Artikel ini adalah intipati kertas kerja yang disediakan oleh Dr. Daman Prakash untuk dibentang semasa Seminar Antarabangsa “Cooperative Enterprises Build A Better World” yang dianjurkan oleh Maktab Koperasi Malaysia (MKM) bersama Angkatan Koperasi Kebangsaan Berhad (ANGKASA) pada 13-14 Mac 2012 di Grand Dorsett Hotel, Subang Jaya, Selangor.

Principles Of Cooperation (Statement Of Cooperative Identity)

The reformulated and universally-accepted Principles were announced during the ICA Congress held in Manchester in 1995. These are:

[01] Voluntary and Open Membership; [02] Democratic Member Control; [03] Member Economic Participation; [04] Autonomy and Independence; [05] Education, Training and Information; [06] Cooperation among Cooperatives; [07] Concern for Community

The 5th Principle reads as follows:

“Cooperative provides education and training for their members, elected representatives, managers, and employees so that they can contribute effectively to the development of their cooperatives. They inform the general public – particularly young people [men and women] and opinion leaders – about the nature and benefits of Cooperation”.

HRD [Member Education and Employees Training] is the foundation for the success of Cooperative Development and Members’ Prosperity.

Awareness leads to better business.

Cooperatives are Owned, Managed and Controlled by members only. Cooperatives are not Government agencies, nor are they charitable and social institutions or clubs. These are business enterprises which provide all social and economic services which are needed by the members.

Cooperatives are a huge worldwide network within which are experienced developed and developing entities. Through member participation and education they have made their cooperatives strong and viable (see Annexure-I). While capitalistic and centrally-planned economies have gone downhill, cooperative economy is shining bright on the horizon of our world of progress. Make these democratic institutions strong by educating the basic members and ensuring capacity building of all employees and leaders.

In a cooperative organisation, member is the owner and the member is supreme in taking all decisions. Therefore, the member needs to know his rights and duties and the expectations that the members has from the cooperative.

International Year of Cooperatives 2012 is the Opportunity

The United Nations International Year of Cooperatives 2012 presents a unique opportunity for the members and their cooperatives to understand the potentials that this business enterprises can offer. They need

Oleh: Daman PrakashIFFCO Foundation, New Delhi. India

Oleh: Daman PrakashIFFCO Foundation, New Delhi. India

STRENGTHENING COOPERATIVE Institutions

Through Member Education

STRENGTHENING COOPERATIVE Institutions

Through Member Education

STRENGTHENING COOPERATIVE Institutions

Through Member Education

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The structure and dynamics of a Cooperative are similar to human body. All organs of the body function in a coordinated manner and in relation to each other for a healthy and strong constitution. If the human parts do not function in a rhythmic manner, there will appear weakness and inactivity. In the same way, all organs of a Cooperative function in relation to each other i.e., General Body of the members directs the Managing Committee which, in turn, prepares an implementable Plan of Action to be executed by the chief executive of the cooperative i.e., the Manager. The Manager assigns various tasks to the sub-managers. The sub-managers report to the Manager, who, in turn, reports to the Managing Committee, which, in turn, reports to the General Body. If there is any break or distortion in the link, the entire frame gets disturbed. It is a similar situation – when any part of the body is sick the entire body becomes sick. Just as we take care of the body, it is the duty of the members to continue to nourish their Cooperative [through active participation in business operations or organizational structure] for a better functioning – rather, delivery of efficient services.

Figure B: Cooperative Structure is like a Human Body

to be strengthened by making the members awareness of running the cooperative business to create wealth for the poor and for those who choose to get together.

Cooperative Organisation

All cooperative institutions have a set organisational structure (Figure-A). Generally the structure consists of a general body of members which elects a Board of Directors/Managing Committee which formulates a work plan in accordance with the decisions taken by the General Body. The Managing Committee is answerable to the General Body of members. In order to implement the decisions taken by the General Body, the Managing Committee appoints an executive officer or a Manager who is responsible to the Managing Committee. In addition, the General Body elects two more bodies i.e., an Audit Committee and a Supervisory Committee which are answerable only to the General Body.

The manager is given the task of implementing the decisions of the Managing Committee and he is provided with all the needed support e.g., additional business managers, machines and equipments and other infrastructural support.

The organisational structure is dynamic, just like a human body (Figure-B). All components of the structure/human body must work in unison to keep the system going and remain in a good condition – just like a human body.

Ordinary members are the real and actual owners of a cooperative society. They organize their cooperative voluntarily and with their own money. They operate their cooperatives in a democratic manner with the help of their own elected office-bearers and the employees who have been appointed by them. It is, therefore, expected of the members that decisions are taken carefully and with due consideration of all aspects. It is, therefore, essential that members become aware of their rights and duties thereby enabling their own cooperative to earn the goodwill of the community keeping in mind the full observance of the Principles of Cooperation and proper and smooth coordination with concerned

Figure A: Formal Organisational Structure of a Cooperative

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government departments. Member education is, therefore, the tool to empower the members so that they make a powerful, sustainable and self-propelling cooperative business enterprise.

Let us dig a little deeper in the basket of experiences!

EXAMPLE 01

ICA Indore Project-India Joint exercise with SCC & NCUI

Pre-Project Situation : 10 Primary Agri Coops in Indore, Central India.

- Average membership 350 farmers; - Credit – the only business; - Poor linkage with Cooperative Bank;- No specific workplace;- Poor input facilities;- Harvest sold on the field;- Main crop wheat and black gram;- Poor irrigation facilities;- Poor performance by Dist Cooperative

Union; - Hard to recover investment; and so on…

Main collaborator : Swedish Cooperative Centre Duration: 7 year in ’70s

Theme: Enhancing Coop Business through Member Education

Inputs: 02 specialists + Support Staff

Methods: Regular member education; Supply of information; Exposures and inter-action with others; Interaction with Coop Bank; Exploiting irrigation potentials; Business Development Planning; Regular evaluations and ploughing back leading to corrections in approaches.

End of the Project ( Achievements)- All coops had their own workplaces and Own warehouses;- Regular meetings of all organs;- Clear and implementable decisions;- Good interaction with Coop Bank and Cooperative Union;- Installed 20 tube wells;- Established a large-size cold store;- Harvest sold in the market or stored;- Regular member education programmes;- Diversification of crops and business;- Overdues reduced considerably;- Good relationship among members, manager and leaders;- Govt of India sanctioned 50 such projects on similar pattern.

EXAMPLE 02

IFFCO FOUNDATION-INDIA(sponsored by the Indian Farmers Fertiliser Cooperative Ltd.)

During 2004-2010 established and operated 12 Cooperative Development Resource Centres in 5 States covering 350 PACS with average membership of 500.

Problem Areas- Low member participation;- High overdues;- One/two business lines [fertiliser];- No agricultural extension and Education;- Poor linkages with coop banks;- Marketing problems;- Dissatisfied members esp. on accounts/book-keeping;- No regular meetings;- High official/political interventions;- Inadequate infrastructure, and so on…

After Project Situation- Gradual crop and business diversification;- Regular meetings;- Better linkages with bank/union;- Better linkages with extension agents;- Computerisation to ensure transparency;- Marketing of produce through Produce Committees;- Formed Self-Help Groups [over 2500 with 31,000 women members];- Undertook micro-entrepreneurship;- High women/youth participation;- Regular education programmes [over 100,000 participants];- Other local issues addressed [Climate Change, Rural Sanitation, Safe drinking water, health etc].- Classes generally held at PACS office;- About 4 classes held each month;- Members also include Office-bearers;- Also held in conjunction with Field Days;- SHG Members also included;- A variety of subjects are covered.

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Invited resource persons: IFFCO Field Staff, KVK Scientists, Coop Bank, Govt Officers, NCUI Field Workers.

Concept of Member Education Programme

Objective: To demonstrate an intensified Member Education and Employees’ Training Programme so that PACS are able to compete and strengthen their own and their members’ economic condition

The following subjects were covered:

- Need for Cooperatives- History of Cooperative Movement- Principles of Cooperation- Member Participation [organisation and business]- Know Your By laws [Rights & Duties] (see Annexe-II)- Functions of a Cooperative- Meetings-Importance of Audit/Annual Reports-Records and Book-Keeping-Visits to Coop Institutions

Emphasis on:

- Difference between Private, Public & Cooperative Enterprises;- Coop Laws, Rules, By laws;- Their Rights and Duties;- Cooperative Democratic Structure;- Significance of “One-Member One-Vote”- Decision-Making Process;- Audit Report & Annual Report;- Importance of Member Participation;- Handling of Cheque/Passbooks; - Obtain Receipt for Payments Made;- Member-Board Relationship;- Manager/Secretary-Board Relationship;- Cooperative-Bank Relationship;- Coop-to-Coop Relationships;- Significance of Federal Structure.

Awareness Strengthens Cooperative

Such Awareness is through Cooperative Member Education

EXAMPLE 03

Indonesia : KUD Movement (Koperasi Unit Desa)ILO-UNDP and ILO-Swiss Projects [1981-1988]Over 9,000 KUDs, in 27 provinces.

Main Theme:

- Member Education,- Employees’ Training, - Institution Building, - Cooperative Management Consultancy

Objectives

Strengthen KUD structure for:

- Welfare of farmers;- Food security;

- Enhance farm production self-sufficiency level;- Enhance agricultural extension services;- Ensure proper management of KUD;- Strengthen marketing structure;- Enhance capacity building; and - Member Awareness through education, training and training facilities, training material.

At the end of the Project:

- Over 1 million farmers given training;- 27 Balatkops and 1 Puslatpenkop upgraded;- Education+Training material developed;- Over 3,500 CMC consultants trained;- Model KUD/PUSKUDs developed;- Consultancy support to Govt and Milk Cooperatives;- Supported management of Women Coops.

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SOME PUNCHES (see Annexure-III)

Conclusions

Cooperative institutions thrive on the principles which have been practiced by cooperatives all over the world. Faith and belief in the principles is the prime factor in the success of a cooperative. More than that, member awareness plays a greater role in strengthening cooperatives. There are a huge number of cooperatives which have earned a niche of prominence and respect in the business world. Their trademarks have become household names. It is all due to member participation in organisational and business affairs willingly and regularly. In a large number of countries, cooperatives operate under a certain legal framework and where some sort of official interference disturbs the operational work, but there are countries in the world which give a free hand to the members to undertake cooperative business operations.

As long as the needs of the members are met adequately through the services of their cooperative, they come forward to participate in the process of decision-making. Member education is therefore a key element in making cooperatives strong and perform a good quality of business professionally.

“COOPERATIVES ARE NOT GOVERMENT AGENCIES.

YOU ARE THE OWNERS. THEY SERVE YOU, NOT GOVERN YOU”

EXAMPLE 04

SRI LANKA – ICA/SCC/NCC-SL Project on Coop. Teachers’ TrainingTeachers’ Training and Member Education Project 1978-1984

Theme: Teachers’/Trainers’ Training and Member Education to Strengthen Multi-purpose Cooperative Societies. 27 Provinces; Over 300 MPCS; and NCC’s Education Centres

-Member Education Courses;-Production of Training Material;-Institution Building;-Management Consultancy to Coops;-Advisory Services to Govt.-National Coops, and -Cooperative School [NICD].

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ANNEXURE-II

Summary of responses to 15 typical questions asked to 500 Regular Members of PACS in Punjab and Uttar Pradesh during Member Education Classes held in February-March 2009

Note: Figures represent the number of persons responding.. Within brackets is the percentage of members responding.250 members in each state.

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ANNEXURE-I

COOPERATIVES HAVE A CLOUT<Do Not Underestimate Your Potentials>

1. COOPERATIVES OF SUBSTANCE- Sunvalley Potatoes of Idaho of USA;- Sun Maid Raisin Coop of USA;- Sunkist Growers’ Coop Of USA;- SYSCO Corporation of USA [US$42 billion turn-over];- A-COOPS of Japan;- Kibbuz of Israel;- IFFCO of India.

2. INDIALargest Cooperative Movement 600,000 Cooperatives – 60% Agricultural. 100% villages covered; 30% of National Population in Membership; World’s largest cooperative credit structure; World’s largest HRD sector [Coop Member Education & Employee Training]; Highest number of National Federations [23]; World’s largest production and distribution network [IFFCO & AMUL]; Almost 50% of world sugar production through cooperative sugar mills; Govt support to coops through official agencies e.g., NCDC.

3. INTERNATIONAL COOPERATIVE ALLIANCE [ICA]

World’s largest association of cooperatives and network; World’s only cooperative non-governmental international organisation; 220 Member-organisations in 99 countries; Total individual membership of 1 billion – world population is 6.2 billion;60% ICA membership in Asia;Asia-Pacific Office in India [out of 4 Regional Offices];IFFCO Chairman sits on the Board of Directors of ICA;In the recent ICA Board election, secured second position [voting pattern].

4. ICA GLOBAL300 STUDYTotal revenue of over 1 Trillion USD [Rs 50 lakh crore];14% Growth Rate and 10th largest economy of the world;30% of list are in agricultural and food sectors;20% more employees than all MNCs put together [100 million] [10 crores];90% Swiss retail business by cooperatives;World’s largest banks are cooperatives [France, Holland, Japan];Out of 300 Coops studied worldwide [2008 Analysis by ICA], 28 are from Asia- Pacific Region: Japan-14, India-04 [Markfed-Andhra Pradesh, AMUL, IFFCO, NAFED], Singapore-02, Korea-02, China-01, Australia-03, New Zealand-02.

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A closer look at the responses reveal the following facts: [Q-01] Some of the enlightened members do ask for a copy of the byelaws and this is readily given by the secretary, an employee of the cooperative, in Punjab, while it is inaccessible to members of the PACS in UP. Some of the secretaries do possess copies of the 30-40 years old byelaws; [Q-03-04] There is a wide gap on the perception of rights and duties of members in Punjab and UP. Punjab members know their rights and duties [48%] while the percentage in UP is 40%; [Q-09] Receipts are promptly given to members in Punjab [60%] while it is just 20% in UP; [Q-12] Overdues in Punjab are almost ‘nil’ because almost 80% members repay their loans in time, while in UP it is 40% farmers who repay their loans; [Q-14] Business transactions between members and their cooperatives are quite active in Punjab – [72%], while it is 40% in the case of Uttar Pradesh; [Q-15] As many as 80% members said that cooperative societies are controlled by the Registrar. No fault of members in UP because at present all cooperatives in the State stand superseded. 32% members in Punjab still feel that the societies are controlled by the RCS.

ANNEXURE-III

SEVEN KEY FACTORS TO STRENGTHEN COOPERATIVES[Key issues discussed during Member Education Classes]

1. Upon being admitted as a member, you become a stakeholder in the ownership of your cooperative. You lay down the policies, develop work plans and to implement them elect a Board of Directors [Managing Committee]. You have the right to obtain information on the progress of the cooperative. Members are the owners of a cooperative.

2. As a member of the society you get the ‘right to vote’. You can use your voting right democratically and without any pressure or discrimination on any issue raised in the General Body Meeting of the society. You must participate in the General Body meeting and in any other meeting and participate in the election process. Members must make use of their voting right.

3. It is your right to discuss the Annual Report and Audit Report in the General Body Meeting. You can seek clarifications from the Managing Committee and the President of the society. You can make suggestions and observations on the progress and work programmes of the society. Members should keep themselves informed on the activities of their society.

4. A copy of the up-to-date registered byelaws should be kept in the office of the society. You should also have a copy of the byelaws.

You should read it or get it read for you from someone. Your rights and duties as member are clearly stated in the byelaws. You can get amendments made in the byelaws at the General Body Meeting. Members should fully acquaint themselves with the contents of the byelaws.

5. You should obtain a receipt for all the payments [cash/cheque] made to the society. No payment should be made in a hurry. Payment should be made only to the authorised official of the society. Remember that on a fertiliser-purchase receipt, IFFCO offers free insurance [Sankt Haran Bima]. Members must obtain a receipt for all payments made to the society.

6. You must keep your cheque book, pass book and credit card in your possession. Under any circumstance you should not leave the signed cheques/cheque book with any employee of the society. Always keep your cheque book, passbook and credit card etc. with you.

7. If you have the right to get loan from the society, it is also your duty to sell your crop produce to or through your society and repay your outstanding loans. In this way you become eligible for fresh loan. Repayment of the loan also helps other members to obtain loan from the society. In this way you continue to uphold the goodwill not only of yourself but also of the society. An enlightened member is the soul of the society.

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Dr Daman Prakash is the Director of the Rural Development

and Management Centre, New Delhi, India. He is also the Senior

Consultant of the IFFCO Foundation [promoted by the Indian Farmers’

Fertiliser Cooperative Limited – world’s major producer of urea

and DAP]. Dr Prakash served the International Cooperative Alliance

Regional Office for Asia and the Pacific [ICA ROAP] since 1962 in various capacities and retired as

Director. He had served in Indonesia as Chief Technical Advisor of the ILO/UNDP and ILO/SWISS

Projects on KUD [Rural Cooperatives] Management Development, Training and Education [1981-

88]; served in Sri Lanka as Senior Consultant to the ICA/SCC Cooperative Teachers’ Training

Project [1978-81]; works as consultant to the FAO, FAO-NEDAC; UN/ESCAP, MAAF-Japan,

etc. He served as Senior Consultant on MAFF/JA-Zenchu/AICAF-sponsored Study Missions to

Indonesia, Laos, Mongolia, Cambodia and Uzbekistan. He has to his credit several books and articles

on HRD, Cooperative and Institutional Development.

About the Author…

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