Academic journal article Social Development Issues

Cooperatives' Community Practices in Costa Rica: Financial Support Mechanisms

Academic journal article Social Development Issues

Cooperatives' Community Practices in Costa Rica: Financial Support Mechanisms

Article excerpt

Cooperatives hold promise as agents of community economic and social development. The United Nations (UN) hoped to bring their potential to the fore by declaring 2012 to be the International Year of Cooperatives. This specially designated year aimed to encourage scholarship both to build capacity within cooperatives and to explore supportive legislative and policy frameworks. In encouraging such scholarship, the UN hoped to maximize cooperatives' potential to help achieve the Millennium Development Goals (Birchall, 2004) and the forthcoming Sustainable Development Goals (Wanyama, 2014). In this article, I will respond to the charge of generating scholarship that strengthens the cooperative sector in achieving social development aims.

Cooperatives are member-owned and member-controlled organizations that unite people to meet shared needs and to achieve common aspirations (International Co-operative Alliance [ICA], n.d.). The ICA, an organization that unifies cooperatives around the globe, publishes a list of values, such as self-responsibility, equity, democracy, and solidarity, that inform the international cooperative movement. These values undergird seven core principles that guide cooperatives' practices: (1) voluntary and open membership; (2) democratic member control; (3) member economic participation; (4) autonomy and independence; (5) education, training, and information; (6) cooperation among cooperatives; and (7) concern for community. By carrying out practices that reflect core values and principles, cooperatives aim to put people rather than profits at the center of their practices. United Nations Secretary-General Ban Ki-moon observed, "Cooperatives are a reminder to the international community that it is possible to pursue both economic viability and social responsibility" (UN Department of Economic and Social Affairs, n.d.).

An asset of cooperatives in achieving social welfare aims is their ubiquity. Nearly 650 million adults worldwide belong to at least one cooperative, and these cooperatives help to secure the livelihoods of up to 3 billion people (UN General Assembly, 2013). There are three times more cooperative members around the world than individual shareholders in investor-owned firms (UN General Assembly, 2013). Their financial presence is expansive. They had a total turnover (i.e., income generated from business activities) of $2.623 trillion in 2012 (World Co-operative Monitor, 2014). Agricultural cooperatives in Europe process and market 60 percent of agricultural commodities (UN General Assembly, 2013). Although this article will focus on two cooperatives in Costa Rica, the processes I will describe and analyze occur around the globe affecting, or having the potential to affect, the lives of millions of people.

In this article, I seek to understand how cooperatives enact the seventh core principle: concern for community. Specifically, I will describe and explore how cooperatives financially support their practices that reflect concern for community by drawing from the market, the state, the community, and their own resources. In so doing, I aim to strengthen cooperative capacity and to highlight the importance of state support for cooperatives. I will draw upon an empirical case study of two Fair-Trade coffee cooperatives in Costa Rica: Cooprouno and Cooprodos. These two cases illuminate how cooperatives operating within very difficult economic conditions sustain a financial commitment to the community. I will begin with a brief overview of the literature related to cooperatives' community engagement, followed by a description of the case study approach used to gather the data and the cases on which this study was based. Next, I will address the way in which cooperatives financially support their community engagement. I will conclude with a discussion of the findings and directions for future study.

Cooperatives and Community Engagement

The seventh core principle of the international cooperative movement-"cooperatives work for the sustainable development of their communities through policies approved by their members" (ICA, n. …

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