Co-operatives and Poverty
Co-operatives have the potential to help the world's poorest people find a way out of poverty, by working collectively to organise themselves and address their own needs. Poor people can use co-operatives to provide goods and services which the state and private businesses do not provide, either because they are unable or unwilling.
Historically the co-operative sector has played a significant role in the empowerment of the economically disadvantaged. The Rochdale Pioneers, credited with founding the co-operative movement, first got together to find a solution to the high prices of necessary goods, which they could not afford to buy. Co-operatives present a way in which ordinary people can take control of their own lives and improve their standard of living.
There are various ways in which co-operatives can benefit the poor:
- Increase their bargaining power (by being part of a group rather than an individual)
- Share the costs of new technology (which would be too expensive to buy individually)
- Add value to their agricultural products (e.g. by processing crops using shared facilities)
- Reduce risks associated with new enterprises and gain access to new markets
- Purchase in bulk to achieve lower prices (e.g. for fertiliser and seeds)
- Gain access to credit and loans on reasonable terms (by borrowing from the society)
The ILO (International Labour Organisation) recommended in 2002 that co-operatives should be considered as one of the pillars of national and international economic and social development. A formal Memorandum of Understanding agreement was signed between the ILO and the International Co-operative Alliance in 2004, which commits both organisations to formulating an agenda, partly focusing on ways in which co-operatives can contribute to the achievement of the Millennium Development Goals.