Book Review: The World of Co-operative Enterprise 1994

    ----------------------------------------------------------
    This document has been made available in electronic format
         by the International Co-operative Alliance ICA 
    ----------------------------------------------------------
                         June 1994

                   ********************
                       Book Review
                   ********************

          The World of Co-operative Enterprise 1994
          *****************************************


Published by the Plunkett Foundation, 190 pages, price 14.95.
reviewed by Keith Brading


The World of Co-operative Enterprise 1994 is published by the
Plunkett Foundation at a time when interest in co-operation is
stirred by the celebration of significant anniversaries. The
150th anniversary of the opening of the Rochdale Pioneers'
store in Toad Lane, the centenary of the Irish Co-operative
Organisation Society and the 75th anniversary of the Plunkett
Foundation itself all occur this year in the UK.

The temptation to contemplate the past has been rightly
resisted by Plunkett. This year's publication is totally
concerned with the present position and future prospects
within the various co-operative sectors. At a time when the
different types of co-operatives are becoming more aware of
similar interests and shared problems, the work of the
Plunkett Foundation, with its world-wide involvement with
co-operatives, assumes greater relevance. This is reflected in
The World of Co-operative Enterprise which, describing the
position of co-operatives in different sectors and in
different countries, brings out their many common interests
and problems. The search by co-operatives for means of
enhancing their capital position is reflected in almost every
article. This in turn leads to expressions of views on
co-operative values and principles - views which in some cases
appear almost directly opposed.

In his concise, positive article "The Future of Co-operative
Banks", Terry Thomas envisages a search for a vehicle, e.g.
preference shares, whereby capital can be raised in the open
market. G. Ravoet, on the other hand, in "The Challenge Facing
European Banks" avers "it is crucial to remember that, by
nature, the capital of co-operative banks is not open to
outside investors". Clearly there is here, as in other
attitudes revealed in this publication, much to discuss. The
Plunkett Foundation serves all co-operatives by allowing the
differences to be brought to light.

Global Perspectives
*******************

The World of Co-operative Enterprise contains 25 Articles,
grouped according to their relevance for the future of
co-operatives globally, in regions overseas, and the United
Kingdom. The first article is by Lars Marcus, President of the
International Co-operative Alliance, whose work has become
increasingly important particularly following the collapse of
command economies in former communist countries. The ICA's new
structure, objectives and main challenges are discussed. The
first challenge concerns the current approach to co-operative
values and principles. The second is the economic challenge
and the urgent need to improve co-operative economic
efficiency and competitiveness. Marcus also comments
significantly "the issue of capitalisation is, like most
economic issues, ultimately linked with co-operative values
and principles. No matter what imaginative financing
programmes are developed ... success will depend in the final
instance on the link between the co-operative and its members.
Co-operatives which have maintained a strong membership base
will be able to first turn to this source of capital, as well
as for other forms of support. But those which have neglected
this base ... can be expected to have much greater
difficulty".

The second article by Dr Hans H. Muenkner is a perceptive
presentation of recent developments and problems among
different types of co-operatives and the legislation running
them. His arguments and conclusions will be of great relevance
and help to co-operators and legislators in those countries
where co-operators are making improvements in their
legislation.

These first two articles should be regarded, in my view, as
essential reading for all serious co-operators. The remaining
twenty-three also provide valuable information and ideas which
make an enormous contribution to co-operative knowledge and
thought. Not one of them should be missed by those with an
interest in co-operatives.

"The Co-operative Role in Travel and Tourism" by R.M. Grindrod
will, I believe, provide an original insight into the travel
"industry" and its problems - its rapid and continuing growth,
with implicit changes for the existing environment and
cultures in or near the most popular tourist destinations. The
size of the industry and its importance in the economies of
many countries is also an important factor. Mr Grindrod's
interesting articles gives some reassurance, and cause for
some pride, that the co-operative travel sector sees itself in
the vanguard of the movement seeking proper control of the
delicate balance between environmental needs and the damage
tourism can do.

Lord Plumb's article "Agricultural Co-operation in a Changing
World" is one of the most important, giving an authoritative
account of the factors shaping the future of agricultural
co-operatives. He considers the problem involved in the
deployment of  "outside" capital and calls for a "more even
balance" between the various "stakeholders" in the
co-operative enterprise including primary producers and
providers of capital, professional managers, consumers and
workforce. "Legislation" writes Lord Plumb "which does not
provide for a fair even balance between these groups only
drives co-operatives to use ways of securing a corporate
identity which are outside the established co-operative laws".

"The Dual Origins of Producer Co-operatives" by Y. Regis,
Chairman of the French Association of Producer Co-operatives,
is a lively account of the formation and growth of new types
of producer/worker co-operatives especially in China and the
East. He also comments realistically upon co-operative values
and principles.

Overseas Reviews
****************

The second group of articles includes important pieces on
co-operatives in Europe. The Netherlands co-operatives
dominate the milk and dairy industries and are substantially
involved in other agricultural interests. Those involved in
these fields will find much of interest in G. Van Dijk and C.
Mackel's closely- reasoned article on European Agro-Food
Industries where the effect of contemporary changes in
structures, marketing, consumer influence, etc., are
convincingly set out.  The suggestion is made that in certain
circumstances the traditional structure of co-operatives is
nearing the end of its useful life.

Also in this group is an article on US agricultural
co-operatives which paints a fairly optimistic picture of
their present and developing condition. In Canada, too, the
country of many initiatives and successful development in
co-operative organisation, the future is faced confidently.
But here too, in M. Doray's article, is the prominent
suggestion that competition, international standards, more
demanding members and ever- advancing technology will require
more capital; and that we need to revise our philosophy and
find ways to reconcile democracy and a capitalization. In the
process, says M. Doray, we will have to acknowledge the
importance of capital.
Further funding is also being actively considered among Irish
co-operatives. The Director General of the Irish Co-operation
Organisation Society Ltd., provides a perceptive analysis of
the factors which impose the need for change in the mainly
agricultural co-operatives in Ireland - applicable in other
sectors and other countries. He refers in particular to the
co-operatives' vulnerability to take over attempts because of
the conflict of interests between the inactive and the active
shareholder.

J. Wesierski on Farmers Co-operatives in Poland provides an
optimistic picture of co-operative development since 1989 - in
which the Plunkett Foundation has played an important part.
"The Growth of Farmers' Co-operative Development in the New
Independent States" reveals the more severe difficulties for
co-operative development in the former USSR. Many have their
roots in history, as much as in the collapse of the communist
economy, but there are hopeful signs that true co-operatives
are beginning to emerge.

Articles about Nigeria and Bangladesh carry a somewhat
depressing picture of co-operative development and raise the
question of whether the structures of conventional
co-operatives on the western model are the most appropriate
for other cultures. In Nigeria the problems are aggravated by
excessive bureaucracy, incompetent management and, not
infrequently, sheer dishonesty. In Bangladesh the question is
not so much the future of co-operatives, but rather how can
even a small start be made to alleviate extreme poverty,
illiteracy and ignorance.

W. Wentzel, on co-operatives in South Africa, brings out
forcibly the past difficulties for co-operatives brought about
by racial segregation and discrimination, and the fierce
competition from capitalist organisations. More co-operation
among co-operatives is likely to bring more hope to the
future, according to Mr Wentzel who also stresses the
importance of research, development and educational
programmes. Certainly a strong co-operative movement with
roots in impoverished black communities should aid economic
growth and political stability in the crucial period ahead.

Developments in the UK
**********************

The third group of articles focuses attention on the UK. Ted
Stephenson devotes much of his article to the CWS - rightly in
my view, as I believe the future of the retail co-operative
movement may depend on the attitudes and policies of that
society. Stephenson believes that to assume a merger of CWS
and CRS would put co-operative trading in the topmost rant of
British retailing  would be a mistake. He explains his belief
with what is, in my view, a powerful analysis of the issues.

M.J. Sargent's "The Chequered Career of UK Agricultural
Co-operation: A Continuing Story?" gives an interesting and
fairly comprehensive picture of the matters to be addressed by
the agricultural co-operatives, and if readers then return to
Van Dijk and Mackel's article on European Agro-Food Industries
and study both articles together, they will be very well
briefed on the purpose and needs of agricultural co-operatives
and their members, and impressed by the general coincidence of
views which emerges.

Housing co-operatives and the UK have had a particularly
difficult time in the past three years or so - partly through
the failure of the co-operatives themselves to give full
support to their representative body. Andy Brittan's article
explains convincingly the circumstances which now face housing
co-operatives of several sorts. His conclusion appears that
self-build housing co-operatives represent the best ray of
hope. It is to be hoped, however, that an increase of
"co-operation among co-operatives" may give strength to this
sector as a whole.

The articles on Worker Co-operatives and Credit Unions each
convey an almost ebullient optimism for the future. These
sectors do indeed present a success story. They are virtually
the youngest, but in a very short time each is showing a
capacity for growth which all co-operatives must find
encouraging. Each sector recognises the need for strategies to
be promoted to proclaim to the government, the media, and to
the public the uses and virtues for which they stand. Each
also recognises the need for efficiency and appropriate
expertise.

The concluding article by Lord Carter, Chairman, UK
Co-operative Council, summarises the role of the UKCC and some
of the valuable work it is engaged upon in the interests of
the co-operative sector. Much needs to be done and a valuable
contribution is provided by the Plunkett Foundation, not least
by this present collection of articles.

In his article already mentioned, Ted Stephenson expresses the
view that "survival depends upon re-thinking many long-held
assumptions and upon a reappraisal of every aspect of
co-operative activity". He is referring to the important
retailing sector, and goes on to say "innovative thinking
within the broad framework of co-operative ideas is essential
if the movement is to play a significant role in the future".
His remarks must apply in some measure to all co-operative
sectors, and the Plunkett Foundation is to be congratulated on
providing so valuable a source of information to allow that
"innovative thinking" to take place.

The World of Co-operative Enterprise 1994 is available from
the Plunkett Foundation, 23 Hanborough Business Park, Long
Hanborough, Oxford, OX8 8HL, fax (0993) 883576.