The Role Of Secondary Co-operatives

pic11.jpegIn haiti, 19 us-based electric co-operatives and 37 volunteer linemen worked with the National rural electric Co-operative Association (NreCA) International to help build haiti's first electric co-operative. the possibilities are now endless for three towns in the southwestern region of the country, because a better life starts with power.

In today's globalised markets and complex supply chains, it is essential that co-operatives in all sectors work together to maximise the co-operative advantage. It is particularly desirable that smallholder farmers not only work together to set up primary/village level co-operatives, but that these co-operatives work together through secondary co-operatives to secure better market access, marketing and storage facilities. the creation of secondary and apex organisations is a helpful way to build strong producer organisations.

Secondary co-operatives, which are co-operatives whose members are primary co-operatives in a particular business sector, have long established associations, federations, and apex organisations to enable co-operatives to speak with one voice. Secondary co-operatives act as advocates on behalf of and in defence of co-operatives in their dealings with governments and regulators, as a place to share knowledge and resources, and to support co-operatives independently and collectively. Through such organisations producers are able to increase their negotiating power in policy-making processes at local, regional and national levels.

The UN's food and Agriculture organisation (fAo) is clear about the advantages of farming co-operatives creating and working through secondary co-operatives. It says:

"Through the device of federation, co-operatives are able to organize very large-scale business operations at the national - or even international - level without detriment to the democratic control of the primary co-operatives by their own members. the secondary co-operative can, because of its larger volume of business or its wider representational base, undertake functions, provide services, and make representations which would be beyond the capacity of all but the very largest primary co-operatives. Secondary co-operatives are a form of vertical integration providing the opportunity for economies of scale, scope for development and improved administration." 1

Forming secondary co-operatives to provide services is also a beneficial application of this 6th Principle in other co-operative business sectors. In many countries housing co-operatives have formed secondary co-operatives to provide professional management support, construction and building maintenance services, education and training services, and governance advice. Credit unions too have formed secondary service co-operatives to achieve the economies of scale to-operate efficient and integrated It systems that are now needed for the delivery of financial services. Local consumer co-operatives form secondary co-operatives too for wholesaling and joint bulk-purchasing and have created joint ventures to enhance combined purchasing power and production units across national boundaries.