Collaboration Between Co-operatives

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    This document has been made available in electronic format
         by the International Co-operative Alliance ICA 
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                         June, 1995

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               Collaboration Between Co-operatives
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                    by Robert Davies*



Throughout Co-operative Movements there has been considerable
discussion on the Co-operative Principles, stemming from the
Report of the ICA Commission on Co-operative Principles. The
Commission recommended, and the Twenty-third Congress of the
ICA in Vienna in 1966 confirmed, the additional Principle that
'all co-operative organisations, in order to best serve the
interests of their members and their communities, should
actively co-operate in every practical way with other
co-operatives at local, national and international levels'. To
choose as the theme for the Thirty-sixth International
Co-operative School 'The Collaboration of Co-operative
Organisations, Locally, Regionally, Nationally and
Internationally', was therefore extremely topical. The School
was held at Jablonna, near Warsaw, from 26th October to 4th
November 1967, at the invitation of the Central Agricultural
Union of 'Peasant Self-Aid' Co-operatives. The venue added
point to the subject of the School for the pattern of the
Polish Co-operative Movement provides in itself an interesting
`case study' for such a theme.

In consequence, the ICA looked forward to the holding of a
School on a topical subject attracting participants from the
whole gamut of co-operative organisations. In the event, it
was disappointing that of the fifty-six participants from
sixteen countries, the majority came from the retail and
wholesale co-operative movements. Co-operative banks and
co-operative insurance were represented, but in very much a
minority. 

The Polish Co-operative Movement nominated fourteen
participants and these came from dairy, marketing, gardening,
housing and building, savings and credit, workers' productive,
agricultural and consumer co-operatives. Without this Polish
participation, nothing would have been heard from co-operators
directly engaged in non-retail co-operatives - retail
co-operatives.

However, all participants regarded the theme as extremely
important and were concerned to explore ways in which there
could be closer collaboration between different types of
co-operatives. There was initially a basic question to be
answered: what reason is there for co-operative movements
engaged in quite different fields of business or activity to
consider collaboration with each other? Is the fact that they
conduct their business according to the same principles
sufficiently strong a link? Should they collaborate purely
because of the emotional loyalty to Co-operative Principles?
There was a minority voice to answer: No - why should the
application of Co-operative Principles in a business mean
collaboration with other business often of quite an alien
nature. The overwhelming majority of participants answered
Yes: this was a strong reason for collaboration, for if they
were accepted as bona fide co-operatives, and subscribing to
the principles of Co-operation, this included the principle of
`Co-operation amongst Co-operatives'. And as participants
listened to the speakers, especially those representing the
ICA's International Committees, and as in the Working Groups
they discussed points raised by those speakers, there
gradually built up support for the view that such
collaboration between co-operatives could be, and in very many
cases has been, good business practice.

Mr N. Hoff, Secretary of the ICA's Co-operative Wholesale
Committee, spoke of the work of that Committee and its
attempts at collaboration in Europe. The nature of the
discussion on Mr Hoff's talk showed the School's practical
approach by concentrating on topics such as whether the
emphasis should be on purchasing or production collaboration;
if there were to be joint undertakings between different
co-operatives, particularly at the international level, should
there be a single production plant for the product, in one
country, or should there be production plants in several
countries? No straightforward answer to all the points could
be made because of the different legislation in each country.
National legislation may also affect trade marks, although
there was general support for aiming at an international CO-OP
trade mark. It was emphasised that much more knowledge and
research is needed, but that the existing knowledge was not
disseminated widely enough and that much more use should be
made of the Co-operative Press to do this. An interesting
suggestion was that the ICA should study the possibility of
creating a centralised agency to meet the import needs of
European consumer co-operatives. No dissenting voice was heard
against the view that there must be wholesale-retail
integration and that, if this could be effected, it should
make for better international collaboration in this field.

Consideration of international co-operative activities
inevitably involves international finance and the financial
aspect of collaboration straddled almost every topic raised at
the School. Mr H.U. Mathias, Managing Director of the
International Co-operative Bank in Basle, gave an excellent
analysis of international co-operative finance and the working
of the International Co-operative Bank. The Working Groups
certainly felt that the Bank was necessary and fulfilled a
need, but there was clearly concern that the Bank should
ensure that it was based on Co-operative Principles - even
though it might be necessary for economic reasons to raise
non-co-operative money. Any money of this kind should not
exceed a certain percentage. As an ideal, national
co-operative movements should raise their own capital, but
practice differed. It was hoped that financial restrictions at
present militating against support of the International
Co-operative Bank by planned economy countries would be eased
so that such support could be given.

Many critical points were raised - perhaps because of a
suspicion of all international finance and the feeling that
perhaps even international co-operative finance would not be
able to remain true to its principles. In replying, Mr Mathias
stressed that all stockholders of the International
Co-operative Bank are co-operative organisations, including
co-operative credit organisations, and that there is no
intention to accept any private stockholder.

Co-operative insurance societies play a large part in
co-operative finance, and in speaking on behalf of the ICA's
Insurance Committee, Mr Kjell Gustafsson, of Folksam, Sweden,
stressed the collaboration that was possible between
co-operative insurance and other forms of co-operation. It was
the case that co-operative insurance societies collaborated
with non-co-operative organisations and this aspect of the
work of the insurance societies provoked much discussion. The
general view was that such collaboration should be
discouraged. Specific examples were given of the links which
could be effected between co-operative insurance societies,
co-operative housing societies and co-operative consumer
societies. It was felt that this kind of collaboration should
be publicized as much as possible. National attitudes may
prevent collaboration between co-operative insurance and
co-operative housing, e.g. in many countries State aid is
available for housing, and even co-operative housing is, in
some cases, able to attract State assistance. These were
included in some of the problems affecting housing
co-operatives posed by Mr Evan Solkjaer, Manager of one of the
largest Danish co-operative Housing Societies, speaking on
behalf of the ICA's Co-operative Housing Committee. Some of
the suggestions put forward by the Working Groups were very
interesting and included the possibility of the International
Co-operative Bank financing national housing projects. It was
asked how closely was it possible for housing co-operatives to
work with workers' productive co-operatives? Mr Solkjaer gave
details of a meeting between representatives of the ICA's
Housing Committee and the Workers' Productive Committee to
discuss possibilities of closer working, and it is hoped that
additional practical action will stem from the real wish to
collaborate, evident in these two Committees. Already the
export is being encouraged of prefabricated housing components
as well as housing equipment, and in Scandinavia there are
many examples of kitchen equipme
t and bathroom ware, manufactured by workers' productive
co-operatives, being used in the construction of co-operative
housing blocks.

Housing co-operatives could ensure a close connection with
consumer co-operatives and take the initiative in ensuring
that such co-operatives were established in co-operative
housing estates. Participants were able to see practical
examples of such close collaboration on a number of occasions
in Poland, where there was clearly a close collaboration
between the two types of co-operatives.

Mr Kaminski, of the Central Agricultural Union of 'Peasant
Self-Aid' Co-operatives and a member of the ICA Agricultural
Committee, spoke briefly of possible collaboration between
agricultural co-operatives and other types. In particular, he
outlined a possible extension of agricultural co-operatives
into the field of processing. There was already a link with
insurance societies, especially in developing countries where
co-operative insurance of harvests was widespread. Tension
exists between agricultural producer co-operatives, which
naturally want the highest price for their produce, and
consumer co-operatives, which aim for the lowest price for
their consumer goods. This was acknowledged, but it was felt
that this tension should be lessened so that there could be
collaboration between the two, and 'contract farming' was
mentioned as a possible trend likely to make for better
relations. Additional cause for conflict could occur when both
types of co-operatives want to go into processing. A French
view, very strongly held, was that perhaps joint enterprises
could overcome this difficulty.

An opportunity to discuss the general international
collaboration of co-operatives was given by Mrs Barbara
Rog-Swiostek, Director of the Foreign Relations Department of
the Polish Supreme Co-operative Council, who posed two main
topics for discussion - the role of the ICA and its
Sub-Committees in developing contacts between Affiliated
Co-operatives, and the degree of co-operation between
co-operatives and international non-co-operative organisations
(both governmental and non-governmental). Discussion of her
talk centred on what were considered weaknesses of the ICA in
disseminating information about the work of its Auxiliary
Committees. Everyone felt that the ICA was not advertising
itself enough and could be much more of a world pressure group.

In the final reports from the Working Groups it was clear that
participants could find no simple solution to the problem of
collaboration. More knowledge about other movements; exchange
of personnel at all levels between movements, even between
different types; good lines of communication, both vertical
and horizontal, were all stressed as ways of encouraging
collaboration. It was emphasised that trading activities of
co-operatives must be successful and this must come before all
other aims. The other aims must follow, for it was these aims
that distinguished the Co-operative Movement from other
organisations. In cases where conflict did arise between
co-operatives, the differences should be discussed and a
solution sought, rather than letting collaboration fail
through thinking that as there was bound to be a conflict
there was no point in trying.

Collaboration was stressed specifically in three areas of
activity - first, in trading matters, secondly, in technical
and scientific matters and thirdly, in social and cultural
matters. The examples from various speakers at the School and
the practical examples seen in Poland showed what has so far
been achieved in trading collaboration. With the speed of
technological change, collaboration in technical and
scientific matters should increase considerably. In this
field, the legislative and political factors are at a minimum.
In social and cultural matters, collaboration should include
all levels of co-operators. 

Following the concentration of co-operative enterprises,there
must be emphasis on participation if the democratic basis of
co-operatives is to survive.

The lecturers from the ICA Committees tended in the main to
speak of international collaboration or of collaboration
within countries of their own national organisation. It was
therefore useful to have a series of lectures and discussions
designed to give participants background information about the
Polish Co-operative Movement. Excellently prepared material
was available and Mr Janusz Sobieszc-zanski, Mr Tadeusz
Szelazek and Mr Tadeusz Romanowski, all delivered excellent
papers which evoked considerable questions and discussion. In
addition, it was possible to arrange brief talks by
representatives of different types of co-operatives in Poland
-housing, invalids' savings and credit, consumer and the
Polish horticultural export organisation, HORTEX. 

The School was fortunate to have the opportunity of welcoming
Dr Mauritz Bonow, President of the ICA, and Mr Gemmell
Alexander, Director of the ICA.

Dr Bonow gave an excellent survey, far-reaching and incisive,
of the Co-operative Movement throughout the world. He put
forward some interesting comments on the Co-operative Movement
in market economies and in planned economies and showed how,
behind the normally used economic phrases, great changes were
proceeding, tending to make for more similarities than might
be thought. He emphasised the great difference between both
these two types of economies, and that of the developing
countries, which, in general, tended to be stagnant economies
dominated by a fairly primitive agriculture. The School's
emphasis on the need for trading collaboration between
co-operatives was echoed by Dr Bonow, who traced the steps
necessary towards freer world trade. EEC, EFTA and COMECON
must be accepted as realities and the Co-operative Movement
must be prepared to use these larger markets, initially within
these groups, and later across them, where even now beginnings
were being made. It was certain that private commercial
agencies would certainly use these large markets. Taking the
joint enterprises already in existence in Eurocoop, Dr Bonow
wondered whether such collaboration would be possible between
Eastern Europe and Western Europe. He thought that, if there
were economic advantages to be gained, then the ideological
barriers could be overcome, and instanced the recent Fiat
arrangement between Italy and Poland. In developing countries,
Dr Bonow pointed out that 52 per cent of the world population
was in the Far East trying to live on only 12 per cent of the
world income, whilst in contrast in North America, the USA and
Canada had 7 per cent of the world population with 40 per cent
of world income. In Western Europe, national income had been
doubled in the last 20 years, and in Eastern Europe, it had
been doubled in less than this, but in the developing world,
with their stagnant economies, the only thing that was growing
was population. Aid from the richer nations was stagnant and
the problems of food and of population growth were the two
great problems to be solved if there was not to be disaster by
the end of the century. He thought the Co-operative Movement
must do more to urge the national Governments to take action
and whilst the national movements acted at this level, the ICA
must act at the international level through non-governmental
and inter-governmental agencies. He thought that the
Co-operative Movement was the most important supplementary
means of help for the developing countries because it was
encouraging self-help at the `grass roots'.

It was significant that donor Governments were increasingly
seeking aid from their Co-operative Movement and, whilst it
was most welcome that government finance would be available,
only the Co-operative Movement itself could provide the
'know-how', and the movements must ensure that good people
were sent out to developing countries, not the rejects! The
ICA must do all it can to ensure increased efficiency from
international aid for the Co-operative Movements in the
developing countries.

Mr Alexander, Director of the ICA, ranged widely over
co-operative topics stressing from practical examples many of
the suggestions put forward by the Working Groups. He showed
how often co-operative contacts were haphazard and thought
there should be machinery for regular contacts for
co-operatives of different kinds. He disagreed with some of
the participants on the question of co-operatives
collaborating with non-co-operative organisations, for he
thought that co-operatives should not shun contact with
non-co-operatives; they should have the courage to see what
was beneficial and adapt that to their own use without
endangering the true character of the co-operatives. He
thought that the Co-operative Movement's ambivalent attitude
to Governments was an excellent example. Many co-operatives
had to function within a government plan. Again, government
finance was often needed - a co-operative fertiliser plant may
need government money and co-operative trade 'know-how' in
order to support operations. 

A recent example of this could be seen in Kenya where the
Government provided money (to be paid back) and a leading
Swiss dairy firm provided machinery to set up a wholly
independent co-operative dairy. Mr Alexander saw a big future
for the International Co-operative Bank which he thought must
play an increasing part in developing collaboration between
co-operatives across national boundaries. There was scope for
the European co-operatives to use it more fully. Other regions
could possibly develop branches of the Bank rather than to set
up regional co-operative banks.

Generally, the Director saw hope for increasing collaboration
between co-operatives internationally, for the ICA was the
only non-governmental organisation that was not split
politically and it was most significant that every time a new
co-operative group had been formed it had been done within the
ICA.

In conclusion, the 36th International Co-operative School was
hard-working, stimulating, practical in its approach. As
always, those participants who had come to work and to learn
found time too short for both. We hope that many of the ideas
raised will be followed up by participants' own co-operatives.
Everyone will certainly remember the warm and friendly
hospitality of the Polish co-operators with whom we came in
contact and who were so clearly concerned for us to see all
aspects of a Movement of which they were deservedly proud. The
collaboration of the host organisation, the Central
Agricultural Union of 'Peasant Self-Aid' Co-operatives, was
excellent and the thanks of all participants and ICA are due
to the offices and staff of that organisation who did so much
to ensure the smooth working of the School.

At the conclusion of the School, thirty-six participants
stayed for a four-day study tour of Polish co-operatives based
in Western Poland in the Voivodships of Wroclow and Posnan.
R.P.B.D.

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* Mr Davies was appointed Administrative Secretary of ICA in
1968 after John Gallacher's resignation. This article was
taken from the Review of International Co-operation, Vol. 61,
No. 2 1968.