CO-OPERATIVES and Credit Unions could soon be subject to new legislation and the Department of Co-operative Development (DCD) will surrender its duties to the Central Bank of The Bahamas.
The move will allow the Producer Service Cooperatives to grow a solid foundation from its current position of only one percent.
Agriculture, Marine Resources and Local Government Minister V. Alfred Gray said: “Cooperatives, without giving any definition to it, are an important sector of our country’s economic development. The genesis of co-operatives and credit unions, of course, was to ensure that the average man on the street had access to funding small projects, big projects, and those in between, without having to find the collateral, which banks do often ask for and for which they would seldom qualify, if there was no credit unions / co-operatives to provide that assistance to them.
“And that is legendary because I know you know of many people, who but for, the advent of credit unions would never have had access to small or large funding. Meaning they would have had no access to funding at all because they would not have been able to walk in to a bank and access any loan whatsoever. But with the advent of cooperatives, many of them were able to send their children off to school, pay their bills, and do other things which the cooperatives allowed them to do without them having to go through the riggers of finding collateral and all the things that attend to the accessing of loans in the average commercial banks,” said Mr Gray.
On April 3, the Department of Cooperative Development (DCD) in conjunction with the Bahamas Cooperative League Ltd. held a Consultation meeting with key member offices concerning the repositioning of the Department of Cooperative Development. The meeting took place in the Training Room at the Bahamas Cooperative League on Russell Road. Minister Gray said that changes are inevitable and is welcomed when its for the better. He said that whatever is done as a sector cannot stray from Sir Lynden’s philosophy, which gave rise to the establishment of the cooperative sector. He also said that whether now or in the future the DCD remains the custodian of that legacy, the DCD must not let Sir Lynden’s philosophy die.
“Ensure that you look at the law, the impending legislation, make sure that those ideals for which Sir Lynden stood and fought never die. And this is the opportunity for you to make sure that those people for whom you must stand will never be deprived of what credit unions and cooperatives meant then and ought to mean now to them,” said Mr Gray.
“I do not believe the Central Bank with its best intentions will be willing to start cooperatives in The Bahamas, throughout the Bahamas. It’s not going to happen. They may manage whatever you put together, but I don’t foresee that they will be willing to assist even in the establishment of new cooperatives. That’s going to have to be always your obligation.” Further, Mr Gray said he does not believe that unless the “League” takes on its responsibility, as he believes it is ready to do, there will be no new cooperatives formed either. He said his duty is to encourage the “League” because based on what he saw of the preliminary draft of the legislation the obligation for ensuring the birth and genesis of new cooperatives and credit unions will fall in the lap of the League. So it must be the ‘League’ that must go from island to island, from place to place, and cause there to be a continuum of the new births, wherever that could be. And if the League isn’t ready to do that, rethink your position because that’s going to be, in future, you obligations. I also know that those unions and cooperatives which were formed to date, had a lot to do with you and the Department jointly. But if the Department as they envision it will be - is going to be taken out of the picture, or perhaps semi taken out of the picture, or perhaps reduced to observing, I dare say that the “League” must fill that void. And I trust that you’re ready to do so,” said Mr Gray.
“My Government in keeping with its policies and strategies for economic and social growth and development is always cognizant of the role that the international labour and conference recommendation play in this regard, and it fully endorses that sector of the recommendation of the conference,” said Minister Gray.
“I’m also aware and I’m delighted to open this workshop today because of several reasons, not the least among which is the fact that you have to prepare for changes which might be inevitable. Ostriches out their head in the sand and pretend as though nothing is happening or nothing will happen only to be shot from behind and find themselves dead with their head in the sand. We cannot allow that adage to apply to us. Hence, we have come in this setting today to begin the process of that preparation for the future.” Mr Gray said over the last 30 years the sector has grown tremendously. He said at the moment it has about a $250 Million Dollars in assets and it boasts of a membership of about 36,000. He said these accomplishments by any standard or reasonable observer spells success.
“The Department of Cooperatives has undoubtedly contributed as I indicated before in an indirect way, to this milestone’s success. Despite these encouraging statistics however, I’m advised that the Producer Service Cooperatives assets represents only one percent of the sector’s total assets and about only one percent of its total membership. That’s not good enough. I trust that you are going to retool yourselves as individuals and as organizations all to ensure that sector does a little better because we believe it can. One percent is not good enough.”Recent developments in the sector have necessitated a closer look at the future role and function of the Department of Cooperatives. I’ve indicated to you already that there is a pending possibility that the role that the Department of Cooperatives now plays may be transferred to the Central Bank of The Bahamas. I’ve already given my view to the Department and I share it with you in this way. I personally believe that the transfer of cooperatives and credit unions to the partner or to the Central Bank ought to be only when these organizations, having been born, grow to a certain level of deposits for Central Bank management. I’m not sure it’s going to work in the future but I do not see that the Central Bank will be an agent of change other than for management,” said Mr Gray.
Minister Gray encouraged the Cooperative Department to continue starting credit unions and then transfer over the management of the deposits to the Central Bank once the Credit Union has reached its limit, whether it is $50,000 or $100,000 or even a deposit of $1 Million. He said regardless of the figure the law should require the deposit be transferred to the management of the Central Bank because he wants to believe that the Central Bank’s management ought not to be a part of the genesis of credit unions and cooperatives. “It’s my Ministry’s duty or obligation to ensure our food security. Our agricultural sector production over the years has declined considerably. 20 years ago there were 2500 farmers in The Bahamas. Now it’s less than 1800. I’m talking about registered farmers. That’s a decline of about 800 over the years. That’s not good for The Bahamas and it’s not good for the future of our food security program. “We import almost $900 Million Dollars worth of food every year. And so it tells me that we are eating food. Who is producing it though? Guatemala? Belize? Other countries in the Caribbean, Latin and South America, yes they are for you, for me. What are we going to do about it? Bahamians don’t seem to like farming to the extent that they want to tap into this $900 Million Dollar worth of food that we must produce and supply, not in any commercial numbers. That’s a sad statement but its true,” Mr Gray said.