National Features of European Co-ops (1994)

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

          **********************************************
               National Features of European Co-ops
           (in the Food Produce and Agricultural Sector)
          **********************************************

                   by Philippe Nicolas*


A North-South Divide

In 1989, the French Ministry of Agriculture (Minagri, Paris)
carried out a series of surveys into agricultural co-operation
in the countries of the European Community. The countries
under consideration did not include France, a decision having
been taken not to approach the French co-op  movement in this
context (BTI, 1992).

Meetings were held directly with the people concerned. This
operation clearly revealed a marked divide between the
countries of northern and southern Europe with respect to
agricultural co-operation.

It can be seen firstly that, although agricultural
co-operation exists in all the countries of the EU, there is
considerable variation in the economic significance and
influence of this co-operation: the conditions under which it
is developed and run differ greatly from one country to the
next. The official representatives of the Ministry of
Agriculture divided the countries into two categories: those
with a "liberal tradition" and those with a "tradition of
greater State intervention".

The first category is characterised by the lack of
governmental intervention "in the economic content of
co-operation". This applies to Germany (1), Denmark, the
Netherlands and Ireland. On the other hand, for the second
category, there is legislation "framing the co-operative
society and its operation, and observance of legal and
statutory regulations is the precondition for state
assistance". This situation applies to Italy, in particular,
but also affects Spain.

Co-operation in Germany
***********************
The German co-operative doctrine and the debate in the

European Parliament following the report by K.H.Mihr.

The question of the relationship between the co-operative
movement and the state has existed throughout its history -
from its origins right through to the present day.

In Germany, Hermann Schulze-Delitzsch (1808-1883) who,
together with Friedrich Wilhelm Raiffeisen (1818-1888), is
still the primary reference for the German co-operative
movement, was radically opposed to State intervention or any
other external intervention, of whatever nature.

There is a doctrine and theoretical model of co-operative
organisation which is accepted and acknowledged by the vast
majority within the professional and academic environments
directly concerned. These special features were highlighted
again when the various groups involved felt that the German
historical model was under threat from certain initiatives,
taken at the European Community level, aimed at harmonising
the national rights of co-operatives within the Community.

Two facts in particular caused swords to be drawn: the report
by the German MEP Karl-Heinz Mihr and the vote on 13 April
1983, resulting from this report, approving a resolution of
the Parliament on co-operatives within the European Community.
As Hans A Engelhard (the then Justice Minister of the FRG)
wrote in 1985: "the deliberations of the members of parliament
clearly illustrated that the views within Europe on the
fundamental concepts of the nature and function of
co-operatives differ greatly... In general, any harmonisation
of the law, which does not take account of the differences in
the organisation of the co-operative sector from one European
country to another will immediately give rise to great
problems" (Engelhard, 1985).

So, what did K. H. Mihr do to give rise to such discontent?
Again in the words of Hans A. Engelhard, he had "placed the
co-operatives and general interest companies in the same
basket... This report regards co-operatives and general
interest companies as a third force, located between the
private and the public sector, which can be used to curb
unemployment within the Community".

The German Co-op Model
**********************

This model refers to two basic concepts which can be found in
all the German literature on co-operatives:

-    the furderungsauftrag or promotional aim (implying the
     economic promotion of its members);

-    and Selbsthilfe or self-help, self-assistance, combined
     with mutual assistance within a group, and which is
     opposed to external assistance, of any nature, including
     State assistance, of course. Selbsthilfe is associated
     with the idea of taking the initiative and self reliance,
     and also implies that the decision goes from "bottom to
     top", whereas any initiative coming down from the "top"
     can only be taken in accordance with the "subsidiarity"(2)     
     principle.

"According to the German co-operative doctrine", wrote H. H.
Muenkner (ADDES, 1992), "the ideas of Friedrich Wilhelm
Raiffeisen and Hermann Schulze-Delitzsch and the positions
adopted by the federations of German co-operatives,
Selbsthilfe... is the essential criterion for any co-operative
activity which is used to distinguish the co-operatives from
organisations to assist third parties (Fremdhilfe), and
therefore from general interest or public interest
organisations".

Thus, the co-operative is characterised by:

-    its "dual nature" (a combination of an association of
     individuals and a common business);

-    the "identity" of the members (who are both shareholders
     and users);

-    and the Fuorderungsauftrag, i.e. the economic
     self-promotion of its members, which in turn implies
     Selbsthilfe.

Naturally, this does not affect the other rules adopted by the
"founding fathers": the dividend, the indivisibility of the
collective reserves for the entire life of the company and,
finally, democracy par excellence: one member, one vote (which
is, of course, the feature which distinguishes the
co-operative from the capitalised company within the service
sector, and is therefore fairly poorly perceived by those,
such as Y. Emelianoff, who hold to the "single principle",
otherwise known as the proportionality rule).

It is interesting to note that, during all the surveys led by
E. Pichot (Minagri representative) in Germany, no mention was
made "in discussions or written documents of affiliation to
Rochdale", thus indicating origins which are specific to the
German co-operatives and the source of inspiration for other
countries of eastern Europe.

However, more generally and very importantly, the German
concept of co-operative organisation is in no way the product
of the tinkerings of intellectuals or the expression of a
governmental choice: it has been adopted, promoted and
repeated in the professional environments of Co-operation, as
shown by the meetings between E. Pichot and the managers of
the German co-operatives, federations and agricultural unions
(Pichot, 1989 - BTI, 1992).

The Transformation Process
**************************

In observing the facts, and in relation to the theoretical
model which we sketched out in Section 2, the experts are only
able to identify the many deviations, irregularities and
drifts causing deplorable "empirical amalgamations",
corresponding to theoretical monsters that are the product of
teratological studies of companies. Although some observers
have no qualms about speaking of "denaturation", others prefer
to use the more neutral expression "transformation process".

If we consider the entirely general nature of the problem,
Professor Erik Boettcher identifies that "frontiers are
violated" in three directions: "In practice - and I am
speaking of the Federal Republic of Germany - it is worrying
to see that frontiers are constantly crossed in the direction
of the general interest economy, state intervention and the
capitalist commercial economy, all at the same time"
(Boettcher, 1985).

In the case of agricultural co-operatives, the people to whom
E. Pichot spoke reported a lack of information and training.
As for the general assemblies, although they represent a
social event, they do not appear to constitute a forum for
discussion and essential decision-making by the co-operative.
"The representative of the Bauernblatt pressure group was very
critical of the democratic principles used to run these
assemblies" (E. Pichot, 1989).

However, the co-operatives establish formulae enabling those
who subscribe to them to take part in the decision-making
process. In this respect, the situation varies considerably,
ranging from the Beirat (3), through to the systematic
recourse to this type of council.

The Socio-political Movement
****************************

In his opening speech to the Munster Conference in 1985, Hans
A. Engelhard declared: "In Italy, the co-operatives constitute
a pillar of economic assistance provided by the State. The
Italian State uses co-operatives to systematically encourage
certain economic categories".

According to Professor Bernhard Grossfeld, speaking at the
same conference: "The European Parliament wants to use
co-operatives as an instrument to solve the urgent problems
facing the jobs market at the European level... This does not
solve the problem of exactly what is meant by "co-operative"
in the various Member States and whether different types of
phenomena are flying the flag under the same name... These
differences are particularly clear if we compare Italy and
Germany..."

Professor Hans H. Muenkner, another speaker at the Munster
Conference (1985), also emphasised the ideological tendencies
and policies of the large Italian co-operative associations,
before concluding that "the State uses the co-operatives to
implement actions and programmes based on aims concerning
social, economic and general policy". He cited as examples the
agricultural consortia, the production workers~ co-operatives,
the housing co-operatives and the consumers~ co-operatives.

1989 Survey of Agricultural Co-operatives
*****************************************

F. Enel, the representative of the Ministry of Agriculture
(Minagri, Paris) for Italy confirmed, in her own words, "the
omnipresence of politics", with each party regarding
co-operation as an "instrument in the political battle in the
field" (BTI, 1992). As F. Enel tells us, this is true to such
an extent that it is essential that the co-operative framework
have "a high capacity for political action" and a "political
culture". Quoting the manager of a marketing consortium
belonging to the LEGA (4), the "Minagri" representative
emphasised the perverse effects of choosing directors on
political grounds and, more particularly: "the bureaucracy and
the impairment of relationships with the members".

On the other hand, and according to many experts consulted by
F. Enel, there are still many "backward" co-operatives, while
the gap continues to widen between the co-operative societies,
which are nevertheless undertaking a process of reform, and
the corresponding companies in the "private sector". We see,
therefore, under these conditions, that the co-operative
societies are attempting to reinforce the role of the
"company", i.e. to put it briefly, to adopt some of the
procedures and behaviour of capitalised companies, and that
the associations of co-operatives are drawing up new
strategies for the movement as a whole (BTI, 1992).

Crossing the "third frontier"
*****************************

Thus, somewhat behind the co-operatives of northern Europe,
and behind the French co-operatives, the Italians are also
starting to cross the new frontier. 

To illustrate these changes, let us briefly consider the
programme of the LEGA - again in F. Enel~s words. This also
involves the transformation of a socio-political "movement",
weighed down by the "legacy of the past" and its "perverse
effects", into a dynamic "System" of companies, grouped into
regional consortia for transformation, marketing and services.
These, in turn, are combined into national unions, the whole
organisation being directed towards the "upper tertiary
sector" (financial management, research and development,
publicity, etc).

A partnership must be created, and this process has already
started, with both co-operative societies and the capitalised
companies. There is also a call for diversification and the
implementation of new technologies, backed up by a "suitable
financial strategy".

Of course, with such a programme, co-operation will ultimately
no longer be "as it was in the past, the association for the
poorest and most deprived, the organisation to defend them...
but will tend to promote those members with the greatest
ability to adapt" (Enel, 1989).

This modernisation effort also requires government
intervention in order to modify the concept of co-operation,
which is now somewhat outmoded, particularly if it means
"remaining in the market in competition with the public and
private capitalised companies". Thus, for example, in order to
reinforce the "entrepreneurial criteria", law no. 59 of 31
January 1992 allows "financing companies" to undertake actions
which are associated with a right to vote (Napolitano, 1992).
However, a second law of 8 November 1992 concerns the "social
co-operatives" which "carry out" their activities within the
context of agreements with state organisations, which they
replace in the management of certain social, health and
educational services.

Within the Christian Social Tradition
*************************************

In Germany, this is represented by the  Raiffeisen-Schulze
-Delitzsch organisation and, in Italy, by the concepts and
strategy of CONFCOOPERATIVE (the Confederation of Italian
Co-operatives).

According to the President of CONFCOOPERATIVE, "the optimum
size for a co-operative must be medium and thus governable.
The small farmers, the real helmsmen, must continue to be able
to find the tiller so that they can take the helm and, in
particular, can see and control it" (Enel, 1989).

Inevitably, certain similarities can be seen between these
statements and those of Professor H. H. Munkner: "The idea
that money invested in the co-operative is a value which must
be profitable in itself is, in my opinion, an idea which has
been introduced into the co-operative philosophy from the
outside ... I believe this to be a fundamental mistake: the
illness to be cured has, perhaps, been badly diagnosed and the
illness is not, perhaps, a demand for remuneration by the
member, but rather that he does not feel that the co-operative
is his "business" and it is down to him to provide its
financing" (Munkner, RECMA, 1992).

Nordic and other Models
***********************

With reference to agricultural policy, we have alluded to the
forms of co-operative organisation developed in northern
Europe, which are regarded as exemplary. So, today, what is
this "Nordic model" from which we have decided to draw
inspiration? A useful starting point is to consult Johannes
Michelsen, the academic and president of the Danish
association for co-operative studies. In a text published at
the 19th International Congress of CIRIEC, reproduced and
translated by the Revue des Etudes cooperatives, mutualistes
et associatives (Review of studies of co-operative and mutual
societies and associations) (1992). It states that the
organisations (including the agricultural co-operatives),
which are perceived as social movements, "pay more attention
to the running of their organisational system, rather than to
the co-operative values of the Alliance (ICA) as such. Thus,
in the Danish co-operatives, the question is less and less one
of the participation of the members. As a consequence, the
decision-making process is becoming ever more centralised,
while understanding of the logic behind the co-operatives has
fallen for several years" (Michelsen, 1992).

After everything that has been said about Germany and Italy,
it is clear that the "sin" of modernity is that which concerns
the "third frontier" (cf E Boettcher), and which leads the
co-operative societies - or at least the agricultural and
therefore the largest co-operatives- gradually, and, for the
moment, partly, to adopt the structures and behaviour of the
capitalised companies. However, it is also important to
understand that this does not just involve grafting new
functions (for public purposes or in the "general interest")
onto the original co-operative organisation defined by the
German co-operative doctrine. The very heart of this method of
organisation is now affected, as shown in the French case by
Claude Vienney in his analysis of the law of 13 July 1992
which modernised the French co-operative societies (and
modifying the text of the "framing law" of 10 September 1947)
(Vienney, 1992).

In the case of the French agricultural co-operatives, we have
endeavoured to show, in a text prepared for the 20th
International CIRIEC Congress (Austria, May 1994) that a
period in which the sense of identity of the co-operatives was
consolidated, stretching from 1885 to 1960, was followed by a
period in which this sense of identity declined, in both fact
and in law. This decline is continuing today such that "the
original and complete co-operative form was only implemented
within the French agricultural system between two
"agricultural revolutions": one towards the middle of the 19th
century to bring about the use, in family-run operations, of
the mixed farming/stock rearing system, and one which started
in the early 1960s to bring about the "agro-industrial system"
characterised by an agricultural business which has separate
workshops and is dependent on peripheral food produce
companies" (Nicolas, 1994).

Notes
******

1    This survey only covered the old (West German) Federal
     States.
2    Quadragesimo Anno Encyclical of 15 May 1981 (cited by
     Muenkner, ADDES, 1992).

3    The Beirat (advisory board) is made up of representatives
     from the different areas of activity or different fields
     of production (BTI, 1992).

4    LEGA: "National League of co-operatives and mutual
     societies", the political orientation of which is close
     to that of the PCI and PSI. The other large grouping is
     CONFCOOPERATIVE (Confederation of Italian co-operatives)
     which has inherited the Christian social tradition.

* Mr Nicolas is the Research Director for the  National
Institute for Agronomic Research (INRA Paris). This is an
abridged version of the original presentation made at the 10th
ADDES Colloqium (Association for the Development of the
Documentation on the Social Economy) in Paris in March 1994. A
fuller version with all bibliographical references will be
published in issue 52 of RECMA, in June 1994.

Bibliography
************

Boettcher, E. - L'idee du mouvement cooperatif et sa place
dans la politique institutionnelle et sociale - "La
cooperative dans la concurrence des idees".  AGI, Mumster,
1985

BTI - La cooperaion agricole dans la CEE. Ministare de
l'Agriculture -  No. 6-7, Janvier 1992

Enel, F. - Les cooperatives agricoles en Italie - Bilan et
Perspective. Ministare de  l~Agriculture, 1989.

Engelhard, H. A. - "La cooperative dans la concurrence des
idees". AGI, Munster, 1985.

Grossfeld, B. - "La cooperative dans la concurrence des
idees", AGI, Munster, 1985.

Michelsen, J. - Le marche, l'Etat providence, et le secteur de
l'Economie sociale au Danemark - RECMA No. 43 - 3e trimestre
1992.

Muenkner, H. H. -  "La cooperative dans la concurrence des
ideas". AGI, Munster, 1985.

Muenkner, H.H. - RECMA, no. 44-45, 1992

Muenkner, H.H. - Panorama de  l'Economie sociale en Allemagne
- 9ame colloque de l'ADDES, Paris, 19992.

Napolitano, C.B. - RECMA, no. 44-45, 1992

Nicolas, Ph., -  Ragles et principes dans les societes
agricoles franiaises: Evolution du droit et des pratiques de
1960 e 1992. 20e Congras International du CIRIEC, Graz
(Autriche), mai 1994, INRA, Paris.

Pichot, E. - Les cooperatives agricoles en RFA - Ministare de
l'Agriculture, Paris, 1989.

Vienney, C., - Identite cooperative et statuts juridiques.
RECMA no. 44 - 45 - 4e trimestre 1992.

List of Periodicals Received by the ICA Documentation Centre 
1993 - 1994

 Argentina
ACAECER, El Agrario, Boleten Credito Cooperativo, 
Cotagro, Cuadernos de Economea Social, FEDECOBA Informa, 
IDELCOOP - Revista del Instituto de la Cooperacion, 
Noticiero, Notico

Austria
Konsum Info

Belgium
Forum de l'Economie Sociale, Revue du Travail

Brazil
Cecrej Informa, Informativo OCB, Informativo UNIMED, 
nornal elo Cooperativo

Canada
The Atlantic Co-operator, The Co-operator,  Le Cooperateur
Agricole, Le Cooperateur Laitier, Coopresse, Credit Union Way,
CU Contact, Enterprise, From  the Rooftops, Info Coop,
International Affairs Update, Ma  Caisse, The Manitoba
Co-operator, La Revue Desjardins, Roseau Coop

China
Chinese Supply and Marketing Cooperative Review

Colombia
Gaceta, Signos y Hechos

Costa Rica
Dialogo Cooperativo Regional, Infocoop, Mensaje Cooperativo

Czechoslovakia
Czechoslovak Co-operatives

Denmark
Andelsbladet, CCD Newsletter, Kooperationen

Dominica
Dominica Co-operative Newsletter

Egypt
Burg al-Taawun

Federal Republic of Germany
BFG Wirtschaftsbletter, DESWOS-Brief,
Entwicklung und Zusammenarbeit, Der Verbraucher,
Die Wohnungswirtschaft,
Wohnungswirtschaftliche Informationen,
Zeitschrift fur das Gesamte Genossenschaftswesen

Finland
Eureka, Finland Consumer Co-ops, Me, Samarbete, Yhteishyva

France
Animation & Education, Les Cahiers du Credit Mutuel,
La Cooperation de Production, Copropriete Cooperative, GNC La
Lettre,
Information Sociales, La Lettre du Credit Cooperatif,
Paysans, Revue des Etudes Cooperatives Mutualistes et
Associatives, SCOP Hebdo

Guatemala
CENDEC Informa

Hungary
Hungarian Co-operation


India
Agricultural Situation in India, AIRD News,
The Co-operator, IFFCO Marketing News, Landbank Journal, NAFED
Marketing Review, NCDC Bulletin,  NCHF Bulletin

International Co-operative Alliance
Asia-Pacific Consumer Coop News,
Asia-Pacific Cooperative News,
Banking Journal
CICOPA News
Co-op Dialogue
Co-op News
Co-operative and Mutual Insurance Network
Co-optrade Bulletin
ICA News
Info-Coop
Insurance News
Luna Nueva
Review of International Co-operation
TICA News


International Publishers (other then ICA)
Afrique Relance
Annals of Public and Cooperative Economy
America Cooperativa
CEA Dialog
CEPAL Notas sobre la Economea y del Desarrollo
COLAC Noticias
Le Courrier des Pays de l'Est
Credit Union World Reporter
Development
ECE Highlights
FAO Quarterly Bulletin of Statistics
Flashes from the Trade Unions
Habitat News
IFAP Newsletter
ILO Information
ILO Official Bulletin
ILO Press
INSTRAW Nouvelles Femmes et Developpement
International Labour Review
IRED Forum Information
IRU Courier
Journal of Rural Cooperation
Naturopa
Naturopa Newsletter
OCA Noticias
OECD Economic Surveys
The OECD Observer
OECD Press Release
PNUD Actualites
Rural Development
Together
UN Chronicle
UNCHS Shelter Bulletin
UNCTAD Bulletin
The UNESCO Courier
UNESCO Sources
UNICE Information
UNIDO Newsletter
World Development
World Food Programme Journal
World Trade Union Movement

Ireland
Co-op Ireland

Israel
Spectrum

Italy
Cooperazione 2000, La Cooperazione Italiana,
Credito e Cooperazione, Libera Cooperazione in Agricoltura,
Rivista della Cooperazione, Unipolis

Japan
Co-op Japan Information, IDACA News, Ie No Hikari,
Japan Agrinfo Newsletter,
Journal of Consumers~ Co-operative Institute,  ZENCHU Farm
News

Kuwait
al-Hasad

Malaysia
Pelancar

Mexico
El Puente, Reflexiones Superaciun por la Educaciun

Nigeria
Co-op News

Panama
Ultimas Noticias

Philippines
The Coop Sector, CUP Gazette, Farm News & Views,
Pakikiisa Philippine Development NGO Update

Poland
Rolnik Spoldzielca-COOP, Spolem,  Spolem - Biuletyn
Informacyjny

Portugal
Boletim do Credito Agricola Mutuo, Boletim Informativo,
FENACAM Boletim Informativo, Informaiao Cooperativa,
Linha do Sul, O Pioneiro

Puerto Rico
Puerto Rico Cooperativista,
Revista Cooperativa Puertorriqueua


Republic of Korea
The Credit Union Newsletter, Monthly Review, NACF News


Spain
Agricultura y Cooperaciun,
Andalucia Cooperativa,
CIDEC Noticias de la Economea Publica Social y Cooperativa,
CIRIEC Espana, Compartir, Cooperaciu Catalana, Credito
Cooperativo, Eroski, Gatza, IberCoop en  Defensa de los
Consumidores, INFES - Revista de Economea  Social, Madrid
Cooperativo, Revista de la Economea Social  y de la Empresa,
Revista Iberoamericana de Autogestiun y  Acciun Comunal,
T.U.Lankide, Tendencies, Treball Cooperatiu


Sweden
Development Dialogue, Koopen, Kooperation, Ledarforum,
Tindingen


Switzerland
Cooperation, Swissaid


Thailand
Asia-Con News


Turkey
Batikent, Co-operation in Turkey, Karinca,
Kooperatif Dnyasi, Kooperatifcilik


Uganda
Co-op News


United Kingdom
British Overseas Development,
CB News the Journal of the Community Business Movement, 
Co-operative Gazette, Co-operative News,
Co-operative Progress, Co-operator's Platform,
Coop Developer, Coop Members,
Journal of Co-operative Studies, The Link,
London Co-op News, Network, The New Co-operator,
New Sector, ODI Briefing Paper, The Society, XSA Briefing

Uruguay
BoletEn Prodeco, El Bulletin CUDECOOP, Caminando,
Dinamica Cooperativa, El Solidario

USA
Banknotes, CHF Newsbriefs, Co-operative Enterprise,
Cooperative News International, Farm Journal, Farmland News,
NCBA Cooperative Business Journal, View

Yemen
Al-Magalis