Market power to the people

The world-wide co-operative movement is to be reviewed in September [2009] by the General Assembly of the United Nations, with a request the UN Secretary-General holds an International Year of Cooperatives.

In preparation Amine Lamrabat of the United Nations Global Alliance for Information and Communication Technology and Development has produced a Background Paper on co-operatives.

The International Cooperative Alliance (ICA) defines a co-operative as “An autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations, through a jointly owned and democratically controlled enterprise”.

The essence is control of production and rewards by the whole body of owner-workers, although there are local differences in achieving this goal. These organisations “aggregate the market power of people” who on their own might achieve little or nothing, inter alia providing ways of escaping poverty and powerlessness.

World-wide the number of co-ops is increasing, although Australia has gone against the trend. A Cooperative Society was founded in New South Wales in 1859 based on the 1840 British “Rochdale model”, but met its demise in 1986. Credit unions, however, remain alive and well. The British Cooperative Wholesale Society was established in 1863 and to this day is the country’s largest co-operative body, with more than 500 food stores, supermarkets and hypermarkets employing 35,000 workers, extensive funeral and farming interests, the second largest mutual assurance society with 35 million members, and a rapidly growing bank with two million customer accounts.

In contrast to Australia, New Zealand is a leading co-op nation. One in three of its population is in membership, as in Canada, Honduras, and Norway, compared with one in two in Finland and Singapore, and one in four in the USA, Malaysia and Germany. In terms of percentage of a country's Gross Domestic Product attributable to co-operatives, the proportion is highest in Kenya at 45 per cent, in New Zealand 22 per cent. Worldwide the sector has some 800 million members in more than 100 countries.

The ICA sets out seven co-operative principles: voluntary and open membership; democratic member control; member economic participation; autonomy and independence; education, training and information; co-operation among co-operatives; concern for community.

Lamrabat: “As the world today faces unstable financial systems, increased insecurity of food supply, growing inequality, rapid climate change and increased environmental degradation, it is increasingly compelling to consider the model co-operatives offer.”

Food

The World Bank estimates food demand will double by 2030 as the world's population increases. There is thus “an urgent need for developing countries to increase the output of food, yet, as the World Bank's 2008 World Development Report on Agriculture for Development has shown, the rural economy has been badly neglected”. Lamrabat encourages farmers to mobilise into co-operatives to gain better market access.

The number of such farmer bodies is increasing in most developing countries, with India's 100,000 dairy co-operatives making a significant contribution to food supply, although they “have yet to reach their full potential”. Co-ops account for 80 to 99 per cent of milk production in Norway, New Zealand and USA, 71 per cent of fishery production in Korea, 40 per cent of agriculture in Brazil.

Primary producers - farmers, fishermen and forestry workers - include some of the world's biggest co-operatives: one in the UK operating 400 markets on behalf of 65 market societies, through which 12,000 producers sell direct to consumers.

Lamrabat points out these organisations sometimes struggle in developing countries. A recent study of 450 in Tanzania and Sri Lanka found workers lacked access to loan finance to help them gain from new technology, training, and markets beyond their locality. Another challenge was the low level of participation by women in some agricultural co-ops, but Lamrabat suggests addressing this problem by creating women-only organisations.