Role of Social Cooperatives in the Rural Economy, Experiences Gained in the first Implementation Phase of the Financial Assistance Programme ‘Focus’

Hamza, Eszter – Rácz, Katalin – Szabó, Dorottya – Vásáry, Viktória

Keywords: social economy, rural development, agricultural employment, Q13, Q18

In Hungary, as in other EU Member States, there has recently been an increased interest in key players of the social economy, namely the social enterprises and, among them, the social cooperatives. The study is aimed at revealing characteristics of the Hungarian social cooperatives, primarily by focusing on those carrying out activities related to agriculture or the food industry. It analyses comprehensively the objectives, results and impacts of the financial assistance granted in the framework of the ‘Focus’ Programme. This programme, initiated by the Hungarian Ministry of Interior, has a focus on supporting social cooperatives built upon public employment and among the members of which there is a local government. Beyond interpretation of international and national literature and documents, descriptive and comparative analysis of statistical and financial support data, and structured in-depth interviews were carried out.
The most notable results of the first stage of the multi-year research work are as follows. In the light of operational experiences, the sustainability of 200 social cooperatives funded with a complex tool kit in the framework of the ‘Focus’ Programme (with an average amount of HUF 53.7 billion) depends to a great extent on project-level factors such as the expertise of the management, its entrepreneurial experiences, the socio-demographic characteristics of the employees, their physical, mental health status, availability of resources and different types of capital, furthermore presence of partnerships providing access to inputs and being able to treat risks. People reached by social cooperatives have first access to products with higher value added and in certain cases even to innovative services or services filling gaps, while in addition they gain adaptation patterns and future visions. This is especially important for social groups which need to be reintegrated into the primary labour market. Moreover, direct beneficiaries are local input suppliers or input suppliers living in neighbouring areas and enterprises providing business services. To facilitate the progress towards their sustainability, there is a need for widening the provision of continuous mentoring and advisory activities, dissemination of good practices, innovations and provision of guidance and assistance to increase the financial absorption capacity of the beneficiaries.

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