New Internationalist

New Internationalist Issue 278

Issue 278

[image, unknown] New Internationalist Issue 278


The material that follows has been provided by New Internationalist

Reclaiming community

Steps to building a healthy local economy
photo by CLAUDE SAUVAGEOT
Local economies need a tough skin to protect them from being destroyed by outside economic forces - banks and businesses intent on soaking up community assets. Many communities in the industrialized world are trying to create such micro-economies in order to keep local resources working within the community. Richard Douthwaite outlines six of the first steps a community can take to revitalize their local economy.



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CREATE YOUR OWN CURRENCY

Problem
:
If people use money earned from outside to trade among themselves, their trading is exposed to fluctuations in the national or international economy.

Community solution:
On the rugged Beara Peninsula of Ireland's Atlantic coast residents set up a Local Exchange and Trading system (LETS) in 1992 so they could use their own money to trade with each other. As a result their difficulties will be minimized if the Irish economy falters or the tourist season fails.

Operation:
A common feature of LET systems is that the money does not exist physically. When one member sells something or does a job for another, she is paid with a special cheque denominated in the local unit. (In Beara the unit is called a 'Hag'.) Cheques are lodged with the system's accountant who keeps records of all transactions on a computer and issues each member with a statement at regular intervals.

Results:
At present the most active 25 members do an average of $200 worth of LETS business each month, which is high compared with systems elsewhere. A LET system's value is not solely economic, however. It is also a powerful way of building community and making new friends. Around 1,000 other places, mostly in the English-speaking world, have similar systems.

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START A CREDIT UNION

Problem
:
If people put their savings into an outside bank or pension fund their money will only be made available to families or businesses in their area if they can afford to pay as high an interest rate as the bank can obtain elsewhere in the world.

Community solution:
In 1971 the people of Port Antonio, Jamaica, like those in thousands of other communities throughout the world, set up the Portland Credit Union (Portland is the parish covering the east of Jamaica) to recycle their savings locally and keep them out of the hands of the international banks.

Operation:
Credit unions are owned and run co-operatively and have very low operating costs which enables them to charge lower interest rates than banks and to keep their rates constant while still paying depositors a better interest rate than their rivals.

Results: The worldwide credit union movement began in Germany in the 1840s. Today the movement is particularly strong in the US where an estimated 54 million people participate.


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HOLD LAND IN TRUST

Problem
:
As an area becomes more prosperous real-estate prices generally rise. This benefits outside landowners and richer members of the community but makes life more expensive and difficult for anyone without real estate.

Community solution:
Robert Swann started the Community Land Trust of the South Berkshires in Great Barrington, Massachusetts in 1981. His house is in an apple orchard which belongs to the Trust. Community land trusts are based on the belief that land is not something which should be bought and sold to make a profit. Instead it should be held in trust for future generations.

Operation:
The Trust first borrowed to buy the orchard at full market price and made four house sites available on part of it. Residents are charged a lease fee for the land though the houses are owned. However, an owner who wishes to sell has to offer the house to the trustees who are only obliged to pay replacement value.

Results:
The lease fees have paid off the initial loan and enabled the orchard to be kept in cultivation which would otherwise have been impossible. The trust has bought two other properties, one of which is part nature reserve as well as a site for well-designed, moderately priced houses. Swann's promotion of the land-trust idea has led to the establishment of almost 200 similar trusts throughout the US.


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GENERATE YOUR OWN POWER

Problem:
People in industrialized nations spend a fifth of their income buying energy from unsustainable, environmentally-damaging fossil-fuel sources. Any community aiming for a more independent local economy should give high priority to meeting its energy needs from local renewable sources.

Community solution:
Vederso in Denmark moved in this direction in 1986 by setting up a co-operatively-owned wind farm. Each family paid around $8,000 for their share, mostly in loans from the local savings bank to be repaid over ten years.

Operation:
Payments for the wind farm's electricity are paid straight into the savings bank by the power company which buys it. The bank then calculates how much money goes to each member and credits their accounts. Once their loans are paid off the members get almost free electricity.

Results:
Similar community wind co-ops have been set up all over Denmark. The movement now has 52,500 members and generates three per cent of the country's electricity.


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SUPPORT LOCAL FARMERS

Problem
:
In most industrial countries farm produce travels hundreds of miles through a long, complex supply-chain before it arrives in a local supermarket or corner store. As a result purchasers have no contacts with farmers and no knowledge of the way their food is produced while farmers themselves often get less than a fifth of the amount the customer pays.

Community solution:
In Buschberghof outside Hamburg a Community Supported Agriculture scheme (CSA) was set up in 1968. Its land, buildings, machinery and livestock are owned by a land trust. The farmer whose family had worked the farm for generations decided that he would rather give it away than lose it by continuing to farm along conventional lines.

Operation:
The trust allows a group of farmers to use the land and buildings rent-free. The farmers estimate each year how much the farm will cost to operate and each family decides for itself how much of this amount it ought to pay. All the produce belongs to the families and they can order as much as they want.

Results:
The farmers grow all the food required by 90 Hamburg families - meat, milk, cheese, butter, bread, eggs, fruit and vegetables.There are now more than 600 CSA groups in the US and Canada. As in Germany these families have banded together to establish direct links with farmers, often paying for their food in advance.


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SET UP A FOOD CO-OP

Problem
:
In many places big corporations have a stranglehold on the food-retailing system, making it difficult for local producers to find a local market.

Community solution:
In Dublin, a food co-op has been running for 12 years, buying wholefoods in bulk and dividing them up among its members on Saturdays in a rented hall. Communities which operate a food co-op provide themselves with a community-owned distribution system and a way of linking and strengthening other local economic activities.

Operation:
The venue provides an ideal place for craftworkers and organic farmers to sell their products. They rent stalls in the hall and the weekly event is an important social occasion.

Results:
The co-op formed the basis for the first LET system in the city and is backing a community-supported garden. Elsewhere food co-ops have been taken up in different ways and adapted to stop the erosion of local institutions. In England the Village Retail Services Association (ViRSA) has been set up to advise communities on how to re-open or retain their village shops. Like the Dublin food co-op, a community shop is a focal point and meeting place as well as an important source of household goods, basic foods and the best of local produce.


Richard Douthwaite writes on environmental issues from County Mayo, Ireland.

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©Copyright: New Internationalist 1996

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