INTERNATIONAL LABOUR OFFICE THE DEVELOPMENT OF THE COOPERATIVE MOVEMENT IN ASIA Report prepared for the Asian Regional Conference (Nuwara Eliya, Ceylon, January GENEVA 1949 1950) STUDIES XKD REPORTS New Series, No. 19 P U B L I S H E D B Y THE INTERNATIONAL LABOUR O F F I C E Geneva, Switzerland Published in the United Kingdom for the INTERNATIONAL by Staples Press Limited, London LABOUR OFFICE PRINTED BY " IMPRIMERIES RÉUNIES S.A.", LAUSANNE (SWITZERLAND) CONTENTS Page 1 INTRODUCTION CHAPTBB I : New Trends in the Co-operative Movement 4 Growth and Increasing Complexity New Responsibilities Policy adopted by Governments New Problems Variety of the Problems Adjustment to New Forms of Co-operation CHAPTBB I I : Means and Machinery for Co-operative Development. 4 9 10 13 13 15 . 17 The Agencies Concerned Federal Co-operative Agencies Other Non-Official Agencies Universities Associations for Promoting Co-operation Social Welfare Institutions Occupational Organisations Government Services Departments of Co-operation Division of Duties Duties generally carried out by the Government Registration Dissolution Audit Public Education Official Agencies carrying out All or Almost All these Duties . Ceylon China Indo-China Philippine Republic Thailand Non-Official Organisations carrying out All or Almost All these Duties Duties generally Shared Research and Publications General Propaganda and Co-operative Education . . . . Training of Responsible Staff Inspection, Supervision and Audit Economic Duties Finance Co-ordination General Observations 18 18 20 21 21 21 22 23 23 24 26 25 25 25 25 26 26 28 29 29 29 30 31 31 32 33 35 35 36 37 39 !V CONTENTS CHAPTER I I I : Problems and Methods Legislation Supervision Co-operative Education Research Public Education Training of Co-operative Workers The Making of Co-operators Shortage of Teachers . Propaganda Beyond Propaganda Study Circles Participation in Management Co-operative Institutions and National Economic Organisation . Agencies of Co-operative Development The Co-operative Movement and Government Services. . . Other Possible Forms of Collaboration Co-ordination Page 40 40 42 43 43 44 46 48 49 50 52 53 55 57 60 60 67 70 CHAPTER IV : Conclusions 75 CHAPTBB V : Proposed Texts 81 INTRODUCTION Among the various technical services of the International Labour Office, there has from the outset been one whose d u t y it is to keep informed about all forms of the co-operative movement throughout the world. This service quickly paid particular attention to the co-operative movement in Asian countries and in those whose economy is predominantly agricultural. I t was aware of the important contribution which this movement was capable of making towards raising the standard of living of a vast number of workers in such countries and, in many indirect ways, towards improving the conditions of employment a n d the welfare of other workers in what is necessarily an indivisible world. During the last thirty years, therefore, this service has kept in touch with people and institutions in the co-operative movement in Asian countries and, thanks to their loyal collaboration, it has been able to assemble all the information it required not only on the activities of co-operative organisations in their respective countries, but also on their structure, on the special conditions of their development, and even on the human and sometimes pathetic problems which pervade the life and work of their members. The service has thus been able to give space to the co-operative institutions of Asia and their problems in the periodical publications of the International Labour Office such as the International Labour Review, the International Directory of Co-operative Organisations, the bulletin entitled Co-operative Information, and certain special studies such as Co-operative Societies throughout the World, Numerical Data, and The Co-operative Movement and its PresentDay Problems. The object of these articles and studies was, on the one hand, to make the efforts, difficulties and successes of co-operative organisations in Asia better known in other countries and, on the other hand, particularly in Co-operative Information, but also in replies to numerous requests for information, to describe institutions, methods and discussions t h a t were likely to help co-operative organisations in economically underdeveloped countries to solve their own problems. 2 THE DEVELOPMENT OF THE CO-OPEKATIVE MOVEMENT IN ASIA The Asian Regional Conference, held at New Delhi in 1947, which was attended b y very few persons directly connected with co-operative activities, showed how justified was the long-standing and persistent interest taken by the International Labour Office in the co-operative movement in Asian countries. Some of the resolutions adopted at the Conference prepared the way for still closer and more organic forms of collaboration than those which the Office had hitherto maintained with the institutions concerned with the development of co-operation in Asian countries. By a decision of the Governing Body of the International Labour Office, three co-operators from Asia were appointed members of the recently created Advisory Committee on Co-operation. By another decision, the Governing Body placed on the agenda of the forthcoming Asian Regional Conference an item whose importance and special urgency had already been emphasised by the New Delhi Conference, namely the conditions and methods best calculated t o promote full development of the co-operative movement in Asia, having regard to the contribution the movement should make to social and economic progress. By way of preparing this discussion, the International Labour Office set on foot, in the first place by questionnaire, an enquiry among the countries concerned. Later, after a preliminary analysis of the replies received to the questionnaire, an official of the Cooperation Service, belonging to one of the Asian countries, proceeded to Burma, Ceylon, India, Pakistan and Thailand, where he made the necessary contacts and held special meetings for information and discussion. Other officials of the Office visited China and the Philippine Republic. The information and the views thus collected, which partly help to complete previous data on the subject, form the basis of the present report. The war and the consequent isolation of certain countries have left some gaps in the information assembled on this subject from day to day b y the International Labour Office. I n present circumstances, it has not always been possible in all instances to fill in these gaps, and the information supplied on the basis of the questionnaire does not always cover the whole field of the original enquiry. None the less, all the information has been useful, a n d the Office takes this opportunity of expressing its thanks to t h e various administrations, persons and institutions in the co-operative movement t h a t have assisted in the preparation of the present report. Although this report must necessarily be based on as complete INTEODTJCTION 3 and accurate data as possible, the mere collection of such data is not in itself the main object of the report. That object is rather to endeavour to meet the wishes of the Governments and co-operative institutions by supplying information and advice which may help them in conceiving and executing their plans for co-operative development. The data have therefore been used only so far as it allows of formulating or clarifying the problems concerned, and also of discerning what is most useful and practicable in the experience of Asian countries, in co-operative institutions which have already proved their worth, and in activities already initiated, so as to work out quite simply a general programme of action, which can both be put into effect and be effective. This is why the suggestions submitted for the most part are illustrated by examples taken from Asian countries, without, however, neglecting the experience of other countries, in so far as such experience derives from circumstances reasonably comparable to those of the countries which are the subject of this report. The object and general conception of the report being thus defined, an attempt must be made in the first place to determine the nature and extent of the new problems to which the circumstances and recent tendencies of the co-operative movement in Asia have given rise. This is the subject of the first chapter of the report. The second chapter deals with these problems in relation to the means available for solving them. The third chapter describes some of the methods by which solutions might be reached. The report ends with a few brief conclusions which, together with the drafts of two proposed resolutions, marshal and summarise the main suggestions submitted and may perhaps afford a basis for discussing any recommendations which the Conference might wish to adopt. CHAPTER I NEW TRENDS IN THE CO-OPERATIVE MOVEMENT The problem for discussion by the Conference is how the co-operative movement can be started, improved or developed in Asian countries so as to give the best results. Any useful thinking on this subject must begin by an appreciation of the new features and trends that the co-operative movement has shown in those countries during recent years, of the new responsibilities it has had and will have to accept, of the new aims it has conceived or has been assigned and, lastly, of the part it will have to take in promoting a new economic and social order. GROWTH AND INCREASING COMPLEXITY Apart from the disturbances caused by the war—which, to some extent, were common to the co-operative organisations of Asia and of Europe—the main feature which strikes the observer at the outset is, as shown in the table below, the extraordinarily rapid increase in the number of co-operative societies and of their members during the last few years in most of the countries of Asia. Thus, over a period of no more than seven years, the number of co-operative societies increased by 40 per cent. (50,000 units) in India and Pakistan, and by 66 per cent, in the Philippines. In nine years the number increased fivefold in Burma and in Ceylon, and quadrupled in China. In eleven years it has more than doubled in Japan, nearly doubled in Malaya, and increased almost sevenfold in Thailand. It will also be seen that the number of members of co-operative societies has shown an even larger increase, except in the Federation of Malaya, where the increase is not more than 27 per cent., and in Japan where it is 49 per cent. In India and Pakistan, the percentage is 64. It would seem to be 120 per cent, in the Philippines, 750 per cent, in Thailand, 900 per cent, in China, more than 1,900 per cent, in Ceylon, and 4,200 per cent, in Burma. NEW TRENDS IN THE CO-OPERATIVE MOVEMENT 5 DEVELOPMENT OF THE CO-OPERATIVE MOVEMENT IN ASIAN COUNTRIES . Year Country Burma Number of co-operative societies Number ol members . . . 1939 (Dec.) 1948 (Dee.) 2,047 10,066 81,804 3,500,000 Ceylon . . . 1938 (April) 1948 (April) 1,299 6,567 55,726 1,157,202 China. 1937-1938 1948 (Aug.) 46,983 167,340 2,139,634 23,695,000 India and Pakistan. . 1938-1939 1945-1946 121,037 170,870 5,370,000 8,935,450 Japan 1936 1947 ( J u n e ) 15,450 38,600 6,170,839 9,230,000 1939 1946 (Dec.) 640 1,065 116,000 256,988 1937 1948 (April) 770 5,574 11,019 93,600 470 878 80,143 102,289 . . . . . . Philippine Republic Thailand . . . Singapore a n d Federation of M a l a y a 1936 1947 Rural credit co-operatives, which represent the most ancient and the most widespread form of co-operation in Asia, have everywhere continued to multiply. But their uninterrupted progress only partially explains the considerable differences to be noted between the figures for 1946, 1947 or 1948. In the majority of the countries under consideration not only did the co-operative movement increase considerably and quickly, but its actual composition was profoundly transformed by the multiplication of forms of co-operation which ten years ago were exceptional or even unknown. This transformation should be studied in some detail, since it throws more light on present and future problems of cooperation than even the startling change in numbers. The transformation may be measured by comparing the increase in the number of rural credit co-operatives with that of other forms of co-operative societies. The latter is almost always greater than the former ; the only exception to this rule would appear to be the co-operative movement in the Federation of Malaya which is, moreover, in a very prosperous condition despite the damage 6 THE DEVELOPMENT OF THE CO-OPERATIVE MOVEMENT IN ASIA caused by the war. Between 1936 and 1947 the number of rural credit co-operatives in t h a t country increased by 91 per cent., whereas t h e co-operative societies of other kinds showed an increase of only 74 per cent. In India, however, whereas the number of rural credit co-operatives increased by 13 per cent, between 1941-1942 and 1945-1948, the number of other co-operative societies increased by more t h a n 35 per cent. The differences are even more striking in the case of other countries. In Ceylon, between 19381939 and 1946-1947, the number of credit co-operatives (limited or unlimited liability) increased by 48 per cent., and the number of their members by more t h a n 82 per cent., but the number of co-operatives of other categories increased by 1,900 per cent. and their members b y 3,400 per cent. I n 1937, in China, 73.6 per cent, of co-operative societies listed in the census were credit co-operatives ; in 1947, although these credit co-operatives had considerably increased in actual numbers, they represented no more t h a n 31.7 per cent, of the total, whereas during the same period, the agricultural purchase and sale co-operatives, for example, rose from 2.9 per cent, to 23.5 per cent., consumers' co-operatives from 0.4 per cent, to 14 per cent., etc. The forms of co-operative societies which thus developed, not always at the expense of, but rather side by side with, rural credit co-operatives, are very diverse, and their development has also proceeded unequally. I n this connection may be mentioned the housing co-operatives, of which there is much talk in India, although it is pointed out how difficult it is for wage earning employees t o contribute to their operation. Another important example is supplied by the so-called " industrial " co-operative societies, which are sometimes co-operatives of handicraftsmen or of cottage industries, and sometimes workers' production co-operatives. There are also the rural supply co-operatives, agricultural marketing co-operatives and, perhaps most important of all, the consumers' co-operatives, not only in the urban centres, but also in the country. The development of these latter, which is due mainly to war conditions, has been the more spectacular in that it was the least expected. Before the war, it was impossible to find more than about a thousand of such co-operatives in the whole of Asia (not counting the U.S.S.R.). They were for the most part small and weak organisations, with the exception of the well-known " Triplicane Urban Co-operative Society " in Madras. At the end of 1948 statistics for Burma alone showed 7,000 of these co-operative NEW TRENDS IN THE CO-OPERATIVE MOVEMENT 7 societies, for the most part less t h a n two years old, supplying about 3 million consumers and their families. I n 1940, Ceylon had no more than 25 consumers' co-operatives. On 30 April 1948 it possessed 3,885, federated in 93 district wholesale units and including more than a million members, thus supplying two thirds of the population of the island. I n China, between 1937 and 1948, the number of consumers' co-operatives rose from less than 300 to more t h a n 5,000, to which must be added about 50,000 other co-operative societies which, in addition to their other functions, undertake the distribution of consumers' goods. I n India, in the period 1938-1939, there were less than 400 consumers' co-operatives, with about 43,000 members. I n 19451946 there were 4,500, with 960,000 members. Between the same dates, in the Province of Madras alone, their number rose from 85 to 1,346 (with 447,000 members) ; in the Province of Bombay they rose from 25 societies with 7,128 members to 465 societies with 132,000 members. I n the Province of Assam between 19381939 and 1944-1945, the 13 consumers' co-operatives with 776 members were multiplied by almost one hundred (1,229 societies), and their membership was even more greatly increased (135,380). I n the Philippines the number of consumers' co-operatives rose from 68 in 1940 to 878 in 1946. I n Thailand, where the public is spontaneously showing an increasing interest in them, their number has been multiplied by more than ten between 1938 (6 societies) and August 1948 (76 societies). The need for something more t h a n a rural credit co-operative, and for a village co-operative centre able to cope with all the economic requirements of its members b y taking the place of the " merchant money-lender ", not only in one b u t in all respects, has led certain countries, in particular China a n d India, to a new conception and consequently to a reorganisation of the village co-operative society. A co-operative of this kind, as it gathers strength and experience, undertakes to procure for members the goods (such as seeds, fodder, fertilisers, agricultural machinery) which they require as producers, and also certain staple consumer goods. I t is also in a position to ensure or facilitate the marketing of its members' products, to encourage recourse to subsidiary occupations with a view to supplementing income, etc. I n short, it has tended towards the form of the "multi-purpose co-operative ". 8 THE DEVELOPMENT OF T H E CO-OPERATIVE MOVEMENT IN ASIA This form of co-operation is not completely new in Asia, since many rural credit co-operatives had already followed the natural course which leads all co-operative societies gradually to meet as many of the common requirements of their members as possible. Nevertheless, the innovation is a real one, since it has by now become systematised and even an accepted policy. Finally, in some countries, such as China, India, Japan and Thailand, interest has been aroused in favour of a kind of cooperative society which has not been generally heard of in those countries (except for J a p a n ) until a very recent date, namely, the co-operative farming society. Not only was this kind of cooperative almost unknown i n almost all the Asian countries, but i t had been prevalent (and, even so, in many different forms) in only a small number of other countries—Italy for about 40 years, Spain, the U.S.S.R., Bulgaria and Yugoslavia, and, more recently, in certain other countries in the east of Europe, and finally in Mexico and Palestine. Latterly t h e system has also made its appearance in Canada, the United States and France. I n China, the Economic Reform Plan adopted on 1 August 1947 by the Council of State provides t h a t the collective and co-operative exploitation of the land, with the use of modern machinery and methods, shall be encouraged in duly selected localities. As early as February 1946, special regulations had been published providing for the constitution and operation of co-operative agricultural undertakings. Such co-operative societies were created in the districts flooded b y the Yellow River, in Formosa, and in the Provinces of Fu-Kien, Kiang-Su, Hu-Peh, Kwang-Si and Shan-Tung. I n India, the Co-operative Planning Committee (1945), endorsing a recommendation made b y t h e Fourteenth Conference of Registrars of Co-operative Societies (1944), recommended t h a t certain experiments should be made in the matter, subject to certain reservations and in certain forms. These experiments were in practice made on a small scale in the Provinces of Bengal, Bihar and Bombay, and also in the States of Baroda, Cochin and Hyderabad. The formula was also employed on certain occasions for the settlement of refugees and the resettlement of demobilised soldiers. I n the Eastern Punjab, an experiment has been carried out on a fairly large scale, covering 218 villages. I n Japan, in 1938, there were already in existence several hundred co-operative societies for collective farming. NEW TEENDS I N THE CO-OPERATIVE MOVEMENT 9 N E W RESPONSIBILITIES Not only have co-operative societies increased in number and in membership, not only have they taken on a greater variety of economic duties, but also they have assumed new responsibilities, or, more often still, they have been entrusted with new responsibilities by Governments. During the war, many Governments turned with confidence to the co-operative organisations for the solution of the distribution problems occasioned by the existing shortage and the rise in prices and, sometimes, by the failure of private enterprise or by the exigencies created by the black market. The Governments were subsequently led progressively to invest the co-operative organisations with economic functions which they had themselves assumed under the pressure of urgent necessity. Thus, consumers' co-operatives played a part of primary importance in the distribution of goods to the officials and to the population of Chungking. They render similar services in Peiping where, in May 1949, they had 96,000 members. In April 1942, when Madras had been partly evacuated and was under the threat of aerial bombardment, it was deprived of all wholesale and retail trade. At that moment the consumers' co-operatives, subsidised for the purpose by the Government, ensured the food supply of almost all the population remaining in the town, that is to say, between 20 and 30 per cent, of the normal population, whereas they formerly supplied no more than about 5 per cent. It was in October of the same year, and in similar critical circumstances, that the consumers' co-operative movement was really set on foot in Ceylon, at the instigation and with the assistance of the Government. Eighteen months later the movement attained the dimensions already mentioned. It was also through the medium of co-operative societies of various kinds (consumers' co-operatives, rural supply co-operatives, weavers' co-operatives, etc.) that the various Governments ensured, and often continue to ensure, the distribution of seeds, fertilisers, yarn, woven goods, rationed goods, etc. In Burma, essential commodities which were until recently distributed by the Government are now distributed by the consumers' co-operatives, There is a tendency for the authorities to give preference to co-operative societies when granting fishing 10 THE DEVELOPMENT OF THE CO-OPEKATIVE MOVEMENT IN ASIA rights or placing orders for woven goods and other products of cottage industries. I n Pakistan, the co-operative organisations have attempted to fill the gaps occasioned by t h e exodus of t h e non-Moslems, in whose hands almost all trade and banking had been concentrated. I n China, Ceylon, India and Pakistan, the various campaigns for growing more food crops are as far as possible and in some cases, as in Ceylon, almost exclusively based on co-operative farming organisations for the purpose of land clearance, certain aspects of irrigation and drainage, the distribution of selected seed, fertilisers, and fodder. I t is also to the co-operative organisations t h a t many Governments have turned for the settlement of landless workers and for the solution of certain social problems arising out of the war, such as the reabsorption of demobilised soldiers (co-operative colonies, labourers' co-operatives, etc.). The press of both hemispheres has made known the remarkable work accomplished by the Chinese industrial co-operatives, which received thousands of refugees and resettled t h e m in war production. I n India and Pakistan, co-operative societies for cottage industries and handicrafts have been created in order to give employment to persons who have been uprooted b y the separation of the two States. I n India, co-operative organisation is, together with education and health, one of the three essential elements in the programme for the betterment of the aboriginal tribes and the depressed classes. POLICY ADOPTED B Y GOVEENMENTS When, in the cases which have been briefly summarised, the Governments appealed to t h e co-operative organisations, they did so not merely on grounds of expediency, but as an act of confidence. Nor was it a casual act of confidence. I t was, in certain cases, and is now in all cases, t h e expression of an ideological choice and of a definite policy. I n his reply to the Office's questionnaire, the Commissioner for Co-operative Development in Ceylon wrote t h a t the Government " attaches very great value to the development of co-operation as the best means of bringing out the economic development of the country ". NEW TKENDS IN THE CO-OPEBATIVE MOVEMENT 11 In China, the Constitution of 1946 included, in its chapter on the fundamental policy of the nation, a provision t h a t " c o operative enterprises shall be encouraged and protected by the Government ". Even during the war a triennial plan for the development of co-operation had been set up, followed from 1947 onwards by a quinquennial plan. Moreover, co-operation was given an important part to play in the plan of economic reform adopted by the Council of State in August 1947, and also in the more recent provisions regulating the application of this plan, namely, the strengthening of credit co-operatives, the encouragement of co-operative societies for agricultural exploitation, the development of co-operation in artisanal and home industries, the extension of the movement to tea planters, silk worm breeders, fishermen, etc. With a view to promoting co-operative organisation at all times, legislation assigns to the agricultural associations the duty " to encourage and assist in the establishment of village co-operatives " (cf. Article 4 of the amended Act on Agricultural Associations, issued on 28 December 1948) and also to create co-operative societies for the exploitation of the land. The Government also inserted among the duties of the workers' unions an injunction " to organise productive, consumer and credit cooperative societies " (cf. Article 5 of amended Act on Trade Unions, issued on 17 January 1949). A report of the north-eastern authorities on agricultural production in Manchuria for 1948 and 1949 emphasised the following points: (a) need for establishing a central supply and marketing co-operative society in North-East China with provincial branch offices, so as to centralise and co-ordinate rural activities ; (b) more Party personnel should engage in the work of the co-operative movement ; (c) the encouragement of co-operative societies by preferential treatment in taxation, transportation, financial assistance, etc. ; (d) improvement of agricultural production and production techniques through the co-operative societies ; (e) improvement of the marketing of agricultural products through the co-operative societies ; (f) the State trade bureaux should help these co-operative societies by supplying them with raw materials and other goods at low prices. I n general the authorities in Northern China consider t h a t co-operative organisation is the link between public undertakings on the one hand and small producers and consumers on the other. Co-operation is not mentioned in the Constitution of India, but, in many statements and decisions, the Government of India has 12 THE DEVELOPMENT OF T H E CO-OPERATIVE MOVEMENT IN ASIA made clear what sort of place it reserves for co-operation in its general constructive effort. In a note communicated to the Office, the Government stated : " Hitherto co-operation has been taken as an isolated and disintegrated step towards the improvement of the agriculturalists' lot. Now co-operative development must be a part of the National Economic Plan." In point of fact, the Congress Economic Programme Committee assigns an important part to co-operation in every phase of economic activity, and makes many suggestions for developing the co-operative movement in all its forms. The various branches of co-operative activity have been the subject of systematic examination and of recommendations by a great many committees such as the Rural Finance Subcommittee and the Marketing Subcommittee of the Policy Commission for Agriculture, Forestry and Fisheries, the Rural Credit Organisation Committee (Bombay), the Provincial Advisory Committee on Housing (Bombay), and above all, the Co-operative Planning Committee. In a resolution approved by the Constituent Assembly on 7 April 1948, the Government of India announced its intention of finding means, through the medium of co-operative organisations, to co-ordinate home industries and small-scale industries and to integrate them with large-scale industry. It has indicated that this doctrine should be the mainspring of the newly created All-India Cottage Industries Board. Apart from the general policy programmes drawn up by the Central Government, the provinces have drawn up their own plans for co-operative development, some of which are already in operation as in the United Provinces, in Bombay and in the Central Provinces. The same is true in Pakistan of Sind, the Western Punjab and Eastern Bengal. To sum up, it may be said that, at the present time, the Asian Governments have all more or less emphatically stated that they intend to develop the co-operative movement in their respective countries. In particular, they wish to take advantage of the movement— (1) to increase production with special regard to immediate requirements and to the requirements of a population which is continually on the increase ; (2) to promote a rise in the standard of living of agricultural producers (between 70 and 95 per cent, of the total population, except in Japan) towards the same level as obtains in other occupations ; NEW TRENDS IN THE CO-OPERATIVE MOVEMENT 13 (3) to carry out their industrialisation programme, a large share in which is assigned to handicrafts and cottage industries reorganised on co-operative lines. The Governments regard this policy as one of the keystones of the new economic and social structure which they wish to set up on as democratic a basis as possible. N E W PROBLEMS This rapid and sometimes very considerable development of the co-operative movement, the readiness of t h e movement to undertake new activities or to enlarge those already exercised on a small scale, the important share which the majority of Governments intend to give to the movement in the essential work of the national economy, clearly raise, both in t h e present and in the immediate and more distant future, problems which are of great significance and sometimes of no less difficulty. Variety of the Problems The rapid increase in the number of co-operative societies of certain kinds has not always been favourable to the quality of their work. Most Governments recognise this fact, whether implicitly or explicitly. The reply of Burma to the Office's questionnaire points out t h a t " co-operative societies in Burma have progressed more in numerical strength t h a n in educational value ". In China, one of the main objects of the five-year co-operative plan is to improve the standard of existing co-operative societies. In India and in Pakistan statistics published by the Reserve Bank of India x show t h a t co-operative societies which are really well administered and which as a rule need no help from outside are not very numerous. These figures show t h a t , between 1939 and 1946, even if there was no deterioration, qualitative progress has been on the whole negligible, except in the Province of Madras, where the proportion of good and very good societies rose in ] 946 to 22.8 per cent., in the Punjab (27.3 per cent.), in the Province of Bombay (49.1 per cent.), in the Province of Coorg (90 per cent.) and in the Province of Delhi (47.3 per cent.). The proportion was no more t h a n 5.5 per cent, in the Provinces of Orissa, 2.4 1 Review of Co-operative Movement, India, 1939-1946. 14 THE DEVELOPMENT O í THE CO-OPERATIVE MOVEMENT IN ASIA per cent, in the United Provinces and 2 per cent, in Bengal. In these same provinces, t h e proportion of co-operative societies threatened with liquidation was respectively 21.9, 18 and 27.4 per cent. I t is doubtful whether t h e situation has appreciably improved since 1946, and it is not certain that it is any better in the countries for which no accurate data are available, and where the co-operative movement has developed even more rapidly than in India and Pakistan. The increase in the number of co-operative societies in certain countries has in some cases been due to the exceptional circumstances of the war, or post-war, period. I t may be questioned whether co-operative societies which distributed, solely or mainly, rationed goods have all acquired sufficient strength to maintain themselves after the return of more normal conditions. If the necessary measures are not taken, or are taken too late, it may be asked whether, when there are no longer any shortages and the Army has ceased placing orders, the existence of some of the co-operatives concerned with home handicraft or cottage industries will not be threatened, particularly those connected with handwoven goods. Thus besides t h e problem of efficiency, there is also one of adjustment to new conditions. These two problems, which are the legacy of the very recent past, have been made much harder by the development programmes contemplated in certain countries where the co-operative movement has already attained considerable dimensions. As an example may be mentioned the objectives laid down by the Co-operative Planning Committee in India. I n a space of 45 years, t h e co-operative movement has succeeded in reaching about 10 per cent, of the population of the country (if it be estimated t h a t each member of a co-operative represents a family of five persons). During the coming ten years, the Cooperative Planning Committee urges that efforts should be made to enable co-operative organisations to reach 30 per cent, of the population and 50 per cent, of the villages. This would mean a yearly increase of more t h a n one million in the number of cooperative members and the creation of 21,600 co-operative societies, or, in other words, very nearly half the already rapid increase which took place in the seven years between 1938-1939 and 1945-1946. I n addition, 2,000 agricultural co-operatives, 11 provincial centres and one national centre will have to be created for the purpose of distributing 25 per cent, of agricultural produce destined for the market. I n provinces where consumers' co-operatives are already NEW TRENDS IK THE CO-OPERATIVE MOVEMENT 15 strongly entrenched, they would have to be multiplied until there is one consumers' co-operative for approximately every 5,000 habitants. Finally, a co-operative centre should be set u p in each province for the purpose of giving financial assistance to housing co-operatives. Efforts on so large a scale naturally raise their own special problems, and the will to bring the work to a successful conclusion raises several others. Thus, certain co-operators are considering the desirabñity of compulsion not only in the case of co-operative societies for the consolidation of holdings, irrigation co-operatives and crop protection co-operatives, but even in t h a t of agricultural marketing co-operatives. These are delicate questions which are, and will continue to be, the subject of lengthy discussions, and which will not be settled without difficulty. Adjustment to New Forms of Co-operation The declared intention of promoting more especially those forms of co-operation which hitherto existed only on a small scale, or are entirely new in Asia, raises yet more problems. True, there are few forms of co-operation which are not yet represented in those countries ; there are even some, such as the co-operatives for the consolidation of holdings, co-operatives for the prevention of malaria, welfare co-operatives, arbitration co-operatives, and yet others which are more numerous in Asia t h a n elsewhere. Nevertheless, the kind of co-operative which came first into being, on which for a long time almost all the efforts of the organisers of the movement have been brought to bear, and which, even to-day, is the commonest in almost all the countries concerned, is the rural credit co-operative. So far as co-operators, administrators, supervisors, and auditors of co-operatives have been trained, they have been so trained, solely or mainly, with a view to dealing with the rural credit co-operative. This form of co-operation is the simplest of all and it has been found possible to make it work even among illiterates. To understand and, a fortiori, to direct the operations of a supply co-operative demands a wider range of knowledge. This is even truer of an agricultural marketing co-operative, of a multi-purpose co-operative or of an " industrial " co-operative. Thus the whole problem of co-operative education arises again with new terms. I t involves the education of co-operators, and a more extensive, more complicated and lengthier training 16 THE DEVELOPMENT OF THE CO-OPERATIVE MOVEMENT IN ASIA of those who are to ensure, supervise and direct the administration and management of co-operative societies. Each one of the co-operative forms which it is proposed to develop meets with fresh problems, such as access t o sources of supply in the case of supply co-operatives ; access to markets in the case of co-operative societies for the sale of agricultural or handicraft products ; the organisational problem, and that of the responsibility of members in the case of multi-purpose cooperatives; finance in t h e case of housing co-operatives; t h e problems of expediency, organisation and mechanisation, and psychological considerations in the case of co-operatives for the exploitation of the land. All these societies share problems which did not arise in times when the rural credit co-operative was the dominant form, e.g., the building u p of share capital and of substantial working capital, the choice between a " federated " and a " centralised " type of structure ; the best size for co-operative societies other t h a n rural credit co-operatives ; democratic administration in large cooperative societies, liaison between co-operatives of different categories, a n d m a n y other problems. The new diversity of forms entails, in most Asian countries, an extensive reorganisation of the co-operative movement. I t will be necessary to create or develop central organisations for supply or marketing, for insurance and reinsurance. I t will probably be necessary in some countries to modify the structure and the duties of co-operative banks. Finally, a whole series of legislative and administrative measures and amendments will be necessary if national economic planning is t o make due provision for the development of the co-operative movement. Some attempt has already been made t o deal with these problems, or with most of them. Their solution will clearly depend on the employment of vast and varied resources. What are the resources t h a t are available in Asian countries ? This question will be briefly considered in the following chapter. CHAPTER II MEANS AND MACHINERY FOR CO-OPERATIVE DEVELOPMENT The creation or extension of a solid and well co-ordinated network of co-operative institutions raises problems and calls for means which are not necessarily today what they were yesterday, nor the same in Asia, as they are in Europe or America. I n the old countries of Europe, where it was born, co-operation took shape in economic surroundings and in a social structure which were characteristic of a well-defined epoch, namely, the end of the 18th century and the first half of t h e 19th. Historical reasons have imposed upon the co-operative movement its present-day conditions, its possibilities, its limits and its form. There can be no doubt t h a t the co-operative movement would assume a totally different form if it were to come into being today in countries such as Great Britain, France and Germany, where it first appeared. So, too, in countries which have an economic and social structure differing from t h a t of the countries of Western Europe, and which have been moulded by different historical circumstances, it is clear that the co-operative will be influenced b y other conditions. There is no reason to suppose t h a t all the methods which have proved useful in the past are equally valid today. I n the case of Asian countries, which are for the most part in full and rapid development, it is well worth considering whether the methods in use for the last 45 years have remained equally effective in all those countries. The means and the machinery which are at present employed in Asia to organise, consolidate a n d extend t h e co-operative movement should therefore be reviewed, not in a doctrinaire spirit, but circumspectly and with due regard for the fact t h a t diversity is to be expected. B u t this review must also be made in the light of two unquestionable facts. Firstly, co-operation is necessarily based on the same welltried principles everywhere, even in countries where it is of com- 18 THE DEVELOPMENT OF THE CO-OPERATIVE MOVEMENT IN ASIA paratively recent origin, and has therefore had to use refashioned or entirely new methods in order to flourish in a different historical setting from t h a t of older co-operative movements. Secondly, co-operation demands for its development conditions which are indispensable because they are of the very essence of co-operation itself. Although legislation which supplies an appropriate legal framework for co-operative organisations has proved to be not everywhere absolutely necessary, it has nevertheless often provided the co-operative movement with a convenient point of departure. Such legislation is therefore considered, and will continue to be considered, necessary in the Asian countries. But, with or without a good legislative foundation, nowhere has a co-operative organisation been successfully started at any time without a previous effort to convince its future members and to initiate t h e m into t h e principles and methods of co-operation. Nowhere has the co-operative movement been capable, at any time, of developing on sound and lasting lines without the assistance of agencies which continuously ensure the diffusion of co-operative ideas, the education of members, the training of its employees, an information and advice service, a certain amount of supervision, the auditing of accounts, proper representation of the interests of the movement, t h e concentration of financial resources or credit requirements, and of supply and marketing needs. Without going into details, since they would be superfluous in a report which is not primarily documentary, it might be well to determine, on the basis of the information supplied, whether and to what extent and through the medium of what agencies all these functions are ensured. I t is interesting to observe at the outset the diversity and the comparative importance of such agencies. The distribution of duties between such organisations, which varies as between country to country, will be considered later. T H E AGENCIES CONCERNED Federal Co-operative Agencies I n most countries other t h a n those of Asia, the functions listed above are carried out by agencies with a federal structure, created by the co-operative societies themselves for specific ser : vices. Such agencies include general federations or " institutes ", auditing unions, consumer co-operative wholesale societies, bank- MEANS AND MACHINERY POR CO-OPERATIVE DEVELOPMENT 19 ing co-operatives, central co-operative credit institutions, central supply or marketing associations for agricultural or handicraft co-operatives, etc. Central co-operative organisations of this or approximately similar nature, or on a national scale, are uncommon in Asia. They exist only in China, India and Japan. I n China, there are the Co-operative League, the Central Co-operative Bank, and the National Co-operative Wholeselling and Marketing Agency. I n India, there are the All-India Co-operative Institutes' Associations, the Provincial Co-operative Banks' Association, and the All-India Co-operative Insurance Societies' Association, which the Eighth AllIndia Co-operative Conference, held a t Bangalore in May 1949, decided to amalgamate into a single All-Indian Co-operative Union. In Japan, where federal organisation was already highly developed in the co-operative movement before the war, there are today about 20 national central co-operative organisations. The progress of federal organisation at the level of the province, the region and the district, is considerably more advanced. The process is almost complete in Ceylon, where each of the nine provinces possesses a co-operative union which includes the primary societies of all categories, as well as specialised provincial unions of agricultural marketing co-operatives, consumer cooperatives, and credit co-operatives respectively, with the addition of central banks for the credit co-operatives. The intention is t h a t in the near future the unions of consumer co-operatives shall federate in a single wholesale society, and t h a t the general provincial unions shall be amalgamated in a national federation. I n China, the regional or hsien federations have been increasing in numbers (415 specialised federations and 236 general federations in 1947), gradually absorbing the district federations (496 specialised federations and 148 general federations in 1947). The large-scale provincial federations include nine specialised federations and five general federations. The intention was that they should constitute the basis of a national federation. I n almost all the provinces and almost all t h e States of India, there are associations for the promotion of co-operation such as federations, co-operative banks and central marketing organisations. I n the Province of Madras, the consumer co-operatives have created central co-operative agencies of a federal nature. Several agricultural co-operative unions exist in Indo-China, notably those of Saigon, Hanoy and Cambodia. Unions of consumer co-operatives are provided for b y law. 20 THE DEVELOPMENT OF T H E CO-OPERATIVE MOVEMENT IN ASIA Like India, Pakistan possesses strong co-operative unions and co-operative banks at the provincial level. Four unions of urban co-operative savings and credit banks have been established in the Federation of Malaya and at Singapore. Unions including other categories of co-operative societies are in course of formation. The creation is now contemplated of a Pan-Malayan federation including all the unions. According to available information, it would seem that the process of fédéralisation is not very far advanced either in Burma, in the Philippine Republic or in Thailand. In Burma, the federations which were created between 1922 and 1929 disappeared as the result of maladministration. The Department of Co-operation is encouraging the formation of some unions of consumer cooperatives in certain districts and towns. To sum up, with certain exceptions, recent years have shown appreciable progress in the movement of co-operative societies towards this higher form of organisation consisting of groups with a federal structure. This is a sure sign of increasing maturity. Nevertheless, several of the replies which the Governments have given to the Office's questionnaire point out that these federal organisations are not yet strongly established or equipped : some of them are not yet in possession of the powers and facilities necessary for their full and efficient operation ; in other cases, they have only been recently created, or again, as in China, they are working under difficult conditions. The development and strengthening of the federal organisation of the co-operative movement still remains a serious problem for most Asian countries. Other Non-Official Agencies Side by side with the central co-operative agencies, and apart from the official Departments of Co-operation, which will be referred to later, other agencies and institutions have played, or continue to play in certain countries, an active part in furthering co-operative ideas and organisation. Although such agencies have not been equally effective in all countries, and although their influence has sometimes been transitory and is, nowadays, almost exceptional, the results they have often achieved, and still do achieve in some comparatively limited fields, are evidence of the part they might play in the future. In this connection, the activities of certain universities, of certain agencies for promoting co-operation, of certain social welfare institutions and of certain occupational organisations, are worth mentioning. MEANS AND MACHINERY POK CO-OPERATIVE DEVELOPMENT 21 Universities, The universities of the Asian countries are not yet as closely associated with popular movements for economic and social organisation in as direct and active a way as are m a n y universities on t h e North American continent. Nevertheless, certain examples of their efforts in such matters m a y be quoted. In China, it was a t the University of Pekin t h a t the first consumer co-operative was created in 1918, and it was under the auspices of the university of Fu-Tan, and mainly due to the initiative of Professor S. Y. Hsueh a t Shanghai, t h a t the first savings co-operative was formed in October 1919. I n the early days of the Republic, the university of Fu-Tan was even called " the cradle of the Chinese co-operative movement ". I n India, it was on the initiative and under the supervision of t h e Visva Bharati University t h a t a network of health cooperatives, working on the Yugoslav model, was developed in 1932 in the Birbhum district of Bengal. Associations for Promoting Co-operation. In China, the Chinese Co-operators' Union, a private association founded in 1928, is carrying on the work of co-operative development initiated by Professor Hsueh. More recently, the Chinese Association for Co-operative Economic Research, which was founded in 1944, deals with t h e publication of studies on the question. Finally, t h e part played by the Association for the Advancement of Chinese Industrial Co-operatives, which was created in 1938, is widely known. Similar objectives were announced by a committee created in Bombay in 1943, and later b y the Provincial Industrial Cooperative Association. This latter association, like many provincial associations in India for the promotion of co-operation, in particular t h a t of Bombay, is tending t o become a co-operative federation. Social Welfare Institutions. The best known and most striking example of such associations is t h a t of the International Famine Relief Commission in China. The Rural Co-operative Committee of this Commission has, by going t o work methodically and efficiently, achieved remarkable results in the matter of co-operative organisation particularly in North China, though, at least until 1935, the Committee directly 22 THE DEVELOPMENT OF THE CO-OPERATIVE MOVEMENT IN ASIA or indirectly helped to extend the Chinese co-operative movement as a whole and to make the movement more effective. In India, associations such as the Young Men's Christian Association and the " Servants of India " Society have, in the course of their campaigns for rural reconstruction, assisted in the creation of co-operative societies. Special associations such as " Bhil Sewak Mandai " and the " Adivasi Sewak Sangh " have taken part, generally with marked success, in activities for co-operative organisation among the aboriginal tribes and the depressed classes. In the Philippine Republic, the Department for Rural Life of the Philippine Federation of Evangelical Churches is endeavouring to promote the co-operative movement, particularly credit co-operatives. The Social Order Institute is helping the official co-operative agency to spread the co-operative idea among workers' organisations. Occupational Organisations. Here and there, the occupational organisations of employers and workers have shown interest in the co-operative movement in general or in one or other of its forms. In China, in May 1949, the North China Assembly of Trade Unions took the view that there was a need for co-operative organisation and that the trade unions should take part in such organisation. Thus the Railwaymen's Union of Chang-Sing-Tien, with a membership of 16,000, and the Miners' Union of MengTou-Kou, have each set up a consumer co-operative to supply members and their families with essential foodstuffs, such as rice, flour, oil and salt, at reasonable prices. In India, their action has been mainly directed towards setting up thrift and credit co-operatives among wage earners and of consumer co-operatives (mainly in the form of factory co-operatives). In the Philippine Republic, the Congress of Labour Organisations has set up a committee with the duty of assisting in the creation of co-operative societies. In Burma, certain large economic organisations are helping the movement in the form of enquiries, publicity work, etc. In the Federation of Malaya, the employers (Government, municipalities, planters) are in general showing considerable interest in the wage earners' thrift and credit co-operatives. The Thai Government states that one of the most important MEANS AND MACHINERY FOB CO-OPERATIVE DEVELOPMENT 23 commercial undertakings in the kingdom has offered to help the co-operative movement by purchasing rice from the agricultural co-operatives at a higher rate t h a n the market rate, b y supplying consumer co-operatives at favourable prices, etc. Government Services Up to the present, there can be no possible doubt t h a t legislative and governmental action has been the chief source of driving power and guidance for the co-operative movement in the Asian countries. In all these countries co-operation is regulated by legislation, usually at the national level, except in India, where since 1919 such regulation has taken place at the provincial level. Thus, the Provinces of Bengal, Bihar and Orissa, Bombay, Madras and the States of Cochin and Coorg have special co-operative legislation. Elsewhere the Indian Act of 1912 remains in force. Generally speaking, this co-operative legislation, whether national or provincial, is common t o all forms of co-operative organisation. Sometimes, as in China and in the Philippine Republic, special legislation has been enacted for certain categories of co-operative societies. Departments of Co-operation. There are many Government Departments which are required to take action for the development of co-operation, for example, the Departments of Agriculture, Labour, Health, Education, National Economy, etc. Generally speaking, however, Government action is carried out through the medium of special Departments of Co-operation. I t should be observed that, in the various countries of Asia, these Departments are attached to or form p a r t of different Ministries and that, even within the same country, they sometimes pass from one Ministry to another. Probably the most frequent practice has been to attach them to the Ministry of Agriculture, as in Burma (Ministry of Agriculture and Eorests), in the Province of Bihar (Ministry of Food and Agriculture), and in the Central Government of India. The same practice prevails in Thailand. The Departments of Co-operation in the Province of Madras, in the State of Cochin and in the Eastern Punjab are attached to the Ministry of Development. 24 THE DEVELOPMENT OF THE CO-OPERATIVE MOVEMENT IN ASIA The Co-operative Department in Western Punjab has been transferred from the Ministry of Development to the Ministry of Education and Hygiene. In China, the Central Co-operative Administration latterly formed part of the Ministry of Social Affairs. In 1935 it was a division of the Ministry of Industry and was handed over in stages to the Ministry of Economic Affairs, to the Administration of Rural Credit, then again to the Ministry of Economic Affairs, before reaching its present Ministry in 1940. These differences and changes in the dependence of Departments of Co-operation are worthy of mention because of the inferences that may be drawn from them, particularly if they are considered with reference to the very different ideas which have prevailed in the matter, e.g., in Ceylon, in the Province of Bombay, and in the Philippines. In Ceylon, a Ministry of Food and Co-operative Undertakings was created in September 1947, and to this Ministry are directly attached those services whose duty it is to deal with co-operative activities (which formerly were attached to the Ministry of Agriculture). In India, a similar solution was adopted in the United Provinces, where a Ministry of Co-operation and Development was established, and in the Province of Bombay, where the Department of Co-operation is under the control of a Minister of Finance, Co-operation and Rural Industries. The Minister himself is an old co-operator of considerable authority. In the Philippine Republic, the Government agency responsible for the co-operative movement has been since 1947 a public corporation, namely, the National Co-operatives and Small Business Corporation, with an approved capital of 5 million Philippine dollars (equal to 2% million U.S. dollars), financed and administered by the Government. DIVISION OP DUTIES As between one period and another, as between one country and another, and, sometimes, within the same country as between one province and another, the various activities concerned with the conception, birth, life and death of co-operative organisations have been and are distributed in very different ways, just as the part played nowadays by each of the agencies which have been mentioned varies greatly. MEANS AND MACHINERY FOR CO-OPERATIVE DEVELOPMENT 25 If any sure guidance is to be found in this general diversity, it may perhaps be desirable to make the following distinctions (even if such distinctions are not always to be considered as categorical) between : (1) duties which are always or generally carried out by official agencies ; (2) cases in which official agencies carry out all or almost all duties concerned ; (3) cases in which nonofficial organisations carry out all or most of the duties concerned ; (4) duties which may be carried out either b y official or b y nonofficial bodies, or by both working independently or together. Duties generally carried out by the Government Registration. All co-operative legislation in the Asian countries provides for the registration of co-operative societies. Such registration is always carried out by an official agency, almost always by the Department of Co-operation, the Head of which has for this reason the title of Registrar. Dissolution. An official agency is also responsible for cancelling the registration and ordering the dissolution of a co-operative society. Audit. Most co-operative legislation provides for the compulsory auditing of the accounts of co-operative societies. Such audit is generally carried out by the official agency or at least under its control. Public Education. Public education concerning co-operation occupies as yet a very small place in primary, secondary or higher-grade schools. I n China, the Universities of Chekiang, Szechwan, Fu-Tan and Honan are described as having Chairs of Co-operation. In India, there is a Chair of Co-operation at the National School of Commerce. In Thailand, the University of Kasetsat has a College of Co-operation. I n India, the curriculum of the University of Madras includes a higher course on rural economy and co-operation. The University of Nagpur provides for a diploma of co-operation, but it would appear that no instruction has as yet been given on the subject. I n the State of Mysore, co-operation appears among the subjects 26 THE DEVELOPMENT OF T H E CO-OPERATIVE MOVEMENT IN ASIA taught in the School of Commerce. Other information received contains no more than an incidental and sometimes brief reference to co-operation among t h e general political economy courses. There is also complaint, in t h e Western Punjab, for example, that professors of political economy are not well versed in the subject, and take little interest in it. I n the Philippine Republic, some courses on co-operation, or on certain forms of co-operation, are given in the State University. There is a new agricultural college which offers education to agricultural co-operatives. Co-operation is taught side by side with political economy in t h e higher schools, and it is proposed to develop this form of education. I n Ceylon, certain elementary co-operative courses are given by certain teachers' training colleges. I n China, the textbooks of the teachers' training colleges and of the secondary schools contain chapters on co-operation. I n a small number of t h e provinces and States of India, such as Bombay, Cochin, Madras a n d the Punjab, lessons on co-operation have been introduced into the school textbooks. The State of Travancore has taken a similar decision. I n the United Provinces, co-operation is an optional course in the secondary schools. On the other hand, it would appear that, in Western Bengal, the introduction of co-operation in the school programmes has been discouraged. I n Ceylon it was recently decided to teach co-operation in the schools. Measures have been taken for the provision of textbooks and for instruction to be given to the teaching staff. Some Governments have inaugurated the practical teaching of co-operative methods and co-operative ideas through the medium of school co-operatives : 67 of these have been mentioned as existing in Ceylon, 56 in t h e State of Travancore (together with one at the University), and one or two in the State of Mysore. Official Agencies carrying out All or Almost All these Duties For various reasons, and provided that significant shades of difference between the countries are borne in mind, Ceylon, China, Tndo-China, the Philippine Republic and Thailand may be said to have such agencies. Ceylon. Ceylon provides a good example of a country with an official organisation for co-operation, set u p on a sound and active basis MEANS AND MACHINERY FOR CO-OPERATIVE DEVELOPMENT 27 and dealing with all questions of co-operation, including even wholesale trade. At the same time, this Government organisation is ready to hand over gradually the duties it performs to central co-operative organisations, as soon as the latter are capable of taking over the responsibility. The Department of Co-operation — which is attached to the Ministry of Food and Co-operative Undertakings — already had in 1945 an establishment of 853 officials, including 88 inspectors and 709 sub-inspectors. I n t h a t year, the organisation was divided into two Departments, the Registrar's Department responsible for registration and cancellation, propaganda, education, training of staff, inspection, control and audit, and the Department for Co-operative Development, exercising general control over co-operative activities, thus assuring an over-all co-ordination of the development of the movement. This latter Department also administers the Co-operative Wholesale Establishment, whose duty it is to supply the 4,000-odd consumer co-operatives on the island. I t is, however, intended t h a t this establishment shall come as soon as possible under the administration of the National Union of Consumer Co-operatives, whose creation is now contemplated. This process of devolution has already advanced considerably as regards certain duties normally allotted to the Department of Co-operation, in particular the general supervision, and even the auditing, of the co-operative societies. A supervision and audit fund has been created and is maintained by the contributions of the co-operative societies which are compelled to pay into it 10 per cent, of their annual net margins. The object of this fund, which the Government supplements in case of necessity, is to cover the expenses of supervision and audit. I t is administered nominally by t h e Registrar, b u t its administration is to be handed over to the National Co-operative Federation when the latter is definitely set up. I t is already administered by the Northern Co-operative Federation as regards t h a t particular region. Furthermore, this Federation, which in 1945 had a staff of 157 sub-inspectors, has been authorised to take over all duties connected with propaganda, education, inspection, supervision, and audit for all co-operative bodies in the north and in the east. I n the other divisions the duties of supervision only are exercised by the regional unions, subsidised by the supervision and audit fund. Although the Government of Ceylon maintains a strong Department of Co-operation and a large fund for co-operative propaganda, 28 THE DEVELOPMENT OP T H E CO-OPEBATIVE MOVEMENT I N ASIA it does not in principle grant any subsidy to t h e co-operative organisations (except, in case of necessity, to the supervision and audit fund), nor does it grant loans without interest. Generally speaking, the co-operative societies are financially maintained by their own banks and other analogous institutions. A Federal Co-operative Bank of Ceylon has just been registered, but has not yet begun to operate. I t has received an advance of capital from the State. China. I n China the Central Co-operative Administration, forming part of the Ministry of Social Affairs, acted throughout the country through t h e Provincial Departments for Social Affairs or the Provincial Co-operation Offices, the social affairs offices of certain municipalities, and the district (hsien) co-operative services. In the provinces and in t h e districts, it employed 5,514 officials on 30 J u n e 1947. I t dealt with registration, dissolution, and liquidation. Through travelling officials, the Administration has been able to help in the organisation and administration of co-operative societies. So far as can be judged from information received, it would seem t h a t the Central Co-operative Administration has only had a general right of control over audit operations, which would appear as a rule to be carried out b y the audit committees of the co-operative societies themselves, these committees being required to submit a report to the Government. Through courses which it initiated and, in particular, through its Training Centre, the Central Co-operative Administration has undertaken the cooperative education of its own staff, of the staff of co-operative societies, and, indeed, of all persons concerned. Since the territory was freed from the Japanese armies, the Central Government has trained some 2,000 directors of co-operatives and the provincial Governments some 9,000. About 2*4 million members and employees of co-operative societies have received elementary training. The Central Co-operative Bank and the National Co-operative Wholeselling and Marketing Agency were created mainly by State subsidies and administered by officials appointed by the Central Co-operative Administration. MEANS AND MACHINERY FOB CO-OPBSATTVE DEVELOPMENT 29 Indo-China. War and post-war conditions very seriously hindered the development of the co-operative movement in Indo-China and have made it difficult to collect information. The actual terms of the report submitted in 1944 to the management committee of the Popular Credit Office leads to the conclusion that this office " administers ", " directs ", or " controls " and it would even seem, " creates " co-operative societies and, naturally, grants them credits. Philippine Republic. The National Co-operatives and Small Business Corporation confines itself to preparing, helping in and supervising the formalities which precede the registration of co-operative societies, which function is carried out by another official body. But the dissolution, if necessary, of co-operative societies is decided by the National Corporation. The travelling officials of the National Corporation are empowered to inspect the accounts of co-operative societies and to supply them with any advice which they think desirable. The National Corporation's staff of expert accountants may, at the request of the societies themselves or by order of the Director of the Corporation, proceed to audit accounts, but such auditing does not appear to be absolutely compulsory. Through the medium of pamphlets distributed gratis, articles in the local press, lecture courses and broadcast talks, the Corporation is trying to awaken public interest in co-operation. The Corporation also deals with the training of co-operative employees (but the Government points out that this costly undertaking is proceeding slowly) and of its own staff, whose courses last from two to three weeks. The Corporation also includes a special division which deals with supply of goods to consumer co-operatives, and thus plays the part of a co-operative wholesale society. Thailand. In Thailand, co-operative propaganda, co-operative education and even the education of candidates for membership, the supervision and audit of co-operative societies, together with their registration and dissolution, are undertaken by officials of the Department of Co-operation. This Department also includes a 3 30 THE DEVELOPMENT OF T H E CO-OPERATIVE MOVEMENT IN ASIA Commercial Section which plays the part of a wholesale agency for consumer co-operatives. Finally, the financial requirements of the co-operative societies, which were at the outset satisfied directly or indirectly through the medium of the Department of Co-operation have, since 1 January 1947, been entrusted to a central co-operative bank. At the present moment this bank is administered almost exclusively by the Government, but its share capital is being subscribed, and its management board is constituted, in such a way that it is possible for the co-operative organisations to acquire an increasing influence upon it. Non-Official Organisations carrying out All or Almost All these Duties In China, mention should be made of the very instructive cases of the International Famine Relief Commission and the Association for the Advancement of Chinese Industrial Co-operatives. Since its foundation during the 1920-1921 famine up to the creation of the Department of Co-operation in 1935, the International Famine Relief Commission in China carried out all the duties which subsequently devolved upon the Department of Co-operation, and later upon the Central Co-operative Administration. Moreover, the executive secretary of the International Commission was appointed to direct the Department of Cooperation. Not only did the Commission deal with propaganda, the education of members, and the financing of co-operative societies, and not only did it increase the number of classes for training the staff, but it also created a kind of registration machinery. Thus, a co-operative society could not receive any loan until it had been " recognised ", that is to say, after it had been well and truly tried over a long period, and an inspector had declared it to be strongly organised on a durable basis. The Association for the Advancement of Chinese Industrial Co-operatives is not a co-operative federation ; but it carries out, as do certain Departments of Co-operation, all the duties of a federation, from co-operative education and the training of staff to finance. It does not, of course, actually register the co-operative societies, but it prepares the way for their registration. MEANS AND MACHINERY EOR CO-OPERATIVE DEVELOPMENT 31 Duties generally Shared Duties of this kind are, for the most part, those which involve more or less close contact with the general public, the members of co-operative societies, the management a n d t h e operative staff of co-operative organisations. Such duties are : information, propaganda, co-operative education of members, training of staff, inspection and supervision of co-operative associations and undertakings and, sometimes, auditing. Certain economic duties and financial operations may also be included. Research and Publications. Since genuine research work and publications are outside the scope of propaganda work, they are naturally attributed in most cases to organisations which are not directly or not entireljr engaged in practical work. I n China, mention has already been made of the Co-operators' Union which set up the first co-operative library for the Far East, and of the Chinese Co-operative Economic Research Association, which publishes two periodicals, one of them in English, and a collection entitled " Co-operative Economy Series ", Mention should be made of the Co-operative League, which also publishes a periodical in Chinese and another in English. The League has also undertaken the publication of a series of books concerning co-operation, and recently created a co-operative correspondence school. The Agricultural Credit Department of t h e Reserve Bank of India not only co-ordinates credit operations, b u t is also entrusted with the duty of studying all questions concerning credit. I t has already issued a n extensive series of publications on various aspects of the co-operative movement, mainly in India, but also in other countries. I t intends to develop this sphere of activity. I n his reply to the Office questionnaire, the Registrar of Co-operative Societies in Western Bengal emphasised the value of these publications, and stated that they have become the " gospel of co-operators in India ". The Provincial Co-operative Union of Bombay has set up a research committee. Measures of more modest scope, but of the same kind, have been taken in Bihar and in the United Provinces. For many years now, in India, the associations promoting co-operation and the chief co-operative unions in the Provinces and the States, as also the All-India Co-operative Institutes Asso- 32 THE DEVELOPMENT OE THE CO-OPEEATIVE MOVEMENT IN ASIA dation, have been publishing monthly or quarterly publications and also occasional works, all of which are of a high quality and greatly appreciated by co-operators in other countries. In Pakistan, particularly in the Western Punjab, the provincial union has, since 1924, been publishing a monthly review in Urdu, and has translated into the same language a considerable number of foreign books on co-operation, and also some of the publications of the Agricultural Credit Department of the Reserve Bank. In the Philippine Republic, the National Co-operatives and Small Business Corporation includes a research section. Apart from articles and pamphlets, it has also prepared a practical textbook for the use of co-operatives and proposes to publish a periodical. General Propaganda and Go-operative Education. General propaganda, t h a t is to say, a persuasive effort amongst the general public with a view to recruiting members for cooperative societies, is generally confused with co-operative education of members already recruited, because in most cases the two are carried out a t t h e same time, under the same conditions and through the same organs, t h a t is, side by side or conjointly by the Departments of Co-operation and by existing co-operative organisations. This is particularly the case in India where, nevertheless, the tendency would seem to b e increasingly to attribute the function of educating members to co-operative promotional institutions and to the Provincial Unions, which are subsidised for this purpose by Governments. I n Ceylon, the Registrar of Co-operative Societies has control over a large propaganda fund, but, as in India, he has tended increasingly to entrust the work to the societies or to the Provincial Unions. In Burma, the Government states that, in view of the fact t h a t rural populations are thoroughly alive to the question, special propaganda action is no longer necessary. Moreover, there is an official of the Co-operative Societies Department in each district, and a co-operative society in 50 per cent, of the villages. In view of the urgent need for co-operative services, the Co-operative Societies Department has concentrated first on forming cooperatives, leaving the teaching of members to be undertaken in the societies as the latter begin to function. In 1947 the Anti-Fascist People's Freedom League and the All-Burma Peasants' Organisation, conducted at their own expense MEANS AND MACHINERY FOR CO-OPERATIVE DEVELOPMENT 33 classes for voluntary co-operative field-working, a t which senior officials of the Department were present. I n the Philippine Republic, the education of co-operators is left to the education committees of the local co-operative societies, assisted by the staff of the National Co-operatives and Small Business Corporation. Training of Responsible Staff. From the outset, and particularly in Burma, Ceylon, India, Pakistan and the Federation of Malaya, t h e head of the Department of Co-operation, who has himself studied the question in advance, and has, in many cases, travelled abroad for t h a t purpose, has had the responsibility of training the staff of his own Department. I n view of the increase in the size of his staff, the personal direct action of the departmental head has been replaced by a system of regular courses and probation periods, in many cases organised and administered by a special division of the Department. I n India, these courses — which are either finishing courses or courses for the preparation of candidates — generally last from three to twelve months according to the grade or the duties concerned. I n Ceylon, a School of Co-operation has been established under the direction of the Department of Co-operation. The extension of the co-operative movement soon modified the nature of the problem of co-operative education. I n the first place, this extension has induced Departments of Co-operation to pay special attention to the training of managerial staff, and even to the training of employees in the various societies. This is the case in certain provinces in India. I t also is the case in Burma, where training was interrupted by the war and has only been resumed recently, and where in July 1948 a cooperative school was opened which is capable of taking 50 students twice a year for a five-months' course. Similar arrangements were made in China as long ago as 1939 when the National Cooperative Training School was opened and attached to the Central Co-operative Administration. On the other hand, certain co-operative promotional bodies and certain co-operative unions, have undertaken t h e training of organisers, committee members and secretaries of co-operative societies. I n this connection reference should be made to the " Baillie Schools" of the Chinese industrial co-operatives, whose original and efficient methods combine co-operative education with 34 THE DEVELOPMENT OE T H E CO-OPERATIVE MOVEMENT IN ASIA vocational apprenticeship for small village industries. Mention should also be made of the co-operative organisations in India and Pakistan which, besides training co-operative employees, have sometimes undertaken or been entrusted with the preliminary or finishing training of the staff of the Departments of Co-operation. In the Punjab, the greatest care has been taken from the outset to secure proper training for co-operative employees. The Cooperative Union of the Western Punjab (Pakistan) directs a highly developed and varied system of courses for each category. During the last five years, the Union has trained 14,000 secretaries of co-operative societies and, since 1934, it has trained 5,000 directors. It also trains secretaries of banking unions, and liquidators and expert accountants for central co-operative banks. finally, it has training courses for candidates for posts of inspectors and sub-inspectors, and even (this is perhaps unique in Asia) for the training of sub-inspectresses. In India, at Hyderabad, the centre of co-operative training, directed by the Co-operative Union, is financed by the Government and is open to the staff of the Department of Co-operation as well as to the employees of the co-operative societies. In the Province of Bombay the two chief agencies for education and co-operative training were until 1946 : (a) the Provincial Cooperative Institute, which was entrusted with the education and training of co-operative employees ; (b) the Department of Cooperation, which trained its own officials. In April 1946, however, in accordance with the conclusions of a committee appointed by the Government, it was decided that the direction of education and of all co-operative training in the province should be centralised in the Co-operative Institute. The Co-operative Institute has initiated, in each of the 19 districts, courses specially designed for the staff of rural credit societies and other small co-operatives ; in each of the three linguistic regions of the province, a regional school for the staff of more highly developed co-operative societies and for the subordinate staff of the Department of Co-operation ; and finally, a co-operative college at Poona for the training of the senior staff of the Department of Co-operation and for persons occupying important posts in co-operative organisations. In Ceylon, it is intended that the co-operative school at present reserved for the staff of the Department of Co-operation should also later on train the employees of co-operative societies. MEANS AND MACHINERY FOR CO-OPERATIVE DEVELOPMENT Inspection, Supervision and 35 Audit. In Burma, India, Pakistan and t h e Federation of Malaya the responsibility of inspecting or arranging for the inspection of co-operative organisations, of supervising and guiding their administration and management, and also of ensuring the auditing of their accounts, rests upon the Departments of Co-operation. Most of these functions can be delegated to other institutions, but t h a t of audit is generally retained by the Department. In Burma, it is intended t h a t the unions of consumer cooperatives which are now being formed should include among their duties that of assisting member societies with advice and supervision. I n most of the provinces of India, supervision is effectively exercised by the provincial federations, or b y the supervising unions, or by the central co-operative banks. In most cases the action of these various organisations is co-ordinated, in different ways, with the Department of Co-operation. Sometimes, as in Bombay, it is under the guidance of a central supervisory office created by the Government. Auditing remains almost everywhere the privilege of the various Departments of Co-operation. Nevertheless, in Pakistan, in t h e Western Punjab, the audit of central banks is carried out by professional auditors as well as b y the higher grade auditors of the Department of Co-operation. I t is also worthy of note t h a t the Registrar has authorised the Co-operative Union to audit t h e accounts of all primary co-operative societies. The Union therefore assumes responsibility for the supervision and the audit of more than 27,000 co-operative societies comprising 1,200,000 members, with a total working capital of about 250 million rupees. The Union employs about a thousand auditors, supervisors, sub-inspectors, and sub-inspectresses. As has already been stated, in Ceylon there is also a tendency to hand over to central co-operative organisations the responsibility for supervision and even for auditing. Economic Duties. The centralisation of marketing or supply operations on a regional or provincial basis has been considerably developed in India during the last ten years. This is generally done by the medium of the co-operative organisations themselves. I n Bombay, a provincial marketing co-operative society was created in 1940. 36 THE DEVELOPMENT OF THE CO-OPERATIVE MOVEMENT IN ASIA Madras has already several regional co-operative marketing federations and one provincial marketing society. I n the United Provinces, the sugar-cane producers' co-operatives are grouped together in development and marketing federations. A provincial marketing co-operative has been created in Bengal, and a federation in the State of Coorg. The hand loom weavers' federations and, in certain provinces, the district co-operative banks, and even the provincial co-operative banks, either perform or facilitate certain commercial operations. I t often happens t h a t these operations are carried out with the assistance or through t h e medium of a Government. Thus, in Bombay the Government, in liaison with the Provincial Industrial Co-operative Association, runs a depot for the distribution of the products of the small-scale and cottage industries cooperatives. The Government is planning about 20 undertakings of the same nature in aid of special village industries. The Rural Industries Committee is doing the same thing in certain villages on behalf of the Government. I t is intended t h a t all these undertakings shall be handed over to the parties concerned when they are capable of administering them. Finance. The unaided resources of the central co-operative organisations are rarely adequate to allow them to cope with all their commitments. Thus all Governments in the Asian countries grant the co-operative movement, either directly or through the medium of t h e banks, subsidies and loans for an initial period, including loans for propaganda, education and development. In certain cases, as in India and Thailand, they guarantee debentures issued b y the co-operative organisations. I n India and in Pakistan, there is an increasing tendency to invite the co-operative organisations, often at their own request, to take part in the cost of co-operative propaganda and education, and in the cost of supervision and audit. I n t h e Province of Bihar, where t h e supervision of co-operative societies is carried out by staff attached to the central co-operative banks, the banks maintain the staff out of the profits which they make during t h e financial period in question. Auditing expenses are borne partly by the societies which are audited and partly b y the Government. The Government assumes for two years the whole cost of auditing in respect of new societies. In the Province of Bombay, a committee set up to study the MEANS AND MACHINERY FOB CO-OPERATIVE DEVELOPMENT 37 reorganisation of co-operative education and training suggested t h a t t h e co-operative organisations which distribute to their members a patronage refund of 4 per cent, or more should set aside 1 or 2 per cent, of their surplus for the educational work of the Provincial Co-operative Institute and t h a t the Government should bear the cost of the balance not covered by this contribution. This suggestion has been accepted by the Government. In Pakistan, societies in the Western Punjab are required to pay their co-operative union a contribution equivalent to 10 per cent, of their annual surplus in order t o cover the cost of propaganda, the training of teaching staff, supervision and audit. Co-ordination The increasing complexity of the co-operative movement, particularly in those countries of Asia where it has been longest in existence or most rapidly developed, and the multiplicity of official and non-official bodies which control t h e movement, was almost bound to result in efforts to co-ordinate the activities of these various organisations. I n an attempt to solve this problem, a t least partially, it may happen t h a t a Government Department which is heavily engaged in co-operative development work may be attached to the Department of Co-operation. This is sometimes the case in India where, e.g., the Registrar of the Province of Bombay is a t the same time the Director of Marketing. The Registrar of the State of Mysore is also the Chief of t h e Marketing Office. The Registrars of the Eastern Punjab and of the Central Provinces are Directors of Rural Reconstruction. The Registrar of the United Provinces is Commissioner for Rural Development and a member of the Provincial Development Council. Elsewhere, as in the Western Punjab, efforts are being made to secure as strict as possible a division of duties and co-ordination between the various services. Thus, the Department of Cooperation assists in the foundation of co-operative societies, whatever their particular object. The other departments give their own technical assistance (stockbreeding, demonstration of improved methods of cultivation, reafforestation, new models and new machines for weavers, etc.). This line of policy was recommended by the 14th Conference of Registrars of Co-operative Societies (1944). 38 THE DEVELOPMENT OF THE CO-OPEEATIVE MOVEMENT I N ASIA B u t even such a division of labour leaves loopholes, if not for overlapping, a t least for possible gaps or perhaps even for a certain amount of friction. For this reason, and also with the object of giving the co-operative organisations some voice in the matter, special committees have been set up in several provinces of India. Bihar, the Province of Madras and the State of Mysore have " advisory " or " permanent " co-operative committees which are qualified to give advice to the Registrars. I n the Province of Bombay, a decision has been taken to create a " cooperative council " ; for the province as a whole, and in each district, there are already committees for industrial co-operatives. In Western Bengal, the creation is contemplated of a " Council for Co-operative Development ". I n Eastern Pakistan, on the recommendation of the First Joint Co-operative Conference (January 1949), the Government has begun to examine the question of setting up an advisory committee on co-operation. I n India, too, contacts for collaboration between the Departments of Co-operation and t h e co-operative organisations themselves are favoured by various existing practices. Thus, the All-Indian Co-operative Institutes' Association and the Registrars are mutually represented at conferences which they hold separately. The Registrar (or his assistant) is ex officio a member of the board of the central provincial co-operative organisations, and he often puts some of his particularly expert officials a t the disposal of co-operative institutions. Finally, t h e Central Government of India has certain general rights of advice and co-ordination throughout the country as a whole. These functions will be fully exercised if the All-Indian Co-operative Council, the creation of which is at present under consideration, comes into being. I n Pakistan (Western Punjab) the Registrar is ex officio President of the Co-operative Union. I n China, the Government's co-operation services and the co-operative organisations were required to meet frequently with a view to co-ordinating their activities. I n addition, a " Central Committee for Co-operative Direction " was founded in 1947, to lend a guiding hand in the drawing up of plans and programmes of action for the co-operative movement. No information is available concerning t h e work of this committee. I n Ceylon, co-ordination is ensured within the co-operative movement through the medium of the Department for Co-operative MEANS AND MACHINERY FOB CO-OPERATIVE DEVELOPMENT 39 Development. As between the two Departments of Co-operation and the other Departments concerned, co-ordination is carried out at ministerial level, since the Minister of Pood and Co-operative Undertakings is a member of the Cabinet. General Observations The above enumeration of the bodies which have been or are still engaged on the development of the co-operative movement, and the description of their various functions, is not complete, because, on several points, available information is either incomplete or not sufficiently detailed. Moreover the information was never intended to be complete and it is only those points which might serve the objects of the present report t h a t have been stressed. The first observation t h a t can be made on the available material is t h a t machinery has been set up on a very considerable scale for launching and administering the co-operative societies. Furthermore this machinery is for t h e most p a r t extremely complicated owing to the multiplicity of its component parts and, in many cases, to their overlapping. Finally, although the machinery exists in somewhat different forms in different countries, it is everywhere fairly similar as regards principal organs and essential functions. The scale of this machinery, the complexity of its structure and the similarity of the functions performed, together with a certain disparity in form, show the nature and extent of t h e effort which has h a d t o be made, the fundamental similarity of requirements, and also the necessity of making adaptations to meet special needs. These features may, in some cases, reflect uncertainty about fundamental notions or simply force of circumstance. The work accomplished is immense, and in t h e eyes of the outside observer the results are impressive, more impressive perhaps t h a n they may seem to be to those actually engaged in the work. I n view of the most recent requirements, it remains to be asked whether all the problems concerned have been satisfactorily solved, to emphasise present and above all future needs which are not as yet fully satisfied, and to look for measures and methods calculated to further the work already begun without imperilling its security. C H A P T E R III PROBLEMS AND METHODS I n his report for the year ending 30 J u n e 1946, the Registrar of Co-operatives in Burma wrote as follows : " Co-operation is a scheme of adult education both in respect of business and in the moral sphere, and, as such, it depends for its success upon two things, viz., efficient teaching and efficient supervision ". This statement will be found, with slight variations, in the writings and speeches of all those who, in Ceylon, China, Malaya, the Philippine Republic and Thailand, have devoted and are still devoting their thoughts and actions to t h e development of the co-operative movement. This is because the declaration goes directly to the heart of the problem. The statement m a y therefore serve as a preliminary guide to t h e study undertaken in the present chapter. After briefly reviewing some of t h e problems concerning those legislative measures which cover or affect co-operative organisations, the object of this chapter will be to explain, in connection with t h e question of the supervision a n d education of co-operative societies, the needs and requirements which have been imperfectly satisfied, and various practical methods which have been suggested for dealing with each of these requirements. Later, consideration wiE be given to the need and the means of inducing co-operators t o take a more active part in their own organisations, and the need of integrating the development of the co-operative movement into a general scheme of economic development. Finally, consideration will be given t o the means of using to the best advantage all those forces and organisations which are working, or which may work, for the development of the co-operative movement. LEGISLATION Co-operative legislation in most countries of Asia is of the best as to general conception. This does not mean, however, that there is no room for improvement here and there. Such improvements, in countries of such vast dimensions, may well be PROBLEMS AND METHODS 41 mainly directed to adapting legislation t o regional conditions. I t has already been seen t h a t various provinces of India have taken advantage of the facilities offered them in 1919 and have established their own special systems of co-operative legislation. This may be done for the purpose of eliminating certain provisions which are considered prejudicial to t h e full development and untrammelled functioning of co-operative organisations. Thus, in India, the Co-operative Planning Committee of 1945 recommended t h a t an amendment should be made t o the 1912 Act curtailing certain powers of the Registrar, in particular, his almost discretionary power of refusing registration and of rejecting modifications which registered co-operative societies might propose in their statutes. Finally, in many cases, co-operative legislation should be amended in order to take account of new requirements, as in Ceylon, where co-operative legislation has already been several times modified and a new Act is in course of completion. In India, t h e Province of Madras is preparing to revise its co-operative legislation, which is in any case quite modern, and the Co-operative Planning Committee is urging t h a t new provisions should be inserted in the Act, thus facilitating the introduction of a system of limited liability and the division and amalgamation of cooperative societies. Another essential provision which should be inserted in those laws which do not clearly and explicitly contain it, is one making compulsory the auditing of the accounts of co-operative societies, at least once a year. Finally, even apart from co-operative legislation as such, it may happen t h a t certain provisions of general legislation, economic or fiscal, may affect co-operative organisations without intending to do so, and may therefore be prejudicial to their operations or may limit their activities or compromise their stability. As practical examples of such provisions, it will be sufficient to mention some of those referred to by the Indian Co-operative Planning Committee, namely : obstacles which may be caused by legislation on wage protection to the creation or operation of savings and credit co-operatives for wage earners (legislation in this connection has already been amended in the Province of Bombay and in Sind) ; difficulties caused by a graduated t a x on building property to housing co-operatives ; the non-applicability to credit cooperatives of certain measures for discharge of debt and concerning lenders, etc. On the subject of these problems, the aspirations 42 THE DEVELOPMENT OF T H E CO-OPERATIVE MOVEMENT IN ASIA of those who are responsible for directing the co-operative movement are in full agreement with t h e following suggestion which the Asian Regional Conference a t New Delhi in October 1947 has already submitted for t h e attention of the Governments of Asian countries, namely, " Elements which may still obstruct the full development and free functioning of genuine co-operative organisations should be eliminated where they exist in national laws and regulations... ". SUPERVISION The term "supervision" should, in this context, be understood in a wide sense. I t does n o t mean solely t h a t form of control which ensures t h a t a co-operative organisation should operate according to the law and its own constitution, and in the interests of all its members without allowing any of them any special privilege. I t also means t h a t sort of supervision which is given to the growth of a plant. I t means, for instance, visits made to co-operative societies, advice and counsel given to them, orally or in writing, for t h e guidance of their administration, for the prevention of errors in management and for the encouragement of fruitful ideas. I n this sense supervision includes also auditing (although in practice auditing is most often carried out by special agencies) ; since auditing, although it is often considered mainly as a measure for safeguarding t h e interests of third parties, and generally consists of purely mechanical checks, may also constitute a particularly useful opportunity for wise advice and good counsel. I t is generally admitted t h a t the obligation upon co-operative organisations of Central Europe to submit their accounts for auditing has contributed in large measure to their development and their general solidarity. All t h a t special care which the federations and the unions lavish upon their affiliated co-operative societies in countries where the co-operative movement has been developed over a long period demonstrates its value for Asian countries too—a need which would have to be strongly emphasised, were it not already so clearly recognised. I n the absence of federations of this kind, all these duties —not only certain aspects of them—were at the outset entrusted to officials whose d u t y it was to promote co-operative organisation. According to a definition, or a slogan which has often been repeated, the Registrars of co-operative societies in India were to PROBLEMS AND METHODS 43 be " the guides, philosophers and friends of the co-operative movement ". For many years now, in practice, the annual reports of the Departments of Co-operation in Asia have been pointing out t h a t they are not capable of carrying out all their duties. I n many cases they even point out (and this statement should be borne in mind) t h a t co-operative development must be slowed down if it cannot be given all the necessary attention. All the information collected by means of questionnaires or oral consultations, with a view to the preparation of the present report, confirm the fact that, at the present time, more than ever in view of such future needs as can be foreseen, the development of the co-operative movement in Asia is hindered by a surprising shortage of qualified staff to aid and guide it. This shortage is intimately connected with another very important requirement, which also is universally acknowledged, namely, the need of information on co-operative education and training. CO-OPERATIVE EDUCATION Here too it is desirable to define the t e r m " co-operative education " in a comprehensive sense. Naturally, it is necessary, —and this no doubt is the root of the matter—to expand and develop co-operative methods of thought and action, and this is the sphere of co-operative education in its strictest sense. But, in order to reach the objective, a widespread and continuous effort is indispensable so as to bring the full fight of knowledge not only to the humble, but also to the more advanced student. This means hard work in the search for and the dissemination of knowledge concerning co-operation, its history, its problems, its potentialities and its limits. Research Although the principles of co-operation are comparatively simple and available to all, their practical application is sometimes difficult and the co-operative movement regarded as a whole is extremely complex. Persons who are completely immersed in day-to-day activities and responsibilities find it almost impossible to spare the time for reflection on this subject. " There is, therefore, a tendency to complain t h a t the work of general research has been on the whole neglected, indeed scarcely even attempted until very recent times. 44 THE DEVELOPMENT OF T H E CO-OPERATIVE MOVEMENT IN ASIA This work is all the more necessary in view of the new problems which now arise (problems which sometimes have to be settled before it has been possible t o study carefully all the necessary facts) especially in view of new theories which may have been too hastily formed and m a y therefore be dangerous to adopt without further examination. I n the creation and operation of forms of co-operation which have not hitherto been widespread it is often necessary to proceed largely by a system of trial a n d error. I t is of course impossible to do without this system altogether, but it is both possible and reasonable to make sparing use of it. Many experiments, and most of the errors, have already been made elsewhere. They have thus produced a fund of experience of which proper use should be made. This explains the general agreement on the question of the necessity of obtaining information concerning experiments tried in the West and in the different countries of Asia, not merely in order to repeat them without any purpose, but to study and adapt them. I n particular, this explains the suggestion sometimes made t h a t universities should undertake research work on cooperation. I t also explains the recommendation of the Indian Co-operative Planning Committee for the creation of an institute of advanced study and research on co-operation. The work already done in this connection has been alluded to in the previous chapter. 1 I t s expansion and multiplication should be encouraged. The different aspects of the movement cannot but gain from being co-ordinated in a national institute of co-operative research, according to the recommendation of the Indian Co-operative Planning Committee. This recommendation, which was well received in India, might well be of value for several other countries which are already deeply committed to co-operative experiments. The expense involved might be borne, at any rate at the outset and to a very large extent, by the State. Public Education One of the main obstacles in the way of the full development of the co-operative movement in Asian countries is that, in comparison with their vast populations, there are very few people who really understand co-operation. This fact is illustrated by the exclamation of the Joint Secretary to the Ministry of Labour in India who, when referring to the suggestion at an advisory 1 Cf. p p . 31 and 32. PROBLEMS AÎTD METHODS 45 meeting in New Delhi that co-operation should be taught in school and s that scholastic co-operative societies should be formed, said, " I only wish that this suggestion had come some 25 years ago, in which case all the rest of us would hare benefited by it ". The best method of preparing the future is to act to some purpose now. Youth is both the present and the future. Now is the time to instruct young people, both at the universities and at school, in the theory of co-operation, so that the co-operative movement may rest upon broad-based and solid foundations. The need appears to be the most urgent at the universities and the higher schools. In the first place, because, in the matter of education, it is necessary to begin at the top. The teachers must first be taught. Secondly, because it is to some extent in the universities and in the higher schools that the future training staff of the nation are being educated, e.g., politicians, lawyers, economists, administrators, teachers, scientists, doctors, engineers, etc., and all these specialists should be put in a position to receive, utilise, and disseminate some kind of knowledge about a method of economic and social organisation to which great importance is attached in national and even in international life. In this connection, the experiments made in Ceylon and in China of teaching co-operation to future teachers deserve further mention because they are well worthy of imitation. As shown by the information supplied in the previous chapter, there has recently been a tendency to teach schoolchildren certain elementary notions concerning co-operation. This type of instruction is not always thought of as being necessarily or solely didactic. It has been suggested, for example, that, in the primary schools at least, it should take the form of stories, anecdotes and pictures, calculated to make a permanent impression on the mind and imagination of the children or to appeal to their spirit of action and adventure. This suggestion is worthy of consideration. The school and student co-operative societies which have begun to make an appearance in several countries are evidence of the growing need to prepare the rising generation for new forms of economic organisation. They do more ; they show one way to the objective, and point out a method which could and should be generally applied. Although it seems mainly concerned with future requirements, the teaching of co-operation is of no less immediate importance. In the first place, it is patent that, particularly in less educated circles, parents often learn much from their children about both 4 46 THE DEVELOPMENT OF T H E CO-OPERATIVE MOVEMENT IN ASIA theory and practice, and even about new methods. Secondly, quite apart from its future value, a unanimous decision by Asian Governments to institute Chairs of Co-operation in universities and colleges and some form of teaching in schools about the theory and practice of co-operation, could not fail to impress pubhc opinion and give a fresh impetus to the co-operative movement. Training of Co-operative Workers " The staff engaged in co-operative education is far too small in numbers ; it has often been hastily trained and it is dangerous to entrust responsible work to an imperfectly trained staff." This is a complaint which recurs again and again in almost all the statements made by Governments. The complaint applies equally to the staff of the Departments of Co-operation and also to the management and operative staff of t h e co-operative organisations. I t is not a new complaint. C. F . Strickland summarised his long experience of co-operation in the Asian countries by stating t h a t the training of the staff of the Departments of Co-operation had often been neglected : " The ignorant have been sent to lead the ignorant, the blind to guide the blind, and the result has naturally been disastrous." x Although the danger here referred to has always existed more or less in the past, it is much more serious in t h e present and for the immediate future. I n the past, almost t h e only common form of co-operation was the rural credit co-operative. The administration of such co-operatives is comparatively easy and well within the capabilities of the most intelligent man in any village. The accounting connected with it is simple and, consequently, the auditing of accounts is easy and rapid. This is not the case with newly emerging forms of co-operation whose rapid extension it is thought desirable to encourage. Not only are these forms new, not only have they t o be entrusted to men with little or no experience ; their administration is more complicated, their accounting is more complicated and the auditing of their accounts requires more knowledge, care and time. More staff and more efficient staff are therefore needed for their management as well as for their inspection, supervision and audit. 1 Cf. International Labour Review, Vol. X X X V I I , No. 6, J u n e 1938, " T h e Co-operative Society as an I n s t r u m e n t of Economic a n d Social Construction ", by C. F . STRICKLAND, p . 748. PROBLEMS AND METHODS 47 I t would hardly be too much to say that, since it first started in Asian countries, the co-operative movement has developed more quickly than the number of its workers. This is a proof of its potentialities, b u t is also a source of weakness. I t would be better to avoid repeating, in yet more accentuated form, the history of recent years. I t was in order to avoid this eventuality, and to cope with pressing requirements, t h a t such institutions were created as the Co-operative Training School in China and, more recently, the Poona Co-operative College in Bombay, and the Co-operative School in Ceylon. Several provinces in India also have set up institutes for co-operative training, of which several, like those of Madras, are already well organised. I t is to be hoped t h a t these examples may soon be followed by all the other provinces of India and by all the other countries. As is the case in Bombay, and as is contemplated in Ceylon, co-operative colleges should be open not only to staff of the Departments of Co-operation, but also to the responsible workers in the co-operative organisations themselves. I t might even be wise progressively to increase the proportion of this latter category of students. The more competent are the administrators of cooperative organisations, the less heavy, and the less necessary, will be certain of the supervisory duties a t present carried out by the departmental staff. To the extent to which this is already possible or becomes so in the future, the number of efficient administrators should increase more quickly t h a n the number of officials in the Government co-operation services. I t is within the co-operative organisations themselves t h a t the real responsibility normally lies ; accordingly efficiency should be found there too and should not have some place reserved for it elsewhere. The teaching to be given will, in certain cases, probably have to be more or less specialised, according to the particular functions for which students are to be prepared. But it must always be of a sufficiently general nature to show the diversity of forms in the co-operative movement and also the deep-seated unity of its principles and methods. The co-operative colleges (as is contemplated in Ceylon) and also the universities might usefully organise correspondence courses on co-operation. The teaching given should lead up to the grant of a diploma, as is indeed very often the case at present. I t might be provided 48 THE DEVELOPMENT OF THE CO-OPERATIVE MOVEMENT IN ASIA that certain posts should b e reserved for holders of diplomas. This has recently been decided in Pakistan (Province of Sind). Finally, it would be desirable to revive the practice by which formerly the senior staff of the Departments of Co-operation were from time to time given opportunities of making long study visits abroad. The best elements in the co-operative colleges, destined for responsible duties in the co-operative movement, might receive the same very necessary privilege on condition that they pass on to others, by means of publications or lectures, the benefits of their observations and of the lessons they have learned abroad. This method of " chain dissemination ", which has been suggested from time to time, is well worth bearing in mind and putting into practice on a more general scale. I t lies at the basis of a vast reconstruction scheme (agricultural and citizenship training) set on foot in China for t h e Province of Chekiang. The object of this scheme is to reach i n the next ten years a population of two million agriculturists. About 120 student instructors were to have completed their training b y J u n e 1949, at which date they would start 50 districts schools (in hsien) where training will be given for the staff of the village schools, the d u t y of which it will be to pass on the education they have received. So too, some of the students in the co-operative colleges may be in a position to administer small co-operation schools. Alternatively, organisers and administrators who have received the benefit of a very careful training a t co-operative colleges might be called upon to help persons holding similar posts in neighbouring co-operatives. The Making of Go-operators This is one of the most urgent and the most fundamental needs for the present and for the future, and it is b y no means the least often mentioned in the statements received b y the I.L.O. In Ceylon, for example, there is no hesitation in admitting that the education of co-operators has hitherto been inadequate, and a general plan for remedying t h e situation is in preparation. I n China, co-operative education is one of the 17 points of the Cooperative Five Year Plan. In Burma, the ill fate of the old federations is attributable to t h e inadequate knowledge of the members and the inefficiency of the supervision which they exercised. The same reason may be assigned for t h e statement reported from India (which may perhaps be equally true elsewhere) that the PROBLEMS AND METHODS 49 richest members too often monopolise the management boards of the co-operative societies and run them chiefly for their private benefit. Shortage of Teachers. I t is universally asserted t h a t the real strength of co-operative organisation, and of the co-operative movement as a whole, lies in the quality of its members. I t is also universally admitted, however, that circumstances have made it necessary to attend more to the machinery of co-operative organisation than to its motive power, to the " undertaking " rather t h a n to the " association ". Every possible effort has had to be devoted to the training of the staff of the Departments of Co-operation and of the responsible employees of the co-operative societies. This training, moreover, has been mainly technical, e.g., legislation, statistics, preparation of registers, accounting, auditing, liquidation, etc. There has sometimes not been enough time to devote to the actual principles of co-operation, and even not enough time sufficiently to awaken co-operators themselves to a sense of their responsibilities and of their rights and of the way in which their rights should be exercised. In 1931 Mr. M. L. Darling (now Sir Malcolm Darling), then Registrar for the Punjab, at t h a t time one of the most advanced provinces of India in the matter of co-operation, wrote as follows : " I was forcibly struck not only b y the lack of understanding on the part of the general body of members of most of the districts, but still more by the inability of t h e ordinary sub-inspectors to teach. Some are good lecturers, few are good teachers." This statement was made 18 years ago, but it was to be made again two years later, and it is extremely improbable t h a t the war and the post-war situation have very greatly improved the position in this respect. To these shortcomings there are certain exceptions, which will be mentioned as a basis for appropriate suggestions, b u t the need to train co-operative teachers is generally recognised, and usually with a view to dealing with these shortcomings. The itinerant officials and, in particular, sub-inspectors of the Departments of Co-operation, as well as active workers in the co-operative movement, should be specially trained to explain in a simple, clear and attractive manner the advantages which co-operation may offer and also the obligations and responsibilities which it entails. Such people should also be good debaters, 50 THE DEVELOPMENT OP T H E CO-OPEBATIVE MOVEMENT I N ASIA since, in the course of their duties it is important that, instead of avoiding discussion, t h e y should know how to provoke and guide it. This training could, without great difficulty, be given in co-operative teaching a n d training centres. Propaganda. The first stage in the dissemination of knowledge on co-operation is propaganda. Such propaganda in certain districts where the very name of co-operation is still unknown may usefully be based on age-old traditions and institutions such as the Hoh-Hui, in China, the Chittis and Kuris on the Malabar Coast in India, the " Sambatan ", the " Toelong " and the " Menoeloeng " in Indonesia, the " Mujin " and t h e " Hotokusha " in Japan, and, generally speaking, on those ancient traditions of mutual help common in village communities, and also probably on the newly discovered sentiments of solidarity which are developing among the working class populations in t h e industrial centres. I t must be understood, however, t h a t such propaganda must borrow from these institutions and these general sentiments no more t h a n the spirit of community and mutual assistance which informs them, and not the actual shape which t h e y at present possess. I t still remains to create the new institutions. Propaganda will also not fail to arouse the interest of local notables, if they are in any way accessible, and of local associations, since, as was justly observed at an advisory meeting held in Bombay : " A person one knows and esteems inspires confidence more readily t h a n a distant institution." In this connection, enough has not always been made of the local village teacher. I t might not be desirable to make such a man into the " lynch-pin " of the local co-operative society, first because, he may later be transferred and his work may crumble behind him, and secondly, because his very superiority over the others, which allows him more or less complete freedom of action, might possibly encourage inertia on the part of his fellow members and deflect them from training for responsible work in the co-operative. B u t a man like this knows the way of life of the village and he knows its inhabitants ; he generally enjoys a certain prestige and he has the knack of awakening interest and of importing new ideas. He should make an excellent propagandist. He might also help in the estabUshment and administration of small school co-operatives. I t is therefore to PROBLEMS AND METHODS 51 be hoped that, as in Ceylon and China for example, the teaching of co-operation should be carried on in the ordinary teachers' training schools. Propaganda can be wide in scope utilising modern mass publicity methods, such as the cinema (as for instance in the Province of Madras and in the Eastern and Western Punjab) and the radio (broadcast talks or playlets have already been inaugurated in the Provinces of Bombay and Madras, in the Philippine Republic and in Thailand). I n Pakistan and the Western Punjab, successful use is being made of theatrical productions. I n the Provinces of Bombay and Madras, co-operative libraries and reading rooms have been set up. In Burma there is an ingenious system of travelling libraries. The celebration of t h e International Cooperation Day, set on foot by t h e International Co-operative Alliance, is already observed in several of t h e countries of Asia and thus a favourable opportunity is provided for extensive propaganda. Side by side with, or sometimes instead of, extensive propaganda, recourse may be had to intensive methods. I t is possible, or it may even be necessary, to concentrate constructive effort on particular areas for periods of months or years. These areas may be chosen either because the need seems to be more urgent there, or because the task involved would seem to be easier, or, on the other hand, more difficult. I n the latter case, success would have a great "example v a l u e " and the experience acquired would be so much more worth while. The work could then be extended to other areas where success would be more eastly achieved by the inspiration of a successful example and by the obligation under which the earlier organised areas would be put to assist the development of others by financial assistance or by lending expert staff. A programme of this nature was drawn up by the Provincial Co-operative Union of Madras and adopted by the Provincial Advisory Co-operation Council. In each district six centres are to be chosen for intensive propaganda with the collaboration of the Government Departments concerned and of well-known co-operators. I n each of these centres a five-day festival will take place ; there will be lectures, cinema shows, processions with music, refreshments, etc. The propaganda campaign is to last for three months, from April to June, the expenses being borne equally by the Government and the Provincial Co-operative Union. 52 THE DEVELOPMENT OF THE CO-OPEEATIVE MOVEMENT IN ASIA Among other propaganda efforts mention should be made, although it is now well known, of the campaign which, from October 1942 to April 1945, brought the number of consumer co-operatives in Ceylon from about 40 t o more t h a n 4,000, and t h e number of their members from 18,000 t o more than a million. Beyond Propaganda. Nevertheless, the lasting effect of propaganda is limited. I t is not well adapted to probe into human minds and to bring sufficiently strong personal incentives into play. Neither is it really suitable for t h e promotion of new methods of thought and action, for the creation of a team spirit which is completely voluntary because it is fully conscious, t h a t is to say, fully aware not only of t h e advantages which m a y be expected or with the methods to be applied, but also with the responsibilities which must be assumed and the risks which must be run in a co-operative organisation. Reference is often made to the example of the Equitable Pioneers of Rochdale, but perhaps enough attention has "not always been paid to one of the main features of their history, which is t h a t they devoted a year to reflection and discussion of their risky undertaking before starting on it. Even today, it is by no means uncommon, particularly in Canada and in some States of the United States, t h a t a co-operative society begins operations only after its members have, for a year, jointly studied its rules in particular and co-operation in general. I n Newfoundland, where co-operation victoriously overcame a long period of distress, one of the first pamphlets published b y t h e Co-operation Division of the Department of Rural Reconstruction listed the " rules of co-operation " . The first of these rules was " Study " . I t is almost always a mistake to think t h a t time may be gained b y founding co-operative societies before really training co-operators. This mistake has not been committed, e.g., b y the Association for the Advancement of Chinese Industrial Co-operatives, which, before the formal organisation of a co-operative, satisfies itself as to the training and education of its future members. On this point, Thailand supplies an example which is worthy of attention. I n t h a t country, persons who apply for membership of a co-operative society are compelled to attend educational lectures. The co-operative education of members should not only precede their admission ; it should be continued indefinitely afterwards. PROBLEMS A2ÎD METHODS Study 53 Circles. Both for the purpose of initiation, and also for completion, the procedure of education by discussion, which is employed, e.g., by the Provincial Industrial Co-operative Association of Bombay, would seem to be peculiarly well adapted to general requirements. The efficiency of this most elastic procedure, which forms the basis of " co-operative study circles ", has been amply proven in the old co-operative countries of Europe. I t is equally well adapted to countries whose " co-operative " age is younger. I t spread rapidly in Canada ; it has appeared in Western Australia and in the Latin American republics. In the United States, it finds expression in the " neighbourhood " councils and in the " kitchen clubs " (which terms are expressive of the simple character of the institution), or in the " study and action groups ", a term which needs no definition. I n Jamaica, the success of this method has surpassed all expectations, and has surprised certain sceptics. I n the Union of South Africa, the Bantus are in the habit of meeting in small study groups at the houses of members, in the factories, and even in trains. Co-operative study circles are not entirely unknown in Asia, as is shown by the scheme to create them in Ceylon, by the first experiments made in Madras in 1940, by the recent experiment of the Provincial Industrial Co-operative Association of Bombay, and by the experiment which is being developed under the auspices of the National Co-operatives and Small Business Corporation in the Philippine Republic. But the experiment is well worthy of being made on a considerably wider scale. The co-operative study circle consists of a very small number of members, a dozen at most. When it exceeds this upper limit, it is preferable to break it up. The study circle should be small. Its very limits protect it from eloquence, and serve to keep alive among the members a feeling of comradeship and liberty of expression which large assemblies do not provide. I n such a group, each member can express his ideas and his aspirations, however humble, and his contributions to discussion will not be overlooked. From their contacts with the ideas and aspirations of other members, all members will derive benefit, whether immediate or more permanent. Shadowy conceptions take shape, prejudices are smoothed away, and a common idea is generated which precedes and prepares the way for collective action. 54 THE DEVELOPMENT OF THE CO-OPERATIVE MOVEMENT IN ASIA For the same reasons, it is desirable t h a t the study circle should include persons (such as neighbours and friends) who have many opportunities of meeting each other outside the circle itself, or who live similar lives, e.g., work in the same occupations (agriculturists, fishermen, artisans, workers in the same industries or in the same undertaking, etc.). Meetings should be frequent ; once a week if possible and at least once a month. They should also be short. It is neither necessary nor even desirable t h a t the leading spirit of t h e circle should be more well-informed t h a n the other members. He should not possess an authority calculated to impose silence or to discourage t h e other members from making their own personal contributions. H e should, on the contrary, possess the art of encouraging each member to take part in discussions. The subjects for study and discussion are to be found in the realities of everyday life. The members of the circles do not endeavour, from the outset, to familiarise themselves with theoretical doctrines, or to draw up vast plans. They consider their own requirements and their own particular problems possibly in a small way, but in a practical spirit and with a will to action. Such consideration leads them first to choose, then to study, and finally to create the form of co-operative organisation which best meets their own situation. Thus conceived, such circles are something more t h a n little nuclei of co-operative culture and action, they are also " nurseries " where the capacities of t h e future active members and leaders of the co-operative societies are revealed and developed. When the members of t h e study circle can read, their studies and discussions m a y usefully be supplemented and guided by a preliminary reading (done a t home) of short pamphlets, collections of articles from the co-operative press, drawn up in simple, direct and concrete language, suitably chosen and graduated according to the progress achieved by members in their co-operative studies. Such study material might be specially prepared for the purpose by the Co-operative Departments, co-operative federations and the other institutions engaged in promoting co-operation. It might also be one of the duties of co-operative teachers to assist in the creation, and in the actual operation, of study and discussion circles. When these circles are sufficiently numerous, it may be possible to proceed to a higher stage of education by correspondence, or by correspondence together with broadcast talks. In this connec- PROBLEMS AND METHODS 55 tion, much may be gained from the practice of the Swedish Cooperative Union in the first respect and of certain Canadian universities in the second. I n Sweden, the pamphlets provided by the Co-operative Union to members of the study circles conclude with a questionnaire. The circles draft their replies to the questionnaire and send them either to the co-operative correspondence school or to a special department of the Co-operative Union. These replies are not corrected in the ordinary sense of the word, b u t receive answers in the form of further questions formulated in such a way as to lead to the solution of problems which had not been clearly understood by the circles. I n Canada, to take one example, the Extension Department of Social Education at the University of Quebec has made use of what it calls the " Radio Forum ". The chief features of this method are as follows : (1) a discussion is held in the studio which, far from exhausting the subject dealt with, results in the raising of a certain number of problems, while throwing some light upon them ; (2) teams or study circles, previously supplied with a specially prepared bulletin designed to facilitate understanding of the subject, listen to the problems and continue, each on their own, to discuss the subject at the point where the broadcast left off, and endeavour to make their own replies to the problems raised ; (3) part of a subsequent broadcast is devoted to commentaries on these replies. PARTICIPATION IN MANAGEMENT Co-operative organisations are, or should be, democratic institutions and schools for democrats. It is t h e essence of democracy to ask for the collaboration of all and to give to all a sense of taking part in work for the common good. However—as is pointed out again and again in the reports and information received by the Office—there are too many co-operative societies in the working of which too few members take an active part. Any progress made towards a more extensive co-operative education should, at the same time, be progress towards a more general and more efficient participation of all the members in the work of their co-operative societies. In particular, the study circles should work towards this objective, not only because they can keep co-operators informed of the significance of their common effort and of their rights and duties, but also because they can 56 THE DEVELOPMENT OF THE CO-OPERATIVE MOVEMENT IN ASIA easily transform themselves into action groups opening up the way to new achievements and focusing attention and effort on certain new undertakings which need the collaboration of all. But, as was justly observed during the advisory meeting at New Delhi, it is important, in the first place, to make the rules of co-operatives comprehensible to the majority of the members, which is by no means always the case. I n essentials, the machinery of co-operation is simple. I t should be possible to describe and explain it in simple terms and, of course, in the language of those who have to deal with it. True, not everyone is literate. This point emphasises the importance of oral education of sufficient duration. I t also leads to methods similar to those in operation in Thailand, where the co-operative education of t h e members includes the teaching of reading and writing, with t h e very object of enabling the members to study the rules, to read t h e notices and pamphlets distributed to them, and to sign their names. I n countries where the development of the co-operative movement has depended in the past, and still depends, wholly or mainly on Government action, there is a risk (often pointed out) of keeping alive easy-going instincts, a desire for credits at low interest and for subsidies. As regards finance in general, and as regards the financial participation of the co-operatives in propaganda work, education, supervision and audit, there has been a healthy reaction in certain countries. Mention has been made of this in the previous chapter. 1 This form of participation should be encouraged b y the federations and, if necessary, and within reasonable limits, should be standardised by law. Finally, in order to cope with the shortage of qualified staff, it is sometimes necessary directly to associate officials of Government Departments in the actual administration of certain cooperative organisations. This procedure has been found to give certain good immediate results. Its main attraction is that it makes it possible to give in advance the form, or the appearance of the form, of co-operation, to certain useful undertakings which go beyond the present competence of their users, although it is intended t h a t the latter should ultimately have the management in their own hands when they are capable enough. But, apart from this somewhat problematical advantage, the 1 Cf. p p . 36 and 37. PROBLEMS AND METHODS 57 procedure presents certain real inconveniences. I n the first place, it deflects from their normal duties, which are already very heavy, a staff which is considered to be not nearly numerous enough. Secondly, it puts responsibility on the wrong shoulders and lessens opportunities of acquiring experience. When a representative of the Government takes part in the administration of a co-operative organisation, he will often be led to do more than take part in it—he will direct it. He will be led on by the taste for action and the joy of creating. He will throw all his energies into the work. He will extend up to the limit of his own capacity an undertaking which, to develop soundly, should rather grow in proportion to the ability of the members themselves. The pressure of immediate necessity, the urge to construct, will frequently suggest recourse to a method which is certainly the most expeditious, but which may compromise the future, namely, the method of making instead of teaching how to make. But it is often a mistake to think that, once an undertaking is properly set on foot, there will be no difficulty in handing it over to those t o whom it belongs. It is normal that, at its outset, a co-operative undertaking should be directed by inexperienced hands. I t is therefore a rule— the application of which has been everywhere successful—that the initial size of a co-operative society should be in proportion to the abilities of those who are going to administer it. The relation between the size of a co-operative undertaking and the talent which it required remains constant, since, if the undertaking is successful, it is because the members have progressively trained themselves for the duties of management and administration ; their abilities are successively revealed and develop at the same pace and to the same extent as the undertaking itself. CO-OPERATIVE INSTITUTIONS AND NATIONAL ECONOMIC ORGANISATION Although adequate numbers, continuously added to, of welltrained and active members, and of competent office-bearers, are the indispensable equipment of the co-operative movement, the movement cannot expect to attain its full stature if it confines itself to acting as a mere palliative for the distress of workers on the land, in cottage industries, in handicrafts, and in industry as a whole. The movement must increase its competence to the point when it can probe deeply into and transform t h e economic organisation of the villages and of the workers' districts in the 58 THE DEVELOPMENT OF THE CO-OPERATIVE MOVEMENT IN ASIA towns, and can exercise its influence on the economic life of the nation as a whole. In this connection stress should be laid on the enormous moral benefit and the strong lead which most of the Governments of Asia have given to certain forms of co-operative organisation in laying upon them the economic duties which they had themselves to assume at the outset, and in thus delegating to them functions involving public responsibility. Some examples of acts of devolution have already been mentioned (provision of food supplies for certain towns, distribution of essential goods, yarn and seeds, the settlement of landless workers and refugees, etc.). 1 I t is to be hoped t h a t this attitude on the part of the Governments will be continued and developed. I n order t h a t it may continue to produce the happy effects which it has hitherto produced, it is enough t h a t the public duties entrusted to co-operative institutions should remain within the sphere of their competence and experience, and should not impose too heavy a responsibility on organisations which are still none too strong, and that such responsibilities should not prejudice the free operation of the co-operative societies and consequently their full efficiency. In a similar sphere, the capacity of the co-operative organisations to act as vehicles of technical progress has already been recognised and has begun t o be acted upon. A report prepared by the Joint Working P a r t y of the Food and Agriculture Organisation of the United Nations and the Economic Commission for Asia and the Far East contains the following statement : The most remarkable feature in the Japanese agricultural economy is the way the results of research have been extended to the fields. The main instrument in this extension work in the past has been the Co-operative Associations of farmers. The Agricultural Organisation Law promulgated in 1943 converted these Co-operative Associations into bodies subject to governmental domination. Steps are now being taken to replace these associations by purely Co-operative Associations based on principles recognised elsewhere in the world.2 I n India, the Co-operative Planning Committee has recommended t h a t the co-operative societies should constitute the main channels for the dissemination and distribution of selected seeds and fertilisers and of the best agricultural machinery. Moreover, the same recommendation applies, mutatis mutandis, to the improvement of home industries a n d handicrafts. Steps have already 1 Cf. Chapter I, pp. 9 and 10. E.C.A.F.E. : Report of the F.A.O./E.C.A.F.E. Jouit Working Party on Agricultural Requisites (Report No. E/CN.ll/135/Add. 1*, of 13 Nov. 1948). 2 PROBLEMS AND METHODS 59 been taken in this direction, in particular, in the Provinces of Bihar and Bombay, in the United Provinces, etc., also in Pakistan, and the Western Punjab. To delegate such duties to the cooperative organisations is not merely to achieve, by methods at once cheap and efficient, an improvement in agricultural and handicraft production ; it means also increased prestige for the co-operative movement by enabling it to drive deeper roots into the daily life of the working masses, and by assuring it a special place in public opinion. Finally, one method of strengthening the co-operative organisations and of developing their activities is to help them to support one another, not only by grouping them in federations, not only through the medium of the assistance which older and stronger societies can give younger and weaker ones, b u t also b y creating direct economic relations between societies which have complementary functions and requirements, e.g., such institutions as agricultural marketing co-operatives, handicrafts and cottage industry co-operatives, workers' productive co-operatives, and fishermen's co-operatives, in supplying their products to consumer co-operatives ; consumer, insurance, or credit co-operatives, in placing their accumulated funds at the disposal of housing cooperatives ; housing and consumer co-operatives, in giving work contracts to workers' productive or handicrafts co-operatives, etc. Generally speaking, such " inter-co-operative " relations presuppose that the organisations which enter into them are already adequately developed on a sound basis. There is no doubt, however, t h a t where such relations can be established they simplifiy economic processes by reducing their cost, and, b y eliminating such superfluous expenses as commission, emoluments, publicity, etc., they introduce an element of order, stability and equity and do much to help in setting u p a " co-operative sector " 1 of the national economy. All such activities, and all activities the effect of which is to link the co-operative movement closely with the requirements of the greatest number of persons and with the forces of progress in general, tend also to associate the movement with all work for economic and social reconstruction. They thus contribute to create conditions favourable for the full development and efficiency of the movement. 1 G. FAtrQTJET : The Co-operative Sector : The Place of Man in Institutions, and the Place of Co-operative Institutions in Economic chester, Co-operative Union, 1949). Co-operative Life (Man- 60 THE DEVELOPMENT OF THE CO-OPERATIVE MOVEMENT IN ASIA There is reason to fear t h a t the co-operative organisations cannot achieve this full development and efficiency in a " deficitary " economy, e.g., an economy at a purely agricultural or handicrafts stage. Any programme for co-operative development must fall within the general plan of economic reorganisation, must be fitted in with other programmes, and must also, as the official representatives of m a n y Governments have stated, supply the guiding note in some of these programmes, above all, in programmes, for agricultural development and for the development of cottage industries. AGENCIES OF CO-OPERATIVE DEVELOPMENT One question which is being p u t in Asian countries is : " T o what agencies and institutions should fall the d u t y of performing such functions and of planning and applying such methods ? " It will be appropriate to answer this question first by examining a special aspect which the problem assumes in Asian countries, viz., the more or less dependent relationship of the co-operative movement to Government institutions. The Go-operative Movement and Government Services Looked a t from this angle, the problem naturally involves the general theory of co-operation, the democratic structure and functioning of its institutions, and the necessary exercise of responsibility and initiative by the co-operative societies. Such considerations, therefore, cannot be entirely left out of the answer to be given to the question. Nevertheless, the problem cannot be settled on purely theoretical lines, without reference to the facts and the lessons of history. The countries of Asia are not the only countries in which the co-operative movement was not the product of popular initiative. In such European countries as Finland, Hungary and Bulgaria, the movement was born of impulses given from outside the circles directly concerned, either b y a group of intellectuals, or by a paternalist aristocracy, or b y Government. I n the United States, side by side with consumer co-operatives founded by the workers, other co-operative societies in considerable numbers have been created by members of the liberal professions, not so much for their own requirements as to serve as an example t o others. I n Canada, in the Catholic provinces, the co-operative PROBLEMS AÏTD METHODS 61 movement owes much to the initiative and watchful collaboration of the clergy. I n Newfoundland, not to mention various territories in Africa, the origin of the co-operative movement was mainly due to institutions similar to the Departments of Co-operation in Asia. Generally speaking, such intervention from outside has not been prejudicial either to the vitality of the co-operative societies thus created, to the soundness of their principles or to their autonomous operation. In the majority of the Asian countries it is an undoubted fact t h a t Government initiative was necessary in most cases, and no one will deny that its results have been salutary. Nevertheless, the system of " t r u s t e e s h i p " which was the result of this initiative is nowadays regarded with some impatience in some countries. This is really the main problem at issue. It must be confessed t h a t the problem has not everywhere reached the same degree of development or difficulty. I t arises mainly in India and in Pakistan which, together with Japan, are the countries of Asia where t h e co-operative movement has been longest in existence. But it is reasonable to predict t h a t it will arise, sooner or later, in an analogous form in other countries. The Co-operative Planning Committee of India, which included a majority of representatives from various Government Departments, including the Departments of Co-operation, stated in its report : As the movement is of the people and for the people and must be run ever more and more by the people themselves, it is necessary to indicate that the sponsoring of the movement by the State is meant only to assist, guide and train up the workers and not to establish permanent control over the movement. One of the members of the Committee, Mr. H . L. Kaji, President of the All-India Co-operative Institutes' Association and of the Indian Provincial Co-operative Banks Association, went much further, in a personal minute annexed to the report. Mr. Kaji urged that the powers of the Registrars should be more strictly defined and considerably reduced, and t h a t work on propaganda, co-operative education and training, together with all work of organisation and supervision, should be entrusted to the co-operative federations, even if, in respect of some of these duties, State financial assistance continued to be necessary or desirable. I n general, Mr. Kaji pronounced clearly in favour of the progressive " de-officialisation " of the co-operative movement. 5 62 THE DEVELOPMENT OF THE CO-OPERATIVE MOVEMENT I N ASIA The solution lay (he wrote) not in the further tightening of the control, and in the appointment of ever more and more officials, but in the decontrolling of the movement, so that with the absence of unnecessary and, perhaps, vexatious interference, a greater sense of responsibility would be evoked amongst the members who by coordinated efforts and guidance from their own federations would secure better results The time has now come for relaxation and withdrawal of official control and to allow the movement to be run ever more and more by the people themselves, for whose benefit, after all, the societies exist. Such relaxation, Mr. Kaji thought, was the more necessary in t h a t the co-operative movement was on the eve of a very considerable expansion and diversification. The Registrar (he wrote), however competent he may be, however well assisted by a large number of Joint and Deputy Registrars, with a host of subordinate officers, assistants, auditors, inspectors and so forth, will soon find the movement too widespread to be easily manageable and controlled. In the earlier stages of this new development, one can readily concede the need for strict and careful supervision by State officials ; but unless such control over the new organisations is accompanied by a withdrawal or relaxation of control from groups of the older organisations, particularly in the urban areas, the movement would get out of hand and the consequences would be disastrous. These discussions threw a strong light upon the essential distinctions to be made in considering the problem. Nobody will deny that the co-operative societies need to be assisted and guided. On the one hand, however, they do not all need assistance to the same extent and, on the other hand, State intervention is considered as being necessary for some, but superfluous and even vexatious for others. Moreover, the right of the State to exercise control over the organisations to which it has made loans or granted subsidies is not contested. These distinctions light the way towards the decisions which should be taken in the future. Such decisions will probably be taken in each case only on its merits, and it is for the Governments to take them. The Governments have made known their attitude on the matter in principle, and even, in some cases, their intentions for the near future. Their attitude is in general favourable to the idea of increasing the independence of the co-operative organisations ; b u t this attitude is frequently conditional, and certain reservations may sometimes be detected. The Government of Thailand, while stressing the fact that it is the wish of the Department of Co-operation ultimately to hand over the management of co-operative societies to the co- PBOBLEMS AÎTD METHODS 63 operatives themselves, takes the view that in the absence of strongly organised federations, co-operators still require not only enlightened advice, but protection by Government agencies. " T h e y will, if uncontrolled and unsupervised, no doubt play into the hands of the more experienced traders who will take every opportunity to exploit them to the full." The Registrar of the co-operative societies of Western Bengal is working towards the same objective, but also deplores the absence of sufficiently strongly established federations and thinks that, in these circumstances, any plans for co-operative development make the continuance of Government control necessary. The Registrar of the Central Provinces of India observes t h a t the credit co-operatives have hardly yet emerged from a recent process of reconstruction, and t h a t the others are still in their infancy. In his view, the time has not yet come to relax State control. I n Burma, the disturbance caused by the war is reported to compel the Government to continue to concern itself with the co-operative societies, but " it is envisaged t h a t the period of tutelage and reconstruction is not going to be long as the people are very conscious of their freedom and eager t o learn more enthusiastically than in the past ". Nevertheless, because of the low level of education, particularly in the country districts, the transfer of responsibility must be gradually made, "otherwise it is feared that a little learning might create a faint idea of co-operation without the true principles ". In Pakistan, the Registrar of the co-operative societies of the Western Punjab recognises the enormous value of such work as propaganda, the training of teachers, general organisation and auditing, etc., undertaken by the Provincial Co-operative Union, but calls for a yet greater development of co-operative training and education. He does not think that the moment has come to " leave the co-operative movement to itself ". None the less, at the advisory meeting at Lahore, he spoke in favour of the new provisions of the Co-operative Bill in course of preparation, the object of which is to reduce the powers and duties of the Department of Co-operation. He added : The co-operative staff will be having lesser powers in the matter of administration and in the recovery of loans because our conviction is that the lesser the powers in the hands of the co-operative staff, the more is the efficient working of the co-operative societies. 64 THE DEVELOPMENT OP THE CO-OPERATIVE MOVEMENT IN ASIA I n India, the officially declared policy is to relax control by Government services. I n his reply to the Office's questionnaire, the Minister of Agriculture (who, it may be remembered, has a general co-ordinating and advisory function with regard to the co-operative movement), states " unless special circumstances necessitate more of Government control, the general trend is towards progressive de-officialisation ". The process has already begun. I n the Province of Bombay, as in the Province of Madras, certain duties of the Registrar have already been delegated. I n the State of Mysore, co-operative societies classed in category A (excellent) enjoy full autonomy. The same is the case in the Province of Orissa, in the case of co-operatives which are working with their own capital, " but in cases where Government subsidies or loans are given the official policy is to scrutinise the use of the loans or subsidies granted ". I n t h e United Provinces, " t h e aim of the Government is gradual and cautious de-officialisation of the co-operative movement". In Western Bengal, an obviously optimistic note is struck : " the co-operative movement as it is now advancing will soon be able to engulf all the activities of Government ". I n Ceylon, the Government's " object is to foster the movement in such a way as to enable it to develop as an independent organisation without being subject to State control or being unduly dependent on State bounty " and " the policy of the Department is to keep in t h e background as far as possible, and it is hoped t h a t some day the Registrar's duty will be merely t h a t of registering". The measures taken, or contemplated t o this end, have been mentioned briefly in the preceding chapter. 1 I n China, the Co-operators' Union states t h a t the Government never intervenes in the affairs of the co-operative organisations, which enjoy complete autonomy. I n Japan, most of the controls and prohibitions established during the war have been abolished. What still remains, particularly as regards certain forms of urban co-operative and fishermen's co-operative societies, is in course of being abolished. Finally, in the Philippine Republic the policy of the National Co-operatives and Small Business Corporation (N.C.S.B.C.) is— to grant the largest measure of local autonomy to all co-operatives in the conduct of their social and business affairs. If co-operatives are functioning in accordance with law,, submitting to the N.O.S.B.C. office financial reports and statements of their activities, and no com1 Cf. p . 27. PROBLEMS AND METHODS 65 plaints of mismanagement of their activities are received, they operate as freely as any private corporate body. It is only when complaints are filed, or mismanagement is found by fieldmen, that supervision over the activities of the associations is exercised by the N.C.S.B.C. I t will be seen t h a t the general tone of t h e statements varies between prudence and optimism. Although certain statements, implicitly perhaps, reflect temperamental differences, the majority correspond to a state of more or less developed maturity among the co-operative organisations and their members. In many areas, and above all in the country districts, illiteracy and inadequate co-operative education deprive co-operators of the means of themselves effectively controlling the management of their affairs. In this case, they require not only to be helped and guided, but also to be protected either against external intrigues or even against the activities of ill-chosen, ill-intentioned or insufficiently controlled office-bearers. In the absence of a wellequipped federation with adequate moral authority, which can guarantee such aid and protection, the Government must, of necessity, intervene. Nevertheless, all Governments are fully conscious of the voluntary and democratic nature of co-operative organisations. All recognise that co-operative societies are capable of bringing within the reach of the largest possible sections of the population a system of training for responsible and collective action, as also for the exercise of the duties and responsibilities of citizenship. All, therefore, admit that, if it is to pull its full weight as an instrument for the démocratisation of t h e national economy, and if it is to retain its full value from t h e point of view of education, the co-operative movement must one day be freed from restrictions which have become superfluous. But, they add, such liberation can be achieved only by stages and with all due prudence. There exists, therefore, already a considerable measure of agreement in principle between the aspirations of those co-operators who are calling for emancipation and the declared intentions of the Governments. The question can now be asked, by what means and through what stages " progressive de-officialisation " can be effected, both in cases where it is already provided for and in cases where it may hereafter become possible. There are certain duties which can only be carried out by the State, namely, legislation, registration, enough supervision to ensure that the activities of co-operative organisations are in accordance with the law, a certain measure of control over the utilisation of loans and subsidies granted by the State, the pro- 66 THE DEVELOPMENT OF T H E CO-OPERATIVE MOVEMENT I N ASIA tection of third parties, and, sometimes, the protection of cooperative societies and of co-operators. There are other duties which normally fall to the State or duties which, generally speaking and for the moment, the State is in the best position to carry out, namely, education, research work and documentation. Finally, there are duties which the State may yet have to continue to assume partially and in certain cases, b u t which do not necessarily belong to the State, or which the State cannot exercise directly, e.g., finance, training of co-operative employees, organisation, advice, technical assistance, and even auditing. As regards these latter functions, it would not seem t h a t there would be any particular difficulty in entrusting them progressively to the co-operative federation or to other voluntary organisations devoted to the promotion of the co-operative movement, in cases where such organisations exist and are of proven efficiency. In practice, cases have been q u o t e d 1 in which some of these duties have been or are being carried on with undoubted success by the voluntary organisations. I n principle, and if the necessary competent staff exist, even auditing work may be delegated. As regards audit, the important point—and it is a very important point indeed—is t h a t it should be : (a) compulsory, (b) actually carried out, and (c) carried out by competent auditors. But it is not indispensable t h a t the auditors should be Government officials. If they are not Government officials the State can, in a n y case, satisfy itself by investigation that they are doing their work efficiently. Already the auditing of t h e accounts of primary co-operative societies has been entrusted t o federations in Ceylon and in certain provinces of India. I n Pakistan, the Co-operative Union of the Western Punjab has expressed itself as being very satisfied with the system of audit which it has launched. The system has won the confidence of the public and has contributed much to the success of the co-operative movement in the province. I t is to be expected that, in delegating to other institutions some of the duties which it used previously to carry out itself, the State will be led to grant such institutions some temporary financial assistance for t h e purpose of carrying out their work. But such assistance will probably be justified, since its effect must be progressively to liberate the State from an expenditure which it had formerly to bear alone. Moreover, such assistance 1 Cf. p p . 33-37. PEOBLEMS AÍÍD METHODS 67 will give the State some right of supervision over the institutions which benefit by it. I t is open to the State to call upon the co-operative federations to take on yet further responsibilities, in particular when, as in Ceylon, in China, in the Philippine Republic and in Thailand, it conducts basic national economic organisations for the co-operative movement through the medium of its own officials. Since such organisations must one day or other be handed over to the cooperatives which they exist to serve, their boards of management should, as soon as possible, include a growing number of proven administrators from similar regional organisations, in order t h a t these administrators may serve an apprenticeship for the management of still more important undertakings. I n this way, the co-operative societies may progressively secure a majority, and later, all the seats on those boards which are responsible for looking after their interests. The intention of proceeding on these lines has been clearly shown in Ceylon. By these different and successive acts of devolution, Governments will be enabled to free themselves for other work. In places where there are as yet no co-operative federations, or rather where existing federations are still not strong enough, it should be one of the main duties of the Departments of Cooperation to help to create or develop them. Finally, there are districts and social categories where distress is so deep-seated and ingrained t h a t it has engendered, and continues to foster, a state of hopeless apathy, which is an insurmountable obstacle t o any attempt at improvement by co-operative means. In such districts and social categories, any work for improvement must be preceded by what may be called " salvage " action. As suggested by Sir Manual Nanavati, of the Indian Society of Agricultural Economics, such action, since it must necessarily pave the way for future work by the co-operative societies, might be undertaken b y a special section of certain Departments of Co-operation and be founded upon methods which the F a r m Security Administration (F.S.A.) has applied with success in certain districts of the United States. Other Possible Forms of Collaboration In view of the wide scope of the development programme, the number of difficulties to be overcome, the complexity of the problems presenting themselves for solution and, generally speak- 68 THE DEVELOPMENT OF T H E CO-OPEBATIVE MOVEMENT I N ASIA ing, the almost infinite multiplicity of the efforts still to be made, Government co-operative organs in Asian countries undoubtedly have a vast field of activity before them for a long time t o come ; and this field is still so vast t h a t it cannot in all probability be entirely covered by Government agencies alone, even if these are considerably strengthened. All the strength, all the resources and all the good will available, both among the people and among the intelligentsia, the teachers, the women's organisations, the universities and the social welfare bodies must be used to a greater extent and in a more effective way t h a n they have hitherto been used. The present report has already referred to the very important part which can be played by the village teacher, not only in administering co-operative societies, but also in disseminating and defending co-operative principles, methods and ideas. The support, whether b y initiative, advice or supervision, which women can give to t h e co-operative movement has been almost everywhere wellnigh entirely neglected. This is a great waste of power. True, in certain districts, women's co-operatives have been created, particularly for the making and marketing of homecraft products, for t h e teaching of domestic science, etc. But women ought to be in a position to take an interest and an active part in the creation a n d operation of consumer, thrift and credit, health, and " better living " co-operatives and also, in some countries, in co-operative organisation for the marketing of certain farm produce and for cottage industries. They are also capable of undertaking propaganda and also of assuming responsible duties, as they do, for instance, in the Western Punjab 1 , and as very many of them were accustomed to do in the armed forces during the war. A certain number of women should be admitted to the co-operative schools and to those bodies which are devoting themselves to t h e development of education. The organisations of employers and workers also afford a growing potential resource. Some of them have already begun t o show an interest in certain types of co-operative societies 2 , but there is sometimes some confusion about the exact nature of the part which they could play. The complaint has been made that consumer co-operatives and thrift and credit co-operatives have been administered exclusively by the managements of the 1 2 Cf. p . 34. Cf. p . 22. PROBLEMS AND METHODS 69 factories in which they operate, thus depriving the workers of any opportunity of developing their own aptitudes and selfconfidence. Again, it is undesirable t h a t t h e management of a co-operative enterprise should be merely a subsidiary branch of the activity of a trade union. The unsuitability of such an arrangement has been conclusively demonstrated by practical experience, e.g., in Germany after the first World War. If an employer wishes to encourage his employees, he can help them to organise their own thrift and credit arrangements b y according them facilities such as premises and accountants, and by undertaking on behalf of the co-operative to deduct from their wages the sums agreed upon by t h e persons concerned. If the trade unions consider t h a t consumer co-operatives, thrift and credit co-operatives, housing co-operatives, labour-contracting co-operatives, and workers' productive co-operatives serve the general interests of the workers or the wishes of certain categories, their moral influence will be valuable for the purpose of spreading co-operative ideas among their members, and creating co-operative study circles, etc. But once co-operative societies are created, every effort should be made to ensure t h a t they are run by the co-operators themselves. While continuing to be centres of advanced study, the universities can help in the practical work of popular education and uplift. But the universities must not wait for the people t o come to them. They should themselves go t o t h e people, e.g., by introducing " external services " or " university extensions " on the model of many North American universities, the travelling staff of which visit the country districts and the workers' quarters in the cities, and help agriculturists, fishermen, miners, and industrial workers to study and find solutions for their own problems. In Asia, original schemes such as those sponsored by Fu-Tan university at Shanghai and by the Visva Bharati in Bengal are still the exception. 1 Finally, in addition to those bodies devoting their entire effort to the development of co-operation x, mention should be made of all social welfare institutions which may include co-operation in their programmes, as has already happened in China, India and the Philippine Republic. 2 Thus, t h e Co-operative Department of Ceylon is proposing to interest such associations (e.g., the 1 2 Cf. p . 21. Cf. pp. 21-22. 70 THE DEVELOPMENT OE THE CO-OPERATIVE MOVEMENT IN ASIA Buddhist Youth Association and t h e Young Men's Christian Association) in propaganda and educational work. Co-ordination All these bodies and institutions, both those which are " official " and those which are " non-official ", should be able to find an appropriate place in t h e execution of co-operative development plans. Each one of them should be fully utilised according to its special qualifications, but in order t o achieve maximum efficiency and to prevent confusion, overlapping and omissions, all these forces should be guided by the same principle of action, should give each other mutual assistance and should, if possible, unite in a single body and operate within the framework of a single plan. As soon as the Department of Co-operation is no longer alone or does not claim to remain alone on the scene, one method by which it may divest its activities of monopolistic or dominating elements is to obtain the collaboration of all persons worthy of taking part in it. From this point of view, it has been wisely decided to adopt at the Co-operative Training Centre at Hyderabad, at the Co-operative College at Poona, and in the courses organised by the Co-operative Union of the Western Punjab, a policy whereby, in such institutions, co-operative staff is trained together with the staff of the Co-operative Department. 1 The work of co-operative propaganda and construction requires the same close contact. In India, the work done in the Central Provinces to raise the cultural, economic and social level of the Gonds is carried out in close collaboration between the " Gond Sewak Sangh " (a philanthropic association), t h e Department of Education, the Department of Co-operation and Rural Development, and the district agricultural co-operative association. With a similar object in view, kindred systems of collaboration have been launched in the Provinces of Bombay, Bihar and elsewhere, between the public authorities, philanthropic associations and the co-operative organisations. With the same purpose of creating a system of liaison, a committee set u p in 1948 by the Government of India has recently recommended that, in the future, a single congress should be convened b y t h e new Indian Co-operative Union, to include both representatives of 1 See above p . 34. PROBLEMS AND METHODS 71 co-operative organisations and the Registrars, who previously held separate conferences. Such interrelation of duties and activities may easily take organic shape in some form or another, and it is perhaps of interest in this connection to remember the very suggestive example offered by Jamaica, a country in which the standard of living and the educational level of the rural population can be compared with that of certain parts of Asia. As from 1938 various voluntary bodies as well as official institutions, working more or less independently of one another, interested themselves in methodically developing co-operative activity. The real step forward which the movement has taken since 1943, however, can largely be attributed to the co-ordination and continuation of these efforts through the Jamaica Co-operative Development Council. This Council includes all institutions and organisations which are interested in the co-operative movement, namely : (1) "Jamaica Welfare", which receives the assistance of the Agricultural Society, the Boy Scouts Association, various post-school agricultural institutions, the Churches, etc., and has been working since 1937 to raise the people's standard of living through constructive economic and social welfare schemes ; (2) the Extension School of St. George's College, which has begun to work for the development of the co-operative movement ; (3) the Jamaica Agricultural Society ; (4) the Agricultural Loan Societies Board ; (5) the Banana Producers Association ; (6) three co-operative federations created since 1942 ; and (7) representatives of the Government Departments of Education, Lands, Housing, Commerce and Industries ; also the Development Secretariat and the Social Welfare Services Secretariat. The main objects of the Council as defined, in its rules are as follows : 1. to supervise and co-ordinate all co-operative activities, in particular, education, training and organisation ; 2. to establish a common policy in relation to co-operative development work in so far as each body is concerned with that work, but subject to the special duties and functions of the different member bodies ; 3. to promote mutual assistance and friendly collaboration between the member bodies ; 4. to maintain contact with the co-operative movement itself, and to assist it by special services in the field of education, marketing and any other matter common to the movement as a whole ; 72 THE DEVELOPMENT OF T H E CO-OPERATIVE MOVEMENT IN ASIA 5. to secure the protection of the co-operative movement by adequate legislation. On the question of education, as in t h a t of organisation, each of the members of the Council is a specialist in one particular sphere corresponding to his own qualifications and experience while being able, in case of necessity, to call upon the help of one or more of the other members. This collaboration, voluntary but organic in nature, between Government Departments themselves and between them and the voluntary institutions, has produced excellent results. The co-operative movement, which was stagnant and had been discouraged by previous disappointments, has recovered its strength and has continued to grow rapidly a n d on sound lines ; voluntary leaders have been found even in the most humble social categories. This experiment might inspire similar undertakings in Asian countries. This kind of co-ordination is useful in the organisation of practical action on planned lines. I t provides desirable machinery for relations between important branches of the economic and social system, in so far as co-operative activities alone are directly concerned. I t may facilitate the preparation and establishment of "inter-co-operative r e l a t i o n s " 1 , b u t it does not necessarily put the co-operative movement in direct and intimate relations with general plans for economic and social development, and it does not definitely assure the movement a place in those plans or any influence upon their preparation or execution. The solution of this important problem of co-ordination cannot therefore always be guaranteed. Generally speaking, it must be sought at a higher level within the political and administrative system of the State. The experience of various countries, including some in Asia, provides three main elements for the solution of this problem. First, as soon as the organisations concerned with co-operative promotion (especially t h e co-operative federations) become adequately efficient and representative, they should be consulted by and represented in the bodies which plan, apply and supervise national economic and social policies, e.g., economic councils, offices or committees for price control, manpower, agriculture, industry, etc. Such consultation or representation already exists in the Argentine Republic, Australia, Canada, Czechoslovakia, Denmark, Finland, France, Iceland, Ireland, Luxembourg, Norway, ' Cf. p . 59. PROBLEMS AND METHODS 73 Poland, Sweden, Switzerland, United Kingdom, United States and Yugoslavia. Secondly, the " co-operative " economy, as such, with its own particular principles, structure, problems a n d interests, and with an original contribution to make to the common good, has seldom obtained really direct representation in Governments. Although there are Ministries of Commerce, of Agriculture, of Labour, etc., Ministries of Co-operation are still exceptional. The divergencies and indecision shown in the assignment of Co-operative Departments to this or t h a t Ministry x demonstrate clearly enough t h a t it is neither appropriate nor efficacious to attach co-operation like a fringe to a Ministry where it is not t h e sole or even the chief centre of interest. The best method of ensuring the collaboration of a Co-operative Department with other Departments is probably not to attach it or subordinate it to any of them, b u t to promote it to the same rank as these other Departments in the Government as a whole. Moreover, it is at the Cabinet level t h a t co-operative activities can best be integrated in a general plan, together with others. The Province of Saskatchewan in Canada provided an example by creating, in 1944, a Department of Co-operation and Co-operative Development. The present report has already referred to similar action taken in the Province of Bombay, in the United Provinces and in Ceylon.2 Thirdly, and lastly, there should be created in each country and, in the case of countries with provincial Governments, in each province, an Advisory Co-operative Council. The duties of this Council should be distinct from and complementary to those of the Co-operative Research Institutes suggested above. 3 The latter should be the place where new problems are studied, new ideas discussed, and new experiments methodically followed up in their various phases so t h a t all possible lessons may be drawn from them directly and in the light of foreign experience. The Institute would be the place to evolve a theory of co-operative action, coherent in itself, but capable of being revised in the light of discussion and experience. Side by side with this Institute and depending upon it, the Advisory Council, comprising representatives of the Ministries concerned, the legislative assemblies, the various types of co-operation, and the Department of Co-operation, would be 1 2 3 Cf. p p . 23-24. Cf. p . 24. Cf. p. 44. 74 THE DEVELOPMENT OF THE CO-OPERATIVE MOVEMENT IN ASIA entrusted with the task of translating theory into practical programmes, plans and methods, for submission to the Governments. Work of this kind has been already done by the Indian Co-operative Planning Committee, and the report of this Committee gives some idea of the potential value of advisory councils. In its main outline, the conception of advisory co-operative councils, as submitted in one of the recommendations of the Indian Co-operative Planning Committee, closely resembles that already tried out in several countries, and more recently applied in practice in the Provinces of Bombay and Madras. At a different level, and in a different form, the same conception, is also found in many other provinces or States of India and Pakistan. More or less similar councils already exist in Colombia, Egypt (where there are also regional advisory co-operative councils), France, Poland and several other countries. In Belgium, a Bill has been submitted to Parliament for the creation of a National Co-operation Office on a similar basis. In Norway, the Government has been asked to take action on the same ünes. In certain countries, such as Belgium, France and Luxembourg, there exist also advisory committees or councils for particular types of co-operation, generally agricultural co-operation. CHAPTER IV CONCLUSIONS Co-operative development work in the Asian countries, as conceived by the co-operators themselves or inscribed in the practical programmes of most Governments, is worthy of attention by all who are striving for progress through freedom and mutual responsible action. Its special importance is not only derived from the improvements which can be effected in the living conditions of a large number of workers. Prospects are opening up for the co-operative movement which have never yet been offered to it anywhere, and if it succeeds it will really have contributed to the creation of a new economic and social structure. If the movement is to succeed, and in order t h a t it should definitely pass beyond the stage of a scattered collection of sporadic organisations into t h a t of an organised section of the national economy, it must win support and active participation from all available sources, and it must generate the force of a real popular movement working on a nation-wide scale. Such is the main underlying idea of the suggestions which have been submitted in this report, suggestions which may be summarised as follows : 1. All legislative and administrative obstacles to co-operative development should be removed. 2. General and adult education should be extended. 3. (a) Public opinion should be kept constantly informed about the co-operative movement, through t h e press, the radio, the cinema, and other mass-publicity means ; through the teaching of co-operation at all educational levels (higher, secondary, primary, professional ; and in teachers' schools) ; and through an intense use of the technique of co-operative study, discussion and action circles, (b) The " creative enthusiasm of the young " should be mobilised (through the schools, the 76 THE DEVELOPMENT OF THE CO-OPERATIVE MOVEMENT IN ASIA school co-operatives and the various youth movements). Without it, in the words of Miss Margaret Digby, " co-operation m a y remain as a system ; it will not go forward as a movement ". (c) Efforts should be made to secure the collaboration of women, (d) All possible use should be made of the intellectual and moral elements which are in direct and permanent contact with the people, such as teachers, occupational organisations, welfare bodies and religious organisations. 4. All these forces and activities should be guided b y institutions for co-operative information and research, by the preparation of an active co-operative policy, b y careful training (in co-operative schools) of co-operative propagandists, teachers, organisers and administrators. 5. Co-operative promotional activities should be co-ordinated by encouraging the creation and operation of central co-operative organisations with increasing responsibilities ; b y setting up joint committees of action in which hitherto sporadic co-operative development activities can be completed and co-ordinated ; by furthering inter-co-operative relations ; and by the elaboration of a plan for co-operative development. 6. Co-operative institutions should be utilised to promote technical progress in agriculture and in handicrafts and cottage industries ; encouragement should be given to co-operative institutions which perform or supplement the duties of t h e State (pending the latter's full participation) in general education, health, medical services, anti-malarial work, insurance, etc. 7. A place should be provided for co-operation in the administrative, advisory and political mechanism of the State (consultation and representation of co-operative movements, advisory cooperative councils, ministries of co-operation, etc.), and in economic and social planning. Many other problems are involved in the development of the co-operative movement in Asian countries, such as the new orientation to be given t o the movement as a whole or to some of its branches ; the new types of co-operative organisation to be created or encouraged ; the introduction of " compulsory co-operation " or t h e system of organisation which sometimes improperly bears this name ; the preference to be given to large or small co-operative societies, etc., etc. These are special problems which can for the most part be best examined in relation to their concrete facts, CONCLUSIONS 77 and collaboration between the research institutes and the departments or organisations which are responsible for the co-operative movement. The suggestions presented above are of a more general nature, t h a t is to say, they can be regarded as applicable, with some adaptations, in all circumstances and for all forms of co-operative organisation. They are particularly applicable in connection with the introduction of new co-operative ideas or institutions and ensuring their acceptance and success. The undertaking will necessarily involve some expenditure on the part of Governments. But such expenditure can be regarded as profitable in the course of a few years, since in actual fact it will be used for the expansion of the national economy and for the welfare of the people. The methods suggested do not present any particular difficulty. All of them have already been tried out in many countries in other continents, and most of them have already been applied, or at least contemplated, in one or other of the Asian countries, as is shown by the examples given in this report. But these methods constitute a whole, and should be employed integrally in order to succeed. Naturally, their success depends also on a loyal and undeviating observance of t h e principles which govern them, and it is here, more than in any other sphere, t h a t the responsibility rests squarely upon the parties concerned. Nevertheless, in its work for development, the co-operative movement in each one of the Asian countries must be able to rely on external help. U p to now, the movement has been too much thrown back on itself, in each country, in each province, and in each village. I t has lacked the invigorating flow of observation, experience and information which comes from frequent contact with people and institutions in neighbouring or distant co-operative movements. I t may even be said t h a t nearly all the individual members lack the stimulus of feeling themselves part of a movement which covers the whole world and which, at the present time, probably comprises more than 150 million persons or families. This lack of external relations and of exchange of information is very keenly felt, and is perhaps the problem upon which most emphasis is laid. Some organisations without relations with importers are unable to procure the foreign goods which they require, and wonder whether they can obtain t h e m through foreign co-operative societies. Others call for the services of small-scale industry experts. All, without exception, ask for co-operative 78 THE DEVELOPMENT OF THE CO-OPERATIVE MOVEMENT I N ASIA publications, information, advice, exchange visits, and the possibility of making practical studies a t first hand of activities which are analagous to their own problems or schemes. I t should be stated at the outset that these requirements can to a very large extent be satisfied, even in Asia, in a neighbouring country or province. There is not a country and probably not a province in Asia, in which some institution, some particular form of co-operation, or some well-planned scheme in process of accomplishment, cannot offer some measure of instruction or inspiration to the co-operatives of another country or province. In budgets devoted to the training of managerial personnel, provision should be made to cover the expense of attending congresses, visiting institutions, etc., and undertaking study tours. Furthermore, to quote the exact terms of the resolution adopted by the Asian Regional Conference a t New Delhi in 1947 : " Periodical regional meetings should be held to provide to officials of the cooperative departments as well as representatives of the co-operative organisations in Asian countries opportunities of pooling their experiences, comparing the results of their work and improving their methods ; of discussing and devising means of encouraging the establishment of direct trade relations between co-operative societies of Asian countries " . But, by the very nature of its principles, the co-operative movement in Asian countries should also be in a position t o appeal to a broader international solidarity. For the exchange of goods and services which it desires, for the general practical information which it seeks, and for the collaboration which it needs, it must as soon as possible establish direct and permanent relations with the great central co-operative organisations in other parts of the world. The federations and other central co-operative organisations of Asia which are eligible should, as a number of them have already done, seek affiliation to the International Co-operative Alliance. Apart from the foreign central co-operative organisations, other sources of reports, pamphlets, periodicals, information and services may be found in institutions such as the Horace Plunkett Foundation of London, which is an international model of the kind of co-operative research institute frequently mentioned in the present report, and the American Institute of Co-operation, which corresponds to the Horace Plunkett Foundation, in North America. I t would also be desirable to consider the help which might be given by the United Nations and the various international CONCLUSIONS 79 specialised agencies, either as regards agricultural techniques, agricultural marketing, and nutrition (the Food and Agriculture Organisation of the United Nations—E.A.O.), or in respect of general education and particularly adult education (United Nations Educational, Scientific and Cultural Organisation—U.N.E.S.C.O.), or in the field of co-operative questions proper (International Labour Organisation). I t may be recalled that, for the last 30 years, the International Labour Office has maintained relations with the co-operative organisations, the Government services, and institutions and persons concerned with the co-operative movement in various countries ; t h a t it has built up a large mass of information concerning the various types of co-operative organisations, their structure, their particular problems and their achievements. This collection of data, which has served as a basis for a whole series of publications 1 , has often enabled the Office to help cooperators, particularly in China and India, in the search for information, in the examination of particular problems, and in the organisation of co-operative study tours. I t likewise enables the Office to assist in the execution of the programme outlined in the present report. The International Committee for Inter-Co-operative Relations had for ten years strengthened its collaboration with the International Co-operative Alliance and the International (now the European) Confederation of Agriculture in a successful effort to create and maintain general and economic relations between different types of co-operative organisations. Today, the Advisory Committee on Co-operation of the I.L.O. is resuming the same form of collaboration with a view to more numerous objectives and on a wider basis. Co-operators from Asia have been appointed to this Committee. They will therefore have an opportunity not only to make useful and continuous contacts, but also to explain their own problems. I n response to a wish which has often been expressed, it may be suggested t h a t one of the duties of the Committee should be to draw up and keep up to date a list of experts who could give advice and counsel, either by correspondence or personal visit, to countries where co-operative development programmes are being planned, launched or revised. Finally, in order to multiply the contacts of the Committee 1 Cf. p . 1. 80 THE DEVELOPMENT OF THE CO-OPERATIVE MOVEMENT IN ASIA with the co-operative organisations of Asia, and in order to disseminate the results of its work more widely and fully, it would be desirable to co-opt on to it a certain number of corresponding members from each of the countries of Asia concerned. These correspondents would, on the one hand, supply the Committee with authoritative information and opinion and, on the other hand, would receive the documents prepared in connection with the work of the Committee. CHAPTER V PROPOSED TEXTS Proposed Resolution on International Action regarding the Co-operative Movement in Asian Countries Having regard to the expressed need of Asian countries for all available information on current experiences and achievements of the co-operative movement both within the Asian region and elsewhere, in order to assist them in evolving the most effective techniques to deal with their own problems of co-operative development ; Having regard to the desirability of making concrete arrangements to meet this need on a broad international scale, 1. The Conference urges that persons holding responsible posts in the co-operative movements of Asian countries should be given facilities to enable them to visit other countries for theoretical or practical studies, or in order to attend congresses and other co-operative meetings. 2. The Conference recalls and endorses the recommendation of the Asian Regional Conference held at New Delhi in 1947, that periodical regional meetings should be held to provide officials of the co-operative departments as well as representatives of the co-operative organisations in Asian countries opportunities of pooling their experiences, comparing the results of their work and improving their methods, and of discussing and devising means of encouraging the establishment of direct trade relations between co-operative societies of Asian countries. 3. The Conference invites the Governing Body to appoint corresponding members of the Advisory Committee on Co-operation for each Asian country, in consultation with the central co-operative organisations and the Government co-operative services in those countries. 4. The Conference invites the Governing Body to recommend the Advisory Committee on Co-operation to establish and maintain up to date a list of experts capable of assisting Asian Governments, on request, in the preparation and execution of their co-operative development programmes. 5. The Conference invites the Governing Body to instruct the International Labour Office to intensify its studies of diff- 82 THE DEVELOPMENT OF THE CO-OPERATIVE MOVEMENT IN ASIA erent problems and forms of co-operation, in connection where appropriate with the work of the Advisory Committee on Cooperation, with a view to considering the special needs of Asian countries, and to ensure the widest possible dissemination of such studies in Asian countries, in order to afford Governments and other interested agencies practical support in their day-to-day task of promoting co-operative development. 6. The Conference furthermore invites the Governing Body to instruct the International Labour Office to provide all other assistance within its power to Asian countries in the preparation and execution of schemes for the development of the co-operative movement ; and to consider in consultation with other international organisations concerned, particularly F.A.O. and U.N.E.S.C.O., the possibility of joint action towards the same end. Proposed Resolution on National Action regarding the Co-operative Movement in Asian Countries Having regard to the conditions in which the co-operative movement has developed in Asian countries during recent years, the important place attributed to the movement by the Governments of these countries in development planning, and their present policy of extending the scope of the co-operative movement so as to embrace every sector of the national economy in continuation of the efforts already made by them to further co-operative organisation among the peoples of their respective countries ; Taking into account the manifold aspects of such an undertaking, The Conference recalls and endorses the resolution on co-operation adopted by the Asian Regional Conference held at New Delhi in 1947, and desires to draw the attention of Asian Governments to the following : 1. Co-operative legislation should be revised and general legislation applicable to the co-operative movement periodically examined with a view to ensuring that the full development of co-operative organisations is not hampered. 2. Appropriate machinery such as advisory co-operative councils should be set up in each country or province, comprising representatives of the Ministries or Government Departments concerned, the national or provincial legislatures, and the various co-operative organisations, in order to facilitate consultation and concerted action in regard to co-operative development, supplemented where desirable by arrangements for co-ordination between such institutions and other bodies interested in the promotion of co-operation. PROPOSED TEXTS 83 3. Co-operative research institutes should be set up in sufficient numbers in each country, and, where they already exist, should be enabled to expand their activities, particularly with a view to making objective studies of new problems and of current co-operative experience, to circulating widely the lessons of this experience, and to providing the national or provincial co-operative movements concerned with all the elements needed to determine an active co-operative policy. 4. Encouragement should be given to the establishment of federal or central co-operative bodies equipped with the necessary functions to enable them to play a responsible part in the development of the co-operative movement. 5. Encouragement should be given to the creation of economic and other relations between different types of co-operative organisations, for the purpose of mutual assistance or the satisfaction of complementary needs, e.g., in marketing, supply, credit, etc. 6. Co-operative schools or colleges should be set up in each country or province for the joint training of officials of Government co-operative departments and of employees of co-operative organisations. 7. Such schools or colleges should be subsidised by the State and be placed wherever possible under the direction of the central co-operative organisations, failing which seats should be reserved on their boards for freely elected representatives of co-operative organisations. 8. The teaching of co-operation as a means of improving the conditions of the people generally should be introduced in public education of all forms and at all stages, notably by providing lessons or courses in co-operation in the schools, by including co-operation in the training of teachers with a view to their participation in the diffusion and implementation of co-operative ideas, and by encouraging the creation of co-operatives of schoolchildren and students. 9. Public opinion should be kept systematically informed of co-operative ideas and activities by all available means such as the radio, the cinema, the theatre, etc., supplemented by provision for the organisation of co-operative study, discussion and action groups among interested circles. 10. The participation in co-operative work should be encouraged of women, young people, professional organisations, and in general of all elements contributing to the full development of the organisational capacity of the people. 11. Co-operative institutions themselves should be associated wherever possible with the extension of general education and in particular of adult education, and should also be employed as channels for the diffusion of technical knowledge in agriculture, handicrafts and cottage industries. 84 THE DEVELOPMENT OF THE CO-OPERATIVE MOVEMENT I N ASIA 12. The development of the co-operative movement should wherever possible be organised on the basis of a general national plan, and in countries of a federal structure on the basis of provincial plans, co-ordinated to t h e highest possible degree, and framed in accordance with the proposals of the advisory co-operative councils in the light of data supplied by the co-operative research institutes.