Transformation of the Rural
Cooperative Sector in Poland.
Its contribution towards sustainable
development
Ilona Banaszak
Environmental and Resource Economics II
Purpose of the presentation
To discuss:

History of rural cooperatives in Poland.
Influence of ideology on economic and social
life, how changing ideology has been
influening attitudes towards cooperatives;

To which extend the cooperative movement
may help to achieve the path of sustainable
development by polish rural areas;
2
Theoretical background (1):
Sustainable development
“Sustainable development is the management and
conservation of the natural resource base, and the
orientation of technological and institutional
change in such a manner as to ensure the
attainment and continued satisfaction of human
needs for present and future generations. Such
sustainable development (in the agriculture, forestry
and fishery sectors) conserves land, preserves water,
plant and animal genetic resources, in environmentally
non-degrading, technically appropriate, economically
viable and socially acceptable”
(FAO 1994)
3
Theoretical background (2):
6 dimensions of sustainability in
agriculture and horticulture




Ethic dimension;
Ecological dimension;
Global dimension;
Retinity dimension;

Economic dimension: securing commercial viability of farms,
improving on-farm employment opportunities, being responsible
for food security and food quality, contributing to gross national
product;

Social dimension: developing the rural social capital, stimulating
participation of the rural population, improving the living and
working conditions of the rural population, developing social
infrastructure and social security services (Hagedorn 2004).
4
Theoretical background (3):
Social capital

Mutual trust and how effectively people work
together, e.g. transaction costs are lowered because
informal self-enforcement of contracts can take place
without third party enforcement; since agents can save
monitoring and transaction costs, social capital may also
be regarded as a new production factor alongside the
traditional ones of human and physical capital
(Coleman 1988);

Social capital can be measured by: (1) membership in
voluntary organisations (e.g. a cooperative), (2)
trust, (3) civic participation (Paldam 2000,
Chloupkova et al. 2003).
5
Theoretical background (4):
Cooperatives

Cooperative movement: aiming in achieving certain
economic goals by less powerful (/poor) economic
groups, based on cooperation and reciprocal aid;

Cooperation must be conscious, voluntary and based
mainly on resources of the associated – self-aid and
self organisation principles (Brzozowski 1998);

Cooperative – main form of the cooperative movement;

Cooperative: autonomous union of people who voluntary
join together in order to fulfil certain economic, cultural
and social needs by establishment of a common and
democratically govern enterprise (ibid.);
6
Cooperatives
and sustainable development

Cooperative movement aims in improving economic and
social situation of underprivileged social groups;

Participation in cooperatives strengths social capital;

Cooperatives may contribute towards more rational using of
means of production (e.g. shared machinery) and more
rational production methods (e.g. diffusion of knowledge),
creation of on- and off-farm employment, development
of the whole local community;
7
Rural cooperatives in Poland:
before the 1st world war

1816: 1st coop, established by a nobleman and
politician S. Staszic for peasants: Hrubieszów
Agricultural Association of Mutual Help in Misfortune;
on a part of land offered by Staszic joint farming; a
fund from income and taxes spent on help for
members, schools, scholarships;

In the part under Prussia and Austrian regime from
1860s: agricultural and trade, dairy, savings and
loans coops; mainly to support Polish peasants
oppressed by the authorities.
8
Rural cooperatives in Poland:
Between the Wars: 1918 - 1939
Cooperative movement propagated by F. Stefczyk; he aimed in gaining by
peasants profits taken by middlemen, industrialisation of agricultural
production, higher profitability of farms;

The most frequent: saving-credit cooperatives – simple forms, acting within
parishes and based on trust between creditors and borrowers;

Other forms:
agricultural-trade coops (rather big, associating rich peasants);
dairy coops (organising purchase of milk, eggs, also simple processing of milk
and butter production, exporting to the Western Europe);
consumer coops (usually based on one shop within a village providing basic
products);
-

Retreat from 1935-1936 as a result of the international crisis;

In 1937 11% of the inhabitants of Poland (including also minorities) were
members of cooperatives;
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Number of cooperatives and their
members in 1937
Coop’s type
No. of coops
No. of members
(thous.)
Loan
5 517
1 515
Dairy
1 408
543
Consumer
1 808
366
Agricultural-consumer
2 973
353
Agricultural-trade
410
22
Housing
252
58
Other
496
76
Total
12 860
2 933
10
Rural cooperatives in Poland:
After the 2nd World War

First coops voluntary formed to govern and farm former
German holdings (in 1948: 91 such coops with 2 300
member);

Reactivated coops connected with non-communistic part
of the peasant movement or politically neutral;

From Dec. 1944 efforts of the authorities to
subordinate the cooperative movement;
11
Rural cooperatives in Poland:
After 1948 – communism

Abolition of most of voluntary, not subordinated to the
state’s control cooperatives (e.g. in dairy, gardening and
credits);

Political, administration and economic pressure on
farmers to joint cooperatives;

Cooperatives subjected to the state: introduction of control
mechanisms, centralised and bureaucratised planning;

Due to strong resistance of farmers and not sufficient
financial incentives in 1955 cooperatives associated only 10%
of the agricultural land and 8% of peasant families;
12
Rural cooperatives in Poland:
After 1956 – destalinisation

In 1956 after the ‘destalinisation’ and neglecting
Stalinist ideology, mass abandonment of
cooperatives by peasants – 85% of cooperatives split,
also these functioning well;

As the result of the process of democratisation and
decentralisation some local reactivation of dairy,
gardening and saving-consumer cooperatives and rural
cooperatives based on providing equipment for farmers
– nevertheless still under the state’s control;
13
1960 - 1989

New forms of cooperation introduced, e.g. a
collective farm associated with a few individual farms, in
70s around 200 such cooperatives, nevertheless, most
of them collapsed till 1980;

In 70s and 80s the state more and more intervened
in cooperatives’ production and decision making;

Number of cooperatives was slightly increasing, but no.
of members decreasing (in 1985: 8 382 rural coops,
7 000 urban);
14
Polish rural cooperative
movement 1988
Type
Number
Members
Employees
Significance
Supply & marketing
1,912
3,531,500
434,570
Dairy coops
Horticultural coops
323
140
1,199,400
372,600
112,793
55,519
Agricultural
production coops
Savings & credit
2,086
177,000
2,700
59% of marketing of
agricultural products
95% of milk processed
50% of fruits and
vegetable
2.8% of arable land
1,663
2,566,100
31,290
Agricultural circles
2,006
113,200
154,447
Total
Source: ICA 1993
8,130
7,959,800
791,319
18.5% of population’s
saving
Important share in
mechanization service
15
Rural cooperatives in Poland:
After 1989 - transformation

In 1989 the cooperative sector associated several millions of people, was
rather good economically developed; controlled but in a privileged
position (legal aid, better access to the means of production, financial
support, etc.);

Due to transformation the situation of the sector changed for the worse:
in contradiction to the Constitution functioning of unions of
cooperatives was abolished, their assets were sold below the value;
subventions, funds and other aid was stopped;
inspecting the cooperatives by the state stopped, cultural, training,
publishing activities of cooperatives abolished;
taxes even higher that for the private sector;
opening the market for foreign agricultural and other goods;
neglecting achievements of the cooperatives also neglecting economic
and social benefits that may be achieved by cooperatives;
-
-
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Cooperatives in 90s:
-
Share of cooperative sector decline
dramatically:
From 9.5% share in GDP in 1989 to 2.4%
share in 1994;
From 12.8% share in employment in 1989 to
4.8% in 1994 and to 3.5% in 1996;
17
Rural cooperatives in Poland:
Presence:

Come back of the idea of cooperatives, new
form e.g. agricultural producer groups –
promoted by the government; seen as a
‘chance’ for Polish agriculture;

Till presence reluctance and aversion of
farmers towards cooperatives.
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Conclusions:






Before the 2nd WW the cooperative organisations grew up
bottom-up as local and regional peasants movement against
economic threats from other social classes or foreign powers;
They strengthened economic and social power of peasants;
A substantial level of social capital on rural areas was achieved;
These networks, social capital and trust destroyed by
socialism – obligatory participation, state intervention, central
planning;
Nevertheless, the cooperative sector was present and active
in some areas before 1989 (e.g. dairy, agriculture machinery);
Transformation denied these achievements, annihilated
the cooperative movement;
Double disaster;
Now: how to build a bridge between pre-socialism practise
and presence?
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Thank you!