We could do better as a Cooperative Economy

Venkat Raman – 
venkat@indiannewslink.co.nz

The success of corporate giants such as Fonterra and Foodstuffs New Zealand has triggered the expansion of the concept to other sectors of the economy and the move of two major universities could see a paradigm shift in the corporate world.

While Fonterra has led to the success of companies like ‘Amul’ (Anand Milk Union Limited) in India, there are larger cooperatives in America and Europe (Examples: Credit Agricole Group of France with revenues of US$ 105 billion and Zen-Noh of Japan with annual earnings of US$ 60 billion) that could encourage the establishment of more cooperatives in New Zealand.

Universities Study

A major step in this direction was taken last week with an announcement that researchers from the University of Auckland are joining forces with colleagues at Massey University and the sector body, Cooperative Business New Zealand, to produce the first ever comprehensive analysis of the cooperative economy.

A University of Auckland press note said, “Ask the person next to you and chances are they can rattle off the names of two or three New Zealand cooperatives. But, ask what cooperatives offer New Zealand, and you might have them stumped.”

Cooperatives are member-owned organisations, meaning that the users of the cooperative are also the shareholders in the organisation.

Cooperative Business New Zealand describes Cooperatives as business owned and democratically controlled by their members –people who use cooperative services or buy its goods but have a number of special characteristics.

“They return surplus revenues to their members in proportion to their use of the cooperative, not in proportion to their investment or share ownership. Cooperatives are conscious of the need to operate profitably rather than at a loss. Cooperatives must meet their members’ needs either by their produce at the best price or by providing affordable and high quality goods and services, rather than maximising profit.”

A joint report, called, ‘Cooperative Economy of New Zealand,’ from University of Auckland and Massey University is expected to be released in December.

Comprehensive data

The report will synthesise data from three years of surveys and case studies from both universities, as well as fresh data collected about the top 30 New Zealand cooperatives.

The study is being funded by Fonterra (lead sponsor), Ballance Agri-Nutrients, CDC Pharmaceuticals, Coop Money NZ, Farmlands, Farmers Mutual Group, Foodstuffs – South Island, Market Gardeners, Mitre 10, Ravensdown and Silver Fern Farms.

Dr Lisa Callagher, Senior Lecturer in Management and International Business at the University of Auckland said that the report will provide accurate facts and figures about what coops contribute to the country, which goes beyond dollars and cents.

“Within the sector, organisations are aware of some of the real social and economic value cooperatives provide their members and their communities. Examples were highlighted at Cooperative Business New Zealand’s annual awards dinner last month,” she said.

‘Cooperative Leader of the Year’ Mark McHardy, General Manager of Farmlands Fuel, was recognised with an award not only for leveraging the Cooperative’s collective buying power and for its health and safety record, but also for bringing Super Rugby back to grassroots with pre-season trainings and matches hosted on paddocks owned by one of Farmlands’ shareholders.

Good Governance

Phil McKendry, chairman of Ashburton Trading Society, received the Outstanding Cooperative Contribution award for years of championing both the commercial and social interests of the society’s members.

“Our own case studies highlight some exemplary practices around governance training, and support for innovation,” Dr Callagher said.

“What this report will do is move beyond anecdote and case studies to identify strengths and needs across co-ops, and inform key stakeholders about the nature, extent and importance of cooperatives in New Zealand. It will also create a benchmark method for monitoring cooperatives’ ongoing contribution.”