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The revival of the co-operatives resides in principles
2005-10-26 06:31:23
By Mireny John
Throughout history, humankind has sought to work together to achieve mutual goals, and in many parts of the world, self-help and primitive co-operation were the foundations of society.
Co-operatives have consequently developed within a vast array of belief systems that have greatly influenced co-operators and, co-operators around the world have developed and expressed views of what is good, desirable and worth striving for to improve human living conditions.
Co-operative societies and unions, which evolved naturally in Tanzania from colonial times, until 1976, when the state decided to abolish them, had grown into powerful grassroot organisations, some of them even able to sponsor students to study abroad.
Somehow in 1991, authorities revisited the logic of abolishing co-ops, and decided to reintroduce them by a new Act of Parliament.
Unfortunately, since their resurgence, co-ops have become a total burden to both members, and the government.
Almost all co-ops are heavily indebted to such an extent that the government had to recently intervene by way of paying off their creditors with billions of taxpayers’ money.
For how long could the government have maintained the payment of subsidies to rescue co-ops from total collapse is unclear. Yet, what is threatening our co-ops is well known.
The principles which govern the existence of co-ops worldwide are being flouted openly, at the end treating symptoms instead of the root causes of the rot.
It seems that even with the new Co-op Act, the principle of user-ownership, for instance, isn’t adhered to in the strict meaning of the word.
The government has built, developed and controlled the co-operatives to such an extent that they have become to be considered as public property.
Management has had almost a free hand in making deductions from member’s produce payments and in using the money in the way they have considered best.
Members have remained a mass of largely passive suppliers, whose ownership and autonomy has not been respected adequately.
The user-ownership principle assumes that only the active farmers are the decision-makers in the co-operative.
In practice, however, this has not been the case, a reason why notorious embezzlers of co-op assets go scot-free.
According to the user-control principle, members participate democratically in decision making in their co-operative according to a one-member, one-vote principle.
User-control is important from the democratic control point-of-view.
The main causes of loss of capital in Tanzania’s co-operatives, and hence the need for improved user-control, are in controlling misuse of the society’s funds and members’ right to obtain transparent financial information.
There are two deficiencies in the implementation of the principle of user-control.
Members’ funds of the co-operatives have been abused and mismanaged leading to large financial losses and lost confidence.
There is hardly a single cooperative in Tanzania that had not, at one time or another in its history, had a case of fraud or mismanagement.
Yet there is no evidence of a recent single court case involving fraud of co-operative funds.
The principle of user-control does not extend to the control of the co-operative’s funds because of the lack of transparency.
Management has been able to hide transactions behind accountancy jargon, which has not been understood by any member, delay disclosure and inhibit information flow by providing only verbal reporting.
Worst of all, a vital group of users does not have ownership or control in the matters related to the governance of the co-operative society.
Women are recognised to be the main suppliers of produce to the co-operatives.
It is also true that that women have priorities, interests and aspirations that are often different from the male-users of co-operatives.
Yet women are left out of the decision-making process in the organisations, which rely for their growth and success on the active participation of its suppliers.
Women cannot influence the development of the co-operatives.
The main argument for excluding women is that only men can own land and should be members.
This takes away the legitimate right of active female suppliers to participate in co-operative decision-making.
There is a consensus that women are more trustworthy than men are in financial affairs.
Promotion of women’s rights would give a more democratic, future-oriented and perhaps also a more trustworthy image to the management.
Good transparency will allow members’ control, which will improve trust and image of the co-operatives, and hence lead to a better environment for capital formation.
At the moment, management is considered to be too powerful to allow them to ignore members’ needs to control the co-operatives.
It seems as if the policy in criminal fraud cases was not to prosecute guilty parties, but to let time heel the wounds.
This policy allowed mismanagement and fraud of ’the public cooperative funds’ without punishment, which lead not only to loss of significant amounts of capital, but to the loss of credibility of the co-operatives in safeguarding members’ funds.
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