Cooperatives and Their Contribution to Development in Peru

Posted on July 9, 2012 by Mariela Wismann

In Peru, 85 percent of farmers and ranchers produce at the family level, with net incomes that are insufficient to raise them above the poverty line. Three million Peruvians depend on coffee, the largest agricultural export in the world, which generates wages for direct labor and services in the production chain. Four hundred and five thousand hectares of coffee is cultivated by 165,000 families (the plantations are spread across 340 rural districts that are situated in poverty or extreme poverty), of which only 28 percent are organized into cooperatives, associations, committees or community enterprises according to the National Coffee Board [1].

The organizations that are the most entrepreneurially dynamic and have developed programs to address the economic crisis are the centrally integrated coffee cooperatives, some of which have operated for three decades in the production and export of high quality coffee. More and more, coffee-growing families are joining coffee cooperatives and associations, not just because of commercial interests (greater profits, increased access to competitive markets) but because of learning opportunities (not just based on production) and social inclusion, especially for those in previously excluded groups, like women and youth.

The history of cooperatives in our country, especially during good years for coffee prices, has motivated producers to revive and strengthen cooperatives. This motivation is supported by the high quality of coffee in Peru, especially that of organically produced coffee, which in recent years has achieved record production and export value.

Since 2010, Heifer Peru has worked with coffee cooperatives to promote the diversification of their production and to strengthen their organizations; in one project executed in northern Peru (Cajamarca and Lambayeque), 1,057 coffee-growing families participated. Taking into account their needs and abilities, training and assistance was provided to improve their food security, diversify their production system, strengthen the capacities of women and men, improve living conditions and expand opportunities for development.

Coffee cooperatives have improved their management and in many cases have achieved direct commercialization, which generates more income for families and gives them a sense of well-being that allows them to focus on other dimensions of their development; for example, revenue can be channeled to education for children.

Cooperatives as a form of association contribute to social inclusion and poverty reduction, in particular for developing countries (UN, Rio+20, June 2012), and allow the exchange of information between partners and peer organizations, the development of commercial initiatives, capacity building, the promotion of food security while creating opportunities for family farmers and energizing local development. Cooperatives are an opportunity for development, not only for families but the community in general. It is important to demand policies that recognize the importance of cooperatives and support their efforts in terms of access to credit, land ownership, organizational strengthening and actual inclusion in the country’s development.

Read more about how Heifer International uses cooperatives in our work around the world.

[1] Founded in 1993, the National Organization of Coffee Growers brings together 236 coffee-growing organizations that represent 40,000 small farmer families organized into cooperatives, associations, committees of producers, community businesses, etc.

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Las cooperativas y su aporte al desarrollo

En el Perú, el 85% de los agricultores y ganaderos son productores familiares, con ingresos netos insuficientes para salir del umbral de la pobreza. Tres millones de peruanos dependen del café- principal producto agrícola de exportación que genera jornales por trabajo directo y por servicios en la cadena productiva. 405 mil hectáreas de esta producción son cultivadas por 165 mil familias (las plantaciones se extienden a lo largo de 340 distritos rurales que se encuentran en situación de pobreza y pobreza y extrema), de éstas apenas el 28% están organizadas en cooperativas, asociaciones, comités y empresas comunales como señala la Junta Nacional del Café (1).

Las organizaciones con mayor dinámica empresarial, y que han desarrollado programas para enfrentar la crisis económica, corresponden a las cooperativas cafetaleras integradas a centrales, algunas de ellas operan hace tres décadas, involucradas en la producción y exportación de café de alta calidad. Cada vez son más las familias cafetaleras que se vinculan a estas asociaciones o cooperativas cafetaleras y no solo con un afán comercial (pues pueden conseguir mayor rentabilidad y el acceso a mercados competitivos) sino por las oportunidades que generan en torno a la mejora de los conocimientos (no solo productivos) y la inclusión social, pues reparan en grupos que anteriormente han sido excluidos, las mujeres y los jóvenes.

La historia cooperativista en nuestro país, sobre todo aquella referida a los beneficios obtenidos en las épocas de buenos precios del café, ha motivado a los y las productoras a la reactivación de sus cooperativas y en muchos casos a su fortalecimiento buscando una gestión efectiva. Esta motivación es respaldada por la oferta importante de café de calidad en el Peru, sobre todo la derivada de producción ecológica, que ha logrado en los últimos años récord de producción y valor de exportaciones.

Desde el 2010, Heifer Perú trabaja con cooperativas cafetaleras promoviendo la diversificación de su producción y el fortalecimiento de sus organizaciones; en el proyecto, que se ejecuta en el norte del Peru, específicamente en Cajamarca y Lambayeque, participan 1057 familias cafetaleras. Tomando en cuenta sus necesidades y potencialidades se brinda capacitación y asistencia para mejorar su seguridad alimentaria, diversificar su sistema de producción, fortalecer las capacidades de varones y sobre todo mujeres, mejorar sus condiciones de habitabilidad y ampliar sus oportunidades de desarrollo.

Las cooperativas cafetaleras han mejorado su gestión y en muchos casos han logrado una comercialización directa, generando mayores ingresos para las familias productoras que les significa un sentido de bienestar que les permite pensar en otras dimensiones de su desarrollo; los ingresos por ejemplo, han sido destinados a la educación de sus hijos que a su vez se constituye en un paso adelante para que la cooperativa se asegure o renueve cuadros administrativos y dirigenciales.

Las cooperativas como forma de asociatividad contribuyen a la inclusión social y reducción de la pobreza en particular en los países en desarrollo (NNUU, Rio+20, junio 2012), permiten el intercambio de información entre los asociados y entre organizaciones pares, el desarrollo de iniciativas comerciales y el fortalecimiento de las capacidades, fomentan la seguridad alimentaria, crean oportunidades para los productores familiares y dinamizan el desarrollo local. Son una oportunidad de desarrollo no solo para las familias que la conforman sino para la comunidad en general, por lo que se demandan políticas que reconozcan su importancia pero sobretodo que apoyen sus esfuerzos en términos de acceso al crédito, la propiedad de sus tierras, el fortalecimiento de sus organizaciones y su inclusión real en el desarrollo del país.

[1] Desde 1993 es la Organización Nacional de Cafetaleros que agrupa a 236 organizaciones empresariales cafetaleras que representan a 40,000 familias de pequeños productores organizados en cooperativas, asociaciones, comités de productores, empresas comunales, etc.

Heifer Cooperatives in Nepal Bring Lasting Changes

Posted on July 9, 2012 by Puja Singh

Nepal celebrates the United Nations International Day of Cooperatives with the rest of the developing world. In Heifer communities throughout Nepal a new wave of cooperatives is promising lasting impacts in battling hunger and poverty and caring for the Earth.

Why cooperatives?

Cooperatives have been marked as one of the pillars for Nepal’s economic transformation after it was declared a people’s republic; the other two being the state and the private sector. Recent development discourse has also shown keen interest in promotion of community based cooperatives focused on production and market establishment.

How are Heifer Cooperatives different?

Successful cooperatives depict strong cohesion, mutual prosperity and a strong ability to capture social capital. The values-based foundation that Heifer lays through intensive social mobilization has resulted in strong social capital induced sustainability. Under the flagship of Social Entrepreneurial Women’s Cooperative Limited, Heifer’s cooperatives aim to be value positive, power negative and politically neutral with strong emphasis in capacity building for production and marketing as per market signals and value addition while building institutional capacity and ensuring effective and efficient management. The services provided by the cooperatives will benefit farmers who don’t have easy access to formal financial services and lead investment in income generation activities and micro enterprises. The cooperatives will also be in a better positioned to advocate for effective services from the government to small farmers, benefitting more farmers in the longer run. Managed and led by women, the cooperative will create opportunities for other women like them.

How are we doing this?

Fifty-five such cooperatives have been formed throughout Nepal incorporating Heifer families and other farmers in the community who are exploring different agricultural enterprising avenues. One such cooperative is the Laganshil Social Entrepreneurial Women’s Cooperative in Shaktikhor. With close to 300 members in and around the area, the cooperative specializes in goat farming. Goats are the most preferred meat in Nepal with the country importing a major chunk of its consumption from India. Smallholder farmers, although capable of ramping-up production to meet growing market demands, are limited from commercial markets and necessary capital. Laganshil cooperative has ventured to strategically increase production from individual farmers and sell to consumers directly and indirectly acting as a marketing entity, hence bridging the gap between producers and consumers and ensuring the producers a decent share of the profit.

What are the ripple effects?

Now Laganshil cooperative is incorporating smallholder farmers from surrounding villages like Siddhi, which is cut-off from any market, to ensure they have a channel to sell their produce. The cooperative will partner with private and public banks to assure the flow of capital, will have a stake in channeling the various factors of production, in their case, feed and fodder for the goats and will liaison with government and non-government development partners. “We are doing what each goat farmer in every household spent a decent amount of time engaging in. It benefits all when these things (market access and access to factors of production) are managed by one entity. Our aim is to make Laganshil cooperative the go-to place for meat goats in the region,” said Chammi Magar, the President of the cooperative.

How will this be sustainable?

When farmers get a fair share in market profits, it not only ensures food security but also encourages small enterprises that are paramount to a healthy economy. With its strong values-base foundations, these cooperatives will put social values into commercial enterprises making it both socially responsible economically viable. Cooperatives in Chitwan and Nawalparasi have already been united into district unions who are influencing district level policies and coordination that favor smallholder farmers. These district unions are already voicing the needs of small holder farmers and shaping the landscape so that they are not left behind when the country moves forward economically. This is crucial to battling poverty in Nepal where 80 percent of the population are directly or indirectly dependent on agriculture in the country. “I hope someday we will have good profits from goat farming so my children don’t have to leave the country to get jobs,” said Ganga Magar. Her hopes are similar to the hope of thousands in Nepal.

Cooperative members hold a meeting in the shade to escape the grueling summer heat. Photo courtesy of Heifer Nepal.

The village of Shakitkhor sits at the heart of a radical cooperative movement. Photo courtesy of Heifer Nepal.

Read more about how Heifer International uses cooperatives in our work around the world.

East African Value-Added Cooperatives Rock

Posted on July 8, 2012 by Ann Mbiruru

Today, July 7 is United Nations International Day of Cooperatives. Join us as we highlight how Heifer International uses cooperatives in our work around the world.

Cooperatives rock! Wait a minute, as a Kenyan who grew up in Kenya, I hesitate… a bit. Given, it was a sad state of affairs for cooperatives in Kenya and larger East Africa, as we grew up. In the late 90’s the dairy cooperative industry in Kenya, for example collapsed, taking with it millions of farmer’s shillings and crushing their dreams, their family’s futures, their life worth investments. Farmers were left at the mercies of middle-men; known best for their knack of taking the products and not paying, or inconsistencies in collection of the products. It has taken a long time for farmers in the dairy sector to regain their confidence in cooperatives.

But…

Photo by Russell Powell, courtesy of Heifer International.

Today is a new dawn. As we celebrate UN Day of Cooperatives, we also celebrate a new revolution in dairy cooperative development that is taking shape in Kenya, Uganda and Rwanda. This is a revolution championed by Heifer International through its East Africa Dairy Development Project (EADD) and embraced by farmers in selected districts of the three countries. The project funded by Bill & Melinda Gates Foundation is one of the inspiring initiatives turning around the lives of over 176 000 farmers who are spread out in 68 innovative, value-added cooperatives partnering with EADD in the three countries. Farmers like Eliud Wanderi, 35, who today milks over 100 litres of milk from five Friesian dairy cows and makes a $900 every month. Five years ago, Eliud had one cow that produced 5 litres of milk at its best. On average, today, he supplies 110 litres of milk daily to the Mweiga Cooperative Society and neighbouring schools. Eliud is just one of the 2,275 members of Mweiga Cooperative Society in Kieni West, Nyeri County, Central province of Kenya who are making millions of shillings by pooling their efforts.

Agnes Mulindwa, a mother of five from Uganda, testifies to the improvement of her life since joining a cooperative that partners with EADD. “I recently built a new three-bedroom house, and my income has grown.” Stories like these can be heard throughout most of the project areas. Both Agnes and Eliud echo the feelings of their fellow farmers that the EADD hub model, which empowers and adds value to cooperatives, has enabled them access to extension services, markets and knowledge in animal husbandry. Such services had remained inaccessible to many small holder farmers previously.

This is how the revolution begins; cooperatives like Mweiga in Kenya are given a new lease on life, or Bubusi in Uganda are strengthened by partnering with EADD. EADD facilitates them to develop milk collection centers -some with chilling facilities- that hold milk for pickup by commercial dairy processors and traders. These cooperative businesses have created market opportunities by negotiating for better contracts with formal sector processors and traders. As a result, they have earned more than $58 million in milk sales over a three-year period. Linked to 15 affiliated savings and credit cooperatives, the farmers had made dairy related investments worth more than $5 million from 2008 to 2011. In addition, the cooperatives provide comprehensive input and advisory services to farmers, including financial services, feed and fodder, extension services, health insurance for members and animal health services.

The farmers have proven that with concerted efforts, cooperatives are indeed a crucial means for poverty alleviation in Africa and other developing countries. They are milking for profits, building wealth and fostering robust health for their families as they take care of their environment. As a result of interventions, formerly quiet villages are now abuzz with economic activities as early as 2:00 a.m., as farmers awake to their milk production businesses. Women like Agnes are able to sell their milk at all times, thus provide food, school fees and clothing for their families. Young men like Eliud have found alternative source of employment through their dairy businesses, carving out a brighter future for their children; and no longer idle in towns. In fact, EADD, the success of the cooperative and the opportunities created have inspired the EADD project to roll out a strategy to further engage youth in the East Africa dairy value chain, be it in feed production, transport or value addition of milk. The beauty of it is that the value-added cooperatives create a chain reaction of economic activities in Kenya, Uganda and Rwanda. Increasingly, farmers within these cooperatives are accessing credit from banks to improve their farms or invest in other ventures, unlike before when commercial banks were very reluctant to lend to farmers, as they were perceived to engage in farming as a way of life and not as a business.

We would then confidently say, even in an East African setting, that value-added cooperatives truly rock!

Cooperatives in Ukraine: A Step Toward Sustainability

Posted on July 8, 2012 by Brooke Edwards

Today, July 7, is United Nations International Day of Cooperatives. From United Nations Secretary-General Ban Ki-moon:

The global financial and economic crisis has also demonstrated the resilience of alternative financial institutions such as cooperative [...] I encourage all stakeholders to continue building awareness and pursuing policies to strengthen cooperatives everywhere. By contributing to human dignity and global solidarity, cooperatives truly do build a better world.

Heifer International uses cooperatives in our projects around the world. Today we will highlight our work with cooperatives with blog posts from field staff. This first post is by Anna Karnaukh, communications and PR coordinator for our Heifer International Ukraine office.

Men load a truck with milk at a collection point in Zavii. Photo courtesy of Heifer International Ukraine.

During the period from 2009 to 2012, the number of agricultural service cooperatives in Ukraine grew from 500 to 774. Heifer International Ukraine currently works with more than 60 of the most promising and active co-ops in the country. Heifer Ukraine’s significant contribution to the development of cooperation in Ukraine led the critical mass of active cooperatives to be noticed by the government officials. The state started to move its focus from large-scale production enterprises to small-scale producers. The government started designing a state target program for the development of cooperatives.

By providing capacity building and financial support to cooperatives, Heifer has managed to transform several into the first cooperative union in Ukraine, which is already launching the country’s first cooperative milk processing plant.

“I’m pleased to say that Chernivtsi oblast became a leader of agricultural service cooperation development,” said Mykhaylo Haynychery, Head of Chernivtsi oblast state administration. “Collaboration between local government and Heifer Ukraine gave an opportunity to involve most of the produced goods into active economic turnover and continue this chain with launching a cooperative milk processing enterprise. I would like to express my gratitude to Heifer Ukraine and Heifer International for the support provided for the approval of this one-of-a-kind project in our region, and hopefully not the last one.”

Passing on the Gift ceremony. Photo courtesy of Heifer International Ukraine.

With the help of cooperatives, families from different parts of Ukraine scale up their household production and develop into family-type farms with 8-10 cows, which helps co-ops increase volume of produced milk and brings them closer to sustainability and economic independence, as well as helps maintain good milk quality.

“We understood that cooperatives have great potential, and people should not be afraid to join them. This is in no way a return to soviet model of life, but the right way to unite efforts in order to help each other. In a while, people will realize the advantages of cooperatives, and we will establish our co-op in my home village of Verhnie. We are extremely grateful that Heifer came into our lives and gave us resources and faith for a better future,” said Mykola and Kateryna Horbei, members of Vulkan co-op in Turka village, Lviv Oblast.

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