13 June 2012

Celebrating the UN International Year of Cooperatives in New Zealand

The following speech was given by Blue Read, Chairperson, New Zealand Cooperatives Association, at the symposium ‘2012 International Year of Cooperatives – Cooperatives Boosting Sustainable Development’, in Beijing, PRC, 12 June 2012.

First of all, Mr Chairman, I would like to thank the All China Federation of Supply and Marketing Cooperatives for this opportunity to take part in your 2012 International Year of Cooperatives Symposium, ‘Cooperatives Boosting Sustainable Development’.

The New Zealand Cooperatives Association and the All China Federation of Supply and Marketing Cooperatives have been working together for a number of years now and we look forward to developing this relationship further.

It is clear Mr Chairman that cooperatives have made a significant contribution to the New Zealand economy over the past 140 years and that without them our economy would not have developed to the extent that it has.

At this point, there are but a small number of cooperatives and mutuals in New Zealand – less than 200 – but their impact on our economy and in our society is enormous. The scale and diversity of New Zealand’s cooperative sector means that they play an important part in the daily lives of a significant number of New Zealanders.

The cooperative ethos suits the New Zealand psyche in many ways. The notion of self-help, and the sharing of profits is particularly strong in rural areas where many of our farmers and townsfolk belong to sometimes four or even five different cooperatives.

For the New Zealand Cooperatives Association, an important part of celebrating the UN International Year of Cooperatives, and the first aspect to be completed, was to measure the contribution of cooperatives to the New Zealand economy. This is what we found:

Cooperatives are responsible for three per cent of GDP. This is a tremendous figure for such a small number of cooperatives.

Of the 200 largest businesses in the country, 19 or almost ten per cent, are cooperatives or mutuals.

For the year 2010-11, New Zealand’s 40 largest cooperatives had a combined turnover or revenue of NZ $39 billion, which is 188 billion Yuan. Of these, the six largest are to be found in the Global 300 put together by the International Cooperative Alliance.

Cooperatives in my country employ 50,000 people, and the small and medium sized businesses which are members of cooperatives offer a further 200,000 jobs at the very least.

This is very good for a country which with 4.4 million people!

With lots of water and a healthy environment, New Zealand grows grass more easily and better than most other countries. Because of this we grow livestock very efficiently and using the appropriate technology we enhance this situation to produce excellent quality milk, beef, lamb and wool, venison and other products.

Through membership of their cooperatives, farmers are involved in more parts of the value chain than if they had not been members of a cooperative, and in that way they improve their income and standard of living.

If we look, for instance, at Fonterra Cooperative Group, New Zealand’s only true multinational enterprise, we see that it is the single largest business in New Zealand in terms of revenue – more than twice the size of the next largest.

We also see that this one cooperative is responsible not just for 25 per cent of our exports but almost 30 per cent of all milk products traded globally. I am proud to be a dairy farmer, one of 10,500 members of this cooperative.

At the other end of the spectrum, New Zealand’s newest cooperative – Harbour Co-op – arose from the ruins of last year’s earthquake as a response from 120 families to the need for a local grocery store. This new consumer- and worker-owned cooperative shows how the cooperative model is able to fulfil both economic and social objectives with the self help ethos being very well presented.

What was the most important thing we learned from gathering statistics for the International Year of Cooperatives?

We learnt that because cooperatives are involved in so many aspects of the value chain – for example producing milk, making cheese from the milk, and then pizza with the cheese and only the pizza counts towards a country’s GDP – that GDP is not the best measure of the contribution cooperatives make to our economy and our society.

With this knowledge, the Cooperatives Association commissioned a piece of research into the attitudes held by New Zealanders around cooperatives. We found that New Zealanders place huge importance on the business values of honesty, integrity and high ethical standards, which are core pillars of any cooperative enterprise.

When asked how our cooperatives performed against these values, we find that we are very well considered. Cooperatives are seen as typically putting long term gain and business stability ahead of short term profits. This approach has helped New Zealand cooperatives come through difficult financial times relatively unscathed, compared with many investor-owned companies.

The contribution of our Government to the celebration of the International Year of Cooperatives was to fund the initial statistical research into GDP and employment, and we are very grateful for this.

All other research has been paid for out of an appeal for funds that the Cooperatives Association launched in the middle of 2011 to celebrate the International Year of Cooperatives.

What do we intend to do with these statistics?

Well, the importance of cooperatives in our economy has been quantified, so it can now be shown clearly.

In our experience, few New Zealand accountants and lawyers have even the smallest understanding of what a cooperative is, how it works, and the reasons that people use cooperatives as their business.

We will be using these statistics to make a case to the NZ Institute of Chartered Accountants and the NZ Law Society for Continuing Professional Development programmes for their accountant and lawyer members. This will make it a lot easier for our cooperatives to find staff with a correct understanding of how cooperatives operate, and why.

The statistics will also be put to good use in the media programme that we are developing. This programme will focus not only on traditional media such as newspapers, radio and television but also on social media.

We have put up a website dedicated to celebrating the International Year of Cooperatives at www.newzealand2012.coop and are employing a communications officer who is using social media to let people know about the Year, with a strong presence on online platforms such as Youtube, Twitter and LinkedIn.

The Year was launched in the New Zealand parliament on 27 March by Minister of Commerce, Hon. Craig Foss. Attendance at the launch was excellent: more than 200 people from all walks of life were present, including almost 40 Members of Parliament, and after the official launch 70 cooperative leaders went on to a celebration dinner.

As well as the Minister, ICA President Dame Pauline Green joined us by video, and Rabobank Global Chairman Piet Moerland spoke at the launch. These speeches, along with my own, can be seen on our youtube channel at www.youtube.com/NZdotCoop.

Using the funds raised from member cooperatives, we have enhanced the staffing of the Cooperatives Association and employ a public relations consultant who will be writing articles for New Zealand newspapers about cooperatives, where relevant using the statistics to back up his arguments.

The International Year of Cooperatives presents a unique opportunity to raise awareness of the cooperative business model, and we are using it to work with government and professional groups to facilitate an environment which supports the cooperative and mutual way of doing business in New Zealand.

Cooperatives and mutuals need to be taken more seriously. The International Year of Cooperatives is a once in a lifetime opportunity. In New Zealand we are making the most of it. My wish Mr Chairman is that the All China Federation of Supply and Marketing Cooperatives succeeds in making good use of this Year and that your members benefit significantly from your efforts.

Cooperatives in New Zealand ... and the world

• While there are just 200 member-owned businesses in New Zealand, they generate an aggregate revenue in excess of $39bn, employ 43,000 people directly and are responsible for 3 per cent of GDP

• Making up almost 10% of Management magazine’s Top 200, some of New Zealand's best known businesses are cooperatives and mutuals, including our single largest -- Fonterra Cooperative Group (www.management.co.nz/top200/)

• Other member-owned businesses include Foodstuffs (Pak'n'Save, New World, Four Square), Alliance Group, Silver Fern Farms, Mitre 10, Paper Plus, Ravensdown Fertiliser Cooperative, The Co-operative Bank, Southern Cross, the Automobile Association and Interflora (www.nz.coop/nzca-members)

• The world’s 300 largest cooperatives and mutuals, of which six are here in New Zealand, generated an aggregate revenue in 2008 of US$1.6 trillion (US$1,600 billion), which is comparable to the GDP of the world's 9th largest economy (www.global300.coop)

• According to the International Labour Organisation, cooperatives provide more than 100 million jobs, more than all the world's multinational corporations combined (www.ilo.org/coop)

Blue Read
Chairperson, New Zealand Cooperatives Association

Blue Read is a Taranaki dairy farmer, and an individual associate member of the New Zealand Cooperatives Association.

He was a member of the Fonterra Shareholders Council for nine years, fulfilling the role of deputy chair for four and chair for three of those years.

Belonging to three other cooperatives – LIC, FMG and Ravensdown – Blue has spoken at a number of international occasions about evolution in cooperatives and is a strong advocate for cooperative and mutual enterprise.

About the New Zealand Cooperatives Association

The New Zealand Cooperatives Association aims to:

• promote the cooperative business model
• encourage and support New Zealand cooperative and mutual enterprise
• act as representative association for those engaged as cooperatives and mutuals
• promote discussion and cooperation with decision-makers at all levels of government to further the interests of cooperatives and mutuals
• facilitate and coordinate services, expertise and research in support of the cooperative and mutual business model
• collect, verify and publish relevant and useful information relating cooperative and mutual enterprise

http://nz.coop

ENDS

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