Role of Design and Informal Share Markets in Success of Sugar Co-operatives

Success of Sugar Co-operatives R Rajagopalan Tushaar Shah Why have sugar co-operatives done so outstandingly well in south Gujarat and Maharashtra? Central to their success are three important features of their design which enable the interests of thousands of cane growers to coalesce into a powerful member organisation, which operates as an engine of wealth generation for its members and remains member-oriented through a patronage cohesive governance structure. A major institution that supports patronage cohesive governance is the informal and yet dynamic market in the shares of these co-operatives in south Gujarat. The prices these shares command are important to their owners as: (a) a form of wealth, (b) a performance index, and (c) an instrument of member control As a robust if imperfect summary index of management performance on which information is available widely and openly, this market price of the co-operative's share encourages the board and management to continually search for and adopt member-oriented policies.