ILO Online: Last month, the International Labour Conference of the ILO examined the state of rural employment and poverty reduction. How can cooperatives promote jobs and livelihoods?
Hagen Henry: Yes indeed, the ILC discussion clearly recognized the essential contribution that cooperatives have made and, especially, can make in promoting rural employment for poverty reduction. The International Cooperative Alliance has estimated that cooperatives contribute to the livelihoods of some 800 million members and their families. They provide direct employment and seasonal and casual work. Yet cooperatives also allow many farmers to maintain their self-employed status and contribute to rural community development. The impact of cooperatives in providing income to rural populations creates additional employment through multiplier effects such as enabling other rural enterprises to grow and in turn provide local jobs. What’s more, cooperatives provide real economic benefits to farm families through increasing the stability of the farming sector, improving market access for their products and strengthening the farmers’ position in the agri-food chain. Financial services, utilities and other types of cooperatives are also important in promoting jobs and livelihoods as well.
ILO Online: What have you seen in terms of growth in cooperatives over the last five years, especially in rural areas?
Hagen Henry: Bio-fuel production is driving a rapid expansion of cooperatives in countries including Brazil, Mexico, Thailand, India, and the United States, while wind power cooperatives are on the rise in Canada, Denmark and the United Kingdom. It is also worth noting that 90 per cent of all fair trade is produced by cooperatives mostly in rural areas.
ILO Online: What is the role of the cooperative movement in addressing the climate change challenge?
Hagen Henry: Cooperatives are socially and environmentally sustainable enterprises based on the principle of caring for their members and communities where they operate. This makes them well suited to make substantial contributions to achieving a coherent balance of growth, productivity, employment and concern for the environment. There are numerous examples of initiatives taken by cooperatives to reduce greenhouse gas emissions, to educate their members, employees and clients on climate change and even promote green jobs that are also decent jobs.
ILO Online: How can cooperatives help mitigate the impact of food price increases, regional conflicts and disasters?
Hagen Henry: In addition to providing jobs and supporting communities, cooperatives can contribute to human security in general terms. Producers, consumers and communities directly touched by these crises are finding that cooperatives can help with the difficult task of adapting to the negative impacts of climate change. Cooperatives help farmers address the increasing production challenges and provide greater stability of the farming sector while respecting environmental resources. Experience has shown too that cooperatives can be highly resilient in crisis and conflict, particularly in building cooperation and solidarity and restoring dignity through self help initiatives in situations of tension, post-conflict and post-natural disaster situations.
ILO Online: Is the role that cooperatives play in the economy often underestimated?
Hagen Henry: Yes, it is. The top 300 cooperatives in the world in terms of turnover are of the size of the GDP of Canada. In Argentina, 58 per cent of rural electricity in 2005 was provided by cooperatives without which the agricultural sector, responsible for 6 per cent of the GDP, would be compromised and jobs in rural communities would be lost. In Colombia, Saludcoop, a health co-operative, provides health care services for 15.5 per cent of the population. In Ethiopia, 900,000 people in the agriculture sector are estimated to generate part of their income through cooperatives. In France, 9 out of 10 farmers are members of agricultural co-operatives; co-operative banks handle 60 per cent of the total deposits and 25 per cent of all retailers in the country are co-operatives, while in Japan 9.1 million family farmers are members of cooperatives who provide 257,000 jobs. In India, the needs of 67 per cent of rural households are covered by cooperatives, and in Switzerland, the largest retailer and largest private employer is a cooperative. Still in New Zealand 22 per cent of GDP is generated by co-operative enterprise and in Vietnam 8.6 per cent of GDP is attributed to cooperatives. Many other examples could be cited.
ILO Online: How can we ensure the required promotion of cooperatives?
Hagen Henry: Policy makers must ensure the current laws and administrative practices (registration procedures, taxation policies, accounting standards, capital standards for financial institutions as well as the ability to access funding, etc.) do not hinder the development and growth of cooperatives. Just to give an example of the problems we face: In some countries, women still need the permission of their husbands to join agricultural cooperatives. ILO Recommendation 193 on the Promotion of Cooperatives provides guidance on cooperative policy and legislation stressing the need for a level playing field for cooperatives and other enterprises.