The co-operative movement is a little over hundred years old now. When the Industrial Revolution in the Western world become mature, it was seen that the small farmers faced a peculiar circumstance in which the buyers of their raw material and the sellers of their consumers goods became big manufactures and traders, who could dictate prices to these small men by virtue of their almost monopolistic power over the market.
In this society, the percentage of literacy was high and there was a social class that was well-to-do, but resonably hardworking, honest and sincere. There were many amongst them who wanted to do good to the society by voluntary social work. They were pained to see that the Industrial Revolution which should have brought the blessings of machine and the high living standard for mankind had actually brought monopolistic exploitation of the small men by the giants in manufacturing and marketing necessitated by the economy involved in large-scale production through the machines.
The nineteenth century capitalists were also a group of people who worked very hard, took great risks and reinvested their profits in the lure of owning still bigger enterprises. Many of these people lived amazingly simple life and even made big donations to charitable purposes for the well being of common men.
It was in this kind of social milieu when Marx predicted that capitalism was destined to destruction because of its weakness in controlling the monopolies and in protecting the proletariat that the co-operative movement came as an alternative to revolution, violence and blood-shed. It provided an alternative to socialism. It aimed at bringing about the advantages of large-scale economy to the small man who by uniting amongst themselves and pulling their resources together, would bring to themselves increased bargaining power, necessary credit supply and the required
marketing and processing services that would restore competition and put capitalistic once more on an even keel. There were a number of social workers dedicated to the movement and the capitalist class also understood the purpose of the movement. These were the circumstances in which the philosophy and practice of the Co-operative Movement flourished in Europe and in America in the second half of the nineteenth century and the beginning of the twentieth century.
The great Co-operator Raiffeisen was born in Germany only abou hundred fifty years back. In the less developed countries, co-operatives have been promoted as a matter of Government policy, and they have been largely supervised and controlled by the Government. Under such circumstances, the member tends to be quiescent, contributing little managerial talent, local know-how, or even a guard against corruption. As a result, inefficiency and even corruption in management are common, further reducing local interest in the co-operative.
Successful co-operatives must first be built on a solid base of rendering a needed service efficiently. The main reason for the continued predominance of the private trade in primary marketing in the developing countries is the complex and fragmented nature of the trading operations involved and the problems of staffing, financing and administration involved in overall public control. Consequently, this is an area in which it has proved difficult for the Government authorities to take decisive action toward helping the producer and increasing marketing efficiency. One of the persistent and basic problems in the development of marketing and agri-culture in general is linking the small farmer’s operations effiectively to the main niarketing channels.
Co-operative development is one logical means of improving the situation. If small producer can be helped to organize themselves into co-operative societies and unions for selling their crops and buying their requisites, they have a prospect of better access to markets and a promise of countervailing power in their dealings with traders. Usually support for co-operative enterprise is politically popular since it is seen as favourable to producers and restrictive to the unpopular middlemen.
Accordingly, most countries have given at least some support to producers’ marketing co-operatives and, for some, the co-operative movement is the chosen instrument for primary marketing development.
Unlike the original porducers’ co-operative movements in Europe the new versions in developing countries have usually been established with considerable assistance from Governments. They have received support in various forms, often including loans, tax privileges, advice, facilities and legal protection. In particular , in order to reinforce the loyalty of their members, they have often been given local monopoly rights in marketing and processing.
However, when a Government creates privileged co-operatives in this way, it must also accept the obligation to combat the dangers of inefficiency and injustice to producers by providing adequate supervision.
Because of the rapid rate at which co-operatives have been promoted in some countries and the heavy responsibilities put upon them in relation to their limited resources and experiences, performance has often been disappointing and competition with private traders largely unsuecessful. Where operations are well managed and leadership is sound and enterprising, subtantial progress has been made in a number of countries where co-operative methods are relatively new.
In some cases, success has to be ascribed largely to special assistance in management. Such assistance cannot be sustained indefinitely. In Africa, this has been the case with the well-run producers’ co-operaratives at Kigesi in Uganda which has built up a successful trade in vegetables ; it was also true of the co-operative ranch
at Koma Rock in Kenya. In Niger, too, rural co-peratives are reported to have been expanding very successfully in the marketing of cereals. In some other countries, such as, Tanzania and Tunisia, co-operatives without intensive assistance of this kind have, for several years, been coping with the marketing and processing of crops on a national scale.
In India, the striking success of the Anand milk producers’ co-operative over the past twenty years has attracted worldwide attention. This venture has transformed the living conditions of peasant farmers in the Kaira district of Gujrat. Its business has expanded continuously under excellent local management and, in 1967, it handled and processed more than 70,000 tons of milk for 120,000 producer members. Its remarkable progress shows what may be achieved under suitable conditions and good management.
In Cyprus, as another example, the co-operative movment has a long history and is a major force in the commercial and industrial life of the country. In several larger Latin American countries, there are large and powerful co-operative organizations which are successfully operating major processing and trading businesses.
In Lebanon the Bekaa Poultry Co-operative packs, grades and distributes egg and table poultry for some 120 members. Since 1963, it has built up excellent facilities and a reputation for quality products and commercial efficiency. It now supplies a large part of the Lebanese domestic market for eggs and exports about 70 million eggs per year. Co-operative buying among farmers or city consumers has developed extensively in some countries, notably the United States, England and Sweden while co-operative selling of farm products is most common in such countries as Denmark,
Finland, Canada and the United States. Denmark is the outstanding example of a country in which cooperative marketing of farm products and purchasing of farm supplies have succeeded on a large scale. The various products handled by co-operatives include butter, bacon, eggs, seeds, foodstuffs, fertilizer, cattle etc. These are handled by thousands of Danish farmers’ cooperative associations. A large proportion of the retail trade in Denmark, Finland, Sweden and England passes through co-operative channels. Wholesale houses organized on a national and international basis are also operated successfully by co-operatives.
The recent expansion of co-operative marketing systems in countries, such as, Sri Lanka, Tanzania and Senegal reflects a shift away from the idealistic tradition of the Rochdale Pioneers to a more pragmatic model. For instance, as seen in Japan, co-operatives there handle 70 to 80 per cent of the rice marketed. These cooperatives undertake only limited responsibilities as receivers and storage agents for a monopoly government food agency.
With a secure base as sole assemling agency, and earning a steady handler’s commission, these cooperatives provide credit and sell fertilizer and other supplies to farmers on easy terms. Once capital was accumulated from these low-risk operations, they could take on additional functions such processing and marketing other crops.
In some less developed countries, the co-operative movement was initiated with the organization of cooperative marketing societies. Coffee marketing in Tanganyika by the Kilimanjaro Native Co-operative Union Ltd., cocoa marketing in Nigeria, cotton marketing in Uganda, ane rice marketing in Malaysia are examples of the case.