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Cooperative v's Corporate

Greetings Readers,

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 and distribution.

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 possible!

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 enterprise.


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 structures.

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.

Good farming

The Editor


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