The study confirms some of the constraints recorded by studies done on LRAD projects (Table 3.2), with special emphasis on social problems such as different goals of group members; no common interest amongst beneficiaries; some beneficiaries wanting to share in the profits without contributing financially or with labour; the Executive Committee wrongly seen as owners of the project and not willing to give the rest of the beneficiaries an opportunity to make decisions; lack of communication between the Executive Committee and other beneficiaries specially regarding feed-back on farming activities and funding; in-house fighting due to miss-trust amongst beneficiaries and finally groups that tend to fall apart after some time. The dairy processing enterprise would have to overcome social obstacles that are not present in individual enterprises.
The problems that surfaced within the Engadini Community Trust confirm the findings of Mavhunga et al. (2004) and Salagae et al. (2004), who found that there are a number of constraints that have to be overcome by LRAD beneficiaries and that a large portion of these constraints are due to group dynamics.
CHAPTER 9
CONCLUSION AND RECOMMENDATIONS
This study set out to investigate the feasibility of a dairy processing enterprise using action research, with a group of women from an LRAD project, and investigated whether or not the beneficiaries had the ability to work as a cohesive team. The review of the literature described the importance of small-scale food processing enterprises in developing countries in creating employment and alleviating poverty. Entrepreneurship and the effect that entrepreneurial qualities have on small-scale enterprise development were explored.
Intrinsic and extrinsic constraints that influence the success of small-scale food processing enterprises were highlighted through case studies. Literature on group enterprises was investigated, to determine specific constraints that group enterprises have to overcome, considering whether or not women’s enterprises have additional constraints due to their social status in the community.
The literature clearly indicated that, although small-scale food processing enterprises can play a vital role in creating employment and alleviating poverty, it is evident that small- scale enterprises need to overcome many obstacles (such as sustainable availability of raw materials, lack of technical and marketing skills and suitable equipment and processing venue) before the enterprise can produce feasible, marketable products.
A manual for planning a food processing enterprise was developed from best practices identified by the literature review. The first sub-problem (namely whether or not the group could identify feasible marketable products) was assessed using the results of the feasibility study, which was conducted using the manual and training sessions, together with observations made by the researcher.
The results of the study indicated that the group has the technical skills to make a good- quality product. The group will face similar obstacles as many small-scale enterprises in developing countries face. The group will have problems ensuring a sustainable supply of
raw materials. The current supply of milk would not be sufficient to supply the target or an expanded market. The group indicated that they would follow the direct selling marketing strategy. This would minimise costs, allowing them to sell the products at a lower price than that of the perceived competition. The consumer survey showed that the group could build up a reliable customer base if the selling price was lower than that of the competition.
The group needed help in determining required resources and identifying where the resources could be obtained. This confirms the findings of the literature, that small-scale food processing enterprises need a certain degree of assistance in planning and implementing the enterprise. Should the group manage to increase the production of maas and yoghurt considerably, further assistance in sourcing appropriate markets may be needed.
A significant disadvantage to the group is the fact that five of the six group members are not living on the farm on which the enterprise is to be established. Although the group members do not perceive the distance of over 60km per day as a problem (30 km one way) they would have to travel to and from the farm as a problem, a question arises as to whether or not the traveling would increase the production costs of the maas and yoghurt.
Not only could the selling price, but also the quality of the product, be affected. It would be difficult to keep the maas and yoghurt at the required temperature of below 5˚C. Literature highlighted the importance of food safety requirements, even for small-scale food processing enterprises. Although the group has the knowledge to produce good quality maas and yoghurt, acquiring a suitable dairy processing plant remains a problem that could affect the feasibility of the enterprise.
The second sub-problem considered whether or not the Engadini dairy processing group could work as a cohesive team. Literature reviewed stressed the complexity of group enterprises. Studies in developing countries across the world, and in LRAD projects in South Africa specifically, clearly demonstrate that groups need to overcome a host of social problems such as poor communication between management and other members;
distrust amongst the members; group members not contributing equally, yet expecting equal shares; to mention a few. The findings of this study correspond with the findings of the literature.
Not only does the Engadini dairy processing group have to deal with distrust amongst the group members themselves, but, because the members are part of the Engadini Community Trust, the dairy processing group is also affected by the problems that exist in the Trust. In this study the internal conflict within the Engadini Community Trust was caused by mismanagement of grant funding; lack of communication between the Trust’s Executive Committee; distrust between family groups within the Trust; and trustees attempting the resolve the situation by electing a new Executive Committee, without the buy-in of all the Trust members.
Even after the dairy processing group drew up strategies to prevent further conflict, the conflict within the larger Trust still had a negative effect on the Engadini dairy processing enterprise. The Engadini dairy processing group cannot function independently, even though the group did decide to form a co-operative. The Engadini Community Trust has the final say regarding aspects such as the distribution of funds and utilization of other resources. Five of the six Engadini dairy processing group members are dependent on their husbands’ incomes and transport for acquiring inputs to the enterprise and to get to the farm where the enterprise will be established.