Unity is strength; where there is teamwork and collaboration, wonderful things can be achieved (Mattie J.T. Stepane). It is not mendacious that alone, we can achieve so little but together, we can do so much. Collaborative efforts and teamwork have over the years been a trump card for many successive ventures.
Arla Foods was formed as a result of a merger between the Swedish dairy company, Arla and the Danish dairy company, MD Foods on 17th April, 2000. Arla is owned by over 9,700 farmers. All the benefits from the sale of Arla’s products go back to the over 9,700 farmers. The owners of Arla Foods live in about 7 countries in Northern Europe and they share the earnings equally on each litre of milk delivered to Arla. In 2021, Arla Foods was ranked the 5th best company in the world’s diary industry, according to the Global Nutrition Index. Arla Foods is evidence of a strong merger between farmers in the rural areas of two great Scandinavian countries. The beauty of this cooperative is that the farmers own and control the entire value chain right from production to finished products.
Another strong case of an agricultural cooperative is the story of Lantmannen, an agricultural cooperative based in Sweden. The company, which was established in 2001, is co-owned by over 19,000 farmers, and employs over 10,000 employees in 20 countries. Lantmannen is the owner of the AXA brand and makes over €4.5billion in turnover annually. The company and its owners own several acres of farmlands and machines which are deployed in production of products ranging from wheat to bakery. As a result of the strong alliance formed by the cooperating farmers, huge capital in terms of finances and machinery is generated to fuel the operational activities of the cooperative. Just like the Arla story, the farmers, factory hands and all stakeholders get to benefit from income generated from the entire value chain. The raw wheat churned out by the farmers are converted into flour and subsequently baked into bread and other bakery products, ensuring that there is income generated across the entire value chain.
The Mondragon Corporation is another success story of a corporation and federation of worker cooperatives based in the Basque region of Spain. Mondragon was founded in the town of Mondragon in 1956 by José María Arizmendiarrieta and a group of his students at a technical college he founded. Today, Mondragon is the largest cooperative in the world. It umbrellas 261 companies in four areas: Industry, Retail, Finance and Knowledge. At Mondragon, the employees own and manage the company by themselves instead of being owned and controlled by shareholders. In addition to co-determination at all levels, it is the lived solidarity that has made Mondragon so successful. The Mondragon Corporation is a quintessential example of how to harness the power of cooperatives. The cooperative relies on its strong finance alliance to support the activities and businesses of its members. In addition, members get to tap into the rich repository of knowledge of the cooperative.
From the success stories of the aforementioned great cooperatives, it is very obtrusive the power that cooperative bodies wield. A formidable cooperative that hinges on teamwork and partnership transcends a lot of areas of an economy. Cooperatives do not only seek the interest of its members, but also create employment opportunities for its members and non-members alike.
The cooperative credit union is a clear area where the power of cooperatives has permeated. These credit unions serve as an avenue where members of mutual interest can access finance personally or as businesses. These cooperative credit unions hinge on the ideology that registered members who contribute savings can request for loans at agreed interest rates. Cooperative credit unions have gone a long way to solve the financial constraints of some sole proprietorships on the condition that they are registered members. There are a lot of cooperative credit unions in Ghana working under the umbrella of the Ghana Cooperative Credit Unions Association (CUA).
The idea of cooperatives should not be limited to the area of access to finance. The General Agricultural Workers Union (GAWU) is carving a path for cooperatives in agriculture in Ghana. However, the potential of GAWU hasn’t been utilised to its full potential. GAWU can learn from impactful agricultural cooperatives such as Arla, Lantmannen and Mondragon Corporation. GAWU should not only seek for better prices, as well as working conditions for its members, but they should think of creative ways to reap more revenue from each agricultural value chain.
The agricultural sector in Ghana has been bedevilled by sporadic fluctuations in prices, making the sector less attractive to prospective investors. Agriculture used to be the leading sector of the economy, but is now trailing the industry and service sector in terms of contribution to Gross Domestic Products (GDP). Adding more value to the raw materials the country exports can be a game-changer for the economy. GAWU can make the agricultural sector regain its place as the number one sector of the economy by developing the agriculture value chain.
The first step toward revamping the agriculture sector is the formation of agriculture credit unions. No agriculture credit union exists in the country, according to our search. Forming a mutual credit union for the agriculture sector will promote the financial welfare of the members and lift the burden placed on the Agriculture Development Bank (ADB) and the newly constituted Development Bank of Ghana (DBG) with regards to finance creation. Members can save as a group, and request for loans from the cooperative union at moderate rates. In addition to establishing a credit union, GAWU can negotiate for better prices by adding value to their products. It is high time farmers put an end to the sale and export of raw farm produce. Establishing cooperatives across the agriculture value chain can solve this age-long conundrum.
Cooperatives have demonstrated the essence of partnership and teamwork. Working together toward one common goal has many benefits. We should not only focus on harnessing the financial benefits of cooperatives; but most importantly, explore the benefits of cooperatives along both the vertical and horizontal value chains.
Patrick ([email protected]) and Linda([email protected]) are with Investment Associates, Ghana Tech Lab
