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Featured Studies

The Role of Cooperatives in Providing Local Answers to Globalization

In this keynote speech, Mark Levin of the International Labor Organization (ILO) analyzes the opportunities and challenges that cooperatives face in the new world order in the context of providing decent work for people. The speech also outlines a number of tasks and options for cooperatives to take to articulate local responses to globalization.

Click here to read.

Observations and Lessons Learned from the CHF Governance Case Studies

CHF International completed this case study on community-based governance practices in four countries where they have projects. In South Africa and the Philippines, the organizations surveyed were cooperatives. In Romania and Poland, the organizations surveyed were condominium associations. The focus of the study is on leadership and decision-making processes.

Click here to read.

Co-ops in Crisis Countries

The July / August 2005 edition of the Cooperative Business Journal features articles that highlight many of the challenges, successes and issues that co-ops have faced working in crisis countries including the dangers and rewards of rebuilding economies after wars; success stories in Sudan, Rwanda, East Timor, Lebanon, Albania, Bosnia and Mozambique; the debate about disaster aid verses development; and safety measures that co-ops should take in war-torn countries.
Click here to read.

Computerizing Agricultural Cooperatives: A Practical Guide

Changes in the world tend to favor small, decentralized organizations that can respond rapidly to the ever-shifting demands of the market. In large measure, this transformation is being enforced by the liberalization and globalization of markets and the growing use of information and communication technologies (ICTs). If agricultural cooperatives are to survive, they must learn how to compete. One obstacle to achieving this is that information-processing in farmer cooperatives in developing countries is notoriously slow; most large cooperatives still operate with manual or semi-manual accounting systems. Such systems are labor-intensive to maintain, leave plenty of occasions for errors and create opportunities for abuse. It is difficult for managers to be competitive when they must work with outdated or inaccurate information.

The immediate advantage that computerization brings is the enhanced ability to handle large amounts of information. This manual by the FAO is written for developing country cooperatives that are just starting to consider whether or not or how to computerize. French and Spanish versions should be ready by mid 2006.
Click here to read.

Reflections on the Rising Coffee Market

This article by Equal Exchange, a worker-owned fair trade cooperative, analyzes the rising cost of coffee on the market and why many coffee cooperatives are not benefiting from this. It also outlines potential solutions for coffee cooperatives to better compete on the market. Click here to read.

An Introduction to Fair Trade and Cooperatives: A Methodology (DRAFT)

This methodology is for farmers and cooperatives interested in engaging in fair trade. The manual discusses the history of fair trade, different types of cooperatives involved in fair trade, lessons learned, models of export methodology, and how farmers and cooperatives can get involved or learn more. We welcome any comments on this methodology. Click here to read.

To learn more about fair trade and the cooperative movement, click here to view a new website we are working on.

Cooperative Insurance Programs: Four Case Studies

Four case studies on cooperative insurance programs in Poland, Guatemala, Malawi and Peru as part of a CGAP Working Group on good and bad practices in microinsurance are featured this week. Microinsurance is a term coined by the microfinance community for insurance that reaches low income clients. TUW SKOK in Poland is the primary insurance provider for Polish credit unions and acts as a brokerage company to insure credit union property and nearly 100,000 policyholders. While not designed for very low income members, the company does serve a market niche below the rest of the Polish insurance industry. Click here to read.

COLUMNA is the insurance company owned by the federation and nine credit unions in Guatemala. The company provides insurance to 54,000 low income credit union members with loan/life, accident and disability coverage. Policies are sold through credit unions, which has proven to be a successful approach to reach large numbers of clients over a wide geographic area. Click here to read.

The Malawi Union of Savings and Credit Cooperatives (MUSCCO) provides integrated and mandatory insurance through credit union savings and loans as part of its core services. The insurance scheme has been growing rapidly with about $200,000 in assets and has been operating profitably. Because of HIV/AIDS, premiums were raised by 60% in July 2003. Click here to read.

While the other case studies are successes, Serviperu was adversely affected by the financial crisis in Peru and regulatory changes that significantly increased capital requirements. As a result, Serviperu seized to operate and merged its activities into a private company, SEGURSCOOP which no longer serves the cooperative sector. A major factor in its decline was an inability to raise sufficient capital and a fall in serving its core cooperative customers given the inability of coops to weather the storm of hyperinflation. Rather than offering insurance, the company today provides funeral and healthcare services. Click here to read.

Old Concepts Revisited: Are Cooperatives the Way Forward for Smallholder Farmers to Engage in International Trade?

This dissertation by Alisha Myers uses the Ethiopian coffee cooperatives as a case study to explore whether cooperatives strengthen smallholder farmers’ livelihoods by facilitating their engagement in international trade. The paper examines internal and external dynamics such as context, policy and the world markets. The paper also looks at: (1) The extent to which cooperatives have facilitated international trade; (2) The benefits they bring to farmers and their impact on livelihoods; and (3) Strengths and weaknesses of the cooperative model.

Click here to view.

The Farmapine Model: A Cooperative Marketing Strategy and a Market-Based Development Approach in Sub-Saharan Africa

The main focus of this paper is to examine a marketing arrangement in Ghana—the Farmapine model—that has the potential of changing the industry structure and offering a means of realizing some of the potentials in the industry. Specifically, this paper examines the institutional arrangement behind the establishment of Farmapine and the inherent efficiencies in the model over existing arrangements. Secondly, this paper seeks to identify and discuss factors that will impact replication of the model by other producer groups in Ghana and other developing countries. Among others suveyed, thirty small-scale producers were selected from the 172-member Farmapine cooperatives. Godfred Yeboah wrote this article for Choices and the American Agricultural Economics Association.

Click here to read.

Tsunami Assessment Report

This report by the International Cooperative Alliance (ICA) provides an analysis of the current situation in Aceh with some statistics on the impact on co-operatives affected by Tsunami. It also confirms the still existing capacity to receive assistance while emphasizing the importance of full involvement and participation of local people in all projects. The report confirms as well that co-operatives are considered as viable business models not only in revitalising existing co-operatives but also in setting up new ones in sectors where they did not exist earlier. As a conclusion of the needs assessment, the Report proposes eight programme ideas which might interest you when defining your support for a long term post-Tsunami reconstruction. If you are submitting proposals, please email Gabriella Sozanski to avoid any duplication and of course to maximise the effectiveness of the co-operative movement's response. Click below to read the introduction by Ian MacDonald and the report.

Letter from Ian MacDonald
Asessment Report

Cooperatives and the Millennium Development Goals

This book higlights the significant contributions that the cooperative model can make to achieving the Millennium Development Goals. The book shows that cooperatives are thriving enterprises which contribute to reducing poverty, promoting gender equality, providing health care services, tackling the HIV/AIDS pandemic, and ensuring environmental sustainability. Johnston Birchall was commissioned to write this book by the International Labor Office (ILO) and COPAC.

Click here to read.

Afghanistan Cooperatives

Since 1963, Afghanistan developed some 2,500 cooperatives by the 1980s with support from the FAO and ILO, but they were destroyed by both the communists and Taliban when they came to power. The enclosed study is a mission report and finding from an investigation of emerging cooperatives in the Parwan province. It is indicates that there are about 170 active and newly established cooperatives in Afghanistan. The Chemonics assessment team met with 10 agricultural coops, and reviewed their management structures in determining that they were democratic and member-owned. Their conclusions are that the ministry is well set up to support cooperatives; the coops have good accounting systems; they are improving farm income; and coops may be a good vehicle in promoting licit production and reducing poppy cultivation.

To read the document, click here.

Sustainable Rural Electrification in Developing Countries: Is it Possible?

In March 2003, the National Rural Electric Cooperative Association (NRECA) organized a two day international conference on rural electrification in developing countries. A synopsis of the conference and presentations on the role of cooperative in rural electrification is enclosed. The papers include a summary of NRECA and the U.S. coop model as well as similar cooperative systems in Bangladesh and The Philippines.

Click here to read.

Evaluation of IFAD Armenia Project

In the draft Independent External Evaluation of IFAD (November 2004), the evaluators found that "IFAD was underperforming" with two thirds of projects rated as satisfactory and half suffering major implementation problems. A notable example of good performance is the Agriculture Cooperative Bank of Amenia (ACBA). "After initial start-up problems, ACBA is now the third largest (and only cooperative) bank in the country, plus the main lender in rural areas - where previously the banking sector had focused on low risk, high return borrowers from the main city. A more detailed analysis of ACBA is on pages 14 to 19 of the final evaluation report.

Click here to read.

Market-Oriented Agricultural Cooperatives in Ethiopia

This case study illustrates how to convert top-down and centralized cooperatives to market-oriented and member-owned cooperatives. Since 1997, ACDI/VOCA has been assisting Ethiopian coops in their transition from a socialist orientation under the repressive Derge regime to a free market, business-driven cooperative approach. The study compares the growth and progress of the Lumme Farmers’ Cooperative Union and the Kolba Primary Cooperative. By giving ownership of the project to the cooperatives, the Cooperative Promotion Bureau (COPB) and ACDI/VOCA promoted sustainability. The growth and profitability of cooperatives has removed the negative stigma of co-ops as an extension of the government’s political machinery. Cooperatives are now seen as essential in a free market economy and democratic society where members choose their leaders democratically without government intervention.

To read the document and learn more about the key lessons learned, click here.

Technical Assistance for Fair Trade Coffee Coops

At a Fair Trade international conference January 21, 2005, OCDC presented an overview of the impacts of fair trade coffee in the U.S. markets, the role of U.S. coops in promoting Fair Trade by direct marketing and certification, and a summary of technical assistance programs to strengthen fair trade cooperatives in Nicaragua, El Salvador, Indonesia, East Timor, Ethiopia, Colombia, Mexico and Rwanda. The paper describes program impacts and methodologies as well as the role of fair trade crafts. Click here to read the paper.

For more information on co-ops and fair trade, click here.

Sierra Leone Diamond Cooperatives

This training report on artisanal mining cooperatives indicates that coops are part of the integrated management program in war-torn Sierra Leone. While the coop training was pretty basic, it does indicate the challenges facing six coops, some of which are involved mostly in diamonds and others that are more diversified. The document provides a summary of the training and an excellent participatory training program for literate and illiterate coop members. Given the dismal history of Sierra Leone and its diamond trade, the training indicates that coops can play a role in revitalizing the mining industry.
Click here to read.

Analysis of Coffee Coops in Yungas

The two brief studies describe the background and suggest ways to strengthen coffee coops in this region of Bolivia as part of alternative development to reduce the cultivation of illicit drugs. Conclusions include: suggestions on how to reduce commercialization costs through better linkages among the small coops, ways to strengthen them financially, and the importance of increasing their capacity to reach scale.
Click here to read Analysis of the Coffee Cooperatives of the Yungas (in English & Spanish)
Click here to read Background on Coffee Cooperatives of the Yungas (in English & Spanish)

Uganda Health Cooperative Case Study

This case study analyses the Uganda Health Cooperative's (UHC) operations from 1999 to present which grew out of a Land O’Lakes’ project to assist dairy cooperatives. Dairy farmers often fell sick, missed work or had to sell their dairy cows due to health care emergencies. HealthPartners, a Minnesota-based health care cooperative, helped implement the community-based prepaid health care program. UHC reached 53 groups serving over 5,775 members. Funding reductions resulted in cutting staff and eliminating uneconomical plans. At 17 plans – mostly older and larger plans – with about 3,000 members the program is largely self-sufficient. The study also suggests ways for UHC to achieve greater scale and sustainability. Click here to read.

Success Story of the Polish Credit Union Movement: How to Reach 1 Million Members in 12 Years

This presentation details the most successful cooperative development effort of the last decade. Grzegorz Bierecki, who is president of the National Association of Cooperative Savings and Credit Unions and who guided its phenomenal growth, outlines seven key reasons for its success. The Power Point presentation graphically shows the growth in membership, credit unions, assets, savings and loans from 1992 to 2004. He also presents each of the credit union components that are linked together within a comprehensive financial system. Click here to read.

Promoting Co-operatives: A Guide to ILO Recommendation 193

The International Labor Organization, International Cooperative Alliance and Co-operative College in Manchester, England, have teamed up to produce a document on how to implement ILO Recommendation 193 on appropriate policies to promote co-operatives. The document details the appropriate role for co-operatives in development countries and their promotion through self-help efforts to address poverty, unemployment and social exclusion. Promoting Co-operatives is a guide to help co-operatives, governments, employers’ and others work together to understand the recommendation and how it can be used to realize the potential of co-operatives. The document contains a useful framework for putting the recommendations into practice through comparing the ILO recommendations with current cooperative laws and policy in a developing country. In English, French and Spanish.

Click here to read.

Micro-finance and Cooperatives

At a recent micro-finance conference in Warsaw, ACDI/VOCA presented two papers on rural finance based on projects in Serbia and Russia. Rural Finance by Michael Harvey and Kyhl Amosson is a PowerPoint presentation that provides an excellent overview of financial services to the rural poor; indicates their diverse financial needs and types of financial institutions; and key constraints. The paper suggests alternative institutional approaches from contract farming to agri-banks, and details technological innovations to reduce transactional costs. To read this presentation, click here.

The second presentation by Michael Harvey and Vladimir Pakhomov describes the rural micro-finance project through credit cooperatives in Russia, funded through USDA and USAID. The project fosters independent and sustainable credit cooperatives that have achieved over a 90% repayment rate. The institutional arrangements, loan characteristics and results are presented. Finally, the paper discusses why the cooperative approach is working and its continuing challenges. Click here to read the presentation.

New Strategies for Mobilizing Capital in Agricultural Cooperatives

Capital accumulation in cooperatives is often difficult. It is shaped, and to some extent constrained, by a unique set of principles that define the cooperative identity and set it apart from other businesses. Despite this, cooperatives in many developed countries have found innovative ways to mobilize capital from their members, while retaining important elements of their cooperative identity. Unfortunately, efforts to mobilize member capital have been less successful in developing countries where conditions are less favourable. The aim of this booklet by the Food and Agricultural Organization of the United Nations is to highlight some of the issues that cooperative leaders must confront in meeting this challenge and to provide suggestions about how capital, especially member capital, can be mobilized in more effective ways. This is an advance web version of the publication that will be published by the FAO in hard copy later this year. Please click here to send comments.

To read the case study, click here.

Insurance Cooperatives in Colombia & the Dominican Republic

This case study of cooperative insurance companies in Colombia and the Dominican Republic discusses the importance of insurance as part of development and in reaching low-income populations who face the greatest risks. Founded in 1970 with a feasibility study funded by USAID, LaEquidad has become one of the most successful insurance companies in Latin America, and reaches over 3 million Colombians who are members of 3,574 cooperatives, 1,475 employee funds and 172 associations. LaEquidad is currently expanding its services to 100 small poor communities outside of Bogotá, with customized products and using its own agents for the first time, rather than relying on its members for marketing. The case study describes how AAC/MIS members provided critical start up and on-going technical assistance, often using technical expertise from companies in the U.S. and Canada and increasingly on a south-south basis.

To read the case study, click here.

Cooperatives in Conflict & Failed States

This paper details the distinct contributions, attributes and recent examples of how cooperatives achieve economic and social development during conflict and in failing, failed and recovering states including Bosnia, East Timor, Lebanon, Mozambique, Rwanda, Macedonia and Nepal. It concludes that cooperatives are often imbedded in cultures where violence is prevalent and they can contribute to rapid economic development as ethnic bridging institutions. They have successfully helped create jobs for returning minorities and ex-combatants to conflict regions, and been particularly effective when markets are distant and high-valve. To become transformational, cooperative networks need to be created beyond initial ethnic or group minorities. While anecdotal and historical information confirms these cooperative impacts, more empirical data is needed to better identify traits that mitigate against violence and to make the case that cooperatives in such circumstances should be the preferred development options.

Click here to read the paper.

HIV/AIDS: Its Effect on Cooperatives & How Cooperatives Can Help

In April 2002, the World Council of Credit Unions (WOCCU) and the Canadian Cooperative Association (CCA) sent a two- person team to Kenya to work in consort with WOCCU Kenya local project staff to conduct an initial investigation exploring how credit unions and their members may be negatively affected by the HIV/AIDS pandemic; how credit unions can become proactive participants in a multi-sectoral response to HIV/AIDS; and what linkages or alliances could be forged with non-financial service organizations such as health service providers in order for credit unions to better serve their members. WOCCU is developing a strategy to harness support for credit union and HIV/AIDS initiatives in Africa in the immediate future, and potentially in other rising infection areas such as South Asia, the Caribbean and Eastern Europe in the longer term.

To learn more, go to http://www.woccu.org/pubs/cu_world/article.php?article_id=183.
To read the research project called The Unpaved Road Ahead: HIV/AIDS & Microfinance, An Exploration of Kenyan Credit Unions (SACCOs), by Anna Cora Evans and Geza Radu, click here.

U.S. cooperative development organizations (CDOs) are working to help stop the spread of HIV/AIDS and mitigate its effects on individuals and communities, especially in East and Southern Africa. While the fight against HIV/AIDS is principally a health issue, social and economic programs are critical in mobilizing communities to make effective prevention, medical interventions and care possible and to deal with the consequences of the victims or those living with HIV/AIDS including large numbers of AIDS orphans.

To learn more about the effects of HIV/AIDS on communities, what cooperatives can do to help, and important facts, go to http://www.coopdevelopmentcenter.coop/OCDC/hivaids.htm.

Tadu Dairy Cooperative Society in Cameroon

The Tadu Dairy Cooperative in Cameroon was designed to assist Fulani cattle raisers through organizing them for higher quality production and value added processing. Formed in 1992 with assistance from Land O’Lakes, the cooperative today has about 500 members with 12,500 animals located in four distinct areas. Fulani’s are traditional nomadic cattle herders that subsist on deteriorating pasturelands and have ongoing conflicts with pastoral farmers. They have not adopted modern hygiene milking practices, nor acquired strong business and market skills. The case study describes the cooperatives successful artificial insemination program, but how broader project objectives failed. It offers various recommendations to improve the cooperative as well as lessons learned. To view the study, click here.

Cooperative Assessment Tool for Land O’Lakes-Assisted Coops

Land O’Lakes, Inc. modified the OCDC Cooperative Development Framework, changed some of the measures to fit dairy cooperatives, and carried out six cooperative assessments in Kenya, Tanzania, Uganda and Guatemala including lessons learned. Land O’Lakes also proposes to add a financial assessment tool that examines the lending and business environment in developing countries. To view the analysis and modified framework, click here.

Credit Intermediation in Guinea

Where do progressive, democratically run rural cooperatives look when they need a loan to advance their business plan in countries where microfinance programs fail? CLUSA faced this question when the cooperatives they had been working with for years in Guinea needed external financing to scale up their economic activities. Focusing on good governance and feasible business plans, CLUSA is successfully connecting rural economic cooperatives to formal banking institutions in Guinea. The result is healthy economic gains for rural clients, and a loan reimbursement rate of 100%. To read the technical article go to http://www.usaid.gov/gn/democracy/news/031222_clusa_ics/technicalarticle.htm
To read the lessons learned, go to http://www.usaid.gov/gn/democracy/news/031222_clusa_ics/lessonslearned.htm

Sudan Trip Report

This timely report, given on-going peace talks, details a mission by the U.S. Overseas Cooperative Development Council (OCDC) to Southern Sudan from October 16-24 in 2003 with representatives from ACDI/VOCA, CHF International, Land O’Lakes, NRECA International, Ltd., NTCA and WOCCU. Based on yearlong discussions with the USAID Sudan Taskforce and meetings with senior SPLM officials, the purpose was to assess the role of cooperatives in the transition from relief to development. Go to http://www.coopdevelopmentcenter.coop/OCDC/sudan.htm to read the report.

OCDC Members' Case Studies

Currently, OCDC memebers are creating case studies of cooperatives in different regions throughout the world. OCDC will we compiling these case studies to give a brief summary and synposis of each study. These case studies will be featured and sent out by the listserver. Click here to read the summaries of the case studies.

Condesuyos Cooperative in Peruvian Andes

The Inter-American Foundation presents an interesting case study on its support for a dairy cooperative and private corporation in the Andes. It points out how rapidly successful enterprises with value-added milk products and a solid market can accomplish and some of the challenges they faced. The case study points out that 23 producers, who organized the cooperative, worked together for their common interests. The cooperative had to sort out “problems arising out of some confusion over the rights of associates and management of the enterprise.” The cheese plant succeeded through a door-to-door campaign to build its market and had exceeded its capacity for cheese production within six months.

The 27 organizers of the corporation decided not to organize as a cooperative “because of doubts as to the viability of cooperatives.” While the plant was successful in acquiring clientele, “conflicts among the associates, who put personal interests ahead of the company’s, caused it to cease operating in 1997.” The cheese plant was turned over to a private producer under a lease arrangement. The project was supported through the Center for Regional Development Studies (CEDER) over a 13-year period with multiple IAF grants.

To view in PDF form, click here.
To view at the IAF website, click here: http://www.iaf.gov/publications/publications_en.asp?journal_id=1&pageLevel=content&pub_ id=351&pub_year=2003&toc_id=696&cont_sort_order=1

CECAM: A Cooperative Agricultural Financial Institution Provding Credit Adapted to Farmers' Demand in Madagascar

A recent case study presented in the conference Paving the Way Forward for Rural Finance: An International Conference on Best Practices highlights a federated system of farmer credit through Casisses d’Epargne et de Credit Agricuole Mutuels (CECAM) in Madagascar. Begun in 1993 with mostly French support, the project organizes informal groups of farmers who are linked to regional and national farm banks. The case study is having national impact in a country where 62 percent of their work force is in agriculture. Madagascar farmers have suffered from low yields, lack of collateral and require both seasonal and longer-term loans for animals, equipment, and plots of land.

To View in Adobe Acrobat Reader PDF File, Click here

Electric Cooperatives in Bangladesh

The socio-economic impact of rural electric cooperatives in Bangladesh was recently completed by NRECA International, Ltd. Over 70 co-ops were envisioned to cover the entire country. So far, 67 have been established and 57 of these are operational. After two decades, around 20 million people in rural areas now have access to electricity through the 3 million meters that have been installed under the Program. The case study also displays the need for less governmental control and a more “democratic” and “participatory” role of the people. “Decision making” and participation by the population in cooperatives is crucial, to avoid governmental corruption or influence in the success of electrification in Bangladesh. Electrification is now proceeding at the rate of 390,000 new connections annually - averaging more than 1,000 per day. The socio-economic impacts include:

· Enhanced productivity and output
· Increased employment opportunities
· Enhanced food production with irrigation
· Increased household incomes
· Expanded rural investment and industrialization
· Improved living standards and quality of life
· Increased literacy rate
· Enhanced awareness of women & children rights
· Improved information access through media

To view the Executive Summary & Chpt 8 in MS Word, click here.
To view in Adobe Acrobat Reader PDF, click here.
To view full study by NRECA Ltd., click here.

Framework for Cooperative Development

This month, the featured study is a draft framework for cooperative development. The U.S. international cooperative development organizations (CDOs) are in the process of developing a framework to assess those factors that differentiate cooperatives from other businesses and link key measures of success or failure at different stages of cooperative development. Once a framework is refined, it will be field tested for usefulness and relevance. Please send us your thoughts or reactions to this effort.

This framework is now revised. To view the revised framework, click here.

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