Co-operatives – still a success story in 2050?

At the World Food Day Colloquium of the University of Hohenheim in Stuttgart/Germany on the 16^th October 2018, participants addressed the topic of co-operatives. In Germany and in other European countries, the notion of co-operatives spread rapidly in the second half of the nineteenth century. European emigrants took the concept with them to their new homes, for example in Brazil, where they then set up the first co-operatives.

Leadership is crucial

Today, Brazil has 6,600 co-operatives with a total of 13.4 million members. The co-operative organisations were given new impetus at the beginning of the twenty-first century following a phase in which Brazilian agriculture had suffered under the impact of the country’s unstable economic situation, as Professor Gilson Martins of the Federal University of Paraná, Brazil, explained. One of the features of the Brazilian co-operatives is that they can offer their members special credit lines for agricultural investments, which makes them attractive. In the Federal State of Paraná, which Martins referred to as an example, co-operatives play a considerable role. Here, 58 per cent of agricultural produce and 52 per cent of total revenues of co-operatives are generated in the agroindustry.

“Co-operatives are definitely a means to achieve food security,” Martins maintained. He added however that in order for co-operatives to be successful, they required leadership and the development of a “culture of co-operation”. 

Turning farmers into winners of globalisation

Sebastian Lesch of Germany’s Federal Ministry for Economic Cooperation and Development (BMZ) regards co-operatives as an instrument to combat hunger and achieve food security and more income. “What one person cannot attain can be attained by many,” Lesch noted, quoting Raiffeisen. Nevertheless, Sustainability Goal 2 – no hunger – could not be achieved alone with co-operatives. In order to overcome the “biggest avoidable scandal on our planet”, Lesch stated, four revolutions were required.

Lesch first of all sees the need for an innovation revolution that has to go hand in hand with a job revolution. There was no use in farmers organising themselves in co-operatives as long as the processing of products took place almost exclusively in the industrialised countries, he stated in Hohenheim. In the rural areas of the developing countries in particular, millions of people could find jobs and hence income in the downstream industries “if such processing industries existed. Local processing could turn farmers into winners of globalisation. As long as coffee, cocoa and cotton are only exported as commodities, smallholders will be doing the work but remaining empty-handed.”

A world without hunger had to be a fair world, Lesch said. This was why a revolution in justice was needed, for example in trade policy. Equal rights for men and women would also contribute to combating hunger, for “hunger is female”. More than two thirds of those suffering hunger were women and girls. Lesch pointed out that secure land rights were an important part of this justice revolution, too. And last but not least, he called for a food revolution with less meat consumption and “forward-looking food patterns”.

Supermarket revolution in full swing

Thomas Reardon, an agricultural economist at Michigan State University, USA, focused on the development of the food system over the last 50 odd years. In the 1980s in particular, an immense transformation had taken place in den food systems that had lasted up to today. “This transformation was not gradual but like a tidal wave,” Reardon said, describing developments. It had been caused by a confluence of factors the most important of which were shifts in policy, rapid urbanisation and a huge change in urban and rural diets. The meta drivers leading to these radical changes were massive private investments, rapid technological change and income growth.

Reardon backed his explications with figures. For example, in 1971, around 24 per cent of the population were living in cities, both in Africa and in Asia, whereas 40 years later, the figures were 40 per cent for Africa and 45 per cent for Asia. According to Reardon, the result was that even in the poorest countries, the power of the market shifted into the cities. The rural-urban food supply chain volumes became adapted to this development. Over the last three decades, their volume grew by 800 per cent in Africa and by even 1,000 per cent in Southeast Asia. “Longer and longer supply chains reach deeper and deeper into rural areas,” he said.

In parallel, dietary habits also changed. Fifty years ago, 80 per cent of the rural and urban diets had been grains, while today, processed food dominated the menu nearly everywhere. The food range had become adapted to changes in eating and dietary habits. In this context, Reardon even referred to a “hyperfast change”.

Agriculture followed suit, progressing from the traditional stage to the modern stage, even though this was not so apparent at first glance. Reardon referred to this as the “quiet revolution in the hidden middle” and mentioned examples. In Bangladesh, aqua farmers were switching from slowly growing fish species to fast growing ones such as tilapia in order to meet rising demand. And in India, modern cold storages were turning the potato, a seasonally available source of food, into an all-year product.

Given these developments, the co-operatives are not playing a central role, the agricultural economist maintains, arguing that they are unable to keep up with the demands of the market.

Beate Wörner, journalist, Fellbach/Germany

Further reading:

Rural 21, 02/2012: Cooperatives