78th ICA International Co-operative Day 6th UN International Day of Cooperatives "Cooperatives and Employment Promotion"

The Contribution of Cooperatives to Employment Promotion Reprinted for International Day of Cooperatives, 1 July 2000

The Committee for the Promotion and Advancement of Cooperatives COPAC is a successful and on-going partnership between representatives of the cooperative movement together with farmers' organizations, and the United Nations and its agencies. Members work together on equal terms to promote and coordinate sustainable cooperative development through policy dialogues, technical cooperation and information, and concrete collaborative activities. Its members include the Food and Agriculture Organization of the United Nations (FAO), International Co-operative Alliance (ICA), International Federation of Agricultural Producers (IFAP), International Labour Office (ILO), United Nations (UN), and World Council of Credit Unions (WOCCU).

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Introduction

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 people-centre business enterprises which operate in all areas of economic activity and in almost all countries of the world. Cooperatives can be large enterprises with millions of members or small community enterprises. However, common to all are the cooperative values of self-help, self-responsibility, democracy, equality, equity and solidarity. Cooperatives also believe in social responsibility and include as one of their principles the concern for the community in which they operate.

The cooperative movement is significant both in terms of membership and impact.The United Nations estimated in 1994 that the livelihoods of nearly 3 billion people, or half of the world’s population, were made secure by cooperative enterprises. Nearly 800 million individuals are members of cooperatives.They provide an estimated 100 million jobs.They are economically significant in a large number of countries providing foodstuffs, financial services as well as the provision of services to consumers.

Examples of the economic significance of cooperatives can be seen by the market shares they hold. In Burkina Faso, agricultural cooperatives are the largest producers of fruit and vegetables for the national market and in Côte d’Ivoire they are responsible for 77% of cotton production.[1]In Uruguay, cooperatives process 90% of national milk production and export 70% of the surplus wheat production. [2] In 1998, 33% of the United States agricultural market was comprised of cooperatives, and rural electric cooperatives operated more than half of the electrical lines in US, providing power to more than 25 million people in 46 states.[3]In 1997, the contribution of cooperatives to Gross Domestic Product (GDP) in the Philippines was 16%.[4]During the same year, cooperatives in Denmark were responsible for 94% of milk processing, 69% of farm supply and 66% of cattle slaughtering.[5] Folksam, a Swedish insurance cooperative held 48.9% of the household insurance market and 50% of the group life and accident insurance.[6] In Korea 40% of local agriculture was marketed through cooperatives.[7] In 1997, 62% of the dairy products in Canada were marketed through cooperatives [8] and in Finland, cooperatives were responsible for 79% of agricultural and 31% of forestry production.[9]

However cooperatives, like other enterprises have seen their operations significantly affected by external challenges in the political and economic environment. These include the impact of structural adjustment, economic liberalization, democratization, globalization, changing government policies, new trade groupings, and pressures towards demutualization. Despite these, the cooperative movement is convinced that there is a growing potential for cooperative development, and for cooperative renewal, in light of the limitations of the free market in regard to social responsibility and equity, the advantages of decentralisation of power, the importance of stakeholder and community involvement in economic and social life, and the growing role of the civil society.

Below are examples of how cooperatives have contributed to making the lives of people around the world more secure.

Cooperatives Create Productive Employment and Contribute to Poverty Eradication

Both the Copenhagen Declaration (Commitment 9 h) and Programme of Action (paragraph 51 e) recognize the potential and contribution of cooperatives for the generation of productive employment.A recent report of the International Labour Office ILO confirms that, “Cooperatives continue to play an important role in employment promotion and poverty alleviation, both as production enterprises – mainly of the self-employed – and as providers of services to members”.[10]

Although cooperatives are not instruments of employment promotion, they do effectively create and maintain employment in both urban and rural areas around the world and thus provide income to both members and employees in the form of shares of surplus, wages and salaries or profits depending of the type of cooperative.

Cooperatives provide self-employment through millions of worker-owners of production and service cooperatives; financial cooperatives mobilize capital for productive investment and provide people with secure institutions for the deposit of savings; consumer cooperatives provide households with affordable goods and services reducing the proportion of income used for basic living costs, and similarly user-owned cooperatives such as housing, utility, health and social care cooperatives provide affordable access to basic services.

However, cooperatives too are also employers in their own right providing security of employment. In a number of countries in Africa, the cooperative movement has become the second largest employer, surpassed only by Government.[11]In this region, the majority of jobs have been created through the activities of agricultural cooperatives - production, marketing, processing, etc. UNCAS (Union of Agricultural Cooperatives of Senegal) reported providing full-time employment to 535 individuals and offered an additional 5,000 people seasonal jobs.[12]

In Latin America, it is estimated that 15,000 jobs were generated by consumer cooperatives.[14] In Brazil, the Organization of Brazilian Cooperatives OCB provided over 296,000 jobs throughout the country in 1996.[15] Unimed do Brasil (Confederaçao Nacional das Cooperativas Medicas), a health cooperative, provided employment to 148,252 individuals in 1996.[16] In Canada it is estimated that non-financial cooperatives employed over 73,000 persons in 1997.[17]In 1997 the Desjardins Movement of Quebec alone provided jobs for over 42,300 people, representing a total payroll of slightly over 1.3 billion Canadian dollars. It is also estimated to have indirectly created an additional 10,000 jobs. Desjardins is the largest private employer in the province of Quebec.[18]

Cooperatives have created over 13.8 million jobs in India, with 92% of the jobs created through self-employment through worker cooperatives.[19]In Japan, the consumer cooperative movement provided 58,281 full-time and 95,374 part-time jobs in 1997. Although the number of full time jobs decreased by 409 from the previous year, part-time positions increased by 4.4%.[20] In the Republic of Korea, the agricultural cooperative movement employed 17,448 at the federation level and an additional 53,698 staff at member cooperative level at the end of 1997. In Sri Lanka cooperatives were responsible for 37,617 jobs in 1997.[22]In the Philippines, it is estimated that the contribution of the cooperative sector to the national workforce was 5.01 million or 16.24% of the total job market in 1997. Cooperatives are expected to provide over 20 million jobs by the year 2000.[23]

In Europe, cooperatives provided employment to over 5 million individuals in 1996.[24] In 1996 the German cooperative movement employed 502,700 persons, up from 487,300 in 1994.[25] In 1997 the Union of Agricultural Cooperatives and Societies in the Czech Republic employed over 92,000 persons, while the Union of Czech and Moravian Producer Cooperatives employed over 40,000 persons.[26]During the same period Co-op Hungary reported that it provided employment to 32,000 individuals compared to 1994 when it had employed 30,225 persons. In 1998, the Latvian Central Cooperative Union (TURIBA) reported it employed 10,000 people of which 73% were women.[27] In Russia, the consumer cooperative movement reported 511,300 employees, of which 70% were women.[28] In Spain, the Mondragon workers’ cooperative movement increased its capacity to provide employment. In 1996 it employed 31,963 persons, increasing its workforce by 7.6 % in 1997 to 34,397 and again in 1998 to 42,129 persons. Today, it provides 46,835 jobs. The Cooperative Union of the United Kingdom reported that the number of full-time employees in 1997-1998 rose marginally over previous years. Cooperatives in the UK provided 113,400 full-time jobs and 71,600 part-time jobs.[29]

The European Confederation of Workers´ Cooperatives, Social Cooperatives, and Participative Enterprises CECOP reports that twenty years ago it was made up of 5,000 cooperatives. Today, it represents a movement of more than 83,000 enterprises, which taken together is the largest employer in the European cooperative sector, with 1.3 million worker members.[30]

In addition to existing cooperatives providing employment, the cooperative movements of a number of Nordic countries and Italy have seen the creation of new cooperatives. These new cooperatives have been a response to rising unemployment. In Finland, over 700 cooperatives were created during the period 1993-1998 of which 330 where workers’ cooperatives.

Excerpt COPAC. The Contribution of Cooperatives to the Implementation of the World Summit for Social Development Declaration and Programme of Action Conference Room Paper First Session of the Preparatory Committee for the Special Session of the General Assembly on the Implementation of the Outcome of the World Summit for Social Development and Further Initiatives, New York, 17-28 May 1999

[1] ACI-CTA-AIAFD-SOCODEVI. Rapport Provisoire du Séminaire sur la Promotion des Echanges entre et par les organisations coopératives agricoles de l’Afrique de l’Ouest. Janvier, 1999. pp.11

[2] CUDECOOP Web site: http://www.cudecoop.org.uy

[3] NCB Web Site: NCB Co-op 100 (1998) http://www.ncb.com/

[4] Gawigawen, M. Jobs Creation by Cooperatives in Selected Asian Countries: Philippine Country Paper. ILO unpublished document, 1998.

[5] Federation of Danish Cooperatives. Annual Report 1997-1998. pp. 27.

[6] Folksam. Annual Report 1997. pp.11 and 19.

[7] NACF. Annual Report. 1998

[8] Government of Canada, Cooperatives Secretariat. Cooperatives in Canada. June 1999. pp. 1

[9] ICA. Statistics and Information on European Co-operatives. December, 1998. pp.57.

[10] ILO. The Role of the ILO in Technical Cooperation: Report VI to the 87^th Session of the International Labour Conference. 1999. pp.20.

[11] ILO. Coopératives et Emploi en Afrique, 1998. pp. 9.

[12] ICA Web Site: http://www.coop.org/ica/members/af/senegal.html

[13] ILO. Coopératives et Emploi en Afrique, 1998. pp. 9.

[14] Pacheco, J.D. Cooperativas y Generación de Empleo.

[15] ICA Databank from OCB sources.

[16] ICA Databank from UNIMED sources.

[17] Government of Canada, Co-operatives Secretariat.Cooperatives in Canada. June 1999. pp. 1.

[18] Desjardins Web Site: http://www.desjardins.com

[19] Mohanan, H. Employment Creation through Cooperatives India. National Institute of Rural Development. (Hyderbad, India). ILO unpublished document. 1998. pp.6-7.

[20] Japanese Consumers’ Cooperative Union. Co-op Japan Information, Vol. 35, December 1998.

[21] NACF Web Site: http://www.nacf.co.kr/report/report97/profile.htm

[22] Herath, W.U..Employment Creation by Cooperatives in Sri Lanka: A Country Study. ILO unpublished document, Geneva. 1998. pp. 36.

[23] Gawigawen, M. Jobs Creation by Cooperatives in Selected Asian Countries: Philippines Country Paper. ILO Unpublished Document. 1998.

[24] ICA Statistics and Information on European Co-operatives. December, 1998. pp.8.

[25]DG Bank.Die Deutschen Genossenschaften 1997 Statistik and Die Deutschen Genossenschaften 1995 Statistik.

[26] Co-operative Association of the Czech Republic. Pamphlet ”Information on the Co-operative Movement in the Czech Republic”. 1998

[27] Turiba. Report to the ICA Global Women´s Committee: The Situation of Women in Latvia. October, 1998. (http://www.coop.org/gender/plenary/paris1998.htm#latvia)

[28] Centrosojuz. Report to the ICA Global Women´s Committee: State Policy and the Role of Women in Society and Consumer Co-operatives in the Russia Federation. October, 1998. (http://www.coop.org/gender/plenary/paris1998.htm#russia)

[29] Co-operative Union Ltd (UK).Co-operative Statistics 1997-1998. July, 1998. pp. 1.

[30] CECOP. Web site: http://www.cecop.org/uk/anniversary/plenary25.htm

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Posted: 30 May 2000 - Links Updated: 13 November 2001