5 Main Forms of Co-Operative Societies

This article throws light upon the five main forms of co-operative societies. The forms are: 1. Co-Operative Societies 2. Consumer’s Co-operative Societies 3. Co-Operative Marketing Societies 4. Industrial Co-Operatives 5. Co-Operative Farming Societies.

Form # 1. Co-Operative Credit Societies:

The societies are voluntary associations of people with moderate means, formed with the objective of providing the short-time financial accommodation to their members. These societies are formed with the idea of saving their members from the clutches of money-lenders.

Co-operative credit societies may be of following two types:

(i) Agricultural Credit Societies:

These societies are formed to advance credit to the agriculturists at a very low rate of interest and to save the borrower from the clutches of moneylenders. The Societies are expected to help in the procurement of agricultural equipments for better production. These are also expected to help in the marketing of the produce. These are also excepted to perform educative as well as advisory functions.

(ii) Non-Agricultural Credit Societies:

These societies are formed in towns by people of moderate means to provide bank accommodation to the members. These societies have really done good to the people. These have helped in the development of thrift habits.

Form # 2. Consumer’s Co-Operative Societies:

These societies are formed by consumers for obtaining their requirement at reasonable prices. Their basic object is to eliminate middlemen. The consumers join together and manage the business. The profit of the business is returned back to the members in the ratio of purchases made by them during the year.

Characteristics:

(i) It is a voluntary association of persons.

(ii) Such societies sell for cash and seldom allow credit facilities.

(iii) Democratic control is exercised.

(iv) The liability of members is limited to the extent of their contribution.

(v) The purchases are made in bulk, thus enjoying economies of large scale purchasing.

(vi) The prices of commodities sold by such societies are fixed.

(vii) Each member has got one vote, regardless of the number of shares held.

(viii) The profit earned by the society is distributed among the members.

Merits:

(i) The purchases are made in bulk and hence trade discount are available to such societies.

(ii) Advertisement expenses are minimum.

(iii) It develops the managerial ability amongst members.

(iv) The control is democratic and no single group can secure control over the organisation.

(v) Members get fresh, cheap and good commodities.

Demerits:

(i) It suffers from low finances.

(ii) There is a lack of proper sales promotion.

(iii) It caters the need of small and medium income groups only.

(iv) The management of the society is in the hands of amateurs,

(v) There is much dependence on the loyalty and honesty of the workers.

Form # 3. Co-Operative Marketing Societies:

Co-operative marketing is essential for marketing the produce of the cultivators at reasonable prices in co-operative way. The main purpose is that the cultivator should get reasonably good price. These are voluntary associations which aim at collectively marketing their produce. The purpose is to save the producer from the clutches of money-lenders.

According to Reserve Bank of India, “Co-operative marketing is a co-operative association of cultivators which have come together to market their produce more profitably. In other words, a marketing co-operative society is a society which is primarily of agriculturist producers who have come together with the objective of selling their own produce along with other producers, both for their own benefit as well as for those of the consumers.”

Objectives:

(i) To protect the interests of the producers.

(ii) To ensure that goods produced by the producer are sold directly in the market and that middlemen’s profits are avoided.

(iii) To ensure that economic needs of the agricultural producers are not exploited by money-lenders.

(iv) It grades the produce in a manner that producer gets best price for his produce.

(v) It advances loans to the farmers for repayment after the crops are sold.

(vi) It strengthens the bargaining power of the producer.

(vii) It helps in getting finances at cheap rate of interest from financial institutions.

(viii) It educates the farmers about marketing problems.

(ix) It helps in checking the manipulation in the prices.

(x) It implements price support and procurement policies of the Government.

Form # 4. Industrial Co-Operative Society:

An industrial co-operative society may be defined as a co-operative unit which is formed by industrial labourers or small industrialists for the purpose of pooling their resources with the object increasing their production and marketing their produce. The members join hands as a body and avoid middlemen services both in production and distribution.

Objectives:

Industrial co-operatives are formed with the purpose of:

(i) Purchasing and supplying of tools etc. to their members and also to market finish products.

(ii) These impart technical training to the members and grant advances to them against finished goods or raw material.

(iii) These also provide protection to the members in economic and social fields.

(iv) They safeguard the interests of poor workers against the rich ones.

Form # 5. Co-Operative Farming Societies:

These societies are the voluntary associations of small farmers who join hands with objective achieving the economies of large scale farming and maximising agricultural output.

According to N. Moris, “Co-operative farming is an organisation of farmers which comes into existence as a result of deliberate efforts to affect certain social and economic changes.”

India is an agriculturist country and it is very much essential that the co- operative farming should be encouraged. Its need arises due to several reasons. India’s population is always increasing and that is bound to result in more demand for food grains.

This demand will be easily met if there are large size farms and cultivation is on co-operative basis. Then in India its necessity also arises because co-operative farming will provide more employment opportunities to our unemployed peasants.

It is only in co-operative farming that it shall be possible to adopt latest technical know-how. The land wasted in dividing the pieces of land will also be saved.