What is a co-operative?

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A co-operative is an autonomous association of persons united voluntarily to meet their common

economic, social, and cultural needs and aspirations through a jointly owned and democratically-
controlled enterprise.

Co-operatives are businesses owned and run by and for their members. Whether the members are
the customers, employees or residents they have an equal say in what the business does and a
share in the profits.

As businesses driven by values not just profit, co-operatives share internationally agreed
principles and act together to build a better world through co-operation.

The International Co-operative Alliance is an independent, non-governmental organisation

established in 1895 to unite, represent and serve co-operatives worldwide. The Alliance
provides a global voice and forum for knowledge, expertise and co-ordinated action for and
about co-operatives.
In 1995, the Alliance adopted the revised Statement on the Co-operative Identity which contains
the definition of a co-operative, the values of co-operatives, and the seven co-operative
principles as described below.

Co-operative values
Co-operatives are based on the values of self-help, self-responsibility, democracy, equality,
equity and solidarity. In the tradition of their founders, co-operative members believe in the
ethical values of honesty, openness, social responsibility and caring for others.

Co-operative Principles
The co-operative principles are guidelines by which co-operatives put their values into practice.

1. Voluntary and Open Membership

Co-operatives are voluntary organisations, open to all persons able to use their services and
willing to accept the responsibilities of membership, without gender, social, racial, political or
religious discrimination.

2. Democratic Member Control

Co-operatives are democratic organisations controlled by their members, who actively

participate in setting their policies and making decisions. Men and women serving as elected
representatives are accountable to the membership. In primary co-operatives members have
equal voting rights (one member, one vote) and co-operatives at other levels are also organised in
a democratic manner.

3. Member Economic Participation

Members contribute equitably to, and democratically control, the capital of their co-operative. At
least part of that capital is usually the common property of the co-operative. Members usually
receive limited compensation, if any, on capital subscribed as a condition of membership.
Members allocate surpluses for any or all of the following purposes: developing their co-
operative, possibly by setting up reserves, part of which at least would be indivisible; benefiting
members in proportion to their transactions with the co-operative; and supporting other activities
approved by the membership.

4. Autonomy and Independence

Co-operatives are autonomous, self-help organisations controlled by their members. If they enter
into agreements with other organisations, including governments, or raise capital from external
sources, they do so on terms that ensure democratic control by their members and maintain their
co-operative autonomy.
5. Education, Training and Information

Co-operatives provide education and training for their members, elected representatives,
managers, and employees so they can contribute effectively to the development of their co-
operatives. They inform the general public - particularly young people and opinion leaders -
about the nature and benefits of co-operation.

6. Co-operation among Co-operatives

Co-operatives serve their members most effectively and strengthen the co-operative movement
by working together through local, national, regional and international structures.

7. Concern for Community

Co-operatives work for the sustainable development of their communities through policies
approved by their members.

History of the co-operative movement

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In 1844 the Rochdale Pioneers founded the modern Co-operative Movement in Lancashire,
England, to provide an affordable alternative to poor-quality and adulterated food and provisions,
using any surplus to benefit the community. Since then, the co-operative movement has
flourished, extending across the globe and encompassing all sectors of economy.

The beginning of the modern co-operative movement

The earliest record of a co-operative comes from Fenwick, Scotland where, in March 14, 1761,
in a barely furnished cottage local weavers manhandled a sack of oatmeal into John Walker's
whitewashed front room and began selling the contents at a discount, forming the Fenwick
Weavers' Society.

There are a plethera of records of co-operatives started out as small grassroots organisations in
Western Europe, North America and Japan in the middle of the nineteenth century, however, it is
the Rochdale Pioneers that are generally regarded as the prototype of the modern co-operative
society and the founders of the Co-operative Movement in 1844.
The Rochdale Pioneers are regarded as the prototype of the modern co-operative society and the
founders of the Co-operative Movement.

The Rochdale Pioneers

In 1844 a group of 28 artisans working in the cotton mills in the town of Rochdale, in the north
of England established the first modern co-operative business, the Rochdale Equitable Pioneers
Society. The weavers faced miserable working conditions and low wages, and they could not
afford the high prices of food and household goods. They decided that by pooling their scarce
resources and working together they could access basic goods at a lower price. Initially, there
were only four items for sale: flour, oatmeal, sugar and butter.

The Pioneers decided it was time shoppers were treated with honesty, openness and respect, that
they should be able to share in the profits that their custom contributed to and that they should
have a democratic right to have a say in the business. Every customer of the shop became a
member and so had a true stake in the business. At first the co-op was open for only two nights a
week, but within three months, business had grown so much that it was open five days a week.

An independently formulated co-operative model developed in Germany by Friedrich Wilhelm

Raiffeisen and Franz Hermann Schultz-Delitsch. Raiffeisen and Schultz-Delitsch originally
formed credit unions in 1862. Since then the model has grown into other sectors and inspired the
growth of financial co-operatives across the world.

The co-operative movement today

The principles that underpinned co-operatives' way of doing business are still accepted today as
the foundations upon which all co-operatives operate. These principles have been revised and
updated, but remain essentially the same as those practiced by the Pioneers in 1844.

Today the sector is estimated to have around 1 billion members. Co-operatives employ, directly
or indirectly, 250 million people around the world. The world's top 300 co-operatives by
themselves have an estimated global turnover of 2.53 trillion USD (2533,1 Bn), as revealed by
the 2016 World Co-operative Monitor.

The International Co-operative Alliance

The International Co-operative Alliance was founded in London, England on 19 August 1895
during the 1st Co-operative Congress. In attendance were delegates from co-operatives from
Argentina, Australia, Belgium, England, Denmark, France, Germany, Holland, India, Italy,
Switzerland, Serbia, and the USA. Representatives established the Alliance's aims to provide
information, define and defend the Co-operative Principles and develop international trade. The
Alliance was one of the only international organisations to survive both World War I and World
War II. Overcoming all the political differences between its members was difficult, but the
Alliance survived by staying committed to peace, democracy, and by remaining politically
neutral.

Values
Cooperatives are based on the values of self-help, self-responsibility, democracy, equality, equity
and solidarity. In the tradition of their founders, cooperative members believe in the ethical
values of honesty, openness, social responsibility and caring for others.
Principles
The cooperative principles are guidelines by which cooperatives put their values into practice.

1st Principle: Voluntary and Open Membership

Cooperatives are voluntary organisations, open to all persons able to use their services and
willing to accept the responsibilities of membership, without gender, social, racial, political or
religious discrimination.

2nd Principle: Democratic Member Control

Cooperatives are democratic organisations controlled by their members, who actively participate
in setting their policies and making decisions. Men and women serving as elected representatives
are accountable to the membership. In primary cooperatives members have equal voting rights
(one member, one vote) and cooperatives at other levels are also organised in a democratic
manner.

3rd Principle: Member Economic Participation

Members contribute equitably to, and democratically control, the capital of their cooperative. At
least part of that capital is usually the common property of the cooperative. Members usually
receive limited compensation, if any, on capital subscribed as a condition of membership.
Members allocate surpluses for any or all of the following purposes: developing their
cooperative, possibly by setting up reserves, part of which at least would be indivisible;
benefiting members in proportion to their transactions with the cooperative; and supporting other
activities approved by the membership.

4th Principle: Autonomy and Independence

Cooperatives are autonomous, self-help organisations controlled by their members. If they enter
to agreements with other organisations, including governments, or raise capital from external
sources, they do so on terms that ensure democratic control by their members and maintain their
cooperative autonomy.

5th Principle: Education, Training and Information

Cooperatives provide education and training for their members, elected representatives,
managers, and employees so they can contribute effectively to the development of their
cooperatives. They inform the general public - particularly young people and opinion leaders -
about the nature and benefits of cooperation.

6th Principle: Cooperation among Cooperatives

Cooperatives serve their members most effectively and strengthen the cooperative movement by
working together through local, national, regional and international structures.
7th Principle: Concern for Community

Cooperatives work for the sustainable development of their communities through policies
approved by their members.