Celebrating the Co-op Group's Democracy

There is no doubt that the Co-operative Movement like all progressive movements underwent a near death experience during the onslaught of Thatcherism. Today we have a vibrant and exciting sector that to be honest is in a much better shape than we ever thought possible but perhaps not in as good a position as it should be. This was what went through my mind as I sat in the Annual General Meeting of the Co-operative Group in Manchester on a very hot weekend. The Group is the giant of the UK Co-operative sector a collection of significant individual businesses that have grown from a series of amalgamations of smaller consumer retail societies and the shared services the old Co-operative Wholesale Society used to undertake on behalf of the entire consumer co-operative movement. The AGM in Manchester is as you would perhaps expect in society with 7.2 million members a huge example of representative democracy with delegates from all the regions and devolved nations and from affiliated independent societies. Making for hundreds of representatives in a huge co-operative parliament. The Group has a lot to celebrate, with a store in every postal area of the UK we are all familiar with the Co-op food stores but did you know it is Britain’s 3rd largest pharmacy chain, as well as Britain’s biggest farmer and funeral director? Then there is the Banking Group and the travel arm with Thomas Cook. This is a huge business conglomerate when they have to some extent gone out of fashion. With a turnover of £13.3billion and £585million operating profit there is a lot to discus. A large part of the chair, Len Wardle’s, report to the members was taken up with the proposed purchase of banking branches from LloydsTSB. Frankly members have been disgusted with the way this had been reported in the financial press. The attacks on the Co-op Group board members as, a nurse, a Methodist Minister, a civil servant, a farmer, etc and therefore unfit to run a bank drew the response that if more Banks had been managed by people with common sense and real world experiences the country would not be in the mess it is in now! This attack on the democracy of the Group is a fundamental issue. We cannot allow the FSA or our enemies in the City who are against our democratic culture to determine our structure. Better in my opinion to pass over the opportunity for quick growth and stick to slower more organic growth than allow ourselves to be dictated to in this way. There is also a school of thought that in the present crisis in the banking sector it is impossible to do any accurate due diligence on these banking operations. The Group also has some new irons in the fire with the expansion of Co-operative Legal Services widening access to the law with the creation of 3,000 new posts. This is an area where trust is paramount and is a testimony to the integrity of the brand. Members however where not resting on their laurels. Clearly as a community retailer the Groups fortunes rise and fall with the communities they serve. There where key motions on improving the food store proposition and a demand that the Co-op Group supports the Living Wage Campaign. This latter is a tough ask for the Group as competition in the food sector is vicious and a 10p increase in the hourly rate is £50million off the bottom line. Also the competition in the form of Asda-Wallmart, Tesco and others has deep pockets. However the Board where anxious to find ways within the means of the Group to see what could be done and to report back to next half yearly meeting. There were tough questions on, supporting the communities in which we trade, e-business, joining with other European Co-operators in international buying, as well as issues around packaging and waste, and executive remuneration. The board where certainly put through their paces. I think however we are fortunate in the quality of the management team and the excellent quality of the CEO’s of the independent societies on the board. People like Ursula Libetter of Lincolnshire, Martyn Cheadle of Midlands, and Ben Reid of Midcounties stand comparison with any CEO’s in the corporate sector. The AGM had some more pleasant duties like voting through the distributions of £50.8million to the individual members and £24.4million to employees. I must say also I was deeply impressed with the contributions from the delegates from the Group regions, the quality of the arguments put forward, even if you did not agree with them was impressive. The passion for the communities they represent shone through, with rich accents from all parts of the United Kingdom. The democracy and representativeness of the Co-operative Groups Parliament feels and sounds like the real thing unlike some of the noises that emanate from the Palace of Westminster which these days sound like bland waffle in comparison. As I said at the beginning we are in a stronger position than we dared expect but we know we can do better and we will have too if in the present period we are to withstand both the competition and the destructive nature of the government’s economic policies.

In Praise of Champagne Socialism!

I am sure many readers of the Morning Star have been accused of being the proverbial Bollinger Bolshevik because they perhaps have a taste for the very best in food and wine. It is funny how many TV chefs trek half way across Europe to eat the food of peasants. I wonder if it is to escape the processed pap they help the supermarkets to sell to millions of us Brits! The TV advertisers tell us it is traditional or just as good as mother used to make but nothing could be further from the truth. There is no greater pleasure than sharing a meal, of good food and good wine, in good company. The tragedy is that unlike in most other European countries where people are closer to the land because of our early start at industrialisation and the consequent land clearances most Brits have long since lost contact with the place where their food and drink actually comes from. I well remember my first visit to the Fete de Humanite the newspaper of the Communist Party of France. Each region of the Party had a tent with a bar and restaurant selling its own particular regional speciality and the Communist Party’s from other countries had similar stalls. I particularly enjoyed those of Italy, Spain and Portugal. I can still remember the Portuguese stand with its grilled sardines and Douro wine; it makes my mouth water to think of it. One refuge from this blandness and an escape to world of the very best wine at very reasonable prices is to loin the Wine Society. WHICH readers proclaim it to be the very best of wine club voting it head and shoulders above all the others. Last Christmas I bought my wife a share in the Society, she is half Spanish, and is particularly fond of the albarino wines of the Rias Baixas area in North West Spain, which can be hard to come by. I must admit she went a bit mad with her first order delivered in the Society’s own van. “Never mind”, I said, “I will help you to get rid of it”! Unlike other clubs the Society is a genuine co-operative with a rather interesting pedigree. For the last of the Great Exhibitions, in 1874, various countries sent large quantities of wine in cask to be stored in the cellars of the Albert Hall where according to the early history of the society, ‘it entirely escaped notice from visitors’. The Portuguese growers appealed for help, step forward Major-General Henry Scott, one of the architects of the hall who held a series of lunches to publicise the wines. Many guests expressed an interest in buying the wine and Scott proposed the setting up of “a co-operative company” to buy good quality wines and sell on a regular basis to members. The International Exhibition Co-operative Wine Society Limited was born. This months AGM will be the 138th year the Society has reported to its members. It is still owned solely by them (one share each) and trades exclusively with them and there are a clear majority of elected members, 8 out of 13, on the board. The focus however is the same as it has always been and that is to make available to members the best quality of wine and service at the best possible price. The society sells only to members and a lifetime share costs just £40 with no annual fee or obligation to purchase and what’s more new members get a credit of £10 to their account to help with their first purchase. The Society’s wine buyers cover the world looking for excellence in every price bracket. Prices start as low as £5 a bottle. Whilst of course they carry all the classics from Claret to Burgundy and the Rhone the current range of 1,500 wines enables members to explore less well known wines if I am beginning to sound like their marketing manager it is because the more members the lower the costs! As the society measures success in member satisfaction at the beginning of this year they reduced over 300 prices and there where no price increases. Because they are a co-op they where able to reduce margins and reinvest previous year’s profits back into the society. 2011 was a tough year with a VAT increase, volatile exchange rates and members feeling the pinch and trading down. So despite the highest ever case sales, over 600,000 to 110,000 members, the deliberate reduction in margin meant that gross turnover only slightly increased to £69.2million. They have declared a 2% dividend which is to be retained within the business to continue to improve the service which includes free delivery on cases of twelve bottles. The price and quality of wine from the IWC is second to none and according to the chair Sarah Evans, who spoke at this years co-operative retail conference, this is thanks to its mutual, co-operative, status, “the buyers are not tasked with meeting specific selling prices and profit margins set by commercial priorities, but with finding high quality, interesting, value-for-money wines from around the world at all price levels. Member satisfaction is paramount, maximising profit is not.” They must be doing something right. Despite the fact they do not advertise membership grew last year by 13,269! As I write we have just taken delivery of a case of white sauvignons for summer which I can tell you we will enjoy drinking even if it never stops raining!

UNITY: a 125 Years of Bolton’s Socialist Club

June 2nd sees Bolton Socialists on the moors taking their annual Walt Whitman walk, with fellowship, a swig of wine from the loving cup and poetry from Whitman. An event made famous from Stuart Maconies Radio 4 documentary and the book, With Walt Whitman in Bolton by Paul Salveson. Their association with Whitman is just one in a long list of historic ties going back to their formation in 1887. “The story begins with Tom France, who sold hot peas around the streets.” Argues Denis Pye in his history of the Club, In January 1886, Tom announced in the Social Democratic Federation newspaper, Justice that he would like to hear from any friends interested in forming a branch. The branch grew and was very active in a bitter engineering workers dispute from May until October 1887. In which they where supported by full-time SDF organiser Tom Mann, Bolton Socialists where so impressed they invited him to stay setting him up with a tobacconists and newsagents in Deansgate. Not long after his arrival the Independent Order of Good Templers Hall where they had been meeting became the Social-Democratic Hall, or the Socialist Club. Bolton had an incredibly vibrant socialist scene, as well as a Labour Church, they even tried to establish the Bolton Co-operative Commonwealth a self supporting village or colony. Sadly it only lasted six years. Meanwhile many important figures passed through including Peter Kropotkin and William Morris. In 1892 the ILP was established in the town with a strong overlap with the SDF. Noticeable when in 1896 Eleanor Marx came to speak. But the most important vehicle for creating socialist unity was the Clarion. Not just a political paper but a way of life. Its readers formed choirs, theatre groups, cycling and rambling clubs and most of all preached socialist unity. It is thanks to the Clarion that we still have a Socialist Club in Bolton today. It was in June 1898 that Sarah Reddish, active in the Co-operative Women’s Guild well known as a speaker with the Clarion women’s van, wrote in to the paper as Secretary of Bolton West Ward ILP branch saying they where prepared to fuse with the SDF. That fusion took place in September 1898 to form the Bolton Socialist Party. Their Principles and Objects ring down the years: a) The national ownership and control of land and the means of distributing national wealth. b) The reduction of the hours of labour to the lowest point compatible with the highest material moral and intellectual development and well being of the individual and society. c) The equal right of all to the highest and best education. Equal social rights, duties and responsibilities. Observance of the highest principles of fellowship. d) The abolition of all class privileges and monopolies. The abolition of war and the establishment of peace between nations. e) The furtherance of Socialism to the uttermost:- by means of local conferences, elections, public meetings, papers, pleasures and pastimes, not incompatible with the highest interests if the Party and Club and the uttermost furtherance of its objects. f) The promotion of the highest material wellbeing of the people of this and every other country of the world, without distinction of race, sex or creed. g) The emancipation of labour from the domination of capitalism and landlordism. The establishment of social equality between the sexes, the cultivation in all the clearest of conception and love of truth, justice, liberty, good manners and good motives. In 1901 a prospectus for the Bolton Socialist Hall Limited (the Co-operative Industrial and Provident Society which still exists) was launched offering £1 shares. Meanwhile social, cultural and propaganda activities continued, a Socialist Sunday School was established with the Socialist Ten Commandments which were reproduced for the centenary by Leeds Postcards. The same year James Connolly visited the town and by 1904 they had raised enough money to buy 16, Wood Street. Still committed to unity the Bolton Socialists sent delegates when the SDF called a Unity conference in 1911. This lead to the formation of the British Socialist Party and they became a branch. Then in 1913 they hosted Big Jim Larkin campaigning against the Dublin lockout. In 1916 a pro-war faction of the Socialist Party formed a National Socialist Party; the Bolton branch had the good sense to reject this and became independent once again. Following the war club secretary, Jim Paulden, write a hundred-page epic poem in praise of Lenin, yet at the end of 1921 they affiliated to the Labour Party. Sadly from the late 1920’s for fifty years the Club became something of drinking den as they exploited the licensing laws to serve alcohol when the pubs where shut. Left wingers still met in the Club but it was thanks to the licensing authorities who took the clubs license away in 1979 that it rediscovered its true purpose. In hock to the brewery the club was put up for sale in 1982 but its co-operative status saved it – the signatures of 75% of its members where required to wind up the society and they simply could not be found. The Society was re-floated in November 1983. The reborn co-operative club introduced many of the old activities to a new generation. Sadly in a burst of sectarianism by the Labour Party the clubs affiliations were terminated having hosted a meeting of Arthur Scargill’s Socialist Labour Party – like they have for many other socialist parties and organisations. Independent again every Friday they have a regular cycle of events designed to encourage the education, organisation and agitation of socialists. They support those in struggle but also have a full cultural program of cinema, talks, play readings they even have a Clarion choir. As William Morris pointed out they are engaged in that most important of work “making socialists”. The Bolton Socialist Party and Club have been doing just that for 125 years, every town needs one!

Civil Service Pensioners Mugged by Maude and Hutton

I read in a Cabinet Office press release "the first 'John Lewis style' business created from a central government service", and ‘the first joint-venture mutual’ said the BBC. What is this new venture? It is MyCSP Ltd -short for My Civil Service Pension. Francis Maude, the Cabinet Office minister, hailed it as an alternative to the "binary choice" between state monopoly and privatisation, and as a "pathfinder" at the "cutting edge of public-service reform". The man who created panic over a potential fuel strike is now spreading panic through the Civil Service and its pensioners as he again mangles the language in privatising the Public Service Pension Scheme whilst telling the world he is creating a mutual. There are such things as financial mutuals, they have their own Association, it is a significant group of 57 member owned businesses managing assets of over £85billion. For the record it defines a financial mutual as “an organisation that supplies financial services products, and which is owned by its customers, or members.” Examples include NFU Mutual and Liverpool Victoria Friendly Society. The 1.5 million members of the Civil Service Pension Scheme have no role in the new organisation. So it is a simple test is MyCSP owned by its customer/members? NO! So it is NOT a financial mutual. Is it owned by its employees? The definition published by the Employee Ownership Association says that, “for an organisation to be classified as ‘employee owned’, employees must have ownership of more than 50 per cent of the organisation”. So a stake of half this means MyCSP is not employee owned either. What’s more a key co-operative principle is “voluntary and open membership”. In a survey conducted by the PCS Union of staff in MyCSP over half responded. 96% wanted to retain their civil service status in full and 94% were opposed to the government's view that the mutualisation would ‘empower employees and improve performance’, as Maude had claimed. What is more as the workers have been coerced into this new business it is in no sense a co-operative. So who are the real owners? Well it is to be 40% owned by the Equiniti Group and the Government are to retain a 35% stake which makes it look like another smelly PFI scheme. As a sop the people who work in the company are to get a 25% stake held in trust. But who are the Equiniti Group? The Chairman is, Kevin Beeston, ex Serco and the Chief Executive is, Wayne Story, ex Capita, not exactly famous for a commitment to workers co-operatives or mutuality. The new business is set to get the contract for the Civil Service Pensions for seven years then they will be out to tender for the business against other Pensions administration businesses. The Parliamentary All Party Group on Employee Ownership, produced a report called Sharing Ownership, The role of Employee Ownership in Public Service Delivery. They asked David Burbage, from the London Borough of Windsor and Maidenhead, if the mutualisation programme was viewed as “disguised privatisation” which could “swallow up” employee led mutuals. He responded that this was something that would have to be guarded against: “We don’t want to find we’re dealing with Serco in a different kind of deal”. Well that looks to me just what we have here. It is not as if we have not been here before when the Railways where privatised in 1993 the Corporate Pensions Department for the British Railways Board was also privatised as Pensions Management Ltd. Today it is called RPMI Ltd as they changed their name to attract non-railway clients. The scheme has been under continuous criticism from all of the rail unions. Despite a Commission on Railway Pensions the disagreements between workers and the scheme has continued. The current pensions dispute between ASLEF and East Midlands Trains which has led to this month’s strike action shows the importance to workers of their pensions. There is a case for both worker ownership and control and mutual financial services, they could have started for example with the bust Banks they had taken into public ownership, but the case of MyCSP is just Government spin. Just look who is to be the £1000 a day chairman of this new business according to James Lyons in the Daily Mirror who else but the architect of the work longer, pay more, get less, pension for public sector workers, the man who started the pensions assault in the first place, Lord John Hutton. What do the new quarter “owners” of MyCSP get? Well many will get the sack! Interviewed on the Civil Service Live Network the new CEO Phil Bartlett said when asked does the new business model mean staff numbers will fall said: “Yes. Overall when we start out, we’ll probably employ about 700 people in the public and private sectors running this. When we’ve re-tooled and opened up the new channels, then we’ll be smaller than that; probably half the size, maybe a bit less.” How long will it be in its present structure? “We want a mutual shareholding structure that provides good stability over time. But you never say never in these things. It will be the shareholders themselves that will take those decisions to change those arrangements in the future,” he says. Clearly the government could have prevented such a possibility by either making it a real mutual or giving the workers complete control. But they have done neither and this dreadful beast will do terrible damage to the image of employee ownership and the mutual sector by behaving like the private business it is.

Financial Fair Play and Fan Owned Clubs

Despite the some drama at the end of the football season it has yet again been a really good one for the case of football co-op’s. OK so fan owned Barcelona lost to Abramovich’s Chelsea. But Chelsea still have to beat the 130,000 fans who own 84% of Bayern Munich to win the title. So another good season for fan owned clubs with three of the four Champion’s League Semi-finalists being owned by their fans. The Bundesliga has a 50% plus one rule which means no individual however wealthy can take control of one of its member clubs. So I will be cheering on Bayern in the final. And when it comes to bankrupt blues why does no one seem to be advocating fan ownership for Glasgow Rangers? With their global support surely if any club is capable of rebuilding itself it has to be Rangers on the back of such a hugely passionate fan base. It is in an ideal position to go for fan ownership surely their experience of being owned by some particularly dubious people is enough to put them off being a rich man’s toy forever! Meanwhile in the lower divisions we have had some stunning performances from fan owned clubs. I will be cheering on Wrexham to make it into the football league after a dramatic year in which the club has been bought back to life thanks to the support of their fantastic fans. Last summer players went unpaid and pre-season games where called off for lack of cash. Now they are on the verge of promotion. The fans raised over £100,000 in a matter of hours to raise the conference bond and nearly 6,000 turned up for the battle of fan owned clubs when they played AFC Telford on New Year’s Day. AFC Telford another club undergoing rebuilding following a fan buyout has managed to hang on to their place in the Blue Square League. Sadly Exeter City one of personal favourites of fan owned clubs who do a tremendous amount in the community in Devon will drop into the Championship League 2 to join AFC Wimbledon who have had, well, a mixed season back in the football league. One of the most amazing performances of the season has been in the Premiership where Swansea the only Welsh club ever to play in the Premiership has set people talking with their brand of free flowing football. Not many people realise however that without the 20% of the club in the ownership of the Supporters Trust, giving them a seat on the board, this success would not have been possible. I am confident that over time as other shareholders come and go the Supporters Trust will come to play an even bigger role in the club. Elsewhere in Wales Merthyr Town won promotion from the Western Football League Premier Division to the Southern League just two years after being reformed under supporter’s ownership after the liquidation of Merthyr Tydfil FC. There is no doubt that Supporters Direct who promote supporters club ownership and the formation of supporters trusts are doing a great job with some 26 clubs now in ownership or control by supporters trusts. I will be looking forward to the contests for the Supporters Direct Shield between Fisher and Lewes and the Supporters Direct Cup, sponsored by the Co-operative Group, between Wrexham and Enfield Town when both games are played, on Sunday July 8th, at Enfield Towns Queen Elizabeth Stadium. Meanwhile talking of stadiums as well as reaching the play-off final in the Evo-Stick League, FC United of Manchester are also celebrating having raised £1.6 million in a community share issue. This cash will unlock the grant funding they need to meet the costs of their new £4.6 million stadium project and building work is set to commence at the Moston site in the spring. Many people have commented that in the tussle between the two halves of Manchester that United have been held back this season by the huge burden of debt imposed on them by the Glaziers. It was this argument that in many ways lead to the formation of FC United. They are not however the only critics of the Glaziers and their financial engineering. One critic brings me back to where I began it is the President of Bayern Munich, Uli Hoeness, he argues it is unfair for the owners of the club to lumber them with almost £450 million of debt, something I suspect many United fans would agree with when they woke up on the morning after City had overtaken over at the top of the Premiership table. This may soon become a much bigger issue as Bayern are vociferous supporters of UEFA’s Financial Fair Play Regulations, which could see clubs barred from the Champions League if they fail to reduce losses and adhere to the new financial strictures by 2015. The German club's chief executive, Karl-Heinz Rummenigge insists that Europe’s governing body must get tough with those who ignore the rules. At the moment only Arsenal of the highest profile Premier League clubs would comfortably meet the requirements of the new rules based on recently published financial results. Under their current ownership model Manchester United, Chelsea, Liverpool and Manchester City would all fail. If it was needed another good reason to rethink how our most popular sport is owned and run.

Co-operation in Education

As a child of a “bog standard” comprehensive and an advocate of comprehensive education I have been horrified by the return to a class based selective education system. Selection achieved not by examination but by geography. Living in the right street or going to the right church gets your child into the ‘right’ school.

We never had a truly comprehensive system - the pernicious influence of the public schools and the church was always felt. Now the changes that began under the Tories, reinforced by New Labour, are reaching fruition with the Condems and can be seen for what they are privatisation and rationing. The mantra of ‘choice’ means schools choose pupils rather than pupils’ schools and the tyranny of testing means there is precious little time for any real education to take place during school time.

Working class education is a relatively recent phenomenon. It was on New Years Day in 1816 that Robert Owen opened, the Institute for the Formation of Character, in New Lanark, establishing Britain’s first primary school.

We can see how out of touch Owen was, he set no targets, children where controlled by kindness and affection with no punishments permitted, there where no prizes given that might encourage individual emulation, instead the emphasis was on a co-operative search for knowledge that would be its own reward. Today these ideas will not even get you the keys to a “Free School”.

As far back as the formation of the Rochdale Pioneers Society back in 1844 education has been one of the co-op principles. Yet despite the movement establishing its own college in 1919 the idea of ‘co-operative education’ in its more holistic sense has been an aspiration rather than a reality because it goes against most educational practice. Co-operative learning has two sides on one is the pedagogy, the way to learn co-operatively, the other is as a way of learning about co-operation as part of an alternative social and economic system.

These complex multi-facetted ideas about co-operative education have been bought together in a special issue of the Co-operative Studies Journal. Guest edited by Maureen Breeze, Co-President of the International Association for the Study of Co-operation in Education, with support from Alan Wilkins of Co-operative Learning and Development Associates and Richard Bickle Secretary of the UK Society for Co-operative Studies.

It contains some substantial articles that put co-operation in education into focus and are followed by 27 accounts of the huge range of practice here in the UK. It is gratifying that there is so much thinking about an alternative educational philosophy in these troubled times.

Maureen in her introduction argues, that “The intention of the Journal is to provide a platform from which to investigate and develop understandings of the breadth of meanings and representations variously described as co-operation in education as well as bringing some coherence to those approaches.”

Many contributors and practitioners in the field have found themselves isolated but by bringing so many together to produce the special issue of the journal co-operatively something really special has been achieved.

Owen was right that education has for its object the formation of character. But so too was Bertrand Russell when in his seminal book, On Education in 1928, he wrote “We must have some conception of the type of person we wish to produce, before we can have a definite opinion as to the education we consider best.”

Our present system does seem to propel those from the “best” schools and “best” universities to the top. Yet as examples of their output, David Cameron and George Osborne display astonishing levels of ignorance and a complete lack of empathy with their fellow citizens. Their socio-pathology shows us something is very wrong with the education they have received unless of course their arrogance, ignorance and greed are the desired outputs?

What is clear is that inviting students to compete as rivals for grades means they work against one another a process described as negative interdependence. Alternatively co-operative learning, working together to accomplish shared goals, creates positive interdependence, achieved when students learn that they can only reach their desired goals, if and only if, the other students in the group reach those same goals.

Co-operative learning can be seen as a form of experiential learning, as US author John Holt points out, “children cannot learn all that much from cookbooks (instruction and textbooks) new or old because they do not learn effectively by trying to transplant someone else’s reality into their own but by building up their own reality from the experiences they encounter.”

This Journal contains a wealth of experience from schools, adult, further and higher education, there is even a piece by a sixteen year old member of the Woodcraft Folk an organisation that could teach us all a great deal about effective learning.

We are facing some deeply challenging questions as the government dismantles the state education system, can you have a genuinely co-operative school within the context of these changes? As Maureen says, “By finding a way to bring these all together and harnessing the combined energy, knowledge, experience and practice, we could truly embrace the potential for transforming education through co-operation and become a force for change.”

That change cannot come soon enough this really is a splendid and timely publication if you are interested in obtaining a copy go to: www.co-opstudies.org

Fairtrade and Co-operation

No one who has been involved in the Fair Trade movement could be failed to be moved by encounters with the producers they meet from the developing world. I have had the honour this year to meet Palestinian farmers from Zaytoun and Ugandan co-operative women coffee growers. This is what the movement is all about putting the producers in contact with the consumers avoiding the alienation and mystification of the ‘market’ and despite the downturn this year’s total sales of fait trade products should reach £1.3 billion.

If nothing else showing, at a time when incomes are tight, that consumers do have a conscience. Today corporations do everything they can to hide exploitation, yet we all know how conventional marketing masks the gross inequalities between producers and consumer, asking consumers to fixate on the commodity.

It’s a long way from the early days of ‘suitcase trade’ when visitors, mainly missionaries, bought suitcases of handicrafts back from the developing world to sell amongst their communities and parishes.

That process of direct contacts between consumers and producers making trade fair was systemised by organisations like Oxfam Trading, the Dutch Fair Trade Organisatie and the Christian based Traidcraft. Their mission was about building relationships and drawing explicit attention to the production process.

Today the base of the Fair Trade system is the huge numbers of producer co-operatives representing small farmers in poor countries producing over three quarters of all fair trade commodities. It was by the formation of these producer co-ops that farmers sought to bypass the monopolists and penetrate western markets. Only co-op control could guarantee that the fair trade premium was distributed fairly and used for wider community benefit. The democratic control embodied in the co-op model was therefore crucial to the system.

Thanks to the Fair Trade mark however the system may be now becoming a victim of its success. The development of the ‘label’ makes a huge difference to the process. It enables consumers to distinguish fairly trade products from ordinary ones and the labelling organisations have become the backbone of the movement.

Originally, however, the movement had a vision of a global trade system built on moral rather than market values. I believe that original objective has been compromised by collaboration with transnational corporations to gain market access. This means that the producer co-ops are once again becoming dependent on the transnational corporations for their survival – the very thing from which they were seeking to escape.

Many argue that Fair Trade is about reforming how markets work and that the contagious Fair Trade mark has been forcing companies to reform their practices even if just for cosmetic reasons and that it has highlighted trade injustices including the complicity of the WTO and IMF in creating an unfair world trade system.

There is some truth in this but even the strongest advocate of fair trade labelling would agree that the movement has not fundamentally changed the underlying imbalance between consumers and producers.

Today, for example, despite the fair trade critique of the system between 70% and 90% of the major commodities are marketed by just 15 transnational companies. The closer we get to the consumer the more concentrated is their power. In coffee, the most traded global commodity after oil, just 6 companies control 50% of the total market. Indeed just two, very well known companies, control half of the market for roast and ground coffee.

Just as co-operatives have fundamentally changed the lives of many poor farmers in the developing world, improving their lives and strengthening their communities, there is a need for co-operative steps to take this further.

We need to make co-operative systems central to the remaking of economies at the growing, picking, and hauling end of the market by helping them to diversify from often single cash crops by leveraging the relationships and capital that comes from fair-trade to localise expertise, resources and co-operative commercial systems.
We need to devise local strategies for accessing global market and there are co-operative ways of doing this too. There is also a need for a formal link between the Fair Trade and Co-operative Movements.

We need to have a wholly co-operative supply chain. There are examples of this on a small scale. Like the way Edinburgh workers co-op, Equal Exchange, creators of direct trading relationships between producers and consumers brings Zaytoun olive oil into the UK from the Palestinian Fair Trade Association which is a group of eight producer co-ops, oil that is then on sale in co-op shops here in the UK.
Other examples include the way the Kuapa Kokoo co-op from Ghana with help and investment has established its own brand of chocolate, Divine, here in the UK capturing more of the value in the supply chain. There are also Co-op Wholesalers like Essential Trading in Bristol, Infinity in Brighton and Suma in Elland in Yorkshire.

All of them work to build genuine relationships with suppliers.
These may seem small scale examples, proof of a principle, perhaps and may not generate the spectacular growth in Fair Trade sales of persuading Nestle to put a fair trade mark on a Kit Kat. In the long run however keeping farmers out of clutches of the transnational corporations is the only way to build a lasting genuinely fair trading system.