CO-OPERATIVE SOCIETIES

CHAPTER 6 

CO-OPERATIVE SOCIETIES

 

INTRODUCTION

A cooperative society is a form of organization that is established and owned by individuals who come together to achieve a common goal. This form of organization is based on the principle of cooperation, mutual assistance, and democratic control. The main objective of a cooperative society is to meet the economic, social, and cultural needs of its members.

The cooperative movement has its roots in the industrial revolution of the 19th century, which led to the emergence of large factories and businesses. Workers who were unhappy with the exploitative nature of these businesses formed cooperatives to pool their resources and provide goods and services to their members. Since then, cooperatives have grown and spread across the world, with a diverse range of activities, from agriculture to finance.

Cooperative societies are unique in that they are owned and controlled by their members. Each member has an equal say in the decision-making process, regardless of the amount of money they have invested. This democratic structure ensures that the society is run in the best interests of its members and not for the benefit of a select few.

Cooperative societies can be formed for various purposes, such as the provision of goods and services, the creation of employment opportunities, and the promotion of economic and social development. They can be classified into different categories based on their area of operation, such as consumer cooperatives, producer cooperatives, worker cooperatives, and housing cooperatives.

One of the key advantages of cooperative societies is their ability to provide a platform for collective action. By pooling their resources and working together, members can achieve more than they would have been able to on their own. They can also access resources and markets that would have been beyond their reach as individuals.

Another advantage of cooperative societies is that they can promote social and economic development in the communities where they operate. By providing goods and services at affordable prices, creating employment opportunities, and supporting local businesses, cooperatives can contribute to poverty reduction and improved standards of living.

In conclusion, cooperative societies are an important form of organization that promotes cooperation, mutual assistance, and democratic control. They can provide a platform for collective action, promote social and economic development, and offer a range of benefits to their members. As such, they play an important role in building more equitable and sustainable societies.

MEANING AND DEFINITION OF CO-OPERATIVE SOCIETIES

A cooperative society is a type of organization that is owned and controlled by its members, who have joined together voluntarily to achieve a common goal. The primary objective of a cooperative society is to meet the economic, social, and cultural needs of its members by providing goods and services, often at a lower cost than traditional businesses.

In a cooperative society, the members pool their resources and work together to achieve their objectives. Members of a cooperative society have equal voting rights, regardless of the size of their investment or ownership. This democratic structure ensures that decisions are made in the best interest of the members, rather than for the benefit of a select few.

Cooperative societies can be formed for a variety of purposes, such as agriculture, banking, housing, retail, or insurance. They are often used by people who are marginalized or excluded from mainstream economic systems to gain access to resources, markets, and services.

Overall, cooperative societies operate on the principle of mutual aid and benefit, where members work together for their common good, rather than for individual profit.

CHARCTERISTICS OF CO-OPERATIVE SOCIETIES

Cooperative societies are unique types of organizations that are formed with the primary objective of meeting the economic and social needs of their members. Here are some of the characteristics that define cooperative societies:

1. Voluntary membership: Membership in a cooperative society is open to all those who share a common interest and are willing to abide by the rules of the organization. Members join voluntarily and are free to leave the society at any time.

2. Democratic control: Cooperative societies are democratically controlled by their members, with each member having an equal say in the decision-making process. Members elect a board of directors who are responsible for managing the society's affairs.

3. Limited liability: Members of a cooperative society have limited liability for the debts and obligations of the society. This means that members are only responsible for their own contributions to the society, and are not personally liable for any losses or debts incurred by the society.

4. Patronage dividends: Cooperative societies distribute profits to their members in the form of patronage dividends. The amount of patronage dividends distributed is based on each member's level of participation in the society.

5. Service to members: The primary goal of a cooperative society is to meet the economic and social needs of its members. This is achieved through the provision of goods and services that are of high quality and at reasonable prices.

6. Education and training: Cooperative societies provide education and training to their members, with the aim of enhancing their knowledge and skills. This enables members to participate more effectively in the decision-making process of the society.

7. Social responsibility: Cooperative societies have a social responsibility to their members and the wider community. They are expected to operate in a way that benefits society as a whole, and to contribute to the development of the communities in which they operate.

ADVANTAGES OF CO-OPERATIVE SOCIETIES

Cooperative societies offer several advantages to their members and the wider community. Some of the advantages of cooperative societies include:

1. Economic benefits: Cooperative societies provide their members with access to goods and services that they may not be able to obtain individually. This enables members to benefit from economies of scale, lower prices, and better quality products.

2. Democratic control: Cooperative societies are democratically controlled by their members, which ensures that decisions are made in the best interests of the members. This also promotes transparency and accountability in the management of the society's affairs.

3. Limited liability: Members of a cooperative society have limited liability for the debts and obligations of the society. This provides members with financial security, as they are not personally liable for any losses or debts incurred by the society.

4. Patronage dividends: Cooperative societies distribute profits to their members in the form of patronage dividends. This provides members with a financial return on their investment in the society.

5. Education and training: Cooperative societies provide education and training to their members, which enhances their knowledge and skills. This enables members to participate more effectively in the decision-making process of the society, and to improve their economic and social well-being.

6. Social benefits: Cooperative societies promote social cohesion and community development. They provide a forum for members to interact, share ideas, and work together towards common goals. This helps to build strong and resilient communities.

7. Environmental benefits: Cooperative societies can promote environmental sustainability by adopting practices that minimize their impact on the environment. This can include the use of renewable energy sources, sustainable farming practices, and waste reduction measures.

Overall, cooperative societies offer a range of benefits to their members and the wider community, including economic, social, and environmental advantages.

DISADVANTAGES OF CO-OPERATIVE SOCIETIES

While cooperative societies offer many advantages, they also have some disadvantages that should be considered. Here are some of the disadvantages of cooperative societies:

1. Limited resources: Cooperative societies are typically smaller than other types of organizations, which means that they may have limited financial and human resources. This can make it difficult for them to compete with larger organizations.

2. Limited growth potential: Cooperative societies are often limited in their ability to grow, as they rely on their members for financial and other support. This can make it difficult for them to expand their operations or enter into new markets.

3. Lack of specialization: Cooperative societies are often focused on meeting the general needs of their members, rather than specializing in a particular area. This can make it difficult for them to compete with specialized organizations in specific sectors.

4. Decision-making challenges: Cooperative societies are democratically controlled by their members, which means that decisions can take longer to make than in other types of organizations. This can make it difficult for the society to respond quickly to changes in the market or other external factors.

5. Potential for conflicts: Cooperative societies are run by their members, which means that conflicts can arise between members over issues such as decision-making, distribution of profits, or other matters. This can lead to tensions and disagreements that may harm the society's operations.

6. Reliance on member participation: Cooperative societies depend on the active participation of their members, who may not always have the time, skills, or resources to contribute effectively. This can limit the society's ability to achieve its objectives.

7. Lack of external investment: Cooperative societies may find it difficult to attract external investment, as they are often perceived as high-risk investments due to their small size and limited growth potential.

Overall, cooperative societies have some disadvantages that may make it challenging for them to compete with other types of organizations. However, these disadvantages can be mitigated through effective management and strategic planning.

FORMATION OF CO-OPERATIVE SOCIETIES

The formation of a cooperative society typically involves the following steps:

Identify the need: The first step in forming a cooperative society is to identify a specific need or problem that the society will address. This may involve conducting research and consulting with potential members to determine their needs and interests.

Gather members: Once the need has been identified, the next step is to gather a group of individuals who are interested in forming the cooperative society. The minimum number of members required may vary depending on the country and the type of society, but typically ranges from 5 to 20 members.

Draft bylaws: The members must then draft a set of bylaws that will govern the operations of the society. The bylaws typically include details on the objectives of the society, the rights and responsibilities of members, the governance structure, and the procedures for decision-making.

Register the society: The society must be registered with the relevant government agency or regulatory body. The registration process typically involves submitting the bylaws and other required documents, paying any necessary fees, and complying with any legal requirements.

Raise capital: The society will need to raise capital in order to operate. This may involve contributions from members, loans from banks or other financial institutions, or other sources of funding.

Establish governance structure: The members must establish a governance structure for the society. This typically involves electing a board of directors or management committee that will oversee the operations of the society and make decisions on behalf of the members.

Begin operations: Once the society has been registered and the governance structure is in place, the society can begin operations. This may involve purchasing or leasing property, hiring staff, and providing goods or services to members.

Overall, the formation of a cooperative society requires careful planning and coordination among the members. It is important to ensure that the bylaws are well-drafted, and that the governance structure is effective and democratic. With careful planning and implementation, a cooperative society can be a powerful tool for addressing the needs of its members and promoting economic and social development.

TYPES OF CO-OPERATIVE SOCIETIES

There are several types of cooperative societies that exist to serve different needs and purposes. Here are some of the common types of cooperative societies:

1. Consumer cooperatives: These are cooperatives formed by consumers to meet their common needs, such as buying goods or services in bulk at lower prices. Examples of consumer cooperatives include food cooperatives, housing cooperatives, and credit unions.

2. Producer cooperatives: These are cooperatives formed by producers to improve their bargaining power and access to markets. Examples of producer cooperatives include farmer cooperatives, artisan cooperatives, and worker cooperatives.

3. Marketing cooperatives: These are cooperatives formed by producers to collectively market and sell their products. Marketing cooperatives may also provide services such as processing, packaging, and distribution. Examples of marketing cooperatives include dairy cooperatives, fruit and vegetable cooperatives, and fishery cooperatives.

4. Worker cooperatives: These are cooperatives where the employees own and manage the business. Worker cooperatives provide employment opportunities and allow workers to share in the profits of the business. Examples of worker cooperatives include cooperatively owned restaurants, bookstores, and manufacturers.

5. Housing cooperatives: These are cooperatives formed by individuals who collectively own and manage housing units. Members of housing cooperatives typically share ownership of the building and common areas, and are responsible for maintenance and upkeep. Examples of housing cooperatives include apartment cooperatives and mobile home cooperatives.

6. Credit cooperatives: These are cooperatives formed to provide financial services to their members, such as savings accounts, loans, and other financial products. Credit cooperatives are owned and controlled by their members, who share in the profits of the cooperative. Examples of credit cooperatives include credit unions and microfinance cooperatives.

Overall, cooperative societies offer a flexible and adaptable organizational structure that can be tailored to meet the needs of different communities and sectors. By working together, members of cooperative societies can achieve common goals and improve their economic and social well-being.

1. Consumer’ s Co-Operative societies

A consumer cooperative society is a type of cooperative where the members are consumers who join together to buy goods and services in bulk and at reduced prices. The main purpose of a consumer cooperative society is to provide quality goods and services to its members at affordable prices.

 

Here are some features of consumer cooperative societies:

1. Membership: Consumer cooperative societies are open to all individuals who share a common need for the products or services offered by the cooperative. Members of a consumer cooperative society have equal voting rights and can participate in the management of the society.

2. Democratic control: Consumer cooperative societies operate on democratic principles where each member has an equal say in the decision-making process. Members elect a board of directors who are responsible for managing the day-to-day operations of the cooperative.

3. Voluntary participation: Participation in a consumer cooperative society is voluntary and members can withdraw from the society at any time. However, members may be required to hold a minimum amount of shares in the society to maintain their membership.

4. Shared profits: Consumer cooperative societies distribute their profits among their members in proportion to their patronage of the cooperative. The profits can be used to pay dividends, invest in the cooperative, or provide additional benefits to members.

5. Social benefits: Consumer cooperative societies can provide social benefits to their members, such as education, health services, and community development projects.

Examples of consumer cooperative societies include food cooperatives, where members join together to buy food products in bulk, and housing cooperatives, where members collectively own and manage housing units.

Overall, consumer cooperative societies provide an effective way for consumers to gain access to affordable goods and services while promoting democratic control and social benefits.

2. Producer’s Co-Operatives

A producer cooperative society is a type of cooperative where the members are producers who join together to improve their bargaining power and access to markets. The main purpose of a producer cooperative society is to increase the income and economic well-being of its members.

Here are some features of producer cooperative societies:

1. Membership: Producer cooperative societies are open to all individuals who produce similar goods or services. Members of a producer cooperative society have equal voting rights and can participate in the management of the society.

2. Democratic control: Producer cooperative societies operate on democratic principles where each member has an equal say in the decision-making process. Members elect a board of directors who are responsible for managing the day-to-day operations of the cooperative.

3. Voluntary participation: Participation in a producer cooperative society is voluntary and members can withdraw from the society at any time. However, members may be required to hold a minimum amount of shares in the society to maintain their membership.

4. Shared profits: Producer cooperative societies distribute their profits among their members in proportion to their patronage of the cooperative. The profits can be used to pay dividends, invest in the cooperative, or provide additional benefits to members.

5. Market access: Producer cooperative societies can provide their members with improved access to markets and higher prices for their products by collectively marketing and selling their products.

Examples of producer cooperative societies include farmer cooperatives, where farmers join together to sell their products to wholesalers or retailers, and worker cooperatives, where workers own and manage a business.

Overall, producer cooperative societies provide an effective way for producers to gain access to markets, increase their bargaining power, and improve their economic well-being, while promoting democratic control and shared profits among their members.

3. Credit Co-Operatives

A credit cooperative, also known as a credit union, is a type of cooperative that provides financial services to its members. The main purpose of a credit cooperative is to provide affordable and accessible financial services to its members, including savings accounts, loans, and other financial products.

Here are some features of credit cooperatives:

1. Membership: Credit cooperatives are open to all individuals who share a common bond, such as living in the same community or working for the same employer. Members of a credit cooperative have equal voting rights and can participate in the management of the society.

2. Democratic control: Credit cooperatives operate on democratic principles where each member has an equal say in the decision-making process. Members elect a board of directors who are responsible for managing the day-to-day operations of the cooperative.

3. Voluntary participation: Participation in a credit cooperative is voluntary and members can withdraw from the society at any time. However, members may be required to hold a minimum amount of shares in the society to maintain their membership.

4. Shared benefits: Credit cooperatives distribute their profits among their members in proportion to their patronage of the cooperative. The profits can be used to pay dividends, invest in the cooperative, or provide additional benefits to members.

5. Financial services: Credit cooperatives provide a range of financial services to their members, including savings accounts, loans, and other financial products. The goal is to provide affordable and accessible financial services to members who might not have access to traditional banking services.

Examples of credit cooperatives include community credit unions, where members share a common bond of living in the same community, and employee credit unions, where members share a common bond of working for the same employer.

Overall, credit cooperatives provide an effective way for individuals and communities to gain access to affordable and accessible financial services while promoting democratic control and shared benefits among their members.

4. Marketing Co-Operatives

Marketing cooperatives are a type of cooperative where members are producers who join together to collectively market and sell their products. The main purpose of a marketing cooperative is to increase the income and economic well-being of its members by providing them with access to markets and higher prices for their products.

Here are some features of marketing cooperatives:

1. Membership: Marketing cooperatives are open to all individuals who produce similar goods or services. Members of a marketing cooperative have equal voting rights and can participate in the management of the society.

2. Democratic control: Marketing cooperatives operate on democratic principles where each member has an equal say in the decision-making process. Members elect a board of directors who are responsible for managing the day-to-day operations of the cooperative.

3. Voluntary participation: Participation in a marketing cooperative is voluntary and members can withdraw from the society at any time. However, members may be required to hold a minimum amount of shares in the society to maintain their membership.

4. Shared profits: Marketing cooperatives distribute their profits among their members in proportion to their patronage of the cooperative. The profits can be used to pay dividends, invest in the cooperative, or provide additional benefits to members.

5. Market access: Marketing cooperatives can provide their members with improved access to markets and higher prices for their products by collectively marketing and selling their products. By joining together, members can negotiate better prices, reduce marketing costs, and increase their bargaining power.

Examples of marketing cooperatives include dairy cooperatives, where dairy farmers join together to sell their milk to processors, and fruit and vegetable cooperatives, where farmers join together to sell their produce to wholesalers or retailers.

Overall, marketing cooperatives provide an effective way for producers to gain access to markets, increase their bargaining power, and improve their economic well-being, while promoting democratic control and shared profits among their members.

5. Co-Operative farming societies

Cooperative farming societies are organizations in which farmers pool their resources, knowledge, and labor to collectively produce crops and other agricultural products. These societies are typically structured as cooperatives, which means that they are owned and democratically controlled by their members.

The purpose of cooperative farming societies is to help small farmers overcome some of the challenges they face in the agriculture industry, such as limited access to resources, volatile market prices, and limited bargaining power with suppliers and buyers. By working together, farmers can benefit from economies of scale, reduce their costs, and improve their negotiating power.

Cooperative farming societies can take many forms, from small groups of farmers who jointly own and operate a single piece of land to large-scale organizations with hundreds or even thousands of members. In addition to producing agricultural products, cooperative farming societies may also provide services to their members, such as training, marketing, and access to credit and other financial services.

Overall, cooperative farming societies can be a powerful tool for promoting sustainable agriculture, improving the livelihoods of small farmers, and creating more equitable and resilient food systems.

Multiple Choice Questions:

 

1. What is the main objective of a cooperative society?

A. To make a profit for its members

B. To meet the economic, social, and cultural needs of its members

C. To achieve political power

D. To compete with other businesses

2. Which of the following is NOT a type of cooperative society?

A. Consumer cooperatives

B. Producer cooperatives

C. Worker cooperatives

D. Investor cooperatives

3. What is the advantage of the democratic structure in a cooperative society?

A. Members have more voting rights than others

B. Members can make decisions for the benefit of a select few

C. Members have an equal say in decision-making

D. Members do not have to invest any money

4. What is the primary objective of a cooperative society?

a. To make profits for its members

b. To provide goods and services to the wider community

c. To meet the economic and social needs of its members

d. To promote environmental sustainability

5. Which of the following is NOT a characteristic of cooperative societies?

a. Democratic control

b. Limited liability

c. Maximizing profits for shareholders

d. Education and training

6. How are profits distributed to members in a cooperative society?

a. Equally among all members

b. Based on the level of investment made by each member

c. Based on each member's level of participation in the society

d. Distributed to the board of directors

7. What is the first step in forming a cooperative society?

A) Drafting bylaws

B) Raising capital

C) Identifying the need

D) Registering the society

8. What is the minimum number of members required to form a cooperative society?

A) 1 to 5 members

B) 5 to 20 members

C) 20 to 50 members

D) 50 to 100 members

9. Which type of cooperative society is formed by employees who own and manage the business?

A) Housing cooperatives

B) Credit cooperatives

C) Producer cooperatives

D) Worker cooperatives

10. What is the main purpose of a producer cooperative society?

A. To provide financial services to its members

B. To increase the income and economic well-being of its members

C. To collectively market and sell their products

D. None of the above

11. What is the common bond that members of a credit cooperative share?

A. They produce similar goods or services

B. They live in the same community or work for the same employer

C. They are all farmers or workers

D. None of the above

12. How do marketing cooperatives provide their members with improved access to markets?

A. By providing financial services

B. By collectively marketing and selling their products

C. By promoting democratic control

D. None of the above

13. What is the purpose of cooperative farming societies?

a. To make large profits for individual farmers

b. To provide free training and education for farmers

c. To help small farmers overcome challenges in the agriculture industry

d. To compete with other farming societies

14. How are cooperative farming societies typically structured?

a. As a corporation owned by shareholders

b. As a government-run organization

c. As a nonprofit organization

d. As a cooperative owned and democratically controlled by their members

True-False Questions:

1. Cooperative societies are owned and controlled by their members. (True/False)

2. The primary objective of a cooperative society is to make a profit for its members. (True/False)

3. Cooperative societies can be formed for a variety of purposes. (True/False)

4. Membership in a cooperative society is voluntary. (True/False)

5. Members of a cooperative society have unlimited liability for the debts and obligations of the society. (True/False)

6. Cooperative societies do not have any social responsibility towards the wider community. (True/False)

7. Cooperative societies can promote environmental sustainability. (True/False)

8. Education and training are not provided to members of a cooperative society. (True/False)

8. Members of a producer cooperative society have equal voting rights and can participate in the management of the society. True

9. Participation in a credit cooperative is mandatory and members cannot withdraw from the society at any time. false

10. The profits of marketing cooperatives are distributed among their members in proportion to their patronage of the cooperative. True

11. The main purpose of a credit cooperative is to provide affordable and accessible financial services to its members. True

12. Marketing cooperatives can provide their members with improved access to markets and higher prices for their products by collectively marketing and selling their products. True

13. Cooperative farming societies are organizations in which farmers pool their resources, knowledge, and labor to collectively produce crops and other agricultural products. (True/False)

14. Cooperative farming societies are typically structured as corporations owned by shareholders. (True/False)

15. The purpose of cooperative farming societies is to help small farmers overcome challenges they face in the agriculture industry. (True/False)

16. Cooperative farming societies cannot take many forms, they are only small groups of farmers who jointly own and operate a single piece of land. (True/False)

17. Cooperative farming societies may also provide services to their members, such as training, marketing, and access to credit and other financial services. (True/False)

 

VERY SHORT ANSWER QUESTIONS

 

Q.1. Why do we need Co-Operative Organisations?

Ans. Cooperative organizations, such as cooperative farming societies, are needed to help small farmers overcome challenges in the agriculture industry, benefit from economies of scale, reduce costs, improve negotiating power, and promote sustainable agriculture, among other things.

Q.2. What do you mean by ‘Co-operative societies?

Ans. Cooperative societies are organizations owned and democratically controlled by their members, who pool their resources, knowledge, and labor to achieve common goals and meet their mutual needs. They can take various forms, such as agricultural cooperatives, consumer cooperatives, worker cooperatives, and credit unions, among others.

Q.3. Explain the ‘Principle of democratic management?

Ans. The principle of democratic management refers to the idea that in a cooperative society, members have equal voting rights and participate in the decision-making process. This means that every member has an equal say in how the organization is run and how decisions are made. Democratic management ensures that power is not concentrated in the hands of a few individuals, but rather shared among all members, promoting fairness, transparency, and accountability.

Q.4. What is the objective of the Co-operative organisations.

Ans. The objective of cooperative organizations is to help members collectively achieve their common economic, social, and cultural needs and aspirations through a democratic and jointly owned enterprise.

Q.5. Name the various types of Co-operative.

Ans. There are various types of cooperatives, including:

1. Consumer cooperatives

2. Producer cooperatives

3. Worker cooperatives

4. Marketing cooperatives

5. Housing cooperatives

6. Credit unions

7. Agricultural cooperatives

8. Energy cooperatives

9. Retail cooperatives

10. Service cooperatives

11. Multi-stakeholder cooperatives

12. Community-based cooperatives

SHORT ANSWER QUESTIONS

Q.1. Discuss the five important reasons for the success of the co-operatives.

Ans. There are several reasons why cooperative organizations have been successful in various fields. Here are five important reasons for their success:

1. Collective Strength: Cooperative organizations are built on the principle of collective strength. Members pool their resources, skills, and efforts to achieve a common goal. This creates economies of scale, which in turn enables members to gain access to resources and services that would be unaffordable or unavailable to them individually.

2. Democratic Management: Cooperative organizations are democratically managed, with each member having an equal say in decision-making. This creates a sense of ownership and accountability among members and helps to build trust and transparency within the organization.

3. Social Purpose: Cooperative organizations are typically founded with a social purpose, such as supporting small-scale farmers or promoting community development. This sense of purpose motivates members to work together towards a common goal, which can be very powerful.

4. Financial Stability: Cooperative organizations often enjoy greater financial stability than individual enterprises, due to their collective resources and democratic management. This can help them weather economic downturns and ensure long-term sustainability.

5. Community Building: Cooperative organizations are often important vehicles for building social capital and strengthening communities. By working together towards a common goal, members develop stronger relationships with each other and build a sense of shared purpose and identity.

Q.2. Explain the five important reasons for the failure of the co-operative societies.

Ans. There are several reasons why cooperative societies may fail to achieve their goals. Some of the most common reasons include:

1. Lack of commitment and motivation among members: Cooperative societies rely heavily on the active participation of their members. If members are not committed to the success of the society or lack motivation, the society may not be able to achieve its goals.

2. Poor management: Cooperative societies require effective management in order to succeed. If the society is poorly managed, for example, if there is inadequate planning or insufficient monitoring of operations, the society may fail.

3. Insufficient capital: Cooperatives require a certain amount of capital to operate. If the society does not have sufficient capital, it may not be able to purchase the necessary inputs, pay its workers, or invest in the necessary infrastructure to operate effectively.

4. Limited market access: Cooperative societies often rely on a small number of buyers for their products. If these buyers have other options, or if the cooperative is not able to consistently produce high-quality products, it may be difficult for the cooperative to maintain its market share.

5. Regulatory challenges: Cooperative societies may face regulatory challenges such as burdensome legal requirements, complex tax structures, or difficulties in accessing funding from government sources. These challenges can make it difficult for cooperative societies to operate effectively and sustainably.

Q.3. How is a Co-operative society formed?

Ans. A cooperative society can be formed by at least 10 adult individuals who have a common interest in the objectives of the cooperative. They need to agree on the cooperative's name, objectives, and the type of business activities it will undertake.

The following steps are involved in forming a cooperative society:

1. Formation of a small group: The interested individuals form a small group to discuss and plan the cooperative's formation.

2. Conducting a feasibility study: The group conducts a feasibility study to assess the viability and sustainability of the proposed cooperative society.

3. Registration: The group must register the cooperative society with the relevant government authorities as per the laws and regulations of the country.

4. Preparation of bylaws: The cooperative society's members must draft bylaws that will govern its operation and management.

5. Capital contribution: Members must contribute to the cooperative society's capital as per the bylaws.

6. Election of office bearers: Members elect office bearers, including a chairperson, secretary, and treasurer, among others.

7. Commencement of business: After completing all the above formalities, the cooperative society can start its operations and undertake business activities.

It is important to note that the formation and registration process of a cooperative society may vary depending on the country's laws and regulations.

Q.3. Discuss the ‘service motive’ of the Co-operative society.

Ans. The service motive is one of the fundamental principles of the cooperative movement. It refers to the primary objective of cooperatives, which is to provide services to their members rather than making a profit for external stakeholders. In other words, the cooperative society is formed to meet the needs and aspirations of its members.

 

The service motive is reflected in the way cooperatives are structured and operated. Members of the cooperative share a common goal, and they work together to achieve it. They are encouraged to participate in the decision-making process of the cooperative and are given an equal voice in the governance of the organization. This ensures that the services provided by the cooperative are tailored to meet the specific needs of its members.

One of the key benefits of the service motive is that it allows cooperatives to operate in areas where other businesses may not be interested. For example, cooperatives may provide essential services to rural communities that are otherwise underserved by traditional businesses. This helps to promote economic development and improve the quality of life in these areas.

The service motive also promotes social responsibility and sustainable development. Since cooperatives are owned and controlled by their members, they are accountable to their members and the community. This means that they are more likely to operate in an ethical and socially responsible manner, and to prioritize long-term sustainability over short-term profits.

In summary, the service motive is a core principle of the cooperative movement. It emphasizes the importance of providing services to members, promoting economic development, and operating in a socially responsible and sustainable manner.

LONG ANSWER QUESTIONS

Q.1. What is Co-operation? Discuss the chief characteristics of co-operative from of organization.

Ans. Co-operation is a form of organization where individuals come together voluntarily to work towards a common goal. The co-operative organization is based on the principles of mutual help, self-help, and self-responsibility.

The chief characteristics of a co-operative form of organization are:

1. Voluntary membership: Members of a co-operative society join voluntarily and can leave at any time without any penalty.

2. Democratic control: Co-operatives are democratically controlled, with each member having an equal vote in the decision-making process.

3. Limited return on investment: The primary focus of a co-operative society is to provide benefits to its members, and not to generate profits. Thus, the return on investment is limited.

4. Distribution of surplus: Any surplus generated by the co-operative society is distributed among its members based on their participation in the co-operative's activities.

5. Service to members: Co-operative societies are established to provide services to their members, such as marketing of agricultural products, credit facilities, and other welfare services.

6. Education and training: Co-operatives aim to educate their members on various aspects of business management, financial management, and market trends to enable them to make informed decisions.

7. Common ownership and control: The assets of a co-operative society are owned and controlled by its members. The members have the right to participate in the management of the society.

Overall, the co-operative form of organization is characterized by a sense of community, mutual assistance, and self-help, where members work together to achieve common goals and improve their living standards.

Q.2. A Co-operative from of organization is method of help’ Discuss.

Ans. A cooperative form of organization is often considered as a method of help or a way of self-help. This is because the members of a cooperative society come together voluntarily to form an organization that aims to meet their common economic, social, and cultural needs and aspirations through mutual self-help and cooperation.

One of the key characteristics of a cooperative is that it is owned and controlled by its members on the principle of one member, one vote. This ensures that all members have an equal say in the affairs of the organization, regardless of their level of investment or participation.

Another important characteristic of cooperatives is that they operate on the basis of democratic management, which means that decisions are made by the members in a democratic and participatory manner. This helps to ensure that the interests and needs of all members are taken into account and that decisions are made in the best interests of the cooperative as a whole.

Cooperatives also aim to provide their members with economic benefits by pooling their resources, knowledge, and skills to achieve economies of scale, reduce costs, and increase bargaining power. This enables members to access markets and services that they may not be able to access as individuals, thereby improving their economic well-being and promoting their social and cultural development.

Overall, the cooperative form of organization is a method of help that is based on the values of self-help, self-responsibility, democracy, equality, equity, and solidarity. It provides members with a means of working together to achieve common goals and improve their livelihoods, while also promoting social and economic development in their communities.

Q.3. Describe the principal types of Co-Operative Societies.

Ans. Cooperative societies are businesses that are owned and operated by a group of people who share a common goal. There are several types of cooperative societies, each with its unique characteristics and objectives. Below are the principal types of cooperative societies:

Consumer Cooperatives: These are cooperatives owned and controlled by consumers who band together to purchase goods and services for their mutual benefit. Consumer cooperatives are typically formed to obtain goods and services that are not easily available or affordable individually.

Producer Cooperatives: These are cooperatives owned and controlled by producers, who come together to sell their products collectively. Producer cooperatives can help members achieve economies of scale, reduce costs, and increase their bargaining power in the market.

 

Marketing Cooperatives: These are cooperatives that market and distribute the products of their members. Marketing cooperatives can help members to access markets that may not be accessible individually, and can also help them to negotiate better prices and terms of trade.

Housing Cooperatives: These are cooperatives that provide housing for their members. Members own and control the housing cooperative and share the costs of maintaining and managing the property.

Credit Cooperatives: These are cooperatives that provide credit and other financial services to their members. Credit cooperatives are often formed to provide access to credit and financial services to members who may not have access to traditional financial institutions.

Worker Cooperatives: These are cooperatives that are owned and controlled by the workers who work for the business. In worker cooperatives, the workers share in the profits and make decisions about the operations of the business.

Agricultural Cooperatives: These are cooperatives that are formed by farmers to help them access markets, reduce costs, and increase their bargaining power. Agricultural cooperatives can help farmers to access inputs such as seeds, fertilizers, and machinery, and can also help them to market their products.

Overall, cooperative societies are an essential tool for economic empowerment and community development, as they enable members to pool their resources and work together towards a common goal.

A. One Word or One Line Questions.

 

Q. 1. What do you mean by co-operative society ?

Ans. A form of organisation, where in persons voluntarily associate together as human being on the basis of equality for the promotion of economic interests of themselves.

 

Q. 2. Under which act co-operative societies is registered?

Ans. A co-operative society is registered under Indian Co-operative Societies Act, 1912.

 

Q. 3. How many members can start a co-operative society?

Ans. 10 adult members.

 

Q. 4. How is capital raised by co-operative society?

Ans. Capital is raised by issuing shares to the members.

 

Q. 5. What is the status of liability of members of the co-operative society?

Ans. The liability of members is limited.

 

Q. 6. Name office bearers of co-operative society.

Ans. President, Vice-president, Secretary, Treasurer.

 

Q. 7. Give any two principles of Co-operative Societies.

Ans. (1) Voluntary Membership

     (2) Democratic Management

 

Q. 8. Is registration of the co-operative society is compulsory?

Ans. No, it is optional.

 

Q. 9. State two merits of a co-operative society.

Ans. (i) Open membership

    (ii) Democratic management.

 

Q. 10. Which co-operative society is started to protect the interests of weaker     sections?         

Ans. Consumer co-operative society.

 

Q.11. Which-co-operative  societies helps its members to do farming on scientific basis ?

Ans. Co-operative farming society.

 

Q. 12. Which-co-operative society extend credit facilities to members?

Ans. Credit co-operatives.

 

Q. 13. Name a co-operative society providing help their members to construct their      own house.

Ans. Housing Co-operatives.

 

Q. 14. Which societies help small producers in selling their products at good price?

Ans. Marketing co-operative societies.

 

Q. 15. What is the voting pattern for members of a co-operative society?

Ans. ‘One person, one vote’.

 

B. Fill in the blanks

 

1. The co-operative society is registered under..........

2. Membership of co-operative societies is.................

3. The management of a co-operative society is always elected in .......... way.

4. In co-operative society, the voting rights are based on the principle..........

5. The primary objective of the society is..........

6. Trading in co-operative societies is done one ............ basis.

 

Ans. 1. Indian Co-operative Societies Act, 1912, 2.voluntary, 3.democratic, 4.one person, one vote, 5. Service First, Profit Second, 6.cash.

 

C. True or False

 

1. The main aim of co-operative societies is to protect the interest of the society.

2. High rate of interest is paid to members in reward for their contribution to the capital of society.

3. The Primary objective of the society is ‘Profit first, Service second’.

4. In a co-operative society, the voting rights are based on ‘One Person, One Vote’.

5. In co-operative societies, trading is done on ‘credit basis’.

Ans. 1. True, 2. False, 3. False, 4. True, 5. False.

 

D. MCQ

 

1. The consumer co-operatives are established for the benefit of

(a) Upper class people

(b) Lower and Middle Class People

(c) Both (a) and (b)

(d) None of the above

 

2. The main aim of co-operative society is to

(a) Earn Profits

(b) Serve the Society

(c) Both a and b

(d) None of the above

 

3. Co-operative societies generally transact business on:

(a) Cash Basis

(b) Credit Basis

(c) Both Cash and Credit Basis

(d) None of the above

 

4. Which one of the following is the feature of co-operative societies?

(a) Voluntary membership

(b) Democratic management

(c) Limited liability

(d) All of these.

 

5. Which one of the following is not the merit of co-operative society?

(a) Open and voluntary membership

(b) Democratic management

(c) Surplus of Goods at higher rate

(d) Low management cost.

 

6. Which one of the following is not the limitation of co-operative societies?

(a) Lack of Secrecy

(b) Inefficiency of management

(c) surplus shared by members

(d) Government interference.

 

Ans. 1. (b), 2. (b), 3. (a), 4. (d), 5. (c), 6. (c)