Insights from a data-driven, multi-stakeholder approach
Governance is the backbone of any successful cooperative. It determines how decisions are made, how transparent and accountable systems are, and how the interests of members are protected. In many countries, including Tanzania, governance is both a persistent challenge and a major opportunity to unlock the potential of cooperatives as engines for inclusive rural development.
The Elusive Nature of Governance
Despite its central role, governance is often one of the least tangible and most sensitive components of cooperative development. It deals with power, leadership, accountability, and internal control—areas that can be politically delicate or socially uncomfortable to address. This sensitivity, combined with the abstract nature of governance, leads many support actors to treat it in a narrow, technical way or avoid it altogether.
Rather than being embedded in long-term strategies, governance is frequently reduced to compliance checklists, board training sessions, or formal audits. Critical elements such as leadership succession, member engagement, and board-management relations are often overlooked. This instrumental or superficial treatment undermines real transformation and weakens the foundations of cooperatives.
Fragmented Support, No Shared Standard
Adding to the challenge is the fragmentation of cooperative support in Tanzania. Multiple actors—including government programs, donor initiatives, and NGOs—are working to strengthen cooperatives. However, these efforts are often uncoordinated and use different approaches, tools, and terminologies.
The absence of a shared framework or standards results in:
- Overlap and duplication of efforts,
- Ad hoc capacity-building interventions,
- Inefficiencies and confusion at cooperative level,
- Limited ability to scale or compare results.
Without a common language or system, investments in governance yield limited, isolated results.
The Cost of Weak Governance
These structural and strategic weaknesses have real-world consequences. Governance failures are a major reason many Tanzanian cooperatives underperform or collapse. Examples include:
- Coffee cooperatives in the southern highlands that declined due to embezzlement and poor financial oversight;
- Sugarcane cooperatives that fragmented due to internal leadership conflicts and lack of transparency;
- Boards and managers that operate without accountability or long-term direction.
In such cases, cooperatives lose the trust of their members—and the interest of investors, buyers, and financial institutions. As the saying goes: Trust arrives on foot but leaves on horseback. Rather than becoming engines of rural development, they turn into passive recipients of donor funding or state support.
AgriGRADE: A Common Language and Systemic Approach
To address these challenges, AgriGRADE introduces a structured, data-driven, and systemic approach to improving the overall performance and professionalism of cooperatives. The AgriGRADE approach was co-developed by a consortium of partners, including Agriterra, a cooperative development organization with decades of experience, and SCOPEinsight, a leader in assessing the organizational capacity of farmer organizations. In Tanzania, implementation is carried out jointly by Agriterra and local partners such as 360 Connect and Sundy Merchant, who provide tailored business development services and coaching to cooperatives based on the AgriGRADE framework.
Key features of AgriGRADE include:
- Assessment
Using ISO 18716-aligned SCOPE tools, AgriGRADE conducts comprehensive organizational assessments across multiple dimensions—such as governance, internal management, financial systems, service delivery to members, and market orientation. Governance is assessed as one of the key pillars, enabling cooperatives to understand institutional strengths and weaknesses in a broader organizational context.
- Segmentation
Classifying cooperatives according to their development stage to tailor support appropriately.
- Evidence-Based Planning
Translating assessment results into targeted improvement plans, jointly developed with cooperatives and BDS providers.
- Coaching and Monitoring
Supporting implementation through regular coaching, peer learning, and annual reviews. In Tanzania, coaching is carried out by trained local experts from partners such as 360 Connect and Sundy Merchant, ensuring contextual relevance and continuity.
- Market Engagement
Through the Institutional Business Assessment (IBA), AgriGRADE strengthens links between cooperatives and processors that source from them. This helps reduce both cost to serve and cost to source, improving supply chain efficiency and service delivery.
- Financial Sector Integration
By generating trusted, comparable data on cooperative capacity—including governance and financial management—AgriGRADE improves pre-due diligence processes and enhances access to finance.
In Tanzania’s Southern Highlands, maize cooperatives such as Iwalanje AMCOS are using this approach to identify performance gaps, improve internal functioning, and strengthen member participation. Over time, this will enhance both business outcomes and trust from members as well as external stakeholders.
From Compliance to Governance Culture
What distinguishes AgriGRADE is its shift from a compliance-oriented mindset to fostering a governance culture. Governance is not treated as an administrative obligation, but as a strategic lever for institutional development.
The model encourages ownership and collective responsibility by aligning cooperatives, technical assistance providers, and public/private stakeholders around shared goals, feedback loops, and performance indicators.
AgriGRADE is also grounded in ISO 18716, the international standard for professional farmer organizations. This gives all actors a shared language and set of expectations, enabling greater coordination and alignment within the cooperative support ecosystem.
Complementary interventions strengthen this shift:
- Structured leadership transitions with mandatory documentation and coaching,
- Digital tools that increase transparency and member access to information,
- Member education programs to reinforce democratic governance.
AgriGRADE Assessments in Tanzania- Snapshot of the governance related subdimensions
The SCOPE-based assessments conducted across 63 farmer organizations (FOs) during the AgriGRADE project in Tanzania provide a snapshot of governance maturity within the sector. The analysis below reflects actual response patterns for each governance indicator.
Scores range from 1 (Basic) to 5 (Top-performing), highlighting both strengths and critical gaps in governance. These scores form the basis for developing tailored technical assistance (TA) plans that address key weaknesses while building on existing strengths. The same scoring framework is used in periodic re-assessments to monitor progress, track impact, and evaluate the effectiveness of TA interventions and service providers over time.
Conclusion
Tanzania’s cooperative sector is at a pivotal moment. Legal frameworks are in place, and commitment from government and partners is high. But without strategic governance, a shared approach, and systematic support, many cooperatives will remain fragile and reactive.
AgriGRADE is working hard to demonstrate that when governance is addressed systemically—with standards, data, strong local partners, and tailor-made coaching—cooperatives can grow into resilient, transparent, and member-driven institutions. Institutions capable of engaging markets, attracting finance, and contributing meaningfully to inclusive rural development.