I Fiance Apicultural

73
Agriculture and Cooperatives 1979). T]iey have been constrained fiom
undertaking operations such as short-term lending, farin input supplies,
and farm prodtuce purchase ol a large scac due to lack of finances and
managerial guidance. Despite this, these cooxelratives are viable and are
reaping scale economics ill their aggregate costs; both could be miproved
if these conStiaints wtre relaxed and if tihe loan collection rate
(which at present is modest) could be improved, as well as tle rate of
return on fari invest ttits associated with new technological iniplits.
These cooperIatives differ firom those discussed in the previois
section. "lu1cy are truly agricultural credit cooperatives, while tie previous
case included general-purpose cooperatives, societies ill cooperation
with other agencies, animal-raising cooperatives, and societies of
special forms. A common feature of all of the Cl operatives covered inl
tile two case studies is that they are organized at the primarylevel.
This Case study is exclisively based on cross-section data of 41
societies survcycd ill 1972. 'I'l- pirpose of these cooperatives is to forni
all institution to extend all integrated J)aclagc to assist farmers to
im)rove their standard of' living. This is being achicved through tihe
provision o" credit, inaiketing, faint input supplies, extension, processitg,
and other services to thew titbers. I lowevVr, ill ;(cality, agriciltral
credit has claiimicd the mtajor portion of ilhcir activities ill aclieving their
goal. For example, ill 1972, lte maitn source of revenl ofa lagricultural
cooperative was interest earnings on loans (9'.9 percent). This is
similar throughout tl nine plovinices froti which tile sample was
drawn. 25 T huts, for all ipractical )r)oses, these coo])pralives were credit
societies. They uxtc ldcidholh)sitol- ald lotng-tcrti loans to farit ncriettbers,
the fortiter being only 18 percent of tle total. 'The main
sources of their working capital or loanable retourt:cs were share capital,
eserve fiiids, Iorrowings, deposits, and others. Thie loan collection rate
was only about 49 percett ill 1972. This rate rangcd front +t1 to 54
l×,tcclit across lic nine diH'f ct admiiuistralivc: areas.
t tilizitng the rl)ortcd grouped data of the agricuuilral cooperatives
front the iiiie different areas, 'able 31 reports average total costs, unit
revctne, and average net muaigin of thtse cooperatives. The positive
average ret itlar-itt is an ;iipotrl;ml achievettinlt, cotisidt.;ing that these
cooperatives arc largely ninedit cooperatives.
The COoplrati\Cs ill the sanipl - could improve their profitability by
enlarging their scale of oluations ;.tud diversifying their loan portfolios
without endangering tihte quality of' these operations. They col1d also
enlarge the scale of operations of their tuonltuding business activities,
sulich as fariti itipuit suplies and f.1tu1 prot(uce l)utchasc opetrations,
which would be possilble becalsc these coop)eralives have a scale pal'ameter
of 0.12 (Table 32). Norcover, such changes itl their business operatiotis
vold also improve loati colhectiou rates through tile highe -- tes
of rtultln Ol fl;l-tll investient that would icsullt floli tile ise of llioct1n
251n 1972, the shate of' these mop rali\cs in total ilntitutional ciedit was about 32
percet, and their share in the ntnibet of farttics financtd by :,It RFIs was 23 percent.