The Cooperative Movement in Mauritius: Origins and Development

This month the cooperative movement in Mauritius is celebrating its 100th anniversary. Ordinance 4 of 1913 was passed on 12 July 1913 ‘to provide for the constitution and control of Cooperative Credit Societies’. In addition, the regulations governing the working of these institutions were also published under Government Notices No 180 of 13 September 1913 and No 250 of 27 December of the same year. The year 1913 thus marks the setting up of cooperative credit societies in Mauritius.

A look into the origins of the cooperative movement will take us to 18th century Europe when savings banks began to appear in the Age of Enlightenment. In the nineteenth century, during the Industrial Revolution, savings banks became increasingly important when the English social and political elite felt that it was essential to lay emphasis on values of self-help and thrift so as to raise the moral standards of the working classes. The British Prime Minister William Gladstone was convinced that the real wealth of nations was the product of individual thrift and industry and he feared that these two qualities would be killed by public and private extravagance. Thrift and self-help together with Christian ethics underlay Gladstonian liberalism, and Gladstone considered all extravagance to be a great moral evil. In 1861, as Chancellor of the Exchequer, he passed the Post Office Savings Bank Ordinance with a view to raising the moral standard of the people in England

Towards the end of the nineteenth century, following the famine in India in 1899, the Second Famine Commission of 1901 recommended the organisation of cooperatives and the Cooperative Societies Act was passed in 1904. While both in India and in Mauritius, ideas of cooperation have always existed among all communities in various spheres of life, particularly during a funeral, a wedding, a religious ceremony or even for education or other charitable purposes, a credit cooperative society had never emerged among the various communities – though the ‘Cittu’, a Tamil word denoting a saving scheme used by close relatives and friends by collecting money together and distributing the collected sums to members on a roster basis, has survived both in Mauritius as well as in India. Among many families, mugs of rice were also collected and distributed to each family on a roster basis each week

Cooperative Credit Banks

It was the Royal Commission of 1909 that recommended that ‘steps should be taken to introduce and encourage among the small planters the system of cooperative credit banks which had been so successful in Europe and in India’. Several Indian small planters and traders together with Manilal doctor had expressed their financial grievances before the Royal Commission. The latter took the view that It was ‘practically impossible to assist them (small planters) with direct loans on such security as they would offer’. The Commissioners had visited the small planters’ estates and had reached the hasty conclusion ‘that most Indian cultivate canes on a bad system… They do not fertilise the land because they have no means to buy manure and either from laziness or want of labour that they usually neglect to give proper attention to the fields’. Consequently as a panacea to the difficulties of the small planters, they recommended the system of cooperative banking just as in India the Famine Commission had made a similar recommendation to tackle the problems of peasant indebtedness.

The government implemented the recommendation of the Royal Commission regarding cooperatives and obtained the services of Mr Wilberforce, a member of the Civil Service who had been working with e cooperative movement in the Punjab. He submitted his report to the government and Ordinance 4 of 1913 inaugurated the credit cooperative movement in Mauritius. Mr Lala Jaygopal, equally from the Punjab was appointed Registrar of Cooperative Credit Societies. A number of Cooperative Credit Societies were set up. Fifteen societies were set up in the period 1913-1914, reaching 36 during 1922-1923. This period was one of prosperity for the sugar industry and small planters benefited from very high sugar prices. With the onset of the great depression and the fall in the prices of sugar, the number of credit cooperatives began to fall, reaching 26 in the years 1929-1939.

In 1932 loans, which were overdue, attained a record figure of Rs 160,561 compared to Rs 7638 in the period 1919-1920. In 1937 when labour unrest broke out in the island, the small planters presented their grievances to the Hooper Commission. One of the main grievances was that they could not obtain any loan from the Mauritius Agricultural Bank and complained about the crushing interests they had to pay to the sugar estates, to middlemen as well as to other moneylenders. Many of the small planters’ grievances received a favourable response from the Hooper Commission and the newly-appointed Governor Sir Bede Clifford.

From 1939 a number of measures were implemented which were favourable to small planters because they were better organised in credit cooperatives, but also because the small planter class was identified by the colonial state as a crucial element to sustain the productive capacity of the sugar industry, as also to bring political stability. After the unrest of 1937, Ordinance 27 of 1939 reorganised the sale of canes to millers in the interests of small planters. They were also eligible to a sucrose content test if they grouped themselves to make up that quantity, as well as eligible to 2/3 of the sugar from the canes supplied by them. Many of these advantages were the result of small planters joining the cooperative societies.

The Great Depression

This period was also one of reconstruction of the cooperative movement after the Great Depression of 1929; by 1943 the percentage of default was reduced from 60% to 2.1% in 1943-1944. The credit cooperatives assisted small planters, members as well as non-members, with loans, but also helped them in buying animals, repairing carts, constructing their buildings, freeing land from debts and also for medical treatment, marriages and funerals. Another important function of the cooperatives was the cooperative sale of canes. In 1943, 2101 members sold 95,082 tonnes of canes through cooperatives and in 1946 the number had reached 2904 members selling 141,814 tonnes of canes. Over the years small planters had obtained a number of benefits in the sugar cane industry through the initiatives of the cooperatives and with the support of the government.

In spite of its many successes, the credit cooperative movement had a number of weaknesses and these were highlighted by WKH Campbell in his report in 1945. He found that the basis of the cooperative movement at that time was too narrow and that it should be extended to all other forms of cooperation, and to other sections of the population. He wanted to ‘deofficialise’ the movement so that the societies developed self-reliance. He further wanted to encourage thrift among the population, to set up a separate Department of Cooperatives, a library and the creation of consumers and fishermen’s cooperatives. Many of these measures were implemented as a result of Ordinance 51 of 1945. A separate Department of Cooperatives was set up. The first cooperative store was opened in 1947 and by May 1948 there were 21 cooperative stores operating with a membership of 2000.

Since the 1950s the cooperative movement has flourished in certain areas and in certain sectors, and there have also been a number of failures as well as successes. Many initiatives had been taken to further develop the cooperative movement and some of the initiatives could not be sustained over a long period. Even today there are numerous examples of remarkable success and it appears that the cooperative movement has still a long way to go because it has not reached its full potential. Great efforts are being deployed to adapt the cooperative movement to the modern world as new challenges have emerged on the horizon. It is still possible to set up modern cooperative convenience stores in all localities and also to move to new sectors. A cooperative pharmacy would be most welcome just like cooperative bookstores for second-hand books at the universities. Similar initiatives can be taken up at school canteens by parent-teacher associations.

For the small planters the challenges are even more daunting. The number of small planters has declined from 31,000 to 19,000 and about 10,500 acres of land remain uncultivated. Cooperatives should think of new ways of making these lands productive and explore the feasibility of transforming them into efficient farming factories. Overall a new approach to cooperation has to be thought out and implemented. It should be member-driven and professionalised and made an instrument for sustainable livelihoods. Some of the initiatives should be implemented in all our educational institutions.

* Published in print edition on 12 July  2013