The International Principles of Cooperation and farmworker cooperatives

Edited by,

      Stefano Patrizi, Head of the agri-food sector of Legacoop Romagna

      Faith Jacob Siame, Student at the University of Bologna

Preface

This paper presents a practical case on the importance of analyzing cooperatives according to the principles of the International Co-operative Alliance, where the seven CABs (Agricultural Cooperatives among Workers) of Ravenna were used as a case study. The study was carried out through the analysis of the relevant literature, identification of relevant variables, construction of a function group for the elaboration of synthetic indicators, construction of a database with the information of the cooperatives, elaboration of an explanatory text and preparation of a presentation. A cross-sectional questionnaire was employed and a simple random sampling technique was used for the seven cooperatives for their members. The data collected were for the years 2017, 2018 and 2019. The result highlighted the strengths and weaknesses of cooperatives with respect to international principles and proved valuable to be able to indicate to cooperatives on which lines to direct their development, in order to be increasingly adherent to their mission. In conclusion, a workshop was organized with the cooperatives that participated in the analysis to discuss the results and understand how this approach can be leveraged in the future to strengthen their "cooperative performance".

Introduction

The meaning of cooperative was established by the International Cooperative Alliance (ICA) in its 1995 Corporate Identity as "an autonomous association of people voluntarily united to meet their common economic, social and cultural needs and aspirations through a jointly owned and democratically controlled enterprise."

Cooperatives must be based on core values and principles. The values, which were also stated by the ICA in 1995, include self-help, self-responsibility, democracy, equality, fairness and solidarity.

Other values that have been enshrined include the personal and ethical behavior that cooperators implement in their enterprises. They describe the goals and important things that cooperators intend to pursue and the traits they hope to encourage through cooperation. These are honesty, openness, social responsibility, and caring for others.

Specifically, the principles we focused on, mentioned in the introduction, include free and open membership, democratic control of members, economic participation, autonomy and independence, education, training and information, cooperation among cooperatives, and concern for the community.

Cooperatives operate in much the same way as other businesses. They must serve a market efficiently and effectively, be well managed, and be financially balanced.

The CABs are all based in the province of Ravenna, have a history of over a century, are managed democratically by the associated workers and cultivate the land as their main activity. Land that is almost all part of the intergenerational heritage of the cooperatives themselves.

The seven cooperatives, in which about 600 people work, with company revenues of almost 40 million euros, are C.A.B. CAMPIANO, C.A.B. BAGNACAVALLO E FAENZA, C.A.B. COMPRENSORIO CERVESE, C.A.B. FUSIGNANO, C.A.B. TER.RA, AGRISFERA and C.A.B. MASSARI: adhere to the national association of cooperatives Legacoop that offers representation, services and facilities to cooperatives and their members as well as promoting the development of new businesses and the dissemination of the principles and values that are the basis of cooperative development.

At the CAB Report presentation conference held on November 12, 2018, focused on innovation and learning, it was highlighted that CABs are investing in organic production with 17.4% of land. It was also highlighted that the share of CAP subsidies for integrated production is decreasing, while the focus continues to be on animal welfare, organic farming, renaturalization, precision agriculture, and green energy. Meanwhile, robots have entered the barn, while farm machinery is beginning to be guided via satellite data.

The technological revolution that has taken place in agriculture over the past few decades has led to a drastic reduction in the workforce needed to conduct these cooperatives in a balanced and economically sustainable manner. The use of these new technologies has caused the total number of workers on these CABs to decrease. In the 1980s, the number of workers employed on these farms, on about the same land area as today, was about 8000 people, but in 2017 CABs had 641 total workers, in 2018 it was 602, and in 2019 it was 595. Not only has the number of workers decreased drastically, but the members among them also tend to decrease from 2017 where there were 417 active members, in 2018 there were 404 and finally in 2019 there were 379.

Cooperatives operate in much the same way as other businesses. They must serve a market efficiently and effectively, be well managed, and be financially balanced.

In the course of their development, CABs have taken on an organizational and managerial form that has been consolidated and standardized over time, achieving very peculiar characteristics compared to other types of agricultural enterprises. They are true "self-managed" agricultural enterprises in which workers and members have decision-making and democratic power.

CABs are historical Italian companies, the first one was born in 1864. They have been studied at various times by many people, especially in terms of their economic, social and agronomic, and historical-political aspects. There is little doubt that these cooperatives are authentic, given their history, their integration into the rest of the cooperative system, and the roots that still run deep in their communities of origin. However, a simple evaluation of them on the basis of the international principles of cooperation has never been done, and this is why we decided to address it in the belief that it could become an important tool and stimulus, also for other cooperatives, to strengthen the pursuit of the mutualistic mission.

In the process of obtaining the data, we used a variety of sources, from the specific literature, to the specific questionnaire, to the data already in the possession of the cooperatives as a result of various analyses done previously.

In the specific questionnaire created for this occasion, the nature of the questions were closed and open-ended, while others asked for the anonymous opinions of the participants.

The interviewees showed complete cooperation and support for our analysis, understanding from the outset the possible usefulness of the survey.

The questionnaires were designed to elicit specific information potentially useful in investigating what was proposed.

CABs and cooperative principles.

These agricultural cooperatives are members of Legacoop, which in turn is a member of the International Cooperative Alliance.

  1. Associazione libera e volontaria. libera e volontaria.

Each year, CABs accept applications from prospective new member workers to the extent that they are able to offer sufficient work and if the prospective workers have the necessary skills for the type of activity. Workers, however, can come in two categories: cooperative members or non-members.

In 2017 seven cooperatives combined reported 41 new workers and 20 new members, out of a total of 641 workers and 417 active members which is 6.4% of new workers and 4.8% of new members. In 2018 there was an increase in the number of new workers compared to 2017: 65, or 10.8% of the total of 602. In the same year, the total number of new members was 19 out of 404, or 4.7%. The following year, 2019, cooperatives had 53 new workers and 595 total workers, or 8.9% and 5% over new members (19 of 379).

These are data that testify to a progressive but steady ability to turnover the social base, however, to investigate in depth gender, social, racial, political or religious discrimination would require additional investigation.

  1. Democratic control by members.

Co-ops held a total of 40 assemblies in the three years covered, from year to year there was an increase in the number of attendees. In 2017 there were 523 attendees, in 2018 548 and in 2019 556. Social participation is appreciable and has grown to close to 80% in 2019.

As far as the way of expressing the vote is concerned, the open one is used for all the assembly resolutions except for the renewal of the social organs, for which the secret vote with preferences is used in all the CABs. The latter is certainly the method that best protects the freedom of expression of the voters.

With regard to the annual frequency of BoDs, it is interesting to note that this has decreased by around 30% over the three-year period. Since there are no absolute parameters for judging this, we limit ourselves to pointing out the need for a more in-depth analysis of motivations and opportunities. The average number of directors on each board, on the other hand, does not change over the three-year period.

The average composition of the boards of directors is very different from the social, in fact we find in 2019 0% foreigners, 10.2% women and 4.6% young people (under 35 years) on average over the three years, while the social bases are composed of 17.2% foreigners, 54.9% women and 23% young people.

In this case, while it is relatively easy to ascertain that proper democratic mechanisms have been adopted, the assessment of the quantity and quality of social participation in the life of the cooperative is more complex.

  1. Economic participation of associatedi soci

Salaries in the CABs are certainly high compared to the average of the reference "market", even considering the high level of tax, contribution and regulatory evasion generally present in the agricultural sector outside. The salaries themselves are, for the most part, rigid with respect to company results, with the exception of a few forecasts that tend to link the company's economic result to salaries. Almost all CABs, in fact, foresee contractual mechanisms of integration upon achievement of certain results.

Ci sono poi attività che possono essere viste anche come un modo per trasferire valore economico e sociale ai lavoratori associati, tra cui i pranzi di lavoro e sociali, i piani sanitari integrativi e la vendita di prodotti aziendali a condizioni vantaggiose. Attività che con ulteriori analisi potrebbero essere valutate più dettagliatamente dal punto di vista monetario.

As far as the relationship of the partners with the capital stock is concerned, we have taken it for granted that this principle is correct, given the long tradition of the CABs on the observance of legal and statutory constraints.

  1. Autonomy and Independence.

Cooperatives must be autonomous and independent, collaborate with other organizations, and maintain their cooperative identity and a fully democratic structure in making decisions that may be governed by outside political or economic forces.

In order to measure adherence to the cooperative's principle of autonomy and independence, we decided to ask members directly, through an anonymous survey in which 152 people participated, what they thought of it. The result appears satisfactory: only 2% of participants considered their cooperative insufficiently autonomous, 15% sufficiently so, 36% fairly so and 47% totally so.

  1. Education, training and information

These agricultural cooperatives engage in various ways in the education and training of their employees and members so that they can effectively contribute to the development of the cooperatives and increase their awareness with respect to the identity of their farms.

Cooperatives use their own resources and invest in the training of their members. In 2017, the average amount of 142.9 euros was used for the training of each worker.  In 2018 it was 65.8 euros and in 2019 it was 60.9 euros.

There were approximately 543 people involved in trainings in 2017, including 283 in 2018 and 302 in 2019. After declining in 2018, the number of participants increased in 2019.

Referred to for further study are the investments made by CABs to implement information campaigns aimed at raising public awareness of the nature and benefits of cooperation, as set forth in the principles and values of the International Co-operative Alliance.

  1. Cooperation among cooperatives.

CABs have always partnered with other cooperatives to provide goods or services or to sell their products. Many of these cooperatives were originally founded by the CABs themselves.

Over an 8-year period, their purchases from the cooperative supply chain dropped from 43.5% in 2010 to 41.6% in 2018.

There was a slight increase in sales to supply chain cooperatives over the same period from 75.1% in 2010 to 76.4% in 2018, demonstrating an important continuity in their integration over time.

  1. Community Interest.

The principle of interest in the community is certainly distinctive for cooperatives, but it is not easy to measure, except for the balance sheet data regarding contributions made to social or cultural initiatives in the area. We can testify in our case in particular to village festivals, shows, projects with schools.

The cumulative figure of the 7 CABs for expenses sustained in favor of the community in the three-year period ranges from 11,000€ to 16,000€ with an average per cooperative of about 2,000€. We are certain that the importance of the cooperative for the community is much greater and also linked to many other mechanisms of social participation, but translating this into an economic calculation is not simple and is an aspect that will certainly need to be studied in depth.

Conclusion   

As mentioned in the introduction, this brief study was presented to the CABs when completed to better understand if this activity could accrue interest and usefulness in the future. At the end of the presentation, the directors appreciated the approach that, since it is still in an embryonic form, could be developed further.

In fact, the possible usefulness found concerns issues that are essential to the life and development of these cooperatives, issues that go hand in hand with the economic ones, but which stimulate managers and members to take action to solve and prevent emerging problems that in the long run can undermine the very essence of cooperatives, such as the sense of belonging, the understanding of cooperative mechanisms, solidarity and participation within communities, and gender gaps.

We thought it would be correct to refrain from providing specific judgments on the results of the study, having conceived of it as a working tool primarily for the cooperatives, thus leaving any evaluations to them, which can only make sense if they are placed in a context of deep internal knowledge of the cooperatives themselves. What interests us is the positive feedback on the approach adopted and the stimulus received to conduct further in-depth studies.

References.

Bollier, D., Conaty, P., 2014. Un nuovo allineamento dei movimenti? una relazione di un workshop del gruppo di strategia comune. Meissen, Germania, 29 agosto, settembre 2014. Disponibile online all’indirizzo: http://bollier.org/report-new-alignment-movements 

Cooperative agricole e tecnologia digitale – PwC France – https://www.pwc.fr/fr/assets/files/pdf/2016/10/agribusiness-and-digital-technology-2016.pdf 

C.A.B CAMPIANO- http://cabcampiano.it/

Coop International Cooperative Alliance – https://www.ica.coop/en/media/library/research-and-reviews/guidance-notes-cooperative-principles?_ga=2.227491733.94186225.1620036019-728159278.1620036019

Cooperative per comunità sostenibili – Strumenti per misurare l’impatto e le prestazioni delle cooperative A cura di LESLIE BROWN, CHIARA CARINI, JESSICA GORDON NEMBHARD, LOU HAMMOND KETILSON, ELIZABETH HICKS, JOHN MCNAMARA, SONJA NOVKOVIC, DAPHNE RIXON, AND RICHARD SIMMONS

ICA (2005)- http://www.ica.coop/

Indicatori chiave di performance – Un quadro e una guida per le cooperative, gennaio 2019 – Cooperatives UK

Indicatori chiave di performance nelle cooperative: Indicazioni e principi di Louis Beaubien e Daphne Rixon

Legacoop Romagna, https://legacoopromagna.it/le-caratteristiche-di-una-cooperativa/

PROMOSAGRI- https://promosagri.it/it_it/

6° Conferenza internazionale AWBR │ Bordeaux Management School │ 9-10 giugno 2011- Proposta di misurazione della performance cooperativa (un test con lo strumento cooperfic© per le cooperative di vino in languedoc-roussillon)

Parole chiave; Cooperative agricole, principi, cooperative agricole braccianti (CAB).

Abbreviazioni:  CABs (Cooperative Agricole Braccianti), PAC (Politica Agricola Comune), ICA (Alleanza Cooperativa Internazionale)

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