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close this bookCo-operatives and the Poor (ICA, 1978, 96 p.)
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View the documentABBREVIATIONS
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View the documentINTRODUCTION AND ABSTRACT OF PROCEEDINGS
View the documentTHE LOUGHBOROUGH STATEMENT*
Open this folder and view contentsCONSULTANTS' BACKGROUND PAPERS
View the documentAPPENDIX: PARTICIPANTS
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INTRODUCTION AND ABSTRACT OF PROCEEDINGS

by R. SAVARY, General Rapporteur

Co-operatives - have they failed the poor people of developing countries? Can they become a decisive factor in conquering poverty? The fourteen experts of international standing assembled by ICA in Loughborough refrained from passing final judgement on these two points.

But their findings illuminate some controversial aspects of the subject:

- The power structure and the political structure within a country may - and frequently do-vitiate the application of basic co-operative principles. Consequently "co-operative" societies are all too often a very imperfect embodiment-and occasionally a caricature - of the lofty ideal of co-operation.

- Co-operation could, theoretically and in the long run, resolve most if not all problems of development. But any strategy of speedy development requires considerable support, guidance and financing from outside. Co-operatives are neither a panacea nor a substitute for income transfers and for enlightened national policies.

- Co-operatives are valuable - indeed, in the view of many, irreplaceable - instruments in the promotion of social justice. However they are not usually equipped nor, in general, intended to redistribute wealth. Within market economy systems in particular they must have regard for the paramount objective of competitiveness as the condition of their survival.

- On the other hand co-operatives seldom utilize fully their potential for meaningful assistance to the poorer categories of the community. They frequently fail to enlist them as active members and, when they do, they frequently fail to give them the full benefits of membership, including preferential treatment as allowed under existing or improved by-laws.

- Education at all levels but primarily the education of cadres is the key to a more significant contribution of co-operatives to the advancement of the poor. Research at university level including further refinement and modernization of co-operative theory should be developed.

- The final objective of co-operation is and will always remain self-reliance, self-help and self-government. These are the standards by which co-operatives should be evaluated. Whether or not a co-operative movement progresses and is programmed to progress in that direction should therefore remain a primary criterion in the allocation of external assistance, governmental as well as intergovernmental.

More specific and practical recommendations emerged from the Loughborough Consultation among which the following should be noted:

- Governments must not expect co-operatives to relieve them of their responsibilities towards the poorer members of the national community. On the contrary, it is only where enlightened policies and programmes are in effect that the potential contribution of co-operative undertakings can materialize.

- Co-operatives, on the other hand, must evolve programmes specifically intended to reach and serve the poor. Management and staff must be educated and encouraged in their implementation.

- Such programmes require changes in the traditional procedures and practices and, in particular, simplified techniques and adapted educational materials. ICA'S Cooperative Education Materials Advisory Service (CEMAS) should be strengthened.

- Co-operation must become a specific field of research and education at university level and co-operative aspects should be stressed in many areas of higher learning.

- A more substantive part of international assistance-financial and technical - should go to self-help, self-managed projects of the poor or intended to serve the poor. Special attention must be paid to the continuance within the national community of projects initiated with international assistance. Useful contacts could be established between financing agencies-especially the World Bank - and ICA to identify projects meeting these requirements.

- Finally, inasmuch as most difficulties centre on the relationship between government services and agencies on the one hand and co-operative leadership and management on the other, it seems imperative if the needs of the poor are to be met to undertake an international in-depth study of this whole problem area.

These and other conclusions are embodied in the 'Loughborough Statement'. The many other points made in the course of the debate will be found in the Abstract of the Proceedings prepared by the rapporteur.

The Consultation had before it at the outset two comprehensive working papers prepared by Dr Alex Laidlaw, a Canadian co-operator with many years' experience of the Movement in Canada and in developing countries, and Dr Uma Lele, a member of the World Bank staff. These are included at the end of this publication.

Abstract of Proceedings

PROPOSED CONTENT OF THE CONSULTATION

a) Are the social and economic objectives of co-operatives, their mode of operation and structure appropriate and responsive to the problems of poverty and social reforms in developing countries?

How relevant is co-operative philosophy and theory to the complex problems of poverty in developing countries?

Do existing co-operatives in major sectors (for example, marketing, inputs, credit) tackle the problems of the poor? If so, how? If not, why not?

What are the constraints on various groups of the poor and which of these can be tackled by co-operative organisations?

Should subsidies be channelled through co-operatives? If so, how?

Are separate co-operatives for different groupings of the poor advisable? What are the problems in establishing them?

What specific needs of the poor are best tackled by co-operatives?

Co-operatives have been described as evolutionary rather than revolutionary organisations. If so, should their pace of development be stimulated by external assistance?

How can co-operative education and training, particularly for management, be made relevant to co-operatives tackling poverty?

What would you regard as a successful co-operative movement?

b) Under what conditions can co-operatives be effective agents of structural reform?

What are the problems for a co-operative movement in a society which is hierarchical and inequitable? Can the co-operative movement influence these structures?

What are the preconditions for co-operatives to develop and to tackle poverty in rural and urban areas?

Which institutions are responsible for creating these conditions? Which are the specific tasks which these institutions should undertake?

How can the alleged conflict between equity and equality be resolved?

c) To what extent and in what manner do governments facilitate or impede the efforts of co-operatives to combat poverty and introduce social and/or structural reforms?

What do you see as the right relationship between the co-operative movement, with its emphasis on self-help and mutual help, and the government?

Does legislation play a significant role? Does it need to be altered in some countries?

Should co-operatives be involved in national planning? If so, how?

Are para-statal promotional agencies advisable as a means of fostering new co- operatives and avoiding domination by interest groups?

OPENING ADDRESSES

The Consultation was opened by Mr J. TOMLINSON, MP, Under-Secretary of State, Ministry of Overseas Development.

Mr Tomlinson, himself a co-operator of long standing, stressed that the UK, in common with many aid donors now, was trying to increase its aid to the poorest communities in the developing countries. The topic of the Consultation was therefore of the greatest importance to the staff of the Ministry for Overseas Development, as also to all aid donors, and most of all to the developing countries themselves. He hoped the conference findings would suggest ways in which cooperation could help the poor.

Mr H. MORSINK (Social Affairs Officer, UN Division of Social Affairs) expressed the appreciation of his Department of ICA's action in responding to the call of the United Nations Secretary General, made in December 1974, that a small expert meeting be convened as soon as possible, with three major aims:

(1)To assess the problems connected with the participation of the poor in the co-operative movement;

(2) To assess the role of governments in alleviating problems of poverty;

(3) To present recommendations to cooperatives, to governments, and to international organisations.

After mentioning the increasing concern of member states, he said:

"This trend in international opinion underlines, more starkly than we would perhaps wish ourselves, the urgency, the importance and the timeliness of your meeting on 'Co-operatives and the Poor' insofar as it may help to regain the confidence of many, including governments and the poor themselves, in the capacity of the cooperative movement to reach the poor and to mobilise the poor for their own development, or to explain under which conditions co-operatives cannot play this role.

"Increasingly, the co-operative movement is left to be its own spokesman and to present to the world facts and research on its past achievements in reaching the poor and its own recommendations and commitments for future strategies and programmes, if any, to promote actively the participation of the poor in the co-operative movement."

EMERGENCE OF THE ISSUE

Considering the origins of the current emphasis on services to the poor, the Experts recognised that while co-operators often succeed in achieving higher incomes for themselves, the government must take on more and more responsibility for aid to the poor, especially the landless. Economic success of cooperatives, however essential, may also be one of the reasons why co-operatives are not constantly looking at the poor. "Rediscovering the poor, now and then, is a function of the economic success of cooperatives".

Other sources of the particular concern for the poor in the context of co-operative policies were: the whole concept of economic planning which brought out the problems of the under-privileged; and the existence of some contemporary political experiments (in land reform for instance) which may not have gone far enough.

DEFINING THE POOR

Although the question was not spelled out in the agenda the Experts felt that they had to reach an understanding of what they really meant when speaking about the poor or about the situation of the poor.

It was stated that the economic context, including the degree of capitalist penetration in developing economies, was a crucial element (e.g. co-operatives are a powerful means of reducing alienation) and that the word "small" might be more appropriate than the word "poor". Searching further for an acceptable definition of the poor it was suggested that one might refer to "the weak of the community" but that there were many subgroups among them; that some of the poorest people were actually unemployable due to physical or mental condition and co-operatives could not assume responsibility for them; that it was important to identify categories (social stratas - poor but homogeneous subsistence farming communities); that the relative "poverty line" is changing all the time - although an absolute "poverty line" can be defined within a given community at a given point in time, but there will always be relatively poor people; that the living conditions of the poor were determined by the availability of services and facilities as much as by levels of income and by the kind of economic environment they had to survive in (e.g. vulnerable one-crop economies).

Absolute poverty and relative poverty must also be considered in the international context, however, and the major concern must be for the poorest in the world.

Reaching the poor is possible through imaginative and unprejudiced methods of information, education and training but such methods require an in-depth analysis of specific circumstances and constraints.

POTENTIAL ROLE OF CO-OPERATIVES

The potential role of co-operatives on behalf of the poor must be envisaged in the light of the global situation in a given country rather than from the more abstract angle of the role of the "cooperative movement" in the world. In that way the contribution of co-operatives becomes clearer: joint effort, increased bargaining power, economies of scale, reduced isolation, improved education. The final aim is to create more prosperity through economic democracy (i.e. decision making and equitable distribution of earnings); in that sense what co-operatives do is always positive.

The use of technology and employment of managerial skills, the generation of reliable information for members and self-discipline, are other major contributions made by co-operatives to the improvement of the living conditions of the poor. Activation of latent local resources (physical and human) is also possible through co-operatives.

But certain risks must be recognised: such as forcing the pace or scope of cooperative development beyond the ability of the community to sustain them, or formalistic adherence to abstract cooperative principles evolved in an altogether different context.

It is a fact however, that many cooperative enterprises are highly beneficial, and telling examples can be found for example in Chile, Kenya, India etc. On the other hand, ways have still to be evolved to help certain categories such as nomads and landless labourers.

CO-OPERATIVES' ACTUAL CONTRIBUTION

The Experts went on to consider specific instances where co-operatives had or had not truly benefited their poorer members or potential members.

In Poland some early production cooperatives had a disappointing record but marketing co-operatives had a limited though real success. In Bulgaria and East Germany on the other hand, production co-operatives and the whole co-operative sector thrives. Other instances of success are found in handicraft and medical cooperatives. In several African developing countries poor management plagues consumer societies. Thus one had to accept local conditions in order to create new occupations and identify existing needs.

A significant contribution by cooperatives to the improvement of the situation of the poor in rural areas is the resulting shift of centres of power from cities to the rural areas themselves. Making an accurate assessment of the true benefits accruing to the poor is essential: the latest Indian data show that, contrary to widespread opinion, on an acreage basis they got more than a proportional share of the available credit.

The social benefits of co-operatives spread far beyond the membership of societies: fair prices, fair credit rates, exact weights and measures, etc., once established in a community cannot be ignored by private traders and moneylenders. Conversely the majority of rural communities in some developing countries still suffer from the absence or neglect of co-operatives.

Co-operative unions in some countries (e.g. Tanzania) have established an education fund allowing children of poor peasants to go to school; in Sri Lanka district development councils organized by village co-operatives have introduced technology, equipment, and management skills to improve the performance and earnings of the blacksmiths, the mechanics, and other handicrafts.

But the key element in a co-operative policy concerned with the difficulties of the poor must clearly be favourable treatment for the poorer members, both in terms of services rendered and of the cost of such services. Many instances were mentioned, including special terms and waiving collateral requirements for loans; setting aside a substantial share of resources and requisites to satisfy the needs of the poor; evolving new adapted technology; using written forms and materials in the local languages, etc. An element of governmental 'paternalism' is generally required, however, for such policies to become operational and the scarcity of resources creates conflicts. In any event, outside subsidies are unavoidable.

All co-operators, including the poor, benefit from the services of consumer cooperatives (demonstrations, classes) and access to such facilities is seldom restricted to members. With respect to the dominant rural "elites," it must be observed that some "elites" need not necessarily be identified with economic power, but often line up with the weak and the poor.

Be that as it may, one must be alert to the risk of co-operatives being in some circumstances damaging to the poor. The Green Revolution, availability of credit, international aid, can widen rather than narrow the gap between rich and poor; a new self-centred elite of co-operative directors and managers may emerge.

SEPARATE CO-OPERATIVES FOR THE POOR?

It is obvious that the poor themselves have at least some potential to start cooperatives, provided they can be reached and that some managerial know-how is made available. In the Philippines, promising insurance schemes and credit schemes starting with minute initial contributions were launched on that basis.

Generally speaking, the balance of the argument seems to be against special, cooperatives for the poor, but there are instances - credit in particular - where the high relative unit cost of serving the poorest may increase a built-in bias against although such bias is normally held in check by the "one man, one vote" principle.

Producer, marketing, and consumer cooperatives can seldom be established specifically for the poor. But women's groups, mutual aid groups (handicraft, building etc.,) can succeed provided they are not impaired by legalistic considerations.

If separate co-operatives for different groups of the poor are not generally advisable there are qualifications: where the major part of the population is not even in a monetarized economy, where a land reform has created a whole new class of poor farmers, etc.

In many developing countries most of the people are poor. Co-operatives are beamed towards the poor, exerting a deep community role, the not-so-poor helping the less fortunate who are, above all, the victims of an irrelevant education or of prejudices discouraging self-help.

Co-operatives exclusively for the poor may identify them, isolate them, perpetuate them. They create risks.

If the notion of "co-operatives of the poor" is not attractive it becomes all the more important to deal with the ways in which the mixed membership co-operative can answer the needs of the poor. They must be made receptive, but illiterate people often cannot understand their operation. They must therefore be given to see clearly what the incentives are, they must be educated in their own language in the study of local development problems.

To say that there should be no cooperatives for the poor is to become excessively paternalistic. They are the ones to decide and there are circumstances - especially structural - where such decision is a logical one.

Bureaucracy often does not take into consideration the special needs of the poorer, and base lines must be evolved with these specific needs in mind: e.g. the food items bought differ between rich and poor.

CO-OPERATIVE EDUCATION AND TRAINING

The consensus of the Experts was that the major weakness of the co-operative movement in reaching the poor was a scarcity of competent managers at all levels.

But managerial talent is not exclusively the product of education. Unfortunately able managers soon go on to higher levels and the problem of poor management at the lower level is perpetuated. Simple procedures must therefore be evolved and this is the responsibility of the higher levels.

Also, the outward movement of competent managers may be checked if they are able to secure better pay in their lower level jobs. In the Philippines a "cooperative management subsidy" is paid from a special fund and part of the beneficiaries' assignment is to train local "understudies".

Managers, in any event, must learn to assess the longer-term benefits of extended membership, including the poor, even if the short-term aspect appears to be a liability.

Education cannot be focussed exclusively on management, however, nor even on raising material living standards. Family welfare is equally important (education, planned consumption, nutrition and health, recreation, etc.). Women should form a vital constituent of the cooperative movement. They are the most under-utilized force.

Teaching the teachers is the crucial issue in co-operative education. A sound basic education is a first requisite and must include science and techniques. Teaching materials should be improved, particularly through the ICA programme (Co-operative Education Materials Advisory Service - "CEMAS").

A sound education has three phases: knowing the people, getting the trainee to order his problems in such a way that he can use the education, and finally knowing how far the individual can go in applying knowledge to his own situation. This requires translating the technical vocabulary into one the people can use.

Much depends on the status of the general education system in the country concerned. This decides where the cooperative should act and where it should defer to existing institutions.

Should not co-operative education be introduced at university level? Chairs in co-operation are overdue. Co-operative subjects should in any event be included in the curricula of all disciplines.

But the co-operative movement often enjoys only low status, too little emphasis is put on increasing its absorptive capacity, too little attention is paid to practical training, especially the use of local languages, basic agronomic notions, simplified accounting systems. There is also need to refine the definition of objectives and targets: reaching a larger number of people is not the same as aiming for higher turnover.

Equally important is the education gained through daily co-operative activities, learning to protect members from themselves and their bad habits.

Management, however, stands out almost everywhere as the weakest link, a greater constraint even than finances because there is often an inability to manage increased supplies of input and credit. Unfortunately co-operative movements in many countries have a low status and the quality of training reflects this.

CO-OPERATIVES AND GOVERNMENTS

The character of the staff in co-operative departments of governments is a matter of great interest; they should be professional co-operative people and not "the general run of bureaucrats".

One should not overlook the fact that there are very few societies and cultures where the notion of voluntariness is operated. This must be taken into account when promoting co-operative development. Those who should be helped are those who are still unable to practise that very notion of voluntariness.

Controversies about what is and what is not a co-operative must yield to the law of the country. But it is imprudent to assume that moving in the direction of voluntariness will be spontaneous and even that it will occur at all. Autonomy of co-operative members within the area defined by the law and continuation of that autonomy are more important elements.

Governments in any event should not load on co-operatives tasks for which they are not equipped; they should not artificially force their expansion and provision should be made for eventual withdrawal of the government from management.

Probing deeper into the issues raised by governments' relationships with co-operatives the Experts noted Dr Lele's suggestions: decentralize planning at the district level to identify the poor peoples' constraints ("co-operative societies can be co-operative in every sense of the term except when it comes to reaching the poor!"). Rural societies in developing countries cannot be assumed to be homogeneous entities. Some of the best cooperatives are most efficient because they refuse to deal with the poor. Structural change may be essential.

Co-operatives are too often "sandwiched" between many other structures (a price system set by government decree, a marketing board). They must be given more scope to operate. The management of co-operatives must not be diverted away from their internal problems by demands of the government for, e.g. excessive numbers of reports, trial balances, etc. On the other hand governments should create an environment favouring the development of participation by the poor. For example, government officers able to start the co-operative off in an autonomous manner should be positively rewarded.

Government is the outcome of the political system and citizens are responsible for it by their votes. They should therefore try to influence it. But conceptual and practical difficulties are real: how open can open membership be? How should co-operatives be taxed? How much restriction on competition can be accepted?

Usually it is not the poor people who are against government intervention: middlemen and bankers, rather than the government, are their real enemies.

To help the rural poor, the co-operation of co-operatives with other institutions (extension services, educational agencies etc.) is useful. But co-operatives should not be put in a position where they are allowed only a marginal function.

With respect specifically to international assistance Dr Lele drew attention to the fact that, with international agencies now stressing programmes for the poor, some national governments have allocated more of their own resources to other endeavours, others claim that programmes for the poor lead to slow disbursement and to a decline in the rate at which international resources can be absorbed. She also felt that technological breakthroughs did not exist for food crops grown by the poor, that infra-structure was essential no less for co-operative development than for overall development and that scarce resources are allocated to the more productive areas or the more prosperous segments of the population, not to the poorest.

CO-OPERATIVES AND STRUCTURAL REFORM

The Consultation evidenced the width of the experts' spectrum of opinions regarding the role of co-operatives as agents of structural reform. While cooperative philosophy and co-operative institutions can go a long way to include the poor in the development process and to distribute equitably the results of productive activities, their function usually falls short of a significant redistribution of wealth. The existing pattern of ownership and power is seldom decisively altered through co-operative activities. In some instances it is crystallized or strengthened. When subsidisation of the poor is essential, attempts to achieve it as an objective of internal policies may be self-defeating.

But there are also circumstances so inimical to co-operative success as to make it most unlikely. The cultural background, the political framework, the system of land tenure, the level of general education, the ability to communicate and, in many instances the prevailing ethical standards pre-determine the outcome of co-operative enterprises.

It was generally agreed, therefore, that great flexibility was required in the application of fundamental co-operative principles in poverty-stricken areas. To the extent that resources contributed by the community at large, especially capital, must complement and supplement those which are generated within co-operative societies, external leadership and supervision are bound to interfere with self-management. The obvious necessity to speed up the development process supersedes the natural concern for a strict application of co-operative theory. In fact a new theory of fast co-operative development has yet to be evolved and should incorporate the accepted notion of social profitability.

A discussion of the welfare functions of co-operatives led the experts to distinguish between the overall welfare objectives of co-operative activities and the narrower concept of welfare programmes, usually identified with the direct distribution of grants or subsidies. Although cooperatives can play the role of governmental agents in the implementation of such programmes they are seldom in a position to generate the resources required for effective relief of poverty.

Even within the limits of normal cooperative activities the welfare potential of such activities is conditioned by their intrinsic efficiency. When co-operatives are grossly inefficient their superiority over the private sector as a means of serving the poor cannot be taken for granted. From a macro-economic standpoint, welfare-oriented shifts of resources from investment to consumption may have long-term detrimental effects. There can thus be instances where the co-operative approach is not the optimum solution.

Such complexities would seem to preclude a scientific a priori determination of the degree of reliance on the co-operative approach. This is a decision to be taken by the people concerned. Evaluation, on the other hand, is a subject for scientific investigation.

In the field of co-operative development, as in others, the character of the community concerned is the major determinant. Cause and effect relationships change from one society to another. Social solidarities are not identical with economic status alone.

Trying to identify the role of agencies external to the co-operative movement with respect to the latter's development, the experts felt that it was primarily one of resource transfer - a transfer which involved urban/rural relationships and entailed a risk of subordinating the countryside to the city. Easier credit terms and rates for the poor were often the chosen instrument of policies. Some participants felt that the major justification of such an approach was to create a demand for inputs and requisites. This was even more important than easing the burden of borrowers.

Unfortunately, the existence of profitable technology for marginal or small farms is uncertain and a considerable amount of guidance is required in any event. The role of governmental agencies and services must therefore be seen in the global context of integrated rural development.

Even allowing for the maximum possible degree of self-determination and self-management within co-operatives there is no substitute for enlightened governmental policies and interventions in land redistribution, credit allocation, educational opportunities and social services. Cooperatives can only succeed where the national community and the government acting on its behalf ensure the right environment and the right climate for their development efforts.

INTERNATIONAL ASSISTANCE

The consultants endeavoured to identify the weaknesses in international assistance for the development of efficient cooperative movements, particularly with respect to the needs of the poor.

Dr Laidlaw mentioned the difficulty of reconciling the diverse - and occasionally conflicting - aims of national and local authorities in aid-receiving countries with those of the co-operative movement; the lack of initiative and aggressiveness of that movement in the field of assistance, as evidenced by the still inadequate financing of ICA; the unfortunate concentration on bilateral (government to government) projects which short-circuit cooperative expertise; and, finally, the reluctance of aid-receiving countries to place co-operatives anywhere near the top of their priority lists. Management skills were in short supply in both aid-giving and aid-receiving areas.

Dr Lele thought that developing the capacity of co-operative institutions at local level had been gravely neglected. That neglect is compounded by the difficulty of locating competent and adaptable managers internationally and by the very high cost of such personnel. She also stressed how neglected had been the monitoring and evaluation of international aid projects in the field of cooperatives.

Participants accepted these findings and expressed many supplementary views and comments:

- Governments in aid-receiving countries seldom provide for continuance of externally financed assistance to poor people when such aid comes to an end. Promising projects thus come to naught.

- Inconvertible currencies should be used more liberally to finance international aid projects.

- Local initiatives - which are best administered by local agents - are often the most relevant to the real needs, but they seldom receive their due share of international financing.

- Assistance intended for co-operative movements is too often used to expand government co-operative departments instead of co-operatives themselves.

- Local organisations may not channel assistance efficiently.

- International agencies themselves are creatures of governments and must deal with governments. Their own priorities can hardly differ from those of their component parts. Such priorities usually depend on power structures within Cabinets: they can hardly be changed from outside.

Politics cannot be segregated entirely from co-operative activities. Many cooperative movements, even in industrialized countries, show political bias.

- The effectiveness of co-operatives in reaching the poor of developing areas is thus questionable and questioned. Faulty planning and defective institutional development are apparent and the co-operative movement has also been accused of being too legalistic and bureaucratic.

- Because the poorest have neither the economic assets nor the social status required to fend successfully for themselves, governments must intervene in the creation and the running of co-operatives and/or other institutions. But how much government "paternalism" is enough and how much is too much? This was one of the questions raised by Dr Lele.

- "When a co-operative comes under the extreme of government control, to the point that the government is making policies for the co-operative, providing the management for the cooperative, denying the democratic control that the co-operative is supposed to have, then, at that point, not only is it failing as a co-operative economically but it no longer performs the social function of a democratic institution and is, therefore, denying the poor people this opportunity for participation.

"Furthermore when the co-operative is completely controlled by the government the poor are at the mercy of the functionary, the bureaucrat, the government and the political party. They are worse off than if they had no organization at all... The cooperative becomes an instrument of oppression" (Laidlaw).

On the question of the extent to which government control or direction disqualified co-operatives from being recognised as such, there was ambivalence even in the most developed countries. But politicians should not be allowed to take over co-operatives or use them as a political base, bureaucracy should not strangle them. International aid should not underwrite such practices.

Asking for a pure definition of a "cooperative" on the other hand is dangerous. There is a continuum: at one end a purely voluntary institution - at the other end the government-controlled co-operative. The criterion of value is whether it serves the purpose that it is said to do, and in particular, does it help the poor? Improving material conditions, and 'emancipation', were two separate functions which a co-operative should fulfil; but they might conflict in the long term and it was sometimes difficult to judge which should be given precedence in the short term.

These views led to further discussion of the issue of governmental involvement in, and control of co-operatives, primarily from the standpoint of evolving acceptable criteria for the granting of international aid.

Democratization of co-operative movements should be the guiding line but there are establishments which call themselves "co-operatives" which should not be given that name.

On the other hand where resources are given by the state to co-operatives they must be directed to the poor; the high unit costs of subsidizing the poor must be underwritten by the government and access to managerial positions must be assured for the poor.

Legislation can either be a trigger mechanism for sound co-operative development or it can strangle a movement, but co-operatives have ways of influencing legislation. Para-statal promotional agencies can have their uses.

To the extent that governments have taken the co-operative movement as one of the means of spearheading development, the movement cannot divest itself from the state. There is need for adjustment through consultation, but state enterprises should always be clearly identified as such and the spirit of self-reliance and self-help should be encouraged; registrars' or commissioners' powers should not be excessive.

FINDINGS AND CONCLUSIONS

The findings and conclusions of the Consultation were embodied in a draft report prepared by the Rapporteur for consideration at the final session. After discussion and amendment the text was approved for circulation within and outside the ICA as an Interim Report. It is included in this book as the Loughborough Statement.