St. Lucia intends to privatise its marketing and processing parastatals, and expects agricultural cooperatives to play a much greater role in value-adding. For most of St. Lucia’s agricultural cooperatives, this will require significant upgrading of their business activities and access to capital to finance value-adding assets. However, cooperatives that operate with traditional institutional arrangements find it difficult to raise significant capital owing to ill-defined property rights. This study examined the institutional, governance, group and management attributes of agricultural marketing cooperatives in St. Lucia and assessed their impact on value added. The objective was to make recommendations aimed at improving the ability of these cooperatives to create and sustain value-adding activities. 

A qualitative, multiple-case study approach was used to gather and analyse data. Four cooperatives with different levels of value-adding were purposefully selected for in-depth interviews. Three of the cooperatives were located in St. Lucia and one in Jamaica. The Jamaican cooperative was added to increase variation in value-adding activity. Theoretical propositions relating institutional, governance, group and management attributes to value-adding performance were tested against patterns observed in the data. 

The results indicated that all of the cooperatives studied had very conservative institutional arrangements that constrained their ability to finance and sustain value-adding activities. Analysis of the governance, group and management attributes revealed that value-adding performance was highest in the cooperative that marketed a single product, and low in the cooperatives that were unable to hold managers accountable for poor decisions and which had not benefited from grant funding. 
It was recommended that St. Lucia’s agricultural marketing cooperatives should hybridise their structure to alleviate free-rider, horizon, portfolio and control problems. This will require amendments to the Cooperative Societies Act allowing cooperatives to issue non-redeemable, tradable delivery rights and equity shares that carry limited or no voting rights if sold to non-patron members. It was also recommended that directors should retain the right to hire and fire managers, that managers should report to elected directors, that elected directors should retain a voting majority on the board, and that all elected directors should be nominated by shareholders. In addition, donor agencies should promote these governance arrangements in the cooperatives that they support