Cooperatives

Dr.M.Rajalakshmi

• Robert Owen (1771–1858)

• considered as the father of the cooperative movement

• Owen believed in putting his workers in a good environment

• with access to education for themselves and their children.

• These ideas were put into effect successfully in the cotton mills of New Lanark, Scotland.

• It was here that the first co-operative store was opened.

HISTORY

• Before Independance

• Cooperative move came with structure and shape -British enactment of the Cooperative Credit Societies Act, 1904.

• After Independance

• 1958, the National Development Council (NDC)

• a national policy on cooperatives and also for training of personnel's and setting up of Co-operative Marketing Societies.

Definition of A Cooperative

• co-operation is derived from the Latin word co-operari,

where the word co means ‘with’ and operari means ‘to work’.

co-operation means working together.

• A cooperative

• an autonomous association of persons united voluntarily

• to meet their common economic, social and cultural needs and aspirations

• through a jointly-owned and democratically controlled enterprise.

Meaning of Co-operative Society

• The main objective is to provide support to the members.

• Nobody joins a cooperative society to earn profit.

• People come forward as a group,

• pool their individual resources,

• utilise them in the best possible manner, and

• derive some common benefit out of it.

Basic Cooperative Values

Cooperatives are based on the values of

• self-help,

• self-responsibility,

•democracy,

• equality,

• equity and

• solidarity.

Basic Cooperative Values

Cooperative members believe in the ethical values of

• honesty,

• openness,

• social responsibility and

• caring for others.

Types of Co-operative SocietiesConsumers’ Co-operative Society:

• formed to protect the interest of general consumers by making consumer goods available at a reasonable price. Kendriya Bhandar, Apna Bazar and SahkariBhandar are examples

Producers’ Co-operative Society:

• formed to protect the interest of small producers by making available items of their need for production like raw materials, tools and equipments, machinery, etc. Haryana Handloom

Co-operative Marketing Society:

• formed by small producers and manufacturers who find it difficult to sell their products individually.

• The society collects the products from the individual members and takes the responsibility of selling those products in the market. Gujarat Co-operative Milk Marketing Federation (AMUL milk products )

Types of Co-operative SocietiesCo-operative Credit Society:

• formed to provide financial support to the members. T

• he society accepts deposits from members and grants them loans at reasonable rates of interest in times of need. Village Service Co-operative Society and Urban Cooperative Banks

Co-operative Farming Society:

• These societies are formed by small farmers to work jointly and thereby enjoy the benefits of large-scale farming.

Lift-irrigation cooperative societies and Pani-panchayats are some of the examples of co-operative farming society.

Housing Co-operative Society:

• formed to provide residential houses to members.

• purchase land, develop it and construct houses or flats and allot the same to members or provide loans at low rate of interest.

• The Employees’ Housing Societies and Metropolitan Housing Co-operative

The Rochdale Society of Equitable Pioneers

• was a group of 10 weavers and 20 others in Rochdale, England-formed in 1844.

• these tradesmen decided to band together to open their own store selling food items they could not otherwise afford

• With lessons from prior failed attempts at co-operation in mind, they designed the now famous Rochdale Principles

The Principles Of Cooperation (Rochdale principles)

1.Voluntary and Open Membership:

voluntary organisations,

open to all persons able to use their services and

willing to accept the responsibilities of membership,

without gender, social, racial, political or religious discrimination.

2.Democratic Member Control:

democratic organisations

controlled by their members,

who actively participate in setting their policies and making decisions.

3.Member Economic Participation:

Members contribute equitably & democratically control, the capital of their cooperative.

Members allocate surpluses for the following purposes:

developing their cooperative,

possibly by setting up reserves,

benefiting members in proportion to their transactions with the cooperative;

and supporting other activities approved by the membership.

4.Autonomy and Independence:

are autonomous, self-help organisations controlled by their members.

5.Education, Training and Information:

Cooperative provide education and training for

their members, elected representatives, managers, and employees,

so that they can contribute effectively to the development of their cooperatives.

They inform the general public – particularly young people and opinion leaders –

about the nature and benefits of cooperation.

6. Cooperation among Cooperatives:

serve their members most effectively

and strengthen the Cooperative Movement

by working together through local, national, regional and international structures.

7. Concern for the Community:

work for the sustainable development of their communities

through policies approved by their members

Objectives of Cooperative Society

•To provide support and services to the members of the society and not to earn the profit

•To help each other mutually and not to have competition

•To practice fair and transparent business activities

•To deliver the quality goods and produce to the end customers

Advantages of the Co-operative Society:

1. Ease of formation: A voluntary organisation -easy to form by any ten members- registration is also easy.

2. Unlimited membership: no restriction with respect of maximum number of members.

3. Democratic management: It is a democracy of men with each member being entitled to only one vote irrespective of the number of shares held by him.

4. Limited liability: The liability of the members of a society is limited to the nominal value of shares held by him.

5. Continuous existence: The society will not be affected by the death or insolvency of a member. It will have continuous existence.

Advantages of the Co-operative Society:

6. Economic operations: Since middlemen are avoided, a cooperative society will have economy in their operations. They need not pile up huge stocks and thereby block capital.

7. Cheaper service: offers better service at cheaper costs.

8. Tax concessions: enjoy the benefit of certain preferences being shown towards them by tax authorities.

9. Social benefit: helps in social welfare as it caters to the needs of the poor and middle sections of the society.

It promotes saving habit, self-help and other moral values in the society.

Limitations.1. Limited resources : Societies cannot raise huge amounts as capital because the

members may not be able to invest more.

2. Limited scope : resources are limited the chance of expansion is limited.

3. Inefficient management : managed by members and the members may lack experience and managerial capacity.

4. No secrecy: Secrets cannot be maintained by business.

5. Lack of co-operation : Sometimes the members may not have unity among themselves which might affect the business of co-operatives.

6. No credit facility : Since credit facilities are not offered to members usually, the members may not be interested in buying goods for cash.

7. Political interference: Interference by political parties may come in the way of proper functioning of co-operative societies.

AMUL- how it started

• Kaira District cooperative milk producers Union (1946)

founder Tribhuvandas Patel

• Dr.Kurien -Return from USA – 1949

• GOI deputed –Creamery Anand Gujarat- should serve 5years-dairy division

• Personally no interest – should perform- in return government scholarship

• Dr.Kurien -1950

• Worked- stop exploitation- middlemen

• Kaira Union (1946)changed to AMUL (1955)

TribhuvandasPatel

Verghese Kurien, Tribhuvandas Patel & H M Dalaya

The Anand Pattern

• Maximizing farmer profit and productivity through cooperative effort is the hallmark of the Anand Pattern.

• An integrated cooperative structure that procures, processes and markets produce.

• Supported by professional management, producers decide their own business policies, adopt modern production and marketing techniques

• receive services that they can individually neither afford nor manage.

• The institutional infrastructure - village cooperative, dairy and cattle feed plants, state and national marketing -- is owned and controlled by farmers.

• Anand Pattern cooperatives have progressively, linked producers directly with consumers.

State Milk Federation

District Milk Unions

Village Dairy cooperative Societies

Producers- Village

Consumers – Market

Sales Revenue

Money

M& MP

Cattle feed,Vet. Services & Rural health Schemes

Bonus, Dividend on Shares & Additional price difference

Milk

Three tier structure

Village Society

• Anand Pattern village dairy cooperative society (DCS) is formed by milk producers.

• Any producer can become a DCS member by buying a share and committing to sell milk only to the society.

• Each DCS has a milk collection centre where members take milk every day.

• Each member's milk is tested for quality with payments based on the percentage of fat and SNF.

• End of each year, a portion of the DCS profits –paid each member a patronage bonus based on the quantity of milk poured.

Three tier structure

The District Union

• District Cooperative Milk Producers' Union is owned by dairy cooperative societies.

• The Union buys all the societies' milk, then processes and markets fluid milk and products.

Most Unions also provide a range of inputs and services to DCSs and their members:

• feed, veterinary care,

• artificial insemination to sustain the growth of milk production

• cooperatives' business.

• Union staff train and provide consulting services to support DCS leaders and staff.

Three tier structure

The State Federation

• The cooperative milk producers' unions in a state form,

• State Federation, which is responsible for marketing the fluid milk and products of member unions.

• Some federations also manufacture feed and support other union activities

• DAIRY COOPERATIVES

• Gujarat Cooperative Milk Marketing Federation Ltd (GCMMF)

• The Himachal Pradesh State Cooperative Milk Producers Federation Ltd

• West Bengal Cooperative Milk Producer's Federation (WBCMPF)

• Bihar State Cooperative Milk Producers' Federation Ltd (COMFED)

• Karnataka Cooperative Milk ProducersFederation Ltd (KMF).

• The Orissa State Cooperative Milk Producer's Federation Limited

• Punjab State Cooperative Millk Producer's Federation Ltd (MILKFED)

• Tamilnadu Cooperative Milk Producer's Federation Ltd (TCMPF)

• Haryana Dairy Development Cooperative Federation (HDDCF)

• Andhra Pradesh Dairy Development Cooperative Federation Ltd (APDDCF)

• Chhattisgarh State Co operative Dairy Federation Limited

• Madhya Pradesh State Cooperative Dairy Federation Ltd (MPCDF)

• Rajasthan Cooperative Dairy Federation Ltd (RCDF)

• Pradeshik Cooperative Dairy Federation Limited (UP), (PCDF)

• The Kerala Cooperative Milk Marketing Federation Ltd

• Maharashtra Rajya Sahakari Dugdh Mahasangh Maryadit (MRSDMM)

• Pondicherry Coop. Milk Producers' Union Ltd.