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Producers' Cooperative

a kind of cooperative uniting small-scale producers (artisans and handicraft workers) for joint production of goods and rendering of services.

Producers' cooperatives originated in France and Germany in the middle of the 19th century. In the late 19th and early 20th centuries they grew in other capitalist countries. However, today in capitalist countries the producers' cooperatives are less common than consumers' cooperatives, credit unions, and agricultural cooperatives. In the late 1950's, Great Britain had 30 producers' cooperatives with a membership of 11,600; France had 680 such cooperatives.

In Russia before the Great October Socialist Revolution, a wide range of consumers' goods was produced by the artisan and handicraft industry. The artisans and craftsmen produced most of the goods in such sectors as shoemaking, the making of fur coats and mittens, cooperage, felting, and tailoring, as well as many luxury items.

After the victory of the October Socialist Revolution, the producers' cooperative became the easiest and most accessible way to socialism for the artisans and craftsmen. From 1918 to 1920 the first steps were taken to organize small-scale commodity producers into cooperatives. On Jan. 1, 1919, there were 780 producers' artels. With the end of the Civil War and the transition to peacetime economic construction, the Soviet state promoted the rapid growth of cooperatives for artisans and craftsmen: on Oct. 1, 1923, 4,952 cooperatives in the handicraft industry were already organized; this number grew to 8,641 in 1925 and 14,811 in late 1933. During the second five-year plan (1933-37) the process of involving craftsmen in cooperatives was completed. On Jan. 1, 1941, there were 25,600 producers' cooperatives, with a membership of 2.6 million.

In the producers' cooperatives, only the most important means of production needed for the operation of the craft were socialized. Remuneration depended on the quantity and quality of the labor input, based on the wage-rate system existing in industry. Unions of the producers' cooperatives directed the artels and united them on a production or territorial basis. The unions were members of the producers' councils, and the entire producers' cooperative system was headed by the Central Council of Producers' cooperatives (Tsentropromsovet).

The producers' cooperative radically transformed the small-scale domestic craft industry, which grew into a widely developed system in all republics. Mainly concerned with the production of consumer goods, the producers' cooperatives have substantially promoted the satisfaction of the constantly rising requirements of the working people, and during the war years they helped to supply the army and the home front with clothing and personal articles. The production output of the producers' cooperatives increased from 534 million rubles in 1942 to 953 million rubles in 1945. During the postwar five-year economic plans the fixed assets of the producers' cooperatives increased greatly: on Jan. 1, 1956, the fixed production assets of the producers' cooperatives amounted to 6,850 million rubles and non-production fixed assets amounted to 1,279.1 million rubles. The producers' cooperative system had more than 54,700 enterprises employing 1.8 million persons. Producers' cooperative enterprises were well equipped and were closely connected with large-scale state industry. In the 1960's, with the complete transfer to the state of the production of consumer commodities, the producers' cooperatives gradually became inactive.

The Twenty-fourth Congress of the CPSU took note of the necessity "for a considerable expansion of the production of high-quality handicraft artistic wares, souvenirs, small household articles needed in everyday life, and other goods of mass consumption, using to the greatest extent possible the local resources of raw and other materials" (Materialy XXIV s"ezda KPSS, Moscow, 1971, p. 260). To improve services, cooperative workshops are to be developed. The development of domestic crafts and subsidiary industrial production is considered to be important for a more complete and uniform use throughout the entire year of labor resources in rural areas and for the consolidation of the farming economy and the increase of labor productivity.

The producers' cooperative plays an important role in the economy of all socialist countries of Europe and Asia. For example, the German Democratic Republic (GDR) in the middle of the 1960's had 4,200 such organizations with 191,000 members; they produced up to 40 percent of the entire output of the craft industry in the GDR. In Hungary the number of members of the producers' cooperatives increased between 1949 and 1966 from 8,000 to 192,000. In Poland at the end of 1966 there were 2,773 producers' artels with 514,000 members. Rumania had 14,000 producers' cooperatives by the end of 1970.

In many countries of Asia and Africa the leading branches of industry are represented by the domestic crafts and trades. For instance, in the middle of the 1960's, over 50 percent of the output of the manufacturing industry of Africa (except the Arab Republic of Egypt) came from small-scale domestic craft enterprises. Thus, the cooperation of small-scale producers takes an important place in the economic plans of Asian and African states once they have gained freedom from colonial domination. In these countries the producers' cooperative enjoys considerable support from the state. For example, in India there are more than 30 different kinds of producers' cooperatives, which are especially popular in hand weaving. India also has cooperative factories, whose member-shareholders are state governments, government organizations, or cooperatives. In contrast to the independent countries of Africa, where the stratification of the domestic craftsmen is insignificant and the cooperatives directly serve the interests of the working craftsmen, in India the cooperatives include primarily the well-to-do craftsmen, who by membership gain certain privileges that help them to consolidate their economic standing.