Sibusiso Ndebele, Premier of KwaZulu-Natal
16 March 2007
South Africa developed co-operatives among farmers, consumers and workers
throughout the 1900s. However, many of these did not observe international
co-operative principles, as they often reflected and entrenched the system of
racial discrimination and social inequality rather than challenging it.
In the late 1800s, white Afrikaner farmers organised themselves into
agricultural co-operatives which marketed their produce and procured inputs
like seeds, fertiliser and livestock. These co-operatives were strengthened
when the Land Bank was formed in 1912 and the Co-operative Act was passed in
1922.
By the 1940s, white farmers' co-operatives were able to benefit from a
system of marketing that fixed the prices of agricultural goods - through the
1937 Agricultural Marketing Act.
In the 1970s, black farmers' co-operatives started to be promoted as part of
the apartheid plan to boost 'homelands' - but they did not enjoy the type of
state support provided to white agricultural co-operatives and they remained
weak.
Subsidies and state protection for farmers have been gradually removed over
the past decades, and many white agricultural co-operatives have had to face
the challenges of globalisation by converting themselves into private
companies.
Perhaps the most common type of consumer co-operatives in South Africa today
are stokvels (buying clubs), which are generally small and not integrated into
any national network.
In the 1940s, there was a national effort within the Afrikaner national
movement to improve the buying power of Afrikaner consumers through
co-operatives. By 1948, there were about 275 of these consumer co-operatives,
but many failed and others were converted into private companies.
The stokvel system has also been an important institution for savings,
credit schemes and burial societies in African communities. Many of these have
been formalised through the establishment of collective support bodies. In
1981, for instance, the Cape Credit Union League was formed in association with
the Catholic Church, to help start and support savings and credit
co-operatives.
In 1993, the Savings and Credit Co-operative League was formed, and now has
a membership of over 30 co-operatives and 20 000 individual members. In 1994,
the first village financial services co-operative ('village bank') was
established in the North West province.
In response to retrenchments and unemployment in the late 1980s, the trade
unions along with churches and community organisations began creating workers'
co-operatives. In the 1990s, this process led to the starting up of new
enterprises, building on local initiatives between Non-Governmental
Organisations (NGOs), government departments and co-operative movements. There
were also worker buy-outs of manufacturing and agricultural enterprises, and
the outsourcing of public sector and private sector contracts to worker
enterprises.
New trends of co-operation among people are emerging with the provision of
social services; this is taking place, for instance, in the fields of housing,
health and day-care centres.
Worldwide, some 800 million people are members of co-operatives, and it is
estimated that co-operatives employ about 100 million people.
The first co-operatives were groups of consumers who got together to start
their own store, so that they could buy their goods more cheaply - and they
used any surplus to improve their communities. The idea soon became applied in
other ways, with people running businesses together to provide employment and
strengthen the community. Since 1994, the South African government has been
supporting the growth of co-operatives, especially among historically
disadvantaged South Africans, as a strategy to alleviate poverty and create
jobs.
In August 2005, the Co-operatives Development Act was passed, laying the
foundation for a more active and supportive environment for co-operatives. The
registration procedure is simpler, it re-defines government's role as a
facilitator in promoting co-operatives, it provides for different types of
co-operatives in all sectors of the economy and ensures co-operative principles
are observed.
The culture of co-operatives is here to stay and is growing. We need to make
it clear that co-operatives are not entities established and run by government
but are a community movement created for the benefit of the members while
government creates a supportive environment for co-operatives to survive. We
look forward to members of co-operatives reaching several millions in the
not-so-distant future.
By the end of this year, there will be at east one secondary co-operative
operational in each district throughout KwaZulu-Natal. We envisage that
secondary co-ops will be incorporated in poultry production, beef production,
vegetable product, beans production and mechanisation programme. A combination
of grant funding and loan capital will be used to drive the programme.
Government remains committed to offering a market for co-operatives to
trade.
Government, acting alone cannot overcome the economic backlogs created by
apartheid. It is through partnerships, such as co-operatives, that we will have
tangible success.
Issued by: Office of the Premier, KwaZulu-Natal Provincial Government
16 March 2007
