Cooperatives: an indispensable tool

By Mittal Shah

(In December, 2019, this article was published by the National Cooperative Union of India’s journal – The Cooperator. This blog is a replication of the published article.)

For close to a decade, India has been labelled an ‘emergent leader in global affairs’ and the “next economic powerhouse”. There is now a strong desire within the nation to see such a vision come to reality. This is clear in the recent push to become a ‘five-trillion dollar economy’ in the span of the coming few years. Yet, without the right processes, such a collective drive towards expansion could be unsustainable. It is imperative to consider the high levels of poverty, the recessionary climate (both domestically and abroad), and the large share of informal work – close to 93% nationally. This, coupled with the strikingly low levels of women’s participation, where large portions are engaged in agricultural and artisanal production, makes sustainable economic growth difficult.

What is required is an approach towards growth that takes account of these conditions, and that would ease the disruption that results from a push towards higher levels of productivity. Structural transformations in the economy, the adoption of new technologies, the influx of foreign capital and firms–these are all developments that can be devastating for the vulnerable in our country. To focus on one particular issue: the artisan’s sector is the source of employment for millions of Indians, as well as a rich cultural reservoir of traditions and knowledge-forms ranging across handicrafts, textiles, indegenous medicine and agricultural practices, amongst others.

Unfortunately, this is also a sector that is particularly open to being disrupted by rapid change, and we have seen countless times that the way incentives are organized for conventional corporations do not always align with the interests and well-being of those threatened by accelerated development. The pressure to be more competitive can often mean harsher conditions for workers, and new forms of operating/technological shifts can cost many their livelihoods.

Thus, one of India’s principal problems is: How does one proceed in the direction of a bigger, more prosperous economy without sacrificing these people’s economic position and their vast cultural heritage? I would like to contribute one suggestion that I believe ought to feature in any proposed solution to this problem—We should champion an organizational form within which incentives are organized to protect and empower the workers. Where those who own the enterprise and reap the benefits of its success are also the ones who drive its everyday functioning. Finally, one whose members are motivated and constrained by a democratic framework that works to prevent disruptive and cynical decision-making. These values/principles are all that drive a cooperative enterprise.

A challenge with artisans’ production is its conventional model: individuals or small groups making these products at home and relying on various distributors and middle-agents to find consumers. With the arrival of new technology, such small-scale producers in, say, textiles or handicrafts are easily undercut by their mass-produced competitor, and so find themselves with smaller and smaller incomes as time goes on. Left to themselves, such forms of economic activity are bound to simply die out, leaving much unemployment and suffering behind.

What is encouraging is that in India, there are several examples of interventions that have managed to provide relief from these developments, and find ways of transforming these producers into viable economic prospects. A great deal of these interventions have taken the form of cooperatives. From government-headed projects in the handloom sector, to bottom-up initiatives that have sprung up for various other crafts; India has seen many positive impact stories with this organizational form.

It is worth noting that in many of these interventions the majority of those involved have been artisanal women, a fact that should highlight the capacity of co-operatives to create the right conditions for greater female participation in the country’s workforce. Indeed, with our work with artisans in Gujarat, we at the SEWA Cooperative Federation have ourselves witnessed the immense potential of cooperatives to transform the livelihoods of women workers. One of the earliest endeavours within SEWA was our ‘Sabina’ cooperative. Back in the early 1980s, there was a dispersed community of women in Ahmedabad who stitched khols (quilt covers) using the scrap rags (chindi) from the city’s major textile mills, and provided by big traders who bought them in bulk. While this was a profitable venture, it was not a secure one, with the women being entirely dependent on traders for work, and a decent price for their raw materials. The Sabina co-operative brought together hundreds of these women artisans, helped them secure their own materials, sell directly to consumers, and gain access credit to upgrade their equipment. As a result of these interventions, the incomes of many of these women grew manifold.

While Sabina no longer exists today, the same spirit of democratic, collective enterprise has been taken up by others. SEWA Federation’s primary artisans’ cooperative today is ‘Abodana’.

Started in 1983, Abodana was established to bring together women block-printing artisans, and cut out the middle-agents so they may distribute the full share of profits amongst themselves. Over the past three decades, this cooperative has grown in both scale and sophistication. Today, its members practice not only block-printing, but also patchwork and appliqué, tie and dye, beadwork, badla work, and embroidery. Over the course of time, SEWA Federation has invested in expanding the skill-sets of the workers through various workshops, just as it has brought them wider recognition by organizing awareness programmes that showcase the rich craft traditions that these women keep alive.

Abodana has worked on collaborations with students and faculty from the National Institute of Design (NID), and has acquired enough of a reputation for quality that it serves as a production unit for various businesses and designers who regularly place orders with the cooperative. Apart from this third-party work, Abodana members also create their own products, which are sold at the Federation’s Kalakruti store in Ahmedabad. The cooperative now has over 100 skilled artisans, and continues its drive to expand membership. These examples demonstrate the capacity for cooperatives to breathe new life into the artisans’ sector, and reorganize it for greater economic viability and success. The size of the cooperative structure brings various benefits: economies of scale, better marketing and distribution, easier access to credit and government schemes, the opportunities to upgrade skills and technology, and a safety net in times of distress. Moreover, the nature of cooperative production ensures a basic democratic framework where the incentive is to work towards inclusive, sustainable enterprise that aims to improve the standard of living for all of its members.

Of course, this is not to say that cooperatives will always be successful and competitive, or will be able to overcome all the difficulties that the economy faces today. A truly inclusive and ethical path to development must include other strategies as well. That said, maybe the test of whether ‘new India’ will genuinely be new revolves around whether it will manage to fix the nation’s rising inequality, and bring its poorer and more vulnerable masses into the fold of economic prosperity. In doing so, the co-operative will be an indispensable tool.

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