Cooperatives in 2012: the successes and challenges
Ian Barney, Managing Director, Twin and Twin Trading
Today marks the launch of the International Year of Cooperatives and there is much to reflect on and celebrate.
For 26 years Twin has proudly worked with democratically organised smallholders to increase their power in value chains and to create and capture value for farmers in the global south. Most of these farmers are organised in formal cooperative structures.
We’re confident that participation in grassroots farmer cooperatives has made a significant contribution to improving the livelihoods of the hundreds of thousands of farmers we have worked with over the years.
We have seen many tangible and encouraging developments from this participation. From cooperatives playing a central role in the fight against oppressive regimes for the political and economic rights of peasant farmers in Nicaragua, to evidence from Ghana that women’s participation in democratic cooperative structures has given them the confidence to represent their communities in local and national political roles. More recently in Peru we have been working with a network of farmer cooperatives to give them the skills and knowledge to influence government policy and access to increasingly decentralised government funding.
Farmer cooperatives have been central to the growth of ethical trade initiatives such as Fairtrade, and there is little doubt that these initiatives have stimulated significant changes in consumption trends and the greater accountability of big players. Some of the cooperatives we work with are beginning to move up the value chain, to invest in new ventures such as brands or processing, and to support diversification from primary commodities. There is increasing evidence that such groups have helped to sustain areas of rich and diverse environmental importance and enhance resilience to the threats of climate change.
But these successes have not been universally achieved and certainly not without significant challenges along the way. The cooperative model implicitly demands a turnover of control (competitive elections) on a regular basis. Whilst encouraging fresh perspectives and the involvement of more farmers in governance, this can create discontinuity and an incentive for short-term rent seeking. It also creates a seemingly never-ending challenge to embed principles of good governance and cooperation.
Short termism is also a result of poverty. A constraint to the sustainability of farmer cooperatives, like any business, is their ability to invest. Poverty creates a powerful incentive to distribute earnings rather than invest. Whilst some small steps have been made to engage women and to support more sustainable agriculture there is still a fundamental lack of attention to strategic gender interventions which attack head on the role of women at household and cooperative level and on innovative ways to enhance yields of cash crops whilst enhancing long-term fertility of soil and contributing to food security.
No development process is straightforward. Rarely do processes of change follow a linear path. The role of cooperatives in development is no different. However it is our belief that cooperatives can make a crucial contribution to establishing a strong cohesive civil society, and provide an important vehicle to promote economic activity in rural communities – promoting entrepreneurialism. It is estimated that 85% of smallholders remain unorganised and this creates a significant barrier to millions of farmers engaging in profitable economic endeavour. As the cooperative and fair trade movement celebrates the International Year of the Cooperative, we will seek to help it develop new and innovative ways to reach more farmers but also respond to the fundamental challenges of gender and environmental sustainability.