Technical and institutional constraints faced by vegetable co-operatives in the Buffalo City Metropolitan Municipality in Eastern Cape Province, South Africa

This study focused on the technical and institutional constraints faced by the vegetable co-operatives with regard to the impact on productivity. Vegetable co-operatives have no access to markets due to their poor performance on productivity and poor quality produce resulting to low prices for the produce such that they cannot compete in a market economy. In this study, the data was drawn from a sample of thirty vegetable co-operatives in the Buffalo City Metropolitan Municipality (BCMM) of the Eastern Cape; obtained through focus group discussions and interviews from each cooperative. The objectives of the study are to measure the productivity of vegetable co-operatives using Total factor productivity analysis (TFP) and profitability of vegetable co-operative using Gross Margin (GM). Followed by the descriptive statistics in identifying and assessing the socio-economic characteristics as well as coping strategies adopted by vegetable co-operatives in BCMM where percentages, means and tables are used looking at the highest frequency. The results show that the vegetable co-operatives in the BCMM are not productive and profitable due to major constraints experienced by co-operatives such as lack of market, information, trainings and business skills, capital, infrastructural facilities, effective extension services that all leads to poor produce quality. Co-operative is said to be profitable and viable if total revenue is greater than the total variable cost which makes the gross margin positive. In this case, the total gross margin is negative. The results showed that the production costs, maintenance (tractor hire, generator hire and servicing) and electricity costs were the major costs incurred in the production of vegetable by the co-operatives