Consumer cooperatives are of two kinds: closed and open.
Closed cooperatives are those that only admit as cooperative members people related to the same company, union or occupation, which, in turn, usually offers the premises, facilities and human resources required for the operation of the cooperative. This can result in reduced autonomy of the cooperative, as these entities often interfere in its management.
Open, or popular cooperatives, are those that admit any person that wants to become a member.
Like in international cooperativism, in Brazil the first cooperatives were consumer co-ops as well.
Cooperativa de Consumo dos Empregados da Companhia Paulista (an employee consumer cooperative) appeared in the city of Campinas (SP), in 1887. Two years later, a Cooperative Economic Society was created in Ouro Preto (Minas Gerais). This was followed by Cooperativa dos Empregados da Companhia Telefônica, founded in the city of Limeira, (SP), in 1891. In Rio de Janeiro, then the Federal District, Cooperativa Militar de Consumo (Military Consumer Cooperative) appeared in the year 1894. Cooperativa de Consumo de Camaragibe was established in the following year in the state of Pernambuco.
Cooperativa dos Empregados e Operários da Fábrica de Tecidos da Gávea (cooperative of employees and workers of a fabric factory) was founded in 1913, led and inspired by Sarandi Raposo, also responsible for the founding of Cooperativa de Consumo Operária do Arsenal de Guerra (war arsenal workers consumer cooperative), both in Rio de Janeiro.
COOPFER - Cooperativa de Consumo dos Empregados da Viação Férrea (railroad workers consumer cooperative) was founded in the same year, in the city of Santa Maria, Rio Grande do Sul, under the inspiration of Manuel Ribas, who brought the cooperativist ideal to Brazil after a trip to Europe. COOPFER developed non-stop until 1964, and was a pioneer in multiple initiatives of a social nature, considered the largest consumer cooperative in South America.
At a time when there was no organized social security, COOPFER created a Pension Fund and set up its own hospital - Casa de Saúde - with the purpose of attending its cooperative members and their dependents. It provided medical and dental care as well as legal assistance. It developed a chain of primary schools along the railroads, known as "Escolas Turmeiras", which gave the children of railroad workers in the most hidden corners of Rio Grande do Sul the chance to learn to read and write. It founded an "Arts and Crafts" school at high school level, a pioneer in technical education, responsible for turning out good professionals, considered true jewels in the job market. It set up workshops for joinery, electricity, typography, lathing etc., where, besides qualifying technical manpower, it also rendered services to cooperative members through the manufacture of furniture, domestic equipment, overhauling of engines, sundry repairs, construction of housing and others.
COOPFER also built an industrial complex for backup: soap factory, coffee roasting and grinding, bakeries, biscuit factories, tailor´s workshop, butchers with their own abattoirs and pharmacies, meeting all the needs of its staff, which in its golden age attained around 18 thousand cooperative members.
As of 1960 consumer cooperativism was shaken to the roots, due mainly to three basic factors: sudden suppression of tax exemptions, especially of Value-added Tax - ICM; shortage of money for purchasing new goods, on account of inflation; and the appearance of large supermarkets, with much more developed technology.
These factors were so drastic that in 1984, the number of cooperatives was reduced to twelve percent of those existing in 1960, i.e., from 2,420, it plummeted to 292.
Lately, cooperatives of farmers have been opening consumer sections, with stores and supermarkets, to meet the requirements of cooperative members and even of society in general. The greatest challenge of this segment is located in urban centers, in the delivery of services to social classes. Consumer cooperatives need to pass on goods to cooperative members with favorable quantities, quality and prices, which can only be achieved if they make common purchases, like in Europe, where several countries got together in a single purchasing center.
The first agribusiness cooperatives were organized in Minas Gerais in 1907. João Pinheiro, State Governor, introduced his cooperativist project with the purpose of eliminating middlemen from agricultural production, the marketing of which was controlled by foreigners. Coffee was the focal point of his concerns and an exclusive section was created for the product, granting it tax exemptions and material incentives.
Agribusiness cooperatives also gradually appeared in southern Brazil, especially in communities of German and Italian origin, which were familiar with the European cooperativist system, having as their main divulger the Italian born Stéfano Paternó.
Agribusiness cooperatives are divided according to the types of product with which they work. Many are mixed, i.e., have more than one section: that of common purchases (for the purchase of inputs, fertilizers, seeds, tools, etc.) and that of common sales (sale of products of cooperative members).
Agribusiness cooperativism has already spread countrywide. It is the kind best known by Brazilian society, with a significant share in exports, which increments the Balance of Trade and, at the same time, supplies the domestic market with foodstuff. It renders a tremendous range of services - from technical assistance, storage, processing and marketing of products, through to social welfare and educational assistance for cooperative members. These days agribusiness cooperatives form the strongest segment of Brazilian cooperativism in economic terms.
One of the most dynamic branches of cooperativism in the past, brutally shattered since the mid-60´s and throughout the 70´s, credit cooperativism is once again seeking to occupy its space, in spite of all the hardships to which it is subject.
Everything began in 1902, in Rio Grande do Sul, under the inspiration of Jesuit Priest Theodor Amstadt who, familiar with the German experience of the model of Friedrich Wilhelm Raiffeisen (1818-1888), transplanted it here with tremendous success.
This model was preferably applied to small rural communities or small villages. It was based on the honesty of its cooperative members and basically operated with small farmers. It did not place importance on the capital of cooperative members.
Every financial transaction was performed through deposits, which received a low remuneration. Any person was allowed to deposit his or her savings. Reserves were created with any surpluses determined, in order to face times of uncertainty with more confidence.
This segment of cooperativism has achieved significant development in Rio Grande do Sul since its deployment, and even sports a central cooperative with another fifty individual affiliated cooperatives.
At the end of the 20´s of this century, a second credit cooperative model also came ashore. Also handled by the Catholic Church, and this time by laymen who, taking part in a Marian Congress in Rome, came across the model developed by Italian national Luigi Luzzati (1841-1927).
It differed from the German model as it required a low amount of capital up the admission of any cooperate member, and as its preferential audience consisted of hirelings, craftsmen and small businessmen, merchants or manufacturers.
Better suited to Brazilian conditions than the German model, the so-called popular credit cooperativism developed here at an amazing speed.
Between the 30s and mid-50´s, it is calculated that roughly 1,200 cooperatives of this model were created and attained a good stage of development. Its only great sin was not having pursued verticalization and not having created an antidote for a few soldiers of fortune who, particularly in large cities, sought to exploit the cooperatives to their own advantage.
From the point of view of Brazilian conditions, it might still be the ideal model for our country.
A third and last model of this segment arrived in the country at the very end of the 50´s. Still brought by Catholic influence, as the total responsibility for its deployment rested on the shoulders of a woman, who still continues to profess with the same conviction of her youth the religion she embraced, it was blessed with the decisive support of Dom Hélder Câmara, at that time assistant bishop of Rio de Janeiro.
This woman is called Maria Thereza Rosália Teixeira Mendes, and it was due to her grit, her fighting spirit and her insight into solidarism that the so-called Desjardian model, created by Canadian Alphonse Desjardins (1854-1920), was able to put down roots here, as in that phase of Brazilian life credit cooperativism no longer enjoying a peaceful life.
The old service of Rural Economics of the Ministry of Agriculture, a government agency in charge of licensing the operation of cooperatives, of supervising them, of intervening therein a and of dissolving them, resolved to suspend any operating license for credit cooperatives at the time when Therezita, as she was affectionately called, was starting to deploy the first cooperative along the lines of this model.
This gave rise to arguments and fighting, and although the license was not granted, some cooperatives were put in effective operation.
Later on the obstacle was removed and the so-called clandestine cooperatives were legalized. In mid-1962, a new restriction was established against credit cooperatives. Once again Therezita´s fighting spirit made itself seen and this model continued on its path.
A fleeting glimpse at/a brief look at the black September of Brazilian credit cooperativism, which covers the second half of the 60´s up to the beginning of the 90´s, bears witness to the quest for recreation of rural credit cooperatives. Having analyzed past experience, and aware that the rural universe would not be capable of sustaining the high interest rates that are charged by banking institutions, a Brazilian cooperativist by the name of Mário Kruel Guimarães commenced a process of very well defined objectives, in an attempt to create a true cooperative Rural Credit System in the country.
The rollout of this project began in the year 1981, and it was widely accepted in Rio Grande do Sul.
The States of Paraná and of Santa Catarina started to develop this segment in 1984. The States of Minas Gerais, São Paulo, Espírito Santo, Bahia, Mato Grosso do Sul, Mato Grosso and Goiás only started to deploy rural credit cooperatives two years later.
After the reflective process of analysis of its past behavior, rural credit cooperativism was reborn on secure bases and with a firm proposal that enables it to identify, at its very origin, any deviation that could hamper it in its development.
This fact has paved the way for an unprecedented level of development throughout the decade, in spite of the troubles experienced by the Brazilian economy in the same period, regardless of the enormous difficulty encountered.
This difficulty can be translated by the denial it is faced with in obtaining the same tools that are offered to the concurrent financial system.
Work cooperatives are formed by people related to a given professional occupation, with the purpose of improving pay and working work conditions in an autonomous manner.
This is an extremely comprehensive segment, as the members of any professional can organize themselves in work cooperatives.
Although there are records of Cooperativa de Trabalho dos Carregadores e Transportadores de Bagagens do Porto de Santos (Work Cooperative of Luggage Porters from Santos Port), founded in 1938 and still in existence, it can be said that this type of cooperativism practically developed as of 1960 and is currently experiencing a boom.
Work Cooperativism has been expanding with notable speed over the last few years. The vast majority (72.5%) of cooperatives were created as of l992.
The major challenge for the branch is the clear identification of its legal bases, both as refers to cooperative legislation strictly speaking, and especially in relation to what could cause any confusion, such as the demands of labor legislation, particularly C.L.T. (Consolidation of Labor Laws). The construction of correct legal limits to cooperativist action in the area of work will certainly strengthen its growth.
Having made an appearance almost 30 years ago, they are currently present in four different areas: medical , dental, psychological and of users The most powerful example of this segment is the cooperativism of doctors, organized by the UNIMED system, with singular cooperatives in the municipalities, federations in the states and one confederation in the national sphere. All told, 40% of the health care professionals from the country have opted to take this route.
Rural Energization and Telecommunications
This segment is comprised of cooperatives that aim to collectively render a given service to the members. In Brazil the most well known types are electrification and rural telephony cooperatives. Rural electrification cooperatives aim to provide the community with electric energy services, either by transferring this energy from concessionaires, or by generating their own energy. Some also open consumer sections for the supply of household appliances and of other utilities. Although rural telephony cooperatives have not exhibited satisfactory development, they have been occupying positions that would hardly be maintained by Public Utilities. Even with the obstacles created by the Government, these cooperatives have contributed significantly to avoid the rural exodus and to keep men in the countryside, improving their living conditions and augmenting the production of foodstuff. The appearance of rural electrification cooperatives occurred in two stages: before and after the advent of the Land Statute, enacted on November 30, 1964, which places special emphasis on the diffusion of rural electrification through the Cooperativist System. This solution arose because rural electrification is not a profitable venture, and consequently, fails to attract electric energy concessionaires. For this reason, the Earth Statute, in addressing the subject matter, appointed cooperativism a top priority means of dynamizing the rural electrification process. In this system it is the users themselves that gather funds from savings and loans for the investments, in order to develop the electric energy construction processes in the rural environment. Brazil´s first rural electrification cooperative was Cooperative de Força e Luz de Quatro Irmãos, now deactivated, located in what was then known as the District of José Bonifácio, currently the municipality of Erechim, in Rio Grande do Sul. It was founded in 1941, with the purpose of generating electric energy for the small settlement, the headquarters of a company - the "Jewish Colonization and Association" - the colonizer of this region, which put down roots there in 1911. These days the main representative of the segment in Brazil and in Latin America is COPREL - Cooperativa Regional de Eletrificação Rural do Alto Jacuí Ltda. (Regional Rural Electrification Cooperative), founded in 1968, with headquarters in the municipality of Ibirubá (Rio Grande do Sul), which has over 26 thousand cooperative members. Of the 5,200,000 rural properties existing in Brazil today, only 21% enjoy the benefit of electric energy. There are roughly 1,120,000 electrified rural properties, 420,000 of which by the cooperativist system, whereas 90% of the funds applied originated from the cooperative members themselves.
This segment is comprised of two types of cooperative: those formed by parents of students and those of students of Federal Agrotechnical Schools.
The Brazilian State has not managed to maintain school vacancies in its public network in the same proportion as the growth of the population of youths and children, and has not managed to offer standards of quality that meet up to the expectations of modern society. On the other hand, teachers are getting paid progressively lower salaries.
The private education network, in turn, charges such a high price for its services that not even the privileged middle class can pay the fees any longer.
The formal cooperativism of students parents arose on account of this difficult context. The main aim of this cooperativism is to build cooperative enterprises to make up for a deficiency of the State, cut the high costs of private schools and meliorate the level of educational quality.
Through the cooperative, parents build up the physical assets of the school and, as owners and users, manage the entire school process, starting with the hiring of pedagogues and specialists in the area of education.
This kind of cooperativism first appeared in Itumbiara, in the State of Goiás, in December 1987, and is now spreading around all the Brazilian states. Nowadays there are probably over one hundred cooperatives.
The role of the teaching cooperative is to be the patron of the school. The school should operate in accordance with the appropriate legal entities, be managed by hired specialists and oriented by a pedagogic council, formed by parents and teachers. The end product should stem from the exchange of ideas between these parties: preparation of the students to face, under better conditions, the challenges of the next century and to intervene as agents of history.
In the specific case of Teaching Cooperatives it is important to interpret the company much more from the sociopolitical and ideological point of view than from the economic point of view.
The common wellbeing of this associativist segment is the educational background of children and adolescents and this is not based on the assumption of profits or surpluses; its success will be measured in a totally different manner from the other economic activities associated with cooperativism.
Hence the parents are free from the dominion of the owners of the private education network and make up for a deficiency of the State.
The actual Federal Government already sees these cooperatives as important partners in the area of education and promises them support.
The cooperatives of Federal Agrotechnical School (EAF) students are a project of the Ministry of Education and Sports - MEC, and already exist countrywide.
With specific sets of rules and budgets, these schools select youths to learn and carry out agribusiness practices.
At these schools the students, which are either full boarders of semi-boarders, learn by doing, combing theory with practice, besides being useful to the school, providing it with food products. The surplus is sold by the students themselves through the cooperative.
This project of MEC is of an unmatchable greatness in the sphere of education of youths for the future. It is a healthy and extremely low cost project. Its existence and growth are even more important if we consider that Brazil is an eminently agricultural country, having an enviable portion of cultivable land.
The educational segment is a strategic lever for developing the other branches of Brazilian cooperativism.
This segment arose with the Law that created it, through BNH - National Housing Bank, which no longer exists, and the Federal Service of Housing and Urbanism, in 1964. The objective was to coordinate the action of government agencies and to provide guidance to private enterprise, stimulating the construction of houses of social interest and financing the acquisition of houses by the population, especially for people with an income in the middle and low brackets. INOCOOP - Institute for Guidance to Housing Cooperatives was created in order to advise these cooperatives, almost totally isolated from the other branches.
The so-called "housing cooperatives", as they are mainly organized these days, are purchasing pools for the construction of houses and not cooperatives, as their basic characteristic is their liquidation, as soon as the housing project is finished. Their existence in new forms, however, is of essential importance to the country, where housing problems are blatantly apparent.
Authentic housing cooperatives are already appearing within the self-management process, especially in the Federal District.