Evolution News

Breakdown Of Coop Stakeholders

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Shareholders and Shares

Management

Members

Board and Directors

Labourers

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Shareholders and Shares

Shareholders must be people of high morality. In cooperatives, voting rights should be on an individual basis and not on the basis of the number of shares a person holds. In capitalist countries shares can be purchased.  Democracy in capitalist countries is a farce because votes can be purchased and poor people cannot fight elections. [Source: PROUTIST ECONOMICS, QUESTIONS AND ANSWERS ON ECONOMICS 25 February 1988, Calcutta]

The board should decide the amount of profit to be divided among the members; that is, the dividend to be paid to each shareholder. [Source: COOPERATIVES, 18 February 1988, Calcutta]

The managerial staff body of the cooperative should only be constituted from among those who have shares in the cooperative

…For this, the total produce of the cooperative should be divided into equal parts — that is, fifty percent on wages for labour, and fifty percent for the shareholders of the land….

Cooperative managers should be elected from among those who have shares in the cooperative…

…To pay this dividend, initially the total produce should be divided on a fifty-fifty basis — fifty percent should be disbursed as wages and fifty percent should be paid to the shareholders in proportion to the land they donated….  [Source: PROUTIST ECONOMICS SOME SPECIALITIES OF PROUT'S ECONOMIC SYSTEM, June 1979, Calcutta]

Share allocation. “A record should be kept of the productive capacity of all the land included in the cooperative. Shares should be allocated on the basis of this productivity. For example, if a farmer has thirty acres of land of which fifteen acres are highly productive and fifteen acres are of low productivity, then his or her shares should take into account the differences in productivity. If some landowners do not want to work in an agricultural cooperative their land should still be included in the cooperative. They should also be considered as cooperative members and should get shares based on the size and productivity of their land. Of course, landowners who do not work in the cooperative will not be entitled to wages.” [Source: COOPERATIVES, 18 February 1988, Calcutta]

[Share ownership and inheritance]. Members who purchase shares in the cooperative should have no power or right to transfer their shares without the permission of the cooperative, but their shares may be inherited. If some cooperative members have no descendants, then their shares should pass on to their legally authorized successors who will become members of the cooperative if they are not already members. The reason for this policy is that it prevents capitalists from purchasing large numbers of shares in a cooperative and speculating in the market place. This type of economic activity can easily lead to a depression. [Source: COOPERATIVES, 18 February 1988, Calcutta]


6) Question: What should be the system of share distribution in cooperatives?

Answer: PROUT advocates the phase-wise socialization of agricultural land which should be managed by farmers cooperatives.

[1] In the initial phase of transition to cooperative management, land shares should be in the hands of those who are landholders. That is, initially the shares in agricultural or farmers cooperatives should be distributed on the basis of the land vested in the cooperative.

[2] When the cooperative system is fully implemented in the agriculture sector, there will not be any distinction between landholders and non-landholders, as all members of the cooperative will be collectively responsible for the management of the land. However, this stage can only be achieved after the proper psychological preparation of the people.

In the cooperative system there should not be any scope for interest earning shares; that is, there should not be profit earning shares in cooperatives. Rather, shares should be according to the production of the land.  If there are profit earning shares in farmers or agricultural cooperatives, then these shares will be sold in the share market, capitalists will buy the shares, the rate of share prices will fluctuate according to share market prices, and cooperatives will become commercial enterprises.

Similarly, in industrial cooperatives there should be dividend earning shares and not profit earning shares as in bank interest, otherwise these cooperatives will also become  commercial enterprises. If there are profit earning shares, the spirit of the cooperative system will be destroyed and cooperatives will go into the hands of the capitalists. So, there must not be any preferential shares in any farmers, producers or consumers cooperatives, only dividend shares. Shareholders with preferential shares earn a fixed amount of interest from their shares regardless of whether the enterprise makes a loss or profit. Preferential shares are like the sonja system in agriculture. In the sonja system, sharecroppers get a fixed amount from landowners when they initially agree to cultivate their land. This is given regardless of the amount produced by the sharecropper, even if there is crop failure. Dividend shares earn a dividend which is defined as a return on the basis of the net profit earned by the enterprise.    [Source: PROUTIST ECONOMICS, QUESTIONS AND ANSWERS ON ECONOMICS 25 February 1988, Calcutta]

Workforce and Worker Incentives. “The workforce in the cooperative system will be composed of the shareholding farmers and non-shareholding labourers. Both groups will benefit: the shareholding farmers will get regular salaries for their work plus a return on their shares, while the labourers will enjoy stable employment and favourable wages. [Source: COOPERATIVES, 18 February 1988, Calcutta]

In the second phase of implementing agricultural cooperatives, the economic holdings of the landowners should be brought under cooperative management. Only after all the uneconomic holdings in a village are brought within the scope of cooperatives should the economic holdings be brought under cooperative management. In this phase it will be easy to apply science and technology extensively in agriculture, increasing the amount of production. [Source: Proutist Economics, February 1982, Calcutta]

Management

There should be a two phase plan to introduce cooperative land management.

[1] In the first phase, all uneconomic holdings should be required to join the cooperative system so that they will become economic holdings. In this phase, cooperatives will only consist of those people who merged their land together to make uneconomic holdings economic. Private ownership will be recognized. For instance, one person may own one acre, another two acres and a third person three acres within the cooperative. Each cooperative member will be entitled to a dividend based on the total production in proportion to the land they donated to the cooperative. Each individual will retain the deed of ownership of their land, but agricultural activities will be conducted cooperatively.

[2] In the second phase all should be encouraged to join the cooperative system… [Source: PROUTIST ECONOMICS, QUESTIONS AND ANSWERS ON ECONOMICS 25 February 1988, Calcutta]

The managerial staff body of the cooperative should only be constituted from among those who have shares in the cooperative. They will be elected. Their positions should not be honorary because that creates scope for corruption. Managers will have to be paid salaries according to the extent of their intellectual expertise. In addition, the members of the cooperative may also employ their manual labour if they so desire, and for this they should be paid separate wages…

Cooperative managers should be elected from among those who have shares in the cooperative….

6) Question: What should be the system of share distribution in cooperatives?

Answer: PROUT advocates the phase-wise socialization of agricultural land which should be managed by farmers cooperatives.

[1] In the initial phase of transition to cooperative management, land shares should be in the hands of those who are landholders. That is, initially the shares in agricultural or farmers cooperatives should be distributed on the basis of the land vested in the cooperative. [Source: PROUTIST ECONOMICS SOME SPECIALITIES OF PROUT'S ECONOMIC SYSTEM, June 1979, Calcutta]

[2] When the cooperative system is fully implemented in the agriculture sector, there will not be any distinction between landholders and non-landholders, as all members of the cooperative will be collectively responsible for the management of the land. However, this stage can only be achieved after the proper psychological preparation of the people. [Source: PROUTIST ECONOMICS, QUESTIONS AND ANSWERS ON ECONOMICS 25 February 1988, Calcutta]

4 Phases of transitional period for the implementation of PROUT Cooperatives

[1] In the very first phase of establishing cooperatives, agricultural labourers, landless labourers, day labourers and sharecroppers will come within the scope of cooperatives. From this phase, the education system in rural areas should be thoroughly reformed. To arouse the cooperative spirit among the people, there should be extensive training and education, but moral education must take precedence over everything else so that people do not give greater importance to individual interests at the expense of the collective interest.

In the second phase of implementing agricultural cooperatives, the economic holdings of the landowners should be brought under cooperative management. Only after all the uneconomic holdings in a village are brought within the scope of cooperatives should the economic holdings be brought under cooperative management. In this phase it will be easy to apply science and technology extensively in agriculture, increasing the amount of production.

[2] In this second phase, all should be encouraged to join the cooperative system.  The net profit will be increased in favour of the labourers working in the cooperatives so that twenty-five percent of the net profit will go to the landowners and seventy-five percent to the labourers. Here labourers means those who employ either their physical or psychic labour in the cooperative. The landowners will benefit in two ways. First, as landowners, they will get twenty-five percent of the net profit of the produce from the land, and secondly, if they are part of the cooperative labour force, they will be entitled to a portion of the seventy-five percent of the profit distributed among the cooperative members.

In this phase, there must be emphasis on the rapid and large- scale establishment of agrico-industries and agro-industries so that the rural population will be dependent more on industry than on agriculture. With the development of such industries, there should be simultaneous emphasis on educational and cultural reforms to further develop the cooperative mentality of the rural population.

From this second phase, production for consumption will increase the standard of living of the rural population, and the basic criteria of social security — that is, the minimum requirements of life — must be arranged for the people. [Source: Proutist Economics, February 1982, Calcutta]

As far as possible, agriculture, industry and trade should be managed through cooperatives. In these sectors of the economy private ownership should be abolished in stages. [Source: PROUTIST ECONOMICS, DECENTRALIZED ECONOMY – 1, 16 March 1982, Calcutta]

Properly managed cooperatives are free from the defects of individual ownership. Production can be increased as required in cooperatives due to their scientific nature. [Source: PROUTIST ECONOMICS SOME SPECIALITIES OF PROUT'S ECONOMIC SYSTEM, June 1979, Calcutta]

Members

Each cooperative[1st phase ]  member will be entitled to a dividend based on the total production in proportion to the land they donated to the cooperative. Each individual will retain the deed of ownership of their land, but agricultural activities will be conducted cooperatively. [Source: PROUTIST ECONOMICS, QUESTIONS AND ANSWERS ON ECONOMICS 25 February 1988, Calcutta]

Cooperative members should form a board of directors for each cooperative.  The board should decide the amount of profit to be divided among the members; that is, the dividend to be paid to each shareholder. [Source: COOPERATIVES, 18 February 1988, Calcutta]

The board of directors should be elected from among the cooperative members – their positions should not be honorary. Care should be taken to ensure that not a single immoral person is elected to the board. All directors must be moralists. [Source: COOPERATIVES, 18 February 1988, Calcutta]

In addition, the members of the cooperative may also employ their manual labour if they so desire, and for this they should be paid separate wages. Thus, cooperative members can earn dividends in two ways — as a return on the land given to the cooperative and on the basis of their productive labour. For this, the total produce of the cooperative should be divided into equal parts — that is, fifty percent on wages for labour, and fifty percent for the shareholders of the land.

Cooperative managers should be elected from among those who have shares in the cooperative. Members of agricultural cooperatives will get dividends in two ways — according to the amount of land they donated to the cooperative, and according to the amount of their productive manual or intellectual labour. To pay this dividend, initially the total produce should be divided on a fifty-fifty basis — fifty percent should be disbursed as wages and fifty percent should be paid to the shareholders in proportion to the land they donated. Local people should get first preference in participating in cooperative enterprises. [Source: PROUTIST ECONOMICS SOME SPECIALITIES OF PROUT'S ECONOMIC SYSTEM, June 1979, Calcutta]

Cooperative members should elect a board of directors which will be able to supervise every aspect of production, thus increasing the out-turn.   [Source: PROUTIST ECONOMICS, COOPERATIVE PRODUCTION, 16 May 1988, Calcutta]

If some landowners do not want to work in an agricultural cooperative their land should still be included in the cooperative. They should also be considered as cooperative members and should get shares based on the size and productivity of their land. Of course, landowners who do not work in the cooperative will not be entitled to wages.” [Source: COOPERATIVES, 18 February 1988, Calcutta]

[Share ownership and inheritance]

Members who purchase shares in the cooperative should have no power or right to transfer their shares without the permission of the cooperative, but their shares may be inherited. If some cooperative members have no descendants, then their shares should pass on to their legally authorized successors who will become members of the cooperative if they are not already members. The reason for this policy is that it prevents capitalists from purchasing large numbers of shares in a cooperative and speculating in the market place. This type of economic activity can easily lead to a depression…

…If this arrangement is followed, cooperative members will not need to go to court or get involved in litigation as the zamindars of the past used to do. As all members of the cooperative will be from the same vicinity or members of the same village, they will all know each other, and thus there will be little difficulty  in deciding who should be the legally appointed recipient of the shares. The members of the cooperative themselves will be able to decide who can claim the right of inheritance to the shares owned by the deceased members. Disadvantaged or minor landowners will also benefit in the cooperative system. A widow, a disabled farmer, or a minor boy or girl who owns some land will derive an income from the land based on the number of shares in the cooperative. In the system of private ownership their land would have remained unutilized, and they would have remained poor. Therefore, even if cooperative members are unable to do any work, they will still be entitled to an income from the total profit of the cooperative. [Source: COOPERATIVES, 18 February 1988, Calcutta]

[2] When the cooperative system is fully implemented in the agriculture sector, there will not be any distinction between landholders and non-landholders, as all members of the cooperative will be collectively responsible for the management of the land. However, this stage can only be achieved after the proper psychological preparation of the people. [Source: PROUTIST ECONOMICS, QUESTIONS AND ANSWERS ON ECONOMICS 25 February 1988, Calcutta]

But while building up the cooperative system, two factors should be kept in mind — first, the high quantity and quality of production should be ensured through the application of science and technology while keeping production costs at a minimum; and secondly, the cooperative members must be encouraged to attain maximum psychic and spiritual development at their highest level in exchange for their minimum physical labour.

[3] In the third phase of implementing the cooperative system, one hundred percent of the net profit will be distributed among the cooperative members. The former landowners will  identify fully with the cooperatives in this phase. [Source: Proutist Economics, February 1982, Calcutta]

The problem of a floating population and immigrant labour will not occur in the cooperative system, as cooperative members will have to be local people. Floating labourers should have no right to be cooperative members – migratory birds have no place in cooperatives — as they can disturb a whole economy…[Source: COOPERATIVES, 18 February 1988, Calcutta]

Economic planning must start from the lowest level, where the experience, expertise and knowledge of the local people can be harnessed for the benefit of all the members of a socio-economic unit. [Source: PROUTIST ECONOMICS, DECENTRALIZED ECONOMY – 1, 16 March 1982, Calcutta]

Economic certainty will create increasing interest and involvement among the cooperative members, and as the local people will be confident of their economic security, they can wholeheartedly accept the cooperative system. [Source: PROUTIST ECONOMICS, DECENTRALIZED ECONOMY – 1, 16 March 1982, Calcutta]

The members of the cooperatives should decide the policies concerning such things as agricultural production, price fixation and the sale of agricultural commodities. Local people should not only control cooperative bodies, but supervise all activities related to the local economy. [Source: PROUTIST ECONOMICS, DECENTRALIZED ECONOMY – 1, 16 March 1982, Calcutta]

Board and Directors

Cooperative members should form a board of directors for each cooperative.  The board should decide the amount of profit to be divided among the members; that is, the dividend to be paid to each shareholder. [Source: COOPERATIVES, 18 February 1988, Calcutta]

The board of directors should be elected from among the cooperative members — their positions should not be honorary. Care should be taken to ensure that not a single immoral person is elected to the board. All directors must be moralists. [Source: COOPERATIVES, 18 February 1988, Calcutta]

Cooperative members should elect a board of directors which will be able to supervise every aspect of production, thus increasing the out-turn. The maxim of agricultural cooperatives should be: “More production, more dividends and more bonuses.”

Labourers

In addition, the members of the cooperative may also employ their manual labour if they so desire, and for this they should be paid separate wages. Thus, cooperative members can earn dividends in two ways — as a return on the land given to the cooperative and on the basis of their productive labour. For this, the total produce of the cooperative should be divided into equal parts — that is, fifty percent on wages for labour, and fifty percent for the shareholders of the land.

Cooperative managers should be elected from among those who have shares in the cooperative. Members of agricultural cooperatives will get dividends in two ways — according to the amount of land they donated to the cooperative, and according to the amount of their productive manual or intellectual labour. To pay this dividend, initially the total produce should be divided on a fifty-fifty basis — fifty percent should be disbursed as wages and fifty percent should be paid to the shareholders in proportion to the land they donated. Local people should get first preference in participating in cooperative enterprises. [Source: PROUTIST ECONOMICS SOME SPECIALITIES OF PROUT'S ECONOMIC SYSTEM, June 1979, Calcutta]

The maxim of agricultural cooperatives should be: “More production, more dividends and more bonuses.” Labourers will earn wages and bonuses. Wages will be earned according to the amount of labour done by the labourer, while bonuses should be paid on the basis of the net per annum profit of the cooperative according to the amount of a labourer‘s net wage.             [Source: PROUTIST ECONOMICS, COOPERATIVE PRODUCTION, 16 May 1988, Calcutta]

Distribution of Production/ Dividends

According to PROUT, in the first phase of agrarian revolution private ownership of land within the cooperative system will be recognized. People should have the right to employ labour for cultivation, but in such cases fifty percent of the total produce should be distributed as wages to the agricultural labourers who work in the cooperative. That is, the owners of the land will get fifty percent of the total produce and those who create the produce through their labour will get the other fifty percent. This ratio must never decrease — rather it should increase in favour of the agricultural labourers who work in the cooperative. [Source: PROUTIST ECONOMICS, QUESTIONS AND ANSWERS ON ECONOMICS 25 February 1988, Calcutta]

[1] In the very first phase of establishing cooperatives, agricultural labourers, landless labourers, day labourers and sharecroppers will come within the scope of cooperatives. From this phase, the education system in rural areas should be thoroughly reformed. To arouse the cooperative spirit among the people, there should be extensive training and education, but moral education must take precedence over everything else so that people do not give greater importance to individual interests at the expense of the collective interest…

[2] In this second phase, all should be encouraged to join the cooperative system.  The net profit will be increased in favour of the labourers working in the cooperatives so that twenty-five percent of the net profit will go to the landowners and seventy-five percent to the labourers. Here labourers means those who employ either their physical or psychic labour in the cooperative. The landowners will benefit in two ways. First, as landowners, they will get twenty-five percent of the net profit of the produce from the land, and secondly, if they are part of the cooperative labour force, they will be entitled to a portion of the seventy-five percent of the profit distributed among the cooperative members…

… n this phase, the landowners will not be able to employ individual labourers, landless labourers or sharecroppers for the cultivation of land, so it will be more beneficial for them to participate fully in the cooperative system. [Source: Proutist Economics, February 1982, Calcutta]

“The workforce in the cooperative system will be composed of the shareholding farmers and non-shareholding labourers. Both groups will benefit: the shareholding farmers will get regular salaries for their work plus a return on their shares, while the labourers will enjoy stable employment and favourable wages.

There are two types of non-shareholding labourers working in agricultural cooperatives — those who are permanent labourers and those who are casual or contract labourers. The permanent labourers will get bonuses as incentives besides their wages, while casual labourers will only get wages for their labour. Those labourers who give the greatest service to the cooperative should get the greatest bonuses. Skilled workers should get paid more than unskilled workers. This will be an incentive for all to become skilled labourers and to work harder. Bonuses should be paid according to the amount of wages which should reflect both the skill and productivity of the labourer.” [Source: COOPERATIVES, 18 February 1988, Calcutta]

Cooperative Labour and Employment

The problem of a floating population and immigrant labour will not occur in the cooperative system, as cooperative members will have to be local people. Floating labourers should have no right to be cooperative members — migratory birds have no place in cooperatives — as they can disturb a whole economy. Howrah district, for example, produces sufficient crops in a season to feed the local people for seventeen months, but due to immigrant labour the produce is consumed in six and a half months. The elimination of the floating population will also protect the social life of the cooperative from the possibility of adverse social influences….

…In modern India there are two distinct areas — one of surplus labour and the other of deficit labour. That is why people usually migrate from surplus labour areas to other regions. However, the very concept of surplus labour is a relative one. Where adequate opportunities

for proper economic development have not been created, there is surplus labour. Labour becomes surplus in all undeveloped socio-economic areas.  When surplus labour moves to another region, the undeveloped area has every chance of remaining undeveloped forever.

According to PROUT, wherever there is surplus labour, top priority must be given to creating employment for all local labour. This policy will raise the standard of living of the local people and the whole area. If this policy is not implemented and surplus labour is allowed to move to other regions, and the Marxist policy that, “those who sow shall reap” is followed, then all tea plantations, coal mines and other natural resources will be controlled by outside labour.  Local people will lose control over their natural resources. This will create a very dangerous situation.

PROUT’s opinion is that local people must have first priority in employment opportunities. As long as there is not full employment for local people, continuous efforts must be made until all local labour is fully employed. In addition, no fresh developmental programmes will be started until there is further demand for labour. Scandinavian countries did not commence any new development schemes for this reason.

While creating employment for the local people, consideration must be given to local sentiments. For instance, many areas of India are regions of surplus intellectual labour.  People in this category are ready to work as clerks for the very low wage of thirty rupees a month, but they are not prepared to work as porters and earn more money.  The problem of surplus intellectual labour is a special one and should be solved in a proper way. In these areas industries which require less manual labour should be established. Thus, different development schemes will have to be adopted in different socio-economic units depending upon time, place and person. [Source: COOPERATIVES, 18 February 1988, Calcutta]

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