Co-ops and Food Security: FAO's Perspective (July 1997)

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This document has been made available in electronic format by the
Committee for the Promotion and Advancement of Cooperatives COPAC
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                COOPERATIVES AND FOOD SECURITY 
                      FAO's Perspective 


Contents:

      World Food Summit Plan of Action and Cooperatives
      FAO and Cooperatives
      The Gender Dimension
      Training of Trainers for Cooperative Development
      Cooperative Capital Formation
      Cooperative Reconversion in Latin America
      Uganda
      Niger
      India
      FAO Assistance
      FAO Forest Trees and People Programme
      Emerging Farmers' Groups in Viet Nam
      Fertilizer Cooperatives

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World Food Summit Plan of Action and Cooperatives
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The World Food Summit Plan of Action stipulates that:

Governments, in cooperation with the private sector and non-
governmental organizations, will:

Foster the social and economic organization of the rural
population with particular emphasis on the development
of small-scale farmers', fishers' and foresters' cooperatives,
community organizations and development associations, so that rural
inhabitants may be actively involved in decision-making, monitoring
and evaluation of rural development programmes; 

* Promote the empowerment of small-scale family farmers, fishers
and foresters, both women and men, to set up their own cooperatives
and business undertakings, as well as farmers' and fishers'
financial and mutual institutions.

(Commitment Three, Objective 3.5)

The World Food Summit Plan of Action stipulates that:

Governments, in cooperation with the private sector and non-
governmental organizations, will:

* Foster the social and economic organization of the rural
population with particular emphasis on the development of small-
scale farmers', fishers' and foresters' cooperatives, community
organizations and development associations, so that rural
inhabitants may be actively involved in decision-making, monitoring
and evaluation of rural development programmes; 

* Promote the empowerment of small-scale family farmers, fishers
and foresters, both women and men, to set up their own cooperatives
and business undertakings, as well as farmers' and fishers'
financial and mutual institutions.

(Commitment Three, Objective 3.5)

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FAO and Cooperatives
--------------------

Addressing the NGO Forum for the World Food Summit in November
1996, the Director General of FAO stressed that today "everyone
recognizes that governments alone cannot solve the problem of food
security and if we are to make any progress we need the energy and
expertise that reside in civil society".

In FAO's view, as a generic term, "civil society organization"
embraces a vast, heterogeneous and multifaceted "set of relational
networks", and includes trade unions, self-help associations,
cooperatives, women's groups, development and advocacy NGOs, and 
informal groups alike. Given, however, this great heterogeneity,
priorities have to be set and FAO thus pays special attention to
membership-based, representative self-help organizations of
farmers, fisherfolk and foresters, in particular their genuine
cooperatives. These cooperatives, in spite of many failures and
shortcomings, are traditional organizations of mainly the poorer
segments of society which have the potential to play an important
role in developing a strong "social capital" in rural areas that is
regarded as a pre-requisite for food security and sustainable
development.

Converting these concepts into activities and outputs, FAO focuses
its cooperative assistance programmes on three technical areas:

     * design of national policies and strategies to enhance
cooperatives' role in development, emphasizing the need for synergy
and the economic efficiency gains to be derived from their
involvement in decision-making and programme implementation;

     * development and refinement of concepts and techniques for
coalition building and partnerships in support of rural development
and food security;

     * internal capacity building to make cooperatives, along with
other civil society organizations, equal and efficient partners in
development.
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The Gender Dimension
--------------------
The world over, statistics show that women's participation in
cooperatives is low, especially in rural cooperatives. Cooperatives
have tended to be synonymous with 'men's' cooperatives. But
importance of agricultural cooperatives in village life, and their
repercussions on food security through agricultural production,
processing and marketing, as well as on family life and on women's
chores, is too great for the exclusion of women from the decision-
making process to be accepted as inevitable.

Cooperative law often condones such discrimination by providing
that the head of the family attends meetings: the fact that the
wife is often de facto - or even de jure - head of the family is
not always seen as enough reason for her to participate. When
cooperative laws are revised, all provisions which make for gender
discrimination should therefore be weeded out to avoid aggravating
the problems faced by women in their attempts to be integrated into
the participatory cooperative structures.

In addition, with greater freedom to decide on the types of
business to conduct through a cooperative, the way is open for the
development of activities of specific interest to women such as
small cooperative mills, food storage and preservation, production
of household necessities like soap and clothing, small animal
raising and handicrafts. More stress should also be laid on
cooperatives' social function by organizing services which would
relieve women from certain of their tasks: child care services or
drudgery-reducing activities, or assist with organizing marriages
and other ceremonies.

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Training of Trainers for Cooperative Development
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FAO has initiated a new programme for training of trainers in
cooperative development. The programme aims at helping developing
countries transform their agricultural cooperatives into genuine
self-help organizations. The programme is developing a training of
trainers manual geared to encouraging greater membership
participation, improving management, and familiarizing political
and administrative decision-makers with new cooperative development
approaches. Topics covered include participatory learning and
action, effective communication, setting cooperative objectives,
mobilizing, financial and human resources, participatory planning,
monitoring and evaluation, cooperative management and negotiating,
lobbying and liaison capabilities of cooperatives.

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Cooperative Capital Formation
-----------------------------

Agricultural cooperatives in developing countries have been
particularly weak in mobilizing capital for investment purposes and
business growth. Many have been heavily dependent on outside
sources of concessional financing. With increasing privatization
and market liberalization, many of these external sources of
finance are disappearing and cooperatives now are faced with the
challenge of mobilizing their own capital.

In 1992, FAO, in collaboration with the Committee for the
Promotion and Advancement of Cooperatives (COPAC),
launched a special research programme with the objective of
identifying successful local strategies for capital formation in
agricultural cooperatives. Country studies were conducted in Kenya,
Guatemala and India in collaboration with a number of institutions
including the Finnish Cooperative Centre, the Kenya National
Federation of Cooperatives, the Federation of Savings and Credit 
Cooperatives of Guatemala and the Institute of Rural
Management at Anand, India, during the 1993-1995 period. The
initial findings from this research were then discussed at an
International Workshop on Capital Formation in Agricultural
Cooperatives held in Rome in November 1995.

Two outcomes of this activity have been the development of an FAO
guidelines booklet on Mobilizing Capital in Agricultural Service
Cooperatives which is now ready for distribution and the
initiation of a more detailed case study in Kenya comparing private
sector vs. cooperative capital formation and investment behaviour
in the coffee and dairy sectors. The latter research,
which builds upon the earlier Kenya study, was launched in March
1997 in collaboration with researchers from Nairobi University, the
Kenya National Federation of Cooperatives, Turku School of
Economics and Business and the Finnish Government. It is hoped that
the latter study will lead to a sub-regional workshop on this
important topic in East Africa and to more concrete and useful
recommendations for strengthening the self-financing and
investment capacities of agricultural cooperatives in the
sub-region.

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Cooperative Reconversion in Latin America
-----------------------------------------

The greatest challenge facing cooperatives in Latin America is
their 'reconversion' from a quasi-trade-unionist role to an
increasingly entrepreneurial role that more effectively meets
cooperative members' needs in the period of transition to market-
oriented economies. FAO has initiated a programme to promote this
process through strengthening the capacities of national       
cooperative confederations to assist their member cooperatives in
the participatory identification and design of investment projects
facilitating reconversions.

A special organizational unit for this purpose has been established
in the Cofederacion Intercooperativa Agropecuaria of Argentina 
which is already assisting  Argentinean cooperatives and 
is expected to extend this assistance to other MERCOSUR countries.
Similar units are being established within the Instituto                      
Nacional Agrario (INA) of Honduras for the                                                      
countries of Central America and within the Confederacion 
Nacional Campesina (CNC) of Mexico.

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UGANDA
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In Uganda, an FAO/UNDP Project (involving Ministry of Agriculture,
Animal Industries and Fisheries, Milk Marketing Cooperatives,
Associations, the Dairy Development Committee, WFP and DANIDA)
increased milk collection by the Uganda Dairy Corporation from 1.0
million litres per day in 1986 to 26.1 million litres in1992.
Further support to strengthen producers' groups in milk production
and marketing in the south of the country continued through FAO
Technical Cooperation Projects.

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NIGER
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Through an FAO/UNDP Project in Niger nearly 800 women, organized in
18 cooperative groups, were assisted with simple equipment for the
manufacture and marketing of traditional dried cheese "Tchoukou".
Profit per unit of cheese produced increased by 30% and total
production expanded significantly.

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INDIA
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India is perhaps the best example of cooperative empowerment of milk
producers.  Under the direction of the National Dairy Development
Board (NDDB), the Amul model of cooperative development was
introduced to  increasing numbers of rural milk producers. In the
Amul district, for instance, the number of producers participating
in 1970 was 180,000 in 700 cooperatives. In 1995 the corresponding
figures were 540,000 members in 950 cooperatives. Nationally the
dairy cooperative movement now caters for over 9 million producers
and India is on its way to surpass the US and become the largest
milk producer in the world.

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FAO Assistance
--------------
FAO has assisted in:

* Training of trainers in cooperative development in Ethiopia
(1996, ongoing) 
* Agricultural cooperative building and training in the North of
Thailand (1995-96) 
* Enhancing farmers' participation in cooperative development in
Tanzania (1996) 
* Strengthening cooperatives' role in horticultural development in
Madhya Pradesh, India (1995-96) 
* Developing a new cooperative system in agriculture in Vietnam
(1995, ongoing) 
* Organizing an international workshop on cooperative legislation
in China (1994) 
* Testing small group- and cooperative-based participatory training
approaches in collaboration with the Cooperative College, Moshi,
Tanzania (1992-95) 
* Developing new legal policies encouraging healthy independent
rural cooperative growth in Ethiopia, Guinea, Tanzania Vietnam and
India (1990-96) 
* Building sub-village self-help groups in the framework of its
People's Participation Programme in Ghana, Kenya, Lesotho,
Nicaragua, Pakistan, Sierra Leone, Sri Lanka, Tanzania, Thailand,
Zambia and Zimbabwe (1982, ongoing) 
* Organizing series of workshops on the problems and strategies of
the transformation of agricultural cooperatives in transitional
economies of Central and Eastern Europe (1992-95) 
* Strengthening the capital base of rural cooperatives in India,
Tanzania, Kenya and Guatemala (1993, ongoing) 
* Promoting cooperative "reconversion" programmes in the MERCOSUR
countries in Latin America (1994, ongoing) 
* Conceptualizing and applying the Systemes de gestion appropries
des cooperatives de petits exploitants agricoles(GACOPEA)■ training
approach in Burkina Faso (1996) 
* Strengthening the capacity of the Office de Developpement de la
Cooperation (ODCO) in Morocco (1996) 
* Organizing a national workshop on training of trainers in
cooperative membership development in Slovenia (1997) 
* Revitalising the Regional Network for the Development of
Agricultural Cooperatives in Asia and the Pacific (NEDAC)(1997)

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FAO Forest Trees and People Programme
-------------------------------------

FAO's Forest Trees and People Programme in Central America supports
different cooperative movements through the Comision Indigena
Campesina de Agro-Foresteria Comunitaria (CICAFOC) and their
affiliated organizations in Central America. Rotating funds, farmer
to farmer training and extension, and farmers■ research have been
the main areas of FAO■s technical assistance. The CICAFOC is now
recognized by the Consejo Centro Americano de Bosques (CCAB) as an
advisory committee through which farmers can present their
priorities and suggestions that can influence forestry policies.

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Emerging Farmers' in Viet Nam
------------------------------

A survey conducted in the framework of a recent FAO technical
assistance project in Viet Nam showed that many farm households
voluntary cooperative groups to provide  support services to their
members. These small groups, with an average of 18
members, include:

Water users groups composed of farm households, which undertake
joint management and maintenance of the irrigation system.

  * Joint liability groups, formed in order to gain
  access to bank credit. The individual farm
  households very often have no collateral. Group
  members jointly guarantee repayments.

  * Professional groups made up of farm
  households exercising the same profession:
  gardeners' associations, shrimp rearing groups,
  sugar cane plantation groups, hybrid maize
  groups, etc. These self-help groups try out new
  technologies, share the results of their
  experiences, process and market the products
  together, strengthen their bargaining position
  with private traders while negotiating prices and
  quality standards, and assist in setting up and
  developing specialized production areas.

  * Marketing groups bringing together input
  suppliers, producers and traders to ensure
  steady and timely delivery of produce, such as
  poultry, vegetables and dairy products. Groups
  have also been formed for off-farm activities
  such as tailoring.

  * Production groups, voluntarily formed by
  members who contribute labour and capital.
  Examples are rice milling groups, tractor groups
  for land preparation, fishing groups, animal
  rearing groups, afforestation groups, shops for
  input supply, artisans and handicraft groups for
  repair work, marketing of agricultural products,
  etc. In general, these joint production groups
  operate as small-scale enterprises and play an
  important role in employment creation and
  income-generation for members.

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Fertilizer Cooperatives
-------------------------

The Indian Farmers' Fertilizer Cooperative Limited (IFFCO) was
established in 1967, with the primary objective of increasing
agricultural productivity and improving the rural economy by
producing fertilizers and promoting the balanced use of these
fertilizers. It is a multi-unit cooperative - a federation of
approximately 30,000 societies from village to national level.
IFFCO has also established 174 Farmers Service Centres where
fertilizers, seed and agrochemicals are supplied under one roof and
where farmers receive technical advice on the use of these
agricultural inputs. The cooperative has far-reaching national
linkages with farmers, researchers, extensionists, the private
sector and government

Since 1992, IFFCO has launched an Integrated Plant Nutrition System
(IPNS) programme in response to the identified need for more
balanced nutrient application in Indian agriculture. The main
objective of the programme is to improve soil fertility and
productivity at farmers' level in order to increase agricultural
production and farmers' income.

FAO has been involved with the IFFCO IPNS programme since its
inception in 1992, regularly providing advice on various technical
aspects of its activities. A joint workshop on IPNS was organized
in September 1992 and in 1993 the cooperative launched a programme
trials and demonstrations to promote IPNS. FAO consultants visited
selected villages and established plant nutrient balance sheets for
those villages. As a result of those balance sheets, FAO has been
able to propose improved plant nutrient management techniques to
farmers in those villages, thereby improving their productivity and
fertilizer use efficiency and reducing nutrient losses to the
environment.

In April 1996, FAO agreed with the Government of India to finance
and provide technical backstopping to a Technical Cooperation
Programme (TCP) entitled "Development of an Integrated Plant
Nutrition System Methodology" In September 1996 IFFCO organized a
workshop for all its regional staff involved in balanced
fertilization and the IPNS programme throughout the country, as
well as university professors and experts from the Indian Council
for Agricultural Research (ICAR) and the Fertilizer Association of
India (FAI). In this workshop the results of the last six IPNS
campaigns were discussed and plans for future activities were
elaborated. The most significant of those future activities is an
International IPNS workshop which is scheduled for November 1997,
in which researchers involved in IPNS work from both the developed
and developing world will meet to share their experiences in this
area of work. Another important output of this TCP will be a
publication entitled "Guide for the Extension of IPNS in Asia and
India: The Indian Experience"

   * * * * * * * * * * * * * * * * * * * * * * * * * *

For further information, please contact:

Rural Development Division
Food and Agriculture Organization of the United Nations
Viale delle Terme di Caracalla
00100 Rome, Italy

Fax: +39 6 5225 3152

Web site:
http://www.fao.org/WAICENT/FAOINFO/SUSTDEV/ROdirect/ROhomepg.htm

July, 1997