The Co-operative Congress-How to grow a co-operative economy?

The afternoon session of the Co-operative Congress was focused on “How to grow a co-operative economy”.

The afternoon session of the Co-operative Congress was focused on “How to grow a co-operative economy”. The main speakers were Monique Leroux, CEO of Desjardins, Zhang Wangshu from All China Federation of Supply & Marketing Cooperatives and Mikel Lezamiz from Mondragon Corporation.

Desjardins’ mission

Moniques Leroux discussed the vision and mission of Desjardins Group and provided insights into the increased relevance of the co-operative business model.

She began her speech by sharing the story of Alphonse Desjardins, the founder of Desjardins. On 6 April, 1987, Alphonse Desjardins heard the story on a man who had to pay at the time $5,000 of a loan of $150.

This made him eager to look for a solution to usurious lending practices. He came across the book “People’s banks” by William Wolff and soon got in touch with him to find our more about European Co-ops. This, explained Monique Leroux, led to the development of the modern “caisse populaires” in Canada.

The first Desjardins Caisse was founded 112 years ago. “This moment in history is very important for us and this afternoon I would like to share it with you,” said the CEO of Desjardins.

Mrs Leroux also said she aimed to show the strength of the co-operative movement by using Desjardins as an example. “I am not saying that we are perfect,” she added. Desjardins is the leading financial co-operative in Canada and the fifth largest in the world.

Mrs Leroux said Desjardins aims to create an international networking between financial co-operative institutions, Co-operatives United being the perfect opportunity to raise the profile of the co-operative movement.

“Our mission is split in two parts: the first part is to develop and manage Desjardins Group as a financial co-operative group. The second part – sometimes challenging – is to contribute to the community by way of education and democracy.”

She emphasised that financial goals are not an end in itself, but tools for Desjardins to achieve its mission. She also pointed out that Desjardins always has in mind the second part of the mission. “This makes us distinctive,” she said.

To work towards achieving the second part of its mission, Desjardins promotes financial and democratic education for its members and has even founded a university where its members can study.

Another important aim for Desjardins is, according to Mrs Leroux, to promote the co-operative business model. Innovation also has a key role to play in the Group’s development strategy. “The first Desjardins caisse populaire was something innovative, it was something new in Canada. We need to maintain that kind of philosophy and approach,” said Monique Leroux.

The CEO of Desjardins also said efficiency can lead to further development and progress. She explained how, by being successful, credit unions can promote the co-operative model. Monique Leroux also highlighted that co-ops need to inter-co-operate.

She said: “We must consider our challenges from a global perspective.” Desjardins supports the Conseil Québécoisde, La Coop, the World Co-operative Monitor and many other initiatives.

Mrs Leroux said Desjardins will be working alongside with the ICA to promote the co-operative model.

She said: “In today’s global world we all face the same challenges”.

“At the time when the world needs balance, I am certain the co-operative model is just what the world needs.

“The members always come first”. Co-operators truly believe in social responsability and sustainability and they always work on long term.

“We should provide them with better support to help them grow. We need to encourage more young people to choose co-ops as a business model, either as employees or elected officers.

“More than ever the world needs co-operation it is up to us to take the lead and build the co-operative economy and build a better world. Now is the time to co-operate in building the future,” said Mrs Leroux in her concluding remarks.

 

The role of farmer co-ops in China

Zhang Wangshu from All China Federation spoke of the role farmer co-ops have played in re-vitalising the Chinese agricultural sector. He described how new co-ops have emerged in China in recent years, after the first co-operative law regarding agricultural co-ops had been adopted. The new law led to an astonishing development of agricultural co-ops in China.

All China Federation created a five year development planning to double the number of co-operatives. Co-ops also benefit from the advice from industry support associations.

Mr Zhang Wangshu said entry requirements for membership can be an impediment for small-scale farmers. He explained that although these requirements are necessary for co-ops to be effective, it is a disadvantage for small households, who cannot benefit from cooperation because they do not have enough land.

Financial restrictions also restricts the further development of co-ops, said Mr Wangshu.

“Our supply marketing co-ops are actively involved in solving these financial difficulties. We have set up some micro-loan and credit guarantee companies and mutual help groups. The government does not permit the development of financial co-ops/credit unions yet, but if these small scale programmes are successful the government may permit it.”

Chinese agricultural co-ops also sometimes tend to be too much focused on production, and, in Mr Wangshu’s view, this can be a disadvantage.

Zhang Wandshu spoke of All China’s plans to boost co-operative development. The federation is encouraging co-ops to call for changes in the legislation, pay attention to the market’s needs and increase their potential by co-operating or joining other co-ops.

 

Mondragon Corporation-Why the co-op has coped well with the crisis?

Mikel Lezamiz from Mondragon Corporation was another speaker at the Co-operative Congress. By using Mondragon as a case study, he explained why co-ops have proven to be a sustainable enterprise model, particularly during the financial crisis.

Mondragon coped well with the crisis because its co-operative structure enabled the corporation to share the burden of shocks. It has taken various measures such as reducing the number of hours.

Mr Lezamiz said: “Mondragon is an integral system, where all co-ops help each other. This system maybe is the key to resolve-because now we are maintaining employment-real inter-co-operation.”

“I would like to advise you to think in your own region/co-operative what kind of organisation are you going to have.”

Mikel Lezamiz also said the size of co-ops is less important. He added small co-ops can be as successful as big co-ops.

Although the Mondragon model has proven to be successful, Mr Lezamiz said this does not necessarily mean the model would be successful in other regions because the internal situation and culture within individual states are also important.

Monique Leroux also agreed with Mr Lezamiz. She said “size should not be the criteria, but the way in which we believe in the values”.

 

 

 

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