Cooperativism is an economic and social movement that unites people around a common goal. The ideology is based on the premise that prosperity is achieved when individuals work together to overcome shared challenges and achieve collective results. The symbol of cooperativism is an organization where all members own their own business and the primary focus is on people, not profit.

The Organization of Cooperatives of Brazil (OCB – acronym in Portuguese) defines cooperativism as a business model that strengthens economic practices and aims to “transform the world into a fairer, happier, more balanced place with better opportunities for all.”

The OCB System demonstrates that economic development and social welfare can be achieved simultaneously through the path of cooperativism. This approach also integrates productivity and sustainable practices at the individual and collective levels. “Cooperatives provide a pathway for small producers to integrate into large production chains and participate in the globalization of markets,” states economist José Carlos de Lima Júnior. “Without the advantages of cooperatives, small producers would face significant challenges in competing with large groups or companies,” adds the agribusiness specialist from USP’s Ribeirão Preto School of Economics (FEA-RP/USP).

• History of Cooperativism
• Cooperativism in Brazil
• Legislation
• General Assembly
• Strategic Planning
• The process of making decisions.
• Bylaws
• Cooperatives in the countryside
• About coffee
• Figures
• Sectors
• Principles
• Transformation
• Benefits for cooperative members
• Protagonism

History of Cooperativism

The Rochdale Equitable Pioneers Society, the first cooperative, was established in 1844 in Rochdale, northwest England. This initiative was driven by the need to address the challenges faced by skilled workers in the context of the Industrial Revolution. The mechanization of the Industrial Revolution had led to a situation where workers were unable to purchase the basic necessities in the local markets. In response, 28 workers—27 men and one woman—came together to establish their own store.

The group’s primary objective was to purchase food in bulk to secure more favorable pricing. The Rochdale Pioneers, a collective of workers, established an organization that provided the local community with cost-effective, high-quality food during a period of significant hardship.

In this way, they established a set of values and principles that would become the foundation for cooperative organizations around the world. These values include honesty, solidarity, fairness, and transparency.

By the end of the fourth year, the cooperative had already attracted 140 members. By 1856, twelve years later, the number of members had reached 3,450, with the share capital increasing from 28 pounds to 152 thousand pounds.

Cooperativism in Brazil

Brazil has a long history of cooperative culture, dating back to the Portuguese colonial era. In 1610, the establishment of the first Jesuit missions exemplified the early development of a cooperative state based on an integral approach.

Indeed, for over 150 years, this business model has set an example of a society based on solidarity and collective work. In this sense, the well-being of the individual and the family was prioritized over the economic interest of production.

However, the movement officially began in the 19th century, in 1889, in Minas Gerais, with the founding of the Ouro Preto Civil Servants’ Economic Cooperative. The focus was on the consumption of agricultural products.

Later, in the 20th century, other cooperatives sprang up in Minas Gerais and also in the states of Pernambuco, Rio de Janeiro, São Paulo, Espírito Santo and Rio Grande do Sul.

On December 2, 1969, cooperatives gained their own representative body. The OCB was created and registered the following year.

Legislation

Two years later, Law 5.764/71 regulated the creation of cooperatives by establishing their own legal system, highlighting the OCB’s representative role, but still containing some points that partially restricted the autonomy of members. The 1988 Brazilian Constitution put an end to this limitation, as state interference in associations was prohibited, thus giving rise to self-management in cooperatives.

Also, as part of the history of cooperatives in Brazil, in September 1970 the Minas Gerais State Cooperative Organization (Ocemg) was born. This was also the start of a major project to consolidate and strengthen cooperatives in Minas Gerais.

“Over the course of more than five decades, Ocemg represents what the sector has been building: a history of achievements, always with a focus on cooperative members, employees and the entire population involved in the activities of cooperatives. In this sense, we are proud to be a body that seeks to provide a basis for a segment that is present in the lives of more than 30% of the population of Minas Gerais, bringing both economic and social benefits to more than two million citizens from this state,” says Ocemg’s president, Ronaldo Scucato.

General Assembly

Many cooperatives have adopted governance in search of best practices for themselves and their members. In this way, the OCB describes Cooperative Governance as “a model of strategic management (…) aimed at guaranteeing the achievement of social objectives and ensuring the sustainable management of the cooperative in line with the interests of the cooperative members”.

The Regional Cooperative of Coffee Growers in Guaxupé, Cooxupé, has adopted governance in its administration. As such, there are two important agents: the Board of Directors and the Fiscal Council.

Thus, the Board of Directors’ mission is to protect and value the cooperative, promoting socio-economic development and the interests of the cooperative members, as well as preserving the business, always seeking a balance between the wishes of the interested parties. The Fiscal Council is the body that permanently supervises the cooperative’s economic and financial activities. As well as any actions that compromise administrative, fiscal, tax and social responsibility.

Strategic Planning

Still within this context, it is important to mention the existence of Strategic Planning. This is the noblest activity of the Board of Directors. Cooxupé’s strategic planning, for example, constantly thinks about and takes care of the future of the cooperative and its members. Every SP was developed with a focus on generating value for members, keeping them prepared to face the challenges of the market.

In this context, there are ordinary general meetings, or AGMs (AGOs in Portuguese). The Ordinary General Meeting is the highest decision-making body of the cooperative, which represents the general decision of the cooperative members. In other words, all the most important decisions go through the AGM, which is held once a year. It is at the AGMs that votes and decisions on the Fiscal and Management Boards take place, as well as the presentation of the balance sheet and financial solutions and the distribution of surpluses to members. For other agendas that need to be called and voted on by the members, AGMs are held throughout the year, this is, extraordinary general meetings.

The process of making decisions.

It is crucial to recognize that the Supervisory and Management Boards, which are consistently elected through a voting process, are collegiate decision-making bodies with autonomy over strategic decisions. In this capacity, they represent the wishes, needs, and demands of the cooperative members.

Bylaws

Cooperatives have bylaws, or a set of rules, which govern the responsibilities, attributions and actions of every organization. It has legal guidelines. Furthermore, the Bylaws are sovereign.  

Cooperatives in the countryside

The history of agricultural cooperatives began in Paraná in 1847, with the founding of the first agricultural cooperative in the country. But it wasn’t until 1907 that the sector gained momentum.

All because the then governor of the state of Minas Gerais, João Pinheiro, launched a cooperative project with the aim of eliminating, once and for all, middlemen from agricultural production. At the time, the sale of products such as coffee was controlled by foreigners.

It was the cooperatives that initiated the process of nationalizing the marketing of Brazilian agricultural products. In 1932, the country’s first coffee growers’ cooperative was established.

About coffee

The current Cooperativa Regional de Cafeicultores em Guaxupé Ltda (Cooxupé) initially operated as a credit cooperative, providing support to coffee producers, and was transformed into a Coffee Growers’ Cooperative in 1957.

The change came about because the first members were sensitive to regional needs. That year, the organization’s main product became coffee production. Soon after, in 1959, the Cooperative exported its coffee for the first time.

“At that time, it is important to highlight the importance that coffee growing had in the national economy, as well as the fact that these producing areas were small in size when compared to other crops, such as grains, for example. As the state of Minas Gerais has always been one of the most important in coffee production, the organization of these producers, most of whom were small, was one of the ways that farmers found to overcome the difficulties experienced at that time with world coffee growing,” says economist José Carlos de Lima Júnior.

Figures

According to a survey carried out by the Brazilian Institute of Geography and Statistics (IBGE) in the 2017 Agricultural Census of more than 5 million rural properties across Brazil, 579,500 of these establishments are associated with cooperatives, which is equivalent to 11.4% of all agricultural establishments in the country. Of these, around 410,000 are family farms, i.e. 71.2% of cooperative establishments are family farms.

“Agricultural cooperatives are the pillars of the economy and are essential for ensuring that there is no shortage of food and for the economic development of the whole country,” says Ocemg’s president, Ronaldo Scucato.

The OCB yearbook shows that, as of December 31, 2023, there were 4,509 cooperatives with active registrations in Brazil. The state of Minas Gerais leads the registrations, with 762 cooperatives, followed by the state of São Paulo, with 544. As a result, cooperatives generated 550,611 direct jobs in 2023, an increase of 5% compared to the previous year.

Therefore, in 2023, the movement’s total assets reached the R$1.165 trillion mark, an increase of 17% compared to 2022. Net worth was recorded at R$94 billion: 17% more than the previous year, according to the OCB yearbook.

Cooperatives therefore injected more than R$33.9 billion in taxes into the public coffers during the year. In addition to the R$31.7 billion related to the payment of salaries and other benefits to employees, 27% more than the previous year.

Sectors

Breaking it down by cooperative sector, agriculture and livestock is the sector with the largest number of cooperatives in Brazil – 1,179. There are 257,137 jobs generated and 1 million cooperative members. As of now, of the 100 largest Brazilian agribusiness companies in 2023, 17 are cooperatives active in the OCB system.

Worldwide, there are 3 million cooperatives, with 1 billion members – representing 12% of humanity – and 280 million direct jobs. Added together, the turnover of the 300 largest cooperatives in the world amounts to US$ 2.4 trillion.

Principles

Cooperatives have a unique way of working. In order to put the values of cooperativism into practice and guide cooperatives around the world, the seven principles of cooperativism were established. As the OCB system explains:

1- Voluntary and free membership

Cooperatives are open to anyone who wants to join, is aligned with their economic objective, and is willing to take on their responsibilities as a member. There is also no discrimination.

2 – Democratic management

Cooperatives are democratic organizations controlled by all their members, who actively participate in formulating their policies and making decisions. In addition, official representatives are elected by the entire group.

3 – Members’ economic participation

Members contribute equally to the organization’s capital. Part of the amount is normally the common property of the cooperative and members receive remuneration limited to the paid-in capital, if any. On the other hand, the cooperative’s surpluses can be used for the following purposes: member benefits, support for other activities approved by the members or for the development of the cooperative itself. Everything is always decided democratically.

4 – Autonomy and independence

Cooperatives are autonomous, mutual aid organizations, controlled by their members, and nothing should change that. If a cooperative enters into agreements with other organizations, public or private, it must do so in conditions that ensure democratic control by the members and their autonomy, in short.

Transformation

5 – Education, training and information

To be a cooperative member is to be committed to the future of the members, the movement and the communities. In this way, cooperatives promote education and training so that their members and workers can contribute to the development of their businesses. And, consequently, the places where they are present. In addition, they offer information to the general public, especially young people, about the nature and advantages of cooperativism.

6 – Inter-cooperation

Cooperativism is about working together. By working together, cooperatives strengthen the movement and serve their members more effectively. Whether they are united in local, regional, national or even international structures, the aim is always to come together for a common objective.

7 – Interest in the community

Contributing to the sustainable development of communities is a natural part of cooperativism. Therefore, cooperatives do this through policies approved by their members.

Benefits for cooperative members

Also in the agricultural sector, cooperatives are a solid tool for accessing markets and helping to keep farmers in the countryside. In fact, it promotes the marketing of products and the provision of services to cooperative members. A number of benefits are offered to cooperative members:

1 – Inclusion of producers, regardless of their size and production system;

2 – Coordination of the production chain in a horizontal relationship;

3 – Equitable generation and distribution of income;

4 – Access to services and technologies;

5 – Economies of scale in buying and selling processes, this is, bargains acquired in collective purchases and sales;

6 – Access to markets, which would be more complicated on their own;

7 – Adding value to the cooperative members’ production.

Protagonism

A fundamental part of the movement, cooperatives account for over 23.4 million people in Brazil, 59% of whom are men and 41% of whom are women.

To become a cooperative member, you need to choose one of the seven branches of activity and contact one of the cooperatives, check the necessary documentation and also take a good look at the Bylaws.

So, inside a cooperative, every member has a voice and decision-making power. In practice, each person represents one vote. Decisions are always taken democratically, by the majority.

After all, the main decisions of a cooperative, such as the election of the board of directors, the choice of advisors and the definition of the policy for distributing profits, are taken at a General Meeting.