Cooperation In Cooperatives-The Subtle perspective

On the parent blog "My Experiments with reforms", , some attributes were highlighted how Disha can fail and  common mistakes that  should be avoided if one wants to avoid failure of community owned enterprises.

Seeking cooperation in cooperatives or for that matter in any activity has been a debatable issue through out history and will possibly continue in future also. While i was pnodering over this issue, I came across an interesting piece of research on Science daily of 22nd May, for reader's benefit, I have posted it verbatim

The finding comes from four new experiments carried out by researchers from Oxford University, Edinburgh University, and the University of Lausanne, Switzerland. A report of the research was recently published in PNAS.

In the four experiments 168 people played games in groups of four where they were able to choose how many of 40 monetary units they wished to contribute to a public project. Players were then rewarded according to the premium put on cooperative behaviour (contributing) as opposed to holding onto their 'money'.

'What we found was that even as we increased the premium on cooperation, so that players made most money by contributing 100 per cent of their money, on average people contributed significantly less than 100 per cent,' said Professor Stuart West of Oxford University's Department of Zoology, one of the leaders of the study. 'In fact even when full cooperation delivered the best financial returns between 66 and 94 per cent of people still saw fellow players as their competitors.'

The research shows that mistakes or 'imperfect behaviour' made by players in a game setting can lead to a systematic bias in how much or little they cooperate.

'Our results suggest that players avoid both completely 'selfish' and 'fully cooperative' behaviour, even if one of these strategies delivers maximum benefit,' said Professor West. 'This could derive from a psychology that avoids extreme behaviours, which could be very costly if they go wrong, or indicate that the sort of simple everyday rules of thumb we use to make these kind of judgements 'misfire' in an intense experimental setting.'

Results are not astonishing and this we face day in and day out. In November when the much awaited social mobilization phase will begin, possibly then on more such incidences will come to forefront.

Disha Cooperative backdrop

Project Area: Mayurbhanj district is situated in the northeastern part of the state of Orissa, bordering the states of Jharkhand and West Bengal. It is one of the largest districts in the state with a geographical area of 10,416 sq km. The area has high forest cover (45% of the total geographical area) and is surrounded by the Simlipal and the Meghasani hills. About 57% of the population in the district belongs to the Scheduled Tribes and 7% to the Scheduled Caste. Forests are a major source of income for majority of the population, especially the Scheduled Tribes and Scheduled Castes in the district. Most of these tribal communities are aboriginals. Some of them are categorized as primitive tribes- the Eranga Kharias, the Mankidias and the Sabharas. These tribes live inside the forests and are primarily dependent on forests for their subsistence and livelihood. 

Situation Analysis before Intervention: The area under discussion is mostly rainfed. So people residing in the proximity are able to take one crop in a calendar year. This crop is essentially for self-subsistence. Therefore as an alternative livelihood option there a significant dependence (to the extent of 1/3rd of their cash income) on NTFP (Non Timber Forest Produce) collection and sale. The major NTFPs available in the area are Sal (Shorea robusta) leaves and seeds, Mahua (Madhuca longifolia) flowers and seeds, and Chironji (Buchanania lanzan). Apart from these some medicinal herbs like Kalmegh (Andrographis Paniculata), Baidanka (Mucuna Pruriens), and Bichuati (Tragia Involucrata), among several others, are also grown in the proximity which inhabitants use as local curatives. The value chain for most of the NTFPs in this region are more or less same, with a slight change, for some (like Sal leaves) extensive value-addition takes place and the finished products are transported to different trading destinations, whereas in the case of Sal seed and Mahua flower, much of the produce reach the adjoining trading hubs such as in Chhattisgarh and Jharkhand respectively and even to the national markets like Delhi, Lucknow, Hyderabad; and in the case of former even exported to countries like Germany and France in the European Union. 

Sale of most of the NTFPs is done without much processing or value addition at “primary collectors’ level” and their access to end consumers is limited to the sale of produce in surrounding villages and weekly markets. A major portion of their produce is sold to the intermediaries like commission agents/village level agents and small traders who operate in the area. Thus, although these products reach a very large market, the market is geographically very limited as far as the primary producers are concerned. In other words, the NTFP value chains are very large and fragmented, though the role of primary producers ends at the very beginning where the returns are the lowest. The NTFP collectors lack awareness on collection and sustainable harvesting, processing, quality control, capacity to add value and trade. There are no specialized/technical agencies for building community skills for sustainable NTFP collection and value addition available at the nearest community outreach. Located in remote areas, the primary collector is not aware about the extended nature of NTFP value chains and does not have information and access to high value markets. The intermediaries, highly secretive and exploitative in nature, often take advantage of the market information to take secure high returns on NTFP commodities. Low capacities of NTFP producers and their support occupations make it difficult to access distant high value markets.

Design of Intervention: As evident, the interplay of issues governing livelihood of the primary collectors of the area demands something more than “individual entrepreneurial aptitude”. Therefore after much deliberation and field research, it was decided to go ahead with the concept of “collective action” for empowering people in the area.

Community-based organizations like cooperatives have considerable potential to fill the social vacuum through provision of services which are needed by the community efficiently and in time and which are based on high principles of management and ethics of the Principles of Cooperation.  Field and Market research suggested that selective NTFPs when taken up within the domain of collective value addition and marketing will ensure the three fundamental centralities viz. “domain centrality, member centrality and patronage centrality”. It was decided to hinge upon the ability of individuals, organizations and communities to manage their own affairs and to work collectively to foster and sustain positive change  (Howe and Cleary 2001).This gave birth to “Disha Cooperative Ltd.” which is a community owned and professionally managed enterprise and acts as a value addition and marketing federation of primary village societies. Ownership of the enterprise by community ensures that surplus generated from the cooperative goes back to the primary collectors, which was earlier being siphoned of middle men. 

Situation Analysis after Intervention: Disha Cooperative has completed its first business cycle with Chironji (Buchanania lanzan) and primary collectors have received 67% higher returns than what they had got last year. Moreover cooperative through VSS (Village Sanrachan Samiti’s) has facilitated the cultivation of 8 medicinal herbs in forest surrounded by 47 villages. Disha has networked with the forest department for this cultivation activity.  On market end Cooperative has evolved a  market linkage with a reputed ayurvedic medicine manufacturer for these 6 out of these 8 herbs