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Development of the Co-operative


Historical Overview

The Co-operative Movement in Jamaica, like in most developing countries, had its origin in the peasantry. Its growth and development can be traced back to emancipation (1838) to the present time, spanning a period of over 160 years.

The informal Co-operative efforts, which characterized the period 1840 - 1938, had some modicum of success; roads, schools and churches were constructed. Farmers benefited from group action in their agricultural pursuits, and most importantly, a keen sense of fraternity developed which augured well for future efforts. This was the foundation on which the more formal co-operative development of the period 1938 to the present time was built, and which saw the formation of Co-operative organizations and the enactment of Co-operative legislation.

In Jamaica there is a great need for improving the economic and social conditions of the masses through self-help. The Co-operative Movement, which builds confidence and enhances the dignity of people, and therefore the nation, is one of the vehicles used for achieving this improvement.

To date, although the Movement has not achieved all it had hoped, a good deal has been done to effect social and economic changes within the Jamaican society.

The Role of Co-operatives in Social & Economic Development, Particularly in Rural Areas

Traditionally, Jamaica's economy has had an agricultural bias. It was not surprising, therefore, that during the post war period, developmental strategies were centered in the rural areas. Two major problems faced the agricultural community: the acquisition of agricultural equipment, seeds and fertilizers on one hand, and its inability to market its produce on the other. Invariably production was low.

Agricultural Co-operatives developed from these areas of need. Farmers were then able to procure their farming requisites and market much of their crops through these organizations. In addition, the introduction of modern farming techniques was possible through the Co-operatives.

As a result, the standard of living of the rural communities increased. More persons could send their children to school. The hut-like habitats of the poorer folks were improved, and farmers now had the ability to save portions of their earnings in the Credit Co-operatives that were rapidly developing at the time. The way was now open for agricultural Co-operatives to further enhance the efforts of the peasantry.

Today, more than 100,000 persons are members of 39 Agricultural Co-operatives, most of which are in the rural areas. Efforts at increasing the range of services to their members are continuing. The emergence of thrift and credit societies opened new avenues, not only for farming communities, but for the rest of the rural population as well. Several persons went into small consumer businesses, whilst others begun small-scale industries.

More land was brought into production. The burden was taken from the government health care system as more persons could afford, through inexpensive loans, medical expenses of private physicians. The nutrition of the peasantry improved. The availability of capital opened new avenues of employment and developed creativity in our people. It is true to say that, among other things, the thrift and credit societies assisted in stemming the urban drift which threatened to place additional pressure on the slum areas of the city. Of significance too, is the fact that, the commercial banking system relaxed its stringent loan policy towards Co-operatives in the face of the growing thrift and credit societies.

Co-operatives have been playing and are expected to continue to play a major role in the social and economic development of the nation, and rural communities in the following areas:

However, Government and Political Representatives must ensure that the appropriate business environment, legislation and infrastructural framework are created to facilitate the successful establishment and development of Co-operatives.

Participation of Peasants including Landless Peasants as well as Women and Youth in Co-operatives

Peasants in Co-operatives

Like other developing countries, Jamaica has a very large percentage of small farmers on plots of 1-5 acres of land. These make up the bulk of rural farming communities. These small farmers have no choice but to organise themselves into Co-operatives in order to survive.

In Jamaica, agriculture contributes greatly to the Gross Domestic Product (G.D.P.); it is the 3rd greatest contributor to G.D.P. and its contribution follows closely to that of tourism and bauxite. Above all, agriculture is the largest employer of labour and provides a livelihood for approximately 200,000 persons. It follows, therefore, that the Co-operative Movement in Jamaica has a strong agricultural base. Two main types of Agricultural Co-operatives were established: :

Collective Production Co-operative

This type of organization began in l950 and consisted mostly of landless farmers who were assisted by Government to farm the land on a Co-operative basis. Later, Land Lease Projects were set up in different parts of Jamaica. The objectives of these Land Lease Projects were primarily to settle landless small farmers on the land, to alleviate unemployment and to boost productivity.

Individual Production Co-operative

The development of this type of Co-operative organization emerged, and was seen to be more successful than the collective production. It was found that Jamaican farmers are individualistic by nature, and produce more individually on their small plots than farming collectively.

Women in Co-Operatives

The active participation of Women in co-operatives began during the seventies, as prior to this period, women were only members of Co-operatives, but they did not take any active part in Co-operative organization. A Women's Bureau was established to deal specifically with women's affairs and its objectives were:

With these objectives in mind, the Bureau, together with the Department of Co-operatives and Friendly Societies carried out a series of training sessions in Co-operative Principles and Practices involving a large number of women. Co-operative Projects were then identified and promoted, and women played an active role in the development of Co-operative ventures, such as the Women's Woodwork and Welding Pre-Co-operative Groups, the Women’s Bankra and the St. Peter Claver Women’s Housing Co-operative.

Youth in Co-operatives

The emergence and participation of Youth in Co-operatives took place also during the period of the seventies when the State established Pioneer Farms on idle or unutilized lands all over Jamaica. The objectives of these Pioneer Farms were to:

These farms consisted of Youth between the ages of l6-25, selected mainly from depressed areas engaged in farming on a collective basis. In the past Co-operative Education has also been introduced in Vocation, Youth and 4H Centres, but apart from the Pioneer Farms and the teaching of Co-operatives in Youth Training Centres, no concentrated effort had been made in involving the Youths in Co-operatives, and one will find that the majority of Co-operative members today are in the average age group of 30 to 60 years, although Co-operative membership is open to persons of sixteen (16) years of age.

Nevertheless, presently there is a move a foot to make Co-operatives a subject for the Curriculum in schools, and it is hoped that when this comes about more youths will be attracted to join the Co-operative Movement. A pilot project is being developed by the Department of Co-operatives & Friendly Societies with selected primary and secondary schools. The College of Agriculture, Science and Education (CASE) was also targeted for the establishment of a Co-operative venture.

Another method being pursued by the Department is the introduction of a Co-operative Essay Competition in the High Schools though Jamaica. To date the Credit Unions within Jamaica and the Caribbean Region have been supporting the effort though sponsorship. Winning Students have visited Trinidad and Tobago and St. Lucia, courtesy of Air Jamaica and BWIA. Other corporate sponsors are Nestle Jamaica; Interlinc Communications.

Ability of Co-Operatives to Increase Material Welfare

There is no doubt that Co-operatives not only in Jamaica, but in other parts of the world, have played important roles in increasing the material welfare of their members. Material welfare as it relates to living standards and total development of the individual is the yardstick for measuring social progress, and Co-operatives have certainly contributed to this process of growth and development.

Several Third World Countries, including Jamaica, saw Co-operatives as a vehicle for social transformation, and used them to this end.

Through co-operatives many small farmers and fishermen have been able to earn a decent livelihood for their families and themselves. They have been able to sell their produce, obtain credit, as well as other inputs necessary for their well being.

Co-operative organizations have been providing ready market for other crops, and with ready cash they are able to purchase homes, and other household items, thus improving their standard of living. Successful Co-operatives have been paying handsome dividends and patronage refunds to their members, thus encouraging them to trade with the Co-operative at all times.

The Credit Unions in Jamaica have contributed greatly to material welfare, in that the small saver has been able to save and borrow at reasonable rates of interest, and to use his money to purchase homes, land and other personal effects. Presently, there are 50 Credit Unions in Jamaica.

Inter Relationship Between Agrarian Reform & Agricultural Co-Operatives

Jamaica, like many developing countries, inherited a very bad system of land distribution, and as a consequence of this, they had to implement Agrarian Reform. As a former British Colony, Jamaica’s system of land tenure was skewed in favour of plantocracy who occupied all the fertile lands on the plains, whilst the small farmers had to eke out a living from the, almost barren hillsides, which they occupied.

This system of land tenure created tension and unrest amongst small farmers, who were hungry for lands. Shortly after Independence in 1962, the State set up the Land Utilization Commission, to monitor the use of idle lands, and to implement the Agrarian Reform.

Thousands of acres of idle lands were brought into production, and Agriculture once again became the leading contributor to the Gross Domestic Product. The Government later acquired several large properties, and these were allotted to small farmers on a freehold basis.

In the period l972-8O, the Agrarian Reform gained momentum. It was during this period that project Land Lease was introduced and several thousand acres of land were allotted on a leasehold basis to small farmers. Under this programme there were two (2) types of Land Lease Projects:

The Collective Land Project was that in which the farmers worked on a collective basis on the property allotted to them. Whilst on the Individual Land Lease Projects the farmers were given their own plots of land on which to farm.

In 1978 under the aegis of the Ministry of Agriculture more properties were acquired for allocation to the small farmers. It was during this period that Pioneer Farms were introduced and more available land put into production. Jamaica's Agrarian Reform helped to make the small farmers self-sufficient, and organized them into Co-operative ventures.

Both the Land Lease Project and the Pioneer Farms were products of the State’s Land Reform Policy, and as such there was inter-relationship between Agrarian Reform and Co-operatives. Consequently the Department of Co-operatives carried out a series of training and development programmes on these Projects, with a view to effecting this policy and broaden the knowledge of said farmers on the subject of Co-operation and Co-operative.

During the years 1974 – 80 the Department’s Officers worked assiduously to set up agricultural Co-operatives on these Projects, but the shortage of staff hindered the process.

Barriers to Establishing, Managing & Maintaining Successful

In establishing and developing Co-operatives, many countries, especially developing countries, experienced many and varied difficulties. Some of these are as follows:

1. Lack of Proper Management

Committee Level

One of the major setbacks in establishing Co-operatives is the lack of suitable management. In most developing countries leadership and managerial skills are not easily available and the Co-operative Movement is no exception. For a Co-operative to succeed it is important that proper leadership be identified from its inception. It is the quality of leadership that is displayed at the Committee or Board level, which determines the success or failure of the Co-operative. If suitable leadership can be identified from amongst the membership then there could be hope for the establishment of a successful Co-operative.

In Jamaica, the lack of proper leadership, especially amongst Agricultural Co-operatives is among the principal reasons for their failures. It is sometimes very difficult to identify leaders at the grass-root level, and even if this is done, one will find that the same set of people dominate the rank and file membership, and are returned to office year after year. This is not good for the Co-operative, owing to the fact that it is a democratic institution, and a change of leadership, is essential from time to time. To overcome the problem of leadership in the Jamaican context, the Department of Co-operatives and Friendly Societies through its Development Section carries out a period of training for all Pre-Co-operative members and during this training, potential leaders are identified and also trained to run the affairs of the business.

Training, therefore, is a continuous process, and by so doing members are geared to take over leadership roles in their Co-operatives, and as such are able to run their business successfully.

Administrative Level

Over the years Co-operatives have been under-capitalized. Consequently, these organizations cannot afford the employment of suitably qualified managers and technical personnel with the result that their operations lack professionalism and forward planning. Routine functions of accounting, purchasing, etc., are left to unqualified persons.

Few meaningful budgets are prepared. Therefore, invariably, the Co-operative will continue as small-scale enterprises. In response to this need the Department of Co-operatives has embarked on a number of training to better equip persons in these areas critical to the co-operative's development. Formal courses have been held as well as on the job training. In addition, technical assistance were sought and obtained in the form of experts, scholarships and training aid from the United Kingdom, the ILO/DANIDA, the Organization of American States (OAS), Israel, Hungary, the former USSR and the United States of America. Most of that assistance has been directed towards raising the level of management skills in Co-operative Principles. However, there is still much more to be done.

2. Lack of Adequate Financing

Traditionally, Co-operatives have developed around persons of limited means who lacked the financial strength to adequately capitalize their organizations. Until recent years, the commercial banking sector had no faith in the Co-operative Movement, and credit from this sector to Co-operatives was virtually impossible. Government provided only minimal assistance through its lending agencies.

As a consequence, only the Credit Union sector of the Movement developed in any significant manner; mainly because of the constant capital injection resulting from the relationship between personal loans and share capital held. The positive effects of the constant capitalization in this sector are easily seen through efficient management, expanding operations and increased services.

On the other hand Co-operatives without this self-financing feature remained at low operational levels. Members were not attracted to these societies whose services were poor and haphazard. Member participation waned in the face of poor record keeping, delayed audits and Annual Meetings, all of which stemmed from the basic problem of inadequate financing.

In addressing this problem, the Department has been encouraging increased savings from Co-operative members through seminars and training courses. Additionally, Committees of Management are advised to charge minimal cess payments for goods and services provided to members, which will in time build capital contributions. The Credit Union sector too, is being encouraged to provide soft loans to weaker societies.

3. Poor Co-operative Integration

Co-operatives developed in isolation of each other. In addition, this inability of some Co-operative Federation and the APEX body to galvanise the Producers and Services Co-operatives into efficient and effective business entities has retarded the development of the Movement. As a result the stronger societies were not willing to help the weak, and the latter were left to the mercy of the private sector to seek finance at exorbitant interest rates and harsh terms of repayment. The Department being cognizant of this factor is working with the Movement to facilitate this facet of the Co-operative Principles and in the resuscitation of the Federations.

4. Government’s Policy

Co-operative Legislation and the Department of Co-operatives have been put in place since 1950. New Regulations are being developed for Credit Unions to be placed under the monitoring authority of the Bank of Jamaica. Consequently the revision of the Co-operative Societies Act & Regulations has been delayed, pending the completion of the Bank of Jamaica Regulations for Credit Unions.

The role of the Department has also been expanded to include Promotion and Development of Co-operatives, Education and Training of Members and Research into the factors affecting Co-operative Development.

Under the Law, Co-operative Societies are exempt from Stamp Duty and Income Tax, and provision is made for inexpensive methods of settling disputes. In all other respects Co-operatives have to compete with the other sectors of the economy. Consequently efforts are being made to concentrate on developing viable and efficient Co-operative enterprises capable of holding their own in the competitive global environment. This is consistent with ILO member states approach regarding promotion of Co-operatives.

5. Resistance to change

In the early stages of Co-operative development a number of small societies were fostered. With the growth and development of businesses in the private sector these small societies have proven uneconomical. The Department has encouraged Amalgamation of these small societies to ensure viability in the dynamic global Market. In spite of the obvious benefits to be derived, members of Committees were reluctant to agree to Amalgamation, as they were anxious to preserve the independence of their own Co-operatives and their social status gained through their organizations. As a result of delaying the Amalgamation process valuable time was lost and some societies have been forced out of existence.

The Department had considerable success with the Credit Union sector of the Movement in this area of change as the Jamaica Co-operatives Credit Union League (JCCUL) and the Credit Union Managers saw the need for collaboration and in most instances embrace the idea. However, the response has not been as good with the Agricultural Sector, and this has adversely affected the growth of these societies. Efforts are still continuing to have Agricultural Co-operatives amalgamated in collaboration with several agencies involved with their development.

6. Illiteracy

In order to reduce the high rate of illiteracy, the Government of Jamaica established a National Literacy Board, which later became the JAMAL Foundation. It was estimated that there were about ½ million persons in Jamaica who could not read or write, or whose level of literacy was very low. Classes were therefore set up throughout the island, and both voluntary and paid staff were employed to implement and maintain the programme.

Since the inception of the JAMAL Foundation, thousands of persons, young and old have benefited from it and illiteracy seems to be on the decline. Despite this, however, Co-operatives face the problem of dealing with small farmers and peasants whose level of literacy is still low, and as such run into problems at the outset. In promoting Co-operatives especially Agricultural Co-operatives in the rural areas, the problem of illiteracy still has to be overcome.

The low level of literacy amongst farmers, fishermen and other categories of rural folk usually frustrate the effort for Co-operative development. Nevertheless, efforts to alleviate illiteracy continues.

7. Lack Of Training Facilities

Training, undoubtedly, holds the key to further and future development of the Co-operative Movement. Jamaica, as a developing country is hard-pressed to find the required resources, which would enable the establishment of meaningful on-going training programmes.

Above all there is no training institution through which the limited number of courses can be held. This has severely affected the regularity, quality and effectiveness of the training offered by the Department of Co-operatives. Smaller number of participants has had to be considered for courses at the convenience of the owners of the Training Centers. Long range planning is therefore challenging.

Notwithstanding, the Department has been working and continues to work within the limitations; and proceeds with training courses in the field, on the job and in available classroom space. In the past members of Co-operative staff were offered scholarships through technical assistance programmes to Holland, Israel, Hungary, Britain and the United States. The opening of Eastern Europe has resulted in a significant shift of foreign aid assistance from the Developing Countries to that region, thereby resulting in fewer scholarships for the Co-operative Movement.

This, clearly, is not sufficient. However, efforts are still being made to acquire proper facilities of our own and to ensure that appropriate training are given to personnel within the Co-operative Movement.

registrar of D.C.F.S

The Department of Co-operatives and Friendly Societies (DCFS), an agency within the Ministry of Industry, Commerce, Agriculture and fisheries, continues its relentless pursuit of social equity and unity of purpose, which embrace the core values of decency, civility and co-operation. Read more...