In the rain-soaked hills of Basque Country, Spain, a factory worker casting engine parts earns no less than one-sixth of what the highest-paid manager takes home — and that manager was elected by the very workers on the shop floor. Meanwhile, in Kalol, Gujarat, a marginal farmer holding two bighas of land collects his subsidised bag of Nano Urea from the local society, blissfully unaware that his purchase traces back to one of the world’s largest fertiliser cooperatives headquartered over a thousand kilometres away in New Delhi. Two cooperatives. Two continents. Two radically different answers to the same question: can ordinary people govern an enterprise worth billions?
I have spent years covering India’s cooperative sector for IICTF, and no comparison sharpens the ideological fault lines of the movement quite like placing Mondragón Corporation beside IFFCO (Indian Farmers Fertiliser Cooperative Limited). One has no CEO and lets workers vote on salaries. The other has a Managing Director, a government-linked board, and serves over 35,000 member cooperatives across India. Both are wildly successful. Both claim the cooperative identity. Yet their DNA could not be more different.
Where It All Began — A Priest and a Famine
Mondragón’s origin story reads like fiction. In 1956, Father José María Arizmendiarrieta, a Catholic priest in post-Civil War Spain, convinced five young engineers in the town of Mondragón to start a paraffin heater factory called ULGOR. The Basque region was devastated, unemployment was rampant, and Franco’s regime offered little help. Arizmendiarrieta’s radical idea was simple: workers should own the enterprise they build. Every employee would be a member-owner. Every member-owner would get one vote — regardless of seniority or capital contribution.
IFFCO’s birth was less romantic but equally urgent. By 1967, India was reeling from consecutive droughts and the humiliation of PL-480 food aid from the United States. The government needed fertiliser — fast. Rather than hand the sector entirely to private corporations, the cooperative route was chosen. IFFCO was registered on 3 November 1967 as a multi-unit cooperative society, tasked with manufacturing and marketing fertilisers through a network of cooperative societies. The founding logic was distribution equity: ensure that the cheapest bag of urea reaches the most remote farmer.
Governance — The Heart of the Difference
This is where the two models diverge most dramatically. At Mondragón, there is no CEO in the traditional sense. Each of the roughly 95 individual cooperatives under the Mondragón umbrella elects its own governing council. The General Assembly — where every worker-member votes — is the supreme authority. The highest-paid worker cannot earn more than six times the lowest-paid worker, a ratio that would be unthinkable in any Fortune 500 company. In 2026, the corporation employs approximately 80,000 people across industry, retail, finance, and education, with consolidated revenues exceeding €11 billion.
IFFCO operates on a federated model. Its members are not individual workers but cooperative societies — approximately 35,000 of them. These societies, in turn, represent tens of millions of Indian farmers. IFFCO’s board includes nominees from NABARD, the Government of India, and elected representatives from member cooperatives. A Managing Director runs day-to-day operations. The revenue in recent fiscal years has hovered around ₹38,000 crore, making IFFCO one of the largest cooperative enterprises on the planet by turnover.
| Parameter | Mondragón Corporation | IFFCO |
|---|---|---|
| Founded | 1956, Basque Country, Spain | 1967, New Delhi, India |
| Membership type | Individual worker-owners | Cooperative societies (~35,000) |
| Employees | ~80,000 | ~5,200 direct employees |
| CEO / MD | No traditional CEO; elected councils | Managing Director + government nominees |
| Revenue (approx.) | €11 billion | ₹38,000 crore |
| Pay ratio (top:bottom) | 6:1 | Not publicly capped |
| Core sectors | Industry, retail, finance, education | Fertilisers, rural tech, insurance |
| Global presence | Operations in 35+ countries | Plants in India; JVs in Oman, Jordan, Nigeria |
What Actually Reaches the Farmer?
IFFCO’s real power lies in its last-mile delivery. Through Primary Agricultural Credit Societies (PACS) and district-level cooperative federations, subsidised fertilisers reach villages where no private company would find it profitable to operate. The introduction of Nano Urea in 2021 — a liquid formulation in a 500 ml bottle replacing a 45 kg bag of conventional urea — was a genuine innovation. By early 2026, IFFCO claims to have sold over 10 crore bottles, reducing input costs for small and marginal farmers. The Ministry of Cooperation, established in 2021, has further pushed for digitisation and strengthening of the PACS network, with IFFCO as a key institutional partner.
Mondragón’s benefit model is entirely different. Worker-members build capital accounts that grow over their working life. Profits are distributed: roughly 10% to community development, 45% to individual capital accounts, and 45% to collective reserves. When a Mondragón worker retires, they receive their accumulated capital — a model that functions as both employment and pension in one structure.
The Cracks in Both Models
Neither model is without scars. Mondragón suffered its worst crisis in 2013 when Fagor Electrodomésticos, its flagship appliance manufacturer and founding cooperative, went bankrupt. Over 1,800 workers lost their positions. The corporation absorbed most into other cooperatives, but the episode exposed a vulnerability: democratic governance can sometimes delay painful but necessary restructuring decisions. Critics also point out that Mondragón increasingly relies on non-member contract workers in its overseas subsidiaries — a practice that dilutes the cooperative principle.
IFFCO’s challenges are structural. Government control over fertiliser pricing means IFFCO’s margins depend heavily on subsidy disbursements from the Centre, which are frequently delayed. Political interference in board appointments remains a perennial concern. The NCDC and NABARD have pushed reforms, but cooperative governance in India still suffers from elite capture at the state level — a problem Mondragón’s individual-membership model avoids entirely.
What Can India Learn From Basque Country?
I believe the most transferable lesson from Mondragón is not its no-CEO structure — that would be nearly impossible to replicate in India’s federated cooperative ecosystem overnight. The lesson is the pay-ratio cap and profit-sharing discipline. If IFFCO or Amul or any large Indian cooperative adopted even a modest version of Mondragón’s transparent surplus distribution, it would transform member trust. India’s cooperative sector, despite employing an estimated 20 million people and touching over 290 million members, still struggles with the perception that cooperatives serve the office-bearers more than the members. Mondragón’s radical transparency is the antidote.
Looking ahead to the next five years, both models face technology-driven disruption. Mondragón is investing heavily in Industry 4.0 and robotics through its Mondragon University. IFFCO is piloting drone-based fertiliser application and expanding its digital cooperative platform. The Multi-State Cooperative Societies (Amendment) Act, 2023, has given the Ministry of Cooperation sharper tools to enforce accountability. Whether those tools are used to empower or to control will determine whether Indian cooperatives inch closer to the Mondragón ideal or remain tethered to government patronage.
Back to the Factory Floor and the Farm Gate
That Basque factory worker casting engine parts will vote again next quarter on whether to reinvest surplus into a new production line or distribute it to members. That Gujarat farmer will return to his PACS branch to collect another bottle of Nano Urea, probably never knowing the global debate his purchase fuels. Both are cooperators. Both are proof that enterprises can serve people before profit. The question India must answer in 2026 is not whether to copy Mondragón, but whether it has the political courage to give its own cooperative members the same voice. If this comparison sparked something in you, share it with a cooperative member you know — or better yet, attend your next local society meeting and ask who decides where the surplus goes.