Co-ops in Australia

A version of this article first appeared in the Coffs Coast Advocate, Saturday 17th March 2012.

Co-operatives represent the ideal of business with genuine ethics, not just window-dressing and ‘corporate social responsibility’ statements. From the social perspective, it’s hard, at least in theory, to get more ethical than the workers in a business also being the owners, and running it for their mutual benefit, rather than to maximise profits for distant shareholders.

As is so often the case, theory and ideals often crash against the harsh test of real life conditions, and human fallability. The ideal of a co-operative commonwealth, appealing to people’s higher values rather than just naked self-interest, is a powerful one, but in practice co-operatives have fallen far short of the vision of the Rochdale pioneers.

The case of farmer co-operatives in Australia, whose history was the topic of a book published in 2006 by Gary Lewis, called ‘The Democracy Principle’, is instructive.

For farmers, co-operation had an extremely sound economic rationale, as Lewis explains. The more farmers jointly could exert ‘ownership and control of the inputs, supply, processing and marketing of farm products’, the more they were able to take control of their own destinies, as regards avoiding the fate of being ‘price-takers’; and so better ensure their own viability.

The Coffs Coast region was home to one of Australia’s premier agricultural co-operatives: the Banana Growers Federation. Operating transportation services and a single marketing desk on behalf of its members, the BGF enabled NSW growers on the Coffs Coast to rise to a position of dominance in the Australian industry. It wasn’t by accident that the ‘Big Banana’ was established here as a tourist attraction. At its peak in the early 1970s, the BGF boasted around 18,000 grower-members.

There were many factors which brought about the demise of the banana industry in our region, and amongst them we have to include the self-interest of some growers who abandoned co-operative principles to pursue their own self-interest through separate deals with buying agents, undermining co-operative unity in the process. It’s been said to me that although the blueberry growers now enjoy a similarly strong marketing position to that once held by the BGF, through the single desk operated by Berry Exchange, the same dynamic that so afflicted the banana growers may already be underway.

History records that in 2004 the BGF was wound up with a mere 428 grower members. The country as a whole is losing farmers at a rapid rate. The fall in the number of dairy farms across Australia has been steep: from nearly 82,500 in 1950, to 7,500 in 2010. A further drop is expected now, with the impacts of the supermarket milk price war being passed down the supply chain.

Could it have been different? We’ll never know, of course, but certainly many farmers, and their leaders, did themselves no favours, according to Lewis, by effectively abandoning any genuine commitment to ‘the democracy principle’, and broader community and social welfare, in preference to their own narrow self-interest.

‘Farmers generally were inclined to squeeze every last drop from their co-ops’, he writes, ‘and neglected to invest in them adequately or in anything not immediately enhancing the bottom line, such as education or federations. With few exceptions, it was a short-sighted and stingy movement.’

The building of an effective co-operative movement in Australia – whether by farmers, workers, consumers, or all three – has, it would seem, been stymied by parochialism, inter-state rivalries, individualism, unhelpful legislation, the lack of substantial co-operative financing, and the inability to build a strong national movement promoting ‘co-operative unity and a co-operative consciousness’. Ironically, Lewis concludes, these are ‘all of the things which co-operative idealists had long argued for and which had been comprehensively quashed by pragmatists’.

The flame of co-operative idealism, however, is not yet quite snuffed out. It’s being revived, amongst other places, in a small town in western Victoria called Girgarre. Next time we’ll look at what’s happening there.

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• The poverty of farming in the Tweed (nickroseblog.wordpress.com)