Explain any four types of Co-operative societies.
Answers
Consumers' cooperatives are formed by the consumers to obtain their daily requirements at reasonable prices. Such a society buys goods directly from manufacturers and wholesalers to eliminate the profits of middlemen.
These societies protect lower and middle class people from the exploitation of profit hungry businessmen. The profits of the society are distributed among members in the ratio of purchases made by them during the year.
Consumer's cooperatives or cooperative stores are working mainly in urban areas in India. Super Bazar working under the control of Government is an example of consumers' cooperative society.
2. Producers cooperatives:
Producers or industrial cooperatives are voluntary associations of small producers and artisans who join hands to face competition and increase production. These societies are of two types.
(a) Industrial service cooperatives:
In this type, the producers work independently and sell their industrial output to the cooperative society. The society undertakes to supply raw materials, tools and machinery to the members. The output of members is marketed by the society.
(b) Manufacturing cooperatives:
In this type, producer members are treated as employees of the society and are paid wages for their work. The society provides raw material and equipment to every member.
The members produce goods at a common place or in their houses. The society sells the output in the market and its profits are distributed among the members.
3. Marketing Cooperatives:
These are voluntary associations of independent producers who want to sell their output at remunerative prices. The output of different members is pooled and sold through a centralised agency to eliminate middlemen. The sale proceeds are distributed among the members in the ratio of their outputs.
As a central sales agency, the society may also perform important marketing functions such as processing, grading and packaging the output, advertising and exporting products, warehousing and transportation, etc.
Marketing societies are set up generally by farmers, artisans and small producers who find it difficult to face competition in the market and to perform necessary marketing functions individually. The National Agricultural Cooperative Marketing Federation (NAFED) is an example of marketing cooperative in India.
4. Cooperative Farming Societies:
These are voluntary associations of small farmers who join together to obtain the economies of large scale farming. In India farmers are economically weak and their land-holdings are small.
In their individual capacity, they are unable to use modern tools, seeds, fertilizers, etc. They pool their lands and do farming collectively with the help of modern technology to maximum agricultural output.
These are the 4 major types of cooperative societies:
Producer cooperative societies- these societies are established by small producers.
They are successful where:
- Business is small
- Management is fair and honest
- Work is labor intensive
Consumer cooperative societies- These societies want to become the main traders for the small markets and buy goods and sell them at cheaper rate.
Cooperative Market societies are formed by small producer societies for the promotion of trade. These societies have two main objectives:
- Selling goods are a lucrative prices
- To become a permanent source of sellers for the producers
Credit cooperative societies: these societies are formed to provide financial assistance to small traders and businesses. These societies provide small loans to farmers with low interests so they could buy stuff to start their businesses.