Papers Presented - ICA, Fed of Danish Co-ops, IFAP

        *******************************************
                     COPAC OPEN FORUM
          CO-OPERATIVES, FARMERS' ORGANIZATIONS 
                AND SUSTAINABLE DEVELOPMENT

                 Copenhagen, 7 March 1995
        ********************************************


-------------------------------
Presentations to the Open Forum
-------------------------------

I.   The Contribution of Co-operatives to Global Action designed
     to Expand Productive Employment, Alleviate and Reduce
     Poverty and Enhance Social Integration:  Mr. Bruce
     Thordarson, Director-General, International Co-operative
     Alliance (ICA)
     
II.  "Danish Co-operatives and Farmers' Organizations: their
     Contribution to Sustainable Development": Mr. Bent Claudi
     Lassen, President of the Federation of Danish Co-operatives
     
III. "Farmers' Organizations and Sustainable Development": Mr.
     Graham Blight, President of the International Federation of
     Agricultural Producers (IFAP)


----------------------------------------------------------------
I.   The Contribution of Co-operatives to Global Action designed
     to Expand Productive Employment, Alleviate and Reduce
     Poverty and Enhance Social Integration"
            Mr. Bruce Thordarson, Director-General
            International Co-operative Alliance
-----------------------------------------------------------------

Introduction
-------------
The title of this presentation is quite a mouthful.  It sounds
more like a UN report than the kind of presentations that I am
used to giving to co-operative audiences.  But I am prepared to
use this title, because to me it basically deals with what co-
operatives are all about - meeting people's needs. 

I should not assume that everyone in this audience is completely
familiar with the co-operative movement, even in their own
countries, much less on a world-wide scale. So let me say a few
words by way of introduction.

A co-operative is, essentially, an organization controlled on a
democratic basis by the people who use its services.  This
commonality of owners and users is the element which
distinguishes co-operatives from other forms of economic
activity, whether capitalistic (in which the investors of capital
control) or public (in which it is the state which decides).

In short, co-operatives are organizations of people.  They are
formed when people have needs - any kinds of needs, economic or
social.  Usually these are economic needs, such as the need for
financial services, consumer goods, marketing services, and so
on.  But they can also be more social in nature, such as day-care
facilities, health services, housing, and education.

In the OECD countries, co-operatives have a long and successful
history, dating back to the last century. Agricultural co-
operatives market more than 70 percent of dairy products in
Denmark, rice in Japan, and wheat in Canada, just to give three
examples. Co-operative banks in the Netherlands, Japan, and
France are among the largest in the world. Consumer co-operatives
are market leaders in Sweden, Italy, and Switzerland.

In the countries of the South, co-operative development has been
more difficult, largely due to both colonial traditions and
recent government policy. But in spite of attempts by some to use
co-operatives for their own purposes, there are many examples of
success.  In Latin America savings and credit co-operatives form
a strong, regionally-integrated financial system.  Co-operatives
dominate the marketing of coffee in Kenya and sugar in India. 
In many countries some of the best grass-roots development takes
place through worker-owned co-operatives.

When you put all these organizations together, the figures are
impressive.  More than 700 million people belong to co-operatives
that are affiliated with the International Co-operative Alliance. 
This represents important percentages of economically-active
people - over 40 percent in the United States, Japan, India,
Malaysia, and Denmark; over 50 percent in Belgium and Norway;
over 60 percent in France; and over 70 percent in Canada, Sweden,
and Uruguay. In terms of global figures, it is estimated that
members of co-operatives, plus their immediate families, make up
some 45 percent of the world's population.  

Having said that, we must also recognise that co-operatives are
not well-known by the general public.  They work in many
different sectors, and so their similarities are not always
recognised. They usually operate in local communities, away from
the centres of economic power. They generally do a poor job of
working together at the international level, with the result that
few have an international reputation. And - like all kinds of
business organizations - some are successful and some are not. 

The World Summit for Social Development 
---------------------------------------
Why then do these diverse organizations, through the ICA, take
an interest in the World Summit for Social Development? I think
it is because the Summit organizers very wisely chose three
themes or core issues which demonstrate the inseparable link
between economic and social development.  This is very relevant
to us, because co-operatives are one of the few business
structures which combine both an economic and a social purpose.

1.   Productive Employment
--------------------------
If we look first at the issue of productive employment, it is
obvious that co-operatives in many countries are large-scale
employers.  Here I am thinking of the co-operatives which offer
services to consumers, whether these services are retail goods,
financial products, electricity, or whatever. In this respect
they operate like any employer--but with the significant
difference that, because they are rooted in local communities,
they do not move to other regions or countries where labour or
raw material may suddenly become cheaper. They are generally a
source of stability and continuity in terms of local employment. 

In addition, there is also the rapidly-growing category of
worker-owned or production co-operatives.  Since they are often
very small-scale and unaffiliated to national bodies, they do not
always appear in official statistics, even those of ICA.   The
best estimates which we have - from our own specialised
organization in this sector - is that there are more than 100
million people employed in these kinds of co-operatives around
the world.  The biggest and most successful worker-owned co-
operatives are in Western Europe - France, Italy, and the
internationally-known Mondragon group in Spain--but in terms of
numbers of members they are in the developing world, especially
Asia - 2 million in Indonesia, 25 million in India, and 30
million in China.  

A third category of co-operative which is an important source of
productive employment is to be found in the field of agriculture. 
The vast majority of agricultural co-operatives in the world are
engaged in the marketing of farm products and supply of inputs. 
The FAO and the International Federation of Agricultural
Producers are both strong advocates of the role which co-
operatives play in enabling many farmers, in both the North and
South, to increase their income and indeed even maintain their
employment.  

Also, although we usually think of farming in terms of family
farms, it should be remembered that there are very interesting
examples of agricultural production co-operatives emerging from
the previously state-owned collective farms of Eastern and
Central Europe. Contrary to all traditional western advice, many
of the employees of these state farms have decided that they
prefer to remain employees - now of large co-operatively-owned
farms in eastern Germany, in Slovakia, and in other countries -
and they are succeeding. Whether this is a temporary development
or not remains to be seen.

2.   Poverty Alleviation
------------------------
There has long been a debate within development and co-operative
circles about the degree to which co-operatives are good
development instruments for the "poorest of the poor". To my mind
this is rather unnecessary and unproductive debate -unnecessary
because it is widely accepted today that co-operatives should not
be seen as anyone's "instruments", except by and for their
members; and unproductive because, by any reasonable definition,
co-operatives most definitely do help "poor people".  (They can
also help less-poor people, and poorer people, and not-so-poor
people - in short, anyone who has the capacity to make use of the
services of a co-operative.)

Almost without exception, the co-operatives which were formed
last century in Europe and North America were designed to help
"poor people". One need only look at the Rochdale consumer
pioneers in England, the first members of Raiffeisen banks in
Germany, or the farmers who formed agricultural co-operatives in
Denmark to realise that they were all simple people trying to
improve their economic and social conditions through self-help
activity.  

Today it is more fashionable to speak of sustainable development,
or sustainable human development, and our co-operative
development experts have identified a number of ways in which co-
operatives make important contributions:

     In the first place, they provide economies of scale.  By
     grouping people together into self-help units, with support
     structures at regional and national levels, co-operatives
     provide services and generate income that would not
     otherwise be possible. The Latin American Confederation of
     Savings and Credit Co-operatives (COLAC) is a good example
     of a continent-wide system which has mobilised resources
     from external as well as internal sources in order to
     provide improved financial services to local members
     through a variety of interlending programmes.
     
     Co-operatives also provide permanence, as I mentioned
     before.  As locally-controlled institutions, they can never
     be tempted to move to "greener pastures" where profit
     opportunities are greater.
     
     Historically, around the world, co-operatives have been
     initiators of new services. Examples include credit and
     income-generating opportunities for women through multi-
     purpose co- operatives in Burkina Faso and India.  In
     Canada they pioneered daily-interest accounts and free-
     chequing services that the traditional banks had long
     resisted.

     Co-operatives are also important sources of competition in
     domestic markets. Often they are formed, and grow, in
     monopolistic or oligopolistic markets where individuals
     have little choice from private merchants or the public
     sector.  As an example one can look at the previously
     state-owned insurance sector in many African and Asian
     countries, where co-operative insurers are now able to
     provide basic services, especially in the rural areas,
     which were previously unavailable.

     Finally, and most basically, co-operatives generate
     increased income. Profits are distributed to members on the
     basis of their patronage, often through year-end refunds or
     as contributions to a member's share capital.  The vertical
     integration of co-operative structures is designed to
     provide the member with a greater return--for example, by
     enabling farmers to share in the returns from processing of
     their products through plants owned by their co-operative. 
     Among many success stories are the dairy and oilseed co-
     operatives which form part of "Operation Flood" in India,
     where prices paid to farmers have more than doubled since
     the introduction of this world-famous co-operative
     development programme.

3.   Social Integration
-----------------------
This example from western India leads me to the third theme of
the Social Summit--social integration.  One of the many
innovations introduced by these dairy co-operatives was to insist
that all members stand in the same line to deliver their milk and
receive payment.  For people used to a life based on separation -
whether by gender or by caste - this simple decision was little
short of a social revolution.  It is hard to imagine that an
investor-owned dairy co-operative would have been interested in
promoting this kind of social change.

This Indian experience also provides another example of social
integration through co-operatives, because the majority of these
dairy farmers are women - women who own one or maybe two cows or
buffaloes, from which they obtain their family's basic income. 
There are countless other examples around the world of co-
operatives which have enabled women to integrate successfully
into the predominantly male world of business.  Some of these are
co-operatives for women only - handicraft co-operatives are
common in most developing countries, for example - but our
experience is that the greatest success usually comes when women
play a full and equal part in a "normal" co-operative, just like
any other member or employee. The savings and credit co-
operatives have been particularly successful in integrating
women.  It is significant that women make up a very high
percentage of credit union managers, as well as members, in
countries around the world, both North and South.  

When one thinks of women in development circles, one often thinks
also of three other so-called disadvantaged groups - youth, the
aging, and the disabled. COPAC (the Committee for the Promotion
and Advancement of Co-operatives) has recently published reports
which demonstrate how co-operatives can provide much-needed
services to all three groups, and help them to integrate more
effectively into society. The only cautionary note I would like
to add here is that co-operatives cannot be and should not be
seen as a universal panacea for problems which are essentially
social in nature. The co-operative structure can certainly be
used by all these groups, but we remain somewhat skeptical about
the long-term future of co-operatives created only for and by
disadvantaged groups. Many main-stream co-operatives have
established programmes to provide services for such groups, and
I think that this social responsibility of co-operatives, when
decided freely by the members, offers the best prospects for
promoting successful social integration.

Last but not least, the importance which co-operatives have
traditionally attached to education - one of the six Co-operative
Principles - is an extremely important element in social
integration. Most co-operatives around the world provide some
kind of education service for their members, ranging from the
Gambia Co-operative Union with its literacy/numeracy programme
to the Swiss Migros consumer co-operatives, which devote fully
one percent of total turnover (not of profit) to member-oriented
education and cultural activities. From an organization that is
the largest single food retailer in Switzerland, this is a major
contribution.  

In many countries of the South, co-operatives have also become
known as "schools of democracy" since, both by their teaching and
by their practice, they are sometimes the only form of democratic
experience available to ordinary people. It is probably not a
coincidence that co-operatives have often received harsh
treatment from totalitarian regimes (Paraguay and El Salvador are
two examples from the recent past), which have not appreciated
their democratic characteristics and influence.

Conclusion
----------
The 1995 World Summit on Social Development is an important step
on the road towards greater understanding of the need for
economic development to be linked to the needs of people.  To co-
operators this sounds obvious.  But we have to remember that it
was only a few years ago that the World Bank committed itself to
"poverty alleviation" as a priority, and that the UNDP began to
focus its own efforts on "human development".  We certainly do
not claim that co-operatives are the only structures which
promote people's participation.  But they have proven their worth
over more than 150 years, and I have a feeling that the pendulum
is now swinging back in the direction of recognising their key
role.

>From our point of view, we can only agree with the conclusion of
the UN Secretary-General, who said in his 1994 report to the
General Assembly on the "Status and role of co-operatives in the
light of new economic and social trends" (A/49/213) that: "In
view of the effective role of co-operative enterprises in
creating employment, reducing poverty, and enhancing social
integration, which are the three core issues to be considered by
the World Summit for Social Development in March 1995 in
Copenhagen, Governments may wish to channel a larger part of
their funds intended for general developmental purposes through
co-operative development organizations". Among the many important
decisions which one hopes will be made in Copenhagen, this would
be one major step towards helping to meet the goals of the
Summit.

---------------------------------------------------------------
II.  "Danish Co-operatives and Farmers' Organizations: their
     Contribution to Sustainable Development"
              Bent Claudi Lassen, President 
              Federation of Danish Co-operatives
---------------------------------------------------------------

The co-operative movement has been of the greatest importance to
the democratic and economic development in Denmark. On behalf of
the Federation of Danish Co-operatives, on this occasion of the
UN Social Summit, I am very happy to pass on the results and
experience that have been achieved in Denmark through co-
operative collaboration.

Danish co-operatives are economically oriented, and their basic
purpose is to promote the economic interests of the members. The
co-operatives do not in themselves have a social aim, but they
have a social effect.

Many foreign representatives have expressed a wish to learn about
the influence of the co-operative movement on the Danish welfare
society. The co-operative principles that we tend to take for
granted is obviously something that others strive to be
acquainted with.

As it has been mentioned earlier this afternoon, also the UN has
specifically wanted to focus on the co-operative movement. This
is because, in connection with its work, the UN attaches central
importance to co-operation. And this is further emphasized by the
fact that the UN at its general assembly adopts a resolution
about co-operative collaboration.

At the same time, the UN has expressed a wish for increased
attention to the Danish form of co-operation. Today, co-operation
is associated with the UN via the International Co-operative
Alliance (ICA), which has the status of first category observer
in the UN.

>From time to time, the Danish co-operatives are looked upon as
in Hans Christian Andersen's fairy tale, 'The Ugly Duckling',
which by a miracle has turned into a swan.

There may be something to this idea, but then it is simply
because the public and the private industries have tended to
regard the co-operatives as peculiar outsiders, who ought to be
bullied out of the way.

They were regarded with scepticism because they were different.
They did not fit in with the crowd.

They have grown into big worthy swans, but not by a miracle. Nor
has it been accomplished through favorable treatment by the
authorities.

Like Hans Christian Andersen's ugly duckling, the Danish co-
operatives have lived through a long, dark winter, which has
hardened them to their present day position. Thus they may
rightfully be proud and stand tall towards those that used to
take a poor view of them. Today, we don't have to hide our heads
under our wings.

The main purpose of the Danish co-operatives is economic, seen
from the point of view of the individual member and the
individual farm,  but the co-operative movement is also of social
importance, because the economy is the foundation of the entire
social development. Co-operation bases itself on the democratic
tradition and thereby strengthens this tradition which, in my
opinion, everyone all over the world, must be interested in
promoting as much as possible. There is no better place to learn
about the mechanism of democracy than as a member of a co-
operative. Here obligations and responsibilities are very
relevant to the individual, and are closely connected to the
rights that membership of a co-operative involve. The co-
operative movement is characterized by a high degree of self
management, and the development is dictated by the needs of the
members. 

Co-operation in Denmark influences a number of different areas.
These include consumers, workers' co-operation, and agriculture.
Co-operation is also found within water and power supply,
housing, taxi cabs, etc. The greatest and most decisive
importance of co-operation is in agriculture and affiliated co-
operatively owned food producing and processing enterprises.

Characteristics of Danish Agriculture 
and Co-operative Enterprises
--------------------------------------
Due to the farmers' co-operative organization and self
management, Danish agriculture has gained a level of development
of international fame, characterized by high efficiency and
purposeful production of quality food. Agriculture and the co-
operative enterprises have created a place for themselves on the
international markets, which has resulted in a high domestic
production and employment as well as a great net profit. At the
same time agricultural production has a considerable influence
on subsidiary industries within machinery, feed stuffs,
packaging, transport etc., which fields deliver merchandise and
services to the agricultural sector.

To a large degree Danish agriculture is export oriented, and more
than 2/3 of the total production is exported to markets, which
normally are dominated by multinational companies. 

During recent decades, primary agriculture has developed from
versatile farms to specialized farming, in such fields as plant
production, cattle raising or pig production. But other types of
production such as poultry and mink are also important. In fact,
Denmark is the world's largest exporter of furs. Even with so
much specialization, Danish agriculture is still characterized
by privately owned family farms.

In general, Denmark is the world's fifth largest net exporter of
agricultural products. This must be seen in relation to the fact
that Denmark's share of the total agricultural land area of the
world is less than 0.2% and that Denmark only has 0.01% of the
world's farmers. Today there are about 70,000 farmers in Denmark,
half of which are part-time farmers.

Danish farmers constitute only 4% of the Danish population of 5
million, but they account for an annual production of food for
15 million people. By far the largest portion of the production
is delivered to the farmer owned co-operative enterprises which
refine and sell the products. In the dairy and slaughterhouse
sectors, co-operatives are completely dominant with market shares
of 93% and 97% respectively. In the farm supply sector the co-
operative share is about 55%. In the other sectors, co-operatives
also play an important part.

Characteristic of Present Day Co-operatives
-------------------------------------------
By means of its unique adaptability, the co-operative movement
has managed to live up to the challenges of our time, and been
able to introduce new technology and know-how in order to honor
the demands for efficiency, quality etc. This adaptability is the
background of the structural development within the agricultural
co-operatives.

Around the 1960's, the number of co-operatives in Denmark topped.
Since then, the development has been marked by mergers by member
decision, which have resulted in very large co-operative
enterprises. The development has brought about a need for
rationalization and increased efficiency in business operation
to be able to manage in a tough market with ever intensifying
competition conditions. Also the co-operatives within the same
production compete with each other, internally as well as on the
export market, and this competition secures very dynamic co-
operatives.

The structural development means that a few enterprises have
considerable market shares in the main sectors. The dairy sector
is dominated by two co-operative enterprises. A total of 93% of
Danish milk producers deliver to the co-operative dairies.

In the slaughterhouse sector, the same structural development has
taken place. And today there are 4 co-operative pigmeat
slaughterhouses which together handle 97% of the pig
slaughterings in Denmark. In 1994, a total of almost 20 million
pigs were slaughtered.

Both in the dairy sector and in the slaughterhouse sector, the
co-operative enterprises are clearly dominant, and competition
from private enterprises is insignificant. The importance of the
co-operative enterprises is solely due to the fact that we have
realized that, through joint, voluntary efforts, it is possible
to maximize the settling price for the farmer.

There has also been important structural rationalization in the
farm supply sector during recent years.

The Development of Co-operation
------------------------------
What we call the co-operative movement in Denmark, did not
originate in Denmark. It came to us from England in the previous
century. We have been able to apply the principles better than
most, and to such a degree that it serves as a model for others.

In Denmark, it began with the first co-op store in 1866, the
first co-operative dairy in 1882 and the first co-operative
slaughterhouse in 1887.

A hundred years ago, all enterprises and stores were privately
owned. However, the Danish farmers did not want to be dependent
on  private merchants and business men. The farmers wanted to
keep the economic returns of their effort for themselves. This
motivated them to join in co-operative societies, which could
ensure their control of their production and economy.

Already then, it was perceived, that through collaboration and
democratic leadership, it was possible to solve the needs for
better purchases and better sales prices.

In principle, all members of a co-operative have the same
economic advantages. And the co-operative strives to procure the
greatest possible profit for the members, given as a bonus based
on the members' turnover with the co-operative.

Co-operation Outside Agriculture
--------------------------------
The co-op stores were established in order to provide good and
cheap consumer goods. The co-op stores gained their strongest
position in the rural districts where often, they also sold farm
supplies. Later they developed in the cities, too.

The number of co-op stores grew steadily until the middle of this
century. The arrival of supermarkets increased competition in
retail business. This meant new challenges for the co-op stores
which have resulted in considerable structural rationalization
and a reduction in the number of stores. The co-op stores still
maintain a central position, and today, they have about 30% of
the retail turnover in Denmark.

As opposed to the co-op stores, the workers' co-operatives found
their strongest foothold in the larger cities. Activities were
primarily concentrated on matters that influenced the workers'
economy. The first workers' co-operative was a workers' co-op
bakery which was to provide bread for the workers at reasonable
prices.

Co-operative enterprises outside agriculture have had, and still
have, the greatest importance within construction, but they are
also important in the financial sector. 

The workers' co-operation differs in nature from co-operation
within agriculture and co-op stores, as the workers' co-operation
has been linked to political and trade union goals.

Importance to Society
---------------------
The level of welfare in Denmark today is among the highest in the
world. This has been achieved in a democratic way through
generations. Over the last hundred years, the development of
welfare has intensified. The co-operative movement has played an
important part in this, mainly in the rural districts and within
agriculture. But via the co-op stores and the workers' co-
operation, the movement has also had an influence in the cities.

Its influence on society can be seen both financially, socially
and culturally.

The direct economic influence of co-operation is most obvious in
relation to the agricultural sector, which is one of the most
important sectors for employment in the trades and industries.
The considerable agricultural export constitutes 25% of the total
Danish export. In fact, every Danish farmer creates an average
net export of $ 48,000 per year. 

The agricultural sector in Denmark has a great impact on
employment. Although employment in primary agriculture continues
to decline, almost 10% of Danish employees work in relation to
agricultural production. About 270,000 jobs derive from the joint
enterprises of agriculture, and thus the sector influences the
economy of many families outside agriculture. 

In certain regions, agricultural production is very important to
the continuation of activities and employment in many small
communities. 

Co-operation has spread like circles in water. Working together
has made it possible to solve tasks jointly which individuals
were unable to handle alone. Some examples include purchasing
societies for the benefit of the members, co-op laundries, co-
operative freezing houses, village meeting houses, etc. 

There will be ample opportunity to see, how such co-operative
activities have influenced development, and how rural communities
have been built around these co-operatives, on 6 different
excursions that the Federation of Danish Co-operatives and the
Agricultural Council arrange tomorrow and the day after tomorrow.
The excursions go to rural districts, where the importance of co-
op stores, meeting houses etc. is evident still today. You are
kindly invited to participate in these excursions.

The cultural importance is closely connected to the social and
political development, which again is connected to the Folk High
School movement - a voluntary school without examinations. In the
middle of the 19th century, the Folk High Schools spread
throughout the country, and both young and adults attended the
high schools to increase their knowledge and to experience and
participate in the free debate. Through the high school culture,
they gained an understanding of democracy and of personal
responsibility, and this has contributed to help them grow into
good co-operators and board members in our co-operatives. They
became free and independent individuals.

The Folk High Schools are not an integrated part of the co-
operative movement. But it is fair to say that co-operation in
Denmark also builds on the Folk High Schools - though not on the
Folk High Schools alone. The folk high school tradition has
persisted till the present day. 

The organizational structure where the members have influence on
all levels, is essential to co-operation. 

The organizational structure can be divided into three parts, and
the first part is the member level, where each member has one
vote.

The second part is the general assembly or board of
representatives, which constitutes the highest authority of the
co-operative. This means that, via the bylaws, the body deter-
mines the purpose of the co-operative and the rights and
obligations of the members.

The third part is the board of directors, which are farmers
elected by the general assembly. The board is responsible for the
management of the co-operative, and it employs and dismisses the
managing directors.

The farmers have complete control from top to bottom, and by
virtue of the structure, the farmers run the co-operative.

The members and their elected representatives function in close-
knit co-operation. When members bring something up, the elected
representative has to deal with it - and to make sure to report
back to the members. The farmer is always at the center of
attention. The focus is on solving the problems that he brings
up. This network functions very well for large enterprises as
well as small ones.

The only condition for using co-operative organization is to have
a group of people with the same interest in solving a given task.
Almost all of the large co-operative enterprises known today have
started out on a small scale.

Among special characteristics of co-operation in Denmark are:

     1)  that we have no co-operative legislation and no
     Ministry of co-operation. 
     2)  that our co-operatives receive no financial support
     and,
     3)  that the bylaws form the legal basis, and in this
     matter we follow the basic co-operative principles. Of
     course, co-operatives must abide by the general legislation
     regarding taxation, environment, working conditions etc.
     like other commercial enterprises.

It is quite essential to the success of the agricultural co-
operatives that the farmer is either 100% a member or not a
member at all. This means that as long as he is a member, the
farmer must deliver his entire production to his co-operative.
The farmer decides for himself how large his production is going
to be. Regardless of the size of his production, the co-operative
ensures him sales at the highest possible price. All members get
the same price for the same product. 

Denmark is a country of organizations and associations, which is
closely connected to our general democratic system. This also
characterizes the agricultural sector. And this is what has made
it possible to create the 'From Farm to Fork' chain, called
vertical integration, which is quite unique and an enormous
strength.

This means that there is a connection between research, field
extension service, primary production, agro-food industry,
marketing and selling. It is the farmer who sooner or later gets
the profit.

The philosophy of the vertical integration is the fact that the
farmer himself owns and operates the whole production and selling
machinery.

Farmers' field extension service in Denmark is organized, carried
out and run by the farmers' own organizations within primary
agriculture. These are The Danish Farmers' Unions and The Danish
Family Farmers' Association.

Conclusion
----------
The starting point of the Danish co-operative movement was of an
economic nature, and the original purpose was to improve
production and earnings, and thereby the foundation for a better
social standard of living.

The Danish export of bacon and butter increased considerably
during the previous century. It was difficult for individual
farms to deliver the high quality needed to achieve the high
prices on the English market. 

Thus, the farmers joined together to solve tasks which for
technical and economical reasons, the individual farmer was
unable to handle on his own.

During the course of 100 years, these small co-operative
enterprises have developed into some of the most efficient and
modern co-operative enterprises which successfully compete with
the multinational companies.

The secret behind this development is the fact that, co-operation
and democracy makes it possible to control a development which
demands continuous decisions and involvement. Co-operation is an
progressive form of collaboration. It only functions optimally
when the members are motivated and aware of the co-operative
activities.

I am sure that in the developed countries as well as in the less
developed countries, co-operatives are the answer to a better
economic and social development.

--------------------------------------------------------------
III. "Farmers' Organizations and Sustainable Development"
           Mr. Graham Blight, President 
           International Federation of Agricultural Producers
           (IFAP)
---------------------------------------------------------------

As the President of the International Federation of Agricultural
Producers, I would like to use this important occasion to share
with you some of our perspectives related to farmers'
organizations and co-operatives, in both developed and developing
countries.  Today we are at the beginning of a period of
reconstruction of developing country agriculture. In most
countries, structural adjustment programmes have been applied and
governments have mostly retreated from the upstream and
downstream of farming operations. This leaves the farmer very
much in charge of his farming activities, and allows him enough
initiative to explore market and other opportunities.      

That is the good news.

The bad news is that in most cases, all the reconstruction that
needs to be done, has to be done now, and quickly.  Farmers, who
are deemed to be the new architects of this reconstruction, lack
the means and the know-how to successfully meet the challenge.
While the state has retreated, a huge vacuum has been left
behind.      

We are faced with an important question. How can farmers fill up
this vacuum, and make the best of it? How can farmers in all
countries organize and reconstruct the agricultural and rural
sector? We all know that self-help efforts alone will not be
enough. We need a broader strategy, involving not only farmers
but also their friends, focusing on not a few magical answers but
comprehensive, sustainable solutions.      

Before I go into what we, as IFAP, believe might be the elements
for such a strategy, it would be useful to go back a bit, and to
see how developing country agriculture has managed up to now.  
Ten years ago, in most developing countries, the State was still
the chief organizer of agriculture. It provided the inputs, the
marketing channels, and guaranteed prices. The farmer had only
to think of hoeing, planting and harvesting - and a little
worrying. The State machinery was cumbersome and bureaucratic.
The inputs were often expensive and not delivered in time, and
payments for crops were chronically  late. The farmer could do
little else than to pray to the Lord for good rains and beg to
the government for inputs, better extension workers, and for
long-overdue payments. The farmer had little other option. He
could not, for instance, go to the  market, because of the
substantial consumer subsidy. In Africa, for example, the price
of maize flour in the cities was at times lower than the farmgate
price of maize.      

This system had one great disadvantage. Through a system of price
controls, overvalued exchange rates and significant urban bias,
it taxed the farmer highly, with rates between 30 to 60 percent
of the farm output. This meant that significant resources were
thus transferred from rural communities to urban centres.      

But times change and issues change. At that time, the dreams and
perspectives of those decades were different. Developing country
governments wanted to build modern cities and achieve 
industrialisation.  Every remote village and hamlet had to be an
integral part of this new goal and dream.  Farmers had to produce
not only enough food to feed the nation but also to generate
enough resources to keep up the process of urbanisation.      

Finally, industrialisation did not really happen and the farmer
lost badly: first, by giving away his money and labour. Second,
by not having in return, the fruits of a thriving industry. And
third, by throwing away much of the useful indigenous knowledge,
skills and practice which farmers  possessed in favour of what
was judged to be modern and therefore better.      

Today, as farmers, we have to construct our goals and 
perspective.      

I would like to lead you through what we see as a strategy,
through three points: Institutions, Linkages and Innovation, and
Infrastructure.      

I shall start with institutions. The number of farmers in the
developing countries, especially in the small-scale farming
sector, is of the order of hundreds of millions, where they
represent the majority of the working population in these
countries. It is vital that they are able to articulate their
views, standpoint and needs in a coordinated manner for the
purpose of self-organization, as well as for the purpose of
influencing decision-makers, and for making effective alliances. 

It is therefore vital to strengthen farmers' organizations -
organizations owned and governed by farmers, which work for 
farmers' interests, whether they be farmers' associations,
farmers' unions, farmers' co-operatives or farmer-owned
businesses. Whatever their type, level or size, farmers'
organizations have to be representative, democratic, accountable,
transparent, credible and open. The strengthening of farmers'
organizations is all the more essential as structural adjustment
programmes are being applied, so that farmers can have more
control over their destiny.      

With respect to institutions, an important issue lies before  us. 
This concerns institutions, which should in theory belong to
farmers, but were never under farmer control.  For example, a
good number of developing country co-operatives, are still more
or less directly accountable to government, and were, up until
recently, an important link in the government apparatus of taxing
the farmer.  As structural adjustment programmes are being
applied, government-controlled co-operatives are undergoing a
crisis.   The withdrawal of State support to such co-operatives
means that they end up in limbo. That is, not being supported by
the State, though inevitably linked to it, and not really being
accepted by farmers as their institution. As IFAP, we would leave
it to farmers in each country, to decide whether or not they
would consider it worthwhile to battle to take over control of
these institutions. It is true that the potential of these
institutions constitutes a certain capital for farmers.  The
safeguarding of this potential, to the extent that it can be
easily recuperated by farmers, is important and even essential.
In cases where it can not be  easily recuperated, it is important
that farmers establish and strengthen new farmer institutions in
all possible diversity, including co-operative-style and other
arrangements for their economic and business interests.      

Let me now come to my second point: Linkages and Innovation. 
Before, in most developing countries, governments gave less
liberties to organizations and institutions. Countries functioned
in a centralised manner, where everybody linked into government
and the government did most of the thinking. In this centralised
model, organizations and institutions had few links among
themselves.  Farmers' organizations, for instance, were not
formally linked up with institutions of agricultural research. 
They were not formally linked up with institutions of trade,
industry and commerce. The institutions of civil society were not
properly linked among themselves.      

Today, centralised decision making has finished. As farmers'
organizations, we have to do the thinking and the linking in our
respective countries. Linking up with others is good for
innovation.  Nothing stimulates innovation more than when people
and institutions of different backgrounds co-operate together,
and force each other to do things differently.      

Before, governments were also in charge of thinking and linking
across national boundaries. Most of the agricultural trade was
handled by State monopolies. Most trade opportunities were
explored by governments, and trade strategies were drawn up by
governments.  Farmers' organizations have to think and link not
only with organizations and institutions within the country's
boundaries but beyond. This means active involvement of farmers'
organizations in a broad range of international activities
including technology transfer, regional integration as well as
international trade. As farmers we should remember it is our
product and therefore we have a need and a right to be involved
in its trade.      

Now, we also have to review our linkages with governments,
governmental and intergovernmental institutions in a new light,
as that of an equal partnership. The interests of government and
farmer organizations are not conflicting, as both wish to see
successful agriculture, and the resolution of problems facing
farmers.  We should therefore see how best we can seek
complementarity with governmental and intergovernmental
institutions, especially at field level.  We should not however
compromise on our independence.      

The third point I would like to raise concerns Infrastructure. 

Agriculture is changing fast.  So are consumer preferences and
markets. Farmers need infrastructure not only for getting farm
inputs and marketing farm produce, but also for getting timely
information, credit, skills and know-how, so that they can
explore market opportunities in a sustainable manner.      

In structural adjustment programmes, agricultural parastatals and
facilities were removed with the intention of stimulating market
forces. But no effort was spent to reconstruct rural
infrastructures. As a result, in a number of significant cases,
no significant opportunities were opened up for resource-poor
farm families. Instead they now face additional constraints such
as lack of credit and marketing facilities.      

Reconstruction of rural infrastructures (to include transport,
energy, telecommunications, marketing and information
infrastructure, legal and financial infrastructures, property
rights, educational facilities) is therefore a vital measure,
requiring policy change and urgent action by the World Bank and
respective governments.      

I had started my presentation with an important question.  How
can farmers best fill the vacuum left behind by governments?  The
solutions I gave are stronger farmers' organizations, more
linkages, and better infrastructure. 

Now, let me tell you briefly what we have done as IFAP towards 
these.      

First, IFAP has launched a comprehensive Worldwide Action for the
Strengthening of Farmers' Organizations, involving activities and
projects at local, national and international levels.
Partnerships with intergovernmental organizations are a central
component of this initiative.  UN organizations and agencies,
including FAO, ILO, IFAD, UNDP and the World Bank, command
relatively important resources and know-how, within the framework
of their current activities.  IFAP's objective is to ensure
greater farmer participation and feedback on the UN agency
programmes, through promotion of partnerships between farmers'
organizations and UN bodies at national and local levels.      

Second, IFAP has done substantial work in the establishment of
linkages especially at local, national and regional levels.  This
for example includes creation of stronger and more formalised
working links among farmers' organizations, agricultural research
and extension institutions. IFAP achieved a new and important
breakthrough in this direction, in the national level workshop
in Kenya, last month.      

Third, concerns infrastructure. In this field, IFAP's actions
have been in terms of lobbying governments and intergovernmental
organizations and pressing for policy changes. 

Finally, let me also brief you on what we want from governments. 

First, we want governments and intergovernmental organizations
to recognise farmers' organizations and involve them in the
elaboration of agricultural policies and programmes.  We would
also like governments to actively support IFAP's Worldwide Action
for the Strengthening of Farmers' Organizations, and be our
partners in this endeavour.      

Second, we propose that structural adjustment programmes be
accompanied by complementary measures for support of farmers'
organizations and for the reconstruction of rural
infrastructures.  This we see as the only way in which the
adjustment process can come to a successful and socially
acceptable end. We must directly involve the farmers in change
and fill in the vacuum that has been left by rapid government
withdrawal.      

Third, we bring to the attention of governments that the
development assistance for agriculture in developing countries
has been sharply reduced during the last decade, from 18% to 6.7%
of the total commitments.  Development assistance must be
urgently re-focused towards building up the rural 
infrastructures and institutions in the widest sense of the word,
in order to enable small-scale farmers to have access to
education, research and extension, credit and to markets, as well
as for strengthening farmers' own organizations.      

Fourth, we would like governments to promote an appropriate
legislative and economic framework which would be conducive to
sustainable development in collaboration with farmers.

Today, farmers stand on the threshold of a new agricultural era. 
It is also today that we are in the Social Summit, where
governments will be signing a Declaration and Plan of Action
largely in favour of people's representative organizations.  As
such, the Social Summit signifies the end of top-down
development.      

For farmers, the Summit signifies the end of top-down
agriculture.      

What confronts us is no mean challenge.      

Thank you.      


*****  The International Federation of Agricultural Producers,
founded in 1946, is the international organization of the world's
farmers.  It is the only worldwide body grouping together
nationally representative general farmers' organizations. The
Federation was established to "secure the fullest co-operation
between organizations of agricultural primary producers in
meeting  the optimum nutritional and consumptive requirements of
the peoples of the world and in improving the economic and social
status of all who live by and on the land". IFAP is financed and
governed by its member organizations.      

       The Federation represents virtually all the agricultural
producers in the industrialised countries and several hundred
million farmers in the developing countries. The one link which
is common to the vast majority of IFAP's members, large or small,
is their attachment to the family farm.      

       IFAP has Category 1 consultative status with the Economic
and Social Council of the United Nations.