II. Cooperatives, Change and Capital

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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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                    REPORT OF THE MEETING
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II.   COOPERATIVES, CHANGE AND CAPITAL 

What are the implications of these changes?  How do they
affect farmers and their cooperatives?  What is to be done?
What are cooperatives actually doing? What success have they
had? 
 
For those who see farming as "a way of life" as well as a
business, for those who value rural communities and
traditions, and for those who look at national and regional
food production and security as strategic imperatives, the
changes taking place must raise a few questions. 
 
The implications are global; the process is at an early stage,
and the effect will be differentiated according to the type of
agriculture practised and the cultural, political, economic,
legislative, fiscal and monetary environment in each country
or region. 
 
In the free-market industrialized countries, independent
farmers will have to compete even harder to survive. 
Competing often means mobilizing common interest, utilizing
well-tried cooperative organizational techniques to set up
structures owned, controlled and used by farmer members.  It
means yet one more challenge to the solidarity and ingenuity
of the members of farmers' cooperatives.  
 
Competing also means adopting leading edge technology, and
investing in the new wave of bio-technological production,
which can be expensive business.  Those cooperatives
successfully competing at the leading edge have a valuable
role to play in advising other farmer cooperatives on how to
succeed, so that the new value-added may extend downstream
beyond the farm-gate of ownership control, rather than allow
the intrusion of powerful non-farmer investor interests into
the countryside. 
 
Speaking at the COPAC Open Forum on Cooperatives and Farmers'
Organizations, held at the World Summit for Social Development
in Copenhagen in March 1995, the President of the
International Federation of Agricultural Producers (IFAP), Mr.
Graham Blight, warned farmers that they had better cooperate,
or they would lose out to the new powerful threats on the
horizon of the farm. 

Some regard capital as the "Achilles' heel" of cooperatives. 
According to these, the current challenge facing farmers and
their cooperatives is to mobilize enough funds to meet the
growing demands of capital-intensive investment in leading
edge technology.  Either farmers generate enough funds to
acquire and use it or they are simply forced out of business. 
 
But as was pointed out in plenary sessions of this technical
meeting, farmers and their families, including women farmers,
have an astonishing power to rally their collective energies
and mobilize capital when they have a strong common interest,
a market opportunity and a threat to counter.  The history of
the cooperative struggle in Europe, the Americas and parts of
Asia is filled with references to this. 
 
Authentic cooperatives are born out of such challenges, and
are strengthened by them.  To give a relevant early example, a
flood of cheap imported foodstuffs depressed farm prices in
the middle of the last century in Europe, particularly
Germany, producing rural misery.  But this also served as a
stimulus to mobilizing capital through popular participation
which ultimately led to the establishment of farmer-owned
savings, credit and purchasing cooperatives that became the
foundation of the Raiffeisen movement. 
 
Statistics showing that farmers' cooperatives are now
increasing their market share in input and output trading in
the USA formed part of Professor Michael Cook's interesting
exposition of how agricultural cooperatives have developed in
the United States.  Of particular note was the news regarding
the recent establishment of a "new generation" of agricultural
cooperatives which have developed innovative and up until now
successful methods for mobilizing member capital so they can
compete in their rapidly changing agricultural markets.  
 
It is encouraging to learn of the resurgence of agricultural
cooperatives in the United States.  But what are the
implications of the new high-tech, capital-intensive
investments for European farmers and their cooperatives, for
those in the CIS, for those in Latin America, Africa, Asia and
other regions? 
 
In many developing countries, the impact of these changes is
closely related to the degree of government financial support
and/or control that was exercised in these countries in the
previous era of subsidies and direct promotion.  In many
cooperative movements in developing countries a kind of
"winnowing process" is now underway: those that cannot stand
without taxpayer support will go under, while those that
promote member commitment through the provision of useful
member services will survive and should thrive.