Supporting cooperatives must for sustainable production, employment

LAHORE: Successful cooperatives in developing countries are the future of work based on sustainable production and employment. However, cooperatives in Pakistan are limited to non-transparently run housing societies, whereas industrial and agricultural cooperatives have failed to deliver.

Indian milk cooperative, Amul has more than three million milk producers, and is a reliable name in milk quality. Its three million members are prospering because of successful and sustainable operations.

In Pakistan, a similar cooperative of farmers launched a milk brand Halla with much fanfare, but it faded out with the passage of time leaving its members in a lurch.

According to the International Labour Organization (ILO), cooperatives were the only “stable” structures present in northern Sri Lanka before, during, and after the conflict. Since 2010, the project has been supporting agriculture and fishery cooperatives by securing fair-trade certification for their products and helping them establish market links.

Our fish cooperative in Karachi is marred by scandals. Pakistan, despite having a healthy reservoir of fish, cannot export seafood because of quality issues that the cooperative was supposed to resolve.

According to ILO, cooperatives create direct market links, benefiting producers and consumers.

“We heard how Kenyan producer cooperatives’ coffee found its way on the shelves of Coop Denmark and how biological pineapples from a Togolese youth cooperative are being sold in retail cooperatives across Italy,” it said in a recent statement published on the International Day of Cooperatives, celebrated on the first Saturday of July each year.

Pakistan had an industrial cooperative under the name of Sohrab. It progressed from producing cycles to motorcycles. In fact Sohrab was the first Pakistani motorcycle brand, and was successful initially. But weak cooperative regulations and absence of vigilance by the cooperative regulator have brought the downfall of this industry.

In 1990s, scores of cooperative banks looted hundreds of billions from their members. The looted money has not yet been fully returned.

The delay in liquidation of confiscated assets resulted in huge increase in properties confiscated. Even after over 300 percent increase in value of confiscated properties, the members could only get back their invested amount after 15-25 years.

This simply shows that the oversight of the regulator on the cooperative banks was very weak. It in fact was a lesson that permission to operate a cooperative should not be allowed if the regulator lacks the capacity to monitor.

It is worth noting that the regulators of cooperatives are from bureaucracy and operate on the same pattern as bureaucrats operate in the country. They are dedicated professionals that are essential to regulate the cooperatives.

Housing cooperatives have also disappointed the residents, as the facilities and civic amenities that are promised to the members are not provided even after decades. The registrars of cooperatives are aware of the deficiencies but look the other way.

They sometimes mortgage residential plots of the society that they promise to release after the completion of development plan approved by the office of the registrar cooperative office. The innocent buyers are sold the mortgaged plot by the cooperative housing societies assuring them that they are totally clear from any claims.

When the construction on that plot is halfway through, the officials of the development authority of the city approach the owner and tell him that the plots are mortgaged with the authority. This is a trick to grab some money from the buyer, who is forced to pay, being in the middle of construction.

The matter of mortgage is dropped after illegal bribe is paid. The development authority or the registrar cooperative should affix notice in the office of the cooperative society about mortgaged plots.

One thing that the members of the cooperative (all plot owners are members of a cooperative) are unaware of is that the liabilities of the society are their combined responsibility.

If a cooperative defaults in its commitment to the state due to incompetence or corruption of office bearers, all the members will have to bear the amount equally.

There is a need to strengthen the cooperative structure in Pakistan as these are gateways to prosperity particularly when they operate in productive sectors. The ILO experts have established that cooperative-to-cooperative trade can help lower the costs of trade, while ensuring fairer prices and better incomes for cooperative members and their communities.

Opportunities exist not only in agricultural supply chains, but also in ready-made garments and other sectors. According to ILO, cooperatives at both ends of the supply chain have been joining forces to shorten value chains, improve product traceability and adopt environmentally-friendly practices.