Maleny cooperatives:

Examples of small-scale
cooperative enterprises
Maleny is situated 100 kilometrers north of Brisbane on the Sunshine Coast
Hinterland. It is surrounded by lush tropical vegitation, has stunning views of the
Glass House Mountains, and overlooks the Pacific Ocean. It has a population of over
7,000 people.

Maleny has a long history of cooperative enterprise. On the 3rd May 1903, settlers
started the first dairy cooperative in the region, the Maleny Cooperative Dairy
Association. During its lifetime, it built 3 butter factories. In the 1940's, the
community got together to build the Maleny Under 5's Centre Kindergarten in one
weekend.

Today Maleny has 17 cooperatives which work in all areas of community life. These
cooperatives include: a consumers' coop, a cooperative bank, a cooperative club, a
workers' coop, a cashless trading coop, a cooperative radio station, a cooperative film
society, 4 environmental coops, and several community settlement coops. All but 3 of
these coops are legally incorporated.

What Is a Cooperative?
Cooperatives are formed when a group of like-minded individuals join together to
accomplish something that each acting alone would never be able to achieve.

Successful coops are always born out of need. They cannot be imposed on a
community -- they have to grow from the energy and commitment of the local
people themselves.

Coops are different to traditional private and public sector enterprises. They
represent a third way that integrates economic and social objectives. Unlike the
private sector, which tends to concentrate wealth and power in the hands of a few,
coops spread wealth and power to each member equally. Unlike government, which
tends to be remote and unresponsive to the communities it is supposed to serve,
coops are driven by their members and reflect their needs.

Cooperatives have a tremendous competitive advantage over both private

enterprises and public enterprises: coop members have a personal interest in their
coop's success. The members own the coop, so they are more likely to buy the
coop's goods or use its services. Shares in cooperatives are not publically traded
because the shares are owned by the members. The members themselves decide
how to spend the coop's profits.

Maple Street Cooperative

Maple Street Cooperative opened its doors on January 14th 1980, nearly a year after
a small group of people met to discuss how to satisfy their need for whole-foods. The
coop started by selling both whole-foods and produce grown by local farmers. Today
Maple Street Coop operates an organic health food retail outlet in the main street of
Maleny, is open 7 days a week, and has 450 active members. Although it functions
as a consumers' cooperative, it still sells to the public.
The coop's policy is organic first, then local, then Australian. It does not stock any
products that contain genetically modified material, nor does it stock products from
companies that are regarded as exploiting people or the environment. It operates on
the principle of consensus decision making.

For the last 6 years, the coop has made a profit. However, the coop is structured as a
non-profit enterprise, meaning that the profits go back into the coop, to expand its
services and develop its infrastructure, or into community activities.

At first labour in the coop was voluntary, but as the coop prospered, the number of
paid workers slowly increased. Today the coop employs 11 part time staff and one
full time manager. In the near future it will have paid off all its loans and own the
coop premises.

The coop publishes a 16 page bimonthly newsletter that outlines current activities
and brings information to members on subjects that are of special interest, such as
the irradiation of food, genetic engineering, and microwave emissions. It produces
1,400 copies.

The coop is registered as a trading coop. Active members are required to pay an
annual membership fee of $11 and to spend at least $20 per year in the coop to
retain their active membership status. Active members get a 5% discount off all
purchases.

During its 22 years of operation, it has overcome several major hurdles. On

occasions in the past, it had no business plan, operated at a loss, made poor
investment decisions, lacked experienced financial management, and had to spend a
lot of time resolving differences of opinion among the members.

Learning from experience, the coop gradually evolved a formulae for success. It now
has a sound strategic and financial plan, regularly makes a profit, cultivates the
support of both the members and the community at large, and ensures that the staff
and management are honest, dedicated and competent.

Maleny Credit Union

The Maleny Credit Union was started in 1984 by several local people with the idea of
setting up an ethical financial institution to foster regional financial autonomy.
Initially the Credit Union was staffed by volunteers, worked from rented rooms, and
entered deposits manually into a journal. On the first day of operations, local people
deposited more than $50,000.

Today the Credit Union has grown to have more than 6000 members, 14 paid staff,
and $15 million in assets, and has purchased its own premises. People from all over
Australia invest their money with the Credit Union, and about half the Credit Union's
deposits come from outside Maleny. It is one of only a handful of financial institutions
in the country that operate according to cooperative principles.

The Credit Union offers savings, cheque, loans, and term deposit accounts, as well as
credit card facilities, and can arrange superannuation and various types of insurance
for members. In addition, the Credit Union contributes substantially to the local
community and leads its development.
Over the years the Credit Union has given out many small loans to local people who
would not be eligible for loans from the major banks. This has helped many people
buy land, build their own home, and start their own business. In dollar terms, 80%
of the Credit Union's loans are housing loans.

The Credit Union's ethical activities include:

* allocating 10% of its profits to its Community Grants Scheme,
* establishing a tax-deductible Charitable Fund,
* paying an eco-tax to Barung Landcare based on every ream of paper used,
* offering low fees to members and special arrangements to cooperatives and
community groups,
* lending only to local people and projects to keep money circulating within the
region,
* purchasing locally wherever possible,
* providing loans for environmentally and socially beneficial projects,
* creating a democratic workplace, and
* conducting an annual social, environmental and financial audit of the coops
operations and accounting in the annual report.

During the course of the last year, grants from the Credit Union's Community Grants
Scheme went to the Maleny Swimming Club, River School, Altair Youth Crisis Centre,
Maleny High School, Sunshine Coast Environment Council, Maleny Community
Centre, Booroobin School, and the Rural Fire Brigade.

By the end of 2001, the Credit Union had provided finance for over 180 new jobs in
78 new businesses. Since its was established, it has reinvested over $50 million back
into the local community.

Like the Maple Street Coop, in its early years the Credit Union went through periods
of difficulty. However, improved planning and financial management overcame these
problems. Today the Credit Union is extremely successful, principally because it
developed the right balance of financial expertise and cooperative spirit.

The Up Front Club

Late in 1993, a diverse group of Maleny residents got together to form a cooperative
club. The aim was to establish a licensed venue to eat, drink, relax and socialize.
Today it is a place where the food is wholesome and inexpensive, the coffee is great,
and local musicians and entertainers can gain exposure.

When the Club first started, instead of relying on voluntary labour it took on the
financial challenge of paying wages to all its workers. But because it was under-
capitalized, it was forced to take out a loan to pay for the lease. Although it had over
1,000 members, each year it sustained a loss. At the beginning of 2000, three
directors took over the voluntary management of the Club, enabling it to remain in
existence.

Then, on the 15th January 2000, the Club turned a corner. Over 100 members
attended a special general meeting, talked of what the Club meant to them, and
committed to regular voluntary work so that it could stay open. Since then, members
and visitors alike have commented on the changed atmosphere in the Club. The
financial position has improved markedly, and for the first time the Club has posted
an operating profit.

Thanks to the support of the members, the Club continues to provide services to its
members, their families and guests. It is open six days a week, providing healthy
meals at reasonable prices. Members get a 10% discount. The Club also publishes a
quarterly newsletter.

A share in the coop costs $10 and shareholders pay an annual membership fee of
$30 per person or $45 per family. Members are encouraged to volunteer their time
and support Club activities.

Over the years the Club has showcased a wide range of local talent, hosting
everything from classical evenings to CD nights for teenagers. For many, it is the
cultural centre of the Maleny community.

Local Economic and Enterprise Development Cooperative

LEED is one of the most recent coops established in Maleny. It is registered as a

workers' cooperative, and is dedicated to creating new businesses and jobs on the
Sunshine Coast Hinterland. It employs 6 people.

LEED recognizes that most investment, jobs and economic development in the
Sunshine Coast Region occur on the coastal strip. It believes that it is vital for the
hinterland to develop its own jobs by creating viable small-scale businesses.

The seeds of LEED were sown in early 1997 after a local economic development
forum. A group of local people came together to help people on the hinterland start
their own businesses. The group organized forums on topics such as product
development, marketing, financial management, and other business skills.

In July 1999, LEED and Maleny Credit Union entered into a partnership to develop a
Peer Support Lending Scheme. Under the scheme, the Credit Union provides small
unsecured loans for start-up businesses and LEED members mentor the new
business people for the first 12 months of their operation. The Scheme is supported
by a grant from the Department of Family and Community Services.

14 new small-scale businesses participated in the Scheme, with 12 continuing to

operate successfully after a year. As a result of this initial success, 13 new loans were
given out in the second year of operation. So far the Scheme has provided a total of
27 loans to new small businesses; 23 businesses are continuing to operate
successfully.

Local Energy Transfer System

Maleny has one of Australia's most successful LETS schemes. LETS began in Canada
in 1982, and was launched in Maleny in October 1987. There are now over 200 LETS
schemes in Australia.

LETS functions as a cashless trading coop. LETS members trade their skills and
provide services to each other without the use of money.

In Maleny members trade their products and services in the local currency, the
Bunya, named after the local native pine nut, allowing people with little or no cash to
participate in the local economy.

Environmental Cooperatives
Maleny has 4 environmental coops: Maleny Wastebusters, Barung Landcare,
Booroobin Bush Magic, and Green Hills Fund.

Maleny Wastebusters is a community based recycling coop which encourages people

to reduce, reuse and recycle; to sort their rubbish; and to avoid buying poor quality
and over packaged items. It employs 20 local people, and its slogan is: "Waste not,
want not".

Barung Landcare is one of several hundred community based landcare groups

throughout Australia. It is dedicated to empowering landholders in the local area to
take ownership of environmental problems and their solutions. It provides a range of
environmental services, publishes a bimonthly newsletter, and participates in the
LETS scheme by accepting Banyas as part payment for the trees it sells. It hosts the
annual From Chainsaw to Fine Furniture Wood Expo which promotes the sustainable
harvesting of native timber. It also runs a successful nursery which propagates local
native plant species which have not been genetically modified.

Booroobin Bush Magic runs a rainforest nursery, while the Green Hills Fund works to
reafforest the Maleny hinterland.

Community Settlement Cooperatives

The settlement coops around Maleny include: Crystal Waters Permaculture Village,
Manduka Community Settlement Coop, Prout Community Settlement Coop, and
Cedarton Foresters.

Crystal Waters is situated on 640 acres of land, and is the first Permaculture village
in Australia. It incorporates 83 private residential lots, a village commercial centre,
visitors accomodation area, and over 500 acreas of common land.

Manduka is situated on over 150 acres of land 6 kilometres outside Maleny. It is

home to 18 adults and 6 children. The residents believe in living simply, sharing
resources, reaching agreement through consensus, and managing their land in an
ecologically sustainable way.

Prout Community is situated on over 50 acres of land, and is home to 3 families and
a primary school run by the Ananda Marga spiritual movement. The Ananda Marga
River School has over 100 students, ranging from kindergarten to grade seven. It
employs 7 full time and 8 part time teachers, and 2 administrators. The curriculum
emphasizes experential and whole brain learning, creativity, ecology, arts and music,
all with a child centred approach.

Cedarton Foresters is situated on 200 acres of land 19 kilometres from Maleny. It

contains 22 private residential lots and is home to 40 people. The community's main
aim is the rehabilitation of the land. Although Booroobin Bush Magic is part of
Cedarton Foresters, it is structured as an independently registered enviromental
cooperative.

Other Cooperatives in Maleny

Other cooperatives in Maleny include: Maleny Film Society (MFS); Family and
Community Empowerment (FACE); Maleny Neighbourhood Centre; and Hinterland
Community Radio, a cooperative radio station.

Building Successful Cooperatives

The experience of the Maleny cooperatives shows that building successful
cooperative enterprises involves several steps.

1. Fulfil a need. People have to come together in order to fulfil a need in the
community. No matter how good the idea, if there is not a community need, the
enterprise will not succeed.

2. Establish a founding group. A few committed people have to take on the

responsibility of developing the initial idea through to inception. However, one person
will have to provide the leadership.

3. Commit to a vision. Commit to the ideals and values implicit in cooperative

enterprises, and try to ensure that both the members and the management are
honest, dedicated and competent.

4. Conduct a feasibility study. To evaluate whether or not the perceived need is

feasible, conduct a feasibility study.

5. Set out clear aims and objectives. Each enterprise must have clear aims and
objectives. This will help direct everything from the founding group's initial focus to
promotional strategies and budgetary processes in the years to come.

6. Develop a sound business plan. The enterprise will require capital, have to
manage its finances efficiently, and at some point have to make decisions about loan
repayments and profit allocation.

7. Ensure the support and involvement of the members. The members own the
enterprise; at every step, their support and involvement is essential.

8. Establish a location. Establish a physical location for the operation of the

enterprise, preferably in the centre of the community.

9. Get skilled management. From within the community, bring in to the enterprise
people who have the necessary management, business, financial, legal and
accounting skills.

10. Continue education and training. Ideally, the members will have the skills,
particularly the communication and interpersonal skills, necessary to run the
enterprise successfully. If not, they will either have to develop such skills themselves
or bring in new members who have them.

The golden rules for beginning a community economic strategy are clear:

• start small, with the skills and resources available within the community;
• make use of role models, those with experience in community development,
wherever possible; and
• make sure the enterprise involves as many people as possible
Community Benefits
Cooperative enterprises benefit a community in many ways.

Socially, they bring people together, encourage them to use their diverse skills and
talents, and often provide them with the opportunity to develop new capabilities.
They create a sense of belonging, build close relationships among different types of
people, and empower them to make decisions to develop their community.

All this fosters community spirit. Working together, a community is able to

accomplish much more than if the various individuals go their separate ways.

Economically, cooperatives produce various types of goods locally, provide a range of

local services, create employment, circulate money within the community, and make
the community economically self-reliant. Because cooperative enterprises are owned
by the members themselves, the profits they generate stay in the local area.
Cooperatives thus build the wealth of the community.

In essence, successful cooperative enterprises transform a community by

establishing economic democracy.

Cooperative enterprise is the socio-economic system of the future. In Maleny, that

future is unfolding before us right now.

*********

The Maleny Cooperatives

* Maple Street Cooperative
* Maleny and District Credit Union (MCU) www.malenycu.com.au
* The Up Front Club
* Local Economic and Enterprise Development Cooperative (LEED)
* Local Energy Transfer System (LETS) www.lets.org.au
* Maleny Wastebusters
* Barung Landcare
* Crystal Waters Permaculture Village
www.ecovillages.org/australia/crystalwaters
* Manduka Community Settlement Cooperative
* Prout Community Settlement Cooperative www.amriverschool.org
* Cedarton Foresters
* Booroobin Bush Magic (BBM)
* Maleny Film Society (MFS)
* Green Hills Fund
* Family and Community Empowerment (FACE)
* Maleny Neighbourhood Centre
* Hinterland Community Radio

Published by Prout Community Settlement Cooperative, January 2002

PO Box 177, Maleny, 4552, Australia.

References
Maleny Coops Work, published by the Maleny Credit Union, 2001
Maleny Credit Union Social, Environmental and Financial Annual Report 2001,
published by the Maleny Credit Union
Community and Economic Development: Towns Shaping Their Destiny, by Jill Jordan,
March 2001
Chronological List of Historical Events for Maleny and Districts, compiled by Amanda
Wilson, July 2001

Copyright Prout Community Settlement Cooperative 2002