What is a Cooperative?
A cooperative is a business run and managed by the people
who work within it. It is a democratic organisation whose
money and resources belong to its members. By becoming an
active member of a coop, you will have more say on what goes
on in your business organisation.
There are different types of coops including: food coops,
housing coops, arts and crafts coops, book coops, bakery coops,
bike coops, farm coops, financial co-ops (credit unions),
insurance coops among others. Although different in what they
produce most cooperatives have several things in common, mainly
the ideals and principles of how they got started.
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Why a Cooperative?
1. Cooperatives save money.
Members of a cooperative ensure that their cooperative business
provides the best quality products and services at the lowest
possible cost.
2. Cooperativly demonstrate democracy.
In a private owned business the people who have the most money
and shares have the most control over the way the business
is run. In a cooperative each member has an equal share and
one vote when decisions are made. This is known as democracy.
3. Cooperatives operate for the benefit of members
In a cooperative, members work together towards the same target.
Members are involved in decisions that affect their own money
and their working conditions.
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Why Do Groups Organise Cooperatives?
To Create work opportunities for themselves and for others.
To improve business.
To reduce costs.
To obtain products or services.
To create new and expand existing market opportunities.
To improve the quality of products and services.
To increase income.
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Advantages of a Cooperative
Cooperatives have been functioning successfully for many
years. Various people worldwide have become very successful
thanks to their involvement in a coo perative. In fact, ten
per cent of global business depends on cooperative organisations
today.
Cooperatives encourage participation, responsibility, unity
and education for their members, while promoting financial
growth.
Being involved, the sense of belonging and the teamwork are
a very important basis for success in cooperatives as everyone
is working for the same aim.
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How is a Cooperative formed?
Maltese Law stipulates that a group of people having the same
aim and interest can form a new cooperative. The basic requirements
are to group at least five adults.
Certificates, licences or academic qualifications are not
obligatory. The crucial requirement is the will and solidarity
between the members, and a professional approach to their
work. It is only in this way that a Cooperative may be competitive
and achieve success.
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Types of Cooperatives
In Malta we find different types of Cooperatives. These include:
Producers’ Cooperative: Here, members pool skills to
offer a professional service or a product. The profits are
then distributed amongst members in proportion to the volume
of their business with the cooperative. Fishermen and farmers
pool their products for the purpose of sale in order to obtain
the most advantageous prices.
Consumers’ Cooperative: Here, members group themselves
in a cooperative in order to benefit on prices and quality
for several products and services as consumers. Students may
form such a cooperative to benefit on prices of books and
other educational materials.
Workers’ Cooperative: Unlike the producer cooperatives
or the consumer cooperatives, the members of a worker cooperative
are both its owners and its employees. The worker cooperative
therefore offers employment to its members. In some cooperatives,
members work only for the cooperatives, whist in other cooperatives,
members are allowed to obtain private work, besides the work
from the cooperative.
Social Cooperatives: This new type of cooperative emerged
lately, to ensure social justice and to work in favour of
subordinate groups in society. Social cooperatives promote
the products of workers who tend to suffer from social exclusion,
so as to ensure better working conditions and profits for
these people. These cooperatives also create the structures
and opportunitie to train and provide employment for people
with special needs.
Public Sector Cooperatives: As from 1996, the Maltese Government
has offered its employees two schemes, enabling these workers
to consider setting up a cooperative organisation. Such employees
would be able to operate with considerable autonomy, enjoying
any surplus resulting from their operations while remaining
public sector employees.
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A Company or a Cooperative?
The difference
The biggest difference is that in a company, the targets
are based on wealth. The richer you are , the more shares
in the company you can buy, and the results of this is that
you will have more control over the company.
In a cooperative each member always has one vote. One member,
one vote. So the rule is that each member has one vote without
considering the amount of shares invested. Whoever or whatever
the status of a person, being rich or poor, a graduate or
any professional, being illiterate, young or old, in a co-operative
everyone is considered as a person. Under these circumstances,
no one is better off or worse off than any other person.
A cooperative is more likely to be formed where:
there is a big number of producers (e.g. farmers)
every producer is small and is not capable to carry the financial
and commercial weight of the enterprise on one’s own
if a small producer acts independently, it would mean competing
against so many other small producers.
So cooperatives offer the best commercial solution for people
who, on their own feel small and weak. United we stand, divided
we fall. When a group of small producers of the same trade
feel that they are weak and small on their own, with the help
of a cooperative they can easily form a strong business where
their common interests are safe and above all where no one
is going to have more say than anyone else.
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Differences between a Company and
a Cooperative.
| Company |
Cooperative
|
| Commercial Aims |
Commercial and Social Aims |
| Targeted to increase the profits of the share holders
|
Targeted to push forward the interests of all the members |
| Applies for those who are financially comfortable |
Applies for those who believe in cooperation |
| Progress is measured according to profits |
Progress is measured according to social and financial
gains |
| Shares belong to those who are wealthy |
Shares are evenly distributed between all the members |
| The company is controlled by those who have most shares |
The cooperative is managed on the model of one member
one vote |
| There is an unequal distribution of profits between
the shareholders. |
In a cooperative profits are distributed equally between
all members. |
| There are no obligations towards society |
There is a stronger sense of social commitment |
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History of Maltese Coopoeratives
The Cooperative Societies Act, Malta
In 1947 the first Maltese cooperatives were officially formed
after a comprehensive inquiry highlighted the advantages of
cooperatives and the way these organisations were operating
in other countries. The first co-operatives hailed from the
farming sector of various villages in the Maltese islands.
These cooperatives were regulated by the Ordnance of 1946
introduced by the British Colonial Government.
Later on, this Ordnance was substituted by a more detailed
Act (No 26 of 1978) which contains a more elaborate set of
regulations which included:
1. Constitution, Functions and Composition of the Cooperatives
Board
2. Formation and Registration of Cooperative Societies
3. Privileges and Duties of Cooperative Societies
4. Rights and Liabilities of Members
5. Organisation and Management of Cooperative Societies
6. Property and Funds of Cooperative Societies
7. Amalgamation and Transfer of Cooperative Societies
8. Duties and Powers of the Cooperatives Board
This Act has been amended, bringing it up to modern standards
and expectations and catering for the needs of the newly formed
cooperatives, especially in the worker and social fields.
The new Act (No 30 of 2001) came into force in April 2002.
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Links – International Cooperatives
Cooperatives and Cooperation
http://csf.colorado.edu/co-op/
Committee for the Promotion and
Advancement of Cooperatives
http://www.copacgva.org/
The Co-operative Information Superhighway
http://www.coop.org/welcome.htm
International Co-operative Alliance
Web Site
http://www.ica.coop/ica/
Co-ops 4 Kids
http://www.coop.org/kids/
Cooperative Life
http://www.cooplife.com/programs.htm
Links – Local
Cooperatives
Co-Operatives Board
http://www.coopsboard.org
Directory of Co-Operatives Societies
Registered in Malta & Gozo
http://www.msp.magnet.mt/services/subpages/content.asp?id=14
Central Cooperative Fund
http://www.ccf.org.mt
Apex Organisation of Maltese Cooperatives
http://www.ccf.org.mt/english/Activities.htm
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