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Food in Canada for efficiencies to produce higher returns on the capital investment for shareholders. When a firm Simon Berge and Masud Khawaja focuses on members, there is a view outward to Business and Administration Department, what a membership community requires of University of Winnipeg, Winnipeg, MB, Canada the firm. As a response to the lack of focus on commu- Keywords nity needs, the model incorporated Co-operatives; Community; Capital; Democ- the democratic member control principle as a racy; Commons means of empowering the community through individual democratic participation. The demo- cratic member control principle ensures that each Introduction member of the cooperative, regardless of their financial state, is provided with a vote within the Food has played a key role in the development of firm. The one member, one vote democratic prin- the cooperative model. From the initial offering ciple is one of the key tenants of the cooperative by the Rochdale Equitable Pioneers of butter, business model. This democratic cooperative sugar, flour, and oatmeal, cooperatives have pro- principle changes the focus of a firm from a vided access to food for those with limited means focus on capital needs to community members’ (Holyoake 1893). Cooperatives have addressed needs. This change of focus from capital to the issues of access by involving the community in individual calls into question the basic tenets of the development of firms that address basic needs human nature within an economic system. such as food. This discussion will look at the The neoliberal capitalist belief about human development of cooperatives as these firms nature is that the individual is self-focused and address a community’s basic need for food by hyperrational. However, this overarching belief applying the cooperative principles. The develop- about the individual should be reexamined in ment of cooperatives and their guiding principles light of the work by authors such as Elinor Ostrom represent an ethical response to perceived injus- (2000) and her seminal work on resource manage- tices within the economic system. ment. Ostrom’s(2000) work shows that commu- This entry will look into the ethical question nities can utilize common pool resources without that revolves around the focus on capital within the resource falling into disaster as outlined in the the investor-owned firm (IOF) and the focus on tragedy of the commons. The tragedy of the com- the member within the cooperative firm. The cap- mons refers to the inability of a group to manage a ital focus of an IOF drives the firm to look inward common resource due to each individual’s

# Springer Science+Business Media Dordrecht 2016 P.B. Thompson, D.M. Kaplan (eds.), Encyclopedia of Food and Agricultural Ethics, DOI 10.1007/978-94-007-6167-4_591-1 2 Food Cooperatives in Canada tendency to overuse the resource for self-benefit. insufficient access to food calories but rather the Overuse of the resource creates problems, often easy availability of unhealthy, energy-dense snack destroying its sustainability. Self-limitation of the foods through corner stores in low-income use of the resource, however, is not effective if neighborhoods. your neighbors do not also refrain from overuse. In response to the decreased access, communi- The resource, it is believed, eventually collapses ties band together to create a food cooperative that due to community overuse, and the individual will will service their community’s needs. This com- have lost any short-term benefits of taking their munity development of a cooperative firm to pro- share prior to the collapse of the resource (Hardin vide access to products and services has been 1968). Ostrom’s(2000) work has shown that the going on for over a century. The Rochdale Equi- tragedy of the commons is not a predetermined table Pioneers of Manchester, England, were the outcome of collective resource management. first to formalize a method for ethical business Human nature has not shown that resources are practices that addresses their community’s needs. overused due to each individual focusing on their own short-term wants as communities have been able to manage resources sustainably as a collec- From Rochdale to Canada tive or cooperative (Ostrom 2000). The capitalist system encourages consolida- This section will provide the historical back- tion, slower growth, importance of inheritance, ground on cooperative development from the and excess use of resources in a manner that original Rochdale Society of Equitable Pioneers could produce an outcome similar to the tragedy including cooperative development in Canada by of the commons. Individual firms act in a self- the Desjardins as influenced by Friedrich Wilhelm interested way to utilize basic resources, for the Raiffeisen. This section will present the ethical interest of the firm and its shareholders, due to the beliefs that drove these original cooperative pio- competitive nature of the economic environment. neers to develop a cooperative business in As IOFs focus inwardly to ensure their own sur- response to perceived injustices within the eco- vival and the return on investment expected by nomic system of the time. The historical context their shareholders, less focus is put toward out- will show that the Rochdale Pioneers established ward sustainable resource development to address their businesses out of an ethical concern for the the needs of the broader community. By failing to community’s access to basic products such as address the broader community needs, the capi- food. The cooperative model was then moved talist system produces market failures. from a response to the need for a basic necessity The cooperative firm has traditionally devel- to a means of empowerment within the economic oped in response to market failures (Fairbairn system by providing access to credit via the Caisse et al. 2000). These market failures leave commu- Populaire established by Alphones and Dorimène nities with limited access to necessary resources Desjardins of the Province of Quebec. such as food creating food deserts. Food deserts While the beginnings of cooperation are a are urban neighborhoods and rural towns without highly debated topic, it is generally agreed that ready access to fresh, healthy, and affordable the Rochdale Society of Equitable Pioneers, nor- food. Alkon and Norgaard (2009) found a direct mally referred to as the Rochdale Pioneers, for- correlation between lack of healthy, affordable malized the cooperative principles that form the food choices and the incidence of diet-related basis for modern-day principles. It was on Decem- diseases, such as obesity and diabetes, which dis- ber 21, 1844, that a group of 28 weavers joined proportionately affects the low-income popula- together to form the Rochdale Society of Equita- tion. The term food swamp may be more ble Pioneers as a retail enterprise. Each weaver appropriate than food desert for areas where invested 1£ to start the cooperative business to sell food of poor nutrition is available. The most crit- basic necessities to their community such as flour, ical issue in North American urban settings is not butter, oatmeal, and, to begin with, two candles. Food Cooperatives in Canada 3

By establishing the cooperative, the Rochdale membership. In primary cooperatives, mem- Pioneers did not just hope to sell basic goods but bers have equal voting rights (one member, provide employment for their members who were one vote), and cooperatives at other levels are out of work or poorly paid. The cooperative even also organized in a democratic manner. went so far so to seek to provide housing for their 3. Member Economic Participation membership (Holyoake 1893). The economic Members contribute equitably to, and dem- interactions that take place at food cooperatives ocratically control, the capital of their cooper- are combined with social interactions which help ative. At least part of that capital is usually the foster relationships between community members. common property of the cooperative. Members These make such alternative food systems valu- usually receive limited compensation, if any, able community institutions. on capital subscribed as a condition of mem- The idea that a business would seek to provide bership. Members allocate surpluses for any or services over and above the basic product line all of the following purposes: developing their which it sells would seem counterintuitive to cooperative, possibly by setting up reserves, today’s approach to economic activity. The Roch- part of which at least would be indivisible, dale Pioneers developed their cooperative with an benefiting members in proportion to their outward-facing focus in order to address their transactions with the cooperative, and members’ needs. Each member not only provided supporting other activities approved by the the necessary investment to establish the cooper- membership. ative firm, but the democratic principle allowed 4. Autonomy and Independence the membership to define the members’ needs, Cooperatives are autonomous, self-help which drove the firms’ activities. organizations controlled by their members. If The Rochdale Pioneers formalize the relation- they enter into agreements with other organi- ship of the firm to the membership by establish zations, including governments, or raise capital guiding principles for all business activities from external sources, they do so on terms that conducted by the firm including democratic rights ensure democratic control by their members of the membership. The Rochdale Pioneers orig- and maintain their cooperative autonomy. inally outlined 12 guiding principles, but in 1995, 5. Education, Training, and Information the International Co-operative Alliance (ICA) Cooperatives provide education and train- held a conference in Manchester, England, to ing for their members, elected representatives, update the original . The out- managers, and employees, so they can contrib- come from the Manchester conference was a list ute effectively to the development of their of seven principles that are meant to guide - cooperatives. They inform the general erative business practices. The seven principles public – particularly young people and opinion are: leaders – about the nature and benefits of cooperation. 1. Voluntary and Open Membership 6. Cooperation Among Cooperatives Cooperatives are voluntary organizations Cooperatives serve their members most open to all persons able to use their services effectively and strengthen the cooperative and willing to accept the responsibilities of movement by working together through local, membership, without gender, social, racial, national, regional, and international structures. political, or religious discrimination. 7. Concern for Community 2. Democratic Member Control Cooperatives work for the sustainable Cooperatives are democratic organizations development of their communities through controlled by their members, who actively par- policies approved by their members (ICA ticipate in setting their policies and making 1995). decisions. Men and women serving as elected representatives are accountable to the 4 Food Cooperatives in Canada

The guiding principles outlined above are put power into the hands of larger enterprises meant to assist cooperatives in enacting their leaving the working class and smaller business values within their business practices. Many of behind. Raiffeisen saw the power imbalance the principles are outward facing from the firm within the economic system of the time as an such as education, training and information, coop- ethical issue, which needed to be addressed. The eration among cooperatives, and concern for com- development of an economic model that encour- munity. These cooperative principles look to ages cooperation and would empower smaller extend business practices beyond the efficient businesses and communities was seen as a solu- production of goods and services to include devel- tion to the consolidation of power within the opment of the members and community in which system. the cooperative resides. Such concern for commu- Seeing a similar separation between the larger nity can be seen in the development of the coop- firms and the small rural land holders, the erative movement in Canada as the Desjardins of Desjardins took their inspiration for cooperative the Province of Quebec established their cooper- development from Raiffeisen. The Desjardins atives in response to high interest rates endured by sought to develop a similar cooperative model in rural farmers at the time. order to shift the economic power toward small rural farmers. The Desjardins saw the threat of economic disempowerment as similar to the threat Canadian Cooperative Development of democratic freedoms: Instead of being governed like peoples were two or The history of cooperatives in Canada begins with three centuries ago, by an autocratic king who the Desjardins through the Caisse Populaire in presented himself as an emissary of heaven, we govern ourselves and we regulate everything Quebec on December 6, 1900 (Fairbairn et al. connected with the political world by the agency 2000). The original cooperatives utilized a credit of our freely elected deputies. Why should we not union business model to help farmers gain access have an equally free regime in the economic world? to credit and avoid usury fees from the standard (Desjardins 1907 quoted in Fairbairn et al. 2000, p. 20) banking models of the time. The high interest rates charged by the banks of the time depressed The Desjardins were expressing the concept the rural economy which was strongly agrarian, that only through equality of economic power, making the lives of rural farmers exceedingly just like political power, can consumers partici- difficult. pate in their communities and thus in their com- The Desjardins took their inspiration from munity development. Desjardins believed that the Friedrich Wilhelm Raiffeisen’s concepts of rural firm must look past its own needs and see to the community cooperation. Raiffeisen, a village needs of the community in which it serves in order mayor in Germany, was the founder of the first to be sustainable (MacPherson 1979). rural cooperative with a vision to build a cooper- The Desjardins and Raiffeisen put their mark ative movement based on education and leader- on the cooperative movement in Canada, empha- ship (Fairbairn et al. 2000). Raiffeisen believed sizing education, leadership, and democracy as that: key components of the cooperative firm. As the The balance has been upset; rural areas and smaller cooperative movement continued into the twenty- trades have been left behind. It lies to them first century, the participatory, democratic princi- (neighbours) to take possession of the benefits of ple remains key to the business structure. The one ’ the new age; then, they won t wish any more to have member, one vote principle of the cooperative is the good old days come back. (Raiffeisen, 1866 as quoted in Fairbairn et al. 2000, p. 20) the corner stone of the cooperative, representing the participation of members in the economic From this statement, it is possible to see that development of their business and by extension Raiffeisen believed that a rebalancing of eco- their communities. nomic power was needed. The existing system Food Cooperatives in Canada 5

The original cooperatives began as credit through economies of scale which Keen believed unions to address access to capital issues faced brought about inflated prices, conspicuous con- by rural farmers and the working classes. The sumption, misleading advertising, exploitative establishment of high interest rates by the banking practices, and class warfare. Controlling the system at the time proved to be an ethical concern resources of a community through a democratic, that the Desjardins could not ignore. The cooper- cooperative model would avoid these issues ative model continues to address empowerment refocusing production on community needs issues within the banking system, but it has also (Keen 1950). extended its influence into housing, healthcare, Keen’s view of cooperatives was that they agricultural boards, and other sectors. The coop- were to focus on fair prices, appropriate consump- erative model has extended into additional sectors tion, avoidance of consumer manipulation of the economy in order to address the needs of through poor advertising, and effective allocation those people who have limited access to society’s resources. Cooperatives could also bring the elite services. This does not mean that cooperatives and working classes together for mutual benefit offer free services to those who do not have the via community development. Keen’s views on means. Cooperatives were meant to provide ser- democratic allocation of resources came from vices for fair prices to meet a community’s need in the overarching Rochdale Principles defined a sustainable manner. between 1844 and 1854. Keen (1950) believed It was the issue of fair prices that initiated the that if cooperatives help community economic development of cooperative on the Canadian prai- development through democratic participation, ries. The agrarian-focused cooperative movement then the development of social injustice through of the prairies that began just prior to the twentieth inequality of economic power would be allevi- century focused on the inclusion of democratic ated. Furthermore, from a divine command ethical participation in the economy very much like the theory perspective, about 30 years ago in their Desjardins’ Caisse Populaire. Inclusion of democ- 1986 pastoral letter, Economic Justice for All, racy in economic activities was a reaction to the US bishops emphasized the concept of justice regional underdevelopment on the prairies. Prairie as participation of all members of society in ser- farmers had been locked in to a monoculture, vice of the common good. Such cooperative eco- staple production system that squeezed grain pro- nomic practice exemplified justice through ducer’s to the point of subsistence living. Agricul- participation (Pfeil 2012). This basic theological tural marketing agencies, farm supply concept serves to ground cooperative economic cooperatives, and eventually the wheat pools practices in communities. would offer more economically democratic alter- natives to the conventional market system that was characterized by unequal exchange Empowerment (MacPherson 1979). Cooperatives on the Cana- dian prairies much like the Caisse Populaire in According to Gomez and Helmsing (2008), local Quebec sought to address an empowerment issue commercial activities, which include currency within the economic system through collective, systems, can affect the quality of communities democratic economic activities. through empowerment via greater economic George Keen, one of the leading builders of the opportunities. The democratic principle of one cooperative movement, visited the Canadian prai- member, one vote embedded within the coopera- ries regularly during 1922 and 1939. Keen tive business model provides a means to enact believed that all human beings have a fundamen- community participation within the economic tal interest in the preparation, manufacture, and system. Community members have the opportu- distribution of high-quality consumer goods sold nity to become more than just consumers within at fair prices. Keen’s consumer theory of cooper- the food system through their active participation ation de-emphasized the overproduction of goods in the cooperative firm. 6 Food Cooperatives in Canada

In addition to the democratic principle of individuals within a community to access food espoused by the cooperative model, the education, brings to light the issue of food security. training, and information principle also assists Food security is the availability at all times of community members in participating in the eco- adequate world food supplies of basic foodstuffs nomic system. McGregor (2005) argues that con- to sustain a steady expansion of food consumption sumer education helps people develop inner and to offset fluctuations in production and prices. power and social potential to challenge the status Allen (1999) would argue that the current food quo. This consumer education according to system is disconnected from the consumer, leav- McGregor (2005) cannot be unlearned and creates ing individuals and communities food insecure. a form of sustainable consumer empowerment. The organization of the current food system raises McGregor believes that enabling consumers to the issues of empowerment or ownership of the do something through skills development alone system itself, which leads us to discuss food does not empower them as long as they believe sovereignty. they have no authority to take action, i.e., an inner Food sovereignty is the right of each nation to perception of power. McGregor (2005, p. 440) maintain and develop its own capacity to produce sees empowerment as increasing the political, its basic foods respecting cultural and productive economic, and social strength of individuals and diversity. La Via Campesina brought this defini- groups that have been marginalized or excluded tion of food sovereignty forward in response to the from the main power structure in a society disempowerment of local farmers. La Via (including the marketplace and civil society in a Campesina is a movement of farm workers, peas- consumer culture). ant, farm, and indigenous peoples’ organizations Consolidation within the Canadian food sys- from multiple regions from around the world. La tem has disempowered and disconnected con- Via Campesina is very much like the cooperative sumers from the food system (Fresco 2009). movement, which seeks to provide a voice in the Cooperatives have sought to redress the lack of management of the food system through the dem- consumer empowerment through a combination ocratic principle. It is only through the develop- of educational programs and democratic partici- ment of a means to exert influence over a system pation for their members. This focus on empow- that an individual or community is truly sovereign erment harkens back to the origins of the over the system (La Via Campesina 1996). cooperative model and the Rochdale Pioneers as Foucault (1979, p. 136) outlined the change in well as the Desjardins. Both the Rochdale Pio- sovereignty from the “right to kill” to the ability to neers and the Desjardins sought to provide oppor- “seize, manage and exert influence over the living tunities for their community members to act conditions of individual bodies and whole within the economic system for the benefitof populations.” Cooperatives provide a means for their communities. individuals and communities to participate within Allen’s(1999) concept of community food the food system, through the cooperative princi- security (CFS) provides an understanding of ples, which allows communities to exert influence how entire communities have become over the system for the benefit of the community. disempowered by the food system and what This was evident on a mass scale in terms of the actions are needed to address the disempower- women empowerment achieved through disburse- ment. By relinking production and consumption, ment of agricultural microcredits by the Grameen it is possible to address the irony of food produc- bank, an initiative of Nobel Laureate Muhammad tion abundance within food insecure communi- Yunus (Boyatzis and Khawaja 2014). ties. Allen seeks to address this problem in which the current food production system is able to produce vast quantities of product, but excludes those who lack the financial means. The inability Food Cooperatives in Canada 7

Conclusion Fairbairn, B., MacPherson, I., Russell, N. (Eds.) (2000). Canadian co-operatives in the year 2000: Memory, mutual aid, and the millennium (2000). In University Cooperatives within the Canadian food system of Saskatchewan. Centre for the Study of Co-operatives offer communities the ability to act within the (Ed.). Saskatoon: Centre for the Study of system in a manner that is over and above simple Co-operatives, University of Saskatchewan. consumerism. While our discussion focused on Foucault, M. (1979). Discipline and punish: The birth of the prison. New York: Vintage Books. the democratic principle of one member, one Fresco, L. O. (2009). Challenges for food system adapta- vote as a means of empowering communities, tion today and tomorrow. Environmental Science and the guiding cooperative principles provide an Policy., 12, 378–385. understanding of economic activity beyond a sim- Gomez, G. M., & Helmsing, A. H. J. (2008). Selective spatial closure and local economic development: What ple return on investment. The focus on capital as do we learn from the Argentine local currency system? the driving force behind the development of the World Development, 36(11), 2489–2511. food system diminishes what should be the very Hardin, G. (1968). The tragedy of the commons. Science, purpose of the system, i.e., the development of 162, 1243–1248. Holyoake, G. J. (1893). The history of the Rochdale pio- food security and sovereignty for communities. neers, 1844–1892. London: S. Sonnenschein & Co. ICA – International Co-operative Alliance. (1995). Co-operative identity, values & principles. Retrieved Cross-References June 5, 2011, from http://ica.coop/en/what-co-op/co- operative-indenty-values-princples.com Keen, G. (1950) The birth of a movement: Reminiscences ▶ Agricultural Cooperatives: Thomas Gray of a co-operator. United Co- Operators of Canada ▶ Civic Agriculture: Amy Trauger Collection. ▶ Economy of Agriculture and Food: André MacPherson, I. (1979). The history of the Canadian Co-operative movement: a summary, a little historiog- Magnan raphy, and some issues. Retrieved September 1, 2012, ▶ Food Deserts: Daniel R. Block from www.socialeconomyhub.ca ▶ Food Security: Irene Hadiprayitno McGregor, S. (2005). Sustainable consumer empowerment ▶ Food Security in Systemic Context: Kirsten through critical consumer education: A typology of consumer education approaches. International Journal Valentine Cadieux, Renata Blumberg of Consumer Studies, 29, 437–447. Ostrom, E. (2000). Reformulating the commons. Swiss Political Science Review, 6(1), 29–52. References Pfeil, M. R. (2012). Food, justice, and economic coopera- tion. In Schaefer, J. (2013). Environmental justice and climate change: Assessing Pope Benedict XVI’s eco- Alkon, A. H., & Norgaard, K. M. (2009). Breaking the logical vision for the Catholic Church in the United food chains: An investigation of food justice activism*. – States. The Institute for Church Life: Lexington Books. Sociological Inquiry, 79(3), 289 305. Lanham, MD. Allen, P. (1999). Reweaving the food security safety net: Via Campesina. (1996). The right to produce and access to Mediating entitlement and entrepreneurship. Agricul- – land. Voice of the Turtle. Retrieved January 15, 2016, ture and Human Values, 16(2), 117 129. from http://www.voiceoftheturtle.org/library/1996% Boyatzis, R. E., & Khawaja, M. (2014). How Dr. Akhtar 20Declaration%20of%20Food%20Sovereignty.pdf Hameed Khan Led a change process that started a movement. The Journal of Applied Behavioral Science, 50(3), 284–306.