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)