GLANBIA, HEADQUARTERED in Kilkenny, is one of this country’s great corporate success stories. As the agrifood and nutrition sectors become identified as high growth areas in the economy, the company has positioned itself as a dominant force in the field. Supplier of some of our most familiar household brands: Avonmore, Kilmeaden and Yoplait, Glanbia is one of the world’s largest dairy processors and one of Ireland’s biggest exporters. A corporate powerhouse that employs 4,300 people and has an annual turnover of €2.5 billion must be owned by a bunch of city boys in pinstripe suits who know nothing of the feel of clay under their fingernails, right? Wrong – Glanbia is majority owned by the Glanbia Co-operative Society Limited. That’s right – a co-op.
Drawing on his experience working with American farmers and on Scandinavian models of co-operation, Horace Plunkett helped establish the co-operative movement in Ireland at the end of the 19th century. Thirty years before independence, Irish farmers were able to come together to process and market their produce and improve standards of exports under the banner: “Better farming, better business, better living”.
Co-operative principles had been applied elsewhere in the world for thirty or forty years, but they took hold rapidly in Ireland, perhaps inspired by the ancient traditions of meitheal. By 1904 there were 800 co-ops affiliated to the Irish Agricultural Organisation Society with a joint turnover of £3 million. More important than those numbers, however, was the common bond that came to be shared by the co-op members who could pool their knowledge and resources as a force multiplier to improve farming techniques, food quality, incomes and standards of living.
‘A group of countries have come together voluntarily to pool knowledge’
To some extent, Ireland’s membership of the EEC – when we joined forty years ago – and latterly the EU – is like the relationship between the farmer and the co-op. A group of countries have come together voluntarily to pool knowledge and resources as a force multiplier to promote economic development and growth, to guarantee basic rights and to improve standards of living for all.
Of course it has not been universally successful and we are going through the biggest challenge to the European co-op yet. In times of crisis in the co-operative movement, farmers fought shopkeepers and neighbours could often be at loggerheads over disputes petty and grave. Prices fluctuated, as did fortunes, but the solidarity of members saw them through.
After all, farmers outside the co-op system may have been independent and sovereign in splendid isolation but enjoyed none of the benefits of co-op membership that saw his neighbours prosper. The principles remained true and members and the country as a whole gradually prospered. In fact, the ICOS founded in 1894 is still hale and hearty today with 150,000 affiliated members employing 12,000 people and alumni including Glanbia, Kerry Group and Aryzta AG.
‘The ESM is in some ways like a European credit union’
An organic and obvious development of the co-operative movement among farmers was the establishment of banks run on the same principles as the agricultural co-ops to enable farmers to borrow from and save with an organisation under their own democratic ownership, guaranteed by the common bond between them. Inspired by this and witnessing the poverty and poor financial management in the 1950s that drove people into the grasp of money lenders in Dublin, Nora Herlihy, Sean Forde and Sheamus P MacEoin helped establish Ireland’s first credit unions in the late 1950s.
Despite the fact that early credit unions had been founded 100 years earlier in Germany, the Irish people proved to be such rapid and enthusiastic adopters of the movement’s principles that Ireland now has, by quite some margin, the highest per capita percentage of credit union members in the world and the ninth largest number of members in absolute terms, totalling more than three million.
The ESM (European Stability Mechanism) is, in some ways, like the EU’s extension of its basic co-operative principles to develop a kind of European credit union. Members pay into a central fund and draw on it in certain circumstances, bound by a common bond and solidarity of membership. The Fiscal Treaty is a statement of the terms and conditions which apply to members wishing to access funds. It is a basic agreement to certain housekeeping rules. They are tough and firm but they allow a certain amount of flexibility in extreme circumstances, allow 20 years for us to get our house in order and have the potential to prevent future debt crises.
‘The principles of EU membership are better than the alternative’
We’ve been disappointed by a lack of solidarity from some EU member states and institutions and we’re rightly angry about it given the fact that our bubble was inflated by capital flows from German and French banks to Irish banks. But the principles of EU membership and the logic of our remaining part of the co-op remain better than the alternative. Solutions are still possible and we can strengthen the common bond by getting through this crisis together.
Rejecting this treaty because we are angry would be dangerously self-defeating because we would not get access to ESM funds and be forced to borrow from the moneylenders at much higher interest rates, if at all. Rejecting the treaty because think we can get a better deal is a dangerous fallacy because Ireland’s rejection will not stop the other member states from going ahead with the plan and we will miss out on any subsequent upside. Threatening a No vote to get better terms is a potentially lethal game of chicken which we will certainly lose, again throwing the eurozone into crisis and, as we already know to our great cost, decision-making in a crisis is nearly always seriously flawed.
Approving the Treaty by voting Yes on May 31st will not overnight solve the continuing problems of the eurozone and the EU, far from it, but it does set out the basic foundations of stabilising the crisis to give us some breathing space to design a more comprehensive solution to the economic crisis and the crisis of democratic accountability. As demonstrated by Ireland’s experience of the co-operative movement, the credit union movement and our membership of the European Union, together we are better. The common bond requires a vote of confidence from time to time, especially in times of crisis. Now is such a time.