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Co-Op Business Model Most Resilient

Excerpt from a July 3 release from the International Federation of Agricultural Producers recognizing the UN International Day of Co-operatives. This year’s theme was “Driving Global Recovery through Cooperative Enterprise.”

Th e International Federation of Agricultural Producers is encouraging the adoption and strengthening of the co-operative business model as part of national financial and social stimulus packages around the world.

Eighty farmer leaders meeting in Copenhagen, Denmark in May discussed the comparative advantages of agricultural co-operatives in sustainable development. They determined the co-operative model not only drives economic development, but also political and social responsibility, leading to a more sustainable way of doing business.

Co-operatives, specifically in agriculture, are the business model most resilient to crises. Too often, the main deciding factor for economic success in businesses has been short-term profitability. This culture of short-term gains has brought on the financial crisis, along with decreased social and environmental values, a widened gap between the rich and poor and a volatile outlook for the future. In contrast, a majority of agricultural co-operatives, have been coping well with the crisis.

In a world of market turbulence, agriculture is increasingly seen as a force of new certainty – a way for citizens to reconnect with basic values. Farmers and their co-operatives can respond to many of the concerns of society in providing the link to the land, local culture, food security, nutrition, the struggle against poverty, renewable energy on certain types of land, creating jobs, improving the economy and rural development.

Co-operatives can play a vital role in increasing the farmer’s share of the retail price by augmenting their participation in the value chain. Their sustainability lies in the fact that they are member driven rather than investor driven; co-operatives focus on providing benefits to its members, as well as consumers of the cooperative services. Their sustainability can be attributed to the fact that farmers themselves own the co-operatives and are therefore more in tune with the risks they are willing to take. Co-operatives also offer the chance for smallholders to become profitable players in the markets, promoting equity and efficient use of human resources. Values like economic democracy, social responsibility and unity strengthens the cooperatives from the bottomup.

Towards these ends, farmer co-operatives around the world are making entrepreneurial and innovative choices that are creating employment and improving livelihoods of their members.

IFAP encourages governments to recognize the contribution that co-operatives can play to help drive global economic recovery, and facilitate their role in creating value added in agricultural markets while continuing to contribute to rural development. Financial stimulus packages of governments should promote an environment in which agricultural co-operation can function and develop their aptitudes, realizing that co-operatives are the most resilient business model to face a fluctuating financial market. All stakeholders are called to seriously consider cooperatives as a multi-faceted solution to the economic recovery for a sustainable future.

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