The potential of cooperatives, and the extent of their development, has in many cases fallen far short of expectations. Low standards of performance, bad management, financial failure, corruption, and misuse of funds, along with the use of cooperatives for political ends, have been common features of cooperative enterprises in many countries.
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As a result, significant criticism has been directed at the cooperative system, leading many, including members, to become skeptical of its ability to play an effective role in the development process.
Cooperatives, as business organizations, have the capacity to act directly as development agencies. Through the steady accumulation of business assets, the expansion of services, the acquisition and use of management skills, and the employment of staff, cooperatives fulfill a positive and measurable development function.
However, despite their considerable potential, cooperatives face a number of constraints that undermine the performance of this unique enterprise system. These constraints include the following:
1. Realism of Objectives: Objectives reflect the purpose and expectations of cooperatives, but members often expect too much from their organizations. In many developing countries, the business environment is not always conducive to cooperative success.
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2. Conflict Between Economic and Social Purposes: Economic success is fundamental to cooperative societies. However, in many cases, cooperatives have been misused for political purposes, negatively affecting their performance and hindering their ability to achieve their goals.
3. Lack of Good Management: One of the major causes of failure among cooperative enterprises is the lack of adequate management skills, which undermines their economic performance and sustainability.
This article has outlined the limitations of cooperative enterprises and highlighted various constraints that affect their performance. These challenges play a significant role in the ability of cooperatives to achieve their potential in agricultural marketing and development.
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