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    20 April, 2009
Assembly passes bill on cooperatives

The Assembly of the Republic on 9 April unanimously passed the first reading of a bill establishing a modern legal framework for cooperatives.

The law, drafted by the Assembly's Agriculture Commission, replaces obsolete legislation from the days of the one-party state and the command economy. "Times have changes, technology has evolved, and the socio-economic reality of today is different from that of 25 years ago", the Commission wrote in its document justifying the bill.

The bill envisages cooperatives as enterprises - but ones that are not devoted solely to making a profit. Instead they are organisations that are democratically run, encourage mutual aid, and are aimed at the sustainable development of their communities.

The key difference between a cooperative and a company was that "a cooperative is a union of persons and not a union of capital", said the Commission. "Although, like any other enterprise, a cooperative needs capital, it is not strategically structured simply on the basis of capital accumulation. While in enterprises of a purely capitalist nature capital is synonymous with power, in cooperatives power is personal and unitary".

The Commission envisaged cooperatives as playing a key role as "an instrument capable of avoiding the economic and social stagnation of the rural areas". Their participatory structures would have an impact on rural communities, and they would generate rural wealth.

"In an environment of a scarcity of capital, or imperfect markets, the cooperative is the best way for rural people to gain access to technology, to credit and to specialist assistance, so that they can deal with the great conglomerates involved in agro-business", stated the Commission.

The bill draws a distinction between surplus generated by a cooperative and company profits.

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