Cooperatives are based upon a small but comprehensive set of principles – guiding ideas – most dating back to the very first successful cooperative, the Rochdale Society of Equitable Pioneers, founded in England in 1844, with the aim of providing its members (weavers working in a large factory) the opportunity to buy good food at affordable prices. Ten years later, there were some 1,000 cooperatives across England, as workers recognized that when they joined together to provide themselves goods (and later also services), eliminating middle men and greed, they could dramatically improve their own standards of living.
But what really let Rochdale flourish were the underlying principles which, through bad times and good, help cooperatives stick together.
Membership is open and voluntary. Read More >
According to the International Cooperative Alliance (ICA) – an independent, non-governmental organization that serves co-ops; it dates back to 1895 – this principle means: “Cooperatives are voluntary organizations, 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.” By all means, cooperatives can set limits on membership – Navy Federal Credit Union, for instance, serves members of the US military, some defense contractors, and a few other groups; it’s not open to the general public but it nonetheless is a kind of cooperative. But within those limits, membership is open, and – importantly – it is also up to the member to join or not. Many Vermont dairy farmers belong to the Cabot Creamery cooperative but there is no coercion. If they prefer to sell their milk elsewhere, that is what they should do and Cabot and its membership wish them well. An open membership works both ways. Nobody should be compelled to belong to a cooperative.
Democratic member control. Read More >
A cooperative is controlled by its members, who set policies and vote on how the cooperative should operate. At the Belfast, Me. Cooperative Store – a grocery store with 3000 members – the members who founded it in 1976 had a work requirement for members, but as the years passed, new members joined and, eventually, the work requirement was voted out. That is a good example of cooperative membership policy is set by members and adjusted to suit changing needs. ICA adds: “In primary cooperatives members have equal voting rights (one member, one vote).” That is how Cabot Creamery is organized – members have equal votes, whether they milk 50 cows or 5000. Ditto for Cooperative Coffees, an innovative organization serving local coffee roasters in the US and Canada. Every roaster gets the same vote, without regard to how much they buy from the co-op.
Is this fair? Cooperatives believe so, and the principle has proven its value for over 150 years.
Member economic participation. Read More >
Cooperatives, fundamentally, are about capital – money or other assets. The Rochdale pioneers saw this and, in the current ICA statement of this principle, “Members contribute equitably to, and democratically control, the capital of their cooperative….Members allocate surpluses for any or all of the following purposes: developing their cooperative, possibly by setting up reserves, part of which at least would be indivisible; benefiting members in proportion to their transactions with the cooperative; and supporting other activities approved by the membership.” At Cabot Creamery, for instance, members are paid monthly for the milk they provide the cooperative – and they are paid in accordance with volumes – but once yearly profits are calculated and members get an extra check (also calculated in accordance with their sales to the cooperative). At the Belfast Cooperative Store members join by paying in $60 capital (which can be refunded if a member decides to quit, a very rare event).
In most cooperatives member have a real economic stake in the organization’s success – and that keeps all eyes on the goal.
Autonomy and Independence. Read More >
Very important: cooperatives may enter into relationships with other organizations, but at no point should the independence of the organization be jeopardized and never should the interests of the cooperative be subordinated to those of another group. Cooperatives, ultimately, must stand or fail on their own.
Education, Training and Information. Read More >
Learning is at the heart of any successful cooperative. Ask Brian Henehan, a cooperative expert at Cornell University, and he pinpoints as a key cooperative advantage the information – knowledge – the membership is able to pool together and share. Henehan says: “For instance Cabot creates significant value for an isolated, rural dairy farmer who has limited access to market information by engaging in gathering valuable market intelligence beyond the capacity of an individual farmer to collect and analyze. The ability of cooperatives to pass this knowledge and information along to members goes beyond the value generated by simply selling milk or dairy products produced by members. “ Be it about new ways to keep cows healthy and producing, or strategies for encouraging members to buy local produce at a cooperative store, cooperatives are fertile ground for disseminating insights. They also are committed to educating and training staff, so that they may better serve the membership and better help the cooperative to compete. At the Belfast, Me. Co-op, for instance, manager Erica Buswell recently took a weekend workshop in how to better empower members to be emissaries for the cooperative in the community and, in the process, to help recruit new members. That kind of commitment to learning is typical of how co-ops that prosper continue to do so.
Co-operation among Cooperatives. Read More >
Yes, cooperatives compete – Land O Lakes and Cabot compete for the consumer’s butter dollar very directly in some markets. Navy Federal Credit Union competes with Pentagon Federal for accounts. In a real sense, Welch’s National Grape Cooperative competes with the Ocean Spray cranberry growers cooperative for the consumer’s thirst quenching dollar. That is reality. But another reality is that cooperatives work best when they work with each other. ICA states this principle thusly: “Cooperatives serve their members most effectively and strengthen the cooperative movement by working together through local, national, regional and international structures.” Cabot Creamery, for instance, actively participates in a range of regional, national, even international cooperative associations that are committed to strengthening all cooperatives. Most other cooperatives do likewise, in keeping with their abilities. This makes all cooperatives stronger.
Concern for Community. Read More >
Cooperatives know they are part of larger communities and they act accordingly. At Cabot, for instance, every farmer-member knows how he operates his farm impacts the community in which his family lives and they farm accordingly. Too many businesses, sadly, operate as though they have no ties to their communities. The Rochdale founders did not believe that worked, not for the community or the cooperative, and to this day the cooperatives that prosper do so in part because they respect their communities. What goes around, comes around.
Cooperative Values. Read More >
ICA adds – and most cooperatives agree – that co-ops involve adherence to a core set of values: “Cooperatives are based on the values of self-help, self-responsibility, democracy, equality, equity and solidarity. In the tradition of their founders, cooperative members believe in the ethical values of honesty, openness, social responsibility and caring for others.” There is nothing to dislike in that statement of values, and there is a lot to applaud. Any organization – be it a farmer’s co-op, a credit union, a cooperative retail store, or a buying cooperative – cannot go very far wrong if it is committed at its core to honesty, openness, social responsibility, and caring for others.
