3 July 2013 – Each year on the first Saturday in July, the United Nations and the International Co-operative Alliance (ICA) celebrate the International Day of Cooperatives to raise awareness about cooperative enterprises and their key role in global economic development. For 2013, the day's activities will emphasize the strength of cooperatives in times of crisis.

Rwandan tea pickers work in a field in Nshili, Nyaruguru. ©IFAD/Susan Beccio

"Investor owned business models currently suffer from a crisis of unsustainability … while the co-operative model has demonstrated time and again that it is resilient," says an ICA statement announcing this year's theme. The statement notes that cooperatives measure their strength and success not simply in terms of short-term financial performance but, instead, by placing members' needs at centre stage. "Quite simply," ICA concludes, "a co-operative is a collective pursuit of sustainability."

As IFAD and its partners stressed throughout 2012, theUN International Year of Cooperatives, smallholder farmers gain multiple benefits from cooperative agricultural enterprises – such as bargaining power, shared resources and economic efficiency. For members, these advantages help to enhance food security and reduce poverty. For poor rural people in societies torn by crisis, cooperative enterprises can do even more by promoting peace, equality and stability.

Indeed, this point emerges clearly from a range of IFAD initiatives supporting the formation of cooperatives by small-scale rural producers around the world. Two of them – in Afghanistan and Rwanda – seem especially relevant to the link between cooperatives and resilience against difficult circumstances.

More secure in Afghanistan
In the eastern province of Nangahar, Afghanistan, for example, 14 dairy farmers' cooperatives operate under the umbrella of the Khatiz Dairy Union, based in Jalalabad city. The union and cooperatives were created with assistance from IFAD, which has also funded a new milk processing plant. At a time when Afghans are taking responsibility for their own security, such investments are crucial.

Dairy cooperative member milks a cow in Nangahar, Afghanistan. ©IFAD/Melissa Preen

Asadullah Battar works with IFAD in the area. He says the establishment of the dairy union and construction of the processing plant will directly affect the security situation for local residents. "If you create jobs, if they have jobs and earn money, there is no need for fighting," Battar says.

At the same time, the project has fostered gender equality by encouraging participation by women, many of whom are now cooperative members. To increase their knowledge and skills, the dairy union sends female trainers into the field to hold classes on improving hygiene, milk yields and other aspects of women's lives and livelihoods.

"Economically, women have gained a better position among their families and community, and on a social level," says Sharifa Sarwar, one of the trainers. "When they sell the milk, they get the income because they do all the work. Socially they are also empowered. Before they were not allowed to leave their homes, but now they can easily walk around."

Video – Afghanistan: Stabilizing Rural Communities In Nangahar Province near the Pakistan border, thousands of Afghan dairy farmers have formed cooperatives that help them earn money while uniting their communities.

Building trust in Rwanda
In Rwanda, which is still recovering from the 1994 genocide that claimed an estimated 1 million lives, IFAD has supported another project that promotes cooperatives as a force for stability and reconciliation.

Rwandan tea pickers work in a field in Nshili, Nyaruguru. ©IFAD/Susan Beccio

The project is based in Nshili, in an area poorly suited to many crops because of its acidic soil. But tea thrives there, and the Nshili Tea Factory opened five years ago as a public-private venture with financing from IFAD. As part of the venture, a cooperative of local tea producers has a 15 per cent ownership share in the factory. That stake has built trust between area smallholders and the factory's investors, according to factory manager Michael Kanyongo.

"When you put up a factory like this and you are dealing with small-scale farmers and the community at large, there could be a lot of suspicion," Kanyongo says. "With the cooperative inside as members of the board and us reporting to them as management, we've not had the tug of war we normally see between farmers and companies in other places."

Adds tea farmer Bernadette Mukamazimpaka: "The co-operative is helping the people here to achieve unity and reconciliation. Everyone experienced what happened here in our country. They know that divisions shattered the lives of Rwandans. So now, in joining together, it helps us to rebuild ourselves."

Video – Rwanda: Teatime with Bernadette Since Bernadette and other tea farmers in Rwanda began working together in a cooperative, they have realized how important economic development is to lasting peace.

Support for family farmers
IFAD's experiences in Afghanistan and Rwanda are just two examples of how cooperatives can contribute to both economic development and stability by building their members' social capital – that is, their connections with institutions and resources that allow societies to develop and prosper. And social capital is critically important to the future of some 500 million family farms that are the main providers of food and other essential agricultural products in the developing world.

Strengthening the grassroots organizations of these small-scale producers will be a top priority of the International Year of Family Farming in 2014. Backed by the World Rural Forum and over 360 civil society and farmers' organizations, the year-long observance will support the sustainable development of agricultural systems based on farming and fishing families, communal units, indigenous groups and cooperatives.

From the perspective of family farmers themselves, the role of cooperatives is self-evident. Because of their small size and high numbers, they must organize in order to achieve economies of scale, expand their access to financial services, modernize their operations and gain leverage with partners along the agricultural value chain. In the long term, then, strong cooperatives are one of the keys to rural development and global food security.

"By placing human need at their core, co-operatives respond to today's crises of sustainability and deliver a distinctive form of ‘shared value,'" says the ICA statement for this year's International Day of Cooperatives. "It is their unique combination of member ownership, control and benefit that is at the heart of their resilience."