A Look Inside Japan's Seikatsu Club Consumers' Cooperative
Seikatsu and the International Cooperative Movement
The Seikatsu Club Consumers' Cooperative (SCCC) is a Japanese food cooperative that has the goal not only of providing wholesome food to its members, but also of fundamentally changing the relationship between producers and consumers and between people and their environment. This article will offer an inside look at how the cooperative operates, what its basic ideals and goals are, and how it manages to combine Western values of individual autonomy and self-reliance with traditional Japanese values of social harmony and cooperation.
The cooperative movement is a worldwide phenomenon. The International Cooperative Association has an estimated aggregate membership of 400 million in 70 different countries (Krimerman and Lindenfeld 1992, p. 213). In Japan there are about 670 consumer cooperatives with a total membership of 15.1 million people (more than 10 percent of the population), a capital base of ¥274 billion, and an annual turnover of ¥3 trillion (Hiratsuka 1991, p. 2). Cooperatives still form a relatively small sector in the Japanese economy, but they are by no means small potatoes.
Modern cooperatives typically attempt to extend Western democratic traditions to the workplace. They trace their ancestry back to the first consumer cooperative formed in Rochdale, England in 1844. Six essential principles evolved from the Rochdale experiment which have come to typify cooperatives: (1) open and voluntary membership; (2) democratic administration; (3) not-for-profit status; (4) return of surplus to members; (5) education of the membership; and (6) cooperation among cooperatives.
Many people who are involved in the international cooperative movement see cooperatives as offering an alternative to both the "free" enterprise system of capitalism (which offers "freedom" for only a relatively small handful of capitalist owners and wage slavery for most everyone else) and the nationalization of industries under socialism (which simply substitutes state ownership for ownership by private corporations). Cooperatives can be seen as an attempt to create what is in effect an entirely new economic system that is neither capitalist nor communist. By bringing producers and consumers into direct contact with each other, they are able to eliminate the inefficient "middle men" of both systems (i.e., capitalists who profit not on the basis of their labor but simply because they own the means of production, and oppressive socialist governments that operate on the basis of central planning and dictatorial control over the economy).
Cooperatives are essentially organizations that are owned and managed by their members. Because the members are themselves the owners, all economic benefits are retained by the members — profits are not siphoned off by private shareholders as in capitalism nor by bureaucratic governments as in socialism. As a result cooperatives are generally able to provide producers with higher incomes and consumers with lower costs. And because the members are themselves also the managers of the organization, there is more active participation and less alienation than in more traditionally structured organizations. In place of top-down, hierarchical, and typically patriarchal systems of control, there is the prospect for genuine democratic decision-making.
While cooperatives offer freedoms, however, they also involve responsibilities. Members are expected to actively contribute to the life of the organization by helping with its administration and work. In place of passive consumers who are heavily influenced by advertising and think they have to buy more and more simply to keep up with what "everybody else has," cooperatives encourage their members to make active decisions about what their real needs are and how they can best be satisfied. It is increasingly clear that thoughtless industrialism and consumerism are at the root of many contemporary social and environmental problems. What goods and services do people really need, however, in order to have genuinely fulfilling lives, a just society, and a sound environment?
Cooperatives in Japan can be seen as extensions of the Western ideals of individualism and freedom, but in addition they draw inspiration from traditional Japanese cultural values which emphasize group cooperation and social harmony. The fusion of Western democratic principles (particularly the six Rochdale principles) and Japanese cultural values can be found at work in many types of cooperatives in Japan, including agricultural cooperatives, housing cooperatives, and credit unions. The food cooperative Seikatsu Club provides a particularly good case study of this fusion, however, because it consciously seeks to promote a new vision of society which combines Western notions of individual autonomy and self-help with Japanese notions of collective effort and active involvement in local communities. The coop has attracted the attention of a growing number of Western writers who see it as a model for grassroots economic initiatives that are socially just and ecologically sound (Krimerman and Lindenfeld 1992, pp. 265-267; Mies 1993; and Morrison 1995, pp. 156-158; the Grassroots Economic Organizing Newsletter has devoted two special issues, nos. 12 and 13, to Seikatsu). This article will attempt to give a fuller account of the cooperative's organizational structure and ideals.
How the Seikatsu Club Works
In 1965 a group of householders, believing that the companies which then dominated the milk market were offering an inferior product and manipulating prices, formed a collective buying organization to enable them to purchase quality milk at lower prices. The project was successful and the gorup began to extend the principle of collective buying to other products, leading to the formation of the Seikatsu Club Consumers Cooperative as a legal entity in 1968. (A detailed history of the SCCC can be found in Seikatsu Club Consumers' Cooperative 1992, pp. 5-6; and Yokota 1990, pp. 3-22.) The network of SCCC-affiliated consumer cooperatives is presently comprised of twelve autonomous organizations in twelve different prefectures. The SCCC has a total membership of 225,000 households embracing more than half a million individuals (Grassroots Economic Organizing Newsletter 1994, March/April, p. 1). As of 1991 it had a capital base of ¥12 billion, an annual turnover of ¥66 billion, and a staff of 901 (Hiratsuka 1991, p. 2).
The Seikatsu Club in Tokyo, which has served as a prototype for the creation of clubs in other prefectures, has spawned 27 affiliated workers' collectives involving 300 member-employees. (Statistics in this and the following paragraph are from Seikatsu Club Consumers' Cooperative 1992, pp. 8-10.) The Tokyo club also has partnership relationships with two dairy firms, a delivery company, a cattle ranch, and a publishing house, and has established the Social Movement Research Center which promotes research, organizes study exchanges, and publishes the monthly magazine, Social Movement. There is also the Tokyo Seikatsu-sha Network, which is legally registered as a political organization but is independent of any political party. By 1992 the Network had elected one metropolitan assemblywoman, nine ward assemblywomen, and 20 city assemblywomen in Tokyo.
The basic organizational unit of the SCCC is the han ("small group" — often used to refer to a group of people living in the same area). Ideally a han consists of seven to ten neighboring households. The actual average number of households per han in the Tokyo club is 7.5. The responsibilities of the han include gathering orders from individual members, passing on the orders to the local center, receiving products from the delivery truck, and distributing them to members of the han. Individual orders are placed a month in advance and forwarded from the local center to a regional center and finally to the cooperative union, which collates them and then places a single order directly with each producer. The goods are delivered bi-weekly by a delivery truck to the neighborhood han, which then distributes them to individual members. Since the food is coming directly from the producer, it is extremely fresh. Eggs, for example, are delivered the day after they have been laid and arrive unwashed. The han system eliminates the need for storage and thus also the need for artificial methods of preservation, such as chemical preservatives or irradiation.
Since the producers receive the orders in advance they can anticipate how much of a given product will be needed in the coming months and are often able to adjust production accordingly. Producers are thus able to fill orders directly to meet actual needs, and are not simply producing vast quantitites of a product which they must subsequently try to sell on the "open market" (with no guarantee that they will be able to sell everything they have produced). There is no need for expensive advertising. Bulk ordering also helps to reduce prices. The cooperative system thus eliminates overproduction and waste, improves efficiency, reduces the stress caused by differences in supply and demand, and helps to stabilize prices. Ultimately it provides more security for both producers and consumers: consumers can be assured that their demand for goods will be met and producers can be assured that the goods they produce will be sold.
In the traditional market system the flow is from producers to consumers: producers produce goods which they must then advertise and persuade people to buy. The cooperative system provides an alternative to the market system by reversing this flow: consumers take the initiative by telling producers exactly what they want. The principle of sanchoku — "direct from the producer" — creates a relationship of interdependence between producers and consumers. Over time consistent patterns of consumption and production develop which help to stabilize this relationship. Consumers are provided with quality products at a fair price and producers are provided with a secure livelihood at a reasonable income. The sanchoku system also eliminates the need for a "middle man." While the cooperative functions to coordinate orders, its purpose is not to generate profits but to serve its members.
Since goods are delivered directly to consumers, the cooperative has no stores, giving the han system several advantages over the conventional store system. In the han system there is no need to invest in commercial property and buildings. Even though there are still the expenses of maintaining offices and depots for the cooperative, paying salaries to coordinators and delivery personnal, and servicing delivery trucks, overhead is still considerably lower for han-based cooperatives than for conventional stores. There is no need to hire managerial experts who must insure that the supply of goods in the store roughly matches actual consumer demand. Delivering directly to the han also gives members direct involvement in at least part of the labor process. For all the above reasons, overall costs can be reduced and efficiency improved, often resulting in lower prices for consumers.
The system developed by the SCCC, and other similar food cooperatives in Japan, is based on the concept of local production for local consumption. Most of the suppliers are local farmers and collectives. The freshness and quality of goods can thus be assured and the cost of transporting goods long distances is also eliminated. This decentralized model is the antithesis of the current "global market" model. Advocates of the global market claim that an international division of labor and free trade will create a larger world economy and thus more jobs. However, a growing number of critics (Greider 1997; Korten 1995; Lang and Hines 1993; Mander and Goldsmith 1996; Nader et al. 1993) claim that free trade agreements often override local quality, safety, and environmental standards. Such agreements also enable multinational corporations to more easily shift production to countries where wages are lower, taxes are minimal, and environmental standards are more lax. Furthermore, they break down traditional distribution networks which, while often cumbersome and inefficient, are nonetheless reliable. It is precisely these established local relationships which cause so much consternation to international traders, who regard them as "non-tariff barriers" to free trade. When these relations begin to break down, however, local communities also begin to disintegrate. Cooperatives help to reestablish and maintain these relationships. Whereas goods are impersonally sold to the highest bidder in a market economy, the personal needs of both producers and consumers are taken into account in a cooperative economy.
For most of the post-war period Japan sought to strictly regulate the amount of imported agricultural products that could be sold in its domestic market — especially rice, beef, and oranges — on the grounds that the country needed to maintain agricultural self-sufficiency. The recent liberalization of the market for agricultural products, however, has led to increased competition for Japanese farmers, many of whom are finding it increasingly difficult to survive. Consumers as well are uncertain about the quality and safety of the imported products they buy. Instead of continuing to pursue a policy of increased self-sufficiency in food production by diversifying its agricultural base and protecting existing agricultural lands from urban development, Japan's current policies increasingly rely on the global market to supply its basic food needs.
Seikatsu has supported the notion that all countries should be moving towards forms of self-sufficiency which are both ecologically sustainable and in accordance with local cultural traditions. Katsumi Yokota, an influential spokesperson for Seikatsu, writes that the organization is "against the complete liberalization of agricultural trade, because we believe every nation should support its own basic food production" (1990, p. 67). Yokota points out that Japan is lowering its rate of self-sufficiency at the same time that it is increasing the amount of industrial manufactured goods it sells in the international market (1990, p. 126). This shift bolsters the profits of transnational corporations more than it satisfies the needs of ordinary people and local communities.
The principle of self-sufficiency does not necessarily preclude the possibility of fair trade across international borders, however. Seikatsu currently has trade relations with local communities on the Negros Islands in the Philippines, for example. Sugar cane is the main export crop of the Negros Islands. When sugar prices fell in the mid-1970s, however, the entire local economy collapsed. Since the land had been used exclusively to grow export crops rather than crops for local consumption malnutrition and starvation became serious problems. Relief agencies attempted to revive export-led growth and to improve working conditions on the sugar plantations. This approach required constant new infusions of outside financial assistance, however, and did nothing to address the problem of food self-sufficiency or unequal income distribution. In 1985 the average annual wage of a skilled laborer in the sugar industry was approximatley US$210, while the poverty line in the Negros Islands was US$1,078 (Iwami, no date-b, p. 11).
A different approach, however, was developed by the Negros Council for Peace and People's Development (NCPD), which coordinates the efforts of thirty local self-help groups. The NCPD promotes group farming of rice, corn, vegetables, and livestock on unused land in order to sustain local populations. It is also involved with organizing a credit union, constructing various communal facilities (including a water supply), and establishing an agricultural training school. In addition local groups are encouraged to grow cash crops, such as mangoes, bananas, and vegetables for export. Japanese cooperatives, including Seikatsu, annually import 700 tons of these bananas directly from the producers, bypassing conventional distribution channels. Local producers avoid using chemical fertilizers, not only for ecological reasons but also to decrease costs. Efforts such as these promote self-sufficiency in both Japan and the Philippines, while still allowing a measure of fair trade in surplus goods.