Rejuvenating Co-operatives | Daily News

Rejuvenating Co-operatives

Amidst the plethora of supermarkets coming up everywhere, there is one institution that is still surviving. This is the village co-operative society, which used to thrive some time back but has now taken a back seat thanks to the supermarket explosion and the retail banking boom. In fact, these are the very foundation of the co-operatives movement – retail sales at reasonable prices and micro-financing through the co-operative lending societies. The latter has now evolved into a bank under the name Sanasa, but it has to face tough competition from established retail banks.

The co-operative used to be the very foundation of a village – an entire village coming together for a good cause. It is a movement that values and promotes equality – you can be a member regardless of whether you are rich or poor and your vote has the same value. At a time when income inequality is rising around the world, it is good to be reminded that solutions to inequality do exist. The co-operative model is foremost among these solutions, since it contains aspects of sustainable development at its core and is based on ethical values and principles.

Co-operatives have been acknowledged as associations and enterprises through which citizens can effectively improve their lives while contributing to the economic, social, cultural and political advancement of their community and nation. Co-operatives’ open membership model affords access to wealth creation and poverty elimination. This results from the co-operative principle of members’ economic participation: ‘Members contribute equitably to, and democratically control, the capital of their co-operative.’ Because co-operatives are people-centred, not capital-centred, they do not perpetuate, nor accelerate capital concentration and they distribute wealth in a more fair way.

On July 7 (today), members of co-operatives around the world celebrate the International Day of Co-operatives. Through the slogan for 2018 “Sustainable Societies through cooperation” they will show how, thanks to their values, principles and governance structures, co-operatives have sustainability and resilience at their core, with concern for community as the seventh of their guiding principles.

By their very nature, co-operatives play a triple role: As economic institutions they create opportunities for jobs, livelihoods and income generation; As people-centred enterprises with social goals they contribute to social equity and justice; As democratic institutions, they are controlled by their members, playing a leading role in society and local communities.

The co-operatives have come a long way since 1761when a group of local weavers formed the Fenwick Weavers’ Society in Scotland. In 1844 a group of 28 artisans working in the cotton mills in the town of Rochdale, in the north of England established the first modern co-operative business, the Rochdale Equitable Pioneers Society. The weavers faced miserable working conditions and low wages, and they could not afford the high prices of food and household goods. They decided that by pooling their scarce resources and working together they could access basic goods at a lower price. Initially, there were only four items for sale: flour, oatmeal, sugar and butter. This is widely regarded as the birth of the modern co-operative.

Today the sector is estimated to have around one billion members worldwide. Co-operatives employ, directly or indirectly, 250 million people around the world. The world's top 300 co-operatives by themselves have an estimated global turnover of US$ 2.53 trillion as revealed by the 2016 World Co-operative Monitor.

In Sri Lanka, The asset base of co-operatives has increased to nearly Rs three billion (US$ 18 million). There are almost 14,500 co-operatives in products, services, SMEs, women's development, rural banking, funeral services, insurance and farming sectors. Co-operatives are also present in the FMCG sector in Sri Lanka through “Coop City” shops run by the co-operatives Wholesale Establishment. The total membership exceeds five million.

The latter statistic shows the tremendous potential for co-operatives – it should not be difficult to enroll at least 2-3 million more members in co-operatives throughout the island. You can find out whether there is a co-operative society in your area and join it. It has the power to bring an entire town or village together for the area’s uplift. The co-operative is often the most vital link in a disaster situation, as it can mobilize resources and personnel to distribute food and engage in relief efforts. Co-operative banks can boost the self-employed and SME sector through their rolling credit schemes.

The International Co-operative Alliance (ICA) recently recognized Sri Lanka’s co-operative sector by holding one of its main conferences in Colombo. This international spotlight should be used to highlight the achievements of our 112-year-old co-operatives sector. One vital factor pointed out at this parley was that co-operatives are no longer charitable organisations and they have to earn considerable revenue to meet their expenses for survival. Co-operatives also have to compete with other institutions in a liberal market economy. The onus is thus on co-operative societies to formulate proper strategic plans taking into consideration the market situation and competitiveness to sell their products, businesses and services. It is vital to strengthen the local co-operatives sector, which can help the country’s development efforts in a massive way.


 

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