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Cooperative entrepreneurship as a means for development and women empowerment in rural areas
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Why are cooperatives unique?

What is a cooperative? Click to read

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.” (ICA, Statement on the Cooperative Identity).

As people-centered businesses owned and run by their members, cooperatives share characteristics of both enterprises and associations.

They operate following internationally agreed values and principles, allowing people to work together and develop sustainable businesses, while the economic and social benefits generated through their activity stay in the community.

How can cooperatives empower women in rural areas? Click to read

Cooperatives play a critical role in local inclusive and sustainable development.

At least 12% of people on earth is a cooperator of any of the 3 million cooperatives on earth. Cooperatives provide jobs or work opportunities to 10% of the employed population. (World Cooperative Monitor)

They are a powerful tool for women empowerment, by:

Creating jobs and increasing income, thus minimizing informal employment* and unpaid work, so common among women in rural areas

Improving livelihoods through the provision of basic services and decent work conditions.

Being open and democratic organizations, they promote gender equality, allowing women to boost their leadership and management experiences.

Some countries have specific women empowerment policies such as gender quotas for cooperatives.

* See DIOMCOOP, a Spanish multi-stakeholder cooperative set up Barcelona, 2017,  to support vulnerable migrant street sellers, which now provides a variety of services and even has its own fashion brand – Diambaar.

Distinctive features, principles, values of cooperatives Click to read

Dual nature:

  • a cooperative is both an association of members and an enterprise
  • it serves the interests of the members while following an economic purpose and being managed in a business-like manner
  • the members (employees, producers or customers), not shareholders, make decisions democratically

Based on values and principles:

  • Cooperatives are based on values: self-help, self-responsibility, democracy, equality, equity, and solidarity Members are guided by the ethical values of honesty, openness, social responsibility and caring for others
  • There are 7 internationally recognized principles, acting as guidelines through which cooperatives put their values into practice. (International Cooperative Alliance)

Cooperative principles

 

Voluntary and Open Membership
Cooperatives 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.

Concern for Community
Cooperatives work for the sustainable development of their communities through policies approved by their members.

Democratic Member Control
Cooperatives are democratic organisations controlled by their members, who actively participate in setting their policies and making decisions.

Cooperation among Cooperatives
Cooperatives serve their members most effectively and strengthen the cooperative movement by working together through local, national, regional and international structures

Member Economic Participation
Members contribute equitably to, and democratically control, the capital of their cooperative. At least part of that capital is usually the common property of the cooperative.

Education, Training, and Information
Cooperatives provide education and training for their members, elected representatives, managers, and employees so they can contribute effectively to the development of their co-operatives.

Autonomy and Independence
Cooperatives are autonomous, self-help organisations controlled by their members.

Source: ICA, Statement on the Cooperative Identity

Regulatory Frameworks Click to read

National level

  • The majority of European countries have a cooperative law: either a general framework, applying to all economic sectors, or, in some cases, each sector has its own cooperative legislation. Most often, cooperative legislation derives from national civil law/commercial law.
  • Although differences are present, national cooperative laws share the values and principles specific to cooperative enterprises.

European Level

  • The diversity of enterprise forms is officially acknowledged through the Article 54 of the Treaty on the Functioning of the European Union: “‘Companies or firms’ means companies or firms constituted under civil or commercial law, including cooperative societies, and other legal persons governed by public or private law, save for those which are non-profit-making.”
  • The Regulation on the Statute for a European Cooperative Society, adopted in 2003 by the EC, sets out the rules for cooperative enterprises aiming to extend their activities beyond national borders.
Functions and typesClick to read

Cooperatives are very diverse: from small enterprises, owned by their members (a minimum number of members can be imposed by national regulations) to large banks owned by their clients. The most (but not only) common criteria to help classifying cooperatives:

Members’ Interest:

Type of business

Membership
  • producer cooperatives
  • worker cooperatives consumer/user cooperatives
  • multi-stakeholder cooperatives (serving more than one interest);
  • agriculture
  • banking
  • retail
  • housing
  • ………

primary or secondary cooperatives (cooperative unions/federations/confederations)

 

Cooperative management and governance

Characteristics of Cooperative Governance Click to read

Although they serve the interests of their members and those of the community, cooperatives are businesses, aiming to produce profit (which is shared among the members or reinvested).

As any enterprise, the activities of a cooperation need to be directed and controlled.

Managing a cooperation brings several specific challenges compared to other types of enterprises.

  • Cooperatives apply democratic decision making (members possessing final-decision rights)
  • Cooperatives delegate decision-making to a Board of Directors and sometimes, professional managers are involved. Accountability of delegated decision-making persons is one of the key governance issues.
  • In smaller cooperatives, the members are often responsible for staff-tasks, requiring specific expertise and skills.
  • Many cooperatives are multi-purpose, providing different services and serving different interests of their members, making the governance of such a cooperative even more challenging.
  • Other challenges: inclusion (including gender imbalances), skills, member commitment and keeping the autonomy (as cooperatives often receive substantial support from outside stakeholders).

The most usual model of cooperative governance involves The General Assembly (formed of all the members), which elects the Board of Directors, which in turn, appoints the executive managers, depending on the size and scope of the cooperative. Often, a Supervisory Committee or a Supervisory Board is elected from among the members, controlling the Board of Directors on behalf of the General Assembly.

Source: Managing your Agricultural Cooperative, My.COOP

 

Member commitment and inclusion issuesClick to read

Cooperative members are involved in decision-making and contribute financially. Therefore, maintaining a high commitment level among members is crucial for ensuring a cooperative’s survival and performance.

The commit level of the members is influenced by social, economic and organizational factors.

Roles of the cooperative manager Click to read

Making decisions regarding operations, allocation of resources and distribution of tasks.

Developing operational and investment plans

Negotiating with stakeholders

Interacting with other persons, stakeholders, BoD, and members.

Collecting and disseminating information regarding the cooperative’s operations and performance. Leading BoD meetings.

From theory to practice

Success stories: WAZO COOP (Spain)Click to read

The Wazo cooperative was established in Spain to solve issues faced by rural communities there as well as to provide these areas with economic and employment prospects.

The cooperative is co-founded and presided by Marta Lozano Molano, a successful musician and composer who decided to return to her homeland in Extremadura (Spain) to support her community and focus on composing social music.

Since 2015, Wazo Coop has promoted local sustainable development in rural and sparsely populated regions using the creative economy as a platform. In order to link distant cooperatives and stakeholders, it has facilitated access to innovation and digitization. It has also facilitated the development of jobs, particularly for young people and residents of rural areas.

One such instance is the EU Smart Composer initiative, which uses a methodology to   help VET music instructors support students who write new music and to provide them   the opportunity to learn new skills in branding, business, and digital marketing.

Success stories: AgroAlim Predesti Cooperative (Romania)Click to read

Early in 2018, the AgroAlim Predesti Cooperative was founded as a component of the WorldVision and Sodexo Romania-led "Empowering Women in Need" project.

The goal of this initiative was to help rural women living in tough circumstances, such as moms raising their children alone, those who have never had a job, or were currently unemployed, day laborers.

In order to process and preserve the fruit and vegetables cultivated locally, the cooperative's headquarters were equipped with specific production machinery. Items like sauce jars, pepper sauces, pickles in vinegar and brine, and many more traditional products are made here.

Preserves and canned vegetables are produced only for the already existing customer network - the shelf life is not very long because they are made using only traditional recipes and ingredients, without additives.

Success stories: Women's Agritourism Cooperative of Zagora (Greece) Click to read

Women's Agrotourist Cooperative of Zagora was founded in 1993 by 50 women who wanted to use their skills and offer tourists high quality traditional products and service.

Now it operates its own shop and cafeteria in the main square of Agios Giorgios village, where tourists can taste various desserts, jams, traditional pastry delights, homemade liqueurs, and appetizers that go with the local tsipouro.

Recently, the cooperative set up a laboratory, allowing for larger production, but without sacrificing the traditional spirit – every product is natural, created only with local fruits and herbs, free of additives.

It also provides catering services and organizes larger events, banquets and meals upon request, and operates a network of traditional guest houses for tourists.

Step to setting up a cooperativeClick to read

Decide on the type of services the cooperation will provide and interests it will serve.

STEP 1

Is a cooperation the right business format for your idea? Analyze market, operating costs and availability of financing.

STEP 2

Who will lead the cooperative? Who will be the  members? Do you have the necessary skills and expertise? Are inclusion issues properly addressed?

STEP 3

Consult national legislation and conditions. Draft incorporation articles.

STEP 4

Attract more members. Apply for funding.

STEP 5

 

Summing up

Summing upClick to read

Cooperatives
are people centered businesses owned and led by their members, sharing characteristics of both enterprises and associations.

Values and Principles
such as self-help, self-responsibility, democracy, equality, equity, and solidarity are the core of cooperatives.

Shape and size
of cooperatives varies greatly, depending on its scope, activities and sector.

Setting up a cooperative can be a great way to legitimize work and serve the needs of vulnerable members.

Setting up and leading a cooperative
can be challenging. However, most of the EU countries have regulatory frameworks and support systems. There are many success stories of women-led cooperatives in rural areas.

 

Test Yourself
TestClick to start


Keywords:

Cooperative, cooperative governance, cooperative union, agri-tourist cooperative, informal work, women empowerment


Objectives:
  • Understand what cooperatives are, their distinctive features, values, principles, types and development opportunities they offer
  • Know the basics of cooperative governance and the multiple roles of a cooperative manager
  • Take the first steps to set-up a cooperative, using MORE hands-on tools, guidelines and practical information

Description:

This module is an introduction to the basics of cooperative entrepreneurship.

It will help you get a broader view on what cooperatives are, how they work and how they can support women and rural development.

The first two units are dedicated to the more ‘theoretical’ aspects of cooperative characteristics and cooperative governance, while the third unit provides 3 real-life examples of successful women-led cooperatives in rural areas from EU countries and a small step-by-step guide on how to set up a cooperative.

A simple template which can be used either as a worksheet for self-study or pre-filled by the trainer will support you identify the formal requirements to consider when setting up a cooperative in your country.


Resources:

Cooperative Principles

https://www.ica.coop/en/cooperatives/cooperative-identity

The Guidance Notes on Cooperative Principles, elaborated by the International Co-operative Alliance, provide practical advice on the implementation and practical application of the cooperative principles. They are available in several languages, including English, Spanish and Greek, on ICA’s website:

https://www.ica.coop/en/media/library/research-and-reviews/the-guidance-notes-on-the-co-operative-principles


Related Materials:

Worksheet Template: Formal requirements to set up a Cooperative


Bibliography

Bouchard, M. et al.(2020), Statistics on Cooperatives: Concepts, classification, work and economic contribution measurement, International Labour Office (ILO), Geneva, available at: https://www.ilo.org/wcmsp5/groups/public/---ed_emp/---emp_ent/---coop/documents/publication/wcms_760710.pdf

Cooperatives Europe, What is a cooperative? https://coopseurope.coop/what-cooperative/

European Parliamentary Research Service. (2019), Cooperatives: Characteristics, activities, status, challenges, https://www.europarl.europa.eu/RegData/etudes/BRIE/2019/635541/EPRS_BRI(2019)635541_EN.pdf;

Fici, A. (2012), Cooperative identity and the law, Euricse Working Paper, N.023, WP 23_12 Fici (euricse.eu)

International Cooperative Alliance with the scientific and technical support of the European Research Institute on Cooperative and Social Enterprises (Euricse), 2021 World Cooperative Monitor – Executive Summary, https://monitor.coop/sites/default/files/2021-11/Executive%20Summary%20WCM%202021.pdf

International Cooperative Alliance, What is a cooperative?, https://www.ica.coop/en/cooperatives/what-is-a-cooperative

International Labour Organization. (2012), My.COOP Managing your agricultural cooperatives, https://www.ilo.org/global/topics/cooperatives/publications/WCMS_644824/lang--en/index.htm

International Labour Organization. (2017), Spotlight Interviews with Co-operators: Rural cooperative works to preserve the cultural heritage of Malta, https://www.ilo.org/global/topics/cooperatives/news/WCMS_776503/lang--en/index.htm

International Labour Organization. (2018), Role of cooperatives in rural women empowerment discussed during a side event at CSW62 in NY with ILO participating for COPAC, https://www.ilo.org/global/topics/cooperatives/news/WCMS_623984/lang--en/index.htm

International Labour Organization. (2021), Spotlight Interviews with Co-operators: Marta Lozano Molano, Founding Member of Wazo Cooperative, https://www.ilo.org/global/topics/cooperatives/news/WCMS_776503/lang--en/index.htm

Women's Agritourism Cooperative of Zagora / Pelion, https://www.agrosweet.gr/

Women's Associations (womenassociations.gr)



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