Non-agricultural cooperatives: What the experts say

HAVANA – We start off with a bad name. It has a negative connotation. Non-agricultural cooperatives (CNA) are defined by what they are not. Almost five years have passed since the first of its kind began operating in July 2013, and today the panorama is far from encouraging.

What some also call urban cooperatives were born without being recognized in the Constitution of the Republic. On the other hand, a history of advances and failures in agricultural cooperatives precedes them. What does that trajectory teach us?

“The first great achievement is that progress has been made in cooperative legislation,” says Juan Valdés Paz, academic and National Social Sciences award winner, although there is no public data on the matter to date. Other gains are the decentralization of agriculture and the emergence of a certain environment of cooperatives in the country, and although insufficient, at least it exists.

“I think there’s another problem with the the place cooperativism should hold in the Cuban socialist development; and what seems to me more determinant is the lack of a cooperative culture. This applies to all issues: the question is always with what experience we will accompany the promotion of changes,” said Valdés Paz, during the Exchange Workshop on Non-Agricultural Cooperatives, hosted by the Incuba Empresas project of the Loyola Reina Center.

Undoubtedly a crucial point is the articulation of the State-cooperative. However, the difficulties start from within. Luis Guzmán Hernández, a CNA consultant in Havana, has observed the non existence of business plans, ignorance of elementary financial tools, and problems in accounting management.

Some distortions affect the very essences of this figure. “There are cooperatives where you arrive and the president is the owner, and the rest are employees,” says Guzmán. “This is seen a lot in the induced cooperatives, where the former administrator is still the president.”

In turn, the experimental nature with which the CNA were conceived causes uncertainty among the partners. This leads to a short-term mentality, whose main objective is to make money. So few cooperatives invest in research and development since you’re not sure how long the experiment will last. There is also no vision of where you want to go with the business.

What should be changed

An investigation conducted in Havana’s Centro Habana municipality shows how the local government itself identifies non-agricultural cooperatives as self-employed workers, which again refers to the lack of culture in this regard.

In the induced CNAs, dynamics inherited from the state model are reproduced. “Although the Assembly continues to be the main instance of participation, these were characterized as silent spaces, where decisions had already been made,” explains sociologist Francisco Damián Morillas, author of the study.

The research showed that the municipality’s 12 cooperatives at that time had few relationships with each other, and with other social and economic actors in the area. Although this analysis is not generalizable outside the territory, the researcher recommends that decision makers include the real participation of the local governments and the community, as well as to strengthen the decision-making capacity of the municipal authorities in the constitution of the CNA.  

Jurist and professor Natacha Mesa Tejeda agrees on this point. In her opinion, administrative intervention is excessive during the creation process, which should be relaxed and give real autonomy to local governments, to determine whether the cooperative proceeds or not.

“A good idea would be the possibility of creating a specialized body in cooperativism responsible for the promotion, development and regulation of cooperatives in our country,” adds Mesa Tejeda.

After this “test period,” one of the major results, in regulatory terms, should be a General Law of Cooperatives, that harmonizes the different regulations that currently govern cooperativism.

“Cooperatives are considered better prepared than a private company to possess an efficient economic management that satisfies social needs and promotes socialist social relations,” says Camila Piñeiro Harnecker. The teacher and researcher mentions some of the most visible benefits: increased motivation, higher income for workers, improvements in material conditions and labor relations…

However, the “how” is also important. Creation processes designed from above and with lack of preparation generate conflicts that affect the relationships between partners. In many cases, the feasibility studies were conducted by entities external to the cooperative and as a formality, which could lead to economic failure, Piñeiro Harnecker stresses.

“In reality, what these new cooperatives need is not just formal training,” Piñeiro points out, “but also advice and spaces to learn from the practical experiences of other cooperatives.”

The back and forth

No cooperative has been approved for more than a year; on the contrary, several have been closed. This is bad news if we think what that means in terms of employment and diversity in the availabilities of products and services. Even then, it is not advisable to maintain dysfunctional cooperatives.

Presently the use of international cooperative experiences is lacking, opines researcher Ovidio D’Angelo. He sees it as a conceptual void and a practice marked by emergencies. “There is no cooperative movement; we have isolated cooperatives,” he said. Similarly, for the CNA there is no association body capable of collecting demands, establishing an agenda and making proposals. The lack of these procedures and cooperative culture were two fundamental points of consensus in the Incuba Empresas workshop.

“There is need for the conceptualization of what a cooperative is, and then analyze it from the point of view of the theory of organizations and administration,” noted Professor Ricardo Jorge Machado.

Valdés Paz recalls that cooperatives do not only constitute economic figures: they are social, cultural entities; entities of opinion, and therefore, political. “If they are forms of self-management, and socialism is self-government and self-management at the end of history, what will the contribution of cooperativism to the democratic development of the Cuban revolution be?”