Introduction to Cooperatives

I have worked in the coop world now for five years and it’s been a really illuminating experience. By working for a coop and being an active director of a coop board for three years as well as attending the CCMA, an annual conference for Food Coops, I have learned about a great alternative business model that stands tall in comparison to the corporate model. The corporation is basically handicapped from the start by the emphasis on profit as the end all and be all. Profit is the bottom line of most business enterprise and that does not, most of the time, translate to social or environmental responsibility. It’s also about a few getting rich on the labor of the many.

Coops on the other hand are organized in an equitable fashion: one share equals one vote and equal responsibility. They are democratic organizations where profit is not the bottom line. They have a set of guiding principles, first drafted in 1844 by the Rochdale Equitable Pioneer Society in Rochdale, England, that were revised in 1994 by the International Cooperative Alliance. These principles are standard throughout cooperatives whether they are wholesale and supplier services, food retailers, credit unions, or employee owned cooperatives like Equal Exchange, the Fair Trade company.

The Seven Cooperative Principles
The co-operative principles are guidelines by which co-operatives put their values into practice.
Principles taken from The International Cooperative Alliance web site.

1st Principle: Voluntary and Open Membership
Co-operatives are voluntary organisations, 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.
2nd Principle: Democratic Member Control
Co-operatives are democratic organisations 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 co-operatives members have equal voting rights (one member, one vote) and co-operatives at other levels are also organised in a democratic manner.
3rd Principle: Member Economic Participation
Members contribute equitably to, and democratically control, the capital of their co-operative. At least part of that capital is usually the common property of the co-operative. Members 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 their co-operative, possibly by setting up reserves, part of which at least would be indivisible; benefiting members in proportion to their transactions with the co-operative; and supporting other activities approved by the membership.
4th Principle: Autonomy and Independence
Co-operatives are autonomous, self-help organisations controlled by their members. If they enter to agreements with other organisations, including governments, or raise capital from external sources, they do so on terms that ensure democratic control by their members and maintain their co-operative autonomy.
5th Principle: Education, Training and Information
Co-operatives provide education and training for their members, elected representatives, managers, and employees so they can contribute effectively to the development of their co-operatives. They inform the general public - particularly young people and opinion leaders - about the nature and benefits of co-operation.
6th Principle: Co-operation among Co-operatives
Co-operatives serve their members most effectively and strengthen the co-operative movement by working together through local, national, regional and international structures.
7th Principle: Concern for Community
Co-operatives work for the sustainable development of their communities through policies approved by their members.

To participate in a cooperative by buying a share and becoming an owner is to take a certain amount of control. You are no longer passive. When I opened my account with my local credit union I became an owner of that business equally with all other shareholders, even if they had more money in their account than me, because the share amount is exactly the same. I have the same vote as every other credit union member.

Cooperative history is rich and goes back a few hundred years. The oldest surviving coop in the United States is the Philadelphia Contributionship for the Insurance of Houses from the Loss by Fire. Benjamin Franklin founded it in 1752, and while a cooperative it operates a little differently than cooperatives formed after the Rochdale Equitable Pioneer Society. Coops are equally important for their contribution to the Civil Rights movement, the electrification of rural America under the New Deal, and they continue today with their work in the arenas of Fair Trade, both internationally and domestically, as well as social equality.

Learn more about coops here: Go Coop.

Can You Make a Difference Really?

I work, currently, for a food coop. I love the cooperative business model because it puts equity, responsibility, and accountability of the owners and the owners are the local people that use the coop. I love that we are primarily geared to natural foods with an emphasis on organic, local, and fair trade, but over time I have come to feel that fundamentally, while coops are essential and should be promoted, the whole natural foods industry has some inherent flaws as a plan to save the world: well certainly as it is applied to our country. I’m not talking about cooperatives operating in third world countries that really are doing groundbreaking work in getting poor subsistence level people empowered.

One of the biggest problems with the natural foods industry as a tool for change is the very fact it is an industry, and we have been convinced that the solution to our problems is in the ‘marketplace’. So many of us jump on the organic, local, and fair trade bandwagon because we care about things like what we put in our body and what is sustainable for the planet, and one of the biggest reasons to care is the very real possibility that climate change will make this plant much much harder to live on, not just for exotic species or some type of frog no one has ever seen in their lives except in National Geographic, but for billions of human beings. But can the marketplace is an inadequate tool for change. It’s all too willing to lie to us with marketing tools that insist that a certain car manufacturer is really green when you and I know that the very fact of burning petroleum products or owning an SUV or four-wheeling over endangered terrain is simply non-sustainable.

But even more than that the marketplace doesn’t care ultimately. As soon as you can’t afford it in your budget because of a recession in the economy they’re going to go back to polluting because it’s cheaper. And to keep profits high in processed organic foods they’re going to look to cut corners and they have already. Just look at the case of Aurora and the scandal of factory farmed milk produced oftentimes by cows just transferred from conventional farms and then denied pasture, or the case of Cascadian Farms where their CEO, once the poster boy for organic Gene Kahn, is now a vice president of General Mills, which owns Cascadian Farms. Kahn regularly lobbies the FDA to undercut organic additives standards in order to make organic food more palatable as processed food.

He also said, in defense of his decision to become part of the system: “We tried hard to build a cooperative community and a local food system, but at the end of the day it wasn't successful. This is just lunch for most people. Just lunch. We can call it sacred, we can talk about communion, but it's just lunch."

I find this statement from one of the pioneers of organic farming to be both ideologically scary and yet profoundly true. When I first read it I was horrified and stopped buying Cascadian Farms products; particularly the pickles as they contain road salt, but he’s really talking about something quite fundamental to my point today. The marketplace doesn’t change because of us – we change because of the marketplace. The solution doesn’t necessarily lie in how we choose to spend our hard earned dollars. Frankly even standing in the middle of a natural foods coop I have no idea how to ‘vote’ with my dollar because behind every label is a hidden history and hidden agenda. I simply don’t have time to research them all.

And as I explained in an earlier blog even choosing to buy from a local farmer doesn’t always equal the right choice if you can’t afford it.

Really when I get right down to it the basic issue of changing human behavior becomes much more complicated when you realize that the majority of people on this planet don’t even have the luxury to worry about whether or not their toilet paper is recycled and unbleached, or whether they should by organic free-range chicken or save a couple bucks by getting the conventional stuff. They just need to get enough to eat, and for their children to eat, or not be tortured or bombed, or be able to get clean drinking water. Ultimately my choice not to eat tortured animals has no worldwide significance on the role that animals play in human lives. And it’s not just ‘somewhere’ else like Africa or India that I’m talking about. A vast number of Americans do not have the financial luxury to even contemplate many of the choices I make every day in the coop when buying my groceries. Most of those Americans don’t have the educational opportunities to even enter the discussion. There is a huge and vast divide in this country and it’s not just about red and blue.

Somehow, somewhere, there must be some sort of solution because if we don’t think of one soon it might well be that nature solves the problem for us.