The United Nations has declared 2012 to be the Year of the Co-op and around the globe people are celebrating. In fact, with 800 million members, cooperatives now employ more people than corporations worldwide. According to the UN, a co-op is defined 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 International Cooperative Alliance (ICA) estimates that the top 300 co-ops in the world account for over $1 trillion in economic activity annually. For instance, there are 49,000 credit unions in 96 countries, and in the
According to the 2009 UN Secretary General’s report titled “Cooperatives in Social Development, cooperatives “offer a model of enterprise that is particularly relevant in difficult economic times and instances of market failure. As a self-help group, a cooperative organization is widely accessible, especially for the impoverished and the marginalized. Where private enterprise or government is weak, particularly in remote rural areas, cooperatives enable local people to organize and improve their conditions.”
Humanity has come a long way since 1228 when Gruyere cheese makers in
Cooperatives have historically dominated agriculture in many parts of the world and are becoming an even more popular economic alternative today. For instance, the largest farmer co-op in West Africa—Kuapa Kokoo in Ghana—boasts over 45,000 members in 1,100 villages, and is a leading force in fair trade through its well-known Divine Chocolate. In
The first producer co-ops in the
Co-ops are part of the economic bedrock sustaining many people. For instance, in
Through cooperatives, farmers can achieve economies of scale, reducing cost for inputs and services, and also help level the playing field in commodity markets that are often dominated by corporate cartels. Farmers are stuck as “price takers,” but co-ops give them a better chance at receiving a parity price and a living wage for their efforts. Pooling one’s economic power with others is always a good strategy to leverage fresh assets, reach new markets, and ultimately alleviate poverty. As the picket signs proudly carried by Union Cab drivers during the 2011
Of course, these ideals are not always reflected in practice, which is why it is so important to hold cooperatives accountable for their behavior. Members bear the biggest burden when it comes to defending co-op integrity. As the 2009 UN report notes, “A vigilant membership base, bound by the democratic one member/one vote principle, is essential to addressing weak or unethical management…. The sound governance of cooperatives depends upon a well informed and active membership base.” In the case of the
In the early 20th century many co-ops were attacked by corporate competitors under the 1890 Sherman Anti-Trust Act, claiming that “marketing in common” was an illegal form of trade restraint. Farmers and their allies mobilized and soon won passage of the Capper Volstead Act in 1922—the Magna Carta for co-ops—that basically gave them the same right to collectively bargain enjoyed by private companies and labor unions. Under Capper Volstead, though, there are some specific rules cooperatives must fulfill in order to enjoy their exemption from anti-trust enforcement, including that the co-op must produce agriculture products (not just process them), that the majority of revenue must stem from production by the co-op’s own members, that the co-op must operate for the mutual benefit of its own members (not just be serving the interest of others), and that the co-op cannot conspire with other non-member entities to engage in illegal market activities (like price fixing).
Unfortunately, as most farmers can tell you, there are co-ops in the
Similarly, Crystal Sugar has crawled into bed with Monsanto with its heavy-handed lobbying for RR sugar beets and is now engaged in a vicious union busting campaign, having locked out 1,300 workers at 5 processing plants in the
There are other serious challenges facing today’s co-ops. One threat is demutualization, a fancy term for basically opening the doors for a takeover of a co-op (and its assets). This happened to Minnesota Corn Processors, lauded as part of a new wave of farmer co-ops, but then sold out and gobbled up by ADM in 2002. Governments, corporations, and multilateral institutions like the IMF often see co-ops as “cash cows” for liquidation and/or privatization. Another problem comes with the profit-driven corporate mentality that can pervade co-op managers. Rather than looking out for their own members, they prefer to grant themselves bloated compensation packages and guarantee hefty dividends for their outside investor friends. Other countries have rules limiting such abuses. For instance, within the Mondragon co-op federation in
A true spirit of cooperation valorizes a deeper belief in the human capacity to care about others and there are all sorts of reasons to be part of growing the cooperative movement. For example, you’ll save more as a consumer and earn more as a worker, since there is no middleperson siphoning off the surplus. Being a member of a co-op also makes you an owner and that gives you a democratic voice in determining its future trajectory. Your chances of falling victim to such capitalist “market failures” as overseas outsourcing, environmental contamination, and workplace exploitation are much less. Many people also appreciate the opportunity to foster social change as part of a broader cooperative community. When you join a co-op, you’re not just a hapless farmer, mindless consumer, or throwaway worker anymore—you’re part of a living breathing vibrant alternative to business as usual.
In 1844, the Rochdale Pioneers in
1st Principle – Voluntary and Open Membership. Cooperatives are voluntary organizations open to all persons able to use their services and willing to accept the responsibilities of membership, without gender, social, racial, political, or religious discrimination.
2nd Principle – Democratic Member Control. Cooperatives are democratic organizations controlled by their members, who actively participate in setting their policies and making decisions. Men and women serving as elected representatives are accountable to the membership. Cooperative members have equal voting rights (one member/one vote) and cooperatives at other levels are also organized in a democratic manner.
3rd Principle – Member Economic Participation. Members contribute equitably to, and democratically control, the capital of their cooperative. Part of that capital is the common property of the cooperative. Members usually receive limited compensation, if any, on capital subscribed as a condition of membership. Members allocate surpluses for any or all of the following purposes: developing their cooperative, possibly setting up reserves, part of which would be indivisible; benefiting members in proportion to their transactions with the cooperative and supporting activities approved by the membership.
4th Principle – Autonomy and
5th Principle – Education, Training and Information. Cooperatives provide education and training for their members, elected representatives, managers, and employees so they can contribute effectively to the development of their cooperatives. They inform the general public—particularly young people and opinion leaders—about the nature and benefits of cooperation.
6th Principle – Cooperation. Cooperatives serve their members most effectively and strengthen the cooperative movement by working together through local, national, regional, and international structures.
7th Principle – Concern for Community. Cooperatives work for the sustainable development of their communities through policies approved by their members.
John E. Peck is the executive director of Family Farms Defenders.