Co-operative Movement Moves into the Cities (1995)

   This document has been made available in electronic format
           by the International Co-operative Alliance.

   Inter-Press Service (IPS) Wire Reports on Co-operatives

        Co-operative Movement Moves into the Cities
                     Stephen Dale

Ottawa (IPS) - For most of this century, the co-operative
movement in central Canada has been associated with the basic
necessities of rural life and work: seeds, farm equipment, animal
feed and fuel.

But urbanisation, economic and population changes and the
pressures of globalisation have created some tough choices for
the old, well-established agricultural co-ops, and have pushed
new types of enterprises into the forefront of the co-op movement

The new inroads co-ops are making in urban areas result from the
decline of a once strong, diversified industrial economy, and the
need for human services - such as childcare, housing and health
- that governments are not providing, says Judy Goldie, Ontario
regional manager of the Canadian Co-operative Association (CCA).

"We're facing a real challenge in servicing all the requests for
information - our phone is always ringing," Goldie told IPS. "In
Ontario we've relied upon the growth of private industry, but
things have changed and communities are having to look at how
they can keep employment and the services they need."

New co-ops in the works or established in Ontario include one
geared towards creating youth employment, a business services
co-op providing support for small business, and "niche market"
consumer co-ops in areas such as organic foods and hiking

These inroads into new areas are matched by major changes on the
traditional, rural terrain. In 1994, a long period of financial
uncertainty led to the takeover of Ontario's network of rural
co-operatives - United Co-operatives of Ontario (UCO) - by the
foreign co-op giant Growmark of Chicago, in the United States.

At first, Ontario farmers reacted with nationalistic resentment
when this "multinational takeover" was proposed. But they soon
realised that pooling resources was the only way that the
faltering Ontario institution would be able to serve its members,
says Cathy Chamberlain, a long-time co-operative worker and a
seven-year employee of UCO, now Growmark's Canadian
communications manager.

"Of course, you will always get some anti-American sentiment,"
Chamberlain told IPS. "But the farmers are also sophisticated
business people who deal with the Chicago Board of Trade - they
buy and sell futures on the Chicago market - so there wasn't the
kind of resistance you might expect."

Chamberlain adds that Growmark's takeover of UCO was not the kind
of hostile buyout that routinely occurs in other parts of the
business world. Growmark bought all of UCO's assets (which pumped
new capital into the Canadian agricultural co-op) and the
Canadian member co-ops of the former UCO took out memberships in

That meant that the individual co-ops continued to be
locally-owned, and that Canadian co-op members could influence
Growmark's operations by having seats on its board.

Linking up with the Ontario co-op network added to Growmark's
status as "a major player" in North American agriculture, says
Chamberlain. Growmark now consists of 220 local supply and grain
co-ops, representing a quarter million farmers in the U.S. states
of Illinois, Wisconsin and Iowa, and the Canadian province of

Despite Chamberlain's characterisation of the take-over as "a
win-win kind of thing," there is some sadness that UCO, which
once enjoyed huge economic and political clout, would have to
seek foreign capital to save it. 

The UCO's lobbying arm, the United Farmers of Ontario (UFO), was
so strong earlier in the century that it formed the government
in Ontario between 1919 and 1923. The primary issue that led the
UFO into office was opposition to the military conscription of
farmers during World War One.

Apart from one term in office, however, the United Farmers did
not sustain itself as a broad political force. "Certainly, in
times of shared mutual concerns like ... conscription and the
depression, the farmers held together," wrote Stan Whiston in the
co-operative publication 'Cornerstone'. "During periods of
economic prosperity and without unifying issues, however, farmers
tended to drift away, to not support their organisations."

As economic players, Ontario's agricultural co-operatives fared
better, but by the early 1990s financial crisis led to a "massive
restructuring" including the sell-off of all of UCO's retail
stores and the merger with Growmark.

While farming co-operatives may have lost some of their influence
with the public, however, newer co-ops operating in
non-traditional areas have been offering a different public face
for the co-op movement in this part of Canada. 

You'll find large crowds most days of the week, for instance, at
the Mountain Equipment Co-op store, located in an upscale
residential neighbourhood Ottawa. On display are rows of hiking
boots, children's snowsuits, backpacks, canoes, kayaks,
dehydrated foods and many other items sought out by enthusiasts
of the great outdoors.

Deliberately left out of the inventory are any kinds of motorised
contraptions such as snowmobiles, motorboats or mountain bikes.
"All the gear is oriented towards the outdoor, self-propelled
experience," said manager Dan Paitich. "We feel the outdoors is
best experienced on your own, without a vehicle. Whether that
means kayaking, skiing, walking or whatever, is your own choice."

The Ottawa store is one of five Mountain Equipment outlets (the
others are in Vancouver, Calgary, Toronto, as well as the co-op's
mail-order operation). This small empire (employing 500 people
in its stores alone) began modestly 24 years ago when members of
the University of British Columbia Outing Club discovered they
couldn't buy the kind of equipment they wanted at stores. They
decided to pool their resources to buy directly from a
manufacturer to get a wholesale discount.

The enterprise grew to a point, says Paitich, where the club
could order stock in advance and open a retail store. They opened
more stores, and also started manufacturing their own equipment.
Most manufacturing is done in Canada, to return employment and
revenue to the community, but when orders are placed with foreign
manufacturers "we will travel to that country to see the facility
and to be sure that the labour standards are at the high end of 
what is expected in that country," says Paitich.

Mountain Equipment also financially supports environmental
projects: last year, for instance, it bought an island off the
British Columbia coast so it could be turned into a park rather
than logged. Paitich also says the equipment co-op attempts to
be democratic.

Each of the 720,000 co-op members can vote for board members, and
staff are encouraged to use co-operative means of dispute

While Mountain Equipment was founded on the typically Canadian
obsession with outdoor sports, many co-ops have benefitted from
the experience of other countries. Raoul Eluciens, Americas
Project director for the CCA, says that while once the CCA
provided assistance to foreign co-ops as a form of foreign aid,
now co-ops in the Canada are beginning to look south for lessons.

"Canadians have a lot to learn from other co-ops who have dealt
with economic problems long before our economic hardship began
in this country," he says. "For instance, we worked with co-op
banks in Argentina that experienced one thousand percent
inflation - and survived. In Canada, a few points fluctuation is
disaster. They can teach us a few things."

                                                October, 1995