Taking co-operative solutions to the next level

From feeding the world’s growing population to keeping local shops alive, co-operatives can provide solutions to problems at all levels. This was the message highlighted at many events at the 2014 International Summit of Cooperatives, alongside discussions on what needs to be done to strengthen the local and global impact of co-ops.

Rabobank, one of the world’s largest co-operative banks, is based in the Netherlands and operates globally. Over recent years, it has been implementing a new initiative to help feed the world’s growing population.

“How are we going to get the best people on the land?” asked Berry Marttin, who heads up international rural and retail at Rabobank, in his address the Summit.

“What we have been doing is looking at the places in the world where the enabling factors are not there.” These factors, he said, include finance and the infrastructure to increase agricultural production.

“We have been investing minority stakes in finance institutions in developing countries and we have been establishing 200 producer co-operatives each year.”

“We know how to do it,” he said, adding that to get the best people on the land and to feed a rapidly growing population, the key is to spread innovations and skills that will increase productivity.

Greg Dinsdale, the chief executive of LBMX, an organisation that supports purchasing co-operatives in Canada, cited the example of a co-operative of independent hardware stores across Canada that is addressing a more local issue.

The co-operative purchases goods on behalf of its independent shop members, enabling them to reduce prices and compete with larger competitors.

“There’s nothing that registers more for people than the local hardware shop,” he said, adding that the co-op is making a tangible difference for local hardware stores. “Independents that are part of a co-op sell more ‘drywall’ than Home Depot,” one of Canada’s largest stores.

Martin Lowery, executive vice president of membership and association relations at NRECA, the body representing electricity co-ops in the United States, offered a different example, explaining the origins and ongoing local impact of rural electrical co-operatives in the US after the Great Depression in the 1930s.

Electrical co-operatives were set up by farmers to “meet a need that was not otherwise going to be met. The government offered investor-owned electricity institutions the option of low interest loans, but they said no. It was about real people meeting their own needs . . . farmers and ranchers.”

Today, rural electrical co-operatives bring power to 42 million people across the US. But, Mr Lowery said, not only do they continue to provide a vital service to rural communities, they also reinvest in them. They “still have that can do spirit,” he said. “We’re looking after ourselves, after our community.”

This year’s International Summit was attended by more than 3,000 people from co-operatives around the world. With its focus on how co-ops are performing and innovating, many other co-operatives also gave examples of how they are trying to making a difference – both globally and locally.

During his keynote address at the conference, world-renowned economist, Professor Jeffrey Sachs, congratulated Rabobank on “its role in scaling up agriculture in Africa” and argued that co-operatives, driven by a fundamental purpose beyond financial return, are well placed to address vital global issues around sustainability.

However, Mr Sachs warned that co-operatives could not solve the major problems on their own. “Our challenge today is how to learn to co-operate, because the challenges we face can’t be solved on our own . . . not by companies, not by individual co-operatives.”

Discussion at the conference developed to include how co-operatives can put principle six, co-operation among co-operatives, into action at a global level in order to address the biggest global issues.

Participants also debated what co-ops need to do to strengthen what they are doing at local level, for members and communities – and how to demonstrate it to those communities.

A common theme in discussions at the Summit was the question of how co-operatives avoid becoming distanced from their members as they grow. Guy Cormier, who heads up the co-operative network at Desjardins Group, one of the largest financial organisations in Canada, offered advice on confronting the problem, saying growth should happen with and for members, not despite or against them.

“Always keep in mind your purpose … money is not the reason you decided to be a co-op. When you start to become stronger and larger, then you always need to bear in mind that you’re doing it for your members.”

Co-ops like Desjardins, LBMX and NRECA – as well as other organisations of different sizes and in different sectors – agreed that co-ops cannot assume they will get support from members and communities simply because they are a co-operative.

Said Mr Cormier: “People won’t do business with us because we’re a co-op; people will do business with us because we’re better than our competitors.”

Tracy Redies, corporate director at Desjardins, made a similar point. “It’s always fundamental to focus on the value to the member,” she said. “While the co-operative model is a great model, at the end of the day we need to solve people’s needs, otherwise somebody else will.”

For Martin Lowery, it came down to two things: the need for co-operatives need to redistribute surpluses back to the communities and the members, and being able to communicate this effectively. “You have to find ways to rotate the capital back into the community” he said, adding that “the way you make news is through real actions that make a real difference to people.”

• For more updates from the 2014 International Summit of Cooperatives, click here