Cooperatives are a failure story !

Yesterday I was having telephonic discussion with a close friend. Arguments shifted towards cooperatives survival and their real effectiveness. He confidently argued that cooperatives across the world are a failure story!

Well so is democracy! But should we do away with or try to see what makes cooperatives not achieve the real intended benefit to the member (farmer or primary producer). What makes them a "poor social collective business proposition".

Some statistics which people arguing 'for' cooperatives often quote

#Colombia's second-largest employer is a health-care co-operative.

#In Kuwait, 80 percent of retail sales are run by co-ops.

#In Bolivia a quarter of all savings are held by a single co-operative credit union.                                                                      #Within India we find the "Amul" which recently touched 2 billion $ business. 

#And perhaps we cannot forget Mondragon Cooperative Corporation, Spain's major business enterprise.

Critics might argue that these are exceptions. Yes they indeed are and  the successful with failed ones constitute 750 million people around the world as member of cooperatives. We need to understand that Cooperative at the end of the day is a "business", business supposed to be run collectively by hundreds or thousands of 'primary producers/workers", owned by them and surplus to be shared according to the labor contributed and not on the basis of capital. We need to understand that Cooperative being a business of the poor, poor not just economically but socially as well; needs special attention. Cooperatives unlike private counterparts cannot be made success in a day. There is a huge transaction cost which comes into picture when we attempt to form a collective enterprise. This transaction cost includes mobilizing people, stictching the diverse interest in a common fabric and above all ensuring that 'business' atleast becomes 'business like' in local rural conditions. This is a like 'threshold energy' binding electron within the atom, once that is crossed, once "cooperators" ensure that members start taking 'ownership' of the cooperative, there is nothing else which can stop the cooperative from being a success. Most of the "Amitabh Bacchan's" of development film tend to take it too fast. It cannot happen this way.

We need to remember that PV=nRT exists only for understanding, in real life specially in social settings which are occupied with century old backwardness only practical form available is
 
When I argue so 'stubbornly' for cooperatives, its not a fanaticism for "cooperative" but for a belief that rural poor have the ability to circumvent vicious circle of poverty. Only thing hindering them is their limited resources which with little external 'catalytic' support can be enhanced by bringing them together as a  collective business.  I, in person don;t see any other development paradigm which can make them better off without compromising on issues of 'equity' and 'parity'. If we don't believe in their ability, we have perhaps gone too pessimistic in ascertaining the worth of God's most intelligent creation.

Yes I Plead Guilty

When I had started this blog, had an intention of keeping my life a transparent open book where thoughts whether good or bad, actions whether good or bad and finally experiments whether good or bad will get reflected across. Time to plead guilty!

Was returning back from field on bike when a person on a bicycle suddenly crossed the road. Tried avoiding a direct hit but still the cycle got touched in the rear and the men with his son fell down. Nothing odd in this, accidents are called accidents because they happen unplanned with mistake from either side. What I felt bad was emergence of a thought that I should move ahead without bothering to see the status of the man and his child as I was getting late. Surprisingly this thought turned into action as well and  I moved about half a kilometer. No one would have caught me, but somewhere deep within the incident pinched  and I returned back. It further added to my guilt when I found that the child was physically challenged. Person had a minor injury on the knee perhaps while saving his child from falling down. Took the person and his child to nearby hospital and got some pain killers for them. Dropped him to his home and gave  my phone number to let me know if pain doesnt subside and further medication is needed.

God saved me from committing this moral blunder.
 Still I plead guilty for the 'thought' of moving ahead after the accident.

Monsoon enters Orissa but .....

Its so serene to view the dark clouds outside pouring rain drops. Perhaps some of us must be enjoying this with old melodies "Rimjhim gire sawan..." with a cup of tea.
But then comes a thought about a fellow member of Marshal Cooperative in Mayurbhanj, for whom entry of Monsoon must be filled with two opposing thoughts. One hand he must be happy that sowing on fields will start and at other end, there must be worry of keeping his produce preserved in the hut with rain water seeping from the thatched roof. Yes this dichotomy in thoughts is true for any rural poor.

But there is a difference in the current context, there are 500 families who happen to be member of the cooperative experiment in Mayurbhanj. These families don't seek your help for repairing their thatched roof. They neither want space in your house for the rainy season. They have a bigger dream. They want to reach to a level where they can repair their house from their own earnings. They want to ensure that their children have a better life. They no longer want to be sympathetically addressed as 'poor' and that is the reason they have come together as a collective which we see as "Marshal Cooperative".

While this is true, like a child envisaging its first walk, it needs to be supported in the endeavor of doing business together for gaining the real share from the value chain. They need to be facilitated in adding more families as members of the cooperative for reaching "threshold volumes" so that they can cost-effectively sell their produce and earn what their efforts mean to them. They need to be facilitated in setting up the production unit so that they can earn  more by value addition to their produce. One hand they have agreed to put in their limited resources for 'working capital' of the collective business, but on other hand they find their resources limited for supporting salary of two field staff's who are doing social mobilization in other villages. One of them has agreed to give 2 acre of land for the production unit but they don;t have sufficient resources to actually set the machines.

Will you help them?  http://www.coit.in/cexperiment.html

The 9th Experiment

What do we do when our dreams receive a major set back and we are on the verge of leaving that dream? We perhaps give a last try and approach our near and dear ones . Mayurbhanj Cooperative experiment was no exception! With presence of caring friends and beloved professors the experiment is still on

Sometimes solution of problems make us realize that we cannot remain selfish. When we have received help in the hour of crises for our dreams, we must ensure that we extend a small hand for supporting others who perhaps might be in similar situation. Now its time to expand this zone to other similar experiments where plausibly network of such caring friends and professors doesn't exist  and those dreamers have to leave their dreams of serving the community halfway . The 9th Experiment "Community Owned Initiative Trust" (Coit) comes into formal existence now.  Coit  is born to support similar initiatives which are left stranded due to lack of institutional funding as would have happened with Mayurbhanj experiment if friends had not come forward. This trust will seek support from individuals in small amounts and work only with "Community Owned Organizations". 

 Mayurbhanj experiment-Marshal Cooperative will  be now onward institutionally managed by Coit as its first assignment.  More details about Coit can be seen here http://www.coit.in/index.html . We seek your help in spreading the word about Coit.

And the Big news

This day perhaps marks one the biggest milestones for the Mayurbhanj Cooperative experiment. Mayurbhanj Cooperative experiment was based on slightly different premise. Conventionally in Cooperatives, cooperative purchases the produce from members and then sells it at a later stage (with or without processing) for better returns to members. This necessitates the need for high cost working capital for purchasing the produce which is mostly borrowed from market or taken as grant from a funding agency.  Essentially this means that members sell 'to' the cooperative instead of 'through' the cooperative. When we began the experiment, we had some fundamental questions in mind

a) Can cooperatives (which are essentially business of the poor) be run without single paisa borrowing from market? This is not say that borrowing for business is bad, but more because poor are vulnerable and high cost working capital in case of loss can put them in vicious poverty cycle. Moreover when Cooperatives or for that matter any business begins, all external loaning agencies are reluctant to give loan and this puts cooperatives at back foot with regard to the volume they cater in their foundation years

b) If cooperative is business of the poor, can people not pool in their resources in cash and kind and run it for better returns from the market? Essentially this means that Cooperative truly becomes their business and they don't sell 'to' the cooperative but 'through' the cooperative

We are yet to explore the firm and final answers but first glimpse of the color after end of 'titration' shows that approach as worked. After collectively selling 96 quintals at village cooperative level for meeting immediate cash needs, the 'contributed' produce close to 100 quintals being sold today at almost double the current market price and without single paisa loan taken from market. More is yet to come, but the preliminary results presents before us a new approach to community enterprise building with small resources which villagers already have.

I am personally indebted to those who had helped us from falling down and leaving the cooperative experiment in the April turmoil. Specially thanks to Prof DP Mishra (IRMA) and Prof J. Banerjee (NIT Surat) and my close buddies Ashirbad, Suman, Ajita, Robin, Nirav, Bhavishya, Rachana, Ankur, Parthav, Abhishek, Sudhin, Avinash, Durgesh, Digyavijay, Sworen (&team), Sunayana, Vinay whose suport both moral and financial has kept the experiment going.  Many thanks to the onces whose good wishes have kept the confidence up in the midst of the shaking period.

Perhaps God gave us the 'possibility' and our task is to make it 'possible'