MOSHI UNIVERSITY COLLEGE OF CO-OPERATIVE ABD BUSINESS STUDIES (MUCCOBS). THE CONSTITUENT COLLEGE OF SOKOINE UNIVERSITY OF AGRICULTURE.FACULTY OF CO-OPERATIVE AND COMMUNITY DEVELOPMENT DEPARTMENT OF COOPERATIVE DEVELOPMENT AND MANAGEMENT ASSIGNMENT 1 1 to fight for 2 . social. It also elects the board members of which the pillar of democracy of one member one vote dominates. Various scholars and organizations including International Labour Organization (ILO) have produced various definitions of cooperatives. This implies that in cooperative people come together with a common goal willingly without coercive force. There are various forms cooperatives which show the same structure of organization both nationally and internationally. The general assembly therefore. Members “throw in their lot” with other members who do the same. ICA defines cooperative as autonomous association of persons united voluntarily to meet their common economic. with a view to realizing benefits impossible by acting on those impossibilities one after another.QUESTION: Give an account of how cooperatives started in Tanzania but with a brief history of origins of present mode of cooperative in the world. retention of profits by workers or the comradeship of coordinated group action. Cooperatives are jointly owned meaning that all the members are owners of the enterprise and its goal is the mutual benefit of members themselves. It also means that cooperatives are created by pooling or mixing interests. Co-operatives are autonomous in the sense that they should not be interfered with regard to states or any other party. and if loss occur it is for all members. and such profit may be sacrificed. Such benefits may include economies of scale. increases in productivity. not an end. join on their own will. profit is a means only. properties or labors. I. But both definitions converge on a more general legal definition adopted by the International Cooperative Alliance (ICA). formulates the policies and guidelines for managing the organization. INTRODUCTION. though they are typically socially-owned in undivided shares and serve a public good. Cooperatives are democratically controlled means that management of the cooperatives is on the basis of democracy whereby the top decision making organ is the general assembly ( the meeting of all members of the cooperative organization) of which the one is a member. These cooperatives were formed with the people of the same goals and interests such as to reduce high life standards in their areas of domicile. and cultural needs and aspirations through a jointly owned and democratically controlled enterprise (1). with the result that if a co-operative is for-profit. social responsibility and caring for others. equity and solidarity. The Industrial Revolution in Europe had a profound effect on the way society was organized and on the working conditions and economic situations of many people. Cooperatives on their formation are guided by some core values. The Modern cooperatives originated in Europe in the 19th century. people have been cooperating to achieve objectives that they could not reach if they acted individually. co-operative members believe in the ethical values of honesty. Autonomy and independence. Among them was a group of 28 workers who were dissatisfied with the merchants in their community. ICA used these as the guidelines that identify the cooperative without which any cooperative cannot be recognized. ethical values and principles. openness. Democratic member control. and Concern for community (1). Co-operatives are based on the values of self-help. In the tradition of their founders. consumer cooperatives such as the Cooperative Supply Association of Tanganyika (COSATA).their rights in the work place. The founders also established a unique combination of 3 . ORIGIN OF THE MODERN COOPERATIVES IN THE WORLD. democracy. II. Education. equality. and the Society quickly grew to include other enterprises. Economic participation by members. training and information. primarily in Britain. France and Germany. to improve housing conditions and so on. They began by opening a cooperative store that sold items such as flour and sugar to members. Cooperation among cooperatives. In response to the depressed economic conditions brought forth by industrialization. In Tanzania cooperatives were dominated by the peasants who were small scale producers and they formed producer cooperatives. Since early man cooperated with others to help kill large animals for survival. They include Voluntary and open membership. They formed a consumer cooperative known as the Rochdale Society of Equitable Pioneers in 1844. self-responsibility. Cooperative efforts are as old as human history. So various forms cooperatives that existed in Tanzania are Producer cooperatives such as KNCU. ICA also believes that the co-operative principles are guidelines by which co-operatives put their values into practice. Transport cooperatives such as Co-cabs and Coast region Transport cooperative (CORETCO) and Savings and credit cooperatives. some people began to form cooperative societies to meet their needs. Dr William King (1786-1865). and his self-published magazine. Hermann Schulze on the other hand. Dr William King was inspired by Owen’s ideas and he even went further by making the ideas more workable and practical. and the education of the public about cooperatives (2). Franz Hermann Schulze-Delitzsch (1852. "The Cooperator". Failed harvests and famines in the years 1846/47 further worsened the situation. He developed credit 4 . the Rochdale principles soon became a model for other cooperative endeavors. and net margins distributed to members according to level of patronage. began a campaign of aid whose goal it was to come to the assistance of financially struggling craftsmen in more urban areas.principles that governed the affairs of the cooperative. Among the great thinkers and founders of cooperative in Europe were Robert Owen (17711858). King emphasized starting small cooperatives with capital that could be supplied by its members. Friedrich Wilhelm Raiffeisen was the founder of credit unions in germany. He advocated the development of consumer cooperatives to address working class issues. He stressed the use of democratic principles of governance. People got interested with his ideas and many cooperatives sprung up (2). They were burdened by having to pay off their former lords and were inexperienced in the independent management of a business. and became known as the general principles that make a cooperative unique from other business enterprises. This was an aid association which he created to help farmers and small craft businesses who found themselves in a desperate financial situation. Based on its success. urban). the success story of cooperatives is inextricably linked with two personalities: Friedrich Wilhelm Raiffeisen (1818–1888) and Hermann Schulze-Delitzsch (1808–1883). Robert Owen who was a trader and industrialist believed that putting his workers in a good environment with access to education for themselves and their children would make the society to live in a mutual and friendly manner and address the working conditions of the time. In Germany. and Friedrich Wilhelm Raiffeisen (1864. rural). provided information on cooperative practice as well as theory. Among these principles were: democratic control of members. payment of limited interest on capital. They got into deeper and deeper debt and often lost their livelihood(2). structures for artisans and small entrepreneurs. In Schultze-Delitzsch’s view. The Kilimanjaro Native Cooperative Union (KNCU) was then the first legal cooperative in Tanzania. (4) In the 1940s and 1950s other important cooperatives and unions were formed and registered. self-administration and self-responsibility. It 5 . It grew dramatically in marketing and ginning cotton that was produced by peasants in the lake zone. which was registered with its eleven affiliated primary cooperatives on 1st of January 1933. These small traders become independent (2). The main founders were the Charles Fourier. it was only possible to achieve a sustainable improvement of economic conditions through bringing together weak individual traders and abandoning heteronomy. In France. Philippe Buchez and Louis Blanc. (5). Others were the Bukoba Native Cooperative Union in Bukoba district. the Ngoni-Matengo cooperative marketing Union with its three affiliated primary cooperatives was registered. III. the Mwakaleli Coffee Growers Association in the Rungwe district. The First Act of Parliament on Cooperative Societies was passed on 12 February 1932 and marks the legal beginning of cooperatives in this country. The aim was to buy coffee and tobacco from producer cooperatives. COOPERATIVES IN TANZANIA Cooperatives in Tanzania started as early as 1925 with the organization of the Kilimanjaro Native Planters' Association to help African coffee farmers. he founded the first “raw materials association” for carpenters and shoemakers in 1847 and the first “thrift and loan association”. (3) In 1930s in Songea. which later changed its name to the Victoria Federation of Cooperative Unions Limited (VFCU). These were the Bugufi Coffee Cooperative Society in Ngara district. and the Lake Province Growers Association in the Lake Victoria area. The VFCU was a remarkable organization that has gone down in history as a landmark. the establishment of cooperatives in France dates from the 1750s when several cheesemakers’ mutual societies were established in the Franche-Comté region. Buchez and Blanc started Worker productive cooperatives with the aim of assisting worker’s group by providing them with credit loans (2). This cooperative was unregistered. The latter went on to change its name to Rungwe African Cooperative Union. in Shinyanga. According to the principles of self-help. Shinyanga cotton cooperative union. Many agricultural products were being exported. the Tanganyika cooperative Trading agency(TACTA) and the Cooperative Supply Association of Tanganyika (COSATA). such as cotton pesticides and seeds to members. 6 . lack of skilled manpower. but different types of cooperatives were encouraged by the government. such as Co-cabs and Coast Region Transport Cooperative (CORETCO) were formed. where new tractors were on display for members to buy. Many of the cooperatives formed after independence began in a hurry and little preparation was undertaken. (Report of Presidential Committee of Enquiry 1966). the latter of which is still vibrant today. was almost a meeting centre for cotton farmers in the whole of the lake zone. The report later saw the decline of cooperative movement in the country because the government rejected some of the key issues in the report. These formed a cooperative union – the Savings and Credit Union League of Tanganyika (SCCULT) (6) After the formation of these cooperatives there was an increased production of agricultural products. its famous building (Pamba House) in Mwanza town. presence of an uniformed membership. lack of democracy at union level. Despite the achievements from its beginning. such as the Cooperative Supply Association of Tangnyika (COSATA) and the Moshi and District Consumer Cooperative Society. By the 1960s the VFCU was the largest cooperative in Africa (4). susceptibility of the cooperative movement to political interference. Agricultural marketing cooperatives were dominant. The report short-listed the following five basic problems facing cooperative movement: shortage of the appropriate manpower. Cooperatives increased rapidly in the country with firm support from the government. Transport cooperatives. cooperatives faced some challenges. Instead worked on the recommendations such dissolution of Victoria Federation of cooperative Unions (VFCU). Many people equated independence with economic development and there was political expediency to open many cooperatives.facilitated the supply of low priced inputs. The federation bought and loaned tractors to its members. It also started an industrialization process in the lake zone distinguishing itself in the operation of cotton ginneries. Complains of mismanagement and corruption were common. Hence the introduction of consumer cooperatives. some of which were not feasible. In 1966 the president started a special commission of inquiry to find out the problems facing cooperatives in the country. as were savings and credit cooperatives. which it purchased in bulk from manufacturers or wholesalers. 7 . created more problems than it solved. IV. The primary societies that had served as distribution and procurement point for the farmers were also legally abolished and replaced by multi-purpose cooperative societies under the 1975 "Villages Act. Although some of the cooperatives were started again but they couldn’t do better as before because most of them went bankrupt. or in most instances. The cooperative societies act of 1982 provided the legal basis for this action. Much distrust and dissatisfaction were caused among members by these actions. RE-ESTABLISHMENT OF COOPERATIVES IN TANZANIA After failures of the parastatals which were given responsibility of buying peasant crops and providing price incentives to the farmers.The Arusha Declaration in 1967 was also a stumbling block to the cooperative movement. In spite of considerable evidence that the cooperative system was working. the desires of the members themselves. however. Concerned about the continuing poor performance of cooperative societies. In 1967 the Government suddenly dissolved all marketing co-operatives and based this upon accusation of inefficiency and corruption. Various cooperative development policies were adopted since then but still there is poor performance of these cooperative societies. (6) Since the abolishment of cooperatives. The Government of Tanzania then instituted a policy that resulted in cooperatives being formed on a "top down" basis without sufficient consideration of economic viability. the Government appointed a Presidential Committee in March 2000 to look into the contributory factors and advise the government on appropriate measures to be adopted. In their place the Government established parastatal organizations. the Tanzanian government has been struggling to reestablish the cooperatives. This move." Officially the assets and liabilities of the unions were in most instances turned over to the parastatal marketing and distribution authorities. the availability of trained management. the government formally announced the re-introduction of primary cooperatives and cooperative unions in 1982. The Socialist Government looked at co-operatives with suspicion. the government in 14th May of 1976 issued a decree abolishing the cooperative unions. They were seen as semi-capitalist organizations and as a base for political opposition. CONCLUSION. This is partly because many people are now involving in microbusiness activities than before the pre-abolition period. Problems of strong politician penetrating in the cooperative societies may lead to the cooperatives to lack autonomy and heteronomically depend on these few politicians in decision making. According to SCCULT (SAVINGS AND CREDIT CO-OPERATIVE UNION LEAGUE OF TANZANIA). Inappropriate policy and legal environment. More efforts are needed to be put in areas of alleviating poverty as some of the members are still very poor. misappropriation and thefts. V. and Lack of cooperative education and training. Accounting records and auditing reports must be disseminated to the members of the cooperatives so as build members trust and commitment to their cooperative. Weak capital base. Any kind of mismanagement and embezzlement of cooperative resources should not be condoned. 8 . The government has done a lot by trying to rejuvenate the cooperatives movement by showing policy reforms since 1982. Another area of concern is transparency and accountability. Poor management. SACCOS should strive to start their own microfinance bank so as to deal with soft credit loans to their own members.(7) Recently there has been a rapid growth of Savings and credit cooperatives (SACCOS) than the crop marketing cooperatives.Inappropriate structure of the Cooperative Movement. Weak cooperative support institutions. This will increase members incentives to participate in micro-business activities that will increase their income and thus meet their economic and social goals. SACCOS is now the leading type of cooperative in terms of numbers and members. Cooperatives out-reach limited within a few sectors. They have instituted strong institutions such as SIDO and MUCCoBS to support the advancement of the movement in the country. This should also be address by putting a legal boundary so as to avoid political domination in the cooperative.The major constraints identified by the Committee included the following:. References: 1. Inc. Maghimbi. Avebury. Nairobi. Peter G. Avebury 7. Socialism and the Development Crisis in Tanzania. URT. & London 1999 3. Lanham. 6. Norman and Kemal Mustafa (Eds) Capitalism. University Press of Africa (for Ministry of Information and Tourism. Avebury. A.Dar es Salaam. Aldershot. Kimario. April 2005: The Cooperative Reform and Modernization Program CRMP: 2005 2015 9 .(1992) Marketing Cooperatives in Tanzania: Problems and Prospects.coop Accessed on 17th Nov 013. Maghimbi. 5. Aldershot. in O’Neill. representing and serving cooperatives world-wide. Aldershot. Historical Dictionary of the Cooperative Movement. Website of International Cooperative Alliance (ICA) — “Uniting. (1992) The Abolition of Peasant Cooperatives and the Crisis in the Rural Economy in Tanzania. 2.. Md. Jack Shaffer.” www. (1990) Cooperatives in Agricultural Development.ica. United Republic of Tanzania) (1968) Tanzania Today. 4. in Forster. S. Dar es Salaam University Press. The Scarecrow Press. and Sam Maghimbi (Eds) The Tanzanian Peasantry: Economy in Crisis. S. 10 .