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Madagascar cooperative sector leaders learn about co-op support ecosystems during Germany visit

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From brewery and cheese-making co-ops to taxi co-ops, food co-ops, and cooperative banks, Germany’s Bavaria Region boasts a strong cooperative economy. In February 2023, a delegation of cooperative sector leaders from Madagascar got to experience this cooperative culture firsthand during a unique learning exchange trip organized by the German Development Agency (GIZ)-funded Adaptation of Agricultural Value Chains to Climate Change (PRADA) project with support from NCBA CLUSA’s Creating an Environment for Cooperative Expansion (CECE) project.

The CECE project, funded by the U.S. Agency for International Development (USAID) Cooperative Development Program (CDP), has leveraged the 6th Cooperative Principle (‚Äúcooperation among cooperatives‚ÄĚ) to provide many impactful learning exchange opportunities.

The goal of the German trip was to learn about the country’s cooperative movement, including different cooperative sectors and the support ecosystem. NCBA CLUSA’s CDP coaching coordinator and two cooperative leaders from a worker coop and livestock coop participated in the trip along with two government officials from the Ministry of Industry, Trade and Consumption (MICC) and the Ministry of Agriculture and Livestock and several PRADA project staff and leaders from PRADA-supported cooperatives.

The itinerary maximized the delegation‚Äôs time in the country and included attending BioFach‚ÄĒthe world’s largest trade fair for organic food and agriculture; discussions with Germany‚Äôs cooperative sector apex DGRV and the Cooperative Association of Bavaria; meetings with key government officials supporting cooperative development; and site visits to many different cooperatives in Germany‚Äôs Bavaria Region, including agriculture production coops, worker coops, and consumer coops.

As cooperatives play a major role in the Bavaria Region’s economy, the Madagascar delegation learned firsthand about the enabling factors contributing to their prominence and success. Key takeaways included the importance of legislation and policies for promoting cooperative sector growth and innovation; the importance of training programs for managers and auditors specifically for cooperative businesses; and the critical role of umbrella bodies and higher-tier cooperatives for advocacy, cooperative development, and service provision and guidance, particularly on topics such as taxation and audits, registration, and mergers.

As NCBA CLUSA‚Äôs CDP coaching coordinator Laza Rakotovao explained, ‚ÄúFor me, personally, it was during this trip that I fully understood the role and mission of umbrella organizations. The strength of Germany‚Äôs federations and the DGRV is respected by the State and visible in relation to the member cooperatives.‚ÄĚ

Other observations included the many types of cooperatives in various sectors that contribute to a robust cooperative economy and their unique ability to meet members‚Äô needs in times of crisis. As one participant noted, ‚ÄúHistorically, the cooperative movement in Germany was born out of an economic slump. Cooperatives meet the economic needs of their members, and they invest part of their profits to support members in times of hardship like during the COVID-19 pandemic.‚ÄĚ ‚Äď Fanja Raharimanana, worker-owner of ONI Cooperative.

Madagascar’s cooperative movement is still quite nascent and with a very limited support ecosystem. There are no sectoral federations or an apex body that advocates on behalf of cooperatives or provide critical services. There is little understanding of the cooperative business model and no formal cooperative education programs.

However, the cooperative movement within the country has gained momentum over the past several years with support from programs like NCBA CLUSA’s CDP and GIZ’s PRADA project. The CDP helped the government develop a national strategy for cooperative development in 2018, and over the past several years the cooperative law reform process has progressed through a gauntlet of drafts, reviews, revisions, and debates. The cooperative bill is now knocking on parliament’s door, and key stakeholders anxiously await its passage. Earlier this year, Madagascar passed its 2023 Finance Law, which for the first time ever, includes stipulations for cooperative businesses. The CDP and PRADA projects co-funded a critical cooperative taxation study which provided input for the updated Finance Law.

Since returning from Germany, the delegation has been discussing the next steps to put their learning into practice. In addition to advocating for the cooperative bill‚Äôs passing, cooperative leaders are considering umbrella structures and sharing ideas about how to better meet members‚Äô needs. Tahiry Sambehafa, president and founding member of MadaOmby Zebu cooperative, has aspirations of forming a federation of breeders‚Äô cooperatives and an apex that will champion the cooperative sector: ‚ÄúI dream that Madagascar will build an organization like DGRV that will be considered by political decision-makers in the years to come.‚ÄĚ

MICC‚Äôs Director of Entrepreneurship Promotion, Ir√®ne Andriamaneho, is optimistic: ‚ÄúCooperatives are being considered more than ever before in Madagascar, and I hope that we are now on the right track. The foundations of the cooperative environment are in place. We have a development strategy. For the first time, we have tax provisions for cooperatives, and very soon, fingers crossed new legislation.‚ÄĚ

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