A globally popular export

“One for all, all for one” – this motto was the fundamental principle on which the agricultural cooperatives established in the 19th century based their activities. These cooperatives became a success story that is set to continue well into the 21st century. The earliest associations were formed in the Middle Ages: miners, for example, founded cooperatives to provide for appropriate funerals in the event of accidents, and formal groups arose to handle community tasks such as maintaining dykes or managing alpine pastures.

In 1848, the social reformer Friedrich Wilhelm Raiffeisen founded an association in Germany; his name has been synonymous with agricultural cooperatives ever since. The “Flammersfelder Hilfsverein zur Unterstützung unbemittelter Landwirte“ (Flammersfeld friendly society for the aid of impecunious farmers) created models for the affordable purchase of producer goods such as seeds and fertiliser, among other things. “Green credit”, which allowed farmers to pay for seeds and fertiliser from the proceeds of the subsequent harvest, joint marketing of crops and locally managed savings and loan associations were introduced in many German villages in accordance with Raiffeisen’s recommendations. The savings associations and cooperatives founded by Hermann Schulze-Delitzsch (1808–1883) grew into the Volksbank cooperative banks that merged with the Raiffeisen banks in Germany from the mid- 20th century onwards.

Since then, cooperatives have proven an effective and adaptable form of enterprise. Major factors in this success story are a reliable legal framework, networking between cooperatives, cooperative education and training, and the cooperative audits first introduced in the 1880s, which serve to protect members of cooperatives from financial loss and stabilise cooperative organisation to this day. In 1972 an umbrella association of German cooperative organisations was established: DGRV – The German Cooperative and Raiffeisen Confederation. It carries the motto “One for all, all for one” out into the world. DGRV is actively involved in shaping development cooperation policy to sustainably support cooperative structures, and advises partners in 30 countries worldwide on implementing and expanding cooperative associations and institutions.

Working with project partners around the world, German development cooperation focuses on cooperative structures and institutions as a factor in successfully implementing the UN sustainable development goals. Agricultural (credit) cooperatives have the potential to make rural areas fit for the future – as well as combatting hunger, establishing value chains and improving access to markets.

They therefore present young people in particular with prospects beyond meeting their most basic needs, such as food and income. A wide range of tools exists to establish the idea of cooperative entrepreneurship in the respective partner countries; as circumstances and specific local needs differ by region and country, this requires differentiated approaches and projects that contribute to demand-oriented and sustainable solutions.

But how do development cooperation policies impact individual sectors? How can sustainable, demand-oriented structures be promoted? What challenges must be kept in mind when taking action at various levels?

Mozambique

In Mozambique, its expertise as the umbrella association of German cooperatives has enabled DGRV to develop the smallholders’ association “4 October” in Inharrime into a model of cooperative entrepreneurship. Even the brewery corporation Cervejas de Moçambique (CDM) now procures significant quantities of cassava from the cooperative to produce its popular “Impala” beer. To improve African smallholders’ frequently rudimentary access to markets, DGRV initially held training courses that taught Mozambican farmers cooperative principles such as self-help, self-responsibility and self-administration, and was thereby able to reduce long-standing reservations against cooperatives and show farmers the potential of member-based cooperative associations. Subsequent advice helped modernise farming, open up new markets and improve farmers’ yields, which had previously been limited to securing their own livelihoods.

India

In India, DGRV supports local partner APAMAS in strengthening cooperatively organised (women’s) self-help groups (SHGs) that facilitate small-scale loans for entrepreneurial, social and cultural projects. In light of the crucial role such groups – of which there are between eight and ten million in India – play in rural areas, a pilot project in Andhra Pradesh is focused on enabling SHGs to establish sustainable networking structures. The introduction of sector own controls (SOCs) in combination with appropriate coaching has proven especially beneficial in this context, and has permanently improved economic circumstances. The same approach has meanwhile also been applied at agricultural producer organisations in the form of cooperative knowledge training courses and seminars.

Cambodia

In Cambodia on the other hand DGRV is working with the Ministry of Agriculture to improve structural framework conditions and establish cooperative association structures. Although the proportion of individuals employed in the agricultural sector has declined substantially, farming remains very important for the rural population. Establishing a modern, entrepreneurially oriented cooperative system can contribute significantly to improving value creation and food security. The cooperative law supported by DGRV and adopted in 2013 was a first major step towards making cooperatives more attractive as a form of organisation. Among other things, the German umbrella association is moreover assisting local NGO Buddhism for Development (BFD) in training agricultural cooperatives and establishing international contacts, as for instance in the case of the pepper cooperative founded in Memot in 2010. The latter represents a success in two ways: while the pepper farmers benefit from improved quality and new markets for their raw pepper, their example also highlights the benefits of cooperative organisation to other groups.

Brazil

The project conducted by DGRV in Brazil on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ) has achieved a cross-sector impact on agriculture, renewable energies and finance. Focusing on farming, the “AceleraCoop” programme implemented in collaboration with cooperative service provider “SESCOOP Nacional” is designed to strengthen cooperatives in the areas of management and strategic planning and promote the establishment of networks and partnerships, thereby effectively improving employment and incomes in rural areas. At the same time, DGRV is using dialogue and exchange formats to highlight the vast cooperative potential of producing and consuming renewable energies, enabling cooperatives to make a valuable contribution to cutting costs and increasing efficiency in the energy sector. Meanwhile, Brazilian credit cooperatives already offer a remarkably diverse range of products: a corresponding cooperation with the Brazilian umbrella association OCB focuses on achieving greater presence of credit cooperatives in the north and north-east of the country and on embedding regulatory and supervisory best practices through national and international exchange. DGRV employs a broad “toolkit” of seminars, workshops, accompanying materials, training and consulting to achieve these goals.

Guatemala

Few other countries in the world have similar levels of social and economic inequality: while the majority of economic resources in Guatemala is in the hands of a small, privileged group, the indigenous rural population lives mostly below the poverty line. In light of this social fault line, (credit) cooperatives have the potential to increase financial inclusion of disadvantaged population groups and reduce the obstacles facing enterprises in particular. The project funded by the German Federal Ministry for Economic Cooperation and Development (BMZ) therefore targets young micro- and small-scale producers in rural and urban marginalised areas, who are frequently at risk of displacement. The project aims to reach these groups with an improved range of consulting and training services offered through the network of the country’s largest savings and credit cooperative, MICOOPE. In addition, the project is working with the Guatemalan umbrella organisation CONFECOAC to develop an education and training system. Further fields of activity include exchange with the relevant supervisory authorities, strengthening a deposit guarantee fund and introducing sustainable financial products.

Japan

Over 100 years ago, Germany’s Cooperative Societies Act served as a blueprint for the emergence of enhanced cooperative structures, and as one of the founding fathers of German cooperatives, Friedrich Wilhelm Raiffeisen is still held in the highest esteem by members of Japanese cooperatives today. Cooperatives have an almost 100 percent share of the Japanese market for milk; 57 percent of fruit and vegetables are produced by cooperative farming, as is half of all rice. Around 210,000 people work in the agricultural cooperative sector.