and Governance Implications

Abstract

In this paper we use primary data on 500 Ghanaian FBOs collected through semi-structured interviews and risky dictator games (RDG) to test the validity of the cooperative life cycle theory and formulate a measure of cooperative health. We first define cooperative health as the alignment of heterogeneity in risk preferences and the effectuation of collective investments. We then use cluster and correlation analysis to categorize FBOs on the basis of their health and correlate these typologies with various performance indicators. Our findings reveal that organizational health is generally low as there are only a few organizations that manage to provide member-farmers with both risk-sharing and cost-saving opportunities. Further, healthier FBOs experience stronger growth in membership while health is lower in FBOs that have been established for the purpose of benefitting from external incentives.