Contents in this issue

• Highlights of ACCORD's CDFI seminar
• "Funding Community Enterprise"
• Co-operative Profile
• Co-operatives and Wealth - The Bega Experience
• The co-operative difference
• Co-ops could solve Canada's housing crisis
• Fair Trade and Co-operatives
• NETCO - strengthens co-ops
• Co-operative Care for Children
• The Wales Co-operative Centre
• Franchising and co-operatives
• Franchising and Co-operatives - The blurred dividing line
• Co-ops and the Financial Advantages
• Social Accounting
• Community bank business picks up in Avoca
• ACCORD in the media
• Loyalty - a key competitive advantage
• News from co-op federations around Australia
• australia.coop
• The Co-operative Federation of South Australia Inc
• Announcements
• New Publication

Highlights of ACCORD's CDFI seminar "Funding Community Enterprise"

Research by ACCORD has found that Community Development Financial Institutions (CDFIs) are emerging worldwide in response to community finance and enterprise needs that are not being served by conventional financial institutions.

A draft report on the research findings was well received at a seminar hosted by ACCORD in Sydney on 10 December. ACCORD Research Fellow, Kathryn Parker said that "Australia lacks the supportive regulatory and tax regimes that have fostered the growth of CDFIs elsewhere."

A panel including some of Australia's most experienced social policy makers, social entrepreneurs, community enterprise developers, and financial managers outlined examples of community capital raising in their own areas, emphasising the need for a more concerted effort in Australia to establish CDFIs.

The panel, chaired by Mark Lyons, Professor of Social Economy at UTS and Co-director of ACCORD, included: Dr Tony Morris, Mission Australia; Duncan Power, Charities Aid Foundation Australia; Elizabeth Cham, Philanthropy Australia; Richard de Simone, Foresters ANA Friendly Society and ANA Ethical Superannuation Fund; Vern Hughes, Social Entrepreneurs Network; Steve Lawrence, Work Ventures Australia; Paul Fitzgerald, Grow and Ted Smeaton, Benevolent Society. The final report is due for release early next year.

Co-operative profile

Co-operatives and Wealth - The Bega Experience

The Bega Co-operative Society Ltd, known as Bega Cheese, www.begacheese.com.au, is a co-operative with a 100-year history. Barry Irvin, its Chairman, stresses, that the co-operative principles, which have their origins in the mid 19th century, need to be applied to businesses facing the challenges of the 21st century.

The Bega Cheese example is an important one: a century old co-operative, a business that has tripled in size in the last three years, a strong culture focused on change and opportunity, and a Board and management for which the first objective is the creation of wealth.

Barry Irvin points out the benefits for the community, which have been a result of the co-op's success: "Our co-op employs over 500 people in its local community, the largest employer by far, and up from 130 just four years ago. Last year, as a result of a major manufacturing and marketing alliance with Fonterra and Bonlac Foods, Bega Cheese released on average $120,000 in cash and shares to its members, over and above milk pay rates. Bega Cheese now has a dominant position in the domestic market and its product can be found in over 30 countries around the world."

This paper was first delivered at the NSW Co-operative Federation's 2002 Annual Conference, and is reproduced with the kind permission of the author.

The Co-operative Difference

Co-ops could solve Canada's housing crisis

Canada's cities are experiencing a severe housing crisis. A recent report by the Canadian Centre for Policy Alternatives, Manitoba, states that housing co-ops could be part of the solution. The report, www.policyalternatives.ca/mb, written by Professor of City Planning, Ian Skelton, uses an innovative international comparative approach to demonstrate how Canada has fallen behind other countries, including Australia, the UK, Sweden and the USA, in its support for co-operative housing.

Canada has no national housing policy, making it unique in this regard among comparable countries. There are indications that the federal government may be moving in the direction of a new national housing strategy. One component of such a plan could be co-op housing.

Fair Trade and Co-operatives

Coffee is the world's second most valuable traded commodity, behind petroleum. There are approximately 20 million farmers and coffee workers in over 50 countries involved in producing coffee around the world. Coffee underpins the café society, which we all now take for granted. However, the benefits of the rise in consumption are increasingly being denied to the coffee producers. The role of co-operatives, http://www.globalexchange.org/economy/coffee/background.html, in assisting third world coffee producers, is more substantial than ever.

NETCO - strengthens co-ops

NETCO is a national alliance of agricultural co-operatives. The organisation strengthens its members' ability to deliver better returns to their local farmers. A co-operative itself, it comprises nine members nationwide to whom it provides advice on risk management and market development, and also coordinates resource sharing between co-operatives.

NETCO activities focus on (but are not limited to) the grain industry. Assistance from NETCO also includes: development of niche and/or export markets, provision of administrative services, licence-sharing, accessing economies of scale on farm inputs and financing, as well as human resource development.

Today NETCO, www.netcoop.com.au, represents over 5000 farmers nationwide, who produce around 20 percent of total grain production in Australia. NETCO also represents its members and their farmer members at industry and government levels.

Co-operative Care for Children

The Maroubra Neighbourhood Children's Centre was incorporated in 1980 as a co-operative and officially opened in 1982. Originally a private home, the building was gradually converted to become a well equipped childcare facility. The centre is run by Co-ordinator Caroline Windsor (pictured left), assisted by six full-time staff. A management committee of seven parents (all Directors) represents 40 member families. The Centre has been accredited, under the Quality Improvement and Accreditation System, for 2 ½years as child care facility. Caroline says: "Our philosophy is built on respect for cultural diversity within the centre and its community and we build aspects of this into our program. The Centre complements the child's home environment; therefore families play an important role in our overall operations."

Franchising and co-operatives

Franchising and Co-operatives - The blurred dividing line

Since the introduction of the Franchising Code of Conduct, the term "franchise" now has a much broader meaning. "Despite passionate protests, many co-operatives are clearly franchises" says Stephen Giles, partner with law firm Deacons in Melbourne.

In the field of trade and commerce, co-operatives come from a different angle. Profit is not the sole, or even dominant motivator, in many cases. The culture of co-operatives is much more egalitarian and different to a pure franchise network, and there is usually a stronger focus on member benefits. However, the dividing line between a co-operative and a franchise network is somewhat blurred, and the Federal Government has been unable to draw a distinction between the two, when drafting the Franchising Code of Conduct.

Stephen Giles and Fiona Wallwork, a Senior Associate of Deacons' Sydney office, are co-authors of an article titled Franchising and Co-operatives - Are you Contravening the Franchising Code of Conduct? The article analyses the Franchising Code of Conduct and is available in our Infobriefs section.

This paper was first delivered at the NSW Co-operative Federation's 2002 Annual Conference, and is reproduced with the kind permission of the authors.

Co-ops and the Financial Advantages

Social Accounting

How do co-operatives and nonprofit organisations add value to their communities? How can they create social capital out of the dollars invested in them? Can nonprofits and co-operatives measure their social performance, and make a business case?

These questions are answered in: What Counts: Social Accounting for Non-profits and Co-operatives, a newly published book, www.prenhall.com/accounting, by authors Jack Quarter, Laurie Mook, and Betty Jane Richmond from the University of Toronto.

The book provides the beginnings of an alternative social accounting, with procedures spelled out in a "how-to-do" manner. The topics covered go beyond traditional accounting and tell a fuller story of nonprofit and co-operative performance.

Ian MacPherson, Director, British Columbia Institute for Co-operative Studies, says about the publication: "As more people become concerned about the social impact of economic activities, communities want to understand and recognise what the social economy does for them in creating social cohesion. This book makes a central contribution in this area."

Community bank business picks up in Avoca

The Avoca Community Bank branch of Bendigo Bank, www.bendigobank.com.au, situated in Central Victoria, 180 km north-west of Melbourne, opened for business in February 1999. The local corporate entity holding the franchise is Avoca District Co-operative Ltd. According to Tony O'Shea, Secretary of the co-operative, the creators of the community bank initially believed their concept would mainly appeal to rural towns. Surprisingly, however, the most successful branches are operating in suburban areas throughout the country. There are now a total of 75 community banks, with a further 100 planned.

When the NAB closed in Avoca in August this year, its departure left the Avoca Community Bank as the only bank in town. Since then the Avoca Bank's business has accelerated, and the Maryborough agency, 26 km away, is also doing well, despite the four major banks and a Credit Union, being represented there. The population of Avoca is approximately 1,000 and Maryborough's 8,000. "Earlier this year we had to install an additional computer terminal in our Maryborough Agency plus extra part-time staff to cope with an influx of new customers, following account-keeping fees being increased by the Commonwealth Bank," said Tony O'Shea.

ACCORD in the media

Loyalty - a key competitive advantage

ACCORD's General Manager, Garry Cronan and visiting guest lecturer, Professor Daniel Côtè, from the University of Montreal, were interviewed recently, by Julie McCrossin on ABC's Life Matters, about the value of loyalty in co-operatives.

Professor Côtè focussed on loyalty as a key competitive advantage for co-operatives. He stressed that loyalty arose out of the principles of co-ops; how they support and nurture a collective approach to decision-making and sharing of common goals. However, he stressed, that the principles are not enough in themselves to sustain loyalty, but that loyalty must be earned. Once it becomes strongly embedded in the organisation's culture, loyalty helps ensure the success of the co-op, not only as a commercial undertaking, but also as a member owned organisation.

Professor Côtè has developed a model for assessing how co-ops balance the important market requirements with the need to maintain a strong member focus.

Garry Cronan highlighted how some Australian co-operatives and credit unions had remained member focused and values lead. Garry also explained how commercial success for some Australian co-operatives had come at the expense of their co-operative character. The balancing of these tensions within co-operatives was a difficult task. Australian co-operatives and credit unions could gain some useful insights from the work of Professor Cote, he added.

Professor Côtè was keynote speaker at a seminar on Revitalising membership, hosted by ACCORD, at the University of Technology, Sydney on 7 November 2002.

ACCORD's next event will be a conference in February on the water reform and co-operation, at Charles Sturt University Wagga Wagga.

News from co-op federations around Australia

australia.coop

The Co-operative Federation of Victoria Ltd (CFV) is about to establish a co-operative portal, http://www.australia.coop

The CFV has been appointed steward for the .Coop Community Name program and has established australia.coop for this purpose.

The web site will include resources on co-operative advocacy, aggregation, case studies, education, formation, history, legislation, management and publications.

For a brochure on australia.coop contact the Secretary of the Co-operative Federation of Victoria Ltd, David Griffiths, cfedv@impaq.com.au

The Co-operative Federation of South Australia Inc

Amendments to the South Australian Co-operative Act, passed in State Parliament in October 2002, now brings the SA Act into line with NSW and Queensland. Regulations have to be drafted for the amendments to become operative.

The Federation held another conference on 25th October 2002 on the theme, Progressing the Co-operative Advantage, The conference built on the success of last year's conference, titled, Selling the Co-operative Advantage. "We wanted to continue the theme, at the request of our members," said David Osgood, Federation Secretary.

"We showcased local examples, highlighting how co-operatives can be successful and progressive", he said. Examples of good practise in 2001 included: The Community Co-operative Store (Nuriootpa) Ltd, a retail co-operative from the Barossa Valley and Seedco Australia Co-operative Ltd, (seed sales, local & export). Showcased at this year's conference was: Lenswood Cold Stores Co-operative Ltd, (apple, pear & cherry sales, and cold storage), from the Adelaide Hills.

The Co-operative Federation of South Australia will hold its next conference on 24 October 2003. For further details email: cfsa@adam.com.au

Announcements

Judy Johnston, Senior Lecturer in Business Studies at UTS, will be assuming the role of Co-director of ACCORD, on a temporary basis, while Professor Mark Lyons takes a well earned sabbatical for the first half of the year 2003.

Monash University Agribusiness Co-Operative Awards Announced

The winner of the fifth annual Sir John Monash Gold Medal Award for Agribusiness Co-operative Directors was announced at the recent Monash University Agribusiness Co-operative Leadership and Governance Forum.

The winner, chosen by an Australasian wide judging panel for 2002, was Rod Madden, Chairman of the United Farmers Co-operative from Western Australia. Under the Chairmanship of Rod Madden this co-operative has grown from five initial farmer shareholders with a $5,000 capital base in 1992 to almost 3000 members with a turnover of $100 million and 50 full and part-time employees at facilities in Perth, Kwinana, Geraldton, Esperance and Albany.

The inaugural inductions into the Australasian Agribusiness Cooperatives Hall of Honour were also announced:

• Charles E.D. Meares (1861-1934) Dairy Farmers' Co-operative Milk Company Limited, NSW
• Harry W. Osborne (1865- c 1934) Western District Co-operative Produce Company, Victoria
• John Pearce - South Australian Farmers Co-operative Union Ltd
• Thomas Bath- Tammin Farmers Co-operative, Co-operative Federation of Western Australia, Trustee of the Wheat Pool of Western Australia, WA Co-operative Bulk Handling, Co-operative Federation of Australia
• Bill Kidston - Poultry Farmers (Red Comb) Co-operative (Brisbane), Co-operative Federation of Queensland
• J.J. (Jack) McGuire - Managing Director (1957-72) Murray Goulburn Co-operative, Victoria
• Ian Davidge, Chairman (1975-1996) Ricegrower's Co-operative, NSW
• Philip Bruem, Director and Deputy Chairman ( 1984-2002) Dairy Farmers Co-operative, NSW

For further details Dr. Lawrie Dooley, lawrence.dooley@buseco.monash.edu.au, Food and Agribusiness Programs Director, Monash University

New Publication

"Concepts of Agricultural Co-operatives"

This paper attempts to provide a comprehensive yet useful overview of the concepts of agricultural co-operatives with a special emphasis on taxonomy of agricultural co-operatives. After confirming the empirical relevance of the co-operative principles within the modern agricultural sector, and outlining economic, social and psychological aspects of the roles and benefits of agricultural co-operatives, the paper focuses on different classifications of the agricultural co-operatives as identified in the literature. The paper considers some new forms of agricultural co-operation currently emerging both overseas and in Australia. While some of these new forms can be categorised as informal, the paper also points out at some problems in conceptualisation of a formal versus /informal division of co-operative business forms. It is suggested that classifications of agricultural co-operatives could have important implications in the situations where co-operatives become instruments of public policy.