History of the Cooperative Movement

History of the Cooperative Movement Prepared by: Jo B. Bitonio Philippines

Robert Owen William King The Rochdale Pioneers Charles Fourier Charles Gide Beatrice Webb Friedrich Raiffeisen
Key Theorists

Robert Owen (1771–1858) OWEN first cooperative theorist and credited with inspiring the Rochdale Pioneers, who in 1844 began the cooperative movement at Rochdale, Lancashire

Owen believed in putting his workers in a good environment with access to education for themselves and their children. These ideas were put into effect successfully in the cotton mills of New Lanark , Scotland .
Robert Owen (1771–1858) Fathered the cooperative movement. A Welshman who made his fortune in the cotton trade

Owen had the idea of forming "villages of cooperation" where workers would drag themselves out of poverty by growing their own food, making their own clothes and ultimately becoming self-governing. He tried to form such communities in Orbiston in Scotland.

It was here that the first co-operative store was opened.

His efforts bore fruit in the international cooperative movement, launched at Rochdale, England, in 1844. Owen died on November 17, 1858, in his home town of Newtown

Although Owen inspired the cooperative movement, others – such as– Dr William King took his ideas and made them more workable and practical.
King believed in starting small, and realized that the working classes would need to set up cooperatives for themselves, so he saw his role as one of instruction .
Dr William King (1786–1865)

He founded a monthly periodical called The Cooperator , the first edition of which appeared on May 1 , 1828 . This gave a mixture of cooperative philosophy and practical advice about running a shop using cooperative principles.

King advised people not to cut themselves off from society , but rather to form a society within a society, and to start with a shop because, "We must go to a shop every day to buy food and necessaries—why then should we not go to our own shop?"

He proposed sensible rules, such as having a weekly account audit, having 3 trustees, and not having meetings in pubs (to avoid the temptation of drinking profits).

Beatrice Webb was the author of The Co-operative Movement in Great Britain (1891).
Charles Fourier should also be mentioned as an important influence. The Pioneers established the first consumer cooperative, leading to a worldwide movement. They also experimented with a producer cooperative, which soon failed .

A few poor weavers joined together to form the Rochdale Equitable Pioneers Society at the end of 1843. The Rochdale Pioneers , as they became known, set out the Rochdale Principles in 1844, which have been highly influential throughout the cooperative movement.
The Rochdale Pioneers

In modern form, cooperatives date from 1844, then a group of 28 impoverished weavers of Rochdale, England, founded a mutual-aid society, called the Rochdale Society of Equitable Pioneers.

As its initial project, the society organized a grocery store , a venture that rapidly prospered. The principles developed for the guidance of this enterprise and others organized by the Rochdale Society have served, with codifications in emphasis, as the basic code of the consumer cooperative movement since that time.

The successful example of cooperative business provided by the Rochdale Society, which also established between 1850 and 1855 a flour mill, a shoe factory, and a textile plant , was quickly emulated throughout the country.

By 1863 more than 400 British cooperative associations, modeled after the Rochdale Society, were in operation. Thereafter the English movement grew steadily, becoming the model for similar movements worldwide.

By the mid-20th century, it comprised almost 2,400 associations of all types. The Cooperative Wholesale Society is the largest distributive agency in England.

( 1) democratic control, with each member entitled to only one vote, regardless of the number of his or her total shares;
(2) membership open to all, irrespective of race, creed, class, occupation, or political affiliation;
3) payment of limited interest on invested capital;
(4) distribution of net profits, usually called savings or earnings, to cooperative members in proportion to the amount of their patronage.
Rochdale Principles

part of cooperative earnings are utilized to expand operations
non-members may become members by letting their share of net profits be applied towards their initial share stock;
Supplemental Principles The Rochdale Society developed a number of supplemental principles, which are generally observed in contemporary consumer cooperatives. According to these:

c. goods and services are sold for cash at prevailing market prices; reserve funds are regularly accumulated for the purpose of covering depreciation and meeting possible emergencies;
d educational activities, designed to increase and inform the cooperative membership, are systematically sponsored and conducted.
e. Other supplemental principles hold that labour must be fairly treated and that cooperatives should work together

Worldwide, some 800 million people are members of cooperatives, and it is estimated that cooperatives employ some 100 million people.
World Cooperative Movement

UK, France, Germany, Belgium, Austria, Italy, Denmark, Finland, Norway, and Sweden.

Notable among the European countries in which consumer cooperation received early popular support were France, Germany, Belgium, Austria, Italy, Denmark, Finland, Norway, and Sweden.

Euros 11B housing health Credit union doctor Football club buying Whole foods care leisure consumers workers Euros 1.3 B Source: Mr. Bob Burlton Midcounties Co-operative, United Kingdom Aug. 2006 agriculture

Credit unions are also established in the UK. The largest are work-based, but many are now offering services in the wider community.
The Association of British Credit Unions Ltd ( ABCUL ) represents the majority of British Credit Unions.
Credit Union

both noted for promoting ethical investment The UK Co-operative Group insurance provider CIS Co-operative Bank

Building cooperative British Building Societies developed into general-purpose savings & banking institutions with "one member, one vote" ownership and can be seen as a form of financial cooperative (although many ' de-mutualised ' into conventionally-owned banks in the 1980s & 1990s).

Building cooperative Members of a building cooperative (in Britain known as a self-build housing cooperative) pool resources to build housing, normally using a high proportion of their own labour. When the building is finished, each member is the sole owner of a homestead, and the cooperative may be dissolved .

This collective effort was at the origin of many of Britain's building societies , which however developed into "permanent" mutual savings and loan organisations, a term which persisted in some of their names (such as the former Leeds Permanent ).

Nowadays such self-building may be financed using a step-by-step mortgage which is released in stages as the building is completed. The term may also refer to worker cooperatives in the building trade

Agricultural cooperative Agricultural cooperatives are widespread in rural areas.

out by private traders, producers In Britain agricultural marketing is carried ’ cooperatives, and marketing boards for certain products. The number of marketing boards has been steadily reduced over the past 20 years.

Co-operative Wholesale Society According to cooperative economist Charles Gide , the aim of a cooperative wholesale society is to arrange “bulk purchases, and, if possible, organise production.”

The best historical example of this were the English CWS and the Scottish CWS, which were the forerunners to the modern Co-operative Group

Cooperative Bank, Credit Union & Coop Savings Bank The Co-operative Bank's head office, 1 Balloon Street, Manchester . The statue in front is of Robert Owen , a pioneer in the coopmovement Credit Unions provide a form of cooperative banking

Other important European banking cooperatives include the Crédit Agricole in France, Migros and Coop Bank in Switzerland and the Raiffeisen system in many Central and Eastern European countries . European Banking Cooperative

The Netherlands, Spain, Italy and various European countries also have strong cooperative banks. They play an important part in mortgage credit.
Cooperative banking networks, which were nationalized in Eastern Europe, work now as real cooperative institutions.

A remarkable development has taken place in Poland , where the SKOK ( Spółdzielcze Kasy Oszczędnościowo-Kredytowe ) network has grown to serve over 1 million members via 13,000 branches, and is larger than the country’s largest conventional bank.
In Scandinavia , there is a clear distinction between mutual savings banks (Sparbank) and true credit unions (Andelsbank

Housing cooperative A housing cooperative is a legal mechanism for ownership of housing where residents either own shares (share capital co-op) reflecting their equity in the co-operative's real estate, or have membership and occupancy rights in a not-for-profit co-operative (non-share capital co-op), and they underwrite their housing through paying subscriptions or rent .

In Market-rate housing cooperatives , members may sell their shares in the cooperative whenever they like for whatever price the market will bear, much like any other residential property. Market-rate co-ops are very common in New York City .

Limited Equity housing cooperatives , which are often used by affordable housing developers, allow members to own some equity in their home, but limit the sale price of their membership share to that which they bought in for.

Worker Cooperative
A worker cooperative or producer cooperative is a cooperative that is wholly owned and democratically controlled by its "worker-owners". There are no outside, or consumer owners, in a workers' cooperative. Only the workers own shares of the business. Membership is not compulsory for employees, but only employees can become members

Mutual Insurance Insurance companies are owned by their shareholders, who in return for providing the company with capital by their share purchases, share in the profits in the form of dividends.

Mutual insurance companies, however, do not issue shares but operate solely on the money obtained as premiums; these organizations are owned by the policyholders, who share in the profits and losses .

Retailers' cooperative A retailers' cooperative (often known as a secondary or marketing co-operative in the UK) is an organization which employs economies of scale on behalf of its members to get discounts from manufacturers and to pool marketing. It is common for locally-owned grocery stores , hardware stores and pharmacies . In this case the members of the cooperative are businesses rather than individuals.

Social Cooperative Social cooperatives are legally defined as follows: the objective is the general benefit of the community and the social integration of citizens type A cooperatives provide health, social or educational services type B integrate disadvantaged people into the labour market. The categories of disadvantage they target may include physical and mental disability, drug and alcohol addiction, developmental disorders and problems with the law.

Consumers Cooperative A consumers' cooperative is a business owned by its customers. Employees can also generally become members. Members vote on major decisions, and elect the board of directors from amongst their own number. A well known example in the United States is the REI (Recreational Equipment Incorporated) co-op, and in Canada: Mountain Equipment Co-op .

The world's largest consumer cooperative is the Co-operative Group in the United Kingdom , which offers a variety of retail and financial services. There are also a number of other, independent consumer cooperative societies in the UK, such as the East of England Co-operative Society and Midcounties Co-operative .

In fact the Co-operative Group is actually something of a hybrid, having both corporate members (other consumer cooperatives) and individual members

Utility cooperative A utility cooperative is a public utility that is owned by its customers. It is a type of consumers' cooperative . In the US, many such cooperatives were formed to provide rural electrical and telephone service

UK co-operatives retain a significant market share in food retail , insurance, banking, funeral services, and the travel industry in many parts of the country.

In the UK, cooperatives formed the Co-operative Party in the early 20th century to represent members of co-ops in Parliament.
The Co-operative Party now has a permanent electoral pact with the Labour Party , and has 29 Members of parliament who were elected at the 2005 General Election as 'Labour and Co-operative' MPs .
Co-operative Party

Denmark

Denmark A notable feature of agriculture in Denmark is the influence of the cooperative movement. Cooperative associations dominate the production of dairy products and bacon. A large percentage of agricultural produce is sold through marketing cooperatives.

Most cooperatives are organized in national associations, which are members of the Agricultural Council, the central agency for the cooperatives in dealings with the government and industry, and in foreign trade

Germany
Friedrich Wilhelm Raiffeisen , the founder of the co-operative movement of credit unions

Raiffeisen Zentralbank , a cooperative bank based in Austria, and operating in Eastern Europe
Bundesverband der Deutschen Volksbanken und Raiffeisenbanken , a federation of Raiffeisen
cooperatives in Germany
Schweizer Verband der Raiffeisenbanken , the federation of Raiffeisen cooperative banks in Switzerland
Germany

Netherlands Rabobank , cooperative bank in the Netherlands

Nestle
Dean Food
Dairy Farmers of America - Coop
Danone
Fonferra - Coop
Kraft
Land o’Lakes - Coop
Lactalis
Aria Foods - Coop
Meilli Dairies
Friesland Foods - Coop
Uniliver
Morinaga Milk Industries
Parmalat
Campina - Coop
Bongrain
Human Milchunion - Coop
Saputo
Nordmilch - Coop
Sodiaal - Coop
World’s dairy top 20 includes 8 co-operatives

1. Vion - meat 2. Friesland Foods - dairy 3. Campina - dairy 4. FloraHolland - ornamental 5. Biomenveilling Aaismeer - ornamental 6. The Greenery - vegetables 7. Cosum - sugar 8. Cehava Landbouwbelang - supply 9. Avebe -starch 10. Cabeco Group - Supply, poultry 11. Agrifirm - supply 12. CNB - ornamental 13. DOC Kaas - dairy 14. FresQ - fruits 15. ForFarmers - supply 16. Fruitmasters Group - fruit 17. Agrico - potatoes 18. CZAV - grains 19. CNC - mushrooms 20. HZPC - potatoes NETHERLAND FOOD & AGRI CO-OP TOP 20

a. market oriented and entrepreneurial b. member interests in market development c. capitalization and voting rights are distributed to members in proportion to their transaction volume with the coop firm specific capitalization instruments Key Feature of Modern Coops

Key Feature of Modern Coops d. member representation is democratic e. members can effectively influence long term strategy f. cooperative constitution in accordance with market condition Source: Dr. Doeke Faber Netherlands Institute for Co-operative Entrepreneurship (NICE) Aug. 2006

USA & Canada

In the United States cooperatives are generally organized according to state law. They are often organized as non-capital stock corporations under state-specific cooperatives laws, which often restrict the use of the words "cooperative" and "co-op" to such organizations.
.

However, they may also be organized as business corporations or unincorporated associations, such as Limited Liability Companies (LLCs) or partnerships ; such forms are useful when the members want to allow some members a greater share of the control, which may not be allowed under the laws for cooperatives

Cooperatives do not generally pay dividends , but return savings or profits, sometimes known as patronage, to their members. Cooperatives can have special income tax benefits in the United States; however, because they are an unusual form of organization requiring specialized knowledge, legal and accounting costs are often very high and many choose to be taxed under less favorable corporate or partnership tax laws.

USA
Central Bank of Cooperatives
12 district banks
lend directly to eligible cooperatives
savings and credit
training and education

In the United States, there are both marketing and supply cooperatives. Agricultural marketing cooperatives , some of which are government-sponsored, promote and may actually distribute specific commodities. There are also agricultural supply cooperatives , which provide inputs into the agricultural process

In North America , the caisse populaire movement started by Alphonse Desjardins in Quebec , Canada pioneered credit unions. Desjardins wanted to bring desperately needed financial protection to working people. In 1900, from his home in Lévis, Quebec , he opened North America's first credit union, marking the beginning of the Mouvement Desjardins

Switzerland

Migros , is the largest supermarket chain in Switzerland and keeps the cooperative society as its form of organization. Nowadays, a large part of the Swiss population are members of the Migros cooperative – around 2 million of Switzerland's total population of 7,2 million[1] [2], thus making Migros a supermarket chain that is owned by its customers Supermarket Chain

Coop is another Swiss cooperative which operates the second largest supermarket chain in Switzerland after Migros. In 2001, Coop merged with 11 cooperative federations which had been its main suppliers for over 100 years.
As of 2005, Coop operates 1437 shops and employs almost 45,000 people. According to Bio Suisse, the Swiss organic producers' association, Coop accounts for half of all the organic food sold in Switzerland

Israel

plural: kibbutzim . gathering or together ) is an Israeli collective community.
The movement combines socialism and Zionism in a form of practical Labor Zionism , founded at a time when independent farming was not practical or perhaps more correctly - not practicable. Forced by necessity into communal life, and inspired by their own ideology, the kibbutz members developed a pure communal mode of living that attracted interest from the entire world
.
Kibbutz

while the kibbutzim lasted for several generations as utopian communities, most of today's kibbutzim are scarcely different from the capitalist enterprises and regular towns to which the kibbutzim were originally supposed to be alternatives. Today, farming has been partially abandoned in many cases, with hi-tech industries very common in their place.

Members of a kibbutz, or kibbutzniks Cooperative Farming in Israel Cooperative farming establishments called kibbutzim and moshavim provide much of Israel’s agricultural

Kibbutzim attempted to rotate people into different jobs. One week a person might work in planting, the next week with livestock, the week after in the kibbutz factory, the next week in laundry. Even managers would have to work in menial jobs. Through rotation, people took part in every kind of work, but it interfered with any process of specialization Job Rotation

It should be noted that kibbutzim were not the only communal enterprises in Israel. Palestine also saw the development of communal villages called Moshavim (singular: Moshav ). In a moshav, marketing and major farm purchases would be done collectively, but personal lives were entirely private. Although much less famous than kibbutzim, moshavim have always been more numerous and popular than kibbutzim
Moshavim

Today, kibbutzim have changed dramatically. Only 38% of kibbutz employees are kibbutz members.
By the 1970s, kibbutzim were frequently hiring Palestinians . Currently, Thais have replaced Palestinians as the non-Jewish physical work element at kibbutzim. They are omnipresent in various service areas and in factories.

Kibbutz industrialization in the 1960s led to an increase in the kibbutz standard of living , but that increase in the standard of living meant an end to the self-sacrifice which regular Israelis had so admired.
In his 1977 campaign for prime minister, Menachem Begin attacked kibbutzniks as “millionaires with swimming pools” and was rewarded with the right's first ever electoral victory

Kibbutzim have gradually and steadily become less collectivist in the past twenty years. Rather than the principle of " From each according to his ability, to each according to his needs ", kibbutzim have adopted "from each according to his preferences, to each according to his needs."
Decline of the kibbutz movement

Since there are still over 250 kibbutzim in Israel, it may be premature to address the legacy of the kibbutz movement. However, although there may be hundreds of entities in Israel calling themselves kibbutzim, the collectivist impulse is gone. As the largest secular collectivist movement ever, kibbutzim arguably prove that the model itself is economically sustainable , while the ideological fervor has not been so. It should be concluded that the future of the kibbutz should be left to unfold
Legacy

Rome, Italy The view from the Villa Medici shows the many domes and churches in the ancient city of Rome

This gives totals of 7,100 social cooperatives, with 267,000 members, 223,000 paid employees, 31,000 volunteers and 24,000 disadvantaged people undergoing integration. Combined turnover is around 5 billion euro. The cooperatives break into three types: 59% type A (social and health services), 33% type B (work integration) and 8% mixed. The average size is 30 workers.

A Market Place in India A vegetable seller checks the accounts at the Crawford Market in Mumbai (Bombay), the capital of the western Indian state of Maharashtra

Rice is the principal crop grown in India, and the country ranks second only to China in terms of world rice production. Much of the crop is used to feed the domestic population, as rice is the dietary staple for many Indians.

Milk
Fertilizer
Sugar
Thrift & credit
oilseed
Success Stories in Coop Sector

The most cherished expectation of members from their coops is NOT cash alone but timely and advantageous marketing of their products, timely supply of credit, quality seeds, farm chemicals, fertilizers and extension service

Malaysia 4,771 co-operative with a total membership of 5.5 M members . This represents about 5% of Malaysia’s total population with a total fund of RM 6.06 B with a total asset of RM 25.7 B

8 types of coops : banking, housing, consumer, transportation, agriculture, small-medium industry, development & service
The CBs give financing other activities includes pawn broking, investment & insurance
The co-operative housing society in Malaysia are actively developing houses and prices of housing are generally lower than the market place

The consumer co-operative operates grocery shops, supermarket, petrol stations and other consumer goods
Transport coops bring agriculture products like oil palm, rubber products.
Agriculture based co-ops produce oil palm, rubber, cocoa and vegetables
Small medium industry co-ops produce handicraft like silverware, ceramics, furniture

Cabbage Field, Japan Rain clouds pass over a cabbage field in Nagano, on central Honshu Island. Cabbage is a major crop for domestic consumption in Japan, and features prominently in many Japanese dishes

system is unique & high tech (high level value-addition)
strong agri coop movement
all farmers in membership
strong federal in character
amalgamation for viability (in progress)
service is important from cradle to grave
strong structural adjustments
strong strategic alliance
Agricultural Cooperative Organization (JA)

JA Chuoukal - guidance
JA Zenchu guidance
JA Shinren credit business
Norinchukin Bank credit business
JA Keizairen purchasing & marketing related business
JA Zen-noh purchasing & marketing related business
JA Kyosairen mutual insurance business
JA Kosairen welfare business
JA Zenkoren welfare business
Nihon Nogyo Shimbun newspaper related information service
JA Shinmbunren newspaper related information service
ie-no Hikari Kyoki publication, educational and cultural activities
Nokyo Kanko travel business
Activities of JA Group Organization Source : Mr. Toru Nakashima Institute for the Development of Agicultural Cooperation in Asia (IDACA) August 2006

Japan has a very large and well developed consumer cooperative movement with over 14 million members ; retail co-ops alone had a combined turnover of 2.519 trillion Yen ( 21.184 ) billion U.S. Dollars [market exchange rates as of 11/15/2005]) in 2003/4. (Japanese Consumers' Co-operative Union., 2003).

Village-level cooperative
Acts to market collectively farm products
Collective agency
Coops are multi-purpose
The apex aside from agricultural financing are engage in international banking and non-bank operations such as: marketing, purchasing, insurance and research
Shirk San Kei

Taiwan

Obtain credit
Buy their farm supplies
Market their produce
Manages irrigation system
Processes and exports agricultural products
Pays salaries of extension workers
Farmers Association

Thailand

Thai rice fields annually produce around 20 million metric tons of rice. As the largest exporter of rice in the world after the United States, Thailand depends considerably on its rice production. Despite the rapid growth and diversification of the Thai economy, the majority of the population are still engaged in agriculture. The Thai government is attempting to institute technological advances, such as flood control, to help farmers prepare for destructive climatic conditions

Thai Agricultural Coops

Agricultural cooperatives are engaged in business in response to members’ need in five areas:
credit business
savings & deposits
purchasing business
marketing business
agricultural services

Types of Agricultural Cooperatives
Water Users Cooperative
Land Reform Coop
Special Cooperative (animal raising)
National Security Command Cooperative (police border patrol)
Rubber Cooperative
Integrated Farming (vegetables/animal raising)
Dairy Cooperative

Singapore National Coop Federation 74 coops classified as: campus coop sector, credit coop sector, NTUC co-op sector, service co-op sector combined membership of 1.6 M

Campus Co-ops
comprised of secondary schools, junior colleges, Institute of technical Education (ITEs), polytechnics and universities
sales of books, stationary, running a bubble-tea café, cybercafés, thrift and loan services
bazaar competition to put on their thinking entrepreneurial spirit
Biz Challenge Simulation Game

Supermarket Chain
own central warehousing & distribution center
ventured into new formats and services such as: Liberty Market, Cheers Convenience Store, The Passar, Bakers Corner, Homemart and Cybermart
invested in real time integrated warehouse management system to achieve better inventory control and streamline orders from operations so as to maximize goods deployment procedures and improve staff efficiency.

SeaCare
SeaCare has its own family of businesses that focused on job creation for displaced/unemployed seamen as well as enhancing and growing business opportunities in the maritime industry
Expanded its business to Australia, China, Indonesia, Malaysia & Philippines
Ventures are: ship management, maritime medical centres, HR agency for seafaring and nonseafaring personnel, commercial cleaning and maintenance services

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History of the Cooperative Movement

by jo Bitonio

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