Findings show that governance challenges caused by weak board selection, poor management capabilities have led to weakness in internal processes. Key among these include the general lack of proper financial accounting practices and audits, lack of strategic plans, poor pricing and marketing strategies. These pose significant threats to MCC performances as members become uncommitted to the core business of the cooperatives through non-payment of subscriptions and selling milk to alternative markets affecting MCC product base and revenue. Similar patterns in members’ behaviour were reported by White (2017) who argued that lack of adherence to set rules and bylaws was the major source of MCC failure. However, Dejene (2014) reported conflicting findings and noted that, it is the experience and managerial expertise of cooperative leaders which is the core determinant of cooperative competitiveness in the small holder sector. This is supported by Guntono et al. (2016), who posits that the purpose of a cooperative is to realise the economic, cultural, and social needs of the members and the surrounding community. This can be achieved by observing proper governance practices such as appointing competent board members who foster loyalty and trust. Anania et al. (2016) also supports the view that good governance increase member participation and motivates new members to join in.
Dejene (2014) argues that leaders give the strategic direction of cooperatives; hence efficiencies in MCC operations can be linked to leadership capabilities. A typical example of a successful cooperative is Land O Lakes dairy cooperative of America, whose management capabilities have seen it grow to one of the world's largest dairy cooperatives, with over 950 centralised cooperatives serving over 300 000 farmers. However, Osterberg and Nilson (2009) report high member disloyalty where members are dissatisfied with management as the core driver of dysfunction in the cooperatives.
As also reported by ILRI (2015), there are evident managerial challenges within the selected schemes where except for MCC A and, to an extent, MCC B, elected management boards and committees are not performing efficiently due to a lack of skills and training in basic management principles. This has resulted in poor execution of duties causing member discontent, the selling of products in alternative markets and the development of passive members. This is consistent with study done by Ordofa et al. (2021), whose study showed that farmer cooperatives use different outlets and price strategies to sell their dairy products. A study by Mojo et al. (2017) shows that availability of feed, breed quality, the price received by farmers and high transaction costs are the major bottlenecks faced by smallholder dairy producers and cooperatives have a role to play in alleviating such constraints. As alluded to by FAO (2016), the boards in selected dairy schemes lacked basic management competencies to provide service support which would help create a committed and active membership. MCC strategic business plans are meant to give and provide a roadmap for economic growth and sustainability. All the MCCs except for MCC A and MCC C, did not have such strategic business plans, a sign of weakness on the part of the board who are supposed to develop and use such plans. This should facilitate their mandate of improving MCC revenue base and farmer’s incomes through integration into competitive markets. White (2017) suggests that successful cooperatives are those whose leadership is capable of making plans and strategic decisions that improve business performance.
Flaws in the institutional and governance arrangements, in particular weak performing boards of the selected dairy schemes in Zimbabwe have resulted in inefficient service provision to members in terms of both access to input and services and competitive markets which has resulted in low production and low deliveries. This points to board formation regarding the set bylaws, experience and management capacities of those selected into leadership. This supports the report by Chibanda et al. (2009) that good institutions and good governance will promote an organisation’s worth and Dejene (2014) position that strong, responsible and committed leaders are critical for effective running of cooperatives. A typical example of a successful cooperative Land O Lakes dairy cooperative of America, whose management capabilities have seen it grow to one of the world's largest dairy cooperatives, with over 950 centralised cooperatives serving over 300 000 farmers. This is in support of the view by Rantlo et al. (2018) which posited that with good governance cooperatives have the potential to generate high and fair rates of growth.
Getting governance factors right calls for turnaround strategies with regards to board formation, adherence to bylaws and executing duties as expected to build trust and an active and committed membership. Such strategies will make it possible for dairy cooperatives to fulfil their mandate of integrating small-scale dairy farmers into competitive markets. Based on these conclusions the study makes the following recommendations. Most cooperatives are rural-based, and members are drawn from local communities, with most having low levels of education. There is a need to explore methods of equipping such elected leaders through training in cooperative management skills to improve governance. MCC’s can use their strengths of collective action to create organized marketing arrangements through partnerships with processors who prefer to work with legal entities and trained members. This calls for agile oriented, strong and capable leaders who can negotiate and mobilize members to ensure supplies meet the minimum daily requirement of processor. MCCs can also work on identified weaknesses especially board selection and pricing strategies by following constitutional guidelines on board selection and adhering to set bylaws and constitutional provisions. Leadership should also take advantage of opportunities presented, such as favourable government policies, including support through targeted loans and the ban on raw milk imports to improve farmer performance. Threats in product offering can be addressed by improving product research and development to keep abreast with changes in the broader economy in terms of pricing and change in consumer tastes. MCC management play an important role in technological adoption processes. Despite the highlighted flaws in MCC governance, it can be argued that with the right policies, supporting regulatory framework, and the right people in leadership with skills and expertise, there is room to rehabilitate the dairy systems and ensure they play their role in the economic transformation of rural communities by integrating producers into competitive markets and moving them out of poverty. These findings help advance knowledge on cooperative governance factors and cover the gaps in the literature on why cooperatives in Zimbabwe have not been effective, failing to carry out the intended mandate of integrating smallholder farmers into competitive and efficient markets.
In conclusion, the present study drew insights from previous studies that looked at the institutional factors affecting farmer participation in markets. This study aimed to highlight the governance factors affecting smallholder dairy systems in Zimbabwe and offer recommendations on improving such factors to bring about significant improvements in farmer production and productivity.