Booklet 1: Rural Social Enterprises

Booklet 1

Rural Social Enterprises

René Mendoza with Fabiola Zeledón, Hulda Miranda and Elix Meneses

 

Violeta Parra (1917-1967)

“Who are you looking for?”, they asked Violeta when she was traveling from one rural community to another in Chile.
-“Someone I do not know, but who has something very important to give me,” she responded. Violeta was a songwriter and artist, she was looking for songs that people in the countryside composed and tended to be left isolated and forgotten. She looked for them for the folklore of her beloved Chile.

(More on Violeta, for a short biography see: https://www.youtube.com/watch?v=G6ZfavenS9A)

 

Who are we looking for? Someone we do not know but who has “something very important” for their community. It is on the basis of “something very important” that we build the means that can be written in stone, that give identity to their communities. In this booklet we recount how we started to get off the traditional path of cooperatives, as we found “something very important” in the people in the communities themselves.

1.    Genesis and brief evolution

In 2018 we concluded that the cooperative path needed other forms of organization. Like Violeta, we decided to go into the communities; since there is no better wedge than a stick, we went into the very communities where some cooperatives came from. We were looking to understand what was the “musical score” that made cooperatives, intermediaries, farmers, churches, storefronts, projects dance. To try to change the dance, we had to understand what the music was, because the dance depends on the music.

To the extent that we got inside and interpreted the “musical score”, we awoke to new realities and possibilities. So, in November 2018 with our own resources we decided to test it out with a new store, then with a roaster…From that combination, study and experimentation, in 2019 we were learning what worked, preparing the rules that would guide us. What most made us wake up? Understanding that, in contrast  to what is repeated in traditional cooperatives, that members do not want to make contributions nor do they have money, we found that people want to contribute resources if they know where their resources are going and how they are put to work, if they receive earnings for their resources, and if they feel part of that process-that they can roll along with planet earth, like the character Mafalda, created by that great Argentinian cartoonist Quino (Joaquín Salvador Lavado, 1932).

Table 1. Basic data
Shareholders (people) 18
Total amount (C$) 260,833
Initiatives 3 stores, 3 roasters, 1 wholesaler, coffee purchasers and sale of roasted coffee

In May 2020 we took another leap, we improved the rules, we added new shareholders, the amount in córdobas increased, more initiatives took off and were strengthened, we improved the organization of the initiatives, more investments were made…See Table 1.

2.    Idea

If a community organizes, nothing can take it off the good path; if it organizes, it does a “musical score”, it does it in alliance with people from outside the community. So the eggshell seems to break as a new life, the baby chick, pushes out.

One way of organizing is that we might have several initiatives in a group that are functioning, profitable and benefit the community. For that purpose, people can buy as a minimum 1 share which is worth 1,000 córdobas. With these shares stores, roasters and bakeries emerge and provide ever more better services. People from other places can also  buy shares, with this we increase our resources and are building another community. In this way the shareholders are the first people to go and make purchases in the stores and to seek roasting services, provide oversight over the initiatives, provide ideas…

Here we learned another lesson: if in order to organize Rural Social Enterprises (RSE), the shareholders are from the communities and from outside the communities, more than just contribute resources, both contribute ideas and legitimacy to the RSEs. Note: prior to 2020 we used to call them “initiatives”, we started to call them RSEs in 2020, in harmony with the Social and Solidarity Economy approach, but adding the word “rural” to it, to give it a distinctive touch.

3.    Organization of the RSEs

Figure 1 shows this network of initiatives. Money, products and services move in them like ocean waves; they are visible, we see them. Under the waves there is another current that we do not see, but we feel, they are the shareholders, interest in caring for one another, friendships that cross over walls, affection, community roots and a different path so that anyone can improve.

Store 2 appears in the figure, because we already have Store 1 and Store 3 in another two communities. The bakery, roaster, buying and selling of coffee, wholesaler and other initiatives are around this Store 2, in addition to other initiatives (e.g. buying and selling  basic grains). These initiatives are connected with one another, they are in the same place and in the same community- this is the key to our success. For example, if a person comes with their coffee to have it roasted, on their return they buy bread and other products in the store, the baker buys eggs in the community itself to make bread. In this way, nearly all of the community is part of the initiatives –“nearly”. The wholesaler is a reseller, because it buys products for the initiatives at wholesale prices, buys products in the communities themselves to sell them in town, transfers products from one store to another, buys products in one community for the other communities, and the profits benefit all of the shareholders.

How specifically are the RSEs organized?

  • Each person who runs a roaster, makes bread, administers a store, sells coffee or is responsible for a wholesaler, registers information about each economic transaction in an honest way.
  • The supervisor each month reviews that record of information in each initiative. Then visits a sampling of clients, studies the local market, and captures the needs of the population, as well as new opportunities.
  • The results of the supervision are sent to each shareholder on the 10th of every month; there is a mural in each initiative (roaster, bakery, store…) that has the prices of the services, the report of the supervision and data for the community. Honest information benefits all the communities.
  • Every 3 months there is an assembly of shareholders where, in addition to being informed about the finances of each initiative, they evaluate the quarter, review the goals for the next quarter, and the profits are redistributed. In the annual assemblies all the initiatives are studied, the investments for the year are planned, the most outstanding initiatives win awards for their order, registration of information, generation of profits and largest number of customers.
  • Each shareholder is committed to the success of each initiative, which is why they report to the community, oversee the initiatives, provide suggestions to improve it, and make their families have a better life.

The effects of these initiatives are seen in 4 distinctive elements of the RSEs: equitable distribution of earnings or surpluses, informational transparency, community democracy and gender and age equity (50% or more youth). In terms of the distribution (see Table 2): from net earnings, 10% is for equipment maintenance and assets that deteriorate; 20% goes to a social fund, a fund that we will save throughout 2020 and that in the annual assembly on May 8, 2021 we will define its use; 20% reinvestment is added to each share in favor of the shareholders, in other words their shares will increase with the reinvestments; and 50% will be provided as cash to each shareholder in accordance with the amount of their shares.

 

Table 2.Equitable distribution
From gross earnings From net earnings
30% is to pay the person who runs the RSE 10% equipment maintenance of the RSEs (refrigerators, roasters, grinders) 20% social fund 20% reinvestment fund 50% individual distribution

Informational transparency is the fact that each shareholder, customer and community in general has access to information about the initiatives. The shareholders have the right to know about the finances of the RSEs. The customers have a right to know the price composition, proper weighing and the elements to be good customers, The community has the right to know the rules under which the initiatives are functioning, as well as their financial results.

Democracy is the fact that most of the shareholders are from the community itself. Each administration of each RSE provides honest information. Good supervision. Quarterly assemblies. Each shareholder watches over the progress of each RSE.

Gender equity is that fact that 50% of the shareholders are women, that that is expressed in the amount of their shares. Then, going beyond that formality, we want the RSEs to contribute to freeing up women´s work time, in such a way that they can take on new responsibilities in other RSEs or other activities in their own homes. In age equity, even though we want people of all ages to participate, including children and the elderly, in particular we want the youth to feel themselves to be the motor of these RSEs, as Yader Meneces said, “The older ones do not detach themselves from the old cooperatives that do not value them, they do not believe in us; but we the youth we are asserting ourselves, this store and roaster belongs to us the youth.”

4.    Concluding

We are building a new culture based on the good that each person has within them. To the question about who she is looking for, Violeta Parra responded, “Someone that I do not know, but has something very important to give me.” In the communities where the RSEs are developing, the RSEs are like the songwriter Violeta, and each person has “something very important”. Each RSE wants to receive it, and at the same time wants each person to find inside themselves that “something very important.” For this purpose The RSEs are emerging for this reason, and need to “be cooked on a low fire.”

This booklet, and the next ones, are texts that accompany what the RSEs are experiencing in San Juan del Río Coco, Waslala and Matagalpa. We call them RSEs, which includes community stores, community roasters, collective bakeries, cooperatives and associations.

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