What is the IWA29 and why is it critical for cooperative development?

While cooperatives can be very helpful in reducing poverty and supporting agricultural sectors, they cannot reach their full potential until there is more widespread confidence in their performance. Towards this end, the IWA29, an international guideline on cooperative professionalism, provides a standardized measurement of cooperative strength. When aligned with the IWA29, professional cooperatives can help reach multiple SDGs and lift millions of smallholder farmers out of poverty.

The enormous potential is untapped

Growth in the agricultural sector is two to four times more effective in raising incomes among the poorest people than in other sectors. However, in many countries, this potential has not been realized.

A critical factor in the performance of an agricultural sector is the health of its cooperatives. Cooperatives provide inputs and connections to the market. They also provide significant efficiencies through economies of scale. Value can be created and shared between buyers and farmers. This additional and shared value is essential for a successful business partnership.

So, why are agricultural cooperatives not delivering as expected in many countries? Many of their members have received significant support, enabling them to increase yields, manage post-harvest losses, and develop business plans. However, the constraints to accessing a new market and accessing finance for their business plan remain problems.

These constraints can be overcome if we build confidence in the agricultural cooperative sector. For some markets, certifications such as Global GAP and fair trade have driven performance improvement by clearly transmitting their requirements to cooperatives. However, these certification processes are unable to drive change in agricultural production systems at scale. From label fees to auditing and compliance costs, agriculture certification can be a costly exercise. In addition, certification audits are often done as a policing exercise, which brings little direct value to the producer. For many cooperatives, certification is not a worthwhile process.

Transparency in market requirements is key

An alternative (or even addition) to certification can be to use a standard method to measure agricultural cooperative performance. If we use a standard method, then stakeholders will have a way to partner with cooperatives with a strong understanding of their current capacity. A standard method will also enable a better understanding of trends and opportunities for scaling up approaches that are proven to work.

The IWA 29 is an international guideline published by ISO, which is expected to become a full international standard in the near future. This guideline defines the core capacities of professional farmer organizations, clarifying what it means to be a professional farmer organization and what it takes to get there successfully. For cooperatives to be better linked to markets, things like consistent supply, proper post-harvest handling, and reliable quality are important. Being able to measure a cooperative’s ability to consistently deliver on quantity and quality (in a sustainable manner) is essential. And for cooperatives, knowing how to demonstrate reliability is critical.

The importance of the IWA29 is best articulated by Mark Blackett, Network Director of the Agribusiness Market Ecosystems Alliance, which supported the development of the standard. He says, “IWA29 is a game-changer if we use it to change the way in which we support all agricultural cooperatives and measure the effectiveness of that support. There is a lot of talk about transformation but very few approaches that can be scaled. IWA29 is a critical, foundational document which enables us to change the system and deliver inclusive agricultural growth based on sustainable business principles.”

Assessment tools to measure cooperative performance

SCOPEinsight developed standardized assessment tools (aligned to the IWA29) to measure the level of professionalism of agribusinesses (including cooperatives). These tools have been used by dozens of partners over 5,000 times in more than 45 countries. The data helps determine the strengths and weaknesses of these assessed agribusinesses, segment them, guide capacity building, monitor performance, build track records, provide business intelligence, and set benchmarks.

Based on SCOPEinsight’s intelligence, the case for farming organization professionalism is highly compelling: Positive correlations between professionalism and a host of outcomes like income, sustainability, quality, human rights (and the list goes on!) suggest that professionalizing farming organizations has a great benefit to many people involved. These benefits are not only seen at the farmer level but also on the sector level as organizations are in a better position to create important business relationships. These correlations underpin the importance of focusing on farmer organization professionalism as a top priority in the agricultural sector to meet the relevant sustainable development goals.

Strong cooperatives are the best hope to lift the world’s estimated 500 million smallholder farmers out of poverty. However, this cannot be realized if cooperatives do not know, themselves, know what it takes to link to markets. The IWA29 is the first step in this direction.

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