Determinants of Market Choice Among Agricultural Cooperatives in South Africa

The potential of agricultural cooperatives to foster socioeconomic development is a critical issue in developing countries. This study examines the factors that influence market choice among South African agricultural cooperatives. Data for 381 agricultural cooperatives were collected from the Cooperative Data Analysis System, drawn from the original database of 3,197 cases from 2017. Cases with missing observations were omitted. A multivariate approach utilising principal component analysis and K-means clustering was employed to identify the typologies of market choices. Multinomial logistic regression was then applied to determine the factors influencing agricultural cooperatives’ choice of market typologies. The study reveals that the financial and social efficiency of agricultural cooperatives, the age of the institution, the square of the age of the institution, ownership of livestock, cooperative size, and credit access all influence market typology selection. Training programs such as those in financial management, corporate governance, accounting and bookkeeping, management committees, and the number of managers in cooperatives also impact cooperatives’ market choice. The findings of this study should facilitate the design of policies that cater to cooperatives encountering diverse market choices. By influencing the choices of agricultural cooperatives, stakeholders can contribute to more meaningful cooperative involvement in markets.