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DEVELOPMENT-BRAZIL: Solidarity Economy Combats Exclusion

Mario Osava

RIO DE JANEIRO, Jan 11 2008 (IPS) - The Harmony Agricultural Company has become Brazil’s largest worker-managed business in the solidarity economy. It provides employment for 4,300 families who work 26,000 hectares of land, and its main activity is producing sugar at 48 mills.

When the company was in crisis in 1993, the first reaction of the workers and their unions was the usual one of trying to ensure that the 2,300 workers who were dismissed received back pay and severance pay. But two years later, the unions took another approach.

Their goal was to win back the lost jobs and maintain the remaining ones, while continuing an activity essential to the economy of Catende, in the northeastern state of Pernambuco.

They applied for the owners of the company to be forced to declare bankruptcy, and took over the firm’s administration, under the supervision of the justice system. Since then, they have resumed sugar production and diversified into other agricultural and industrial activities.

The sugarcane producing area and diversified family agriculture are spread over five municipalities.

Producing sugar in this location "costs a little more than in Sao Paulo (a southern state that accounts for over half the national output), but our model makes the project viable," Lenivaldo Lima, a technical adviser at Catende-Harmonia, as the project is also known, told IPS.

The model Lima mentioned is cooperative, self-managing, and based on economic solidarity, with a large proportion of sugarcane plantation and industrial refinery workers also growing cassava, fruit, maize, potatoes and even raising livestock, "in a family farming system based on agricultural cooperatives."

The local terrain does not allow mechanised harvesting, as in Sao Paulo, but this creates more jobs, "fulfilling the goal of social inclusion" and better income distribution, which benefits the municipalities and boosts the local economy, Lima said.

Catende-Harmonia is an excellent example of private companies which have foundered, but have been rescued and put back on their feet by their workers. There are about 200 of these in Brazil, according to Fabio Sanches, Assistant Secretary for the Solidarity Economy at the Labour Ministry.

The sector is made up of about 22,000 solidarity-based economic enterprises (EES), comprising nearly two million workers, according to official figures. That’s not much in a country with over 188 million people, half of whom are of working age, but it is a new phenomenon that is expanding rapidly, Sanches told IPS.

The EES are collectively managed businesses involved in productive activities, services or credit cooperatives. They emerged in Brazil in the 1980s, in response to "the crisis in waged employment, the growth of the informal economy, and the high levels of unemployment and job instability," he said.

Small-scale agriculture is the main occupation, but fishing, handicrafts, rainforest products, mining, small-scale workshops, waste recycling, retailing, credit cooperatives and other services all have a place in the solidarity economy.

Initiated by unions and non-governmental organisations, the EES received a big boost in 2003 with the creation of the National Secretariat for the Solidarity Economy and the Brazilian Solidarity Economy Forum (FBES). Their formation was promoted by the World Social Forum, which held its first global gathering in the southern city of Porto Alegre in 2001.

The Secretariat seeks to broaden EES access to know-how, markets and capital. It carries out training courses in management and appropriate technology, offers technical assistance, organises marketing fairs, regulates fair trade, and provides credit facilities for purchasing equipment and tools.

The main achievement has been "instituting a public policy for the sector," said Sanches. The activists’ ultimate dream is for the solidarity economy to become the dominant force in social and economic life, he said.

One of the solidarity economy’s main aims is to make "human beings the active agents and the final purpose of economic activity, instead of private accumulation of wealth," according to the FBES, made up of non-governmental and university organisations, government officials and social movements.

Solidarity-based initiatives in Brazil started "because of the struggle against unemployment," said Lima. "But they changed the world view of workers, who up until then had just wanted a wage," but now value a better quality of life, with greater security and control over their own destiny.

However, the solidarity-based sector is limited in scope, and should be seen as one alternative among many, with a broad view of "inclusive production" in a country where nearly half the population "is excluded from the system," economist Ladislau Dowbor, a professor at the Catholic University of Sao Paulo and an expert on decentralised planning and management, told IPS.

"Those who are excluded are not uninformed people; they are aware of their situation and they exert pressure," he said.

The enormous challenge of including nearly 100 million people in the development process requires networking connections between subsystems, such as organised civil society, policies that support local development, non-monetary economies and volunteering, Dowbor said.

The economist said wealth indicators should be adopted that go beyond the calculation of gross domestic product (GDP), because some activities yield "spectacular" results yet involve very little hard cash.

As an example he described the Brazilian Catholic Church’s Child Pastorate programme, founded in 1983. It has recruited and trained over 300,000 local volunteers all over the country, and the programme has significantly reduced child mortality, at a cost per child of 78 cents of a dollar per month, Dowbor said.

In recent years, apart from the rise in GDP, improvement in "the quality of Brazilian economic growth" has been due to the availability of microcredit, the increase in the minimum wage which benefited tens of millions of workers and pensioners, social programmes for the poor and the expansion of formal employment, all of which have dynamised local economies, Dowbor said.