Governments promote the use of cooperatives to enhance development of smallholder farmers. However, challenges are inevitable and this study investigated factors responsible for the collapse of agricultural cooperatives in Manicaland province of Zimbabwe, and developed propositions for use on a larger scale. Five cooperatives drawn from Mutasa and Chimanimani districts bwere chosen using purposive sampling based on overall performance of the cooperatives as main criterion (shown by available records) and management and staff availability. All selected cooperatives were willing to participate in the study and had been operational for more than five years. A qualitative research methodology was used, with focus group discussions (FGDs) and in-depth interviews for data collection. Participants included members of cooperatives, Agritex officers, field officers from different organizations and management of cooperatives. The performance of smallholder cooperatives was analyzed using the New Institutional Economics (NIE) theories namely transaction cost economics, agency theory, collective action theory and property rights theory. From the outcome, it was found that the general consensus among all participants was that the cooperatives are not sustainable in their current state.
