Aquaculture farmer organizations and cluster management: concepts and experiences

3.1.1 Informal organizations 
Informal organizations are unregistered FOs that have no legal rights, and they are 
how most FOs start off. FOs will only register once the benefits of doing so outweigh 
the additional costs that come with registration; for example, the Samroiyod Shrimp 
Farmers Cooperative in Thailand, introduced in Case Study 1 (Box 2), was an informal 
unregistered farmers’ organization for a whole year before its members decided to 
register with the Department of Cooperative Promotion. The Surat Thani Shrimp 
Farmers Club, introduced in Case Study 2 (Box 3), has remained unregistered as an 
informal club for 20 years to avoid the costs of having to follow government rules and 
regulations. In some countries, the laws governing FOs are poorly specified or require 
an inappropriate structure for small-scale producers,
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providing farmers with little 
incentive to register their organizations. Registration can be a disadvantage if an FO is 
competing with informal traders in an unregulated informal market (e.g. if FOs have to 
pay tax when their competitors do not). However, without registration, FOs can have 
12
This chapter draws on Part II of Oxfam’s guide to producer organizations: 
Producer organizations: 
A guide to developing collective rural enterprises
(Penrose-Buckley, 2007). 
13
For example, in Viet Nam, cooperatives are the only legal structure for collective business, but 
cooperatives have a lot of rules and regulations that are not suitable for small enterprises (Penrose-
Buckley, 2007).

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Aquaculture farmer organizations and cluster management – Concepts and experiences
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problems accessing market services (such as bank credit or technical assistance) and 
can be seen by potential business partners as being less credible than other FOs that 
are registered (Penrose-Buckley, 2007), and experience has shown that, in the long-run, 
FOs are less likely to be sustainable if not formally registered.