Overcoming financial, social, and environmental challenges faced by cooperatives: case studies from the state of Rio Grande do Sul, Brazil
Like many other developing countries, Brazil faces issues around a rising population, growth of economic activity, and rapid urbanisation, leading to changing consumption patterns and the fast-growing generation of urban solid waste. Around 95% of all the waste generated in Brazil, which is one of the highest producers of waste globally, is sent to landfill (da Silva, 2018). Despite the implementation in 2010 of the National Solid Waste Policy (NSWP), Federal Law 12.305/10, most municipalities have not drafted or implemented their own municipal policy. Curitiba is one of the few municipalities to have developed a plan (da Silva, 2018). The National Solid Waste Policy established guidelines for integrated waste management, proposed sustainable consumption, and emphasised recycling, with landfill as a last resort (Ryen et al., 2018). However, 58.4% of urban solid wastes are disposed of in landfills, with the rest being deposited in inadequate or unsuitable places (ABRELPE, 2016). In addition, the municipal cost of waste management is the third-highest element in terms of expenses, equivalent to almost 6% of the entire budget of Brazilian capital cities (SNIS-RS, 2016). The NSWP also facilitates a shared responsibility approach for the product life cycle and establishes reverse logistics as an instrument of economic and social development (Azevedo, 2015; Demajorovich and Migliano, 2013). In 2004, a national policy to support local productive arrangements (LPAs, which are composed of companies focused on a similar product or service) was created with the intention of increasing competition, creating jobs, and increasing the capacity for cooperation to strengthen the country’s industrial policy (Figal Garone et al., 2015).
There are only a few empirical studies in Brazil of the utilisation of circular economy (CE) approaches (e.g.. Moreno et al., 2016; da Silva, 2018; de Oliveira et al., 2018; do Amaral et al.,
2018; Sehnem et al., 2019; Silva et al., 2019). Moreno et al. (2016) examine design strategies for a CE by considering knowledge about resource cycles and designs for longer product life, da Silva (2018) focuses on the development of a systems approach for the management of solid waste in the municipality of Curitiba, de Abreu and Ceglia (2018) found that ‘interorganisa-tional strategies and management’ were key driving forces in bringing together a ‘community’ of actors to successfully implement the circular economy concept in a group of organisations. Similarly, Sehnem et al. (2019) showed that the support of senior managers, particularly those with formal sustainability education and an understanding of national sustainability strategy, was crucial for successful implementation. Silva et al. (2019) noted that there was a need for more cross-sectoral cooperation, as well as long-term approaches to implementation of the circular economy concept.
Brazil is considered one of the global centres for agribusiness (UNCTAD, 2017). The agrifood sector is one of the key areas of focus for a more circular approach due to the potential for recovery of value and the need to manage the impacts of increasingly intensified farming (e.g., waste, water scarcity, chemical contaminants, adaptation to climate change, etc.) (Piedra-Munoz et al., 2016; Godoy-Duran et al., 2017; Stock et al., 2017).
Cooperatives play a vital role in this more circular approach. Indeed, Clinton and Whisnant (2014) assert that they are innately a more sustainable form of business, one that is able to plan for the longer term and avoid the pressures that come from the demand for immediate profits. The International Cooperative Alliance defines a cooperative as “an autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise” (ICA, 2014). They are composed of an elected board of members which hires professional staff to handle the day-to-day operations (Coren and Clamp, 2014).
Cooperatives play a particularly crucial role in the global agrifood sector and are responsible for over 60% of the collection, marketing, and processing of agricultural commodities at the source, generating in excess of USS290 billion (Campos-Climent and Sanchis-Palacio, 2015). For example, about 30% of the fresh vegetables produced in Spain, and 18% of those in Europe, are produced by small-scale family farms in Spain (Cajamar, 2016). Of all the sectors, it is in farming and agriculture where the cooperative business model is most widely utilised (cooperatives together have an estimated 32% of global market share). Cooperatives therefore play a key role in feeding the world’s population.