Name: Date:

Course Code and Section: Course Degree and Year:

RESEARCH LITERATURE SECTION EXERCISE 2

Directions: Identify the rhetorical units and sub-rhetorical units of the following Related Studies section by
surrounding each of them with brackets and extending each of the brackets with arrows leading to the writing of
the specific units on the margins.

2.6 Related Studies

The creation of cooperatives comes from a group of individual’s answer to a rising problem both in the
market and the community. According to studies (Mojo et al., 2016; Chagwiza et al., 2016; Ma & Abdulai, 2016;
Huang, Wu, Xu & Liang, 2016; Tesfay & Tadele, 2013; Kirezieva, Bijman, Jacxsens, & Luning, 2016; Hogeland,
2015), cooperatives have contributed in farmers agricultural operations. Cooperatives alleviate farmers’
constraints in accessing the market in terms of transaction costs, information asymmetry, and food safety and
quality standards of their goods.
High-transaction costs in accessing production agents hinder development of small enterprises (Mojo et
al., 2017). Ma and Abdulai (2016) reported how apple farmers in the remote areas of China are unable to
procure apples and have value chains in the international markets due to the high transaction costs and
information asymmetry. Additionally, Chagwiza et al. (2016) explained that small-scale agricultural farms have
relatively high transaction cost because of their stringent and limited production capabilities. Fortunately,
cooperatives have used an inherent organizational structure that internalizes farmer’s external transactions by
improving market access to production inputs (Huang et al., 2016). Dairy farmers in Ethiopia affiliated with
cooperatives were able to acquire network of agents outside the value chain (i.e. government, donor funds, R &
D operations) as well as bulking, bargaining services (Chagwiza et al., 2016). Kirezieva et al. (2016) also found
that these cooperatives services which, in the case of strawberry farmers in Netherlands and Belgium, were
sorting, packaging, transporting and storing of products.
Another issue is the inability of smallholder farmers to adapt to the evolving market and consumer
preferences due to asymmetric information. As stated before, Ma and Abdulai (2016) recognized how
information asymmetry together with high transaction costs hinder apple farmers in China to develop their goods
and transport it until it reaches the international market. This dilemma is also attributed to the capacity of
farmers who were unable to acquire access to funds and other inputs, and sufficient information on the current
th
technological operation for production (Mojo et al., 2017). One major example of this would be the late 19
century farmers who had a dilemma to deal with regarding the agricultural industrialization where farmers
believed they would be beaten out of the market (Hogeland, 2015). Cooperatives believed that smallholder
farmers will be able to survive in the market if they can acquire technology at par with those industrialized
enterprises. However, Hogeland (2015) asserts that the aforementioned is subjected to risks and uncertainty
where perceived costs on such changes will differ amongst farmers due to the asymmetric information.
Cooperatives were able to resolve this issue through their collective action. Cooperatives act as a unified body
representing a number of farmers or entrepreneurs; hence, they have to act as one. Ma and Abdulai (2016)
noted that cooperative institutions have liabilities to inform members on technological or market developments
since they are recognized as one entity. Collective action requires dissemination of knowledge and information
amongst other members regarding the next course of action to do towards the cooperative’s goal (Chagwiza et
al., 2016).
Farmers have problems in conforming to the larger markets’ food quality and safety standards. Apple
farmers in China experienced this dilemma especially in meeting the international market’s food safety and
quality standards (Ma & Abdulai, 2016). This resulted in Chinese apple farmers unable to capture a large share
in the world market despite being one of the major producers of apple. Because of the cooperatives’ inherent
structure of collective action, not only do they internalize the costs of farmers but also offer operational
technologies and market information. Ma and Abdulai (2016) state that disseminating marketing and
technological information is one of the responsibilities of a cooperative. Market information includes food safety
and quality standards which enables small-scale farms to meet the requirements of the larger market.
Additionally, Kirezieva et al. (2016) proved in their findings that strawberry cooperatives in Belgium and
Netherlands have performed key roles in quality and safety coordination. By offering information and services to
strawberry farmers, not only were they able to disseminate the information about the safety and quality
standards to the consumers, but also helped farmers supply the appropriate products in required state levels.
Cooperatives enabled small-scale farmers survive in the market despite the high competition amongst big
farms.