Cooperative movement in Cyprus was born and evolved mainly in the agricultural field. At the beginning of the 20th century, agriculture was the most important sector in Cyprus and a lot of families used to farm their land. The first cooperatives were established in 1909, five years before the first cooperatives law, introduced in 1914. The movement was known for being well organized, but unfortunately had to face the island’s event. The British made the organizations and the primary laws of the cooperative movement during their occupation. They managed the development of this kind of institution by loans over the top at the beginning causing a lack of competence among people. These loans were secured through cooperatives and throughout the history of Cyprus. The period 1936-1974 was the golden era for the development of cooperatives. The reasons for the development of the Cooperative Movement were the rapid growth of the economy after the country’s independence and the spread of cooperative solidarity across the Cyprus society.
In 1974 Cyprus was invaded by Turkey and the cooperatives movement suffered from this. Previously, cooperatives were spread all over the island, but after the invasion 225 cooperatives were displaced and lost their properties and businesses, as happened to many people at that time in Cyprus. It is important to highlight that at the beginning of 2001, the Cooperative Movement declared its final position on harmonization with the European Acquis, agreeing to fully adopt the relevant European Acquis for credit institutions within a five-year transitional period. The cooperatives are “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”. The primary objective of cooperatives in Cyprus is to enhance the economic, social, and cultural well-being of their members. This mission aligns with the International Cooperative Principles established by the International Cooperative Alliance, which emphasize self-help, mutual aid, solidarity, equality, and democracy.
Cooperatives are important entities, and several types exist. This article considers the agricultural ones because of its importance in Cyprus. The island benefits from fertile land and favorable weather conditions, making most agricultural sectors, except for sugar, significant contributors to the country’s agricultural output. The primary agricultural products and exports of Cyprus include cereals, potatoes, citrus fruits, and wine grapes. However, since 2003, cereal production has been steadily declining, along with the production of wine and table grapes. This decline is largely attributed to unfavorable weather conditions, particularly water scarcity, as these crops rely heavily on rainwater for irrigation. For citrus and potatoes, which depend on irrigated water supplies, production levels have been impacted by adverse weather and natural disasters, even though water availability from dams and reservoirs has remained consistent.
Despite the characteristics of the area, the sector now suffers from imports from Greece, Bulgaria, Romania and Ukraine which are cheaper and affect local agriculture. Also, Cyprus is a victim of structural problems in the economy, such as the small size of agricultural plots, an inconsistent water supply, and unpredictable weather patterns, all of which hinder the competitiveness of agriculture. Among these factors, the unpredictability of weather remains beyond human control. Additionally, international competition has made the sector hard for local cooperatives and farmers who are at great disadvantage against some competitors such as Gr.V North Fruit Ltd, a company that processes about 40% of all fruits and vegetables produced in Cyprus and also imports large quantities from abroad. The supermarkets operated by the cooperative movement are not highly competitive, and there are few stores to support other members of the movement on the production side. Although incentives are offered to producers to sell their products directly to consumers, this form of trade is not widespread in Cyprus. Instead, consumers tend to prefer shopping at local grocery stores and neighborhood supermarkets.
Initially, cooperatives lacked skilled personnel in accounting, management, and related fields. However, they are gradually recognizing the need to hire professional managers to run their businesses effectively. Despite this shift, they often prioritize hiring an administrator or an accountant over a marketing expert or sales manager, who might be more beneficial for their growth. In the past, the focus was on collecting products from farmers and processing them through a network of wholesale traders who handled distribution to retailers. The primary effort was to monitor the inflow of products tracking producers, quantity, and quality and the outflow to wholesalers, ensuring accurate payments to farmers based on their production and to wholesalers based on the received goods. Today, professional managers, often strangers to the cooperative members or the local community, increasingly run large cooperative companies. The more established approach involves a team structure including a traditional secretary-administrator (manager), an accountant overseeing financial functions, and a marketer or sales manager responsible for marketing and sales operations.