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Cooperative Societies in India

The Cooperative Societies can be defined as 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". India is an agricultural country and laid the foundation of World’s biggest cooperative movement in the world. The need for profitability is balanced by the needs of the members and the wider interest of the community, the Cooperative Movement was started by the weaker sections of society for protecting its members from the clutches of profit hungry businessmen.

Importance of Cooperative sector for India

The Cooperatives play a very important role in India because it is an organization for the poor, illiterate and unskilled people. The importance of Cooperative sector for India is given below:

1. It provides agricultural credits and funds where state and private sectors have not been able to do very much.

2. It provides strategic inputs for the agricultural-sector; consumer societies meet their consumption requirements at concessional rates.

3. It helps to overcome the constraints of agricultural development.

What are the types of co-operatives in India?

Let’s explore the six major types of co-operatives that exist in India.

1. Consumer Cooperative Society

These societies are primarily for consumers who wish to buy household goods at lower prices. The society buys goods or products in bulk amounts directly from the producer on wholesale rates and sells them to the members, thus eliminating the need for a middleman. The purchased goods are sold to members and non-members in cash. Capital is raised by issuing low denominational shares to the members who also get dividends on the shares. Consumer co-operatives do not use advertising but rely on word-of-mouth. They ensure a regular supply of goods at reasonable rates. They set up stores or outlets to sell goods and avail huge trade discounts from producers. Some of the best examples of a consumer co-operative society are Super Bazar and Apna Bazar.

2. Producer Cooperative Society

Also known as industrial co-operatives, these types of societies look out for the small-scale producers in a cut-throat market scenario. Production and distribution are handled from within the co-operative. These producers could be farmers, ayurvedic herbal medicine producers, organic produce sellers, handicraft or handloom producers, artisans, etc. Raw materials, ingredients, tools, processing units, etc. needed for the manufacturing or producing the goods are obtained by the members directly, provided to the producers and the final output is distributed to the buyers/non-members without a middle link. Producers pool in their resources, increase production volumes and minimise risk in the face of the competitive capitalistic markets. Best examples are dairy, fish farmers, weavers and artisans and tribal co-operatives.

3. Co-operative Credit Societies

These are urban and rural financial societies that provide loans to members at low rates of interest, protecting the members from massive debts to traditional money lending agencies. They serve a basic but highly personalised banking role in a sense. They have deposit schemes in forms of saving accounts, FD, RD, pension schemes, etc. The money procured is then given on loans to members as personal loans, agricultural loans, housing or vehicle loan, etc. These societies are regularly aided by state and national government subsidies and funding. Some examples are Teachers Co-op Credit society, State Electric Board Employee Co-op Credit Society.

4. Marketing Cooperative Society

Mostly for the benefit of farmers, these societies function to market the produce profitably at the best possible prices, increase the bargaining strength of the farmers and protect them from the trials of individual selling and market exploitation. The profits are distributed on the basis of the contribution of produce made. They also educate the farmers on market prices, stabilise supply against demand, help them get loans, and help with grading, pooling, processing and procurement of produce and provide safe storage and reliable transportation facilities. Some good examples are Milk Co-operatives in Gujarat, Maha Grape, Cotton Marketing Co-ops.

5. Housing Cooperative Society Housing cooperatives are a type of society that provides affordable housing to the middle and low-income groups. One becomes a member by purchasing shares in the co-operative. Instead of owning the real estate, the members own a share in the entire corporation, which in turn gives them a house to reside in. Such societies are commonly found in urban and semi-urban cities. They construct the residences or flats and provide them to the members to live in and collect the money in instalments. In other cases, they provide the land to the members who themselves construct their own residences.

6. Co-operative Farming Societies

The financially challenged farmer may not be able to maximise his agricultural output individually and earn optimum profits. Farming co-ops are a way for farmers to retain the right to their land, yet pool together and consolidate land, livestock and equipment while earning a share in the total output as per the contribution made. In better farming co-ops, members co-operate for pre-sowing, seeds, fertilisers and equipment, and joint selling, but cultivate the land separately. In joint farming, they pool in the land as well. Co-op tenant farming is the type in which the society leases the land to the farmers and collects the rent. In collective farming co-ops, farmers are members for life and cannot remove their land but can transfer the land rights to another.

These societies have always stood for the people of the nation. Government schemes and benefits may or may not reach those who are in need, but these co-operative societies were always there.

-Aparna Singh