Ref: 4
People form cooperatives for their economic, social and intellectual development.
The types of cooperatives in Botswana are Consumer Cooperative Societies,
Marketing Cooperative Societies, Multipurpose Cooperative Societies, Savings and
Credit Cooperative Societies and Producer Cooperative Societies. Cooperatives serve crucial functions and make major contributions to national economies. Taken as a whole, the cooperative movement is Africa’s biggest non-governmental organization, playing a significant role in many national economies and has created a great number of salaried jobs and self-employment opportunities in Africa.
AUTHOR
Title of author
Surname
First Name
E-mail address of author
Dr.
Srivastava
Rama
Name of Institution Tonota College of Education
Address of Institution Pvt Bag 3, Tonota, Botswana tekswana@botsnet.bw
& srivastavarama@hotmail.com
Author biography
Rama Srivastava was born and brought up in New Delhi, the capital of India. Dr.
Srivastava has always been a holder of first position throughout her studies. She was awarded a first class in both the Bachelor’s and Master’s degree (Community
Resource Management) by University of Delhi, India in 1984 and 1986 respectively.
She also qualified the National Education Test (NET) for ‘Lectureship/Assistant
Professorship by two most renowned Educational and Research bodies of India which are ‘University Grant Commission’ and ‘Indian Council of Agriculture
Research’. She completed her doctorate in 2007 from University of Limpopo, South
Africa.
She worked as Lecturer in the Ministry of Education, National Capital Territory,
India from July 1988 to Jan 2000 where she was honoured with the ‘National Award of Education’. Presently, she is working with the Ministry of Education, Botswana as a Senior lecturer.
Sustainable Development
Sustainable Urbanisation
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Rural Development
Sustainable Urbanisation
Case Study
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Rama Srivastava
In many developed countries, people have formed cooperatives for their economic, social and intellectual development. In these countries, the governments neither hampered cooperative development nor regulated their activities and hence, the cooperatives progressed consistently. However, this was partly attributed to the high rate of literacy in these industrialised countries.
The cooperative movement in Botswana was introduced by the government in the early 1960’s to improve the social and economic situations of the underprivileged and poor strata of the rural community. The types of cooperatives in the region are
Consumer Cooperative Societies, Marketing Cooperative Societies, Multipurpose
Cooperative Societies, Savings and Credit Cooperative Societies and Producer
Cooperative Societies.
Most of the rural cooperative marketing societies have diversified into multipurpose societies, supplying consumer goods, building material and agricultural requisites as well as providing loans to the public. Due to this diversification within the cooperative sub sector, members and the public, especially in rural areas, have access to various goods and services at affordable prices as the private sector has been reluctant to invest in remote and low income areas. Access to goods, services and farm supplies etc. through the cooperative societies has further improved the living standards of people in Botswana.
According to Tumagole (1993), the mass establishment of cooperatives in the rural areas was not so much in the need to compete against existing business establishments but rather to provide solutions for the socio-economic needs that these other ventures were failing to satisfy. Cooperatives are products of the local people; and whether their establishment was because of the objective assessment of the economic needs for the ventures, or just entities established because a particular community wanted to emulate more of what already had a cooperative, is a subject of debate.
The government views cooperatives as “private” and voluntary business founded by members of the community and totally owned and managed by members for the
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purpose of development of areas such as agriculture, provision of commercial services, promotion of rural industries, and other employment generating activities including the supply of goods and services to the people. In the light of this policy exposition, it is obvious that without proper coordination and guidance by all those whose role is enshrined in the same principle, it will be impossible to have a common understanding of this important government objective.
COOPERATIVES WORLDWIDE
Cooperatives in Developing Countries:
According to a report by the Secretary-General (A/49/213 of 1 July 1994) of the
United Nations, an estimated 2.3 billion people, or 57 per cent of the total population in developing countries alone, is "closely associated with cooperatives". Cooperatives serve crucial functions and make major contributions to national economies; for example:

India: Some 90,000 agricultural supply and marketing cooperatives existed in
1993. They helped to spearhead India's "Green Revolution" by supplying 34 per cent of fertilizer input. Simultaneously, the Anand Dairy Cooperatives, comprising over 57,000 dairy cooperatives with more than 6 million members, was the country's largest producer of dairy products.

Brazil: Recognized a convenient access to adequate medical care collective through collective healthcare businesses. Today it has 61,400 doctors (about one third of the national total) and 8.5 million patients.

Republic of Korea: In 1992, after only thirty years in existence, the largest credit union movement in any developing country, first in terms of assets ($ 7.7 million) and second in terms of membership (2.8 million persons), was registered in the
Republic of Korea.

Africa: In Burkina Faso, Cote d'Ivoire and Mali, the process of transforming parastatal "cooperatives" into genuine private sector cooperatives was actively assisted by the International Labour Organization (ILO) through its Interregional
Programme for Commercial Exchange among Cooperatives (INTERCOOP) and its Organizational and Cooperative Support to Grass roots Initiatives (ACOPAM) project.

China: In April 1994, 160 million Chinese were members of cooperatives under the International Cooperative Alliance (ICA) umbrella. Although parastatal
"cooperatives" are still significant, many of them have embarked upon the challenging path of privatisation, as evident by the fact that some 1,000 joint
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ventures involving $1 billion in capital had been set up by 1993 between foreign enterprises and Chinese cooperatives.
COOPERATIVES IN DEVELOPED ECONOMY MARKET:
What many people do not realize is that cooperatives are not active exclusively, or even primarily, in developing countries; on the contrary, an estimated 531 million (62 per cent) of the total population in developed market economies is closely associated with cooperatives in some way. For example:
 USA: In 1994, the 100 largest US cooperatives employed 750,000 persons and provided a combined contribution of $ 87.2 billion to the national economy. Moreover, the 1993 Fortune 500 list of major US industrial corporations worldwide included 14 cooperative enterprises while another six appeared amongst the 100 largest diversified service companies in Europe. In
1993, agricultural supply and marketing cooperatives in the European Union,
Austria, Finland and Sweden had 14 million members, 800,000 employees, a turnover of ECU 205 billion (European currency units), a 55 per cent share of total farm inputs and a 60 per cent share of overall marketing. In 1993, cooperatives in Sweden had an aggregate annual turnover of 20 billion ECU
(8 percent of GNP) while cooperatives in the Basque region of Spain accounted for 15 per cent of 1989 regional GNP.

Japan: Almost every Japanese farm enterprise is a member of supply and marketing cooperatives, which handled 95 per cent of rice production in 1993.
Cooperatives also accounted for approximately 90 per cent of Japan's 1993 fisheries products;

Canada: Quebec's "Movement des caisses Desjardins", one of Canada's largest financial institutions in that province, established 12 regional investment corporations to help promote balanced development by stimulating entrepreneur- ship in economically disadvantaged communities in the region.

Sweden: Kommuninvest, a financing cooperative for local government use in
Sweden is exemplary in the way it works, financial support services provided and Membership in the cooperative (Holmberg & Frommegard, 2005).
COOPERATIVES AND THE BATTLE AGAINST POVERTY
Poverty is the enemy of development. In addition, in today's world, one in every five persons lives in poverty, an ominous omen for our common future. In order to raise
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awareness and stimulate remedial action, the United Nations declared 1996 as the
International Year for the Eradication of Poverty. Moreover, the UN sponsored World
Summit for Social Development, dubbed by the media the "Poverty Summit", which took place in March 1995 in Copenhagen, Denmark, had the eradication of poverty as one of its core issues. The Summit's concluding the Declaration and Programme of
Action for the formulation of national strategies to eradicate poverty acknowledged the potential and contribution of cooperatives for achieving social development goals, particularly, the eradication of poverty.
In addition, it is true that cooperative enterprises do contribute substantially to the eradication of poverty, both directly through members and employees, and indirectly through stimulating the economies of the communities in which they operate. For example, through income derived from employment; the provision of affordable goods and services to households; consumer protection practices, effective management of household and enterprise finance; affordable insurance packages; the provision of adequate housing, utilities and services; and finally through the provision of education and training for human resource development.
Cooperative de Seguros Multiples de Puerto Rico (CSM) is an example to all the cooperatives in the world. The island's first miscellaneous insurance cooperative,
CSM is owned collectively by approximately 200 local cooperatives and is used by the International Cooperative Alliance (ICA) to showcase the potential the cooperative movement has to become a major player in any country's economy (Rosa,
2001).
COOPERATIVES AND AFRICA
Cooperatives are successful in economic development because they are commercial organizations that operate by a broader set of values than those associated with the narrow pursuit of profit alone. They are first and foremost businesses, yet at the same time they practice economic fairness by ensuring equal access to markets and services among an open and voluntary membership base. Because they are owned by the consumers, in all the services they provide, they tend to make decisions that balance the need for profitability with the greater interests of the community which they serve. More than 40% of all households in Africa are members of a cooperative society. Taken as a whole, the cooperative movement is Africa’s biggest nongovernmental organization, playing a significant role in many national economies and
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has created a great number of salaried jobs and self-employment opportunities in
Africa. Yet, the role of cooperatives in employment creation has been neglected by employment planners, cooperative promotion agencies, social partners and donor organizations alike. In many African countries, cooperatives were considered primarily as tools to execute certain economic or political functions on behalf of the government, not as autonomous, member-based organizations that create and consolidate self-employment. This policy of “incorporation” has done great damage to cooperative development in Africa. Fortunately, government policies towards cooperatives have changed after the economic reforms and the democratisation process that have taken place in most African countries. Today, the economic, political, legal and administrative environment of many nations is conducive to the development of genuine, self-reliant and autonomous cooperatives and similar organizations which can greatly contribute to job creation and to the empowerment of the poorest. This opportunity must be seized. The present report shows that African cooperatives have created a sizeable number of salaried jobs; yet, their biggest employment creation potential lies in the field of direct and indirect self-employment.
Cooperatives do have a comparable job-creation advantage over other types of enterprises: they are labour intensive by nature, they are cost-effective because of member commitment and participation, they generate economies of scale and scope through horizontal and vertical integration, they establish links between the informal and the formal sectors, and they put economic and social development on a broader base. Worker-owned cooperatives provide their members with decent, permanent employment (Lindenthal, 1994).
No recent, complete statistics on the cooperative moments of Africa are available.
The following table is based on data collected by the ILO in 30 countries between
1989 and 1996.
TABLE 1 INTERNATIONAL COOPERATIVE ALLIANCE –AFRICA
Data on Cooperatives in 30 African Countries (members in millions)
Agriculture Saving and Credit Others
Consumer
S M
41,352 13.9
S M
19,838 7.1
S M
5,324 2.7
S M
9,834 3.3
(Source: Internal ILO mission reports) M - Members S- Societies
The average “cooperative density” in the 30 countries, expressed as the percentage of cooperative members in the total population, amounts to 7%. As there is usually only
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one cooperative member per household, and assuming an average household size of six persons, the “cooperative density” exceeds 40% of the total population. The cooperative movements of Africa are therefore, despite their shortcomings and weaknesses, an important element in the societies and national economies of their respective countries.
According to Holmen (1990), to understand the roles, performance, influence and potential of cooperatives (or any other institutions) as development instruments, it is essential that the research studies should go beyond the immediate focus for investigation. He further adds that nothing takes place in isolation and cooperatives are certainly not built in a vacuum. Without explicitly relating them to a wider context, analysis will be of limited value. The need to apply a broader, interdisciplinary perspective is further accentuated by the very complexity of the development process itself.
Africa is currently passing through an uprooting process of transformation both physically, socially, economically and politically. Its various characteristics are alerted in this process. Cooperatives are linked to various interests and groups
(members, employees, aid agencies, public administrative bodies, political institutions) who have been given certain objectives, resources and directives. They operate amidst a mass of external actors (individuals, groups, institutions) with sometimes overlapping and opposing objectives. Some aim at modernisation, while others want to preserve what already is. Some aim at greater central control and some at local self-reliance. Constraints, characteristics and interests of these competing/cooperating actors need to be established if we are to understand why and how cooperatives perform as they do, especially if we are to say anything about their potentials as future development instruments (Holmen, 1990).
WOMEN AND COOPERATIVES IN AFRICA
Women in particular find "membership in cooperative enterprises" as the most effective means to achieve economic empowerment, to engage in entrepreneurial activities and in employment, and, of great importance, to retain the benefits thereof.
Coopa Roca, a women's textile cooperative in Rocinha, Brazil is exemplary to people related to the world of cooperatives (Booth, 2004).
Women are generally under-represented in African cooperatives. This is mainly due to the fact that land is traditionally owned by men. As a landowner, the husband and
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not his wife becomes the member of a cooperative, even though the wife too contributes considerably to agricultural production. In fact, women generally devote more time than men to agricultural production. On the other hand, women remain in the village after the harvest, when many men go to town in search of seasonal jobs.
This is why women actively participate in mixed rural cooperatives and cooperativetype organizations created by village communities to organize pre- and post production services. When women have access to education and training, including functional literacy training, they often assume leadership, management and secretarial functions in the local cooperative.
Sometimes, cooperatives are created exclusively by women to develop, organize and manage rural economic activities such as horticulture, handicraft production, small animal husbandry and food crop marketing that are traditionally carried out by women. Women also organize thrift and credit cooperatives both in rural and urban areas to finance these activities and to raise funds for community investments such as village health care centres, pharmaceutical depots, consumer shops and storage facilities. Here again, female cooperative members have greater access to permanent or seasonal salaried posts (shopkeepers, accountants, managers etc.). It has been found in many African countries that the percentage of female membership is much higher in handicraft cooperatives and credit unions than it is in agricultural cooperatives. In addition, it has been proven that women are better credit union managers, more regular savers and more reliable borrowers than men. Many African credit unions would not survive without their female members. It is interesting to note that female membership in all types of cooperatives is very high in some Southern
African countries. This is a result of male labour migration from these countries to
South African mines and farms. The women, who remain in the home country, bear alone the responsibility for their families and must therefore, manage the family farm and household. Experience has shown that the best way to increase the participation of women in national cooperative movements is to organize cooperatives around those economic functions that fall traditionally under the responsibility of women (for example, food crop marketing). Such cooperatives may de facto become women’s cooperatives without being called such.
COOPERATIVES IN BOTSWANA
Many Batswana have come to depend on cooperatives for a range of goods and services. There are consumer-owned cooperatives selling clothing, appliances, camping gear, bicycles and books. There are cooperative wholesalers providing
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products, branding and other services to independent hardware, grocery and natural foods businesses. There are cooperatives disseminating news and photographs, and cooperative for the arts community. There are cooperatives that provide electricity and telephone service. By nature, credit unions and mutual insurance companies are cooperatives because they are member-owned. There are also many agriculture cooperatives providing finance to farmers. Furthermore, there are cooperatively organized employee owned companies, cooperative purchasing groups, and, many more.
Cooperative Societies in Botswana consist of Producer Cooperatives, Consumer
Cooperatives, Multipurpose Cooperatives, Marketing Cooperatives, Savings and
Credit Cooperatives and Secondary Cooperatives. The Department of Cooperatives continues to encourage the establishment and strengthening of all categories. The key project of this department is Cooperative Development.
The overall objective is to provide a range of services to farmers in rural areas, especially in livestock marketing, supply of inputs and consumer goods by improving the working conditions of staff through the availability of offices and houses.
“The Botswana Agricultural Marketing Cooperative Union in Lobatse” is a member of ICA.
The Botswana Agricultural Marketing Cooperative Union is involved with the marketing of agricultural products, produced by the cooperative sector in
Botswana.
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Figure 1 SACCO Organizational Chart (Botswana)
Supervisory
Committee
APPOINTS/APPOINTED
ELECTED
Management
Committee
Loan Department
Education
Committee
Accounts and
Administration
Department
FAILURE OF COOPERATIVES IN AFRICA
There exist practitioners who pretend that the reason for failure of cooperatives in the
African context is the inherent disequilibria, in their annual balance sheet, between the financial equities and reserves (shares, savings, and non-divided earnings), and their capital (loans demand and cash). In short, this means the lack of financial resources needed for their functioning (Zvi Galor, 2004).
Cooperative stands over two legs, in order to be solid and sustained: a . The equal ownership of members of their cooperative- Members pay with their own money whether by cash payments or by loans undertaken by the cooperative, to create the fixed assets of the cooperative. Therefore, the cooperative belongs to them entirely and equally, since members own equal shares. These are the
Property Shares. In most cooperatives in Africa, and in other parts of the world, this notion does not exist, and the cooperatives belong to members on an indivisible basis
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i.e., belonging to everyone commonly and belonging practically to no one. This is one of the major reasons of the declining of so many cooperatives in so many places. b.
The cooperative is rendering to members the best possible service at the lowest possible cost. This means that cooperatives are not working to generate profits/surplus to enable the head of the cooperative, at the
AGM, to show to members that s/he was successful in creating this wealth; but to cater for the members effectively. This wealth came from member’s pockets when applying a very expensive policy - of participation as members. Members created their cooperatives believing, that they would render them a service, or enable them to purchase a commodity at a low price, they could not afford it individually. This was not the case for cooperatives in Africa and elsewhere. The cooperatives there were not standing on two legs, and they failed. These cooperatives were always looking to create and to increase profits, on the account of members, and almost never rendered the best possible services for them.
The importance of savings for the success of cooperatives savings is a very important element to start successful development. The Savings and Credit cooperatives were, and could have been, a very useful tool for development. They were turned, by various organizations, governmental and NGOs, to become their "own" structures, instead of being the enterprises belonging truly to their members. So, one may think that these are not the cooperatives who failed, but rather those who "kidnapped" them from their members, who caused their failure, at least on the level of the international donors and development organization.
Another vital aspect is ‘Policy Making’. In order to ensure that the new cooperative policy is accepted it is necessary for the target group (cooperative members, leaders and other cooperative players) to be involved from the earliest possible stage of its development. Ideally, the participatory approach should start from the "idea" stage.
This early involvement will ensure that target groups adopt the ownership of the document from the onset. A participatory approach guarantees that cooperative principles are translated into an acceptable policy, and that genuine cooperative structures are developed. To achieve best results, the participatory approach must be allocated a considerable amount of time and resources. If the participatory process is to be effective, then decision-makers must appreciate that the exercise will be both
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time-consuming and costly. The potential social and economic benefits of the participatory approach cannot be underestimated and should not be compromised in any way.
Cooperatives have been playing an important role in shaping not only agricultural and rural economy but also the urban economy. They are engaged in several economic activities such as disbursement of credit, housing, consumer, distribution of agricultural inputs like seeds, fertilisers, agrochemicals, and in arranging storage, processing and marketing of farm produce. Cooperatives thus contribute directly to the eradication of poverty through the economic and social progress of their members and employees and indirectly through stimulating the economies and enhancing the social fabric of the communities in which they operate. Their importance is linked to their purpose and the values and principles they espouse to their members and their communities. In other words, when the objective is to enable poor people to help themselves through economic activity that builds on their strengths and compensates for their weaknesses, then people-centred businesses such as cooperatives have builtin advantages (Birchall, 2004).
The values on which cooperatives are based are self-help, self-responsibility, democracy, equality, equity and solidarity. At first sight, these principles and values seem to focus upon internal and organizational aspects of cooperative enterprises.
Still, cooperatives will stress upon their market behaviour as well, displaying that they distinguish themselves by honest measurement, high quality and fair prices.
They have come a long way since they originated in the 18 th
century. Further, they are active in all economic sectors all over the world. As a recognized and well established social movement, they have a representative body with the ICA and are officially promoted by the ILO through the ‘Promotion of Cooperatives
Recommendation 193’ of (2002), and by the UN through the Committee for the
Promotion and Advancement of Cooperatives (COPAC).
According to the International Cooperative Alliance, the number of farmers' cooperatives in Africa is smaller than in other regions and accounts for just 6 per cent of the world total, but is still significant: 24,000 cooperative associations, with some
10.4 million members. In some countries, such as Morocco, one in five small-scale farmers belongs to a farmers' organization, most frequently a cooperative. A number of countries, including Ethiopia, Guinea, Kenya, Uganda and Zambia, have started changing their legal and policy frameworks, with the aim of transforming agricultural
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cooperatives and other farmer organizations from state-supported rural enterprises into more independent, farmer-run businesses.
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Anonymous, (2005). “ Cooperatives Values
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Birchall D. (2004)
“Creating Training Programmes relevant to the labour market.
Quality in Training” – Conference Paper. Birmingham 16-17 Feb.
Booth, H. (2004). “
Waxing Brazilian
”. Design Week; 19 (17); p.14, 2p.
Galor Z. (2004) “
Failures of Cooperatives
”. Retrieved from www.coopgalor.com on
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Oct 2007.
Holmberg, A. & Frommegard, L, (2005). “Sweden's Kommuninvest Financing
Cooperative”. Government Finance Review; 21(3); p.30, 5p, 1c.
Holmen.H. (1990). “State, Cooperatives and Development in Africa”. Research report no 86, The Scandinavian Institute of African Studies, Uppsala.
Lindenthal R. (1994) Cooperatives and Employment in Developing Countries, A working Paper, Geneva, ISBN 92-2-109292-5
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Rosa, Taina (2001). “An Example to Cooperatives around the World”. Caribbean
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Tumagole, L.O. (1993). “The Assessment of Marketing of Livestock in Botswana: A
Case Study of Cooperatives”. Department of Cooperatives: Gaborone.
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