Why cooperatives?
There are numerous reasons why cooperatives are pursued. Some of the positive impacts of cooperatives include:
- Improved access to goods and services: it may be that these are not available from existing businesses, that the quality is not acceptable or that the cost is prohibitive. This could apply to businesses or producers as much as to household consumers.
- Coops outlast other businesses: Cooperatives are far more likely to last 5 years than traditional businesses. They therefore contribute to a resilient economy.
- Better jobs: some cooperatives as with Suma in the UK and the Mondragon Corporation in the Basque region of Spain place a focus on the quality of work and professional development they are able to offer their worker members.
- Improved access to market: while in the most traditional sense this is most often cited in international development contexts, increasing access to market and the share of value captured by those at earlier stages of the value chain is the primary reason for most cooperatives. This can involve the coop investing in vehicles, weighing scales and warehousing. The multi-billion pound Arla dairy farmer coop in the UK operates in this way. Smart Coops across Western Europe are another example but instead bring together those in creative industries.
- Improved access to capital goods: again more commonly seen in international development, if there is equipment that is of benefit but not everyday use, a number of businesses grouping together to purchase an item might make more sense than each purchasing them individually. This is typical with smallholder farmers buying equipment for planting, harvesting, storing, weighing or transport of goods.
- Increasing social capital: Cooperatives enable people to cooperate and collaborate for their common benefit, creating bonds of trust, reciprocity, and solidarity. Cooperatives also foster a sense of belonging and identity, as well as a shared vision and values, among their members and with other cooperatives and communities.
- Better care for society and the environment: Cooperatives are better for the environment than traditional businesses because they operate according to principles of sustainability, responsibility, and stewardship. Furthermore, as coop members make decisions for themselves and their peers rather than shareholders, cooperatives tend to make decisions that are more in line with their own values and concerns including their community and the environment.
- Positive community impact: for some coops, benefitting their community is written into their DNA. For many others it is an outworking of their cooperative values.
- Strengthening the local economy: Cooperatives often circulate and reinvest profits within the local economy. They don’t have external shareholders so have no aim to extract profit for them. Cooperatives can also collaborate and network with other cooperatives and organizations, creating synergies and economies of scale.
- Strengthening local democracy: Cooperatives can also foster civic engagement and democratic participation among their members and in their communities.
