******************************************* 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.