Here is a compilation of essays on ‘Co-Operative Society’ for class 6, 7, 8, 9, 10, 11 and 12. Find paragraphs, long and short essays on ‘Co-Operative Society’ especially written for school and college students.

Essay on Co-Operative Society

Essay Contents:

  1. Essay on the Meaning of Co-Operative Society
  2. Essay on the Essential Features of Co-Operative Society
  3. Essay on the Advantages of Co-Operative Society
  4. Essay on the Disadvantages of Co-Operative Society
  5. Essay on the Classes or Types of Co-Operatives
  6. Essay on the Present Position and Future Possibilities of Co-Operatives in India


Essay # 1. Meaning of Co-Operative Society:

A co-operative society is commonly termed as a co- operative. A co-operative is an organisation or enterprise owned by and operated for the benefit of those using its services.

It is a voluntary association of persons who undertake business and economic activities not for the purpose of making profits only but to bring about equality for the promotion of economic interests of themselves through self-help and co-operation. Will­ingness and ability to work with others are the basic ingredients in the formation of a co-operative. A co-operative is another form of business organisation.


The basic elements of a co-operative such as capital struc­ture, membership, management and control, registration, etc., are more or less similar to that of a company form of business organisation. Yet, it has some distinctive characteristics in the commercial and economic world.

Essay # 2. Essential Features of Co-Operative Society:

A co-operative, being different in orienta­tion and outlook, possesses the following features:

1. Ownership:

Being a voluntary association, it is owned by a group of persons (who are called members) living generally in the same locality or working at the same place. A minimum number of ten members is prescribed by law but there is no limit for maximum membership. Its membership is open to all.


2. Management and Control:

The members of a co-operative elect the office bearers of a Managing Committee from among the members by casting of their votes. The committee members retire annually by rotation and the vacancies so created are filled up by holding a fresh election at the annual general meeting. The retiring members are eligible for re-election.

The committee formulates and executes the broad policies outlined by the mem­bers. The members exercise and maintain the overall control through the holding of meetings. Its ownership and control are perfectly harmonised. It stands for a common interest among its members and thereby institutes a democratic control of its affairs.

3. Capital and Liability:


Its members supply the capital jointly.

Irrespective of the amount of contribution towards its capital, each member has usually one vote. It may be organised on the basis of either limited’ liability or unlimited liability. The liability of each member is limited upto the value of his or her shareholdings.

The value of each share being small and the extent of shareholdings by an individual member being restric­ted, the liability of a member is not very high. The limited liability co-operative societies must use the word ‘limited’ as a part of their names. Credit societies in rural areas, where the majority of members are farmers, can be famed with unlimited liability of members.

4. Legal Status and Registration:


It must be registered under the Co-operative Societies Act 1912 or State Co-operative Societies Act, and with the Registrar of Co-operative Societies. The Governments of the State control the Co-operatives.

On registration, the co-operative becomes a body cooperate like a company and acquires the facilities of perpetual succession, common seal and legal entity. Its shares are not liable to attachment on the part of outside creditors.

The requirements of registration are:

(i) That there must be at least ten members above the age of 18 years;


(ii) That member must reside in the same town or village;

(iii) That all details as to the membership, objects, share capital, etc., are furnished to the Registrar through a joint application of the members; and

(iv) That a copy of the bye-laws containing the rules and regulations of the society is submitted to the Registrar for purposes of scrutiny.

5. Profit-Sharing:


Its profit is shared by the members in the form of dividend in proportion to their contribution to capital. At least one-fourth of the profit is transferred to reserve funds for being capitalised later for the society’s development purposes.

A part of the profit is also used for giving rebate to members on their amount of purchases from the co-operatives and for allowing some interest on the member’s capi­tal investments in some cases.

6. Subscription:

The subscription list of the co-operative, unlike the practice of a company, is not closed after a fixed period.

In these matters, the usual restrictions are:

(i) One member cannot hold more than 10 shares or more than 10% of the total shareholdings, whichever is higher;


(ii) One member can have only one vote;

(iii) Shares are not transferable to other persons except transmission to heirs on the death of a member;

(iv) A member cannot subscribe for shares of mare than Rs. 1,000/- in value; and

(v) The shares in absence of marketability can be reverted back to the society only.


7. Perpetuity:

Like any other body corporate, it has a perpetual succession; that is, not affected by death, retirement, or insolvency of a member. It may break up due to disputes among the members or may wind up following the provisions of the Act.

Essay # 3. Advantages of Co-Operative Society:

The following are the advantages of or merits to the credit of the co-operative farm of organisation:

1. Service-Oriented:

The co-operatives are formed not with the sole object of profit-making but with the object of benefit and welfare to their members. Their main objective is to provide services to their members.


2. Goods and Services Rendered at Cheaper Prices:

The members themselves arrange for the production and sale of goods and services. The production and operational costs are low and, therefore, the supply of goods and servi­ces is likely to be at cheaper prices.

The members and even the outside customers get the supply of goods (through customers’ stares) or services (through credit cooperatives) at reasonable price or service charge. Such supplies at fair prices, when vastly increased, have an effect on the general price level.

3. Economy and Low-Cost:

The voluntary services rendered by the members have an effect of reducing the establishment or management costs. Again, uneconomic expenses like unnecessary advertisement cost, middlemen’s commissions or profits, etc., are eliminated. This leads to a reduction of prices or charges.

4. Reduction in Inequalities:


Through the formation of co-opera­tives, inequalities in income and wealth can be reduced to a great extent.

5. Employment-Oriented:

The establishment of small industries, or commercial and trading concerns in the form of co-operatives fosters and generates employment opportunities.

6. Protection against Exploitation:

In a co-operative society, the members themselves arrange for the production and sale of goods and services. In a company or industrial concern having a capitalistic bias, the working community is mostly exploited. Co-operatives, in this respect, offer a challenge to the exploiting class of industrialists and traders.

7. Spirit of Fellow-Felling:


The co-operative is a desirable form of business from the social point of view. It fosters the spirit of fellow- feeling among the members of an association and imparts moral and educative values essential for any better living.

8. Removal of Diseconomies:

Since the demand for and the supply of goods can be co-ordinated in a better way, any excess production or acquisi­tion of goods and the accumulation of unnecessary stocks are avoided by the co-operatives.

Essay # 4. Disadvantages of Co-Operative Society:

As against the above merits, there are sate draw­backs or limitations of co-operative associations.

These are summarised as follows:

1. Lack of Managerial Efficiency:

The lack of business experience and managerial ability on the part of the members of a co-operative has an impact on its management and efficient performance.

2. Lack of Co-Operation and Enthusiasm:

The success of a co-opera­tive depends on the spirit of co-operation and enthusiasm among the members. Unfortunately, the high order of co-operation and great enthusiasm displayed by the members of the time of formation of a co-operative die out after a period of time.

3. Growth of Vested Interests:

Through the subordination of cannon interest to their individual interests, some members are found to make the co-operative a source of their personal gains.

4. Lack of Sustained Efforts:

The success in any business depends on the sustained efforts over a period. But such a state of affairs does not exist in many cases. Within a short span of its dramatic start, the co-operative becomes lifeless and inactive in its nature.

5. Rivalries:

Internal dissensions and rivalries among the members hit the very vitality, strength and vigour of a co-operative. The collapse of many co-operative associations is attributable to this factor.

6. Financial Difficulties:

Much capital cannot be pooled by the weaker sections of the community e.g., farmers and workmen far the formation of a co-operative.

7. Inadequacy in the Economics of Production:

The economics of large-scale production-cum-distribution system cannot be obtained as the most of the co-operatives are formed and run on small-scale.

From the above, we may state the advantages or merits of co-operatives outweigh the limitations. These drawbacks or disadvantages can be overcome with the Government’s support and assistance in the areas of better adminis­tration and organisation of a co-operative.

Essay # 5. Classes or Types of Co-Operatives:   

In different areas of our economic life, now-a-days, we find co-operative farms of business.

We can classify such co-operative associations into four categories from the nature and purpose of their activities:

1. Co-Operative Credit Societies:

These are basically financial organisations. These are formed by the members to pool their savings and invest the resources so collected with a view to giving loans and credit facilities to their members on easy terms of interest and repayment against securities. Such co-operatives when farmed in rural areas are called Rural Credit Societies, and in cities and towns these are known as Co-operative Banks.

2. Producers’ Co-Operatives:

These are also known as Industrial Co-operatives. These are organised by small industrialists in urban areas and by artisans like weavers and shoe-makers in rural areas. These industr­ialists and artisans produce goods collectively by dint of their hard labour and talent. There is no employer-employee relationship among than. They arrange their remuneration in the form of share in profits.

The whole system is similar to co-partnership scheme. Now-a-days, banks and other financial institutions come forward to provide financial assistance to this type of co-operatives.

This type is very suitable for the development of small- scale and village industries. Marketing difficulties generally pose problems to this type. This aspect can, however, be overcome with the help of marketing co-operatives. Such producers’ co-operatives fail, in most cases, on account of managerial inefficiency.

3. Consumers’ Co-Operatives:

These are alternatively called retail co-operatives. These are famed with the object of eliminating the role of middleman from the distribution process. The goods are procured directly in bulk from the manufacturers at a concessional rate for distribution among members.

The members of these co-operatives get their needed products at a rock-bottom price because of elimination of trading profits as well as procurement from the manufacturers at a quantity discount. Co-operatives of this type are very common in industrial towns. Consumers’ co-operatives are a type of marketing co-operatives.

4. Agricultural Co-Operatives:

These are formed by farmers for sale of their own farm products as well as for obtaining their necessary requi­sites for agricultural operations. These co-operatives buy seeds, manures, and implements on the one hand and sell farm products on the other. These are often organised an a multi-purpose basis to cater to the needs of the agriculturists both as sellers and buyers of farm products.

5. Service Cooperatives:

These are formed with the abject of rend­ering different types of services to their members at a nominal charge. Insurance societies, housing co-operative societies, transport societies, etc. are grouped under this type. A housing co-operative is organised by a group of members who intend to build their residential houses or apart­ments.

The members pool their savings and together with the Government or bank or insurance assistance buy a big plot of land or construct a multi- storied building with apartments for distribution among the members. Housing co-operatives are now very popular with the urban people in recent times. A transport co-operative is one by which bus service is maintained in a village or semi-urban area.

Essay # 6. Present Position and Future Possibilities of Co-Operatives in India:

With the execution and implementation of five-years plans, the Government of India took several steps to reorganise the co-operative socie­ties and to revitalise their functioning in the country.

Some of the steps taken in this direction and their present condition are discussed below:

1. Credit Facilities:

In 1954, All India Rural Credit Survey Commi­ttee (popularly known as the Garwala Committee) made certain succinct reco­mmendations for an integrated scheme of rural credit by way of dovetailing other activities with credit facilities.

Mr. Garwala, the Chairman of the Committee observed that co-operation can be made to pave the way of success by combinations of better and stronger societies not only for credit but for marketing and processing as well, with the provision of properly managed warehouse run by a competent authority.

Based on these recommendations, the old Imperial Bank of India was nationalised in 1955 and in its place the State Bank of India came into being with the object of extending increa­sed credit and remittance facilities to all co-operative societies in the country.

Again, far enabling the State Governments to participate in the share capital of all co-operative associations, the Reserve Bank of India created (in 1956) two separate funds ; National Agricultural Credit (long- term Operations) Fund and National Agricultural Credit (Stabilisation) Fund.

The object of the first fund is to grant long-term loans to the State Governments and to the Central Land Mortgage Banks far enabling than to convert their short-term loans into medium credits in cases of famine, drought or similar calamities.

Besides these two funds, National Agricultu­ral Credit (Relief and Guarantee) Fund set up by the Ministry of Food and Agriculture operates to meet the bad debts of credit co-operative in abnor­mal circumstances. In addition, the Agricultural Refinance corporation, established in 1963, functions to provide medium and long-term credit by way of refinance or otherwise to eligible co-operative institutions.

2. Storage Facilities:

For the promotion and co-ordination of credit facilities with other agricultural activities like marketing, proce­ssing and warehousing, the National Co-operative Development Corporation, the Central Warehousing Corporation and many State Warehousing Corporations have set up a large number of warehouses and sub-warehouses to increase and improve the storage facilities.

3. Processing and Marketing:

In order to diversify and expand these activities, the National Agricultural Marketing Federation and’ many State Agricultural Marketing Federation, and also other marketing societies have been established.

4. Other Developmental Measures:

For the development of co-operati­ves, various other measures taken so far include:

(i) Training of higher, intermediate and subordinate levels of perso­nnel necessary for the management and operation of different co-operatives.

(ii) Formation of National Co-operative Farming Advisory Board and many model Co-operative farms to foster the spirit of co-operative farming.

(iii) Establishment of National Co-operative Consumers’ Federation and many wholesale and retail stares for distribution of consumer goods and articles of reasonable prices.

(iv) Strengthening the staff of the co-operative departments of the State Governments for introducing effective supervision and audit.

(v) Granting of subsidies towards meeting the management expenses of new co-operatives for the first three years.

(vi) Liberalisation of industrial licensing for the co-operative sector of industries.

(vii) Extension of the benefits of deposit insurance to co-operative banks.

(viii) Exemption of income tax and granting of concessions to co-opera­tives in respect of other taxes and duties.