Development Co-operation: How Cooperatives Cope - A survey of major cooperative development agencies

Ignace Pollet and Patrick Develtere (2004)
Belgian Raiffeisen Foundation (BRS) and Cera Foundation, March 2004

Full version of the report as a 435Kb pdf

Executive Summary

In both industrialised and developing countries the interest in cooperatives is growing again. So is the interest in co-operation between cooperatives in the North and South. An important sign of this new enthusiasm for cooperatives is the new Promotion of Cooperatives Recommendation 193 adopted by the International Labour conference in 2002.

In this report we present the results of a survey of the major cooperative development agencies belonging to the cooperative sector of northern industrialised countries. With this research we tried to find out what role northern cooperatives play in supporting their colleagues in the south, what the evolutions are in their strategies and what comparative advantages they have.

The cooperative movement has always been an international movement and since its early days the northern cooperative movement has been interested in the fate of the cooperative sector in the south. However, not the cooperative movement itself but the colonial agencies first took the lead in promoting cooperatives in the southern hemisphere. This led to a kind of 'colonial cooperative paternalism'. After independence, the new governments of the Third world took over. They were in favour of a state-led cooperative strategy in tune with their populist and nationalist ambitions. This strategy has failed in most developing countries and was abandoned with the structural adjustment programmes (SAP) of the 1980s and 1990s. The renewed interest in cooperatives as development actors has much to with the new development paradigm. The new development agenda is a window of opportunities for cooperatives and cooperative development agencies because it insists on:

• the participation of multiple actors (multistakeholdership);
• decentralisation and privatisation;
• local entrepreneurship;
• poverty reduction; and
• specialisation and professionalisation

Several important northern cooperative groups have adapted their strategies to these new challenges. The American, Belgian, British, Canadian, Danish, Dutch, German, French, Irish, Italian, Norwegian and Swedish cooperative development agencies under review have either chosen for an integrated approach whereby the northern cooperatives themselves become development actors, or a specialised approach whereby they delegate the development work to specialised units (mostly NGOs) that remain structurally linked to the cooperatives. A number of international cooperative organisations such as the International Cooperative Alliance (ICA), the World Council of Credit Unions (WOCCU), and the International Raiffeisen Union (IRU) also play an important role in cooperative development. This is also the case for a few United Nations agencies such as the International Labour Organisation (ILO), the Food and Agriculture Organisation (FAO) and the World Bank. A number of related social movements are equally important promoters of co-operativism in developing countries. We present the cases of International Federation of Agricultural Producers (IFAP), International Confederation of Free Trade Unions (ICFTU), World Confederation of Labour (WCL), Oikocredit Cooperative Society and Fair Trade Labelling Organisation (FLO).

The agencies under review have a variety of ways to mobilise resources for their development work. Most rely on contributions from their own cooperative institutions and subsidies from their governments. In a number of countries, such as the United States, Canada and Sweden the Ministries responsible for development co-operation have a long tradition of collaboration with the cooperative development agencies. In recent years several agencies have developed new fundraising products together with the cooperative businesses they are related to.

In relation to the human resources for their development work most agencies can rely on the expertise of professionals and volunteers from their own cooperative movement. The tools used for their development work are also very much linked to their cooperative background. Technical assistance remains the most important development instrument of the agencies, followed by financial support and transfer of know-how and training. Interestingly, many agencies are actively involved in the creation of a favourable institutional and legal framework for cooperative development in southern countries. In recent years many agencies have been instrumental in creating trading and business linkages between northern and southern cooperatives.

The survey also reveals that the strategies of the cooperative development agencies are evolving. The majority are moving towards a programme approach whereby development activities are interlinked and whereby partnerships last over many years. Most agencies favour a network approach through which their partners can develop multiple relations. This supports also the trend towards knowledge acquisition as an alternative for knowledge transfer. In recent years most agencies have moved from a social approach to a business approach in which trade and international business arrangements also get an important place. While agencies, for obvious reasons, prefer the cooperative model, they also increasingly work with other locally adapted social economy models. And, finally, the days of working in splendid isolation seem to be over. Agencies tend to cooperate more and more. But they also tend to compete increasingly.

The agencies have an impressive track record but suffer from a lack of visibility and only limited evidence of the results and impact of their cooperative work.

Further Information

The Cera Foundation and the Belgian Raiffeisen Foundation (BRS) form the social arm of Cera Holding, a dynamic cooperative group with 450,000 members, with a tradition stretching back more than 100 years, and a passion for further developing and promoting the cooperative model. The Cera Foundation supports projects in the following areas: medical/social; struggle against poverty; agriculture, horticulture and environment; education and training/entrepreneurship; and art and culture. The sixth area of activity is credit and insurance cooperatives in Third World countries. This is supported by an independent organisation within the group called the Belgian Raiffeisen Foundation (BRS).

The Higher Institute of Labour Studies (Hoger Instituut voor de Arvbeid - HIVA) is a research institute attached to the Catholic University of Leuven. Ignace Pollet is a senior researcher specialising in organisation and co-operation studies at HIVA. Patrick Develtere is professor of Development Co-operation at the University of Leuven and director of the Sustainable Development section of HIVA.