ear 2025 was declared as the Year of Cooperatives. As the year has passed by, one wonders if any lessons have been learnt and a better future for the cooperatives is being envisaged.

As an instrument of mutual help, cooperatives have a long and rich history. The formal origin can be traced back to the early 19th Century Europe during the Industrial Revolution. In 1844, the Rochdale Society of Equitable Pioneers—a group of 28 textile workers in Rochdale, England, established a consumers’ cooperative. The original 8 principles (The Rochdale Principals) included, open membership for all, democratic control with one member one vote, fair distribution of surplus, limited interest on invested capital, cash-only trading, fair weights and measures, political and religious neutrality and education for members to uphold cooperative values. These foundational principles were later adopted by the International Cooperative Alliance, founded in 1895.

The ICA defines a cooperative as “an autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly owned and democratically controlled enterprise.”

Many cooperatives have evolved from small local associations into large-scale enterprises operating in diverse sectors including agriculture, finance, housing, health care and retail. In agriculture, cooperatives have historically emerged as institutional mechanisms to address market failures, reduce transaction costs and overcome barriers to accessing credit, inputs and fair pricing. For smallholder farmers in particular, cooperatives offer a platform for improving bargaining power, reducing costs of production and enhancing market access and profitability. Many a times, groups of small cooperatives are front loaded with large corporate structures.

A key strength of agricultural cooperatives lies in their role in vertical integration, where various stages of the agricultural supply chain are combined under one entity. This integration enhances value addition, increases efficiency and improves returns for members.

Across vast regions in Africa, Asia, Australia, North America and Europe, cooperatives have helped create stable food systems, inclusive rural development and stronger local economies. In Asia, India’s Amul has empowered millions of small-scale dairy farmers; in Africa, Kenya’s Tea Development Agency has helped small growers (more than half a million members) in efficient processing and global marketing; in Europe, Denmark’s Arla Foods, a multinational farmer-owned dairy cooperative, has become a leading global brand by pooling resources across borders; in North America, the Land O’Lakes supports thousands of farmers with access to markets, innovation and supply chain infrastructure; in South America the Brazilian Coamo cooperative enables grain producers to thrive with shared facilities, financing and export support; in Oceania, Australia’s CBH Group (Co-operative Bulk Handling) is one of the largest grain exporters, owned by over 3,900 Western Australian grain growers playing a key role in supply chain efficiency and international competitiveness. These diverse examples underscore how cooperatives worldwide drive agricultural success through shared ownership, collective strength and community-driven growth. Semael UnDung in Korea is a bottom-up model of inclusive growth and mainstreaming of masses through cooperation catalysed by public-private partnerships.

Cooperatives have made significant contributions to natural resource management by combining economic objectives with environmental stewardship. In many countries, community-based cooperatives manage shared resources such as forests, fisheries, water bodies, and rangelands—promoting local governance, sustainable practices and equitable access. These models are aligned with broader goals of climate resilience and adaptations, self governance and sustainable development.

In the subcontinent, cooperatives used to be a major development vehicle. The Societies Act of 1860 is still a valid Law. The cooperatives introduction dates back to Co-operative Credit Societies Act, 1904, as first formal law in British India focused on agricultural credit and rural finance to combat the influence of moneylenders (mahajan). In 1912, Cooperative Societies Act, 1912, replaced the 1904 Act and allowed the registration of non-credit cooperatives, including farming cooperatives. Famous Chottu Ram legislative reforms during 1930s strengthened cooperative societies in the Punjab. After the 18th Constitutional Amendment, cooperatives are a provincial subject. In Sindh and Balochistan, Cooperative Societies Act, 2020, and in the Punjab and Khyber Pakhtunkhwa, Cooperative Societies Act, 1925, are operational.

Interestingly, some cooperatives of pre-partition days are still operational on the other side of the border. We have success stories like AKRSP-led movement in GB and the National Rural Support Programme. The community development projects led by individuals like Akhtar Hameed, Shoaib Sultan and Rashid Bajwa are vivid examples where leadership made a difference. Sociology seems to have played a role in avoiding elite capture and bad governance. Unfortunately, the list of failures is also long and painful.

Higher education institutions/universities can play a critical role in supporting cooperatives through research, education and partnerships that build capacity and help informed policy formulation. Institutions such as the University of Agriculture, Faisalabad, have a longstanding focus on rural industries. The UAF has contributed significantly in the past to the understanding of cooperative governance, member engagement and business performance in agricultural settings through its Department of Credit and Cooperation.

The writer is a former vice-chancellor of the University of Agriculture, Faisalabad