The Cooperative in Israel

The Cooperative Movement pre-1948

The development of the cooperative movement in Israel shadowed the construction and growth of the Jewish communities and Zionist settlements in Israel. 

Organizations developed on two parallel tracks – civil and political groups; and workers’ groups related to the Histadrut (the umbrella body for trade unions). 

The roots of the civil cooperative go back to the second half of the 19th century when cooperative associations were established for the purpose of building houses, neighborhoods and communities. 

Membership was open to anyone who accepted its regulations. However, these associations were not formally registered as cooperatives (due to the lack of appropriate legislation at that time) but in terms of conduct they conformed to the definition of a cooperative.

The first civil cooperatives were founded with the help of the philanthropist Baron Edmond de Rothschild and two settlement companies: JCA (Jewish Colonization Association) and PJCA (Palestine Jewish Colonization Association). These included a cooperative farm in Atlit, a cattle insurance company, a cooperative society 'Pardes’ and the Vintners 'HaCormim’ Association. 

Over the years other cooperatives were established (most of them convenience stores) and were widespread across communities.

The cooperatives linked to the Histadrut developed in parallel and membership to these organizations was only open to members of the Histadrut.

The first Cooperative Conference in Israel was held in 1930 in Tel Aviv and was attended by 37 representatives from cooperative associations.

At this conference it was decided that new cooperative associations would be approved only after they were recognized as being in economic good health and selective in choosing their members. 

In addition, they decided to look at establishing cooperatives in other sectors of employment such as workers’ kitchens, savings and loans, consumer associations, condominiums etc. 

That same year ‘The Central Store – HaMashbir’   was restructured and a new entity that handled the auditing and training processes for consumer cooperatives was formed.

The second Cooperative Conference was held in 1933 and in the same year the order of the Cooperative Societies was enacted which legally recognized the associations and alliances.

To this day, the “Cooperative Societies” as declared by the government of the British Mandate, together with the amendments added over the years, are the legal basis for the existence of the cooperative sector in Israel. 

The regulations define the registration, activities and liquidation of the cooperative societies. The registrar for Cooperative Societies is under the auspices of the Ministry of Finance and is responsible for the registration and monitoring of their activities. 

The importance given by the legislator to the shared attributes is recognized by the fact that an organization not registered as a cooperative cannot include “collaborative” in its name.

From the Establishment of the State to Today

The early years after the foundation of the State saw an accelerated development in the production output from cooperatives - partly as a result of a tripling in the number of cooperative societies belonging to the central association in just one year.

The cooperative sector took an important role in the construction of the young country: factories, bakeries, workshops and collaborative enterprises such as the Kibbutz, buying groups and old transportation cooperatives – Egged (which remains a cooperative) and Dan (now a limited company).

The fundamental principles of the cooperative movement in Israel are similar those of the International Cooperatives Alliance. 

The following text was approved by the Conference of Israeli Cooperatives in 1966 and is still in effect today: 

• Membership in a cooperative is voluntary and open without discrimination. 
• The cooperative is a democratic organization. 
• Members of the association will contribute to its capital and earnings and its profits will be divided equally among them. 
• The cooperative is an independent organization based on mutual aid and controlled by its members. 
• Cooperative associations will care for the education of their members, employees and general public. 
• Cooperation between cooperatives will be done in a way that best serves its members and communities. 
• The purpose of the activity is ongoing development. 

Today, the cooperative movement in Israel flourishes. Once again, the values of sharing hold a respected place in public discourse and new cooperatives are being established. 

This is a reflection of diverse social initiatives and the commitment of many Israelis to change and mutual responsibility. 

Each month dozens of cooperatives open in all sectors of the economy and their activities are performed with the aim of benefitting cooperative members and society as a whole – rather than an individual tycoon.

This renewed impetus, with the assistance and support of the International Cooperative Alliance, strengthens belief in the spirit of the cooperative and its ability to mobilize people for social change and to create a fair and more humane society. 

http://www.israel.coop/subpage/18/the-cooperative-in-israel