Speech at the Co-Operative Alliance Conference: Co-Operatives The Way Forward
Croke Park, 15th May 2012
It is with great pleasure I am here today during the United Nations International Year of Co-operatives, to celebrate the invaluable contributions of co-operative enterprises. Be it to poverty reduction, employment generation or social integration across the world, co-operatives are unique enterprises, sharing a distinctive set of principles, focused around their member-driven ethos.
Your conference, as you state in your invitation to me, has as its aim, ‘to raise awareness of the presence of the co-operative sector in Ireland and to promote opportunities for further development of the sector.’
Ceann de na príomhghnéithe sainiúla a bhaineann le fiontair chomharchumainn is ea an mhianach ar leith atá iontu toisc go bhfuil siad ballthiomáinte. Is iad na baill féin ar a ndéantar freastal orthu atá ina n-úinéirí agus ina gceannasaithe ar na comharchumainn. Mar gheall air sin, nuair a bhíonn cinneadh á dhéanamh sna comharchumainn cuirtear riachtanais agus leas na mball agus a bpobal chomh maith le tóraíocht brabúis san áireamh.
[Their member-driven nature is one of the most clearly differentiating factors of co-operative enterprises. This stems from the fact that they are owned and controlled by the very members that they serve. As a result, decisions made in co-operatives bring into balance the needs and interests of members and their communities and the need to generate a project for viability.]
In my inaugural speech as President of Ireland I gave a commitment to “champion creative communities” that bring about “positive change at local level”. I spoke of the need for a “common shared future built on the spirit of co-operation, the collective will and real participation”. Co-operative societies are a vibrant example of such ‘creative communities’ that have organised themselves to address a particular purpose or situation in their community through co-operation.
It was as a response to the inequitable social conditions, themselves the consequences of the profit driven economic theories asserted during the Industrial Revolution that initially prompted the emergence of such organisations. As groups within communities organised themselves, co-operative societies emerged, growing from strength to strength across Europe during the nineteenth century. The emergence of a new economically viable model, that afford to retain democratic control for those involved, with practical benefits of a return for its members, provided an attractive alternative in the late 1800s.
Today as we struggle in very difficult economic circumstances, brought about an acquisitive individualism that drove the worst aspects of the Celtic Tiger, the values of the co-operative movement are critically relevant and your leadership in transforming our society is needed more than ever.
In closing a chapter on a flawed model of extreme neo-liberal, unregulated, market extremism we should remember what its consequences were and are in relation to food itself. According to Professor Howard Stein of the University of Michigan:
“Commodity markets are being driven not by fundamentals of producers and end users but by other factors. Among other things, commodities are seen as good hedge when the value of the dollar falls which lowers the value of global commodities in non-dollar terms. Strategies now include speculation on food which has become a bio-substitute for fuels with frightening implications to the welfare of millions of net food buyers in poor developing countries. In 2011, for example, it is estimated that 61% of the wheat futures market was held by speculators compared to only 12% in the mid-90s prior to deregulation. The amount of money flowing to speculation in food markets futures continues to grow appreciably and roughly doubled between 2006 and 2011.
The result was a steep rise in food prices which more than doubled between June 2003 and June 2008. After declining following the financial crisis they started rising and peaked in April 2011 at more than 2 ½ times the pre-deregulation level in June 1999. The impact on food consumers in poor African countries is well documented. IMF estimates that on average the internal price of food rises by .33% for every 1% in global food prices. In a survey of 58 developing countries, food prices were up by 56% between 2007 and 2010 putting millions more at risk of undernourishment and malnutrition.” 1
Deregulation of commodity markets has lead to a massive increase in the financialization of commodities like food and with it tremendous volatility in prices. As Professor Stein has written the consequence has been “an unprecedented period of economic instability, stagnation and growth inequality” over the past three decades.
Is léir nach féidir linn filleadh ar an mbealach a ndéanimis rudaí tráth. Teastaíonn múnlaí comhoibrithe nua uainn a sháróidh na lochtanna a bhí ar an taithí a bhí againn le déanaí. Tá múnlaí uainn ar nós múnla an chomhoibrithe a spreagann daoine le hoibriú i gcomhar lena chéile ag baint úsáid as a mbuanna, le páirt ghníomhach a ghlacadh ina bpobail agus cuidiú leo, múnlaí nach bhfuil bunaithe ar shaint an duine aonair ach a oibríonn ar bhonn dlúthpháirtíochta, páirtíochta agus dianiarrachtaí comhoibrithe.
[Clearly, we cannot go back to doing things in the same way as we did before. We need new models of working together that will transcend the shortcomings of our recent experience. In the new social economy we will need models like the co-operative model which encourage people to work together using their talents, to proactively participate and contribute in their community, models constructed on the basis of collective welfare, which operate on the principles of solidarity, partnership and collaborative endeavour.]
The fresh innovative form of organisation that co-operatives contributed historically had a different philosophical make-up built on democracy, mutuality and service, which gave the co-operative model its unique identity, defining its relationship with both its members as well as non-members.
Well known figures such as Horace Plunkett, George William Russell (AE) and Father T.A Finlay played a vital role in the development of the co-operative movement in Ireland, particularly in the agricultural sector, establishing the Irish Agricultural Organisation Society (IAOS). Plunkett went on to assist in the establishment of the Department of Agriculture and Technical Instruction for Ireland (DATI) in 1899, the forerunner to today’s Department of Agriculture.
Their contribution to the shape and development of the Irish Co-operative sector is unequivocal and has to be commended. Irish co-operatives have evolved and vary greatly, not only in purpose, operating in various sectors of society, but also in shape and size – from the local rural seven member group water scheme to those large agricultural co-operatives which have evolved into major international businesses.
Co-operative societies now, as much as ever, have a central role to play and can be a significant component part to the economic recovery of this country. I wish to acknowledge the work of those involved in the co-operative movement for their commitment and contribution, often on a voluntary basis, to local communities and to Irish society in general. Their efforts are an example to us all and I encourage others to get involved and follow their example.
There is huge potential for budding enterprises that wish to pursue economic viability along with social responsibility to utilise the cooperative model successfully, aiding the revival of the Irish economy.
I welcome the role played by co-operative umbrella organisations such as the Irish League of Credit Unions (ILCU), Irish Co-operative Organisation Society (ICOS), the National Association of Building Co-operatives (NABCO) and the National Federation of Group Water Schemes (NFGWS) for their work in supporting the growth of the co-operative sector across Ireland. Their role in providing essential guidance and support for the growth and development of long-standing co-operatives, as well as information regarding new co-operative start-ups has been fundamental to the promotion of the sector.
Co-operatives have made a substantial economic contribution to the Irish economy, as well as significant contributions in the areas of housing, group water schemes and community development. Since its foundation in 1973, the National Association of Building Co-operatives has supported the provision of approximately 5000 homes across a mix of tenures and taken responsibility for the ongoing management of nearly 1800 homes available at affordable rents. This is an important contribution to the expansion of social housing in Ireland today.
In the economic sectors such as agriculture and credit unions, the co-operative model has had remarkable successes. Agricultural co-operatives alone account for around €12 billion turnover annually with some 150,000 individual members, employing 12,000 people in Ireland and a further 24,000 people overseas.2 At the end of 2011 there were 404 credit unions with savings of €11,895 million and membership of approximately 2.9 million3.
Given its origins the Co-operative movement has played, and continues to play a significant role in Irish agriculture. Involved in the sector since its very foundation, the movement is represented by a diverse array of enterprises ranging from milk production, to pig rearing to farm relief services to fishing. Over one third of all industrial and provident societies registered with the Register of Friendly Societies are agricultural in nature.
The agri-food sector, including those organisations within the Co-operative movement, is now well placed to take advantage of the increasing demand for food arising from global demographic trends, including in the dairy sector. The co-operative movement will also be a major player in implementing the ambitious Food Harvest 2020 Report, which targets a 40% growth in agri-foods exports, including a 50% increase in milk production by the end of the decade.
Bord Bia’s Bloom Festival is another example of the success of co-operative working. This year’s show will incorporate 27 show-gardens, over 100 Irish food and drink producers, 40 nurseries, 25 cookery demonstrations and over 160 retailers. Last year over 90,000 attended and enjoyed the fruits of what can happen when like minded but diverse interests co-operate.
With the recent publication of the Report of the Commission on Credit Unions and its far reaching recommendations, these are also challenging times for the individual credit unions. However the values of cooperation, volunteerism, provision of financial services to the less well off and the common bond that has traditionally united members should continue to engender close ties within communities.
The United Nation’s International Year for Co-operative societies provides us with the opportunity to increase public awareness and promote the co-operative sector here in Ireland. It is also an opportunity for us to look at co-operative societies across the globe, learn from their experiences and mirror some of their achievements here in Ireland.
I know for instance, that the Irish credit union movement has been involved for the last 30 years in assisting developing countries in establishing their own credit unions and other cooperative type organisations. The Irish League of Credit Unions Foundation was set up to share the success of the Irish credit union movement with similar movements in developing work and low income countries.
Throughout the EU there are approximately 300,000 co-operatives providing 4.8 million jobs.4 Worldwide, 800 million people are members of co-operatives providing 100 million jobs.5 The co-operative model has huge potential to aid and drive economic recovery in Ireland.
I wish to salute the co-operative sector on its achievements to date. The Irish co-operative business model has proven to be a successful, enduring and sustainable business model and I am sure this will only continue and develop further in the years ahead, enhancing its capacity to contribute to economic and social well-being into the future.
1 Stein, H. 2012. “The Neoliberal Policy Paradigm and the Great Recession.” in Panoeconomicus. Vol. 59, issue 4, pp. 421-440
2 ICOS
3 Report of the Commission on Credit Unions, March 2012, p. 13
4 ICA 2007
5 Cooperatives Europe