EORUPA SCIENCE &COMMERCE ACADEMY
Q. No. 19: Explain the main types of cooperative societies. Also explain there role in the promotion of trade. ANSWER:
TYPES OF COOPERATIVE SOCIETIES
INTRODUCTION: Co-operative is a special form of organization. It differs from other major forms of organization as it is setup not to earn profit but to render service to its members. DEFINITION: The international Labour Office (I. L. O) defines a co-operative as: An association of persons usually of limited means, who have voluntarily joined together to achieve a common economic end ad through the formation of a democratically controlled business organization, making equitable contributions to the capital required and accepting a fair share of risks and benefits of the undertaking. TYPES OF COOPERATIVE SOCIETIES: There are a large number and variety of co-operative societies organized in the past few decades. The main societies which have been organized in different parts of the worlds are grouped together under the following main heads. 1) Producers Co-Operative Societies 2) Consumers Co-Operative Societies 3) Marketing Co-Operative Societies 4) Insurance Co-Operative Societies 5) Co-operative housing societies. 6) Co-Operative farming societies. 7) Co-operative credit societies 8) Miscellaneous Societies 1) PRODUCERS COOPERATIVE SOCIETIES: These are formed to eliminate the middleman and capitalists groups from industrial production. Its main purpose is to produce goods for the requirement of its members. Surplus production is supplied to the outsiders in the open market at profit. All the necessary activities are production; management, marketing etc. are performed by the members themselves. Its members get dividend on the basis of capital invested by them. Objects: To purchase the raw material and other factors at economical prices. To purchase the gods at most economical level. To supervise the production most efficiently and effectively To eliminate the middleman and capitalists. To remove the workers; grievances in respect of working condition wages etc. Condition: These cooperatives have been successful in those concerns where: a) Business is labour incentive b) Need special skills. c) Members are having limited liabilities
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d) Marketing of the product is guaranteed e) Management is efficient and honest. f) They do not acquire the service of professional managers. 2) CONSUMER COOPERATIVE SOCIETIES: It is voluntary association formed with the object of obtaining daily requirements of the member. It directly purchases the gods at large scale from producers or wholesalers at wholesale price. It eliminates capitalists, retailers and middleman from channel of distribution Anyone can become members by purchasing only 1 share of the society. Sometimes goods are supplied to non-members but they dont share in profit. Mangers who are elected by members conduct purchases. Types: Generally there are two types of it: o Wholesale cooperative store o Retail cooperative store Objects: These are as follows: To eliminate retailers capitalists and whole sellers To supply daily necessities to its members at market price. To promote welfare of members. To increase purchasing powers of members To improve the standard of living of the members. Reasons for Failure: It is not satisfactory in developing countries because: 1) These lack capital 2) Cooperative spirit is missing 3) The gods are sub standard 4) Goods lack varieties 5) There is no continuous supply of goods. 6) Price of commodities does not change with that in the market. 3) MARKETING COOPERATIVE SOCIETIES: It is voluntary association of producers, formed for the purpose of arranging the disposal of their output. It pools together the output individual members and arranges for supply at highest possible prices. The profit is distributed among the members contributing to the pool. This kind of society is useful for small producers and agriculturists.
These can be divided into: Single Purpose Society Multi purpose society Objectives: The objectives are as follows: a) To eliminate middleman b) To pool together the output of individual members c) To grade and process of the pooling products of the members d) To dispose of product at maximum price e) To adjust supply to demand
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EORUPA SCIENCE &COMMERCE ACADEMY
f) To provide storage facilities to its members. g) To provide financial facilities to its members. 4) INSURANCE COOPERATIVE SOCIETIES: It is formed for objects of providing group insurance facilities to its members It makes contracts with sound insurance companies and collective terms and conditions and thus pays lower premium rate. These are of two types Mutual Office: In this type, policy holders are the owners and profit is utilized in the following ways: To strengthen financial position of society. To decrease future amount of premium To distribute bonus to its members. Mutual Office: It is organized to provide insurance facilities like the private insurance company and issues policy for reasonable amount. Objects: The objects are as follows: a) To provide insurance facilities to its members. b) To charge low rate of premium c) To promote welfare of members d) To encourage habit of saving and investment. Reasons for Failure: It has not proved successful because: a) The contribution of the pool of society is to sufficient to pay claims b) The capital of society is not looked after carefully. c) Funds are not wisely invested d) The claims are not made promptly 5) COOPERATIVE HOUSING SOCIETIES: It is an association of middle and lower income groups of people generally it is formed in urban areas. The liability of members is limited to his capital. It is also called building society. It is divided into three types: a) House building society b) Land Society c) Finance Society Objectives: The following are the objectives of it. 1: To receive deposits from its members. 2: To make loans to the members at low rate of interests for construction of house. 3: To render technical services. 4: To purchase building materials at economical rate. 5: Supply of electricity, gas etc 6) COOPERATIVE HOUSING SOCIETIES: This form of society formed with the object of obtaining the benefits of large scale farming and maximizing agriculture products. Its members generally relate to the farmers including those owing land. These are of following types: a) Cooperative collective farming society b) Cooperative joint farming society c) Cooperative better farming society. d) Cooperative tenant farming society. Objectives: The objectives are as follows: o To introduce new techniques of cultivation
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EORUPA SCIENCE &COMMERCE ACADEMY
o To improve irrigation system. o To improve the area under agriculture. o To improved the standard of living of the farmers. o To increase production per acre. o To provide seeds etc. o To depots agriculture output. 7) COOPERATIVE CREDIT SOCIETIES: These are classified into: (A) Urban Credit Cooperative Societies: These societies get finance from central and provincial cooperative bank, which supply medium and short term loans. (B) Rural Credit Cooperative Societies: These are further classified as: Agriculture Credit Societies Non-Agricultural Credit Societies These get finance from the central and provincial cooperative banks and provide it to the members. Objects: To make loans for various purposes. To improve the standard of living To increase the purchasing output 8) MISCELLANEOUS SOCIETIES: In addition to major forms of societies, there is large number of establishment, which re organized on cooperatives. Example: Proceeding cooperatives (proceeding of raw material into finished goods) o Cooperative for fisheries o Cooperative for cold strong o Cooperative or forestry o Cooperative for poultry farming etc. CONCLUSION: Cooperative in recent year is not considering merely a form of organization. It is a movement new which aims at improving the economic conditions of the low-income groups of a self help basis.
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