With the collapse of financial institutions and the uncertain economic climate, more and more people are looking for alternative ways of doing business. The cooperative model offers just that. What’s more, cooperatives are an integral part of Fairtrade - a massive 75 percent of Fairtrade’s producer organizations are small farmer cooperatives. 2012 is the United Nation’s International Year of Cooperatives, good occasion to celebrate the joint achievements of cooperatives and Fairtrade.
Though it began as a niche industry, cooperatives now run the gamut from small groups to big business. Around one billion people worldwide are members of cooperatives, and revenues from the world’s largest 300 cooperative enterprises amounted to US$ 1.6 trillion in 2010, according to a Global300 report.
The cooperative model is so successful because it brings people together to achieve common needs and aspirations in a democratic way. By joining a cooperative, producers can increase their outputs, diversify production, and band together to transport goods to market, among many more benefits.
Cooperation has always been a fundamental principle of the Fair Trade movement. The first-ever Fairtrade labelled product – coffee sold in 1988 under Max Havelaar label in the Netherlands – came from cooperatives of small scale Mexican coffee farmers. More than 20 years on, there are over 320 Fairtrade coffee co-ops around the world. Together they received over €17 million in Fairtrade Premium money in 2009-10.
Fairtrade producer co-ops are jointly owned and democratically governed by the producers themselves. Fairtrade certification, through its price floor safety net, access to new markets and training on sound environmental and agricultural practices has often given cooperatives the boost they need to become viable businesses. Fairtrade cocoa, sugar, cotton, coffee, herbs and spices are all exclusively sourced from small producer organizations.
The Fairtrade Premium helps cooperatives live their values of social awareness, and self-responsibility, and also make improvements to their business. The Premium can be spent on business or community development projects and co-op members decide democratically how to use it. Last year over half of Fairtrade’s small producer groups opted for business development projects or investments in production and processing facilities, thereby increasing the quality and value of the products and making their business more effective and sustainable. Being Fairtrade certified has helped a sugar cooperative to build its own producer-owned sugar mill, a cocoa group invest in education for its members’ children, and Chilean beekeepers to receive a 20 percent higher return for their honey.
Although producer organizations represent the majority of cooperatives within the Fair Trade movement, there are also many importers, traders, financial institutions and more organized as cooperatives. Secondary cooperatives promote Fairtrade through campaigns and advocacy, and offer technical assistance. Financial cooperatives also act as investors and creditors to small producers. And the Cooperative Group in the UK was the first ever retailer to sell Fairtrade bananas.
Cooperation and Fairtrade go hand in hand.
As part of the UN’s International Year of Cooperatives, we plan to post regular profiles on co-ops and a position paper on Fairtrade and co-ops will be published later this year. Our members – labeling initiatives and producer networks - also plan special activities throughout the year, so watch our latest news for more. We will also regularly feature posts on cooperatives on our Tumblr blog.
Events will be held worldwide in 2012 to demonstrate the cooperative difference. To follow these events or even register your own, see the IYC 2012 website.