Happy International Credit Union Day to one and all!

As we’ve mentioned here, here, and here ICU Day is celebrated across the globe throughout the credit union community and is a great way to promote the credit union difference, especially in today’s economic climate. To help celebrate, we thought it would be a good idea to highlight ICU Day resources to help your credit union share the message.

Feel free to select some or all of these and share with your members and staff via Twitter, Facebook, email and even on your credit union’s website! And don’t forget to leave a comment about how your credit union is using these resources or other ways you are celebrating International Credit Union Day.

Cheney video for CU staff

We shared the video message from CUNA’s CEO Bill Cheney to credit union members the other day. Credit unions and CU organizations responded by posting the video on their websites and sharing with their members. Now we’d like to share Mr. Cheney’s ICU Day video greeting for credit union staff! Be sure to share this with your staff.

Young & Free videos

Young & Free spokesters from across North America created some awesome videos to help spread the word about International Credit Union Day. They set the following six credit union attributes to music:

1. Membership is open to all
2. Members call the shots
3. Rates and fees should benefit members
4. Credit unions are just as accessible as banks
5. Financial education should be free and available to all
6. Giving back to the community is a priority

How cool is that? The music videos include an orignal rap, a Lady Gaga tribute, and a sweet Journey-inspired tune:

Article for your Baby Boomer members from Plan It

The credit union financial education site aimed at Boomers preparing for retirement has their own article covering International Credit Union Day. You can learn more about Plan It here. Be sure to check out the following example of a credit union using Plan It to share this positive message with their members:

The Disclosures music video: Building a Better World

Our friends Christopher Morris and Chad Helminak of The Disclosures pay tribute to International Credit Union Day with their song and music video Building a Better World. What’s really cool is that The Disclosures recruited credit union employees from across the nation to supply video clips of credit union people singing portions of the song!

The band is encouraging credit unions and friends of credit unions to share the song to raise awareness of the positive impact credit unions have around the world.

Article to share with your Gen Y members from MoneyMix

MoneyMix, the Gen Y personal finance site for credit unions, has an excellent article about International Credit Union Day. Subscribers have been sharing this article via Twitter. Check out the article here and don’t forget to learn more about MoneyMix here.

The International Credit Union Day Facebook page

Have you visited or “liked” the International Credit Union Day Facebook page? If not, you should! You’ll get updates about ICU Day from WOCCU, CUNA, and other credit union organizations you can share with your members through Facebook, Twitter, on your credit union website, or through email!

September ushered in changing fall foliage, football, and plenty of excellent credit union articles. Selecting the top 10 must-reads was no easy task, but we at CUNAverse believe the following list delivers the best content from across the internet. As always, we highlight important credit union articles from a variety of sources, including The Wall Street Journal and USA Today.

Did we overlook an article? Please share your thoughts by leaving a comment!

Facebook: Bank Transfer Day Generates Pro-CU Comments

The Facebook page for Bank Transfer Day, Nov. 5, is garnering many comments that are favorable to credit unions.

Credit Unions: A Cheaper Banking Option

With banks doing away with free checking and tacking on more fees, you may be able to get more bang for your buck with a credit union.

Your Money: Act to Avoid Bank Services Fees

Banks are awash in cash, despite the fact that they’re paying pennies in interest. And increasingly, customers are being charged for services that used to be free.

BofA Debit Fee Shows Interchange Cap a Blow to Consumers: CUNA

As most credit unions continue to offer free debit card services, banks are just beginning to apply sometimes hefty fees to the popular service.

Ensure FFIEC Compliance with Risk-based Authentication

The Federal Financial Institutions Examination Council (FFIEC) recently released a supplement [pdf] to its “Authentication in an Internet Banking Environment” guidance, originally published in 2005.

Federation Creates Foreclosure Intervention Toolkit for CUs

The National Federation of Community Development Credit Unions (Federation) has recently completed a new “Credit Union Foreclosure Intervention Toolkit” to help credit unions combat the foreclosure crisis in their communities.

Data Breaches Top List of Fraud Threats

Data breaches have overtaken the theft of physical assets as the No. 1 fraud type, with most data theft occurring in the financial services industry, according to Ken Otsuka, senior risk consultant for CUNA Mutual Group. Here are 6 steps to avoid devastating financial, reputation, and legal risks.

WOCCU Launches Intl. Year of Co-Ops Online Platform & Resources

The United Nations earlier this year announced 2012 as the International Year of Cooperatives (IYC), a time to recognize the contributions of cooperative enterprises worldwide, including credit unions. World Council of Credit Unions (WOCCU) recently launched a special section on its website to provide a platform for credit union organizations to share ideas about cooperative services and ways to celebrate the U.N. designation.

CU Execs Must Serve Only One Board, NCUA Says

The National Credit Union Administration’s (NCUA) management official interlocks rule prohibits members of a credit union’s management team from serving other nonaffiliated depository organizations, NCUA Associate General Counsel Hattie Ulan said in an agency legal opinion.

Enhance Your CU’s Investment Portfolio

Credit union leaders should set aside personal investment biases and change their investment styles to build a solid investment portfolio, two MEMBERS Capital Advisors analysts told attendees at CUNA Mutual Group’s Online Discovery Conference.

The third Thursday every October has marked International Credit Union Day each year since 1948. On this day, credit unions around the world celebrate their impact locally and abroad as not-for-profit financial cooperatives.

Why do they do this? Because credit unions from Philadelphia to the Philippines participate in a global financial cooperative movement with a unique structure and shared principles. With these, credit unions have the power to change people’s lives and are set apart from all other financial institutions.

It’s important for credit unions to celebrate this credit union difference during International Credit Union Day, especially during the current economic climate. Doing so reaffirms the positive impact of people helping people and introduces why credit unions are different from other financial institutions to those unfamiliar.

Service 1st Federal Credit Union in Danville, PA planned a full week of community service projects to celebrate 2010’s International Credit Union Week.

CUNA is proud to promote International Credit Union Day and support credit union celebrations–both large and small–across the United States. There are many examples of how credit unions have shared this event with their members and their community and dozens of ideas for how to host your own celebration.

For example, a recent News Now article highlighted the 2011 plans for South Dakota’s East River FCU and Stage Employees FCU in Las Vegas.

Stage Employees FCU members service representative Colleen Hermann shared in the article how even a tight budget won’t stop her credit union from using signage and small giveaways to tie her credit union to the larger cooperative celebration.

Mechelle Johnson, President/CEO of East River FCU explained in the article how they plan to use International Credit Union Day as an opportunity to thank members with a shred-it day and an open house, communicate the credit union difference with activity books and t-shirt giveaways, and help their community through a canned food drive.

We want to know: how does your credit union plan to celebrate?

Share your celebration plans by September 30 by either commenting on this post, posting to the ICU Day Facebook page or send your plans to ICUDay@cuna.coop and you’ll be entered to win a free ICU Day Celebration kit, a $198 value! Remember to include copies of promotional materials and photos of decorations and staff in their ICU Day finest.

Celebration Kit Includes:

ICU Day 2011 promo materials

• Large posters (5) to decorate the branch
• Stuffer/brochures (500) to explain the credit union difference and introduce 2012 as the International Year of Cooperatives (IYC)
• Skittles (1 case of 250 packets) to treat members on Oct. 20
• Tattoos (1 bundle of 200) to reward young ones making deposits during Oct. and the 2012 IYC

The winner will be announced Oct. 4 on Facebook and Oct. 5 in the free ICU Day Update e-newsletter (sign up today)

If you’ve already shared your plans…GREAT! Then you’re already entered.

Thank you for helping to show credit union members around the country how credit unions build a better world!

From: Sarah Arthurs M.Ed.

Some of us are of the Dragon Tales generation. We either watched Dragon Tales (a cartoon for 3-to-7 year olds) as kids, have children who have watched Dragon Tales, or maybe even sat with grandkids and flew to Dragonland.

One of the dragons has two heads, Zak and Wheezie. As you can imagine the plot often involves their having differences of opinion and the two needing to come to a common decision.  Zak is the calm and tidy one, while Wheezie is more excitable and carefree—known for saying “LOOOOOVE IT” when she approves of something.

It is my observation that the credit union community has a lot in common with Zak and Wheezie; we are like a two-headed friendly dragon.

One of our heads is our established, institutional, hierarchical nature with obligations commitments and structures.  All good!  Our other head is our grassroots beginnings, our member driven agendas, our democratic infrastructure and commitment to socially progressive community friendly values.  Also all good!

From the one head we get stability, resources, infrastructures, from the other we get energy, ideas, relevance and responsiveness.  One provides the answer to the question HOW, the other the answer to the question WHY.

As we look toward the International Year of Cooperatives we need to benefit from the contributions of both of our heads. This can happen through the use of web, social media, and in-person network and strategy sessions.

There are a number of internet crowd-sourcing platforms we can use to harness the power of social media and ask our members, staff, management, and directors how they would like to use the IYC to raise the profile of credit unions as well as celebrate and expand the contributions that we make to our communities.  A successful web platform would empower users to make suggestions, develop ideas, and vote for their preferred ideas.

Crowd-sourcing through social media allows us—in a manner concurrent with our member focus—to begin engaging our members in the IYC experience. It also allows us to demonstrate our commitment to democracy and the input of members by involving them in the process of determining what we might do. Most importantly we can benefit from the wisdom, creativity, and ‘on the groundness’ of members and front line staff.

In-person networking and strategy sessions are a good way to move from the idea generating stage to action plans, timelines, and collaborative partnerships.  Through social media we can enable the two heads of our friendly dragon to collaborate and benefit from the unique and complimentary assets of each. We can enjoy both the “LOOOOOVE IT” factor and the infrastructures and resources of our established organizations.

And where does the Detroit Robocop sculpture fit in?  In just 6 days citizens and friends of Detroit created the idea of the Robocop sculpture, shared it through social media, and were able to find enough resonance to raise more than the $50,000 project required.

Just imagine what we as Credit Unions could do to make the International Year of Cooperatives a significant experience for Credit Unions and the communities we support as we benefit from both of our heads.

Sarah Arthurs M.Ed., C.Psych. is Director, First Calgary Savings; Director, Credit Union Central of Alberta; and a member of the Prairie Sky Co-housing Co-op.  Send Sarah an e-mail at sarah.arthurs[at]prairiesky.ab.ca

In this, the second part of a two-part series, Sarah Arthurs’ outlines her ideas for how the credit unions and cooperatives can make the most of the United Nations’ declaration of 2012 as the International Year of Cooperatives. Please read the first post describing her thoughts on the opportunity presented in 2012.

To support this process I would like to offer some ideas for the consideration of the cooperative and credit union community.

Under 40 Friendly

Whatever we do, we need to make it under-forty friendly (at least! Probably under-twenty would be better!)  Our initiatives need to be in the social currency of the next generation.

• We need to use social media such as Facebook, Twitter and other digital media I don’t even know about because I am over 40.
• We need to use the reality show model (e.g., Dragon’s Den) to engage new members, to encourage new cooperative ventures and tell our story. Of course this would need to be done with a cooperative twist where everyone is treated with respect and all participants get value from their participation.
• Our initiatives need to be inclusive and participatory… perhaps with voting opportunities for the public.
• We need celebrity participation.  We live in a culture where celebrities often lend credibility to and fuel social change initiatives. For Canadians how about Rick Mercer as a spokesman for our year? He did a great job with the One Ton Challenge.
• It needs to be fun.  This is often accomplished by linking social change initiatives with sports, music or the arts.  We could have a bike tour across the U.S. or Canada with participation by co-op and credit union members.  We could have “Coopapaloooza’s” – music festivals with a message.

Legacy projects

As we think about “legacy projects” let’s broaden our thinking beyond books and investment funds . . . of course intellectual and financial capital of all kinds is important.  Equally important and a strength of the cooperative movement is our ability to create and leverage social capital—the relationships between people and the connections across organizations.

A bias toward mutually-supportive interactions is built into the structure of our organizations with the democratic model of member-owned credit unions, worker-owned cooperatives and social co-ops.  The events and initiatives of the International Year of Cooperatives need to create opportunities for the further development of social capital.

The legacy of 2012 can be new collaborative relationships between organizations fueled by trust, similar values, shared accomplishments and mutual appreciation.  In other words let’s do innovative projects with new partners so part of the legacy of 2012 is increased social capital within the cooperative community.

Local Autonomy

One of the guiding principles of the cooperative movement is local autonomy.  Our uniqueness is rooted to some degree in a structure which has tried to keep decision-making power and responsibility within its geographic location and as close to its member-owners as possible.

Co-ops and credit unions have often grown out of a group of neighbors who recognize a common challenge or opportunity.  These neighbors gather and generate a synergistic response using the cooperative structures.  The cooperative structure lends itself to bottom-up rather than top-down leadership.

The co-op movement is filled with engaged participants including directors, member-owners, CEOs and employees with a sense of ownership for their organization and the capacity to be leaders.  This leadership capacity has often been developed through their training and experience in the cooperative world.

In taking advantage of the United Nations 2012 International Year of Cooperatives it would be a huge loss not to use processes which give lots of freedom, permission, and support and indeed are dependant on as much local grassroots involvement as possible.

What if each city or rural area had a steering group of representatives from local co-ops, credit unions or utility coops  brainstorming how they can use this opportunity?

In Canada there could also be a steering committee with representation from provincial organizations.  In Alberta this could include Alberta Central and SACHA, among others.  And at the national level, The Canadian Cooperative Association has a committee with representatives from Cooperative organizations like The Cooperators and Mountain Equipment Co-op.

If credit unions and cooperatives are in a passive mode waiting for others to act, their leadership will not be awake to considering the opportunities afforded by the International Year of Cooperatives.

Those organizations and leaders will be given the space to own this opportunity creatively, releasing the energy and possibility inherent in the International Year of Cooperatives if they are challenged with questions such as:

• How can the United Nations International Year of Cooperatives help your organization meet its strategic goals?
• How would you like to take advantage of this opportunity?
• Who would you like to work with?
• What are your first steps?

It is time to change our BKS rating! We have a story to share. The story of a model which is democratic, local and sustainable . . . a story which the world needs to hear now!

Sarah Arthurs M.Ed., C.Psych. is Director, First Calgary Savings; Director, Credit Union Central of Alberta; and a member of the Prairie Sky Co-housing Co-op.  Send Sarah an e-mail at sarah.arthurs[at]prairiesky.ab.ca

The United Nations has declared 2012 the International Year of Cooperatives

This is the first in a two-part series from Sarah Arthurs, Canadian credit union and cooperative professional. Look for her second post in the coming days which outlines Sarah’s ideas on how the credit union and cooperative community can make the most of the International Year of Cooperatives.

Over the past two years I have had the huge privilege of attending a number of credit union and cooperative conferences where we received the wisdom of world renowned leaders from outside of the cooperative world.  The recurring themes from these leaders were:

Where have you been all my life? Why haven’t I heard of you before?

As part of their preparation to address the Canadian Cooperative Congress or the World Credit Union Conference they had researched co-ops and credit unions and were blown away by the history, integrity and capacity of the cooperative model.  They say:

This is good news! Why is it not out there?

Well, as a psychologist, I have indulged myself in the consideration of this question.  I have frequently posed it to my credit union colleagues in formal and informal groups. Why aren’t we more out there?  Some suggested explanations include:

• We are ambivalent about our cooperative identity.  We are afraid it might make us look “Mickey Mouse”, not in the same league as other financial institutions. We are concerned that folk will be turned off by non-mainstream elements.
• We don’t have the shareholder imperative to maximize the bottom line through rigorously promoting our brand or products.
• By virtue of the nature of cooperative ventures, we attract people who are team players and not self-promoters, so we are less likely to blow our own horn.
• Our energy is going into doing the work, not talking about it; so we continue to operate under the radar.

Whatever the cause we continue with our BKS rating—Best Kept Secret!

But now, with the United Nations declaring 2012 the International Year of Cooperatives, we have been given permission—indeed we are encouraged—to blow our horn and tell our story.  We are challenged to share the scope and potential of the cooperative model with our neighbors, colleagues as well as with other businesses and institutions.

This is a unique and time-limited opportunity which would assist cooperatives of all kinds in Canada, the United States and throughout the world to advance their cause.  It would allow us:

• to reach out to a younger demographic;
• to create legacy projects of all kinds;
• to raise our profile locally, nationally and internationally;
• to empower local partnerships and inspire new collaborations.

More to come in Sarah’s next post, including several ideas for how the cooperative and credit union community can share their story with the world.

Sarah Arthurs M.Ed., C.Psych. is Director, First Calgary Savings; Director, Credit Union Central of Alberta; and a member of the Prairie Sky Co-housing Co-op.  Send Sarah an e-mail at sarah.arthurs[at]prairiesky.ab.ca

Andrew McLeod

From Andrew McLeod, communications specialist for the National Cooperative Business Association (NCBA). Learn more about him and his trip to Mozambique here in his first CUNAverse post. 

My big trip is over. And although I’ve had a long weekend (and a very long flight) to digest what I’ve seen in Mozambique, I know that I’m only beginning to grasp the work being done there by NCBA’s CLUSA International program. 

After all, how can I hope to summarize something that has been developing for 15 years, and which now employs several hundred people? I spent less than a week there. While I think I grasp the program’s significance, I am humbled by the challenge of describing it. 

I’m reminded of a trip I took last fall to visit Mondragon, the massive Basque system of worker cooperatives that now employs well over 100,000 people and is one of Spain’s largest enterprises. At the time, I wrote, “Trying to understand Mondragon is like trying to understand Belgium or something; really you can only begin to do it by living there for a year or three.” 

I’m not saying that CLUSA’s work in Mozambique is as significant as Mondragon, but I do believe it is close to that: More than 80,000 farmers have better access to resources and markets, and there are promising signs that CLUSA’s work has contributed to the creation of what may be a sustainable development model for Africa and the world. 

And by “the world” I do mean to include the United States. 

Shortly before I went to Mozambique, I had a chance to speak with Papa Sene, a longtime CLUSA staffer now based in Ghana and serving as CLUSA’s overall coordinator for Africa. He talked of a “CLUSA methodology” that is based on providing questions rather than answers, and focusing on what people have rather than what they need. I’ve done enough co-op development in the United States to instantly see these insights as tools I could have used. 

Mozambique’s struggles are obviously more intense than ours in the U.S., but we are more alike than different: Farmers struggle to sell their crops and watch their kids move into overcrowded and expensive cities. The poor are denied access to credit or charged usurious rates (although at least Mozambique seems to have avoided the scourge of payday lenders). Cheap imports and corporate dominance distort the economy and prevent the creation of vibrant local markets. And – I have to add – co-ops sometimes miss opportunities to support each other through the principle of cooperation among cooperatives. 

Similarly, Mozambique’s solutions look much like ours, as people who are excluded from economic opportunities help each other out. Farmers benefit from pooling to purchase inputs and market produce. Financial co-ops provide credit and control to members. Young people take an interest in farming once they are shown a way it can actually work. Ideas are percolating about how to build on past successes and create linkages to support a vibrant cooperative movement. 

As I described in last week’s posts, there are lots of reasons for hope in Mozambique, despite its underdevelopment and poverty. Not only is CLUSA making progress toward addressing immediate economic needs; it is helping to mentor an independent and self-generating cooperative movement. This is essential, because once Mozambique is up and running CLUSA would be able to shift its attention to another target, applying the lessons learned. Even more intriguing, Mozambican cooperators would be able to do the same thing, perhaps with their neighbors in Zimbabwe. 

The most tantalizing part of CLUSA Mozambique is the extent to which its work is building local capacity. I can’t overemphasize the importance of that piece: One of the most challenging things about cooperative-based economic development is that it is not possible to give people a co-op. They have to want it and build it themselves. CLUSA hasn’t answered all the questions around this key challenge, but its work is an important contribution to the ongoing study of how cooperative development can be extended. 

Can we move from the level of helping start individual co-ops, to helping start co-op associations, to actually helping start entire national cooperative movements? I’m not certain this can be done, but I think that Mozambique is a key place to look for answers. 

Postscript: 

I’m grateful for the opportunity to take this trip, and want to thank everyone who made it possible – both the staff in our D.C. office and especially the folks in Mozambique – without your work I wouldn’t have had much to report! I also want to thank CUNAverse for the chance to blog about the experience so its readers can hopefully gain something useful from my little adventure. This gave me a good opportunity (and discipline) to record my thoughts regularly, which will be instrumental in the next phase of writing a report for the next issue of the Cooperative Business Journal. Finally, thanks to everyone who read and commented. 

Read previous “On the Road with NCBA” posts: 

1. On the Road with NCBA: Meet Andrew
2. On the Road with NCBA: View from the Center (of Mozambique)
3. On the Road with NCBA: View from the Outskirts
4. On the Road with NCBA: Strength in Numbers
5. On the Road with NCBA: Cooperation, Women and Youth

The Caixa das Mulhere de Nampula has a small office and a big impact on its members lives.

Note: this post was delayed by a general telecommunications outage. No phones, no internet, no nothing. The lights are on.

Mozambique needs general economic growth. But that growth needs to be as broadly distributed as possible to have the maximum impact on quality of life. So we must pay attention to how development engages with the needs of women and young people, who are sometimes excluded from economic growth.

Today I met with two groups that are focused on these issues: a women’s savings cooperative, or caixa, and the organizers of more than 100 agricultural youth clubs.

Caixa is a Portuguese word corresponding to the Spanish caja and the French caisse. It literally means “case” or “box” and has a distinctly cooperative meaning in this context: All members put their money in the same container.

My meeting turned out to be with eight leaders from both governance and management, which was rather startling. Caixa das Mulheres de Nampula is a caixa for women in Nampula, a city of about a half-million that is also home to the national office of NCBA’s CLUSA International program.

The caixa’s nearly 2500 members have collectively saved over $215,000, and currently have more than $81,000 in outstanding loans. For perspective, Mozambican GDP per capita is $933, one of the lowest in the world.

Caixa Mulheres was started in 1994 as a rural women’s organization. They gave shared loans then to support women’s farming groups. The caixa’s focus shifted as members moved to town and urban interest spread. Now loans are now only granted to individuals.

The Mozambican business context seems to be more based on independent ownership. Even farmer associations are geared toward strengthening individual farmers, and there have been few if any urban examples of formal collaboration among urban entrepreneurs. I heard no sign of the concept of a worker co-op in our discussion.

Around 2002 the name was changed and rural members were encouraged to join other caixas, which are organized into a network of 45 caixas in more than half of Nampula province’s districts. Those caixas collectively have more than 11,000 members –women and men – with $675,000 in outstanding loans. Some other provinces have caixas, but my source at the network told me that specifically rural groups are rare. These groups have generally decided not to become cooperatives, preferring to focus on microfinance.

However, Caixa Mulheres is now working with CLUSA to become a modern co-op under the new law that CLUSA helped pass. They believe they have outgrown their current structure.

They are already thoroughly cooperative in practice. They have an annual general assembly, which is typically attended by 200-300 members. At this gathering, the members elect leaders to one-year terms on three bodies: In addition to the conseil de dirrecao (board of directors), they also directly elect a financial council and the “assembly table,” which is in charge of organizing and promoting the next general assembly. The general assembly even elects the officers of these bodies if I understood correctly, although I have a hard time picturing that process.

My second meeting was with two coordinators of youth clubs supported by CLUSA. Maria and Firoza each supervise the program in half of Nampula province’s 14 districts. The program, run through a multi-faceted USAID program called SCIP.

There are more than 3000 youths, aged 12 to 24, organized into 109 clubs. These are often linked with a farmer association that provides an advisor. Club members may join an association when they turn 18, but must then leave the youth club. The clubs teach conservation farming and association functions, as well as doing other activities like soccer and HIV education. Two members of each club are selected for doing more outreach, providing leadership development.

Each club farms a small common demonstration plot, usually about 100 square meters located near a school or other central location. The produce grown is sold at the local market, and profits are used to buy seeds for the next season.

Here is where it gets intriguing, at least to me: They are developing a process for selling produce to local schools and hospitals. I think it’s a pretty positive step to give youths a chance to feed their peers and those under medical care. It strikes me as a huge boost to self-esteem and a chance to tangibly tie education to the advancement of the whole community – community development through individual development.

Mozambique has the same essential problem as the United States. Family farm succession has broken down, so conscious efforts are needed to train and motivate young farmers. The consequences of this breakdown may be more pronounced in Mozambique, where hungry-looking kids roam around looking for odd jobs or handouts. But the same force can be seen in the U.S., where rural communities are collapsing and driving youths into cities.

I smell a potential youth exchange program.

One of the most inspiring parts of this trip has been discovering the common cause that is shared by Americans and Mozambicans. The details are certainly different, but I see shared themes of finding ways to cooperate and meet our needs. These needs are both individual – like entrepreneurs’ access to credit – and collective – like developing the next generation to keep society moving forward.

Maybe I’m stretching here, but that’s how I see it.

From Andrew McLeod, communications specialist for the National Cooperative Business Association (NCBA). Learn more about him and his trip to Mozambique here in his first CUNAverse post.

Yesterday I got a look at the grassroots of NCBA’s CLUSA International program. These are the associations formed by a few dozen individual farmers, and the second level “forums” through which associations band together to do work that is beyond the capacity of a single association.

The typical forum involves hundreds of farmers, putting them in a position to reach markets that would be well out of reach for an individual with a small plot and no vehicle. But these too are limited in a global market filled with transnational corporations.

This morning I picked up the story with a visit to IKURU. This is a trading company partly owned by 29 forums, representing more than 200 associations and 20,000 farmers. This is all not terribly different from the federated structure found in many U.S. agricultural co-ops.

Each association sends a delegate to its forum, which in turn chooses a delegate to send to the annual general assembly of IKURU. There, five farmers are elected to the board of directors, which meets quarterly and also includes two representatives from GAPI and Oxfam NOVIB, which together own most of IKURU. Although the farmers currently contribute only 14 percent of the company’s equity, they have control of the board.

About 80 percent of IKURU products are sold domestically. However, one of the services provided is certification for fair trade and organic, which brings a premium for the 20 percent that is exported through groups like the U.K.’s Twin Trading. IKURU also provides research and development, as well as supply of seeds and processing of outputs.

IKURU's cleaning operation

Because IKURU has aggregated the produce of many farmers, it has some leverage to seek help from organizations like Twin and Root Capital. The way the system works is that Twin makes a contract to buy a certain amount, which can be taken to Root Capital as a sort of collateral. Since IKURU’s founding in 2003, annual sales have grown to $1.4 million.

Still, IKURU’s biggest problem is cash flow. Farmers face two problems in the world of finance, which aren’t automatically solved by aggregation: Crops are seasonal, so there are times of no production and therefore no income. More challenging, the expense of farming comes long before the product is ready to be sold – and even longer before it actually is sold and payment is received.

One worrisome effect I heard from Forum Netia yesterday is that IKURU has not bought product that it was expected to buy, leaving Netia with more than 4,000 tons of grain and beans sitting in a warehouse. There are only about two months left before this harvest is too old to sell.

IKURU’s manager Moises says that they need at least $300,000 or more to get to the next level. Getting this formidable amount is complicated by Mozambican law, which prohibits international transfers of more than $5,000. So at least 60 separate loans would be needed.

CLUSA’s work has also addressed another obstacle facing farmers: the threat of aflatoxin contamination. This is a fungus commonly found on groundnuts or corn, which can cause serious liver damage. It is especially hazardous to people infected with hepatitis B or HIV, both of which are common in Mozambique. To identify and fix production problems that cause contamination, CLUSA was a partner in establishing a lab at Lurio University, known as UniLurio. Typically, testing has cost $150 and taken three weeks or longer, but this lab cuts the cost by 76 percent and reduces the wait time to a matter of hours.

Collecting samples to send to the lab

The lab is not certified, but it does provide preliminary results. This has greatly helped IKURU by identifying problems before the shipping process starts. And it has helped the people of northern Mozambique by reducing the prevalence of this hazardous toxin in their food supply.

UniLurio has attracted the attention of the World Food Program, which has provided $100,000 toward expanding the lab. That would facilitate WFP’s Purchase for Progress program and lay the groundwork for certification and expansion into other types of testing.

IKURU and UniLurio have a symbiotic relationship, in which the trading company provides the bulk of the lab’s business while the lab helps improve the quality of product. Together they have opened markets that individual farmers previously had no way of reaching.

PS: I just got word that Donn Teske – a Kansas Farmers Union volunteer for the NCBA/CLUSA Farmer to Farmer program – is blogging about his trip to advise cooperatives on the other side of Africa. He has way more interesting border-crossing stories than I do, and if you want a whole different glimpse into the wide world of CLUSA, check it out.

After my previous post describing Mozambican cooperation at the national level, I am now going to zoom in to the very local.

CLUSA directly employs 120 people here, and indirectly supports the work of as many as 500 by training and funding staff of groups like Save the Children. CLUSA is reportedly one of the largest and most effective NGOs in Mozambique.

Today I was given an overview document that starts out like this:

CLUSA has been present in Mozambique since 1995…Today, CLUSA manages 9 agricultural programs in Mozambique, assisting 83,546 farmers to produce, process and sell groundnuts, sesame, cashew nut, soybeans, cotton, maize and beans…CLUSA Mozambique’s mission is the promotion of these communities’ intellectual, economic and social wealth through cooperative principles and a network of sustainable and viable rural cooperative businesses.

Good stuff, no?

Too big to be a garden, too complex to be a farm. New tomatoes mark the leading edge.

To find out how it looks at the ground level, we visited two groups of farmers.

The first was a brand-new association called Terra Natal. I’m not really sure what I was expecting, but it definitely wasn’t what I saw. We pulled off the highway, parked the car by a mud-brick house with corn and cassava drying on racks, then walked down a short trail that opened out into the most amazing vegetable garden I’ve seen in a long time, anywhere. And even after that, it took a while to grasp that it was basically a scaled-up version of a North American organic garden, using local herbs for pesticides.

The crops were cabbage, tomatoes, collards, onions and carrots; chosen for their nutrition value as a way of increasing food security. These crops are grown both for consumption and for sale. In all, I estimate it was about a half-acre, farmed by 14 men and six women –including their vice president, who couldn’t have been much older than 20 and was working with a conked-out baby on her hip. She beamed with confidence during the round of introductions.

The most amazing thing was that they had cleared this former scrubland in the last three months, and had raised a vibrant garden despite a drought that had reduced the nearby river to a series of excavated holes. Even more impressive, they had done this despite getting the seeds late and each member having the distraction of their own gardens.

One more sign of progress is that they are showing signs of adopting the unfamiliar new techniques as their own. They have a member who is in charge of teaching technique and making sure everyone pulls their weight. Another member leads the effort to teach nutrition and hygiene to their neighbors.

The second group was a second-level structure, called Forum Netia. It was made up of nine local associations (three of whose delegates were absent because the telecom problems prevented them from getting word of the change of date to accommodate our schedule).

The warehouse and headquarters of Forum Netia is now surrounded by the racks of a new major market.

The manager gave a presentation of the year’s totals, which were impressive. Each association ranges from 29-53 members, with a total of 396 members (108 of whom are women).  Collectively, they have grown 3559 tons of milho grain, 1533 tons of beans, 1288 tons of sesame, and 62 tons of peanuts. They are currently negotiating with the World Food Program to sell their remaining stock through the Purchase for Progress program.

They have not been a co-op so far, due to the term’s socialist baggage. But they are interested in the new law that establishes modern co-ops as autonomous organizations. This forum’s members want to engage in more commercial activity, so they are interested in converting to a model that allows for profit.

This is already a fairly remote area, far removed from the capitol in the nation’s southern tip. And from what I’m hearing the people don’t get to Nampula much, let alone to Maputo. Portuguese is a second language to them. They are also generally illiterate (at least until CLUSA gets its adult-educating hands on them). So any concepts of global economics are likely to be pretty hard to convey.

Still, they are the backbone of Mozambican society. So one of my main questions at the end of this day is whether and how a process of consciousness-raising might add social depth to the already profound physical changes that are happening.