ABOUT 800-million people in 100 countries are members of co-operatives of various types, says the trade and industry department.

Its estimate, citing the International Co-operative Alliance, is contained in a strategy document outlining government’s plans to promote all types of co-operative in SA. It envisages that co-operatives can reduce poverty, particularly in rural areas, and create as many as a million jobs.

The main purpose of a co-operative as an economic unit, the document says, is to promote its member-owners by rendering services rather than to maximise profits.

Factors that can give a co-op a comparative advantage over other types of enterprise or the public sector, it argues, are: economies of scale, economies of scope, bargaining power, member participation and motivation, membership value, representation of member interests, stability (through member risk sharing), joint innovation and legal protection (by joining a co-op small-scale producers get legal protection and limited economic liability).

Worker-owned co-ops can take various forms. Traditionally in industry or agriculture they are joint production units. Labour contracting co-ops offer joint services on a contractual basis, most often in public works, construction and forestry. Networks of individual entrepreneurs or microenterprises organise certain economic functions (eg. independent taxi drivers may organise a co-op to jointly operate control stations). Client-owned co-ops obtain goods or services for members' enterprises or households.

"In the context of high-cost bond housing that is out of reach of the poor, black women are coming together to build their own capital and to collectively seek government support to build decent and affordable houses for their members.

"The resulting rise in housing co-operatives and housing associations indicates that South Africans are taking back control of the housing development process. As food prices rise, communities are establishing collective bulk-buying schemes as a way to provide their members with quality goods at lowest prices. These schemes include stokvels and consumer co-operatives,” the document says.

Co-ops are mentioned in government’s black economic empowerment (BEE) strategy “because the model forms the most important aspect of BEE”.

Co-ops, says the trade and industry department, are a vehicle to achieve the objectives of BEE, enterprise development and rural development.

"The fact that in a co-operative every member is the owner spreads the sense of ownership to all members. The model gives a chance of ownership even to people who have never owned a business before,” the department says.