FEDERATION OF SOUTHERN COOPERATIVES/ LAND ASSISTANCE FUND

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1 FEDERATION OF SOUTHERN COOPERATIVES/ LAND ASSISTANCE FUND Note: This being the "International Year of Cooperatives", as designated by the United Nations, we will periodically be sending information developed by the Federation of Southern Cooperatives/Land Assistance Fund over the years about the basic concepts of cooperatives. You can also go to our website for more information "About Cooperatives". About the Cooperative Principles: The cooperative principles used in our "modern day" period were created by the Rochdale Weavers in 1844 in Rochdale, England. "The economic and social conditions facing the working class people of Northern England during the first half of the nineteenth century...leave no doubt that Cooperation emerged, as it usually does, as a collective response to keenly felt needs. These were primarily economic needs, but to a significant extent they were also social--a desire for basic education, for political rights, and for more equitable participation of women. The Rochdale Pioneers, as Cooperative leaders after them have done throughout the world, were concerned with both economic and social forms of justice. They sought to combine the development of a strong, economic enterprise with contributions toward social and political rights." 2012 INTERNATIONAL YEAR OF COOPERATIVES Executive Director Ralph Paige in England celebrating the Rochdale cooperators Bruce Thordarson, Director General, International Co-operative Alliance, Geneva, Switzerland (1995)

2 COOPERATIVE PRINCIPLES Open Membership A co-op is open to all persons who have a common need or interest. One Person - One Vote Co-ops are democratically controlled by their members. Limited Return on Investment To ensure that the benefits of the co-op go to those who use it most, the co-ops will depend on their members to be owners and customers. Benefits Returned According to Use In a co-op, any margins earned on operations above expenses, and a reasonable reserve, are available for return to members based on their patronage of the co-op. In a co-op, any of the expenses that can be reduced by voluntary efforts of the members reduces the cost of the item to all of the members. Business for Cash Whenever Practical Co-ops must raise most of the capital and operating funds from members because granting credit is expensive and always risky. Constant Expansion Members will earn increased services from the co-op if it is effectively serving its members. Constant Education Since the cooperative form of economic organization is new to most people, especially poor people, education is constantly needed by the members. For more information go to Weavers of Dreams: Founders of the Modern Cooperative Movement by David J. Thompson (2012)

3 Ralph Paige in England celebrating the Rochdale cooperators with author David Thompson Foreword Note: The Foreword below is from the Weavers of Dreams: Founders of the Modern Cooperative Movement (1995) by David J. Thompson that has been reissued in 2012 in celebration of the United Nations "International Year of Cooperatives". It was written by Bruce Thordarson, who was then the Director General of the International Cooperative Alliance. The 150th anniversary of the Rochdale Cooperative Principles was in The story of the Rochdale Pioneers, and their role laying the foundations of today s worldwide Co-operative Movement has been told before in many ways. To mark the 150 th anniversary of the founding of the Rochdale Equitable Pioneers Society, David Thompson has chosen the approach of a true believer-a committed community developer who sees Co-operation as a means for achieving the twin goals of progress and equity. The economic and social conditions facing the working class people of Northern England during the first half of the nineteenth century...leave no doubt that Co- operation emerged, as it usually does, as a collective response to keenly felt needs. These were primarily economic needs, but to a significant extent they were also social- - a desire for basic education, for political rights, and for more equitable participation of women. The Rochdale Pioneers, as Co- operative leaders after them have done throughout the world, were concerned with both economic and social forms of justice. They sought to combine the development of a strong, economic enterprise with contributions toward social and political rights.

4 What is striking from this account, in fact, is the extent to which the British Co-operative movement of the 19 th Century exercised a significant influence in the development of national policies in such areas as consumer standards, women s rights, and popular education. The Co-operative Women s Guild is described as Britain s pre-eminent women s organization, and its parliamentary successes were significant indeed. Like the author himself, the early Co-operative leaders were strong idealists. It is not surprising, therefore, that the door of the Rochdale store was painted a bright green-the symbol of the Chartist Movement which had inspired many of the Rochdale Pioneers. But whether Owenites, Chartists, or Christian Socialists, the early leaders also realized the need to emphasize common values, which would untie rather than divide their members. As is well known, the Rochdale Society was not the first Co-operative in Britain. But, for a variety of reasons, it has become the symbol for a movement, which is today worldwide and multi-sectoral. In large part, this is due to the Pioneers wise and judicious financial policies. They emphasized the importance of member contributions to capital-as much as 10 weeks wages -so as to avoid the problems of undercapitalized Co-operatives whose fate they wished to avoid. In order to attract this capital, the Co-operative paid a fair market rate, ranging from 3.5 to 5 percent. Equally important was its codification of the practice of dividends on purchases-both to ensure sufficient reserves for the Cooperative and to reward the individual member for his patronage. The wisdom of such policies remains apparent 150 years later. When modern readers attempt to understand the reasons for the success of the first consumer Co-operative, it is important to remember that its attraction was based on the values of quality and honesty. The attraction of pure food and honest weight, combined with financial statements that were open to all members, demonstrated that the Co-operators was truly an alternative form of business operating in the interests of its users/owners. Another characteristic of the early Co-operative leaders in Britain was their understanding of the need for vertical integration, not only in order to attain economies of scale for their consumer operations, but also to extend the benefits of Co-operation into other areas-manufacturing, farming, financially services, and education. The stories of the Co-operative Wholesale Society, the Co-operators Bank, the Co-operative Insurance Society, and the Co-operative Union have been told in detail elsewhere. For the purpose of this account, the important message is that attention to local matters-while essential-is not sufficient. Committed Co-operative leaders realize that their success ultimately depends upon a wider public understanding of co-operation, which in turn requires Cooperative action at both national and international levels. This is certainly David Thompson s view, as attested by the attention which he pays to the efforts of the British Co-operative Movement to support both Co-operative education and housing. It is revealing that the Rochdale Society was allocating 10 percent of its

5 profits to education (until the government s Registrar forced it to reduce this amount), and that it soon became the foremost educational institute in Rochdale. Today, some 150 years later, the concepts developed by the Rochdale Pioneers and their successors have spread around the world, joined and adapted by other philosophies and other cultures. The Co-operative model is today truly universal, but still reflects very much the values and principles which inspired the weavers of Rochdale. Their vision does indeed deserve to be celebrated in this anniversary year. Please go to the Federation's website at for information about upcoming workshops and events.