Reflections on Cooperatives, Ambiguity and Governance

Anyone who has had the opportunity to visit India can attest to the fact that this country holds a great capacity to accommodate diversity reflected in the number of states, cultures, history and languages. More importantly, I have observed India’s ability to hold hybrids/combinations – to hold ambiguity.

One example of hybrids that holds significance in India’s rural economic development is the cooperative movement. Cooperatives at their core are organizations owned by and for a group of members (often times being marginalized) to harness the collective bargaining power and protect the financial interests of the community.  The movement has its roots in the early nineteenth century through a Cooperative Society Act in 1904 and was part of the first five-year economic development plan of India specifically for the agriculture and allied sectors1. India has a total of over 8 lakh (0.85 Million)  registered cooperative societies, primarily in the agriculture and banking sectors. Notably, 35% of the sugar production in the country is accounted for through cooperative mills2. Some successful cooperatives in India are Amul, Lijjat Papad and the SEWA movement.

Interestingly, cooperative structures parallel and reflect the grassroots community structures such as self help groups, village level organizations and farmer producer organizations at a larger scale. The key characteristics of cooperative structures are:

  1. Created, owned and managed by groups at the grassroots level i.e farmers, producers, artisans, self-help group women.
  2. Each individual is a shareholder of the organization.
  3. Each individual has the right to vote and each vote has equal weight.
  4. Eliminates middle players in the market and profits directly flow down to the grassroots level.

What I find most admirable about these structures are their governance principles i.e these organizations are built on mutuality, trust, collective decision making and dedication towards a collective objective. I like to think of Cooperatives as hybrids because they often serve a dual purpose – have a business interest and act as an advocacy platform for marginalized communities.

With these hybrid structures comes an inevitable ambiguity, complexity and vulnerability in decision making. The currency of a relational transaction becomes:

  1. Intentional – An understanding of why a specific decision is made and the source of that decision.
  2. Trust – Each individual is faced with a choice between their personal interests versus that of an organization and can (ideally) choose to move towards the organizational goal.
  3. Belief in and commitment to the mutual objective – Each individual has made and continues to make an active choice to engage in the organization and its activities and defining value in their own way i.e for some financial, for some communal and more commonly a combination.
  4. Ownership – Each individual agrees to bear the consequences in profits, losses, and the fluctuations in between.

    AIF Fellow Hamsini Balaji with of 18 self help group women after conducting a focus group discussion to understand the challenges, fears and resource constraints of growing as entrepreneurs.
    AIF Fellow Hamsini Balaji conducted a focus group discussion with 18 self help group women to understand the challenges, fears and resource constraints as entrepreneurs to inform the development of a farmer producer company in Jharkhand. | Picture credits : Author

Due to its grassroots nature and in the absence of a hierarchical structure, it is fascinating how these groups define power and control. The ownership is decentralized and so is decision-making power. The beauty of the structure is that it distributes wealth through the flow of profits to the grassroots level and divests from private ownership. During my focus group discussions with the self-help group women, they pointed out collectively that each of them was able to grow further because of the support of the group and in some cases, these structures proved to be critical in the transition to self-reliance, not just financially, but personally – specifically in family structures that proved unsupportive.

Through my field experiences so far, below are a few reflections that I believe we can all ponder on and apply to our personal relationships and development solutions alike:

    1. Interconnected – The ecosystem is intrinsically connected. Each stakeholder within the cooperative has their own objectives and decision-making process while working towards the same goal. How might we remain connected to the growth goal of the organization while honoring  the growth goals of each stakeholder? 
    2. Originality of Solutions – Each group of women had their own relational dynamics, goals, hopes and fears. The negotiation process to arrive at a consensus and the resulting tug of war can lead to unique solutions. How might we be bold enough to generate solutions unique to each group and their context? 
    3. Aligned Solutions Every aspect (i.e. strategy, operations, marketing) of a cooperative organization has to work in congruence with another to achieve longevity in the mutual objective. How might we align the varied interests of a system to create alignment and  increase sustainability? 

Currently, primary agricultural credit cooperatives alone contribute to 20% of the country’s GDP3 and these structures offer a great opportunity for continued employment and skill building at the grassroots level. As I study these structures, I am reminded and continue to think of what one of my favorite author/activist, Adrienne Maree Brown, so eloquently expresses in her book, Emergent Strategy, beautifully capturing the core of cooperatives:

“There is an art to flocking: staying separate enough not to crowd each other, aligned enough to maintain a shared direction and cohesive enough to always move towards each other.’’

Sources:

1 https://www.kribhco.net/pages/Coorporative/history.html

2 India’s New Ministry of Cooperation – Catalysing the Cooperative Movement. India Brand Equity Foundation. August 2021.

3 https://www.hindustantimes.com/india-news/centre-may-widen-roles-of-cooperatives-to-boost-jobs-101657739032677.html

 

Hamsini is serving as an American India Foundation (AIF) Fellow for the Jharkhand State Livelihood Promotion Society and she will be helping build a social enterprise to brand the products of Self-Help Group (SHG) Members to increase access to larger markets and create sustainable livelihoods. Hamsini values curiosity and community which has led her to the development sector which allows her to apply systems thinking to identify interdisciplinary and cyclical solutions to development challenges. Hamsini’s prior experience has involved serving as a Technical Program Officer and Measurement Advisor for a USAID nutrition, WASH and women’s empowerment program. She holds a Master’s in Social Entrepreneurship from the University of Southern California and has designed and developed two social enterprises during her graduate career.

Personally, Hamsini is exploring what it means to be a woman, the power of women and their ability to organize for social change. Through the Fellowship, she hopes to co-design a solution with rural women and understand the operational and field realities of the development sector. In her free time, she enjoys exercising, spending time in nature, reading and dancing.

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