Cooperatives

P.R. Sarkar
As you know, human society is one and indivisible. A human being cannot live alone. If a person wants to drink water from a well, he or she needs a rope and a bucket, and to tie the rope one needs a hook. For all these things, the help of the others is indispensable.

In society human beings have to work jointly with others so that everybody can move forward collectively:

Sama´nam ejati iti sama´jah.
“Society is the collective movement of a group of individuals who have made a unanimous decision to move towards a common goal.”

If human beings move closely together in all aspects of life, except for those few aspects which are very personal, the better it will be for the welfare of society. Only those things which cannot be done collectively should be done individually.

So, it is always better for people to work together as far as possible – the more that human beings work together, the better it is. If this principle is not followed the spirit of society will be broken, adversely affecting the very existence of human beings. People have to eat food individually – another person cannot eat your food for you – however a meal can be shared collectively. Where individuality dominates human life, the environment, the welfare of different groups and even the continued existence of humanity may be adversely affected.

Coordinated Cooperation

“Operation” means “to get something done through any medium or media”. Suppose you are operating a tool machine. If this type of operation is done with collective effort then it is called “cooperation”. In the case of cooperation, something is done with equal rights, equal human prestige and equal locus standi.

In every field of collective life there should be cooperation among the members of society. Where this cooperation is between free human beings, each with equal rights and mutual respect for each other, and each working for the welfare of the other, it is called “coordinated cooperation”. Where people do something individually or collectively, but keep themselves under other people’s supervision, then it is called “subordinated cooperation”. In each and every stratum of life, we should do everything with coordinated cooperation and always avoid subordinated cooperation.

In the world today different socio-economic systems are in vogue, but none of these systems are based on coordinated cooperation. Rather, in these systems social relationships are mainly based on subordinated cooperation, resulting in the degeneration of society’s moral fabric. For example, in some countries there is a glaring lack of racial parity and no coordinated cooperation among the different ethnic groups whatsoever. This lack of proper equilibrium and equipoise in social life is causing the whole structure of society to crumble down.

In those countries that follow the commune system there is also lack of coordinated cooperation. In the commune system society is reduced to merely a production-distribution mechanism under a regimented system of control. Rather than increase production, the commune system forces production down. The consequences can be seen in nearly all communist countries: food shortages. Capitalist countries such as Australia, Canada and the USA are selling their food grains to the Soviet Union and China. Moreover, the workers in a commune do not feel oneness with the job, nor do they have the freedom to express all their potentialities. Such a suffocating and mechanical system fosters a materialistic outlook and produces atheistic leadership.

In the commune system there is no personal ownership. Without a sense of personal ownership people do not labour hard or care for any property. If farmers feel they have permanent usufructuary rights to the land they will get a better out-turn. Such a sentiment is suppressed in the commune system, resulting in sluggish production and psychic oppression. Intelligent people are forced to do work which is unsuitable for them and are paid the same wages as ordinary workers. There is no incentive system and individual initiative by meritorious people is not encouraged, so naturally people do not work hard. Such a system can never solve society’s economic problems, either in agriculture or in industry. Rather, it will only aggravate existing problems and create fresh social problems. The production and distribution systems of the commune system are fundamentally defective, exploitative and anti-human.

The commune system is based on subordinated cooperation – the relationships are those of supervisor and supervised or master and servant. Such relationships are detrimental for human progress and retard any possibility of progressive movement. They are ultravires to the wonts of the human mind.

PROUT supports the implementation of the cooperative system because its inner spirit is one of coordinated cooperation. Only the cooperative system can ensure the healthy, integrated progress of humanity, and establish complete and everlasting unity among the human race. People should work to enjoy sweeter fruits by establishing the cooperative system. PROUT raises the slogans: “We want cooperatives, not communes,” and, “We are not slaves of communes.”

Cooperation in Agriculture

If the spirit of cooperation is followed, those commodities which are essential for supplying the minimum requirements such as food, clothing, housing, education and medical treatment will have to be cooperatively produced. Food is the most important commodity, and because of the importance of food, agriculture is the most important sector of the economy. It is generally the case that the staple food of a country is also its main food crop. In Bengal, for example, the main food is rice and so paddy is the main crop. Similarly, the main crop in the Punjab is wheat, in Ireland potato, and in Scotland rye, oats and barley.

For the proper reorganization and maximum utilization of agricultural land, the cooperative system is most preferable. The fertility of the soil depends upon the natural terrain of the countryside, and the size of a harvest depends largely upon the water content of the soil. High land will not generally produce very much, even if it is fertile, but it is often possible to produce good crops on less fertile soil at lower levels because water usually accumulates there. Even on relatively flat land, agricultural plots should be arranged depending upon the level of the field in relation to the flow of water, or water should be channelized from upper levels to lower levels. Cooperatives will follow such an arrangement.

Land is extremely important in the psychology of farmers because they are very attached to their land. Farmers may give away hundreds of kilos of produce, but they would never voluntarily give away even a few square metres of their land. Suppose many small farmers own a total of 200 acres. If they form a cooperative and keep a record of their shares based on the size of their individual holdings, a sense of ownership is maintained. If all the land is on the same level then the boundaries between the small plots can be broken down, increasing the area of arable land. In such a system the psychology of the farmers will not be affected and they will not feel any insecurity. They will be able to increase the area of land under production by clearing away the boundaries which needlessly divide the land into many individual holdings and by scientifically cultivating infertile land.

Farmers who own only several square metres of land cannot keep bullocks and a plough. They have to give their land to someone who can cultivate it, as in the sharecropping system. If they do give their land to a sharecropper, they rarely get anything in return. This predicament arises because the size of the land is so small. If cultivation is done on a cooperative basis many small plots can be merged into one large plot. This will be of great collective benefit to the farmers.

In India in the time of Akbar a system was in vogue whereby boundaries were constructed around plots of land. Akbar introduced a new system in which the northern and western boundaries of each plot were owned by the owner of that plot. When cooperatives remove boundaries to form larger areas of agricultural land, the land occupied by the northern and western boundaries of each plot should revert to the owner of that plot.

Today for the cultivation of land farmers need things such as fertilizer, a tractor and irrigation water. Animal fertilizers are insufficient – farmers need chemical fertilizers. But wherever chemical fertilizers are used intensively, the land becomes infertile and useless after some time. Chemical fertilizers eventually destroy the vital energy of the land and it becomes lifeless, like cement. Intensive research should be conducted on how to use chemical fertilizers in agriculture without any ill effects on the land.

In the system of individual farming it is not possible to escape the ill effects of chemical fertilizers. However, in the cooperative system there is great scope for agricultural research and development to discover new ways to better utilize and prolong the vitality of land. The benefit of a cooperative is that it combines the wealth and resources of many individuals and harnesses them in a united way.

There was a time when farmers used to leave their land unused for a year after several years of continuous cultivation, but this is not possible today. So it is necessary to adopt a system whereby either chemical fertilizers will be used which will not decrease soil fertility, or high yields will be achieved without using chemical fertilizers at all. I am confident that this will be achieved in the very near future.

Agriculture should have the same status as industry. This policy is not followed in many undeveloped and developing countries today, and can best be implemented through the cooperative system. For example, the apple orchards of Himachal Pradesh should function as cooperatives rather than private farms, and so should the packaging industry for apple transportation and marketing. The processing and packaging of apples should be regarded as part of the farming industry. Those employed in agriculture should get bonuses in the same way as those employed in industry. Thus, farmers or agricultural cooperatives should organize the whole agricultural sector of the economy on the basis of industry.

Farmers Cooperatives

PROUT advocates the reorganization of all agricultural land according to a phase-wise plan. In the first phase all uneconomic landholdings should be taken over by cooperative management for the benefit of both those who previously owned the land and agricultural labourers who work in the cooperative. In the second phase all landowners should be requested to join the cooperative system. In the third phase there should be rational distribution of land and redetermination of ownership. Finally, in the fourth phase there will be no conflict over the ownership of land. People will learn to think for the collective welfare rather than for petty self-interest. This psychic expansion will create a more congenial social environment. However, such a change in the collective psychology will not come overnight, but will occur gradually according to the sentiment of the people. When such a system has been introduced the present conflict among landowners and landless rural workers will no longer exist.

In the initial stage agricultural cooperatives will be formed with the mutual cooperation of groups of farmers. Suppose A, B, C and D are four farmers who have consolidated their land into a cooperative in the following proportions: A two acres, B five acres, C ten acres and D fifteen acres. The profits from the sale of their crops should be shared in proportion to the amount of land each gave to the cooperative, and the service each rendered for the production of these crops. Farmers will receive produce and profits according to the number of their shares in the cooperative and their labour. As the yield of land increases due to the continuous development of improved scientific techniques, farmers can expect increased productivity and greater prosperity.

A record should be kept of the productive capacity of all the land included in the cooperative. Shares should be allocated on the basis of this productivity. For example, if a farmer has thirty acres of land of which fifteen acres are highly productive and fifteen acres are of low productivity, then his or her shares should take into account the differences in productivity. If some landowners do not want to work in an agricultural cooperative their land should still be included in the cooperative. They should also be considered as cooperative members and should get shares based on the size and productivity of their land. Of course, landowners who do not work in the cooperative will not be entitled to wages.

In the cooperative system farmers need not sell their produce immediately after harvesting due to pressure of circumstances. In the individualistic or private enterprise system, most farmers have to sell their produce immediately in order to get sufficient money to survive. But in the cooperative system farmers will enjoy more financial security as the cooperative can advance money to individual farmers and sell the crops at the most favourable time for the best price. That is, the cooperative can determine how much to sell and when to sell in order to get the best profit. Cooperatives will also be able to fix the price of their own produce within certain price limits. Thus, cooperatives will get the profit which is taken by middlemen and profiteers in the individualistic or capitalistic system.

In the present system after the harvest poor farmers have to pay off the loans they took for such things as irrigation, seeds and labour to produce their crops. In addition, they often purchase clothing for their families for the following year. Due to their urgent need for money they are frequently forced to sell their harvest at virtually give away prices. This type of sale under the pressure of circumstances is called a “distress sale”. To protect the farmers from distress sales, the cooperative system is essential. In a cooperative, farmers will keep the necessary quantity of farm produce to meet their food needs for a year and will sell the excess produce to the cooperative at the rate fixed by the cooperative. When the market price is reasonable, the cooperative will sell the produce. The farmers will then receive their percentage of the profit which will be proportional to the amount of their land shareholding in the cooperative.

Taxes, levies, excise duties, etc., should be collectively paid by the cooperative, thus freeing individual farmers from financial pressure and economic exploitation. In many economically developed countries, there are no land taxes because the revenue collected from such taxes is only a very small part of the total revenue.

The workforce in the cooperative system will be composed of the shareholding farmers and non-shareholding labourers. Both groups will benefit: the shareholding farmers will get regular salaries for their work plus a return on their shares, while the labourers will enjoy stable employment and favourable wages.

There are two types of non-shareholding labourers working in agricultural cooperatives – those who are permanent labourers and those who are casual or contract labourers. The permanent labourers will get bonuses as incentives besides their wages, while casual labourers will only get wages for their labour. Those labourers who give the greatest service to the cooperative should get the greatest bonuses. Skilled workers should get paid more than unskilled workers. This will be an incentive for all to become skilled labourers and to work harder. Bonuses should be paid according to the amount of wages which should reflect both the skill and productivity of the labourer.

Members who purchase shares in the cooperative should have no power or right to transfer their shares without the permission of the cooperative, but their shares may be inherited. If some cooperative members have no descendants, then their shares should pass on to their legally authorized successors who will become members of the cooperative if they are not already members. The reason for this policy is that it prevents capitalists from purchasing large numbers of shares in a cooperative and speculating in the market place. This type of economic activity can easily lead to a depression.

In different countries there are different systems of inheritance, so the right of inheritance should be decided according to the system in vogue in a particular country. For example, in Bengal the Da´yabha´ga system is followed, in other places in India the Hindu Code is the established system, while in other countries other systems are practised. If this arrangement is followed, cooperative members will not need to go to court or get involved in litigation as the zamindars of the past used to do. As all members of the cooperative will be from the same vicinity or members of the same village, they will all know each other, and thus there will be little difficulty in deciding who should be the legally appointed recipient of the shares. The members of the cooperative themselves will be able to decide who can claim the right of inheritance to the shares owned by the deceased members.

Disadvantaged or minor landowners will also benefit in the cooperative system. A widow, a disabled farmer, or a minor boy or girl who owns some land will derive an income from the land based on the number of shares in the cooperative. In the system of private ownership their land would have remained unutilized, and they would have remained poor. Therefore, even if cooperative members are unable to do any work, they will still be entitled to an income from the total profit of the cooperative.

Farmers may also create producers cooperatives to produce items for various industries. Thus, some farmers cooperatives may function as both farmers and producers cooperatives. Raw materials which are of non-farming origin, such as limestone for the production of cement, should be processed by producers cooperatives. Cooperatives which are only agricultural should sell their produce directly to the producers cooperative which in turn can manufacture a variety of consumer goods. Farmers cooperatives which also function as producers cooperatives can increase their profitability in various ways. For example, such cooperatives could produce oil from rice husks. The money earned may be reallocated and reinvested in the farmers-cum-producers cooperative or used for research and development.

Farmers in agricultural cooperatives will be able to exert collective pressure on the local, state or federal governments for different benefits and facilities. For example, in India individual farmers who grow fruit normally use deep well irrigation. But this can adversely affect fruit production because if the water-table drops too far below the roots, the fruit trees will gradually wither and die. In such circumstances shallow tube wells are better, but these wells cannot supply sufficient water for irrigation. Farmers need ponds, barrages and lift and shift irrigation facilities, and for these things they may need government assistance.

It is the cardinal right of the people to be guaranteed the minimum requirements of food, clothing, housing, education and medical treatment. The proper supply of irrigation water is also a cardinal right, because without water, food, which is the most important of the minimum requirements, cannot be produced. Irrigation water is like the apex of a spinning top – without it the top cannot spin.

Producers and Consumers Cooperatives

Besides agricultural or farmers cooperatives, PROUT advocates the formation of other types of cooperatives, including producers and consumers cooperatives. Producers cooperatives include agro-industries, agrico-industries and non-agricultural industries. The total profit of such cooperatives should be distributed among the workers and members of the cooperative according to their individual capital investment in the cooperative and the service they render to the production and management of the cooperative.

Similarly, consumers cooperatives should be formed by like-minded persons who will share the profits of the cooperative according to their individual labour and capital investment. Those who are engaged in the management of such cooperatives will also be entitled to draw salaries on the basis of the services they render to the cooperative. Consumers cooperatives will distribute consumer goods to members of society at reasonable rates.

Commodities can be divided into three categories – essential commodities such as rice, pulse, salt and clothing; demi-essential commodities such as oil and antiseptic soap; and non-essential commodities such as luxury goods. If hoarders create artificial shortages of non-essential commodities common people will not be affected, but if they accumulate essential commodities then common people will suffer tremendously. This situation can be avoided if consumers cooperatives purchase essential commodities directly from producers cooperatives or agricultural cooperatives.

Capitalists hoard essential commodities and create artificial scarcity to extract the maximum profit. As a result consumers pay inflated prices for essential commodities, and sometimes they even find that such goods are not available at all. Middlemen and profiteers create artificial shortages of essential commodities knowing that people will certainly purchase them, even by taking loans, but few people take loans to purchase luxury goods. If the distribution of essential commodities is done through consumers cooperatives, middlemen and profiteers will be eliminated.

Consumer cooperatives should be supplied with commodities from both agricultural and producers cooperatives. Commodities which do not go directly from agricultural cooperatives to consumer cooperatives should be produced by producers cooperatives. In addition, non-farming commodities should be compulsorily produced by producers cooperatives. For example, agricultural or producers cooperatives which produce cotton or silk thread should sell the thread to weavers cooperatives which can produce cloth on their power looms. Hand looms can also be used where intricate design work is required, but generally weavers cooperatives should install the latest power looms. The weavers cooperatives will in turn supply consumers cooperatives.

The number of items considered essential commodities should be continually and progressively revised and expanded with the changes in time, space and person. Such revisions should be made by the government and not by the board of directors of a particular cooperative. What is considered a demi-essential commodity today may be treated as an essential commodity tomorrow. Demi-essential commodities which may be affected by artificial shortages causing suffering to common people, should be produced by producers cooperatives. The production of luxury goods can be left in the hands of the private sector. Essential commodities or services of a non-farming nature coming within the scope of producers cooperatives, and which require huge capital investments, should be managed by the government. The railway system is an example.

So, for the establishment of a healthy society, agricultural cooperatives, essential commodity producers cooperatives and essential commodity consumer cooperatives are a must.

Cooperative Management

Cooperative members should form a board of directors for each cooperative. The board should decide the amount of profit to be divided among the members; that is, the dividend to be paid to each shareholder. However, the total profit should not be distributed in the form of dividends – some should be kept for reinvestment or purchasing items such as tractors, manure, etc.; some should also be used for increasing authorized capital; and some should be deposited in the reserve fund. The reserve fund should be used to increase the value of the dividend in the years when production is low. If this system is followed the authorized capital will not be affected.

The board of directors should be elected from among the cooperative members – their positions should not be honorary. Care should be taken to ensure that not a single immoral person is elected to the board. All directors must be moralists.

To stop black-marketeering strong steps need to be taken by the government. For example, to protect the clothing industry, the government should pass a law which prevents the sale of any clothing without the trademark of the producers cooperative where it is made. Thus, if black-marketeers try to sell any clothing without trademarks, they can be easily caught. This simple but effective remedy is known to many intelligent people, but still they do nothing. This is because they are the agents of capitalists who need money from these black-marketeers and hoarders to fight their election campaigns. This kind of corruption in the electoral system is part of democracy, so we can say that democracy is not the best form of government. Hoarding, profiteering and black-marketeering cannot be stopped in the democratic system because those who try to stop it will be thrown out of power. At the high point of the Ks´atriya (warrior) Era smuggling and hoarding were controlled, but as soon as the influence of the vipras (intellectuals) or vaeshyas (capitalists) emerged, the control over these corrupt practices slackened.

Many small satellite cooperatives should be formed to supply various items to large producers cooperatives. Take a car factory, for example. The many different parts for a motor car can be locally manufactured in small cooperatives. The members of these small satellite cooperatives may even carry on their work from their homes, involving all their family members. The main function of large producers cooperatives will be to assemble the different car parts. This will have two benefits: the large cooperative will not require many labourers hence labour unrest will be minimized, and labour costs will be reduced and thus the cost of the commodities will be kept low.

The problem of a floating population and immigrant labour will not occur in the cooperative system, as cooperative members will have to be local people. Floating labourers should have no right to be cooperative members – migratory birds have no place in cooperatives – as they can disturb a whole economy. Howrah district, for example, produces sufficient crops in a season to feed the local people for seventeen months, but due to immigrant labour the produce is consumed in six and a half months. The elimination of the floating population will also protect the social life of the cooperative from the possibility of adverse social influences.

In the cooperative system unemployment will be solved. As production increases the need for more facilities and resources will also increase. Educated people can be employed as skilled workers. There will also be a need for tractor drivers, labourers and cultivators, and cooperative members will naturally do this work. Village people will not need to move to the cities for employment. In the cooperative system there should be no compulsory age for superannuation. People should be free to work as long as they like, providing their health permits.

Those socio-economic units which do not have a sufficient supply of raw materials will have to manufacture synthetic or artificial raw materials. Suppose a unit or region does not have an adequate supply of fodder to feed its cattle or sheep. Will it import fodder from another unit or region? No, it should manufacture artificial fodder instead. Similarly, it takes a substantial volume of cotton to produce one dhoti [the traditional lower garment worn by men in northeastern India]. To transport large amounts of cotton also requires much energy, and so if it is not readily available, synthetic fabric can be produced instead.

As science advances, cooperatives will develop and manufacture a great variety of commodities from synthetic raw materials. In the capitalist system, raw materials are imported from other countries or regions in order to manufacture finished products. Cooperatives will not follow this system. They will develop their own raw materials through research so that they are not dependent on foreign raw materials.

Integrated Progress

Through the cooperative system human society will progress with accelerating speed, ushering in a new revolution in science. No part of the universe will be left unutilized – every nook and corner will be properly used. Where fodder is available, grazing land, dairy farms and milk production can be developed. Where fodder is not available, synthetic milk will be produced. In this way progress and development will be maintained in every field of life.

The day is very near when science will be guided by spiritually oriented intellectuals. When this day comes, science will move forward with leaps and bounds, causing the intellectual capacity of human beings to increase immensely. Cooperatives will greatly assist this psychic and spiritual advancement.

To enhance the unity in society we should encourage all common factors and discourage all fissiparous factors. For example, in India there are many common factors which help create unity, and there are many fissiparous factors which create disunity. The most fundamental point of unity in India is that the Indian mentality is God-centred; that is, it is intrinsically based on theism. It accepts divine providence as a cardinal human factor. Even Indian communists are theists in their hearts, but on a political platform they speak as atheists. Although the spiritual standard of the people is high, the moral standard is lower than in western countries. Thus, the moral standard needs to be increased. Moralists should be created. For this a universal ideology should be propagated in every nook and corner of the country.

Another point of unity in India is the Sanskrit language. The Indian people may or may not know Sanskrit, but they all certainly have a deep love and respect for it. If Sanskrit had become the national language of India instead of Hindi, all the present problems relating to the national language would have been avoided.

Take another example, the calendar system. In North India and some parts of South India the lunar calendar, called Sam´vat, which depends upon the movement of the moon, is followed. In this system the seventh as´a´rh is in the morning, the eighth as´a´rh is at noon and the ninth as´a´rh is at night. A lot of problems arise with such a calendar. In Bengal, Assam, Manipur, the Punjab, Jammu, Kashmir, Orissa and some parts of South India the solar calendar, called Shaka´bda, which depends upon the movement of the sun, is used. According to this system, in Bengal the first Vaesha´kha is on the fourteenth of April and in the Punjab the first Vaesha´kha is on the thirteenth of April. Should we encourage this difference in the calendar system? No, so either the Shaka´bda system or the international calendar system should be followed. So, to integrate the entire human race, unifying factors should be encouraged and fissiparous factors should be discouraged.

The sweetest unifying factors are love and sympathy for humanity. The wonts of the human heart are joy, pleasure and beatitude. In the physical realm the best expression of this human sweetness is the cooperative system. The cooperative system is the best representation of the sweet nectar of humanity.

Discourse delivered on 18 February 1988, Calcutta. Published in Prout in a Nutshell Part 14 and in Proutist Economics.

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