Zambezia (1983), XI (ii).TOWARDS PUBLIC ENTERPRISE:THE ROLE OF COMMUNITY DEVELOPMENT IN THEPROMOTION OF CO-OPERATIVESS. AGEREMinistry of Community Development and Women's Affairs, HarareTHIS ARTICLE ATTEMPTS to analyse the role that Community Development,both from an institutional and a methodological point of view, can play infacilitating the promotion of co-operatives in the rural areas. It is argued that itis only through the pooling together of resources and exploiting the naturalresources of the country collectively that private enterprise will yield to publicenterprise which is controlled by the beneficiaries themselves.Primary co-operatives administered by the peasants in the rural areas willbe used as'an example to show how popular participation can be an effectivemeans of conscientizing or educating people so that they can control the meansof production. It is in this way that co-operatives can make a substantialcontribution to social and economic development.The Government of Zimbabwe has declared transformation of our societyas a broad goal; 1983 is the Second Year of National Transformation. Thisbroad goal of national transfomiation is to be implemented in every sector ofthe economy and society. Thus each ministry as part of the governmentmachine has a role to play in transforming that aspect of society for which it isresponsible. The Ministry of Community Development and Women's Affairshas a responsibility, in conjunction with other ministries, in transforming therural areas in particular. The purpose of rural transformation is to abolish allexploitative relations on the land and to pursue policies aimed at maximum co-operation right from the start of the transition period, and it is in this mannerthat socialist relations are characterized (Thomas, 4974, p. 163).As a result of this commitment to rural transformation, many politicians,government officials and non-government organizations have visited ruralareas and have' encouraged the peasants to form co-operatives in respect ofvarious tasks in which they are engaged. But, despite the good intentions ofthose activities, there has been little attempt to explain to the masses, theprecise nature of a co-operative, the principles that govern it, the differencesbetween a co-operative society and a joint-stock company, the various types ofco-operatives and more importantly the role that co-operatives can play in thepromotion and acceleration of social transformation. Because of this lack ofeducation a lot of people think that government should meet the costs ofrunning a co-operative.It is the intention of this article to contribute to the discussion of these ideasfor the benefit of the public and all extension workers responsible for thepromotion of co-operatives.Definition yf Ł operatives. There are many ways of defining a co-operativemovement In tins article a co-operative is defined as a form of organizationwhere persons voluntarily associate together on a basis of equality for thepromotion of the economic and social interests of themselves. Defined in thismanner a Co-operative movement has an important part to play in themobilization of families, peasants and workers for better production, increased99Income and Improved living conditions and technology. It, therefore, becomesone of the pillars of the economic and social development of the country. Itbecomes a process, by Its nature and organization, through which acommunity draws the maximum of the potentialities of its environment withthe most appropriate techniques, to satisfy in a fair and desirable way the needsof everyone in view of our goal of social transformation.Co-operatives are the instruments of labour which is a means ofproduction created by humanity at a certain degree of development and alsothey are the subject and object of labour Š that is, the producer. Thus co-operatives are relations between people. They bring together the entirety of therelations that people establish amongst themselves in the production of theirmaterial life (Mandel, 1977, p. 173).The co-operative movement is also seen as a form of planning which isessentially, and above all, a form of the management of labour, of the incomefrom production, of income and of social capital Consequently it cannot bedetached from those who have property rights to the means of production orsocial capital or those who hold a monopoly of political power over thosemeans. The planning system is, therefore, always directly a reflection of thecharacter of production relations and of the whole range of socio-economicand political relations. It hence follows that it is our task to build up the kind ofsystem of social planning that will directly reflect the production, socio-economic and democratic relations of the socialist society and that willuninterruptedly reproduce those relations at an even higher level in terms ofquality (Kardelji, 1980, p. 7).Community' development as a method of approach to peasants andtheir problems facilitates the translation and implementation of all these ideasat the village level where its operational activities are generally programmed.Basic principles. A co-operative movement as both an economic and socialorganization has basic principles which sustain its activities and programmesand its survival. The co-operative movement as viewed in this article has thefollowing principles:(a) Members join as equals and not as capitalists. Division of surplus is inaccordance with the work done with the society and not according tocapital involved;(b) Members come together on the basis of equality Š one person, onevote, for example, irrespective of the amount of share capital invested;(c) Members join to improve their economic interests;(d) The act of association is voluntary. Co-operative enterprises shouldnot be judged solely or mainly on the basis of their achievements asbusiness enterprises. It is argued that co-operation is socially andpolitically desirable because it encourages producers, for example, to beself-reliant, thrifty and ready to submerge individual interests for thegreater good of the community of producers. Participation in co-operation is economically desirable because it acquaints producers ormembers with the problems of markets and of business organization andso enables them to see their problems as producers more intelligently inthe larger setting of economic life; it also may widen the range ofalternatives open to them (Bauer and Yamer, 1965 p. 225).For the rapid transformation of our society to occur through the co-operative movement, it must be achieved in a basically voluntary manner iftrue socialist relations are to prevail. It is important to note that voluntary co-100operation and participatory aspects of rural transformation have always beenimportant cornerstones of socialist theory. In some countries this voluntarypractice has been different since specific historical configurations haveresulted in a more or less forced transformation of agricultural sectors of somesocialist states. Yet this element of socialist thought must be stressed if we areto effectively combat the prevalence of this practice. As Engels declared longago:When we are in possession of state power we shall not even think offorcibly expropriating the small peasants (regardless of whether with orwithout compensation), as we shall have to do in the case of the biglandowners. Our task relative to the small peasants consists, in the firstplace, of effecting a transition of his private enterprise and privatepossession to co-operative ones, not forcibly but by dint of example andthe proffer of social assistance for this purpose (quoted in Thomas. 1974,Ps 161).In promoting co-operative movements we should not be compelled to useforce. But where pressure or force has been used it has probably arisen out ofthe contradictory position of the peasantry as well as from the specifichistorical conditions facing that country. While on the one hand, peasantrelations on the land have been subservient to the dominant mode ofproduction (capitalist or pre-capitalist) and as a result the peasants have beenexposed to social and economic exploitation in the countryside, on the otherhand the peasants own some resources privately and frequently employ labouron a small scale, usually in the form of family labour. While the peasants are,therefore, anxious to end rural exploitation and to support straggles along theselines, the end to exploitation is frequently seen as occuring by way of greatersecurity of private tenure and real income, both of which the peasant believescan follow only from an expansion of holding-size and from the preservationand extension of unrestricted rights to the use and disposal of land (Thomas1974, p. 161).A careful theoretical analysis of our society is necessary before weindiscriminately encourage every peasant to join a co-operative. The mainreason for such a cautious and well-programmed approach is the fear of failureof co-operatives. People become easily suspicious of programmes that failin circumstances over which they have no control.Difference between a co-operative society and a co-operative company.Many people including the well-informed are not clear on these differences. Itis important that the people who make and implement co-operative policies bemade familiar with the distinction. Failure to understand these differences willlead to implementing a co-operative policy which conflicts with the philosophyof government and finally will lead to failure of the co-operative movement.The instrument of national transformation must fit into the framework ofoverall policy and plan of development of the country.Co-operative societies in Zimbabwe are registered legally under the Co-operative Society Act (Cap. 193) whereas co-operative companies areregistered under thc Co-operative Companies Act (Cap. 190). The purpose ofa co-operativ ->ety is to secure an increased return, marketing services atcost, a supply ot goods at reasonable prices, and an improved standard of livingfor its members. The purpose of a co-operative company (or a private or joint-stock company) is to make a profit upon investment and perform marketingservices for the benefit of the shareholders. The basis of organization of a co-operative society is that producers and members market their own produce or101consumers sell their own goods to their own members while a co-operativecompany's basis or organization, is money and so only people with wealth caninvest.The membership of a co-operative society is unrestricted. Bona fideproducers are eligible to join a marketing co-operative society. Shares are notnegotiable and cannot be sold on an open market. In a private co-operativecompany, on the other hand, membership is often restricted; and many co-operative companies are closed corporations in which stock cannot bepurchased. But, in so called 'open* corporations stock is available to anyonehaving funds, and stock is sold on the open market.The voting in a co-operative society is based on one person, one vote.Voting by proxy is not allowed. The number of shares owned by individuals isrestricted. There is no concentration by an 'inside' group, whereas in a co-operative company voting is on the basis of stock owned. Ordinarily there isone vote for each share of common stock held. Proxy voting is permitted.There is no limit on the number of shares held by an individual member.Control is often concentrated in a small minority or 'inside' group.The operation of a co-operative society is based on the interests of themembers themselves, who pool their resources, expenses and products. In aco-operative company the operation is done in the interests of shareholders,irrespective of interest in the actual business done by the co-operative on thepart of such shareholders. The profits of a co-operative society are returned tomembers on a patronage basis. Limited interest is payable on shares of stock.Wealth is widely distributed. In a co-operative company profits are distributedto shareholders dn the basis of shares owned. The aim of the members inbuying stock is often to profit or resale. There is a tendency to concentratewealth among the shareholders.Types of co-operatives. Co-operative societies cover a wide variety of socialand economic activities. The list appearing below contains many of them,although it is by no means exhaustive:(1) Agricultural producer and marketing co-operatives, which aim at theimprovement in the production and marketing of crops and the breedingand sale of livestock;(2) Consumers may, for example, involve themselves in the establish-ment of a store (usually retail) from which they become customers. Thepurpose is to obtain commodities on better terms than can be obtainedfrom a retail store operated for profits;(3) Credit and thrift co-operatives, which provide credit to theirmembers for a variety of purposes. By joining a thrift and loan society,the members are encouraged to save and are able to obtain a loan up tothe limit of their savings for certain speciied purposes;(4) Housing co-operatives, the aim of which is to help members to eitherbuy or construct a house;(5) Transport co-operatives, in which members pool their resourcestogether in order to provide themselves with transport facilities;(6) Dairy and food produce co-operatives, which are organized forpurpose of the consuming and marketing of perishables;(7)-Industrial co-operatives, where the workers pool their resources inorder to run a factory.A co-operative.movement can be multipurpose in that it can combine somany activities under one organization as a primary co-operative society. In102such an organization functions of thrift, credit and supply can be combined,Co-operatives and national development The co-operative movement isone of the instruments used for development at a village, district and nationallevel. It is a way in which members or consumers can collectively pool theirresources for their benefit. Collectively they manage and control resources intheir own community. Co-operatives are, therefore, a means to an end and notan end in themselves.Generally co-operative activities at a village level are closely tied tocommunity development programmes of national plans. This is so becausecommunity development is involved in the promotion of the quality of life atthe village level and is also a primary means of raising the level of productivity,extending improvements in technology and expanding local organization andemployment. Basically community development is one of the means ofreaching the poorest of the poor, the deprived and the politically powerlessgroups because it essentially encourages their participation in decision-makingprocesses. In this way economic development and social changes as vitalelements in national development are translated to the villages throughcommunity development. Co-operation has the merit of combining freedomand opportunity for the small man with benefits of large-scale managementand organization as well as goodwill and support from the community. Thus arapidly growing co-operative sector, with special emphasis on the needs of thepeasant, the worker and the consumer become vital factors for social stabilityand for expansion of employment. Along with a growing public sector, whichfunctions with a responsibility to the community as a whole, the influence ofco-operation extends far beyond the particular activities organized on co-operative lines and gives to society and the national economy, a balance,and a sense of values and of direction.Co-operation has, for example, its own systems of production, distribution,banking, power, equality and other services which are distributed solely tobenefit the community and include no element of individual profit. In the co-operative system there is ideally complete personal equality. It is a voluntarysystem, created by personal effort, freely given. It leaves wide areas of freechoice within a planned framework. The co-operative system is applicable topeople of all walks of life and at all stages of development. It provides a uniquesystem of education, democracy, responsibility, collective work and toleration.Of significant importance is its effectiveness in training people for political andeconomic power. The element of authority is much more evenly distributed inthe co-operative organization than in private industry.Co-operatives also make certain contributions in the sphere of socialdevelopment. People gain a sense of pride in achieving something from theirpersonal efforts and co-operation. They leam to be self-reliant and toadminister organizational rales and regulations necessary to economicachievement, such as punctuality, accounting, regular auditing and reliability.Co-operatives provide basic training in democratic procedures which arenecessary in many phases of community development. jCo-Qperatives providethe organisation ancf leadership training at the visage level through variouskinds of government assistance or financing which can be channelled whilegiving some responsibility to the people themselves for its equitabledistribution. Theyocan also act as a link between people and the government intraining and the dissemination of government policy. In general co-operativesand community development provide mutual assistance to each other, good103co-operatives help in community development, and community developmentin turn makes for better co-operatives.The role of government In co-operatives. To facilitate the formation and theadministration of co-operatives the government should provide certainservices which the co-operatives need in order to survive.The first area of activity of government in co-operation is that oflegislation. The law deals with co-operatives in three ways. Co-operativesmust have an officially recorded corporate existence; it is necessary toestablish what functions they perform, how funds are to be subscribed, whethertheir members' liability is limited or unlimited, and what records are kept Theco-operative character of the enterprise must be established; co-operation isdefined and its limitations are described. The government may grant co-operatives legal and fiscal privileges; national credit may be placed at itsdisposal, close contact between the movement and government departmentsmay be provided, and a suitable standard of efficiency and social principlesmaintained. The degree of state supervision and support should vary with thephilosophy of government and the level of development and character of theco-operative membership.Many failures of co-operatives have been largely due to lack of training ofboth the leadership and the members. There has been an apathy in membersand committees and inefficiency in staff dealing with unfamiliar problems,such as credit and competition with the private sector. Some members,perhaps because of a high level of illiteracy, do not understand howmembership fees are organized, how meetings are conducted and how loansare productively utilized. All these problems indicate clearly the need forgovernment to establish training colleges for co-operatives which will be thesource of learning for the staff members of a co-operative society, civil servantsand the masses.A third way in which government can promote co-operatives is by way offinancing the co-operative movement. Since the co-operative movement hasbeen assigned a significant role in the attainment of targets and goals of socialand economic progress, it must be recognized that orderly and purposefulgrowth and public enterprise inevitably involve problems ©financial strategyŠ including such crucial questions as the mobilization of financial resourcesfor investment, the establishment of investment criteria, the setting up ofeffective mechanisms for deciding upon investment priorities, the linking ofco-operative finances to national finances and budgets, the establishment ofsystems for effective monitoring of the use of capital, defining objectives andgoals of enterprise policy, defining the concept of returns on investment andadopting pricing policies suitable to the declared objectives (Femandes, 1981,p. 14).Many co-operatives fail because they make losses owing to wrong,uneconomic investment decisions. Some losses have occurred owinf to poorfinancial management and poor knowledge of seasonal cyclical market .actors.Some of these losses could be prevented by improved financial management,higher skills of investment planning, more accurate and realistic marketsurveys and accurate estimates of supply and demand. The government couldalso help in providing short, medium and long-term loans to co-operativemovements so that they increase their capacity to meet the needs of themembers, The role of government does not end in the provision of finance butextends to the advising of co-operatives on how to manage their movement. Inthis way the government is helping and influencing the direction that the104economy should take and more importantly the nature and type of resourcesthat the country should control.To this extent the co-operative movement has a special responsibility toact as a pioneer and pace-setter in the drive towards the economic stability andemancipation of the country. If it is to fulfil this role effectively the co-operativemovement must develop a clear understanding of its tasks regarding adequatemanagement, philosophy and style, a high level of efficiency and properattitudinal approach (Femandes, 1981, p. 9). A co-operative movement onceformed can be self-perpetuating if the members are given the relevant training,philosophy and resources,A co-operative can be multipurpose as in the case of the Madziwa Co-operative Society which is affiliated to the Bindura-Darwin Co-operativeUnion. It buys seed, fertilizer, pesticides and grain bags for its members, all atreduced prices, and markets the members' crops. It also orders paraffin indrums which it sells to its 700 members for markedly less than shop price. Itnow plans to build a store where it can stock equipment used by farmers such asgumboots, overalls, ploughs, picks and shovels. Consumer goods such as sugar,tea, bread and soap are sold to the members. In this case it is operating as aproducer, a consumer and a marketing co-operative. Many such registeredco-operatives are now functioning in, for example, Tsonzo in Mutare, Dowa inRusape,«and Silobela in Kwekwe. With increased resources such co-operativeshave the capacity to be involved in bigger enterprises and to control resourcesin their own communities.There are also some small groups of people who have come together todeal with local problems and who are in the process of becoming a full-fledgedco-operative. One of such groups is in Mutoko at Mupfava's village whereseven men and four women are jointly involved in vegetable growing, pig-farming, food production, and marketing their produce. This club has hadproblems of marketing its produce; for a distance of 175 km from Harare theyare charged as much as $450 per trip. This takes away all the proceeds theyhave made from their sales. However, the members are now planning to buy atruck which will facilitate the marketing of their perishable produce. In thisway they will remove the burden placed on them by the middlemen who takeadvantage of their inability to provide their own transport services.The Ministry of Community Development and Women's Affairsencourages the formation of these clubs or groups at a village level. Thesegroups should mature or move to a stage at which they can be formallyconstituted and be registered. Progressively they should move to a furtherstage at which they begin to control and manage bigger issues until they arecapable of controlling the means of production. The Ministry, through itscommunity development workers stationed in villages, has facilitated theformation of co-operatives throughout the country. It must be mentioned thatthe co-operatives belong to the people and not to the Ministry or governmentonce they are formed. The Ministry is only a catalyst To date the Ministry hasassisted in the formation of at least 185 co-operatives which are registered bythe Department of Co-operatives in the Ministry of Lands, Resettlement andRural DevelopmentMany of the co-operatives promoted by the Ministry can be categorized asincome-generating (e.g. uniform-making, bakeries etc.), construction (e.g.community halls), and infrastructurai development (building of small roads,footbridges, wells, toilets and rubbish pits). As can be seen the projects have105two basic goals, one to improve the quality of life of the people and the other tocontrol and own the means of production.As organized groups, co-operatives have access to agricultural credit,fertilizer and other productive resources. The capital and income from one or afew animals or bags of maize can afford the peasants a significant measure ofindependence and security in their bargaining with the big commercialfarmers. Participation by members in co-operatives for the marketing oflivestock and crops, or for the provision of transport services and of credit, ischeaper and more practicable than trying to help peasant farmers individually.Increased crop production can ameliorate the large and growing proteindeficiency and achieve self-sufficiency and also provide employment whichdirectly helps the participants and beneficiaries and through them the economyas a whole. The provision of additional and alternative employment canindirectly ameliorate the imbalance of bargaining power in the immediate areaand, therefore, helps support peasant demands for a higher share of agriculturalincome produced in the area. Further income from their produce can beploughed back into the communal lands by way of developing and improvingthe infrastructure. The increase in agricultural co-operatives in the communallands has in fact led to increased production of food in some areas from anaverage of 9 bags of maize per acre to 27 bags per acre, because members havelearnt how to use fertilizer and other techniques {The Herald, 26 May 1982).One of the development areas in the field of co-operatives, sinceindependence, has been the establishment of warehouses and distributioncentres in rural areas by co-operative unions. The government has provided aconsiderable input in this regard by way of soft-interest loans. Africare, avoluntary non-government organization, has also funded the construction ofwarehouses for farmers.The concept of community development agrees on the necessity to initiateas far as possible self-help activities undertaken by the people concerned, thatis to motivate peasants and economically and socially deprived groups tointroduce innovations in order to make more productive use of their ownresources, to have access to additional ones and, as a consequence, to raisetheir real incomes and awareness of what they can do with their little economicpower.The co-operative enterprise has to promote the members' interest byproviding efficient services in accordance with their interests, their felt needsand their objectives. To this extent they are a highly decentralized form ofdevelopment administration easily accessible to members. As a developmentstrategy co-operatives are a form of 'bottom up' approach in which majorinitiatives, policy and decision-making and control of activities are undertakenby the members themselves, within the overall national development goals.From the community development perspective the essence of co-operativeaction by peasants is to gain and consolidate economic and political power inorder to utilize and control the means of production.This, in a small way, is the beginning of a long process of removingexploitative relations on the land. Inevitably this process is a straggle againstthe forces that wish to maintain the status quo and in particular it is a fightagainst capital which may not be interested in developing areas from which itdoes not make a profit, In this view, community development plays a crucialrole in facilitating the social transformation of our society. Throughcommunity development, cooperatives are a useful way of transformingpeople's minds in that they facilitate the altering of habits, morals and ways of106thinking which have resulted from years of exploitation, oppression and'socialconditions favouring the desire for private enterprise. Co-operatives can be awatchdog against any potential alliance between rich peasants or traditionalistsand the middle class who may want to perpetuate the system of privateownership of the means of production and advocate the interests of the few andnot those of the public.This problem was clearly exhibited in Binga in 1983 when the fishermenaround Kariba Dam were considering forming a fishing co-operative. A localMember of Parliament, who felt that his interests in fishing and marketing werethreatened, tried to discourage the fishermen. As a leader in that community hesent some of his aides to disrupt meetings which* the Ministry of CommunityDevelopment and Women's Affairs was holding with the fishermen in order toform a co-operative. The collective action, willingness and understanding ofthe community and the efforts of the Ministry of Community Developmentand Women's Affairs and the Ministry of. Local Government and TownPlanning undermined his power and interests. The Binga Fishing Co-operativewas formed against this background of opposition from a local leader. Thus ahighly monopolistic market structure in which this local leader had control wasoutweighed by the power-of the members of the co-operative. In the past thefishermen lacked knowledge of production and marketing and transport facilities.This forced the fishermen to sell their fish to local traders at a very low priceand the unscrupulous traders for a long time exploited the Binga fishermen.These newly formed co-operatives will help to redress this imbalance inbargaining power by intervening in the local and regional market to buypeasants' products in competition with existing buyers. Economic powergained in this manner by the peasants can successfully be extended to othersectors of the economy.This is a small but significant, practical example of the beginning of a longprocess of social transformation.ReferencesBAUER, P. and YAMEY, B. 1965 The Economics of'Underdeveloped Countries (London,James Nisbet).FERNANDES, P. 1981 Financing of Public Enterprises in Developing Countries(Belgrade, International Centre for Public Enterprises in Developing Countries).KARDELJI, E. 1980 Self Management Planning (Belgrade, Socialist Thought andPractice).MANDEL, E. 1977 From Class Society to Communism: An Introduction to Marxism(London, Ink Links).THOMAS, C.Y. 1974 Dependence and Transformation: The Economics of Transitionto Socialism (New York, Monthly Review Press).107