Cooperative v's CorporateMonday, Jul 10, 2000
I wrote last week about the drift away from the principles of cooperation that have been an important
part of the survival of the family farm business over the past century. It is no accident that NZ
dairy farmers seem to be in a stronger position than meat and wool farmers, recognizing that dairy
started from a much more tenuous and lower base in the relative levels of pastoral product incomes
early last century.
Perhaps it was because of that low financial base dairy cooperatives were able to flourish in spite
of the efforts of the Tooley Street traders to disrupt their development. Cooperation in the meat
industry had the misfortune to run up against the transfer pricing activities of the Vesties and their
ilk. Some survived in the modified forms of Affco, Alliance and PPCS but never achieved the Dairy
Board equivalent of an umbrella-marketing organisation with full responsibility for export sales
As farmers we are still facing the dilemma of choosing between cooperative and corporate ownership of
our interests. It seems that cooperation or bundling has become the dirty association in the minds
of the economic purists promoting the competitive market model. They theorise in isolation from
the realities of the structures required for rural production confidence. Farmers need to take care
they do not abandon the structures that have served them well for fleeting benefits of fashionable
economic theory. Remember they are of the group that want what we produce for as low a price as
A restatement of the seven principles of cooperatives would be worthwhile:
A cooperative is an autonomous association of persons united voluntarily to meet their common economic,
social and cultural needs and aspirations through a jointly owned and democratically controlled
Cooperatives are based on the values of self-help, self-responsibility, democracy, equality, equity
and solidarity. In the tradition of their founders, cooperative members believe in the ethical values
of honesty, openness, social responsibility and caring for others.
1. Voluntary and Open Membership — Cooperatives are voluntary organizations, open to all persons
able to use their services and willing to accept the responsibilities of membership, without gender,
social, racial, political or religious discrimination.
2. Democratic Member Control — Cooperatives are democratic organizations controlled by their members,
who actively participate in setting their policies and making decisions. Men and women serving
as elected representatives are accountable to the membership. In primary cooperatives, members
have equal voting rights (one member, one vote) and cooperatives at other levels are organized in
a democratic manner.
3. Member Economic Participation — Members contribute equitably to, and democratically control,
the capital of their cooperative. At least part of that capital is usually the common property of
the cooperative. They usually receive limited compensation, if any, on capital subscribed as a condition
of membership. Members allocate surpluses for any or all of the following purposes: developing
the cooperative, possibly by setting up reserves, part of which at least would be indivisible;
benefiting members in proportion to their transactions with the cooperative; and supporting other
activities approved by the membership.
4. Autonomy and Independence — Cooperatives are autonomous, self-help organizations controlled
by their members. If they enter into agreements with other organizations, including governments,
or raise capital from external sources, they do so on terms that ensure democratic control by their
members and maintain their cooperative autonomy.
5. Education, Training and Information — Cooperatives provide education and training for their
members, elected representatives, managers and employees so they can contribute effectively to the
development of their cooperatives. They inform the general public — particularly young people
and opinion leaders — about the nature and benefits of cooperation.
6. Cooperation among Cooperatives — Cooperatives serve their members most effectively and strengthen
the cooperative movement by working together through local, national, regional and international
7. Concern for Community — While focusing on member needs, cooperatives work for the sustainable
development of their communities through policies accepted by their members.
More in the future.