Ukraine faces daunting hurdles in building co-operatives

Vitaly Zinovchuk doesn’t think much about new generation co-operatives.

He’s more concerned with trying to get the first generation up and running.

“We have plans to create 40 to 60 private local co-ops during the next three years,” says the president of the National Agricultural Co-operative Union of Ukraine.

Quickly, he smiles and corrects himself.

“Of course they will create themselves,” he said. “But we will provide technical assistance and consultations.”

Zinovchuk was in Canada last month to visit co-operatives, talk with co-op experts, do some research for a book about the role of co-operatives in the Canadian agricultural system, and maybe drum up a little business.

“I want to declare that we exist and are open for co-operation,” he said in an interview in his temporary office at the University of Saskatchewan’s Centre for the Study of Co-operatives.

“It’s attempts to convince Canadian agri-businesses to be more active in Ukraine. It’s not a concrete proposal to go into a certain region to do something, but … there are a lot of opportunities in Ukraine, for agricultural machinery, technology equipment and so on.”

There are a number of successful co-op projects by American, German and French companies, he said, but only one Canadian project is currently under way.

Zinovchuk said the fledgling Ukrainian co-ops can learn from their successful Canadian counterparts.

He said while Canadian co-ops debate such things as how to raise hundreds of millions of dollars to finance expansion and joint ventures, in Ukraine the issues are more basic, like explaining to people what a co-operative is.

Murray Fulton, an agricultural economist at the university’s co-op centre, said that watching the efforts now under way to set up agricultural co-ops in Ukraine can provide valuable reminders to Canadians about why co-ops were formed here.

“We can have a bit better understanding of actually how co-ops have formed by looking at what’s going on there now, because there are some similarities to what was going on 70 years ago here,” he said.

Fulton said the challenge of organizing a co-operative movement from scratch in these turbulent economic times is daunting.

“We think that we have some challenges ahead of us, in taking our co-ops and adapting them to this new global agriculture that’s coming,” he said. “They have to do the same thing and yet they’re stuck in a system that isn’t even where ours is.”

The Ukrainian co-ops will have to skip about 70 years of historical development and move right into the 21st century.

To make set-up even more difficult, Zinovchuk said co-operatives have a bit of a bad reputation in Ukraine. Many people see co-ops as an extension of the collective farms of the Soviet era.

“That is the main obstacle for developing of co-operatives,” he said. “That’s why we need to educate people that co-ops are a private business based on private property.”

The term co-op also was misused during the Soviet era, as unscrupulous people set up businesses outside the state-run system and called them co-operatives.

“They were of course profit-oriented business and had nothing in common with co-operatives,” Zinovchuk said, joking that even a shop selling erotic movies would call itself a co-operative.

“Many economic crimes were connected with this kind of organization.”

There are about 36,000 private farmers in Ukraine. So far, 23 agricultural co-ops have been registered under new laws passed in the summer of 1997.

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