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The co-operative as a basis for local money
The legislation in Costa Rica offers special fiscal and legal advantages to co-operatives. The legalisation on co-operatives was a response to the crisis of 1929, which had disastrous effects on small farmers. Consequently, the co-operative movement has seen a strong development in the last decades.
Coope Victoria is a flourishing agricultural co-operative in the region of Grecia, and lies at the foot of the impressive volcano Poas. This co-operative is, due to its great variety in products, the driving force behind the local economy, which makes it therefore an ideal partner for STRO.
Coope Victoria started in 1943 with 19 coffee and sugar cane farmers. In 2007, Coope Victoria has a turnover of 45 million dollar per year with products such as sugar cane, their own coffee brand and vegetables. This co-operative not only gives agricultural advice, but also organises courses on agriculture. Furthermore, it manages gas stations, a graveyard and is an active player in local reforestation.
Coope Victoria’s good reputation, its stable trade structure, and large product and service diversity are the sound basis for local money. The local money in turn is covered by the value of the co-operative’s inventory and can only be spent in the region itself. It therefore stimulates local production and local employment. Moreover, it is an interest-free financial resource for the co-operative.
The introduction of local money, the UDIS (Unidad de Intercambio Solidario or solidary exchange means) occurs step by step. This provides on the one hand CoopeVictoria with the opportunity to gradually switchover their extensive administration. On the other hand the population has time to gain trust in this new financial system, which should be easy to adapt to, since an UDIS has exactly the same value as a Colon, their national currency.
The 1st year, all regular CoopeVictoria customers receive a 2% bonus in the form of UDIS notes. The 2nd year UDIS are brought into circulation as loans. The purpose is to pre-finance the plantation of coffee shrubs by coffee farmers, of which the proceeds reach their optimal level only after three years.
The next step will probably be the production of bio fuels as for example ethanol, which is made out of coffee pulp, sugar cane molasses and Jatropha oil. Currently, the Jatropha bushes are mainly used as fences around meadow-lands. Another possibility is to use recycled oil. Since pure vegetable oil is produced and consumed locally, it is an excellent product to enhance and strengthen the local economic circulation.
More information regarding this subject can be found on the following websites:
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