Cooperatives at work
What is a cooperative? “The cooperative movement is one of the largest or-
ganised segments of civil society, and plays a crucial
A cooperative is an autonomous association of
role across a wide spectrum of human aspiration and
persons united voluntarily to meet their com-
need. Cooperatives provide vital health, housing and
mon economic, social and cultural needs and banking services; they promote education and gender
aspirations through a jointly and democrati- equality; they protect the environment and workers’
cally controlled enterprise. rights. Through these and a range of other activities,
they help people in more than a hundred countries
As self-help organisations, cooperatives in better their lives and those in their communities.”
both developing and developed countries —United Nations Secretary-General Kofi Annan
help raise the income and employment pros-
pects of its members. The strength and reach In what industries and sectors do you find cooperatives?
Though the list is a long one, there are farmers’ and agri-
of cooperatives are illustrated by the success cultural cooperatives as well as banking and insurance
of both small and large scale farmers in India cooperatives in just about every country. Credit unions
who help 11 million families earn part of their provide over 123 million people with access to safe savings,
affordable credit, and a chance to plan for the future. There
income from dairy cooperatives. In Africa, cocoa are also fisheries and retail cooperatives. Cooperatives can
and coffee growing cooperatives, which have provide housing and even internet access for members
and can also provide health care and other social serv-
a considerable export market, re-invest profits
ices for a community. Cooperatives also provide utilities in
in their communities to obtain potable water, many countries, such as water and electricity. The coopera-
sanitation facilities, and resources for local vil- tive form of business has easily adapted to many areas that
range from tourism to textiles to transportation.
lages. Cooperatives are also multi-billion dollar
businesses, such as Sunkist and Ocean Spray, What unites cooperatives representing many sectors all
over the world?
as well as self-organised artisans and rural
Despite the diversity of cooperatives across industries and
farmers. The Associated Press, one of the old- regions, the movement is united by a few shared values
est cooperatives, employs 3,700 people and and principles. In summary form, these principles are:
provides current news to 121 countries in five 1. Voluntary and open membership
languages. Thus cooperatives can be a source 2. Democratic member control
3. Member economic participation
for information, credit, food, social protection,
4. Autonomy and independence
housing, and job creation.
5. Education, training and information
6. Co-operating among cooperatives
7. Concern for the community
Who are members of cooperatives? obtain production inputs and build marketing capacity.
The first of the seven principles of cooperatives is volun- Consider the fact that over 50 per cent of global agricul-
tary and open membership. Cooperatives are membership tural output is marketed through cooperatives.
driven organisations that anyone may join and their work
and their services offer a great deal to society as a whole. Cooperatives have also proven to be a useful tool in com-
The United Nations estimates that 800 million people are bating social exclusion and fostering community cohesion.
members of cooperatives and 100 million are employed by As local participation and inclusion are central to poverty
them, though cooperatives play a vital role in the lives of reduction, co-ops often take into account the needs of the
many more. weakest and less privileged people in society.
Human development is essential for the prosperity of
“Cooperatives empower people by enabling even any community. Targeted training and social develop-
the poorest segments of the population to partici- ment measures provided by cooperatives prevent new
pate in economic progress; they create job oppor- poverty that may result from the modernization and
restructuring of an economy. As people continue to accu-
tunities for those who have skills but little or no
mulate economic advantages, they are less likely to slip
capital and they provide protection by organising
back into poverty. Cooperatives are a force that helps to
mutual self help in communities” ensure that people from all income levels are included in
—Juan Somavia, the long-term growth of vibrant national economies. They
Director-General, International Labour Organization represent local solutions to the challenges created by a
rapidly globalizing world.
Do cooperatives help reduce poverty? What is the role of government regarding cooperatives?
Cooperatives contribute to economic and social develop- Governments should adopt policies and a legal frame-
ment in both developed and developing countries. Though work that support cooperatives and are consistent with
the value which a cooperative contributes to society differs their nature and values. The institutional environment
depending on its individual objectives, cooperatives play a should provide for a rapid, simple and affordable reg-
role in finding solutions to unemployment and promoting istration process of cooperatives. To achieve the most
technical skills. Members are able to assert greater control effective policies, governments should consult coopera-
over their livelihoods and meet their everyday needs, espe- tive and workers’ organisations when drafting or revising
cially in rural areas where jobs are scarce and basic services legislation or regulations that affect the work of members
are often weak. and the capacity of co-ops to create employment and
income. For example, in some countries, notably Uganda
For example, credit cooperatives can be positioned as part and Ethiopia, cooperatives are contributing to the design,
of a country’s overall poverty reduction strategy by pro- implementation and monitoring of the national Poverty
viding financial services to those who do not have access Reduction Strategy Papers.
to them and by establishing an entrepreneurial climate
where small businesses can flourish. A water cooperative in Though it is important to remember that cooperatives are
a remote city of a million people in Bolivia has been cited as autonomous organisations controlled by their members,
one of the best run water companies in Latin America and governments should promote the growth and viability of
has served as a model in efforts to provide safe drinking cooperatives by facilitating access to investment finance
water. Agricultural cooperatives can give producers clout and credit, as well as to training, and should enter into part-
in an increasingly competitive market and can help them nerships with cooperatives where appropriate.
Sources:
“Promoting Co-operatives: A Guide to ILO Recommendation 193”. Published by the Co-operative College for the Department of International Development,
Manchester, UK, 2004.
“Making a Difference: Co-operative solutions to Global Poverty”. Edited by Andrew Bibby and Linda Shaw. Published by the Co-operative College for the
Department of International Development, Manchester, UK, 2005.
[Link]
[Link]
UK Department for International Development:“Things you probably didn’t know about co-ops” at [Link]
Produced by the United Nations Department of Public Information