1. Concept of Cooperative Society
Descriptive Explanation
A Cooperative Society is a voluntary organization formed by a group of people who come together to achieve common economic and social objectives. The main aim is mutual help, not profit maximization.
People who have similar needs or problems join together, contribute capital, and run the organization democratically. Every member has equal voting rights, regardless of the amount of capital they contribute.
In India, cooperative societies are registered under the Cooperative Societies Act 1912 or respective state cooperative acts.
Cooperatives play an important role in sectors like agriculture, dairy, housing, banking, and consumer goods distribution.
For example, the famous dairy cooperative Amul is owned by milk producers (farmers) who supply milk and share the benefits. Similarly, the fertilizer cooperative IFFCO helps farmers obtain fertilizers at reasonable prices.
Thus, cooperative societies help small producers, farmers, and consumers by reducing exploitation by middlemen and large businesses.
Key Features of Cooperative Society
- Voluntary Membership: Anyone who wishes to join and accepts the rules can become a member.
- Democratic Control: One member = One vote, regardless of capital contribution.
- Service Motive: The main objective is service to members, not profit.
- Separate Legal Entity: The society is legally separate from its members.
- Equal Voting Rights: All members have equal say in decision-making.
- Distribution of Surplus: Profits are distributed among members as dividend or bonus.
Example from India
- Amul – Dairy cooperative owned by milk farmers.
- IFFCO – Fertilizer cooperative owned by farmers.
- KRIBHCO – Cooperative fertilizer organization.
- Sahakar Bharati – Promotes the cooperative movement in India.
2. Merits of Cooperative Societies
Descriptive Explanation
Cooperative societies provide many benefits to members, especially small producers, farmers, and consumers. By working together, members can pool their resources, reduce costs, and protect themselves from exploitation by middlemen.
They promote economic equality, democratic participation, and social welfare.
For instance, milk farmers associated with Amul receive fair prices because the cooperative directly sells dairy products without middlemen.
Point-wise Merits
- H → Easy Formation: Cooperative societies can be formed easily with minimum legal formalities.
- E → Equal Voting Rights: Every member has equal voting power.
- L → Limited Liability: Members are liable only up to their capital contribution.
- P → Public Confidence: Cooperative societies gain trust due to democratic management.
- S → Service Motive: They focus on providing services rather than earning profits.
Additional Benefits:
- Support from Government: The government often provides loans, subsidies, and tax benefits.
- Elimination of Middlemen: Direct transactions between producers and consumers reduce costs.
3. Limitations of Cooperative Societies
Descriptive Explanation
Despite their advantages, cooperative societies face several problems. Lack of professional management, limited capital, and sometimes excessive government interference can reduce their efficiency.
Some members may also show lack of active participation, which affects decision-making.
Point-wise Limitations
- P → Poor Management: Management is often done by inexperienced members.
- I → Insufficient Capital: Limited funds restrict expansion.
- G → Government Control: Excessive regulation may reduce independence.
- L → Lack of Motivation: Members may not actively participate in activities.
- S → Slow Decision Making: Democratic process sometimes delays decisions.
4. Types of Cooperative Societies
Concept: These societies are formed to protect consumers from high prices and unfair practices. They purchase goods in bulk directly from producers and sell them to members at reasonable prices.
Example: Consumer cooperative stores run by organizations like Kendriya Bhandar supply essential goods to members.
Example Situation: A group of families in a colony opens a cooperative store to buy groceries in bulk and sell them at lower prices.
Concept: These societies are formed by small producers or craftsmen to improve production and marketing. Members pool resources to buy raw materials, machinery, and technology.
Example: Handloom weavers forming a cooperative to produce and sell textiles.
Concept: These societies help farmers or producers sell their products at fair prices. They collect products from members and sell them in markets.
Example: Farmers selling milk through Amul.
Concept: These societies help farmers with agricultural inputs like seeds, fertilizers, equipment, and irrigation facilities.
Example: Fertilizer supply through IFFCO.
Concept: These societies provide loans to members at low interest rates. They protect members from moneylenders.
Example: Village cooperative credit societies that provide agricultural loans.
Concept: These societies help members obtain residential houses at reasonable cost. Members contribute funds and the society builds houses or flats.
Example: Many housing societies in cities like Mumbai and Delhi operate as cooperative housing societies.
Acronym to Remember All Types
“CPMFCH” → Cool People Make Farmers Comfortable Homes
- C → Consumer | P → Producer | M → Marketing
- F → Farmers | C → Credit | H → Housing
Quick Learning Game (Classroom Activity)
Game: “Cooperative Match Challenge”
Teacher prepares two sets of cards: Set A (Types) and Set B (Functions).
- Consumer → Sell goods at fair price
- Credit → Provide loans
- Housing → Provide houses
- Marketing → Sell farmers’ produce
Students must match the correct pairs within 2 minutes. Winner: Student with maximum correct matches. This game helps students quickly remember all types of cooperatives.
5-Second Revision Trick
Remember “HELP FARMERS”
H → Housing | E → Easy formation | L → Limited liability | P → Public confidence | F → Farmers cooperative | A → Amul example | R → Reduced middlemen | M → Marketing cooperative | E → Equal voting | R → Reasonable price | S → Service motive
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