Nour and I visited Cooperativa Bandera in Cuernavaca and yesterday Cooperativa Tlahuica in Tepoztlan.
Both cooperatives have similar modes of operating and similar visions as far as I can tell. Don Pedro Romero director of Bandera who co-founded the cooperative 50 years ago, also gave the impulse to transform the Tlahuica organization into a similar cooperative in 2001. They also form the group COSEM (Consejo de cooperativas de Morelos), which used to count 3 other members who broke apart.
In Tlahuica we spoke with Julia San Martin Elisanto, who is head of the department of education. At Cooperativa Bandera we spoke with Pedro Romero and on another occasion with Armando, who works at the store.
The credit unions
They have a credit union: one must pay a certain amount to become member, and the rate at which you deposit as well as buy from the coop store determines how much you may borrow from it. At both cooperative the interest rate is below 2 percent; at Tlahuica it is 1.8 percent. Armando borrowed money to buy his nice rimless glasses at 5000 pesos. He had not saved much money, just a small percent of his salary each month, nor did he buy much from the store (though he worked there, he said he finds it inconvenient because he lives elsewhere in Cuernavaca and has no car); he was allowed to borrow that amount because he had worked for 14 years without borrowing much.
Tlahuica started as a credit union in 1991 called Unión de Tlahuica. At that moment, its founders did not know about the cooperative system. When the Fox administration passed the infamous Ley de ahorro y credito popular in 2001, which regulated the cajas populares, Unión Tlahuica became Cooperativa Tlahuica, and a consumer cooperative as well as a credit union
Mrs. Elisanto laments that the law regulated the number of members as well the amounts that the institution can lend. It imposed the Impuesto a los Depósitos en Efectivo (IDE), a tax on cash deposits which applies in all banking institutions in the event of a deposit exceeding 15,000 pesos. Exempted from the tax are non-profit legal persons. The law then reduced the tax status of caja popular to that of any for-profit banking institution, in this case a small mercentile bank, that should be placed under the supervision of the Comision Nacional de Bancaria y de Valores. These regulations were deemed necessary in part because the some cajas could launder large amounts of money from the narcotrafficants, for example. Some cajas, like the nearby Coop. Tepoztlan, welcomed the law. One of its directors, Salvador Diaz Lopez, said that it was good because it prevented fraud; on another occasion he mentioned that it marked a division between Coop. Tepoztlan and ALCONA (Allianza cooperativista Nacional) who fought against the law juridically by establishing that the law was unconstitutional. Indeed, the law was viewed as an imposition by ALCONA and many others, including Coop. Tlahuica. In fact Mrs. Elisanto denounced Coop. Tepoztlan for its support of the law. This law strongly weakened the “movimiento cajista”. Many cajas had to shut down, most being in small rural towns where they were only alternative for credit to usurers with up to 20 percent interest rates. Mrs. Elisanto suggested that there was a division between those who supported the law and those who stood against it. It is reasonable to infer that the law was and is a factor of division and polarization within the solidarity economy movement, perhaps between its moderate and radical elements.
So, in 2001, by becoming a consumer cooperative, it could avoid certain of the regulations and preserve the non-profit status. I wonder, what regulations did it then avoid? And, what regulation does Marin’s “cooperativa integral” (which once was and currently is not a legal status, is technically illegal) fall under, and which does it escape?
It also now does not function as a regular credit union because it relies on a system of “ayuda mutua”: when one wishes to borrow money, one paired oneself with another, the lender, most often an acquaintance, who sets the time frame, and is held responsible for enforcing it.
Mrs. Elisanto says that most people borrow to invert, for medical emergencies and educational costs.
These sell products to their members at reduced prices. Bandera runs a relatively large store, down from three a few years ago (the other two were too expensives because they rented the space). Tlahuica runs two stores, one in the center of Tepoztlan, and one on its outskirts, closer to Tepoztlan’s rural populations.
Both cooperatives sell their products with a small margin of profit, smaller than other stores, to their members upon presentation of a membership card. This small “incremento” is called “aportación a la manutención”, or contribution to maintenance. All quotas which are not spent by the cooperative on projects (elaborated by the assembly) are returned to the members.
Tlahuica has seasonal promotions during which they are sold at wholesale prices. Tlahuica does not sell to non-members; because we were coming in solidarity, they sold us honey and water. We bought a bottle of water at 9,50 pesos instead of the normal 11 pesos.
Mrs. Elisanto says that Tlahuica sell the basics, food and products for the home (soaps, detergent etc.), to inculcate, she says, “the ethics of non-consumerism”. Both mostly sell products from big international and national brands. It also sells some products from its members: the avocadoes, tomatoes and cucumbers, and honey. The honey is sold by a member who works at a honey-producing cooperative. It also sells sandals and clothes from a cooperative in Tepoztlan. However these links are only individual-based and are made unsystematically at the request of a member; there exists no partnership between cooperatives as organizations.
Mrs. Elisanto agreed that in the future producer cooperatives and local and member producers should be privileged as providers of goods. However, as yet the cooperative must refuse many offers from members to sell their goods, because she says that most people shopping there are attracted to brands. It seems that membership in a consumer cooperative does not necessarily signify a minimal sense of consumer ethics as it does in the US. It is not often a sense of social responsibility that draws people to become members. The head of the department of education believes that it must be developed a posteriori in courses and assemblies. She says that most people become members because they hear that they can thus buy products for lower prices and borrow money at lower interest rates.
In accordance with the law (Ley General de Sociedades Cooperativas), they hold annual, regular ordinary assemblies.
Interestingly, both hold “seccional” or partial assemblies at which they share information about its financial state and manage its expenses, elect the board of directors, the “directivo”, and elaborate new projects. Bandera has approximately 5000 members; Tlahuica has 1700. They divide themselves into smaller groups to encourage better participation from all its members and further dialogue. Pedro Romero encouraged Tlahuica to imitate Bandera in this respect.
Tlahuica divides itself in 8 to have groups of about 200 people.
Both are mostly composed by members of the community. Tlahuica only includes people living in Tepoztlan, because they are more easy to track down, more trust-worthy and more susceptible to buy at the store.
Bandera mostly is composed of people living in and near Cuernavaca. Armando, a member who has worked at the store for 14 years, said that he is acquainted with most of the 5000 members. They celebrate annual assemblies as well as parties. He says that he is unmarried, and that the majority of the members are women.
Unlike Bandera, Tlahuica holds annual courses to teach the principles of cooperativism and encourage trusting relationships between its members. Mrs. Elisanto who organizes those courses identifies this as a feature of the cooperative that best distinguishes it from a capitalist institution, as well as from a nearby credit union, Cooperative Tepoztlan, which she says is a pseudo-cooperative because it does not promote relationships between its members nor a “literacy of cooperativism”.
She says that it does not distinguish itself from a capitalist organization because while acknowledging that people become and stay members out of personal economic interest, nothing is done to change this.
Mrs. Elisanto says that the concept of “solidarity” is very important for them. She says that in Tepoztlan there are many traditional and non-institutionalized forms of solidarity. She names the following:
- Coatequitl, which is a traditional form of mutual aid, which is a form of trueque of services
- civil resistance. In 1995 a group of businessmen with the support local and federal authorities planned to build a luxurious golf club inside El Tepozteco National Park. Residents of Tepoztlan demonstrated and negotiated against it. The authorities responded with threats, arrests and a murder, but finally the people won.
- Fiesta de barrios. On many occasions, residents of Tepoztlan open the doors to their house and people bring food, and have a party. There are also many street celebrations and rituals organized by barrio or neighborhood.