The Concept of Cooperatives

Shoulder to Shoulder
for Food Security

The Concept of Cooperatives - Shoulder to Shoulder for Food Security
The Concept of Cooperatives - Shoulder to Shoulder for Food Security
Around the world, millions of farmers have strong allies who care about their livelihoods and business success: Agricultural cooperatives provide technical and financial support for their members to meet tomorrow’s food challenges.

In a Brazilian warehouse, hundreds of farmers sit in rows of white chairs. Under a sea of hats, the farmers’ eyes are firmly fixed on a man standing onstage in front of them: The man is José Aroldo Gallassini, CEO of COAMO Agroindustrial Cooperativa, the Brazilian agricultural industry cooperative. He is presenting the most recent research results on new seeds and fertilizers, as well as the latest developments in digital farming. While the farmers in the audience are of different ages and backgrounds, they are united at this moment. They glance at each other and nod, knowing they are a part of an organization that understands their professional needs and shares their excitement at how innovation can contribute to their future success.

This special “Field Day” event has been taking place in different regions of Brazil for more than 25 years. Carried out by COAMO Agroindustrial Cooperativa, the event allows members to “get insights into modern farming innovations,” says Gallassini. More than ever, Brazilian farmers recognize the importance of getting up to date with the latest agricultural innovations to help them better compete in an increasingly competitive global marketplace.

Brazil already plays a central role in world nutrition: According to the Organization for Economic Co-operation and Development (OECD) and the Food and Agriculture Organization of the United Nations (FAO), Brazil is the second largest exporter in the agricultural sector worldwide and the premier global supplier of sugar, orange juice and coffee. But to maintain this position in the future, Brazilian farmers need support. The demand to increase their production level is intensifying. Today, agriculture is the key pillar in Brazil’s national economy. According to the Food and Agriculture Organization (FAO) of the United Nations, the output of Brazilian agriculture has more than doubled in volume in the last two decades, from 1990 to 2013.

1 billion

Around the globe, cooperatives have more than 1 billion members.

Source: Statistical information on the cooperative movement. International Co-operative Alliance

Brazil’s cooperative sector is a central part of farming, consisting of more than 6,500 single cooperatives and more than nine million members. Overall, cooperatives in the Brazilian rural sector help produce more than a third of the national gross domestic product.

After listening to the first part of COAMO’s Field Day event, the farmers move to the field, where further presentations are to take place. As José Aroldo Gallassini points to the large fields, he notes “Field Days provide farmers with an opportunity to observe our latest field trial results and demonstrate how innovation is changing agriculture. Here, farmers can see first-hand how the latest technologies can be used on their own fields with similar soil and climate conditions.” The cooperative’s Field Day provides members an up-close experience to witness innovations, such as new methods for cultivating their soil, or improving fertility – based on the latest research findings. “We also provide our growers with sustainable crop protection solutions against pests, diseases and weeds, to protect crops, such as soybeans,” Gallassini adds. This is important because Brazilian farmers need to help showcase sustainable agricultural methods to a public that is largely disconnected from agriculture. “In Brazil, many people think the farmers’ work is harming the environment,” says Marcos Montans, a farmer from Paraná and member of COAMO. “By investing in enhanced seeds and integrated crop solutions, we’ve managed to achieve record harvests in an environmentally acceptable manner without enlarging our agricultural footprint.”

Transferring Knowledge

One of the guiding principles of cooperatives around the globe is the personal connection they create within their membership. This connection is evident in another Brazilian cooperative, COOPAVEL Cooperative Industrial, which regularly hosts its “Show Rural.” This event focuses on technologies for agriculture and livestock, and brings together farmers and other agricultural business interests. “Show Rural” is deeply tied to the history of Western Paraná and Brazil agribusiness, where for years soybean has reigned as the region’s and the country’s most important crop. The event demonstrates how knowledge-transfer through cooperatives improves the overall agricultural business. “When we started this event, the average soybean yield was around 1,800 kilograms per hectare,” says Dilvo Grolli, CEO of COOPAVEL. “Today, the average yield in Brazil is over 3,000 kilos per hectare.”

Personal contact with their cooperative members continues well-after the Show Rural event. “COOPAVEL’s consultants visit our property to get insights into our daily business,” says Vinicius Formighieri Lazarini, a Brazilian soybean farmer in Paraná and a coop member. In the southern Brazilian state of Paraná, cooperative systems are very strong – and popular: Six cooperatives in this region have more than 30,000 producers. “The consultants give us recommendations of which products to use,” Lazarini adds. “And we benefit from their technical expertise. They advise us on which solution best fits our individual needs. Depending on the size of the farm and the type of technology user – from low-tech smaller operations to high-tech larger ones – the consultants can provide slightly different formulations or concentrations, and a specific product, to match each category of farmer.”

Vinicius Formighieri Lazarini, Brazilian soybean farmer in Paraná

The consultants give us recommendations of which products to use, and we benefit from their technical expertise.

Vinicius Formighieri Lazarini, Brazilian soybean farmer in Paraná

Uniting the Voices

Some 9,000 kilometers away, farming cooperatives are deeply anchored in Europe’s agricultural sector, representing about 60 percent of the region’s processing and marketing of agricultural commodities – and more than half of the supply of inputs. “Probably one of the biggest challenges for European farmers currently relates to market volatility,” says Pekka Pesonen in Brussels, Belgium. Pesonen is the Secretary General of the EU Agricultural Organization COPA-COGECA, which represents the united voice of farmers and their cooperatives in the European Union. “Recent fluctuations of the agricultural commodity markets – and, more specifically, rock-bottom prices for dairy, pork, beef, fruit, vegetables, and cereals – have put an unbearable burden on the farmers’ economic survival.” Some of these developments are linked with wider international political developments unrelated to the agricultural sector, such as the Ukrainian political crisis or oil prices. On top of commodity pricing, farmers have to deal with complex international rules and politics. “In the long term, farmers have to produce more food, of better quality and in a more sustainable way,” Pesonen adds. But to achieve this, they need support, including the best possible scientific tools, which can only come from research, innovation and investment. Members of COPA and COGECA feel that their cooperatives can help provide this much-needed support.

In Western Europe, the cooperative concept was started 150 years ago by German social reformer Friedrich Wilhelm Raiffeisen, in order to support troubled farmers. Today, the concept goes much further: A cooperative is similar to a company pursuing the economic interests of its board members, except that in the case of the cooperative, each farmer is a member of the board. Additionally, it offers services and opportunities to further strengthen the farmers’ businesses. One example of this is the German winegrower’s cooperative Moselland, founded in 1969. Moselland supports their members’ ability to earn a living – at the same time, they have expert consultants who provide on-site support and services, such as grower newsletters. These experts make regular information available to the membership, including pest alerts, by sending out a notification when the next fungal infection is expected – based on disease monitoring or analytics. In turn, the winegrowers can time their crop protection product applications for optimum disease control.

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A paradise of wine crops along the river mosel: New technologies, including disease monitoring, help winegrowers of the mosel region to ease their daily work in the fields.
Henning Seibert, chairman and CEO of Winzergenossenschaft Moselland (Moselland Wine Cooperative)
Henning Seibert, chairman and CEO of Winzergenossenschaft Moselland (Moselland Wine Cooperative)

Henning Seibert

Activities like these support Moselland’s winegrowers by improving their agricultural businesses on a long-term basis. “Depending on the region, winegrowers face different challenges,” says Henning Seibert, chairman and CEO of Winzergenossenschaft Moselland (Moselland Wine Cooperative). “In the Mosel region growers farm on steep slopes, and harvesting is much more complicated than in areas with gentle gradients, where winegrowers can harvest entirely with machines,” he says. Moselland members are encouraged to solve this challenge by producing a more specialized wine – with reduced yields but higher quality.

Planning Security

All of Moselland’s consultants are enologists and have knowledge of modern production methods and technologies. Furthermore, they help reduce the winegrowers’ administrative, logistical and marketing work. “Managing a wine crop is becoming increasingly difficult – especially in terms of EU, country-specific, or federal regulations, such as the new plant protection laws,” says Kurt Kranz, a winegrower and member of Moselland. “The cooperative supports us. We provide the grapes. They do the rest,” he adds. “Thanks to their efforts, we can concentrate on our most important task – wine production. For me, the Moselland cooperative is an honest partner that provides me constant financial support.” Through their participation in the cooperative, growers receive a regular payment made in six installments over twelve months. “This system makes sure I receive a certain amount of money every two months,” Kranz points out. “And this gives me the security I need to plan my production.”

In the Mosel region, growers farm on steep slopes, and harvesting is much more complicated than in areas with gentle gradients.

Henning Seibert, chairman and CEO of Winzergenossenschaft Moselland (Moselland Wine Cooperative)

Agricultural Cooperatives Worldwide

Agricultural cooperatives are the backbone of the world´s nutrition. Worldwide, these member-owned units provide farmers with access to up-to-date farming methods and technologies, and even financial services. Europe holds the largest number, hosting 62 of the world’s top 100 agricultural cooperatives. In comparison, Asia and South America host five each. 
Source: Pricewaterhouse Coopers
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