38 CADERNOS DE ANÁLISE E PROSPETIVA CULTIVAR N.º 32 DEZEMBRO 2024 – Cooperativas dairy in the northern and western parts of the country. In the poor southern and eastern regions, with mostly smallscale agriculture on poor soils, cooperative development was a bit slower and more focused on emancipation of the peasants, with support from farmer unions, the Catholic church, and the local dignitaries. 3. Institutional context The formal and informal institutional environment in the Netherlands has been favourable for the development of cooperatives. The long history of decentralized government and the need for self-organisation in keeping the feet dry in the moors typical of the western part of the country has promoted a cooperative mentality. Other sociological features of the Dutch society are high trust and a trade orientation. Different legal forms can be chosen for collaboration among farmers, but the cooperative has been the favourite form due the low cost of establishing, the ease of enter and exit of (new) members, and the high legitimacy among public and private stakeholders. There is no state policy to induce farmers to choose a cooperative over another legal business form, while cooperative legislation is more flexible in The Netherlands than in other EU Member States (Bijman et al., 2012). There is high flexibility in tailoring the articles of association to the needs of the members (Van der Sangen, 2013). It is easy to establish and maintain a cooperative, in terms of money and time. Within general rules on the internal governance structure, cooperatives are free to develop more detailed rules in their statutes, for instance on the type of activities, the member financial contribution, the distribution of surplus, and the communication between the members and their cooperative. While there are tax benefits for cooperatives, particularly for small cooperatives, these tax benefits are limited and have never been a reason for farmers to choose the cooperative form over any other business form. During a specific time in history, state policies have been supporting the development of agricultural cooperatives in The Netherland. In the 1930s the Dutch government shifted it economic policies from a traditional non-interventionist approach to a strict regulation of food markets and heavy support for agriculture. The economic crisis of the 1930s, the food scarcity during the Second World War, and the need to modernize the agricultural sector in the post-war years, were reasons for the government to regulate agricultural markets. In dairy, these regulations indirectly favoured cooperatives over other businesses (Bijman, 2018). In fruits and vegetables, cooperatives were even mandated for three decades. From 1934 until 1965, farmers were obliged to sell their fresh produce through a cooperative auction. 4. Effective internal governance While legal and other institutions support the establishment and development of cooperatives, well-functioning structures and processes of internal decision-making are crucial for strong organisations. Good internal governance in cooperatives, including effective member control, needs to be organized. Two key issues in cooperative governance are member control and good leadership (Bijman et al., 2013). Member control requires both participation and skills. Members should participate in the General Assembly in order to elect the Board of Directors and to (dis)approve the annual financial accounts, but also to decide on investment and growth strategies. Being involved in the governance of the cooperatives requires knowledge and skills. The high level of education of Dutch farmers has always been favourable for member participation. In addition, low geographical distances and the homogeneity of the farming community have supported member participation in decision-making bodies and thus in members having control over the cooperative. Good leadership implies having the right people in the Board of Directors (BoD). Transparent election processes and maximised tenure (max 12 years) allows for the good balance between experience and new ideas. In The Netherlands it is common to hire professional managers to run the cooperative business. While finding good managers is always difficult for cooperatives, a strong business orientation and the availability of opportunities for growth of the cooperative business have helped to attract highly qualified managers (often with experiences in non-cooperative businesses). A related internal governance challenge is the relationship between the BoD and the professional managers. While the BoD, representing the members, is the ultimate decision-makers, the managers are the ones with most of the knowledge and those who have to implement strategic decisions. Resilient cooperatives have found a good balance between BoD control on the one hand and empowerment of the managers on the other hand. Agricultural cooperatives in The Netherlands have shown to be flexible and innovative in their internal governance structures (Bijman et al., 2014). In order to develop appropriate strategic and tactic responses to competitive pressures, cooperatives have strengthened the autonomy of the
RkJQdWJsaXNoZXIy MTgxOTE4Nw==