Regional Office for Asia and the Pacific

Hiroyuki Konuma

FAO Regional Representative for Asia-Pacific

SPEECH

Relevance of Co-operative Institutions for Agricultural Development
and  Social Inclusion

by

Hiroyuki Konuma
Assistant Director-General and
FAO Regional Representative for Asia and the Pacific

delivered at the

Ninth Asia-Pacific Co-operative Ministers’ Conference

27 February 2012
UN Conference Center, Bangkok, Thailand

 

Mr. Chairman,
Honorable Ministers, Excellencies, Ladies and Gentlemen,

First of all, I wish to express my heartfelt appreciation to the organizers for inviting FAO to this important gathering and for providing me an opportunity to make a short speech on “Relevance of co-operative institutions for agricultural development and social inclusion in Asia and the Pacific”.

Despite of the fastest economic growth in past decade, Asia and the Pacific region is a home of 578 million undernourished people in 2010, which represented 62 percent of the world total undernoulished population. Ninety one (91) percent of them live in just 6 countries (India, China, Pakistan, Bangladesh, Indonesia, and Philippines). Despite of our continued efforts, the absolute numbers remain almost the same level of 20 years ago. The achievement of MDG goal No.1 to halve the proportion of extreme hunger from 20 percent in base year (1990) to 10 percent in 2015 become a real big challenge, as it still stands at  16 percent at present. 

In Asia and the Pacific region, more than 80 percent of farmers are small scale farmers who are contributing significant portion of food production from the average 0.3 hectare of small arable land per a farm household,  against world average of 1.4 hectare. They constitute the majority of the poor and chronic hunger in the society.  They became increasingly vulnerable in recent years due to negative impact of globalization and trade liberalization, rapid expansion of hyper markets, food price volatility, climate changes and other external influences and shocks. In deed, individual small farmers are weak players, unless they unite themselves by organizing into larger groups and gain bargaining power and skills, reduce transaction costs, accessing inputs, loans and transportation, facilitate processing and organize marketing.  However, once they are united, trained and provided with a strong bargaining power, globalization could be turned into an opportunity to leap the benefit. Empowered by being a part of a larger group, smallholder farmers can negotiate better terms in contract farming and lower prices for agricultural inputs like seeds, fertilizer and equipment. In addition, cooperatives offer prospects that smallholder farmers would not be able to achieve individually such as helping them to secure land rights and better market opportunities.

FAO considers the cooperatives and producer organizations as the key partners in our joint efforts to eliminate poverty and hunger, and respond to the many challenges that face our world today. And indeed,  the United Nations has declared this year as the International Year of Cooperatives, and FAO has just  decided last week this year’s World Food Day theme as “Agricultural Cooperatives feed the World”.

Mr. Chairman,

The International Cooperative Alliance has estimated that cooperatives and producer organizations bring together more than 1 billion people all over the world, out of which nearly 60 percent are in this region. Their organizations ranged from small scale ones to multi-million dollar businesses, in both rural and urban areas and active in many different fields, including agriculture. The largest 300 cooperatives globally had a total turnover of US$1,600 billion in 2010, out of which about one thirds are in the agricultural sector.

When we study the figures more closely,  then we realize that more than half of the 300 biggest cooperatives are based in only four countries: the United States of America, France, Germany and Italy and that 60 percent of the revenues was generated in only four countries: France, Japan, the USA and Germany.  Another observation is that out of the 300 biggest cooperatives by revenue, only four are from developing countries: two from India and one each from the Peoples’ Republic of China and Malaysia.  It appears that developing countries, including those in Asia, still have a long way to go in their cooperative development.

On the other hand, we increasingly have come across with critical observations that some of cooperatives have been created through Government initiatives, highly influenced and controlled by politics, administratively too complicated and sometimes benefitted the middle class and those who have decision making power, instead of created by farmers themselves based on their own needs, and managed by themselves to empower the poor and share the equitable benefit among the cooperative members. In some cases, I noticed that some people even feel allergic to the word “cooperatives” itself as it gives a different imagination rather than its original intention, and proposed to change the name or create another one, and call with a different name to safe guard its original aims and images.  Nevertheless, I strongly believe that it is our duty to bring cooperatives back to its original intention and the real benefit of poor members through a constructive dialogue, and the formulation of regulatory and policy measures among government policy makers, cooperatives secretariat staff and member representatives. And I trust this conference will serve fully for this purpose.

In 2011, more than 180 FAO programmes and projects helped to build and strengthen the capacities of farmer organizations, cooperatives and local community groups to reach their organizational goals.    On the occasion of the International Year of Cooperatives, FAO has teamed up with its two Rome-based UN sister organizations, the International Fund for Agricultural Development (IFAD) and the World Food Programme (WFP) to work together to support farmer cooperatives and producer organizations.  The details are shown in the joint publication called “Agricultural Cooperatives: Paving the Way for Food Security and Rural Development”. FAO and ILO have recently agreed to strengthen inter-agency collaboration at regional level and preparing a detailed work plan for next two years.  FAO is also planning to open liaison office space for cooperatives at FAO's headquarters in Rome.

Finally, I wish to assure you once again FAO’s readiness to support the cooperatives and farmer organizations as one of the highest priorities during the year 2012 and beyond, and wish to look forward to working closely together with partners and member countries to attain our common goal to eradicating hunger and rural poverty.

Thank you.