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Chapter: 11th Commerce : Chapter 7 : Cooperative Organisation

Types of Cooperatives

The Cooperatives can be broadly classified into two viz., Credit Cooperatives and Non- Credit Cooperatives.

Types of Cooperatives

The Cooperatives can be broadly classified into two viz., Credit Cooperatives and Non- Credit Cooperatives. The credit cooperatives can be further classified into Agricultural credit and non-Agricultural credit coopertives. However for beginners the coopertives are classified as follows.


A. Consumers Cooperatives


Consumer cooperatives are organized by consumers that want to achieve better prices or quality in the goods or services they purchase. In contrast to traditional retail stores or service providers, a consumer cooperative exists to deliver goods or services rather than to maximize profit from selling those goods or services. They also supply essential commodities through Public Distribution System (PDS). Nationally, the most widely used cooperative form is the credit union, with some 90 million members. Credit union assets have grown a hundred- fold in three decades. Credit unions are essentially cooperatives of people that use banking services.

Students’ cooperative stores, Cooperative provision stores and supermarkets set up on cooperative societies of India are examples of this type.


B. Producers Cooperatives


Producer cooperatives are established and operated by producers. Producers can decide to work together or as separate entities to help increase marketing possibilities and production efficiency. They are organized to process, market, and distribute their own products. This helps lessen costs and strains in each area with a mutual benefit to each producer.


Cooperative weavers’ societies, Cooperative carpenting units, Cooperative match factories.


C. Marketing Cooperatives


Cooperative marketing societies are associations of small producers formed for the purpose of marketing their produce. The marketing cooperatives perform certain marketing functions such as grading, warehousing, advertising etc., They secure better prices for their members by transporting goods even to distant markets. Advance is also given to members against produce deposited with the society. Thus they are a boon to agriculturists, small producers and artisans, who in the absence of these cooperatives would be forced to sell at low prices to middlemen.


D. Credit Cooperatives


Cooperative credit societies are those formed for the purpose of providing short- term financial help to their members.

Agriculturists, artisans, industrial workers, salaried employees, etc., form these credit societies. Being unable to obtain financial accommodation from banks they  are  at  the mercy of money-lenders who charge exorbitant rates of interest. Ending this exploitation and encouraging thrift among members is the objective of these societies. Credit societies may be agricultural credit societies or non-agricultural credit societies.


H. Housing Cooperatives


These cooperative housing societies are meant to provide residential accommodation to their members on ownership basis or on rent. People who intend to build houses of their own join together and form housing societies. These societies  advance  loans  to members, repayable over a period of 15 to 20 years. Housing building societies, on the other hand, construct houses for their members instead of granting loans to them. These are house construction societies which acquire land, construct houses and rent them to members. The member-tenant, however, can own the houses after paying the cost.


F. Cooperative Farming Societies


When various farmers in a village pool their land together and agree to treat the pooled piece of land as one big farm for the purpose of cultivation, purchase the necessary inputs for the cultivation, and market the crops jointly, they are assumed to have formed a cooperative farming society. Such a society, for its proper working elects its office bearers on the basis of one member-one-vote.

The office bearers look after the proper cultivation of new farm that emerges after the land of various farmers has been pooled. The ownership of the land still lies with the respective members of the society and they withdraw from the society whenever they so like.

Besides land the farmers also contribute variousproductiveassetsaswellastheirlabour for the purpose of cultivations. Whereas they get rent for their land and productive assets, they get wages, for their labour.


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