Project Details:

Assignment Title: Organizational Strengthening and Record-Keeping

Country Project Plan: Staple Crops

Project Location: Hohoe   Country: Ghana     Region:  West Africa

Summary of Scope of Work Objectives:

  • Identify the strengths and weaknesses of VCPPG and train leaders and members on organizational strengthening and record keeping. 
  • Assist VCPPG to empower women in the group to contribute and play effective roles in decision-making and planning
  • Train VCPPG leaders on leadership skills and their roles and responsibilities.
  • Work with the group to develop a constitution and by-laws to govern the cooperative operations.

Recommendation Summary:

  • Employ Record Keeping
  • Develop Strategic Goals
  • Create Expansion Fund
  • Provide Supply Management Services

Client Description:

The Volta Cereal Production and Processing Group (VCPPG) is a rice value chain association which was formed in July 2007 to produce and market local rice. The group has a total of about 6,000 hectares with each member cultivating an average of three acres of rain fed rice. Although the group has seen a growth in membership since its inception, members are unable to clearly determine their profit margin at the end of each season. The leaders of the association have little knowledge of their roles and responsibilities and are unable to effectively manage the association. They also face challenges with record keeping and teamwork. Though women form the majority of the group, they often lack the confidence to contribute to decision-making and planning within the group and often leave this up to the male members. VCPPG, therefore, requested the assistance of a consultant on group dynamics and strengthening, record keeping, and effective management of an association. The group requested assistance with the development of a constitution to guide leaders and members in their respective roles. 

Issue/problem: 

In my initial assessment of the group, it became clear that the group suffered from a lack of sound management and poor planning due to a lack of collective knowledge. To address this, I designed a 5-day training that focused on allowing the group to understand the full scope of their organizational landscape and give structure to the direction of their future efforts.

Day 1: Mission and Vision

Day 2: SWOT Analysis

Day 3: SMART Goals

Day 4: Record Keeping

Day 5: Decision Making

Recommendations:

Short Term (1-2 years):

1. Practice record keeping of financial transactions and input stores.

Members of the cooperative have been trained in the use of simple record keeping using symbols and have been instructed on how to adequately determine the cost and set prices, including their income as an expense.

2. Develop strategic goals to achieve the mission of the cooperative.

Members have been taught about the principles of creating SMART goals and why having adequate records is a necessary component to determine if a goal is reasonable or attainable.

Long Term (3-5 years):

1. Create an Expansion Fund

Overhead expenses or Fixed Costs which are incurred in the general administration of the society and the maintenance and renewal of facilities – such as staff salaries, traveling expenses, costs of stationary, telephone, postage, advertising, depreciation, repairs, bank charges (with the exception of crop finance), costs of the committee and general meetings, etc. 

The Variable Costs which are incurred directly by the marketing process and vary according to the volume of products handled. This group includes: 

  • transport costs (if the society is responsible for it) 
  • handling charges, casual labor, etc. 
  • leakage in storage and transit caused by drying, spilling, spoiling, or pilferage 
  • packing materials 
  • bank charges for crop finance 
  • insurance fees for produce storage and movement

To cover these expenses, and also to create funds for future expansion, the society needs to set aside a proportion of the revenue resulting from the sales proceeds of the members’ produce. Depending on the mode of operation the society can use one of the following methods of cost covering, by charging: 

  • a Commission, which is a fixed percentage of the sale’s price deducted from the total sales proceeds. The revenue which the society can obtain from this commission is related to the current market price and the volume of produce handled; or 
  • a Levy, which is a fixed charge imposed on each unit of weight or volume sold through the society, either as a flat rate on all products, or differentiated according to grades. Thus the revenue of the society under the levy system is not dependent on the market price which the product fetches, but only on the quantity sold. The commission and the levy are usually fixed in advance of each season. 

2. Provide Management Supply Services

Additionally, one of the group’s biggest challenges is supply management. Private traders have frequently been unable to provide small producers with an efficient and effective supply of necessary inputs. Apart from charging high margins, they often do not have the technical knowledge or time for extension work that should accompany the sales. The objective of cooperative supply services should be: 

  • to keep the prices at a reasonable level by: 
    • using its bargaining power based on bulk buying; 
    • shortening the lines through direct purchases from factories or importers and through production on the secondary level in the cooperative network; 
    • efficient handling to avoid losses and waste. 
  • to supply goods and services of a type and quality which are to the best advantage of the producer. This, of course, requires the staff to have a sound technical knowledge of the supplies offered, and the cooperative to educate and train the farmer/small producer in the use of these supplies. 

Anticipated Impact: 

Within, one year the group should be able to employ solid record-keeping and be able to accurately report what the assets and earnings are for the cooperative as a whole. They should be able to clearly show if the cooperative is operating at a profit or loss.

By year two, the cooperative should be able to determine what goals are reasonable for them to pursue a 5-year plan. They should be able to use the information from their record keeping to inform these decisions and they should be able to lay out a solid plan to achieve these goals.

By year three, the group should be showing increased income and decreased cost of production. They should be providing supply management services to their members and should be maintaining a cash reserve fund for expansion.