United Nations


General Assembly

Distr. GENERAL  

6 August 1996



General Assembly
Fifty-first session
Item 102 of the provisional agenda*

*    A/51/150.

                            PERSONS AND THE FAMILY

              Status and role of cooperatives in the light of new
                          economic and social trends

                        Report of the Secretary-General


                                                              Paragraphs Page

 I.   INTRODUCTION ..........................................     1        2



IV.   COOPERATIVES AND SOCIAL SERVICES ......................  41 - 52    11

 V.   COOPERATIVES AND FOOD SECURITY ........................  53 - 64    13



Annex.  Statement on Cooperative Identity ..............................  20

                               I.  INTRODUCTION

1.The present report has been prepared pursuant to General Assembly resolution
49/155 of 23 December 1994 on the role of cooperatives in the light of
new economic and social trends, in cooperation with members of the
Committee for the Promotion and Advancement of Cooperatives
(COPAC). 1/


2.An important contribution of the cooperative movement continues to be its
capacity for promoting and supporting entrepreneurial development in
forms compatible with the principles and objectives of the World
Summit for Social Development, held at Copenhagen from 6 to 12 March
1995 which, inter alia, call for governmental support to cooperative
enterprise as a means to create productive employment, reduce poverty
and enhance social integration. 2/  These instruments, and more
comprehensively, the Beijing Platform for Action, specifically call
for support for women's use of cooperative enterprise as a means of
economic empowerment. 3/

            A.  Means for entrepreneurial start-up, particularly by
                disadvantaged individuals and communities          

3.The cooperative form of organizing a business enterprise assures any group
of individuals an effective means to combine their resources, however
small.  It permits a larger resource mobilization than that within the
capacity of most individuals and small enterprises.  It is a catalyst
for local entrepreneurial growth; cooperatives retain within the
communities in which they operate the capital that they mobilize
there, as well as surplus derived from outside transactions, both
accumulating for further entrepreneurial development.  As direct
beneficiaries, cooperative members have a strong incentive for
efficient operation and continuous innovation in response to changing
business environments, achieving thereby high rates of both initial
success and long-term viability.  They favour long-term development of
their enterprise compatible with the interests of the communities in
which it operates.  The stability they assure within local communities
itself induces further entrepreneurial expansion.

4.This type of enterprise is particularly appropriate for persons who have no
other vehicle for economic progress.  Even the poorest and most
disadvantaged women have found cooperatives an effective means for
economic empowerment; for example, the Self-Employed Women's
Associations (SEWA) in India have adopted them as the most effective
form of entrepreneurial organization.  In New York City, the
Cooperative Home Care Associates was formed in 1985 mainly by young
minority women who were single parents and welfare recipients. 
Through intensive training and commitment to their first means of
dignified employment their cooperative succeeded; by 1995, 300
worker-members provided home-care services to the elderly and disabled
and had income and benefits better than any in the industry.  The
model is being replicated in cities throughout the eastern and central
United States of America.

           B.  Means to establish community-based private enterprise
               in response to privatization                         

5.Because they are user-owned and community-responsive, cooperative
enterprises are acknowledged increasingly by Governments, especially local
authorities, as means whereby citizens can assure themselves
appropriate and affordable housing, utilities, infrastructure, health
and social services.  Consequently, they are transferring
responsibilities to cooperatives.  This promotes large numbers of
small enterprises, which tend to be labour-intensive and to integrate
as members beneficiaries, providers and other interested parties,
thereby supporting local social cohesion.

6.In the health sector, for example, a number of Governments have already
established partnerships.  In Costa Rica, the Social Security Bureau
began in 1988 to contract cooperatives of health providers to take
over and expand public health services.  In Malaysia, the Government
has transferred part of the public health services to a comprehensive
cooperative system, comprising a national network of doctors'
cooperatives financed by cooperative banks, delivering services to
members of the cooperative movement, with health insurance provided by
the Malaysian Cooperative Insurance Society.

         C.  Capacity for development into self-sustaining large-scale
             business groupings and mutually supportive networks      

7.The organizational characteristics of cooperative business enterprises
strongly favour capital accumulation and reinvestment, organizational
expansion and diversification and formation of operational alliances within
the same region.  This permits the combination of large-scale operations
with worker- or consumer-control.

8.In Brazil, for example, the National Confederation of Health-care
Cooperatives (Unimed do Brasil) has grown from a single cooperative set up in
1967 to a business complex now comprising 304 provider-owned health
cooperatives, many owning hospitals, organized in 17 State-level
networks, and a national holding company that owns subsidiaries in
insurance and provides bulk purchasing and common services for
members' hospitals and clinics; data management and communications;
and training, research and development.  The complex also includes
complementary nationwide systems of credit unions and user-owned
health cooperatives.

9.In such ways, cooperative business complexes continue to aggregate economic
power sufficiently to compete successfully in the global economy. 
They are able to assure the viability of the numerous independent
enterprises they supply, or whose output they process and market. 
Through their aggregate economic weight and lobbying capacity they are
able to break monopolies and ensure fair treatment for consumers,
producers and employees.

               D.  Capacity for promoting and supporting its own
                   entrepreneurial development                  

10.   Few cooperative enterprises have to start up and operate for any
period in isolation.  Increasingly, they are able to benefit from
membership within a broad movement equipped to promote new
entrepreneurial initiatives.  In addition to cooperative financial
institutions, numerous forms of support are available.

           1.  Cooperative sector business development organizations

11.   In many countries, national cooperative organizations have set up
enterprise development institutions.  In the United States of America,
for example, the National Cooperative Business Association, in 1996,
set up the CLUSA Institute for Cooperative Development, responsible
for increasing the capacity of cooperatives to provide concrete
solutions to contemporary problems and to act as a catalyst for the
replication of successful cooperative development models within the
country and elsewhere.

                  2.  Cooperative human resources development

12.   Most enterprises and organizations attach high priority to
training.  National movements have specialized training institutions,
some at the university level.  Human resources development is a major
component of technical assistance programmes operated within the
cooperative movement.  This has been particularly valuable in
promoting new cooperative enterprise in economies in transition, given
the scarcity of business experience and training; for example, in
1994, the International Institute in Israel organized a seminar,
conducted in Russian, on the organization and management of
cooperatives in a market economy.  The Global Human Resource
Development Committee of the International Cooperative Alliance (ICA)
supports programmes throughout the world, as does the International
Labour Organization (ILO) through its COOPNET programme.  Access to
such experienced institutions gives cooperative enterprise,
particularly in disadvantaged communities, significant advantages over
other types of enterprise.

                 3.  Movement-to-movement technical assistance

13.   In addition to training, all forms of business assistance,
managerial guidance, equipment and credit are provided by national
cooperative movements to others in need.  Most specialized bodies of
ICA, and ICA itself through its Development Programme, together with
independent regional cooperative organizations in Latin America,
support cooperative entrepreneurial development.  The Coop Network for
Cooperative Development in Eastern and Central Europe, set up in 1993,
included by the end of 1994 54 national and international cooperative
development institutions.

14.   An example of how individual resourcefulness, made possible by
the adoption of a cooperative form of enterprise, when combined with
cooperative sector support, is capable of transforming the lives of
the least privileged members of society is that of the worker-owned
waste recycling cooperative in Buccaramanga, Colombia.  This was
formed in 1986 with capital equivalent to less than US$ 70 by
marginalized women and men who made precarious livings from picking
saleable waste from the municipal dump.  They set up a cooperative
which, once founded, was helped by business advisers and auditors
provided by the Colombian Cooperative Association (Asociacio'n
Colombiana de Cooperativas (ASCOOP).  The Canadian Cooperative
Association provided credit and skilled technical assistance and
channelled support from community organizations in Canada.  Today, the
cooperative combines the operation of its recycling plant with a
contract to clean the city's streets and operate a restaurant at the
bus terminal.  There are 130 members; the cooperative owns two trucks,
the buildings in which its recycling machinery operates and a day-care
centre for 60 of its members' children.  Members receive average
monthly pay equivalent to between US$ 350 and $420.

              4.  International cooperative-to-cooperative trade

15.   Cooperative enterprises in developing countries have access to
cooperative international business networks and trade assistance
programmes whose goal is to promote their exports and assure them fair
returns.  For example, since 1984, Cooperative Business International
has promoted trade and investment between cooperatives in the United
States and those in developing countries, primarily India, Indonesia
and the Philippines.  Between 1984 and 1994, it generated more than
US$ 150 million in sales and 6,000 jobs.  In 1991, it established the
American Cooperative Enterprise Center in the Czech Republic.

16.   The International Cooperative Alliance, through its regional
offices and its specialized bodies, promotes inter-cooperative trade. 
Its annual Regional Conference of the Americas, held in 1995 in Miami,
United States, was used as an opportunity to foster strategic
alliances between cooperative businesses within the region.  The
International Consumer Cooperatives Organization, a specialized body
of ICA, issued a message to its members on the occasion of Consumer
Day, 15 March 1996, which emphasized solidarity through "fair trade"
programmes.  This approach, already commercially successful, is of
considerable significance, given the high proportions of households in
Europe that are members of consumer-owned wholesale and retail
cooperative enterprises.  ILO supports this movement through its
Interregional Programme for Commercial Exchanges among Cooperatives

         5.  Channelling governmental and intergovernmental assistance

17.   Cooperatively structured community enterprises are an effective
organizational means whereby grass-roots initiative and both public
and private funds can be combined in order to revitalize disadvantaged
communities without creating dependency.  In December 1994, for the
first time, the European Union granted the ICA European Regional
Office funds for the promotion of new cooperative enterprises,
cross-border business between cooperatives and transfer of know-how to
cooperatives in central and eastern Europe.

18.   A total of 27 Governments channel technical assistance through
ICA.  The long-established and continuing cooperative development
programmes of ILO, the Food and Agriculture Organization of the United
Nations (FAO) and the United Nations Centre for Human Settlements
(Habitat) and other United Nations bodies and intergovernmental
organizations, collaborate closely with cooperative development
institutions.  The Committee for the Promotion and Advancement of
Cooperatives harmonizes the programmes of the United Nations, ILO and
FAO with those of ICA, the International Federation of Agricultural
Producers (IFAP), the World Council of Credit Unions (WOCCU) and the
International Union of Food, Agricultural, Hotel, Restaurant,
Catering, Tobacco and Allied Workers Associations (IUF).

          E.  Means for improving the viability of independent small-
              and medium-scale enterprises                           

19.   This type of enterprise derives important benefits from
membership in purchasing, common service and marketing cooperatives. 
In rural areas, they can withstand competition from private for-profit
agro-business, and survive unfavourable market conditions, only
because they combine their purchasing and marketing power by means of
cooperative organization.  This has enabled the continued existence of
a viable family and community-based rural economy in many countries. 
Cooperatives are also highly significant for such enterprises in urban
sectors, ensuring their survival in an extremely competitive market. 
For example, in the United States, almost all independent hardware
retailers are members of cooperative wholesalers - two, Cutter & Co.
(True-Value) and Ace Hardware, being included in the 1994 "Fortune
500" list, with annual revenues in 1994 of US$ 2.6 billion and $2.3
billion, respectively.

            F.  Means of providing an entrepreneurial mode whereby
                other people's organizations are better able to   
                achieve their goals                               

20.   Many new cooperative enterprises are sponsored and initially
supported by broad people's movements such as farmers' organizations,
other self-employed associations, trade unions, women's organizations
and associations formed by the elderly, immigrants or minorities. 
They perceive this form of enterprise as a particularly effective
means of providing their members an organized economic base.  In
Israel, for example, members of the national trade union organization,
Histadrut, which includes 85 per cent of wage-earners, are
simultaneously owners and members of a parallel system of cooperative
business enterprises active in most economic sectors; in aggregate,
they account for 25 per cent of the gross national product.

                G.  Benefits to society of the entrepreneurial
                    dynamism of the cooperative sector        

21.   The cooperatively organized segment of the private business
sector contributes to the public good in a number of ways.  It ensures
that there exists an alternative form of economic organization,
available to both producers and consumers, and to both enterprises and
households, which assures many of the benefits but avoids most of the
costs of both the public sector and that part of the private sector
whose business goals must conform to the criteria of maximizing
profit.  It also ensures a means whereby the associations of civil
society can furnish themselves with an empowering and enabling
economic base.

22.   Cooperative enterprises must maintain financial viability:  their
success in this is proved by their leading status in many sectors. 
However, their business goals attach as much importance to maintaining
stable employment, producing only goods and services that are
appropriate and safe, and supporting long-term sustainability in the
communities in which they operate.  Financial surplus is only a means
whereby such broader goals may be achieved.

23.   Where market fluctuations threaten to put small- and medium-scale
enterprises out of business, cooperative enterprises provide the means
of empowerment and protection.  They strengthen rural societies'
capacity to protect both themselves and their natural environments. 
They afford consumers the means to withstand and eventually overcome
monopolies.  They offer those marginalized by larger economic
processes opportunities for protection, empowerment and equitable


24.   A major factor contributing to the economic success of the
cooperative movement has been the establishment of its own financial
sector.  Controlling their own affordable and relevant financial
services, cooperative enterprises ensure that capital within the
cooperative sector is utilized only to foster the goals of component
enterprises and their individual members; most is continuously
reinvested.  Moreover, a high proportion of new cooperative
enterprises can only obtain capital from financial institutions in
their own movement.  The significance of cooperative financial
enterprise for sustainable entrepreneurial development is acknowledged
in the Copenhagen, Beijing and Istanbul strategies. 4/

              A.  Savings and credit cooperatives (credit unions)

25.   Savings and credit cooperatives, or credit unions, continued to
mobilize local savings and provide credit to members, thereby
encouraging thrift and entrepreneurial activity.  When first started,
credit unions use relatively unsophisticated administrative practices,
so that costs are very small and most interest income from loans may
either be distributed to the members or reinvested in the credit union
within a capitalization programme.  Consequently, they can be set up
in poor communities, where access to means of secure savings and to
credit at non-exploitive terms is of the greatest importance.  These
enable the poor to avoid permanent indebtedness.

26.   At the end of 1994, member organizations of the World Council of
Credit Unions in 87 countries comprised 37,078 credit unions and 88
million members.  In United States dollars, total savings amounted to
378 billion, loans to 418 billion, reserves to 14 billion and assets
to 419 billion.  Percentages of the working age population who are
members of credit unions are already considerable:  100 in Dominica,
to between 30 and 49 in five countries (including 44 in Ireland and 36
in the United States); between 10 and 29 in 16 other countries
(including 30 in Quebec and 22 in other parts of Canada; 21 in
Australia and 13 in France).  In addition, savings and credit
cooperatives belonging to the Raiffeisen movement are of major
importance in Austria, Germany and Switzerland.

27.   Credit unions are of particular importance to women, allowing
them to manage their own financial affairs and to obtain credit for
their own entrepreneurial ventures, and serving as a base from which
women's status in the local community can be questioned and changed. 
Women make up high proportions of membership in some national
movements; at the end of 1992, these were high in Lesotho
(87 per cent), and were between 50 and 61 per cent in Montserrat,
Costa Rica, Seychelles, the Philippines, Japan and Sri Lanka.  The
credit union movement has taken energetic measures during the past
decade to help members overcome discrimination against women.

28.   The mission of WOCCU is to assist members to organize, expand and
improve credit unions as effective instruments for people's economic
and social development.  During 1995, it provided technical assistance
to credit unions in 44 developing and transitional countries,
assisting new credit union movements in Belarus, China, the Czech
Republic, Latvia, Lithuania, Poland, the Russian Federation and
Ukraine.  Initial work is being undertaken in the former Yugoslav
Republic of Macedonia, Romania and Uzbekistan.  In China, the
Agricultural Bank of China is encouraging the independence of rural
credit cooperatives, which operate under its control; there is
considerable interest in their transformation into credit unions.

                             B.  Cooperative banks

29.   Cooperative banks are organizations of and for people, not
capital.  Their central objectives are to improve the economic
position of members, whether individuals or enterprises, denied access
to other banking institutions owing to their inability to offer
sufficiently sound collateral; to facilitate the continual recycling
of cooperative capital into cooperative enterprise; and to attract and
manage capital obtained from outside the cooperative sector for use by
individual cooperatives.

30.   The dimensions already reached by cooperative banks are
considerable.  In Europe, in 1991, they had a membership of 33
million, a total clientele of 60 million, combined assets of ECU 1,100
billion, total deposits of ECU 800 billion, loans of ECU 700 billion
and a staff of 400,000.  Their share of the savings market was about
17 per cent.  In 1994, the market share they held reached 34.3 per
cent in Finland, 31.9 in France, 30.5 in Austria, 25.0 in the
Netherlands and 19.6 in Germany.  Many cooperative banks are the
principal financial institutions of the rural sector and have major
national standing.  In the United States of America, the cooperative
Farm Credit System services more than 500,000 farm and utilities
borrowers.  In 1993, it loaned US$ 54 billion to its members, 25 per
cent of all loans to agriculture.  In many developing countries as
well, cooperative banks play the same key role.  They channel external
funds to individual cooperative enterprises without creating

31.   Cooperative banks of such large dimensions often originated as
small local enterprises in capital-scarce communities.  They have a
similar role today, and are particularly valuable for women.  For
example, their membership in the SEWA Bank in India has enabled 60,000
of the poorest and least privileged women in the Ahmedabad region of
Gujerat to create during the past decade assets now worth the
equivalent of US$ 6.6 million.

32.   The combination of a local community base with national aggregate
financial strength contributes to regional economic balance.  For
example, the Swiss Raiffeisen banking system, the sixth largest system
in the country, whose base consists of individual community-owned
banks covering most rural areas, has a management policy that
emphasizes the use of customer deposits within the economic area of
origin, strengthening the economic independence of local communities,
and thereby community cohesiveness, vitality and self-confidence. 
Cooperative banks also play an important role in reducing
oligopolistic market situations.

33.   Cooperative banks base their commercial success partly on
recycling capital for sustainable cooperative entrepreneurial
expansion, and partly on their ability to attract customers through
their combination of efficiency with ethical principles.  They combine
business viability with belief that commercial organizations should
contribute positively to the communities in which they operate.  For
example, the Co-operative Bank in the United Kingdom of Great Britain
and Northern Ireland adopted an "ethical policy" in 1992, extended in
1994, after extensive consultation with its member customers.  The
policy stated, among other things, that the Bank would not conduct
business with any regime or organization offending against human
rights, manufacturing or selling weapons to oppressive regimes or
manufacturing tobacco products.  It would encourage environmental
responsibility among its business customers and would support "fair
trade".  In 1995, the Bank announced funding of a one million pound
sterling National Centre for Business and Ecology at Salford
University, Manchester, which would advise small- and medium-sized
enterprises on environmental matters.

34.   Established cooperative banks promote and support new banking
enterprises.  For example, the Rabobank Foundation in the Netherlands
supports a project managed by the ICA regional office which promotes
"bottom-up" cooperative banking systems through pilot projects in the
United Republic of Tanzania, with emphasis on women's financial needs. 
The Latin American Confederation of Credit Unions (COLAC) in Panama
has developed the first phase of a regionally integrated cooperative
financial sector.  The International Cooperative Banking Association
promotes cooperation and exchange of information among members,
supports new cooperative banks and undertakes research into subjects
of common interest.  It works for the formation of regional committees
in eastern Europe, North Africa and Western Asia, areas with weak
international cooperative institutions in this as in other sectors.

                     C.  Cooperative insurance enterprises

35.   Affordable and appropriate insurance against risk is essential
both for individual financial security and for entrepreneurial
success.  It protects firms from the impact of events that may damage
their viability, and protects individuals and communities from falling
into conditions of poverty.  This is an area in which cooperative
enterprise plays a role of central importance, but one not yet
sufficiently acknowledged and supported by the intergovernmental

36.   Because households and enterprises are inadequately insured by
public sector programmes and cannot afford products offered by private
for-profit insurers, many have combined, often through their
cooperative organizations, in some cases in combination with trade
unions, to set up cooperative or mutual self-help insurance
enterprises.  In 1994, 26 million families in Europe were insured by
them.  Their combined market share was 8 per cent.  In the United
States, 50 million persons were beneficiaries of policies issued by
cooperative insurance enterprises.  In most developed market
economies, cooperative insurance enterprises have for several decades
played a central role in the maintenance of a viable family- and
community-based rural economy.  In Japan, the national agricultural
and fisheries cooperative organizations, which serve almost all
producers, have set up their own specialist insurance subsidiaries. 
One was, in 1995, the second largest insurance firm in the world, with
assets of US$ 24 billion.

37.   Cooperative insurance enterprises are particularly responsive to
the needs of their member customers.  For example, the Folksam Group,
among others in Sweden, has designed new insurance products to meet
the distinct needs of women.  They are particularly proactive in the
reduction of risk and undertake or fund research into sources of risk
to individuals and enterprises.  They support preventive health
programmes and "healthy living", and have alliances with health and
social care cooperatives.  Moreover, they take a holistic and long-
term approach to the economic situation of their customer-owners,
helping them to foresee and adjust to changing circumstances.

38.   There is a high level of mutual support among national insurance
enterprises.  This allows newer and smaller cooperative insurers to
enter or remain viable within highly competitive markets, and thereby
meet needs unlikely to be met by either investor-controlled or public
insurance sectors.  Cooperative insurers in Japan and Singapore have
supported the establishment of similar enterprises in China and Viet

39.   The International Cooperative and Mutual Insurance Federation
(ICMIF), a specialized body of ICA, supports business structures and
technical assistance among 72 members in 50 countries.  Its
reinsurance service facilitates support for smaller enterprises:  for
example, the Bolivian Cooperativa de Seguros Crucena Ltda is provided
with reinsurance jointly by cooperative insurers in Belgium, Denmark,
Italy, Sweden, the United Kingdom and the United States.  Through its
capital support facility - Allnations Inc. - based in the United
States, ICMIF facilitates development assistance and investment
opportunities.  A new Insurance Intelligence Network identifies gaps
in knowledge, promotes and supervises research and disseminates

40.   Cooperative enterprises in the insurance sector are able to make
unique contributions only because of their special characteristics,
which differentiate them from those whose business goals are to
maximize investor profits.  However, these are insufficiently
acknowledged in legislation and administrative practice, which, except
in France and the Philippines, are applied without distinction to all
insurers, including cooperative enterprises for whom their regulatory
criteria may be inappropriate.  In particular, minimum guarantee
capital requirements are usually set on the basis of international
standards and the "top end" of the market and often exceed
considerably the value of premiums underwritten by a cooperative
enterprise, given that these relate to the needs of members and,
although critical to large numbers of persons, are modest in


                          A.  Health and social care

41.   This is an area of considerable entrepreneurial innovation and
growth within the cooperative movement.  Health insurance is already
offered by 19 of the 72 cooperative insurance enterprises that are
members of ICMIF.  User-owned health cooperatives in 14 countries (of
which 10 are in developing regions) provide a combination of
insurance, service delivery and pharmacy services - with a strong
emphasis on preventive health - to about 39 million members and their
dependants.  In Europe, 30 million persons are owner-members of
cooperative pharmacies, which have an aggregate market share of 10 per

42.   Other user-owned types of cooperatives make large contributions
to health and social well-being.  Retail cooperatives improve
nutrition and operate pharmacies; housing, community development,
utilities, sanitation and cleaning cooperatives assure a healthy
environment; cooperative financial institutions help households
allocate adequate funds to healthy living, especially to shelter;
media cooperatives diffuse information on nutrition and health.  Many
cooperative enterprises give special attention to occupational health
and the reduction of environmental hazards in the communities in which
they operate.

43.   About 13 million persons in 20 countries (of which 12 are in
developing regions) have contracts with health cooperatives owned and
operated by doctors and dentists.  In Brazil, one third of all doctors
are members of the National Confederation of Health-care Cooperatives
(Unimed do Brasil).  Many health and social care facilities, both
cooperative and others, combine to form their own purchasing, common
service and marketing cooperatives.  Labour-contracting and service
cooperatives owned by workers contribute to the effective operation of
health and social care facilities in such areas as ambulance
operation, catering, data processing and accounting.  Worker-owned
production cooperatives supply special equipment.

44.   Health cooperatives often extend their emphasis on prevention and
healthy living to provision of social services, with special emphasis
on the elderly and persons with disabilities.  In many countries,
autonomous social care cooperatives also exist, often owned jointly by
users, providers and interested parties, such as local governments. 
They provide such services as home care, residential institution
operation and special workplaces for persons with disabilities.

45.   In Colombia, Italy, Japan and Malaysia, alliances between
cooperative insurers, health cooperatives, cooperative pharmacies and
major cooperative organizations, acting on behalf of their members,
are initial steps towards setting up a comprehensive cooperative
health sector.  In Brazil the provider-owned system promotes
user-owned health cooperatives.  Some Governments have long worked in
partnership with health cooperatives, notably, in India, Japan and Sri
Lanka.  New partnerships are under way in Benin, Costa Rica and
Malaysia.  Interest is being shown at national and local levels
elsewhere, notably, in Brazil, Canada, Sweden and the United Kingdom.

46.   At the international level, regional meetings of health
cooperatives took place in Sri Lanka in 1994 and Brazil in 1995, and
global meetings took place in Japan in 1992 and the United Kingdom in
1995.  Substantial progress has been made towards setting up an
international health cooperative organization as a specialist body of
ICA.  ICMIF recently established a health group within its Insurance
Intelligence Network.

47.   Intergovernmental bodies are showing interest in the potential
offered by cooperative enterprises; the European Union has
collaborated with the European Committee of Workers' Cooperatives
(CECOP); ILO has begun the pilot phase of a comprehensive programme
for the promotion of social services through social economy
institutions, including cooperatives; the World Health Organization
(WHO) has collaborated with ICA in exploring ways of reducing the risk
of HIV infection by promoting women's fish marketing cooperatives in
Zambia; the United Nations Development Programme (UNDP) and the World
Bank support health cooperatives in Benin; the United Nations
Educational, Scientific and Cultural Organization (UNESCO) has
supported a disabled persons cooperative in El Salvador; and in May
1996, the United Nations completed a global review of cooperative
engagement in health and social care.

                                  B.  Housing

48.   Housing cooperatives are microcosms of the desirable
neighbourhoods and communities whose establishment and protection have
been strongly recommended in recent international conferences.  In his
statement to Habitat II, the President of ICA Housing pointed out that
housing cooperatives had long and successfully addressed the problems
the Conference examined.  Democracy, equity and social responsibility,
identified as goals for Habitat II, had been core values of the
housing cooperative movement since its inception.  Consequently,
Governments were more likely to find inspiration in the housing
cooperative model than in any other option for satisfying needs for

49.   The model offered by the housing cooperative movement is
particularly significant given its wide dimensions and sustained
success in almost all types of human settlement.  For example, those
living in cooperative housing numbered 500,000 individuals in Chile in
1991, and 150,000 households in Switzerland in 1993.  In Europe, in
1994, one person in five lived in housing provided through a member
organization of the European Committee on Social Housing (CECODHAS);
these included, however, not only cooperatives, but mutual and other
associations as well.

50.   Housing cooperatives are important means whereby low-income
households can afford adequate shelter in the inner cities of
developed countries.  For example, in the United States of America,
the United Housing Foundation in New York sponsors 33,000 units of
limited-equity cooperative housing for working families.  The first
such cooperative, Amalgamated Houses in the Bronx, was developed in
1927 with support from a largely immigrant women's trade union, the
Amalgamated Clothing Workers of America.  Of particular significance
has been support for women's needs for secure and supportive
neighbourhoods.  For example, the Cooperative Housing Foundation in
Canada has supported the spread of initiatives taken by a number of
housing cooperatives to declare themselves "domestic violence free
zones".  Numerous housing cooperatives provide home care and health
services to the elderly and to persons with disabilities, and help the
integration of immigrants and other minorities.  They have had a major
impact on the situation of migrants from rural areas who have come to
major cities.

51.   Housing cooperatives play a major role in many developing
countries, particularly in helping informal sector households to
obtain access to land and to key material and equipment, prerequisites
for the application of their own labour and capital.  Members of the
SEWA Bank in India benefit from their Bank's insistence that, since
housing loans are in the name of a woman member, the house itself
should be in her name.  Housing cooperatives have an important role in
the transitional economies; for example in the former Czechoslovakia,
in 1991, there were 1.5 million cooperative apartments. 
Transformation into genuine cooperatives has proved to be an
acceptable means of privatization, although still constrained by legal
and financial considerations.

52.   Considerable international technical and financial assistance is
provided by the housing cooperative movement in developed countries;
for example, for 44 years, the United States Cooperative Housing
Foundation has supported projects in 90 countries, and is currently
active in 30, including major projects in South Africa and Poland. 
CECODHAS and ICA Housing work energetically in support of housing
cooperatives in the transitional economies.

                      V.  COOPERATIVES AND FOOD SECURITY

                              A.  Food production

53.   Cooperative enterprise has a major role in food production.  In
1993-1994, in 47 countries, 180 million persons were members of
330,000 agricultural cooperatives.  About half their total turnover,
equivalent to US$ 455 billion, was achieved in Europe, about a quarter
in Asia and in North America and Latin America combined.  The total
turnover in billions of United States dollars in individual countries
was 89 in Japan (1993), 83 in the United States (1993), 75 in France
(1994) and 51 in Germany (1994).  Percentages of total national
agricultural production for which agricultural cooperatives were
responsible were:  80 in Israel in 1994; 67 in the Czech Republic in
1994; 40 in Canada in 1992; and 30 in France in 1994.

54.   Fisheries cooperatives continued to play an important role in
food production in both developed and developing market economics.  In
Japan, the 350,000 members of such cooperatives were responsible for
97 per cent of total fisheries production and 90 per cent of output
marketed.  In India, in 1995, 956,000 persons were members of fishery
cooperatives.  In Nicaragua, small-scale fisheries cooperatives
accounted for 60 per cent of fishery exports, valued at almost US$ 40

55.   In many developing market economies, cooperative membership is
high; for example, in Co^te d'Ivoire, 827,000 small farmers are
members.  In Nicaragua, 78 per cent of maize and 59 per cent of beans
are cooperatively marketed; in Brazil, shares are high for wheat (64),
pigs (52), cotton (39) and soya beans (30).  In transitional
economies, new cooperatively organized enterprise still contributes a
significant share of food production, and appears to have become a
permanent actor within national economies.  For example, in the Czech
Republic in 1994, new agricultural cooperatives operated on 47 per
cent of cultivated land and were responsible for 67 per cent of
national agricultural production.

56.   Cooperatives support rural societies in many other areas,
including savings and credit; banks and insurance; electricity,
telephone, heating, water and sanitation, health and social care; and
community development.  They make available the essential services,
facilities and amenities without which even commercial success would
not retain the population.

57.   Technical assistance within the cooperative movement is
particularly well developed in agriculture and fisheries.  The
Japanese agricultural movement, in 1974, set up an Institute for the
Development of Agricultural Cooperatives in Asia (IDACA), which now
provides training jointly with the ICA regional office, partly funded
by the Government of Japan.  ICA and its regional offices have
collaborated closely with FAO and ILO in a large number of projects
designed to promote and support rural cooperative enterprises and
their representative organizations, including human resources
development, often addressing in particular women farmers.  IFAP
operates a Worldwide Action for Strengthening Farmers' Organizations.

                             B.  Food distribution

58.   Cooperative wholesale and retail enterprises provide affordable
and appropriate foodstuffs, as well as the household equipment and
information needed to ensure their consumption at maximum nutritional
value, to members and their families, and, in many countries, to the
general public in the areas in which they operate.  For consumers in
general, the cooperative movement has promoted beneficial marketing
innovations, such as unit pricing and nutritional labelling.  It has
contributed significantly to consumer awareness and education.

59.   EURO-COOP was assigned formal responsibility by the European
Union for drafting its directives on foodstuffs, and lobbied
successfully to have a consumer protection section included in the
Treaty of the European Union.  The movement has been able to break
monopolies and cartels, thereby reducing prices and rationalizing
production and distribution.

60.   Dimensions in European developed market economies are
considerable.  In 1994, members of EURO-COOP had 21,367,000 household
members.  In some countries, retail cooperatives account for large
shares of the retail food market:  in Switzerland, more than half; in
Denmark, between 30 and 35 per cent; in Finland, 30 per cent; in
Norway, 25 per cent.  Consumer-owned retail cooperatives collaborate
directly with producer cooperatives, and have set up international
business federations:  for example, NAF, in the Nordic countries, and
INTER-COOP (the International Organization for Consumer Cooperative
Distributive Trade), an ICA specialized organization.  These increase
member influence in the market by joint purchasing, use of common
facilities and services and promotion of trade between members.

61.   In most developing countries, such cooperatives have not achieved
the national dimensions they have in developed countries.  However,
they are important locally, often as part of the services offered by
community development and other multi-functional cooperatives.  In
Singapore, trade unions have set up cooperative supermarket chains.

62.   In the transitional economies, most foodstuffs were formerly
distributed to consumers through systems termed "cooperative",
although in fact they were parastatal agencies.  In some countries
these still function as the principal, if not the only, means for
distribution.  Elsewhere, they have been transformed into smaller but
still significant genuine cooperative distribution systems.  In some
cases, as in Belarus, they have set up associated processing and
marketing cooperatives among independent producers in order to ensure
reliable supplies.  ICA and other cooperative organizations provide
technical assistance programmes designed to promote new retail
cooperatives and to restructure and modernize former "parastatal"

                  C.  Preparations for the World Food Summit

63.   The international cooperative movement recognizes its
responsibilities and potential with respect to world food security. 
At the ICA Centennial Congress, held at Manchester, United Kingdom in
September 1995, member organizations, by adopting the Cooperative
Agenda 21, committed themselves to assure food security while
promoting sustainable agricultural development.

64.   At the World Farmers' Congress, held at Versailles, France in
April 1996 on the occasion of its fiftieth anniversary, IFAP adopted a
Farmers' Strategy for Agricultural Development and World Food
Security.  This policy statement, intended as a contribution by the
world's farmers to the World Food Summit, emphasized that in order to
increase food production while at the same time assuring sustainable
relationships with the natural environment and maintaining stable
rural societies, farmers acting through their own organizations needed
to take a central role.  Full and formal recognition needed to be
accorded farmers' representative organizations and organizations of
farmer-owned cooperatives.


65.   The cooperative sector is able to make a major contribution to
the achievement of the goals of the International Year (1996) and
United Nations Decade (1997-2006) for the Eradication of Poverty.  By
establishing their own cooperatively organized enterprises, the most
diverse groups of individuals afflicted by poverty, or at high risk of
becoming poor, have succeeded throughout the past 150 years and in
almost all countries to alleviate and then to escape from poverty.

66.   The capacity of the cooperative movement for creating viable and
sustainable enterprises secures productive employment and
self-employment, the generation of income and the payment of adequate
wages and salaries.  Financial cooperatives provide the means for
escaping from indebtedness and for effective financial management. 
Their provision of insurance and services for health and social care,
as well as affordable and appropriate housing, and their contribution
to food security are clearly major contributions to the alleviation of

67.   A significant proportion of the world's poor continue to be
small-scale, resource-poor farmers and other rural entrepreneurs in
developing countries.  In the absence of improvement in their
productivity, and the provision of opportunities for marketing with
fair returns, their condition is unlikely to improve, and problems of
unemployment, underemployment, excessive migration, poverty and social
disintegration will not disappear, while food security will be even
further from achievement.  Only by means of a people-centred,
participatory approach will effective transformation of the rural
sector occur; cooperative enterprise is one of the most efficient
organizational vehicles for such transformation in developing regions
- as it has been in the past when similar conditions existed in the
rural economies of currently developed countries.  Individuals and
communities also empower themselves to escape from or to avoid poverty
by setting up cooperatively organized enterprises in the supply of
utilities, transportation, household equipment and clothing.  The
strategies adopted at the three recent international conferences
clearly recognized the important role of cooperative enterprise in
revitalizing rural economies.

68.   Because of the combination of very large membership and economic
weight, cooperative movements are often able to lobby successfully
against macroeconomic processes that create poverty and constrain its
solution, as well as for legislation protective of small- and
medium-sized enterprises, workers and consumers.  They form the
economic base whereby people's organizations such as trade unions and
women's organizations, which themselves seek to eradicate poverty,
gain the economic weight to make their views heard.  Only by these
means are the poor able to exert some influence on national policies
relevant to their condition.


                     A.  International Day of Cooperatives

69.   Observation on the first Saturday of July 1995 of the seventy-
third in a series of International Cooperative Days organized by the
International Cooperative Alliance was enhanced by the complementary
observance for the first time of the United Nations International Day
of Cooperatives, proclaimed by the General Assembly in its resolution
47/90 of 16 December 1992.  Observance took place with the
participation of ministers and representatives of the United Nations,
and in some cases Heads of State or Government.  In Argentina, the
Commission for the Economy and Regional Development of the House of
Deputies held a special session, at which it established a
Subcommittee on Cooperative Affairs.  The Higher Institute of
Agricultural Cooperation in Cairo held a seminar devoted to improving
collaboration between Egyptian cooperatives, ICA and the United
Nations.  Events were widely covered by national and cooperative

70.   The theme chosen by ICA and the United Nations for joint
observance on 6 July 1996 of the seventy-fourth International
Cooperative Day and the second United Nations International Day of
Cooperatives was "Cooperative enterprise - empowerment for
people-centred sustainable development".  It was designed to promote
better understanding of the unique capacity of cooperatively organized
enterprises to create productive employment, eradicate poverty and
enhance social integration.  It was intended thereby to contribute to
the programme of the International Year for the Eradication of
Poverty, 1996.

             B.  Consideration by Governments of the potential of
                 cooperatives to contribute to problem solving   

71.   The recognition by Governments of the special character of the
cooperative movement and the desirability of a successful partnership
between it and the public sector is clearly evidenced within the
commitments made and strategies adopted at recent major international
conferences.  This position has been reiterated at regional
conferences organized by ICA of ministers responsible for policy in
respect of cooperatives.  Partnerships have continued to develop, for
example, in the promotion and support of enterprises in poor or
isolated rural regions, old industrial regions and inner cities.  They
have included transfer of housing, health and social care programmes.

              C.  Review of legal and administrative constraints

72.   Significant changes in relationships between citizens, their
organizations including cooperatives, and the State have continued. 
At the same time, cooperative enterprise is having to make major
adjustments in order to remain competitive.  Consequently, in many
countries, substantially changed legal systems, and, in some, entirely
new ones, are required if cooperatives are to fulfil their potential
for resolving societal problems.

73.   Recent conferences have recognized the importance of appropriate
legal environments. 5/  Many desirable changes have been effected
already.  In central and eastern Europe, revision of cooperative
legislation has been largely completed, although certain anomalies
persist.  The legal environment for credit unions has improved.  In
1994, WOCCU published a Content Guide for Laws Governing Credit
Unions, as an aid to legislators, regulators and credit union leaders
in preparing and seeking approval of laws that would strengthen the
safety and soundness of credit unions.  ICA has set up a legislative
task force to respond to requests for advice and assistance.  ILO has
continued its technical support for legislative reform.  In May 1995,
it held a Meeting of Experts on Cooperative Law.

        D.  Improvement of statistics and dissemination of information

74.   The current situation is similar to that of other issues of
policy interest that have passed progressively from growth of
awareness and interest, to realization that improved statistics are
essential, to initial steps to achieve this, and then to gradual
integration of the issue in regular procedures for collection,
evaluation, analysis and dissemination of statistical information.  In
most countries, the initial phases of review of available data and
design of pilot studies have been reached.

75.   In Germany, as well as in a number of other countries, the
movement is already publishing regular annual series.  Elsewhere,
occasional surveys are published; for example, in 1994, the United
States National Cooperative Bank published a popular survey of
cooperative enterprise.  One of the three regional apex organizations
of cooperatives in Latin America, the Organization of Cooperatives of
America (Organizacio'n de las Cooperativas de America (OCA)) published
in 1995 a comprehensive review of existing statistics, which were
found to be inadequate in most countries.

76.   WOCCU has developed a monitoring and evaluation system for credit
unions in Africa and Latin America and has supported studies in
Guatemala (1992-1993) and the Niger (1995) of the total impact of
credit union activity within national financial markets.  The
Coope'rative federe'e de Que'bec reviewed, evaluated and analysed
available statistics on agricultural cooperatives throughout the
world.  These were found to exist in 47 countries, in 24 of which
substantial data was available.

77.   Comprehensive surveys of the cooperative sector are carried out
regularly by some governmental departments responsible for policy with
respect to cooperatives, such as in Canada and Chile.  FAO has
continued to support the improvement of statistics on agricultural
cooperatives in Latin America in collaboration with regional
cooperative movements and Governments, notably in Colombia and Panama.

                E.  Consideration by international conferences

78.   Member States represented at the World Summit for Social
Development, the Fourth World Conference on Women, and the United
Nations Conference on Human Settlements (Habitat II) responded to the
General Assembly's invitation to give due consideration, in
formulating respective strategies and actions, to the role and
contribution of cooperatives.  For example, they acknowledged the
important role of the cooperative sector and included numerous
references to cooperative enterprises in the commitments made and
strategies adopted.  In the Copenhagen Declaration on Social
Development Heads of State and Government committed themselves to
"utilize and develop fully the potential and contribution of
cooperatives for the attainment of social development goals, in
particular the eradication of poverty, the generation of full and
productive employment, and the enhancement of social integration". 6/ 
In principle VII, adopted by Habitat II, Member States included the
"cooperative sector" among the actors among whom partnerships were
essential for the achievement of sustainable human settlements. 7/


 1/   The following members of the Committee for the Promotion and
Advancement of Cooperatives contributed to the present report: 
International Labour Organization, Food and Agriculture Organization
of the United Nations, International Cooperative Alliance,
International Federation of Agricultural Producers, World Council of
Credit Unions, and International Union of Food, Agricultural, Hotel,
Restaurant, Catering, Tobacco and Allied Workers' Associations.  The
International Cooperative and Mutual Insurance Federation also

 2/   See Report of the World Summit for Social Development,
Copenhagen, 6-12 March 1995 (A/CONF.166/9), chap. I, resolution 1,
annex II, paras. 31, 34, 88 and 91.

 3/   See Report of the Fourth World Conference on Women, Beijing,
4-15 September 1995 (A/CONF.177/20 and Add.1), chap. I, resolution 1,
annex II, paras. 58 (n), 166 (c) and (f), 175 (a) and (c), and 176 (d)
and (e).

 4/   See notes 2 and 3; see also, Report of the United Nations
Conference on Human Settlements (Habitat II), Istanbul, 3-14 June 1996
(A/CONF.165/14), chap. I, resolution 1, annex II, paras. 82 (a), (c),
(d), (e) and (g), 158, 159 and 204 (f) and (q).

 5/   See Report of the World Summit for Social Development ...,
para. 51 (e); see also, Report of the United Nations Conference on
Human Settlements ..., para. 78.

 6/   Report of the World Summit for Social Development ...,
commitment 9, para. (h).

 7/   See Report of the United Nations Conference on Human Settlements
..., para. 33.


                       Statement on Cooperative Identity

At its Centennial Congress, held at Manchester, United Kingdom of Great
Britain and Northern Ireland, in September 1995, the International Cooperative
Alliance adopted a Statement on Cooperative Identity, which included a
revised set of principles intended to guide cooperative organizations
throughout the world at the beginning of the twenty-first century. 
The Statement was based on a philosophical perspective consisting of a
fundamental respect for all human beings and a belief in their
capacity to improve themselves economically and socially through
mutual self-help.  The cooperative movement believes that democratic
procedures applied to economic activities are feasible, desirable and
efficient, and that democratically elected economic organizations make
a contribution to the common good.


A cooperative is an autonomous association of persons united voluntarily to
meet their common economic, social and cultural needs and aspirations
through a jointly owned and democratically controlled enterprise.


Cooperatives are based on the values of self-help, self-responsibility,
democracy, equality, equity and solidarity.  In the tradition of their
founders, cooperative members believe in the ethical values of
honesty, openness, social responsibility and caring for others.


The cooperative principles are guidelines by which cooperatives put their
values into practice.

Principle 1.  Voluntary and open membership.  Cooperatives are voluntary
organizations, open to all persons able to use their services and
willing to accept the responsibilities of membership, without gender,
social, racial, political or religious discrimination.

Principle 2.  Democratic member control.  Cooperatives are democratic
organizations controlled by their members, who participate actively in
setting their policies and making decisions.  Men and women serving as
elected representatives are accountable to the membership.  In primary
cooperatives, members have equal voting rights (one member, one vote)
and cooperatives at other levels are also organized in a democratic

Principle 3.  Members' economic participation.  Members contribute equitably
to, and democratically control, the capital of their cooperative.  At
least part of that capital is usually the common property of the
cooperative.  Members usually receive limited compensation, if any, on
capital subscribed as a condition of membership.  Members allocate
surpluses for any or all of the following purposes:  developing their
cooperative, possibly by setting up reserves, part of which at least
would be indivisible; benefiting members in proportion to their
transactions with the cooperative; and supporting other activities
approved by the membership.

Principle 4.  Autonomy and independence.  Cooperatives are autonomous, self-
help organizations controlled by their members.  If they enter into
agreements with other organizations, including Governments, or raise
capital from external sources, they do so on terms that ensure
democratic control by their members and maintain their cooperative

Principle 5.  Education, training and information.  Cooperatives provide
education and training for their members, elected representatives,
managers and employees so that they can contribute effectively to the
development of their cooperatives.  They inform the general public -
particularly young people and opinion leaders - about the nature and
benefits of cooperation.

Principle 6.  Cooperation among cooperatives.  Cooperatives serve their
most effectively and strengthen the cooperative movement by working
together through local, national, regional and international

Principle 7.  Concern for the community.  Cooperatives work for the
development of their communities through policies approved by their


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