Cane farmers' credit co-operatives in Fiji

Abstract

Chapter one sets out the purpose of this study which focuses first on the operations of typical small rural rotating credit cooperatives in underdeveloped areas, then on a case study of three small credit co-operatives of this type in Fiji cane growing areas. Chapter two briefly describes the sugar industry in Fiji which employs about 35 per cent of the economically active population, and accounts for over 60 per cent of the value of commodity exports. In the 1970 season there were 15,430 contracts for the supply of cane, each holding averaging 10.6 acres, from which a total of 2,840,000 tons of cane were supplied to the sole processor, South Pacific Sugar Mills Limited. Approximately 80 per cent of the cane farmers are Indian, and this study concentrates on Indian cane farmers'credit co-operatives. The seasonal patterns of activity of a typical cane farmer are also discussed. Chapter three provides a general discussion of rural cooperative societies, and rotating credit co-operatives in particular. Special emphasis is given to those factors which are likely to affect the success of small credit co-operatives. Chapter four outlines some of the major characteristics of seasonal cash cropping agriculture and discusses the importance of credit in financing farm inputs and household consumption over the crop maturation period when no receipts are being obtained from the crop. The sources from which seasonal credit is financed in Fiji are discussed, and their relative importance, advantages, disadvantages and attributes are outlined. The major sources of credit for cane farmers in Fiji are: the South Pacific Sugar Mills, store keepers, trading banks, money lenders, private individuals and credit co-operatives. In chapter five, the type of rotating rural credit cooperative common in the cane areas is described. This type of cooperative exists in many countries, and have been described by Geertz (1962). As they exist in Fiji they are mainly small in scale, and with membership restricted to a radius of about 5 mi les or less. The patterns of communal responsibility and mutual help which exist in societies of small-holders such as in Fiji are suggested to be of considerable importance for the successful establishment of a small credit co-operative. In 1968 there were 83 credit societies of this nature among Fiji-Indian cane farmers, with a total of 1314 members. Data on three cane farmers' credit co-operatives in the Sigatoka area of Fiji was analysed and the results are set out in chapter six. The Sigatoka area is described, and the attributes of the two areas from which the members of the co-operatives come are compared, as well as the attributes of those farmers in each area which belong to the co-operative and those who do not. It is concluded that the area of the co-operative which is least successful of the three is one of average farmers, and that the membership of the cooperative is representative of the area. However, the two more successful co-operatives are not only in an area of high-income and efficient farmers, but their membership is drawn from higher than average income farmers of the area. These results lend support to the suggestion by Belshaw (1959) that one factor in the success of a credit co-operative is the existence of a fair proportion of upper-income farmers as members. A summary of the statistical methods used is at the end of the chapter. Chapter seven presents some conclusions and comments and outlines a method, and the data requirements, by which a similar study to this one might better be carried out. Ways in which credit cooperative societies may be assisted, while still preserving their local character, are suggested. It is suggested that some of the problems of financing weaker co-operatives can be overcome by the establishment of a co- operative bank, which is being done in Fiji, and which will transfer funds from the richer to the poorer societies. In general the study concludes that the small rotating credit society is a useful institution in the early stages of development, and before farmers become borrowers from more sophisticated institutions, provided they are given government support and assistance . Show more