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Cooperatives as Business Models of the Future

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  • Dan Clore
    News & Views for Anarchists & Activists: http://groups.yahoo.com/group/smygo http://www.ipsnews.net/2012/11/cooperatives-as-business-models-of-the-future/
    Message 1 of 1 , Nov 27, 2012
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      News & Views for Anarchists & Activists:

      Cooperatives as Business Models of the Future
      By Thalif Deen
      Three members of the Verapaz egg farm cooperative in El Salvador, with
      one of their daughters. Credit: Edgardo Ayala/IPS

      Three members of the Verapaz egg farm cooperative in El Salvador, with
      one of their daughters. Credit: Edgardo Ayala/IPS

      UNITED NATIONS, Nov 26 2012 (IPS) - When the International Year of
      Cooperatives (IYC) concluded last week, some of the overwhelming success
      stories highlighted at a two-day interactive session came both from
      developing and developed countries, including India, Brazil, China,
      Kenya, Rwanda, Ethiopia, Italy, France and the United States.

      As Dame Pauline Green, president of the International Cooperative
      Alliance, pointed out, two of the largest domestic agricultural food
      businesses in India – the Indian Farmers Fertilizer Cooperative (IFFCO)
      and the Gujarat Cooperative Milk Marketing Federation (widely known as
      Amul) – are both highly successful cooperative business models.

      Amul, which is owned by over three million small dairy farmers, mostly
      women, has helped elevate India as the world’s largest milk producer.

      And last month, IFFCO partnered with Coop Federee, a major agricultural
      cooperative in Canada, to invest in a hefty 1.3-billion-dollar joint
      transnational cooperative venture for a fertiliser plant in Quebec.

      In Brazil, Green said, a clearly defined government policy aimed at
      helping rural people, through cooperative businesses, has seen a massive
      reduction in poverty in the rural areas of the sprawling South American

      In Kenya, cooperatives account for nearly half of the country’s gross
      domestic product (GDP), while in Rwanda the cooperative economy has gone
      from zero to eight percent of GDP over the last 10 years.

      “The cooperative model of business could be a valuable tool in building
      sustainable, grassroots agricultural businesses in Africa,” she added.

      In Italy, she pointed out, about 90 percent of the production of
      parmesan cheese comes from cooperatives, while nearly all of the
      champagne produced in France is the result of cooperatives.
      A Roadmap for the Future

      Asked what next for post-IYC, Felice Llamas, focal point on cooperatives
      at the U.N.'s department of social policy and development, told IPS that
      U.N.-related action on cooperatives will be guided by the proposed
      International Plan of Action for 2012 and Beyond.

      Into the short and intermediate terms, this plan will serve as a
      preliminary roadmap for coordinated activities and policies concerning

      "This instrument is crucial as it will maintain the momentum of IYC by
      sustaining collaboration among the full spectrum of stakeholders - from
      member states and cooperatives, to academia and civil society
      organisation," she said.

      Over the longer term, she said, the U.N. anticipates that cooperatives
      will continue to grow, not only in terms of business and public
      visibility, but in regards to policymaking.

      Asked if cooperatives will find a place in the U.N.'s post-2015 economic
      agenda, Llamas told IPS that cooperatives are viewed as crucial
      participants in any economic development agenda, and "we will work to
      have cooperatives included in the UN's post-2015 plans."

      To this end, the proposed Plan of Action will seek to align cooperative
      objectives and action on this front with those of the U.N. and its
      specialised agencies.

      "Now that cooperatives are widely recognised as crucial to people
      empowerment, employment generation and social protection, they will have
      an increasingly significant role to play in the future," she added.

      It is foreseen that in addition to the U.N.'s Department of Economic and
      Social Affairs, specialised agencies such as FAO, the International
      Labour Organisation (ILO) and the U.N. Development Programme (UNDP),
      among others, will continue to guide and coordinate action on
      cooperatives within the context of their specific fields.

      Currently, youth unemployment and food security are major priorities, so
      the U.N. agencies will provide the necessary support so that
      cooperatives can effectively direct efforts to address these issues.

      And in the United States, Ocean Spray, described as one of the world’s
      largest cranberry producers, registered a 20-percent increase in sales
      last year.

      The world’s largest 300 cooperatives, primarily in the insurance and
      food and agriculture sectors, generated revenues of 1.6 trillion dollars
      and employed nearly 100 million people worldwide.

      Asked if the cooperative model of enterprise may well be one of the
      answers to the global economic crisis, Green told IPS, “Without doubt
      the cooperative business model offers a proven solution to this global
      economic crisis we are mired in.”

      She pointed out the important role cooperatives have played in building
      economic prosperity in Brazil, Russia, India and China (known, along
      with South Africa, as the emerging new coalition BRICS).

      But in troubled regions like the Eurozone, cooperatives have also
      demonstrated that generally they are more resilient to the downturn than
      non-cooperative businesses, while cooperative banks are actually
      protecting against market failure.

      “Moreover, we are seeing cooperatives choosing to release surplus
      capital rather than sack people in difficult markets like Spain,” Green

      In Spain, the Mondragon workers cooperative has seen its members vote
      for two years running now to take pay cuts rather than lose people.

      “It’s a recognition of the value of human capital in business. All of
      this in fact means that cooperatives are sustainable businesses and
      supporting and promoting them will help ensure we can climb out – and
      stay out of the financial crisis in which so much of the world once
      again finds itself,” Green said.

      In a statement released here, U.N. Secretary-General Ban Ki-moon said
      there continues to be a hunger for policies and approaches that address
      social and economic goals that go beyond a one-dimensional bottom line.

      As a strong partner in development, Ban said, the cooperative movement
      works with the United Nations every day to empower people, enhance human
      dignity and help achieve the Millennium Development Goals (MDGs), which
      include the reduction of extreme poverty and hunger by 50 percent by 2015.

      The theme of 2012 World Food Day, commemorated on Oct. 16, was
      “Agricultural Cooperatives – key to feeding the world.”

      According to U.N. figures, the number of hungry people worldwide has
      been estimated at nearly 870 million.

      Jose Graziano da Silva, director general of the Food and Agriculture
      Organisation (FAO), said “cooperatives hold a key to feeding the world,
      but so do governments, civil society and private sector (in order) to
      achieve food security for all. We all need to work together.”

      In its declaration presented to the United Nations, the 2012
      International Summit of Cooperatives, held in Quebec City, Canada last
      month, reinforced “the amazing power or cooperatives”.

      Pointing out that the cooperative sector is pervasive, Green told IPS
      that far from just being restricted to agriculture and farming,
      cooperatives touch every part of business.

      Insurance, banking, health, housing, retail and education are all
      sectors which have strong cooperative components.

      In the UK, she said, schools have become one of the fastest-growing
      parts of the cooperative economy.

      “Renewable energy cooperatives have been springing up all over the
      globe, and of course media is another area which benefits from the
      cooperative model because it ensures independent journalism remains
      viable,” she noted.

      In the northern part of Italy, social cooperatives are a significant
      feature of the regional economy where people with a disability, whom
      would otherwise be reliant on the state for support, or be part of the
      long-term unemployed, are starting and successfully running their own

      Asked about the future, Green said: “We will of course be working
      closely with the UN to ensure that cooperatives are a key piece of its
      proposed 2015 economic agenda, but every indication from this meeting
      has been that cooperatives are ready and willing to enhance their
      engagement, and that the U.N. not only wants but needs us too.”

      Dan Clore

      New book: _Weird Words: A Lovecraftian Lexicon_:
      My collected fiction: _The Unspeakable and Others_
      Lord Weÿrdgliffe & Necronomicon Page:
      News & Views for Anarchists & Activists:

      "From the point of view of the defense of our society,
      there only exists one danger -- that workers succeed in
      speaking to each other about their condition and their
      aspirations _without intermediaries_."
      --Censor (Gianfranco Sanguinetti), _The Real Report on
      the Last Chance to Save Capitalism in Italy_
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