Page 37 - Agricultural innovation

at higher prices. The cooperative regularly has a meeting every three months. Members can share
their experience in production and market. They will help each other when a member has a problem
in production. The organic agriculture cooperative in Paek district encourages its young members
to exchange experiences with cooperatives in Cambodia, Thailand, and Indonesia. Although the
cooperative is mostly managed by elderly members, they are active to modernize its group management.
The cooperative plans to send its members to learn how to use ICT in financial management.
The organic agriculture cooperative in Paek district has a savings fund that members can deposit
and borrow money for their production. The saving fund receives a deposit of at least LAK 20,000 per
month. Currently, there are 80 households accounted for around 50 percent of total household members
depositing their money with the savings fund. The cumulative amount of savings is around LAK 43
million, almost this amount is loaned to the member of the cooperative with a monthly interest rate
of 1 percent. Since it started lending money to its members in 2016, the cooperative never experiences
a problem that borrowers could not pay back. A likely reason is that the cooperative carefully lends
money to its members based on their payback capacity. Moreover, the cooperative monitors whether
borrowers use the money for their production properly.

4.4.3. Opportunities and challenges
The organic agriculture cooperative in Paek district brings a great benefit to farmers. The household
income of farmers increases significantly. Farmers can sell their organic vegetables with nearly two
times of non-organic vegetables in the market. In addition, transforming from non-organic to organic
production reduces the risk to farmers’ health.
The savings fund of the cooperative can help farmers to overcome their financial constraints during the
production season. When the production area of farmers is damaged by a natural disaster such as flood,
drought, and disease, the cooperative has the policy to lend money without interest for 3 to 6 months.
However, this model has to cope with following challeges:

• Managing committee of the organic agriculture cooperative in Paek district consists of many
elderly members who are not good at using ICT in management.

• Since the cooperative consists of many ethnicities with a large gap in knowledge and understating
about the management of cooperative.
• The farming outputs of farmers are often damaged by natural disasters such as disease, flood,
and drought.

4.4.4. Conclusions

The success of the organic agriculture cooperative in Paek district in Xiengkhuang is a good example of
how farmers can benefit from the operation of the cooperative. The success of the organic agriculture
cooperative in Paek district comes from the fact that the cooperative has good management and
transparency. The leader of the cooperative is a factor influencing the success of the cooperative. Mrs.
Bouachan Heuangvilay is a determined leader with full of skills in the management of cooperatives
and saving funds. Although her age is over 65 years, she constantly encourages applying technology to
improve the management of the cooperative.
Lessons and experiences learnt from the organic agriculture cooperative can be implemented in
other cooperatives and production group. The organic agriculture cooperative was born when receiving
support from SIDA. Thus, initial support from the government and non-government organization
is important. The support here does not mean money only, it could be in the form of production
technique, management, and marketing, etc.

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