Co-operatives worldwide have one billion members and provide 100 million jobs, and the top 300 co-ops have a combined turnover of $1.7 trillion – equivalent to the ninth largest international economy.
There are around 600 cooperatives in NSW alone. These cooperatives are owned by their members, as is the case with Mutual banking services providers like Community Mutual Group (CMG) with headquarters in Armidale. CMG is marking 2012 , the International Year of Cooperatives, with a number of events.
Local Mayors, Councillors, business people and academics attended an interactive forum at the University of New England recently to discuss the way the co-operative model could drive greater regional prosperity.
There has been a renewed interest in the cooperatives since the Global Financial Crisis, as they survived the meltdown in much better shape than the rest of the financial and corporate sector. What is sometimes seen as the drawback of not inviting speculative capital emerged as its major strength, as was the democratic principle of one vote per member. It meant that a special interest group within a business could not hi-jack the agenda and drive through risky investments and measures without the full cooperation of members.
These key advantages were highlighted by speakers at the Armidale Forum, including: Jo Barraket (Associate Professor of Social Enterprise at the Queensland University of Technology); Melina Morrison (IYC Secretariat Executive Officer ); Professor Alison Sheridan (Head of the UNE Business School); Valerieanne Byrnes (Executive Director of People, Communities and Credit at Community Mutual Group); Peter Tregilgas (Executive Officer of Regional Development Australia Mid North Coast and author of Social Enterprise Australia) and Tony Wilson (Deputy Chairman of Norco on the Mid-North Coast).
Associate Professor Barraket told participants that niche markets existed for co-ops to retain services in the rural sector. There was a history of communities banding together to save their pubs, medical services, post offices, cinemas, petrol stations and retail and other businesses. Local Government was often involved, and co-ownership by local people had proved a successful formula. She said complex projects like wind farms were much more likely to win approval as cooperative ventures, citing the Hepburn Wind Farm in Victoria as an example.
“It actually overcame the barrier to entry, which is usually strong community resistance,” she said. “When the co-op is community owned, the venture is welcomed.” Other examples of successful cooperative retailing were the Indigenous Cooperatives, which have been selling art online successfully for more than ten years.
Ms Morrison told the forum the cooperative model had proved to be one of the most enduring and successful ways of running a business for the last 150 years. She gave the example of the West Belconnen Health Co-op, formed to cover six northern suburbs in Canberra with a high proportion of public housing, when there was no local doctor practicing in the area. Since 2010, the Co-op, with 12,000 members, has opened a super clinic offering bulk billed primary health care across three sites. It offers members unlimited free medical consultations in return for a $66 annual membership fee.
She said in some countries like Japan and Finland, co-op members represented more than one in three households and that internationally, co-ops were the fastest growing form of business development and included travel agencies, famous international football clubs, banking and other enterprises.
The Community Mutual Group offers an example of how a small member based venture located on the campus of the University of New England has grown to become the largest inland credit union in Australia. It now boasts 29 branches, 3 agencies and almost 70,000 members stretching across the New England North West, Orana and Hunter regions.
Like all credit unions, it provides the same financial services as banks but is owned and controlled by its members. Responding to members who want quality local services, rather than to shareholders looking purely for profit, allows mutuals a much closer community focus. CMG and other mutuals operate successfully in many smaller communities well below the ceiling set by larger banks, which deserted small towns in droves a couple of decades ago. Because of strong member influence, CMG has continued the respected traditions of local decision making at branch level and has encouraged its staff to fully immerse themselves into local community life. It is usually the first port of call for people looking for support for community ventures and to help out when people are in need or facing difficult situations. To the management and staff, there is a system of values consistent with community engagement, which has an ethical as well as fiscally responsible base.
Credit unions originated in Germany in the mid 19th century and crossed the Atlantic by the turn of the century. Alphonse Desjardins opened North America’s first credit union from his home in Quebec in 1900. Eight years later, he was advising others who wanted to set up similar institutions in the US. Now there are almost 8,000 credit unions in the States, with around 90 million members and more than $679 billion on deposit. The story has been similar world wide – small beginnings and rapid incremental growth.
There appears to be no limit to the flexibility of the co-operative model, which has been adapted to serve many communities of interest – farmers, volunteers, consumers, business and employment, housing, banking, sport and utilities, to name a few. It is also receiving a boost through the proliferation of social media, with its mantra of networking and cooperation unlimited by geographic boundaries. And that is a world with endless opportunities to open up a new range of co-operatives and mutuals to serve their communities of interest in the future.
This story was published in issue 61 of New England Focus