Meeting of the Steering Committee of ICA Co-operative Research Committee

Dear Co-operative Colleagues,

As you are aware, we will be holding a Regional Research Conference in conjunction with ICA Regional Assembly in Beijing, early September, 2010.

The Chairperson of the Research Committee through the Blog Site has already requested members of the committee to come out with possible themes for the Conference.

The theme of the last ICA General Assembly held during November, 2009 at Geneva was "Global Crisis – Co-operative Opportunity". Hence it would be ideal if the themes suggested by the members could relate to this theme.

In order to decide on the theme and sub-themes, I would request the Steering Committee members to suggest a suitable date and time, preferably in December, 2009, for us to meet, discuss and finalise.

Looking forward to receiving your views, either through the Blog, or through e-mail nair@icaroap.coop or on phone -011-9810507944

With co-operative greetings,
Sincerely
P. Nair
Secretry, ICA Committee on Co-operative Research for Asia and Pacific

Hello !! Dear Researchers and Friends

Dear Friends,

Greetings from IFFCO !!

We had successfully completed the first Regional Seminar and first Meeting of the ICA Cooperative Research Committee for Asia & Pacific in the month of October,2009. I take this opportunity to congratulate you all for your active participation and making this event a success.

As I had mentioned during the meeting that this first Meeting is only a curtain raiser and a pointer to the researchers for the events they wish to undertake. Accordingly, now I am inviting your comments and suggestions for taking up future activities in this Region by the Research Committee of Asia & Pacific.

As you may be aware that the next Regional Assembly of Asia & Pacific is scheduled to be held in the beginning of September, 2010 at Beijing, China. The Vice Chair of the Committee Mr. Akira Kurimoto, who because of his pre-engagement could not come to FMDI, Gurgaon to participate in the concluded meeting, had sizeable contribution in shaping up the constitution of this Research Committee and it is his desire (which we also aspire) that this Committee should meaningfully contribute to active research helpful to guide the governance and activities of cooperative societies in this Region. Mr. Kurimoto in his mail to me has made his intentions known that this time it should be a qualitative Research Conference and Committee Meeting at Beijing, China in coming September 2010. Friends, this is a good opportunity for the researchers to present their papers at Beijing. I, therefore, invite all of you to post your views and possible topics/themes which could be suggested for the ensuing Research Conference. For the sake of brevity, I would suggest that you may kindly not suggest more than three topics/themes. After knowing the views, I, in consultation with Mr. Kurimoto and Steering Committee, will arrive at a consensus to decide the topic/theme for the Research Conference to be held at Beijing.

There has been some delay in communication to all of you which had occurred as I was travelling to different places. The Geneva ICA General Assembly has been a roaring success. The main theme was Climate Change and Alternate Source of Energy. Prof. Jeremy Rifkin excelled and regaled every one with his spell bound lecture. The ICA Global Board has been reconstituted in which the Chairman of IFFCO was re-elected as Director securing second-highest votes. From our Region Asia & Pacific this time we have 6 Directors out of 23 Directors on the ICA Global Board. All the six Directors are committed for the betterment of the cause of cooperation globally and specifically for this Region. The details of various events concluded in ICA General Assembly at Geneva, are posted on the ICA Website: http://www.ica.coop/. You may like to read more about it.

This is the time to make up for the lost time in communication. Therefore, I request all of you to promptly respond and send your suggestions as early as possible.

With cooperative greetings,


Gopal N. Saxena

Chairperson,

ICA- AP Research Committee

GOVERNANCE IN COOPERATIVES - Dr.G.N.Saxena

GOVERNANCE

The United Nations Development Programme (UNDP) defines governance “ as the exercise of economic, political, and administrative authority to manage a country’s affairs at all levels.

The Organisation for Economic Cooperation and Development (OECD) describes “Governance” as : “ the use of political authority and exercise of control in a society in relation to the management of its resources for social and economic development.”

Governance is understood as the structures and processes by which cooperation in organizations is directed and controlled for the purpose of producing beneficial outcomes for its stakeholders and to promote greater openness and democracy as well as longer-term thinking and commitment.

COOPERATIVE GOVERNANCE

Co-operative governance is the set of relationships between the co-operative’s members, the board as representatives of members that advise management for the members and the management that has the care and control of the co-operatives for the members and how a business can be best governed in the interests of its owners.

Co-operative governance provides the structure through which the objectives of the cooperative are set and the means of attaining those objectives and the monitoring of performance.

It requires that managers and stakeholders adopt a thinking which mediates between hierarchy and autonomy thereby effectively combining the strengths of each principle.

In a cooperative society, it is very essential that the critical balance between the needs of the members expressed through the democratically elected leadership are implemented by the professional executives to the entire satisfaction of the members of the cooperative society.

This tight rope balance can function pragmatically only when the enlightened democratic leadership assumes the role of monitoring and supervising the implementation of economic and social needs expressed by the members without interfering with the implementation process by the professional team.

The system of governance in cooperatives is relatively a complex system compared to private enterprises, because ensuring retention of control by members, to a great extent, depends on the awareness, understanding and knowledge of the elected representative about the cooperative philosophy, responsibility and their own role in the management. In order to insulate itself from the outside interference such as political and government, the prevailing legislation made for the cooperatives will also play a great role.

INSTRUMENTS OF GOVERNANCE IN COOPERATIVES

Typical organisational structure [governance frame] of a co-operative in Asia. This structure is the product of the byelaws.

PARAMETERS OF COOPERATIVE GOVERNANCE

Good governance in a cooperative society will largely depend upon the following factors:
§ Autonomy & Democratic Leadership
§ Awareness to Elected Representatives
§ Cooperative Law
§ Role of Government
§ Federal Structure
§ Value-based Professional Management; and
§ Social Audit

AUTONOMY & DEMOCRATIC LEADERSHIP

In order that the cooperatives remain member driven, the autonomy of the Board is important.

As it has been rightly said that :-

“ OBVIOUSLY NOT ALL WELL GOVERNED COMPANIES DO WELL IN THE MARKET PLACE. NOR DO THE BADLY GOVERNED ONES ALWAYS SINK. BUT EVEN THE BEST PERFORMERS RISK STUMBLING SOME DAY IF THEY LACK STRONG AND INDEPENDENT BOARDS OF DIRECTORS.”

AWARENESS TO ELECTED REPRESENTATIVES

Cooperative so far have evolved out of the weaker sections unfortunately their representatives are scantly aware about responsibilities and role they are supposed to play. Their knowledge about the business dimensions, vision, business acumen and sharpness to take control of the business initiatives is far from desirable.

In case a healthy environment for good governance, if it is to be set up, there is an absolute need to make them aware about the existing laws for cooperatives, awareness about their role and fraternising them with the existing business environment.

It has also been observed at most times that the professionals also exploit this inherent weakness and take away the control and initiatives from the elected representatives. In this situation the organisation shirks from catering to the felt needs of the members and, thus, actually functions as a private business enterprise.

Essential expected role of the elected leadership in setting up a good governance, therefore, would be to take care of the members’ needs, transparency and right of information to members, develop consensus in decision making (democratic decision where the dissent is not to be over-looked) and above all, to ward off the interference by the non stake holders like government and politicians.

COOPERATIVE LAW

In most countries the ‘cooperatives’ were recognised as an important economic tool, therefore, were, in most cases, formed at the ‘encouragement’ from the Government. States assumed for themselves the responsibility to develop cooperatives.

The Governments in various countries are thinking to give greater autonomy to cooperatives and amending the erstwhile cooperative laws. In India the Government of India recently in the year 2002 had enacted the Multi-state Cooperatives Societies Act 2002 with a view to provide more autonomy in the functioning of National Level Cooperative Societies.

ROLE OF THE GOVERNMENT

In most countries, the role of the Registrar of Cooperative Societies has no longer remained of a “friend, philosopher and guide” of the Cooperative Movement, but his office is now, in most cases, being used as a ‘single’ key option to exercise control.

Government should recognise the Cooperative Movement as a distinct & major stakeholder in both national and international affairs

Governments should recognise that the Cooperative Movement is highly democratic, locally autonomous but internationally integrated, and a form of orgnisation of associations and enterprises whereby citizens themselves rely on self-help and their own responsibility to meet goals and objectives.

Governments seek to support the Cooperative Movement and to wor closely with it to develop an effective partnership to achieve their respective goals.

Government to take into account the special character of cooperatives and the Cooperative Movement, which differs significantly from that of associations and enterprises not organised according to cooperative values and principles.

Governance, and for that matter, good governance, is not the game of singles. In this case, the governments and the Cooperative Movement have to join forces to bring about positive changes in favour of the ultimate basic members.

FEDERAL STRUCTURE

In order to effectively serve its members and to also strengthen and propagate the Cooperative Movement, it is desirable that the cooperatives not only have a well-knit and widely spread structure at different levels through multi-tiered structure, the federation aspect of cooperatives has also been expressed in the 6th ICA Principle of Cooperation "Cooperation among Cooperatives". The 6th ICA Cooperative Principle states:
"Cooperative serve their members most effectively and strengthen the cooperative movement by working together through local, national, regional and international structures."

It may, however, be ensured that these upper tiers do not grow at the cost of primaries. The upper federal tiers of cooperatives should be made to play more positive role in promoting the interests of primaries rather than acting as their competitors. The various tiers should function through ‘inter-dependence’ so that the need for each tier remains in prominence.

VALUE BASED PROFESSIONAL MANAGEMENT

It is the collective responsibility of the Board of Directors to protect the interests of the members and carry out the business of the cooperative society according to expressed needs by the members,the role of “professionals” in setting up good governance cannot be ignored.

The professionals who are associated actively in the jobs of the cooperatives should be necessarily inducted into understanding cooperative philosophy, cooperative way of functioning and, above all, respecting the democratically expressed needs of the members.

The concept of value-based management emanates out of the thinking that there should be only one unified board in a cooperative society to build a collective competency by bringing in professional managers as a united team on the Board to achieve the objects of the cooperative society.

The team of professional managers on the board, such as functional directors, allows them to comprehend the thinking of the elected leaders in totality and thus are able to serve their members without compromising their professional management capabilities.

This concept will have ample scope to allow policy formation to be driven by both member-lead philosophy and business results.

SOCIAL AUDIT

To judge the effectivity of a cooperative society to the purposes it has been formed besides the financial and management audit, the society should also conduct social audit so that it may receive a positive feedback about the reach of the services it is rendering to its members.

ROLE OF COOPERATIVES IN THE PROCESS OF ECONOMIC CRISIS RECOVERY - Dr. G.N.Saxena

GLOBAL ECONOMIC CRISIS

It started off as a sub-prime housing mortgage crisis in the United States where the Banks lent mortage loan to the people without assessing their assets value and credibility. The Banks converts those mortgage loans into Bonds & “securities” and attracted Global Investors into a trap for investments which appeared an easy and steady source of income.

Credit rating agencies erred in estimating the risk associated with mortgage - based “securities” and rating them as the safest investment product. Investment in these “toxic-assets” cascaded into a Global Banking Crisis and then later compounded into a full blown Global Economic Crisis.

CAUSE OF ECONOMIC CRISIS

§ Imperfect understanding of the implications of the mortgage based securities by the investors.

§ Failures in Regulation, Supervision, and Monitoring of the Financial Sector by the Regulating Authority (US Federal Reserve). There was a mismatch between Securities offered as Financial Innovation and the ability of the Regulators to properly scrutinize and monitor the associated risks.

§ Excessive leverage on the part of banks and the Financial Institutions. (More Debt than Equity & holding more Non Performing Assets)

§ Excessively loose and open monetary policy (Low Interest Rates on Loan).

§ Lack of transparency on the part of Banks and other Financial Institutions in sharing with the investors the market risks associated with the mortgage based securities.

§ Unsound Risk Management Practices of the Investor Companies.

§ Short term greed of the Corporates.

ECONOMIC CRISIS IN DEVELOPING COUNTRIES

Globalisation helped in forwarding the crisis to the developing countries through multiple transmitting mechanisms:

§ Trade - Volume of Exports of Goods and Services is contracting in open economies.

§ Financial Flow - No Fund lending for new project.

§ Foreign Direct Investment - Sharp fall in Foreign Investment into Emerging Markets (Developing Countries)

§ Remittances - Income transfers from workers employed abroad back to their households have decreased.

§ Less Employment Opportunities Abroad.

IMPACTS OF ECONOMIC CRISIS

§ Hundreds of thousands of businesses have collapsed or are in a state of near collapse.

Lehman Brothers, Bear Stearns, Goldman Sachs, Morgan Stanley, Merrill Lynch, AIG Insurance Company, General Motors etc.

§ The estimated market loss due to this Global Melt Down is USD 50 Trillion.

§ Global Credit Crunch.

§ Rapid increases in Unemployment, Job Losses, Salary Cuts, Poverty and Hunger.

§ Reduced Public Confidence in Financial Institutions.

§ Unprecedented Rise in Essential Commodity Prices.

§ Deceleration of Growth, or Severe Economic Contraction. Reduction in Country GDP.

§ Downslide of Stock Markets across the world.

§ Slowdown in Real Estate.

THIS ITSELF PROVES THAT SURVIVAL IS IN TOGETHERNESS.

COOPERATIVES – AMIDST ECONOMIC CRISIS

Late Mr. Ivano Barberini, President of ICA termed this economic crisis as the moral crisis of capitalism & termed Cooperatives as the antidote to Economic Recession. Even in this age of Global Economic Crisis the Cooperatives stood strong and positioned themselves as a rock of stability. No Cooperatives report to have applied for Government aid so far. Bankruptcies of Cooperatives due to the crisis have not been reported, nor have Employee Layoffs been reported.

Japanese Cooperatives are a classic example; NORINCHUKIN Bank in Japan incurred losses to the tune of US $ 8 Billion. But reposing their faith in the NORINCHUKIN Bank came forward and funded further capital in Bank. This is a unique example of Cooperative functioning where in the members own the responsibility of their decisions.

RABO Bank, originally a Federation of Credit Unions, though has recorded reduced profits is trying to aggressively reposition it in the market by using captive slogans of Cooperative advantages.

Cooperative Enterprises around the world are showing resilience to the crisis. Financial Cooperatives remain financially sound; Consumer Cooperatives are reporting increased turnover; Producer Cooperatives showing increased production and Worker Cooperatives are seeing growth.

The Global Economic Crisis poses an opportunity for Cooperatives to show their presence to the world and prove that they are the best alternative business model.

WHY COOPERATIVES SURVIVED?

Ivano Barberini – Cooperatives are borne out of the need of the members & their members take responsibility of their decisions. Cooperatives are the top survivors of Global Economic Crisis.

Cooperative Principles and Values that we practice, and our ethical practices – like Good Governance, Democracy, Transparency & Accountability saved us from the crisis. They keep the wealth generated by local businesses in the local community with meagre outside exposures. They have depth of Loan given- Loan attached with the holding. More traditional values helped Cooperatives to suffer less.

Cooperative model is a better model of business. It is
§ Not linked to Stock Markets.
§ Relies on Member funds for its operation.
§ Controlled by Local people for Local people
§ Know individual need & repayment capacity hence loans are not unfettered.
§ Hardly any exposure on mortgage-securities.
§ Not motivated by profiting and capitalistic gains.

Cooperatives work within a long-term time frame. They do benefit from long-term perspective in their investment strategies. They are modest and realistic in planning the Growth of the Business with manageable control on costs and aspirations giving them a greater power of flexibility. Cooperatives are organizations with human face and soul. They are in position to retain their workforce and continue to provide services to members at reasonable cost & affordable prices.

COOPERATIVE SECTOR IN INDIA

Indian cooperative sector has once again proved that the efficiency of cooperatives can successfully counter the recessionary trends of the economy thereby ensuring consistent livelihood to the farmer producer and offering value for money products to its consumers.

Cooperative sector in India which is largest in the world is associated with over 0.6 million cooperative societies with 250 million members. They have been playing distinct and significant role in the socio-economic development of our country. There is almost no sector left untouched by the cooperative movement and everywhere they are successful.

Cooperatives have covered 100% of villages and 67% of rural households. They have been operating in various areas of the economy such as credit, production, processing, marketing, input distribution, housing, dairying and textiles. The cooperative credit system has the largest network in the world and cooperatives have advanced more credit in the Indian agriculture sector than commercial banks. They are providing 43% of total rural credit. Over 40% of the total fertiliser distribution in the country is handled by the cooperatives and over 30% of total fertiliser production is also contributed by cooperatives and out of this 25% is contributed by IFFCO alone. Dairy cooperatives operating under the leadership of the national dairy development board has now become the largest producer of milk in the world. In the production of sugar the cooperative share of the market is over 58% and in the marketing and distribution of cotton they have share of around 60%.Cooperatives process, market & distribute 50% of edible oils. Cooperative sector in India generated around 1.20 million direct employment and self employment for 15.50 million people.

IFFCO, one of the premier cooperative society of India engaged in production & marketing of fertilisers has achieved the highest ever sales turnover of Rs. 32, 933 Crore (USD 7160 Million) as compared to Rs.12, 163 Crore (USD 2650 million) in the previous year.

During the current year, IFFCO produced the highest ever 7.2 Million Mt of fertilisers and marketed 11.3 Million Mt of fertiliser becoming the largest marketer of fertiliser in the world. Every fourth bag of Urea and every third bag of NPK sold in India is of IFFCO.

Gujarat Cooperative Milk Marketing Federation Limited (AMUL), the largest Dairy Cooperative of the country has also posted turnover of Rs. 6700 Crores (USD 1490 Million) during the current year.

EXPECTED ROLE OF COOPERATIVES

§ Cooperatives should refocus on their business and increase their capital base to cope with any such crisis in the future. They should continue their trade with increased efficiency with more focus on the risk averse poor people.

§ “Distrust is the biggest challenge for Economic Recovery”. Now the people are disenchanted with “CORPORATES”. Cooperatives can help in the restoration of people confidence.

§ Cooperatives can help in creating more employment opportunities (both locally & globally) and other income support measures.

§ Cooperatives should broadbase their income portfolios by integrating value additive features in the operations and services offered to its members and customers.

§ Continue investing & patronizing local economy and strengthen global connectivity with intra trade network of Coops.

§ Members to patronize Cooperatives & Coops to serve members better than before and create an umbrella model from Local to Global.

§ Expand business and diversify itself into related sectors.

§ Make member business more productive.

§ Cooperation among cooperatives through technical assistance, product development and fair trade.

Cooperatives should ensure that:

§ Any future financial rescue packages for crisis recovery implemented at global or national levels should also take cooperative network into accord and be unbiased against cooperatives relative to the corporate sector.

§ Future regulations or legislation that resulted from this crisis should favour, not hamper, cooperatives for building a safer & stable financial system.

§ Should be visible and showcase their achievements aggressively.

§ Should demand a rightful place in economic system, as they deserve.

“BAD COMPANIES ARE DESTROYED BY CRISIS. GOOD COMPANIES SURVIVE THEM. GREAT COMPANIES ARE IMPROVED BY THEM.” - Andy Grove (Former CEO of Intel Corporation)

“COOPRATIVES ARE GREAT ORGANIZATIONS AND THEY HAVE BETTER CHANCES OF SURVIVAL AND THUS HAVE THE POTENTIAL TO HELP THE WORLD TO COME OUT OF THIS ECONOMIC CRISIS.” - Ivano Barberini.

EXCERPTS FROM 15TH UN INTERNATIONAL DAY OF COOPERATIVES MESSAGE, JULY 04 2009

“The Cooperative Movement will need to work with policy-makers to ensure that they recognise the particular nature of cooperatives. They should not be over-regulated, and their essentially risk-averse nature should be understood. A consistent and well-articulated policy response is crucial to ensure that they are not disadvantaged by changes in the regulatory environment. Only with appropriate policies will cooperatives continue to be able to drive global recovery…. Cooperatives are demonstrating that they not only drive economic development but also economic and political democracy and social responsibility”.

SEMINAR ON COOPERATIVES A BETTER BUSINESS MODEL:EMERGING OPPORTUNITIES

International Cooperative Alliance - Asia Pacific, the highest cooperative body at Asia Pacific region in collaboration with IFFCO organized a seminar on “COOPERATIVES - A BETTER BUSINESS MODEL –EMERGING TRENDS” from October 23 -24, 2009. The Chief Guest, Mr Shil Kwan Lee, Regional Director, ICA Asia Pacific on this occasion said the cooperatives have by and large remained unaffected by the global economic crisis, which otherwise has severely affected the investor owned corporate structures. He further said that AMUL, IFFCO, NCCF, Cooperative Banks and state level cooperatives have continued to achieve high level of business turnover and profits. The cooperative business model being members owned, member controlled and service oriented in nature certainly deserved to be a preferred form of economic models in the context of moral crisis of capitalism. He informed the delegates from five countries about the decision of UN to declare year 2012 as year for cooperatives.

Dr.G.N.Saxena, The Chairman of Research Committee of the ICA Asia Pacific and Director, IFFCO urged the cooperative fraternity to give priority to cooperative research and studies in the region, so that the cooperatives could add on to their strength and become more competitive in the era of globalization. ICA Research Committee will look into the problem areas, issues and suggest feasible solutions to overcome these challenges.

Mr. JNL Srivastava, Ex Secretary, Agriculture, Govt. of India delivered his key note speech on the theme of the seminar and dwelled upon the values that cooperatives adhere to in terms of developing human capital that remains one of the biggest challenge before societies at large.

Mr.Rajiv I.D. Mehta, Dy. Regional Director, ICA, Asia Pacific presented the recommendations of eight Ministers’ Conferences on Cooperative Policy & Legislation and laid emphasis on the need of an enabling policy environment to make cooperative legislation more effective, clear, simple and crisp.

The deliberations at the seminar resulted in following strategic aspects:

• Cooperatives need to showcase their strength by sharing success stories of successful cooperatives to gain confidence of the stakeholders and policy makers.
• ICA and National Cooperative Federations should institute an Award for the best ten research papers on cooperatives in different sectors.
• Community Media to be more pronounced and directional.
• Cooperatives need to communicate more effectively with the primary members by using latest communication modes like SMS, voice messages for illiterate and visually impaired.
• The students in school and colleges must be given hands on experience on cooperatives as it would help build the social capital of the country.
• The meeting of the Research Committee should be held every year to learn from the research studies.

FOOD SECURITY

MEANING OF FOOD SECURITY
Ø Food security exists when all people, at all times, have physical and economic access to sufficient and nutritious food to meet their dietary needs and preferences for an active and healthy life (fao, 1996)
Ø Adequate Production Of Diverse Food Items In A Sustainable Manner In Response To Rising Demand, Resulting From Population And Income Growth, No Trade Barriers Across The World, Appropriate Infrastructure And Institutions For Effective Food delivery and distribution and adequate purchasing power in the hands of all, are the key elements of food security

NATURE AND SOURCES OF THE PRESENT FOOD CRISIS
Ø Wheat Production in 2007-08 increased Marginally over the previous year. But it was still lower than 2005 level. Production in Europe, Canada, Pakistan, North Africa, Especially Morocco And Australia came down. prices are abnormally high, above us$ 400 per tonne.
Ø Rice Production In 2007-08 Was At Last Year’s Level. There Was Increase In Production. In India, Indonesia, China, And Bangladesh. But It Declined In Japan, Philippine, Viet Nam, Turkey, Sri Lanka, Egypt, Mali, Argentina, Bolivia, Brazil, Ecuador, Peru, Uruguay, Australia, And European Union. International Market Prices Are All Time High, At Above US$ 1000 Per Tonne. During jan-april, the rice prices rose by about 68 percent. There are restrictions on exports by india, china, viet nam and egypt.
Ø Production Of Course Grains, Particularly Corn And Sorghum Increased In 2007-08. But Prices Remain Abnormally High Due To Increased Demand Of Animal Feed As Well As Bio-fuel. The Maize Prices Peaked To 10 Year High In 2007. The Average Prices Of Course Grains Increased By 165 To 28 Percent Over A Year, While Average Food Prices Jumped By 25 To 70 Percent.
Ø The cost of cereal imports to low income food deficit countries increased from us$ 14.03 billions in 2002-03 to us$ 33.11 billion in 2007-08.
Ø International market prices of dairy products are twice their level of one year ago. Also prices of all the three major groups of meat, i.E. Bovine, pig and poultry meat are up by 4 percent. Fish prices however remain sub-dued.
Ø Due to high prices, volumes of import and availability of food have declined in many countries.

FUTURE OUTLOOK
Ø It has been estimated that by 2020, about 400 million tones of grain will be burnt for bio-fuel. This is almost equal to the entire world’s rice production.
Ø As a result of climate change, global food production may decline by 2 to 6 percent by 2030 and by 5 to 11 percent by 2050. In several tropical countries, the effect of temperature rise may be disastrous.
Ø World’s ability to maintain food supplies against rising demand, changing climate and appropriate institutional and policy responses are the key challenges on the food front.
Ø While Improvement In Technology And Infrastructure For Higher Food Production In A Cost Effective And Sustainable Manager Would Be Important, Appropriate Institutional And Policy Responses In Terms Of International And Regional Co-operation In enhancing food production and food supplies without any trade restrictions would be necessary.
Ø Large Number Of People In The Developing Countries Of Asia And Africa Are Poor. Malnourished And Do Not Have Adequate Purchasing Power. So The Issue Of Regional And Household Level Food Security Are As Important As The Macro Level Food Security.

WHAT CO-OPERATIVES CAN DO TO IMPROVE FOOD SECURITY?
At The Micro Level, Co-operation Among Small Farmers In Any Location, Can Help Ensure Efficient And Sustainable Use Of Land, Water And Other Natural Resources For Increased Food Production For The Present And Future. Both Farming and marketing co-operatives can be helpful in this regard.

Marketing Co-operatives Can Help Stabilise Prices Of Food Artices Through Vertically Integrated Chain That Seeks To Encompass All Operations Which Intermediate Between The Primary Producer And Final Consumer And Making Food Available to poor consumers at reasonable prices. The price spread between what the producers receive and what the consumers pay gets minimized. This helps improve food production and ensure food supplies to consumers at reasonable prices.

Consumer co-operatives can help ensure distributing food items to people at reasonable rates.
Credit co-operatives and self-help groups can provide loan to poor households at zero or low service charges and help improve their effective purchasing power to buy more food and other articles.

Ø There Are Several Success Stories Of Co-operatives In India And Other Countries Of The World Which Should Be Closely Studied For Wider Replication.
Ø Besides international co-operation between surplus and deficit regions in terms of technology transfer, marketing without much barrier and food aid would be of great value.
Ø May almighty god give us a sense of co-operation at various levels to work together for food security and consequent peace and prosperity of mankind every where for all times to come.

CLIMATE CHANGE AND AGRICULTURAL COOPERATIVES

Cooperative form of economic enterprise is different than the private organizations in many ways as it is member driven and member controlled. It works according to the expressed needs of the members with their own resources having regard to their social & cultural aspirations. These are member based and Community oriented. Concern for Community is one of the important Cooperative principle. Since the Cooperatives are member-driven, the upliftment of members is their prime concern. The Cooperatives have to also consider to use local resources in such a way that it does not interfere with the ecological balances which are presently otherwise threatened by Climate Change and Global Warming.

CLIMATE CHANGE

Entire world today is concerned about the impact of climate change. Natural disasters do not recognize any national, political or regional boundaries, nor do they distinguish between developed and developing countries.

Climate change refers to change in the behavior of weather elements (temperature, rainfall, wind pattern etc.) over an area during a time span.

Though this phenomenon had also existed in past but now has become prominent.
Such known things are:
- 37” rain in Mumbai in one day.
- Last year floods in China.
- Cyclone in Myanmar.
- Snowing in Jordan.
- Recent reports of floods in many places.
- This time no summer in Delhi.
In fact we ourselves have to blame for it. Perhaps, this is the price of developmental activities and interference with the nature, we are now paying.

This is working in two ways. The dust particles in atmosphere trap the gases released due to industrialization and also the heat emitted. With the reason, this Infra-red radiation is absorbed and re-emitted in all directions by the green house gases.

The moisture from the earth when evaporates, due to these gases gets trapped and taken to different places by these gases. Wherever these vapours accumulate in large quantities and get cold temperatures, it causes heavy rainfall.

At some places due to increase in the concentration of green-house gases, the layer becomes thick and most of the Infra-red radiation get reflected back to the earth’s atmosphere resulting in warming of the earth’s surface.

In some part of the world, it is just opposite. The dust particles in the atmosphere do not allow the sun rays to pass causing fall in the temperature, with the reason in some parts of the world the winter season is increasing.

For example, in Antarctica, it has cooled during last 35 years despite the global average increase in the temperature by 0.6 degree.

CAUSES OF CLIMATE CHANGE

Burning of Fossil fuels (Coal, Petrol, Diesel, oil & Natural gases) results in the emission of carbon-dioxide gas.

Deforestation and less number of trees to absorb CO2

Rice paddies, Cattles, Coal mines, gas pipe line releasing Methane

Chemicals releasing Nitrous Oxide.
This results into concentration of green house gases which include
- Water vapours
- Carbon- dioxide
- Nitrous Oxide
- Methane
- Ozone
- Chloro-fluro Carbons
Greenhouse gas emission from the food and agriculture sector account for over one-third of the current total emission. High emissions are largely from the industrialized countries as is evident from the per capita emission of greenhouse gases of different regions of the world.

Fig.1- Per capita emission of greenhouse gases from different regions of the world.

In India highest emission of greenhouse gas is from energy sector (61%) followed by agriculture (28%).emission form industrial process is just 8%. (Fig 2)






Fig 2 – Greenhouse gas emission from different sectors

RESULTS OF CLIMATE CHANGE

Rise in temperature.
- Productivity of most cereals would decrease due to increase in temperature and decrease in water availability.
- Every 1degree Celsius increase in temperature reduces wheat production by 4-5 million tones.

Severe threat to Food security.

Rising food prices.

Erratic Weather – Excess rainfall, Intense floods, Cyclones.

Increases effects of pests and diseases.
Irrigation potential likely to decrease due to melting of glaciers.
Rise in sea level
- With the increase in temperature volume of water is going to expand. Similarly melting of glaciers and mountain snow will add to the volume of water in sea, resulting in rise of sea level.

Scarcity of Fresh water

Complete change in cropping pattern and resulting into complete change in infrastructure.

REMEDIES

Less use of fossil fuel
Less gas emissions to atmosphere
To keep this globe-green by more plantation and trees
Less emission of Carbon.

KYOTO PROTOCOL

180 Countries have signed this protocol including India.

Kyoto Protocol has three innovative mechanisms known as

§ Joint implementation

§ Clean Development Mechanism

§ International Emission Trading
Developing countries have to reduce their greenhouse gas emissions by a collective average of 5.2% below their 1990 levels by 2012.

Clean development management (CDM) is a project-based mechanism that allows public or private entities from countries with emission reduction targets to invest in emission reduction projects in developing countries in order to earn emission reduction credits (known as “certified emission reduction units” or CERs).

The credit Carbon units can be used against domestic reduction targets or sold to other interested parties.

WHAT COOPERATIVES CAN DO
At government level there are initiatives to mitigate the impact of climate change but at the community level they are not visible. Cooperatives are the community-based and member- oriented organizations. Therefore the cooperatives also have a responsibility towards helping the community in preparing for climate change risk management.

Create Awareness
Carry out awareness programmes about ill- effect of climate change on agriculture and what should be done to minimize its effect.

Intensive awareness campaign - can be carried out by distributing leaflets and handouts as well as training and educating the cooperative members regarding the disaster management so that they can disseminate the knowledge to large number of people and help in curbing climate change effects

Committees - They can help in the formation of the village protection team at the local level to carry out the disaster management programme.

Prevention

Improve technology for less emission - Agricultural cooperatives can implement technology that will lead to less nitrous oxide emission during fertilizer production.

Preparedness

Warning - Cooperatives can assist in linking rural communities with warning and protocol agencies so that they can communicate with rural people to ensure timely early warning about disasters.

Identifying the local polluting solves

Identification of natural warning system, its documentation & dissemination.

Mitigation

Alternate cropping pattern - Cooperatives can help in mitigating the risk associated with climate change by promoting alternative cropping practices and tolerant varieties to be used by farmers.

Take anti- flooding measures in low lying areas.

Alternative livelihood options other than farming - They can also promote non-farm livelihood options to be practiced by farmers in order to increase the flexibility of rural communities when confronted with climate hazards.

Adopt risk – mitigation tool e.g. crop insurance, weather insurance.

Take up natural resource conservation activities like afforestation, water harvesting and conservation.

Post disaster Relief

Cooperatives can be the first one to start the rescue and relief operation after the disaster. They helps in providing rescue & evacuation, first aid, shelter mgmt, damage assessment, counseling, water & sanitation, carcass disposal, relief distribution, damage assessment etc.

Cooperatives can create common disaster management fund to carry out the disaster mitigation, prevention and relief & rehabilitation purpose.

Create a cooperative hub for networking with already established national & international systems and disseminate information to grassroots level cooperatives.

FAO of UN in their message on 14th International Cooperative Day have said

“Cooperatives enterprises can promote local prevention and adaptation practices that reduce the impacts of natural hazards and climate change. Also the proximity of Cooperative, to the rural people & their Capacities to achieve economies of scale by grouping people, Cooperatives have to play a key role in ensuring rapid, effective & sustainable response to climate Change.”

ECONOMIC CRISIS AND COOPERATIVES

SPEECH BY IAIN MACDONALD

(JULY 2,2009, BANGKOK)

COOPERATIVES AND THE WORLD ECONOMIC CRISIS - COOPERATIVE OPPORTUNITY

The impact of the financial crisis is felt by the developing economies as well as the developed. Growth is slowing down in all these countries.Growth rate in current year is much lower than the previous year.Prospects for 2010 do not appear to be better. While most of 2008 escaped from the impact of global recession, but in 2009 the impact is visible and palpable.

The international financial crisis , as we all know , originated in the sub prime mortgage crisis which surfaced nearly two years ago in the US.With interest rates rising and home prices falling there was a sharp jump in defaults and fore closures.However, this would have remained as purely mortgage market crisis but for the fact that these sub prime mortgage crisis were packaged into financial derivative products that were rated as investment grade.once doubts about these assets arose it became very hard to price them.as a result, it started affecting a host of institutions which had invested in these products.

But, amid the gloom and doom of the past several months , there is good news for the cooperative movement.cooperatives are faring better in the financial and ensuring economic crisis than other enterprises.

Cooperatives were born in the hard times of the industrial revolution, they survived and thrived during the great depression of the 1930's, and there is growing evidence to anticipate that cooperatives will thrive and many more will be born during our current "hard times".

What is the evidence base?

The International Co-operative Alliance has just commissioned a study for the International Labour Organisation that shows that the co-operative model of enterprise is more resilient to crisis-financial cooperatives remain financially sound; agricultural co-operatives in many parts of the world are showing surpluses, consumer co-operatives are reporting increased turnover; and worker co-operatives are seeing growth. And so, people are choosing the co-operatives form of enterprise to respond to new economic realities.

So, this is indeed a time of opportunity for the co-operative movement. It is an opportunity to show that there is an alternative business model which instead of focusing on profit, focuses on people and guides its operations on the basis of the co-operative values and principles.

For co-operators, this is simply what a co-operative is and does. However, for many, this sounds like quite a revolutionary concept – A model of enterprise that not only drives economic development, but also economic and political democracy and social responsibility-a fairer way of doing business where social and environmental values count not as something you do if you can afford to do so, but that simply are the part of the way you do business. The movement, as we all know, is not new, nor is it is insignificant in terms of neither its economic contribution not its membership. Indeed, ICA will shortly be releasing new statistics that shows that closer to 2 billion people, rather than the 800 million we have been quoting, are members of co-operatives and that this number reflects only those persons affiliated to co-ops through ICA’s 223 member organizations in 85 countries. The Movement provides 100 million jobs, 20% more than all the multi-nationals put together and, of course, our 300 Project shows that the top 300 coops in the world have a combined turnover equal to the size of Canada’s GDP!

Our challenge today is grab the opportunity that is being offered to us. As one ICA board member noted, we need to speak louder about the merits and successes of co-operatives to raise awareness on the fact that other ways of doing success business exist, are just as successful and are worthy of more attention and support.

Economists, academia and the international community are desperate for answers on how to stimulate a global recovery, and in doing so are beginning to question the economic model which has lost the confidence of policy-makers as well as the average person. Indeed the famous economist, Jeremy Rifkin, will be our keynote speaker at our General Assembly in Geneva in November emphasizing the crucial rule the co-operative movement has in resolving the combined effects of economic crisis, energy needs and climate change-please be there!

Former US Federal Reserve Chairman Alan Greenspan went before the US Congress lat October, and told American lawmakers that the economic meltdown had revealed a “flaw in the model” that he had not expected-that banks operating in self-interest would not self-regulate to protect their shareholders and institutions. That flaw has led to the massive public bail-out of private, investor-owned banks. However, very few co-operative banking institutions have needed any kind of government support as few have shown the level of irresponsibility in their operations and financing that has been so apparent in other financial institutions. Savings and credit cooperatives, credit unions, SACCOs, building societies and cooperative banks all over the world have experienced an increase in almost every facet of their business including: increase in assets and deposits; increased volume of lending; increases in membership; a better rate of interest; and greater stability (measured by capital adequacy ratios, and loan default rates). This is an important fact when you consider that the magnitude of the movement: the World Council of Credit Unions has 49,000 credit unions in membership, with 177 million individual members in 96 countries while the International Raiffeisen Union estimates that 900,000 cooperatives with around 500 million members in over 100 countries are working according to the cooperative banking principles.

So, the criticism of the financial co-operative sector – that they are more risk- averse and less driven by the need to make profits for investors and bonuses for managers, is now a true asset.

We know for example from Pete Crear, CEO of WOCCU that, “not a single credit union, anywhere in the world, has received government recapitalization as a result of the financial crisis and they remain well capitalized”. We know too that in 2008, Rabobank (Netherlands) which has 50% of Dutch citizens in membership, and is the largest agricultural bank in the world was also rated the world’s third safest bank. It saw its share of loans increase to 42% of the market, and its local member banks recorded a sharp influx of savings of 20%. We know too that Raiffeisen Switzerland reported that 2008 outstripped al expansion in its 108-year history with 150,000 new members (7.3% increase to over 1.5 million members) and inflows of some 12 billion Swiss francs of new money in the retail business, taking total client monies above 100 billion Swiss francs. In the US, credit union loan volume increase 6.7% in 2008 while US bank loans declined by 40% and credit union loan delinquency rates though increasing are still less than half the rate for banks.

And from the Bahamas, to Philippines and Kenya, government officials are recognizing that co-operative financial institutions are safe, stable and sound and encouraging their citizens to continue to bank with them.

That is not to say that no financial co-operative has been impacted. In Japan, Korea, France and Germany to name but a few, some of the larger co-operative financial institutions that invested heavily in the market have made severe losses. Some have foregone dividends, others have locked to mergers and sought additional capital, but none is out of business. In the US and Canada losses have been also been made at the level of central cooperative banks and credit unions, many attributed to investment in what were once AAA securities-i.e. considered to be the safest of all investments.

Other sectors of the co-operative movement are also doing well in this crisis. The consumer movement is reporting an influx of new members and consumers. Many are reporting high turnovers not only for 2008, but also good performance for 2009 with guarantees to consumer to limit price increases and not sacrifice quality. CICOPA is gathering information from workers co-operatives and we know how they have grown in other crisis-like in Argentina in 2001 when employee-owned co-operatives flourished to take over failing enterprises-empresas recuperadas-or in times of high unemployment when the movement partnered with government to promote worker owned co-operatives in countries like Sweden, Finland, Canada and others.

And how are farmer co-operatives faring in this time of not only a financial and economic crisis, but also a food or food price crisis?

There are reports from around the world that farmers’ co-operative surplus was of record proportion particularly in rich and emerging market nations, but also in some developing countries, despite that 2008 being a year of high volatility of commodity prices, oil prices and investment markets. Agricultural co-operative banks like Norinchukin and NACF have suffered losses and are unlikely to be able to distribute dividends as in the other years, thus impacting the stability of the farmer, fisher and forestry co-operative sector. However, it is interesting that there is not much information on how farmer co-operatives are doing vis-a-vis this crisis. Rather, there are such a wide range of challenges faced by the agricultural sector that farmers are simply bracing for the hard times once again.

As US Coop, Land O’Lakes chairman, Pete Kappelman, reminded delegates at their annual meeting: “We have built a system that has consistently created value by helping producers and partner co-operatives manage through down times and capitalise on the up times. Together, we will meet the challenges of 2009 and beyond.” This sentiment was reiterated recently by COGECA president, saying “despite the current difficulties in sectors such as dairy, beef, pig-meat and olive oil, European agri-cooperatives have confidence in their ability to help their ability to help their members surmount these hard times. Farmers and agri-cooperatives continuously invest and innovate in order to secure a fair position in the food chain. This is even more necessary in the light of evolving global markets for food and agricultural products.”

However, the 2009 crisis will pose a number of additional challenges particularly in assessing to capital as seen by the recent offer for retail bonds by Fonterra in New Zealand to raise monies for general business purposes, including working capital requirements when its overseas credit facilities became increasingly scarce and expensive. It was looking to raise NZ$300 million and was a stunning 267% oversubscribed reflecting the confidence people have in Fonterra and its business and perhaps to of the fact that it is a co-operative.

So why are co-operative able to survive and indeed thrive in crisis and beyond?
It is the model. Co-operatives aggregate the market power of people who on their own could achieve little or nothing, and in so doing they provide ways out of poverty and powerlessness. They do so by operating under seven cooperative principles: voluntary and open membership; democratic member control; member economic participation; autonomy and independence; education, training and information; cooperation among cooperatives; and concern for community and are guided by a series of ethical and particularly co-operative values that set them aside from other forms of business-solidarity, democracy, equity, equality, self help and self responsibility. We eschew the selfishness and greed of our investor owned competitors

The general advantages of co-operatives are derived from membership. Cooperatives are uniquely member-owned, member-controlled and exist to provide benefits to members as opposed to profit and this has an impact on business decisions. When the purposes of the business are aligned with those of members who are both investors and consumers of the cooperative, the results are loyalty, commitment, shared knowledge, member participation, underpinned by strong economic incentives. These are the kinds of values any business organisation would want but that investor-owned business can only achieve by mimicking the idea of membership

The particular advantages of consumer cooperatives are that they provide people with consumption goods at the lowest possible price and with a guarantee of good value, and so make their income go further. Producer cooperatives enable self-employed people and family business to gain the strength in numbers they need to survive in the market. Agricultural co-operatives in particular improve bargaining power in the marketplace, reduce costs by pooling capital and resources, and make expensive services, such as marketing, that are unavailable to individuals accessible. Through cooperatives, farmers can achieve economies of scale, by reducing the unit costs of inputs and services, enabling farmers to focus on producing goods enabling them improve product and service quality and reduce risks, develop new market opportunities or expand existing markets.

There is also evidence that co-operatives in all sectors survive better than their competitors; the rate of survival of new start ups is better, and the co-operatives outlive other types of enterprises.

We are not alone to recognize the potential of the co-operative movement. In the year or so, there has been a rediscovery; some say a renaissance of the movement. The World Bank, the International Monetary Fund, the International Labour Organisation and the United Nations alongside international business and national media including the Economist, Wall Street Journal, the Financial Times, Le Monde, El Pais, the New York Times, and many more have started looking at the co-operative model and acknowledging its success-albeit reluctantly!

They like others recognise that cooperatives can lessen the impact of the recession by the mere fact that they survive and continue to carry out business. Co-operatives can use member capital rather than bank borrowing the expand the business, and they provide services to more risk-averse consumers. More specifically, worker cooperatives can concentrate on employment creation through labour cooperatives, employee buyouts and rescues, consumer cooperatives on lowering the cost of food and other essentials, and producer cooperatives on making members’ businesses more productive.

The recession will hit developing countries particularly hard, but it can be countered by continued strengthening of the savings and credit Co-operative sector and development of farmer cooperatives and new cooperative unions or federations to develop their business. Also important are the strengthening of links between cooperatives, through technical assistance, product developed and fair trade.

Over the years, cooperative enterprises have successfully operated locally-owned people-centered business while also serving as catalysts for social organization and cohesion. With their concern for their members and communities, they represent a model of economic enterprise that places high regard for democratic and human values and respect for the environment. As the world today faces unstable financial system increased insecurity of food supply, growing inequality worldwide, rapid climate change and increased environmental degradation, it is increasingly compelling to consider the model of economic enterprise that cooperatives offer.

At the recent meeting of the UN’s co-op expert group, planning for the International Year of cooperative in 2011 or 2012, they recommended that Governments should:

1. give preference to co-operatives when making decisions about funding programmes designed to mitigate the effects of the recession;
2. assist the co-operative sector in ensuring that the co-operative form of business is better understood by ensuring that co-operative business education is included on the education curriculum at all levels, from primary school through to business school;
3. support, through state-funded research councils, research and development into all aspects of co-operative business;
4. provide a legislative environment that allows co-operatives to extend their business into micro-insurance products that provide their members with a minimum of social protection; and
5. consider the co-operative sector’s values, principles and models in its restructuring of the current economic system.

In conclusion, I am personally very pleased to support this initiative by my colleagues of ICA Asia Pacific. There can no denial of the fact that cooperatives at this critical juncture must advocate and prove the values that distinct them as the guardians of real socio-economic growth. The time has come when cooperative practices must be understood and practiced in both conventional and non-conventional sector so as to insulate macro and micro economic development from the ills and evils of neo liberal economics. The challenge is huge. The value and significance of cooperatives is required to be seen in its true historical form and actionable steps have to be planned. Co-operative ideology cannot be seen in isolation rather it has to become an integral part of the social and economic norms that the local and global communities embrace naturally, rather than by imposition. The UN theme for International Co-operative Day on Saturday, Driving Global Recovery through Co-operatives, is a good start and we need your Governments’ active support at the UN in October to achieve an International Year of Co-operatives which really would be the ultimate promotional tool!

We have to show that Co-operatives are the better business model!

Thank you !!

ABOUT ICA AP RESEARCH COMMITTEE

Research has been and is of vital importance for the functioning of co-operative organizations. This is all the more so in the current economic crisis engulfing the whole world. Co-operatives have proved again that the Cooperative Model of Business is probably the only alternative to corporate sector in surviving in the complex problems and difficulties faced by all business organizations.

Research activities were continuing in the Asia-Pacific region since a long time, in some form or the other. In the year 2000, a group of researchers in the region have got together and organized the first Co-operative Forum in Singapore, with active involvement of the late Mr. Madhav Madane, formerly working for ICA Asia-Pacific, and Mr. Akira Kurimoto of JCCU, Japan. This Co-operative Forum was followed by others in Cebu, Philippines (2002), Chiangmai, Thailand (2004), Colombo, Sri Lanka (2006), and Hanoi, Vietnam (2008).

During and after the Research Conference in Colombo, the researchers who were associated with the Forum felt the need for setting up a proper Committee for Co­operative Research under the ICA Regional Assembly.The Committee was officially approved and set up at the ICA Regional Assembly held in Hanoi, on 5th December, 2009. Dr. G.N. Saxena , Director (Cooperative Development), IFFCO, India, was unanimously elected as the Chairperson of this Committee, while Mr. Akira Kurimoto was elected as the Vice Chair. Mr. P. Nair was entrusted to provide secretarial support to the Committee and function as its Secretary.

While there was no specific activity since its inception in December, 2008, Dr. Saxena felt that the Committee should have some activity during 2009 and hence organized the two-day Seminar from 22nd of oct to 24th of oct 2009 on the theme "Co-operatives a better business model: Emerging Opportunities" and a meeting of the Committee thereafter. It is heartening to note that a large number of participants, almost 50, from Thailand, Mauritius, UK and Nepal, apart from researchers in India, participated at this Seminar.