“Co-operative enterprises achieve sustainable development for all”
Message of the Food and Agriculture Organization (FAO) of the United Nations
On the 20th UN International Day of Co-operatives
5th July 2014
Worldwide, the important contributions of agricultural cooperatives to poverty reduction and the achievement of food security are becoming increasingly recognized. As autonomous businesses that are jointly-owned and democratically controlled by their members, cooperatives are a tested model that can sustainably support small-scale producers to improve their access to markets and increase their incomes.
Small-scale producers however, face numerous constraints. They are often dispersed, fragmented and face high transaction costs. This limits their ability to access and compete in markets and to influence policies that affect them. By grouping together in cooperatives and producer organizations, smallholders can overcome these barriers and develop innovative organizational arrangements that broaden their capabilities, enable them to benefit from an array of services, and facilitate the participation of all.
To be sustainable, agricultural cooperatives need to develop their own economic, financial and political autonomy. Building their capacities so that cooperatives and producer organizations become fully autonomous and innovative is essential to ensuring that they can drive rural institutional changes within their own organizations and become critical agents of change for sustainable development.
This capacity strengthening process requires action at three related levels. First, improving the skills and competencies of individuals within organizations is important. As illustrated in a FAO programme promoting junior farmer field and life schools in at least 15 developing countries, the programme offers life-business skills training to rural youth to empower them socially and economically. Secondly, the performance of organizations themselves must also be strengthened, including through enhanced management, financial and strategic planning. Peer-to-peer exchanges among producer organizations and cooperatives can be used to share expertise and lessons learned and are a useful form of collaboration to enhance the capacities of organizations throughout the world.
Thirdly, and importantly, there must be action to support governments to establish an enabling environment for these organizations to develop and thrive. The external environment within which cooperatives and producer organizations operate – including the regulatory framework – is fundamental as it has an effect on the sustainability of these organizations. This environment can either facilitate or hinder the development of these organizations. For instance, regulations such as building local institutional markets established by governments can facilitate their linkage to local markets.
One of FAO’s priorities is to promote the important role of producer organizations and cooperatives in achieving food security and sustainable development. FAO is strengthening its support to cooperatives and producer organizations through capacity development activities, sharing knowledge and assisting member governments. Definitely, cooperatives and producer organizations can play a key role in rural development and building a food secure world for all.