The Cotton Cooperatives in Peru: Roles, Governance, and Performance

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Cotton Production, Cotton Cooperatives, Textile Industry, Pima, Tanguis
Barrientos, Percy Enrique Guevara
This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License. CC BY-NC-SA 4.0 Creative Commons License:
Cotton production is a multibillion-dollar industry. The fibers are used to make textile products such as towels, robes, and clothing, as well as non-textile products like fishing nets, coffee filters, tents, and many other items. Due to the multi-faceted use of this crop, cotton is an important staple to the Peruvian community. To ensure the growth of this “white gold,” and to help small farms, the cotton cooperatives were formed. The government decided to create these cooperatives to continue Peru’s presence in the textile industry. Prior to the cooperatives introduction, farmers were at the mercy of the “elements.” These elements not only included climate changes, but also competition and market supply and demand. With the cooperatives in place, farmers had a little more “leeway” and a “safety net” provided by the government. If the farmers did not produce enough crops, or the crops were destroyed, the farmers originally had to find other means of earning income and bear the entire costs of the loss on their own. The government provides the farmers with the funds needed to grow the crops in way of a “loan.” The farmer then has to “sell” the crops to the government in order to re-pay the debt. However, if the farmer’s crops don’t produce enough, or are destroyed by weather changes, that loan payment can either be delayed or forgiven. This helps mainly the small local farmers, however, some of the bigger independent producers are able to have some advantages in the cooperative as well. Although, the bigger independent producers are not as dependent on the help from the government as they produce enough crops to make a decent profit. This study is to show the effect of the formation of the cooperatives; how the cooperatives help or hurt the individual farmers and how the country, as a whole, can benefit from the implementation of such government “interference.”
Full text: IJRAS_269_Final.pdf

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