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Cooperative Societies You Need To Know Before Building Yours

Cooperative societies are based on the principle of cooperation and mutual aid, with members coming together to achieve a common goal. In this article, we will explore the concept of cooperative societies, their history, importance, types, benefits, challenges, and how to form one. We will also compare the different types of cooperative societies, their advantages, disadvantages, and operations. By the end of this article, you will have a better understanding of cooperative societies and their potential to create economic, social, and environmental benefits for their members and the wider community.

Explanation of What a Cooperative Society is

A cooperative society is an autonomous association of people who come together voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly owned and democratically controlled enterprise. The cooperative society is based on the principles of self-help, self-responsibility, democracy, equality, equity, and solidarity. Members of cooperative societies contribute equitably to the capital of their cooperative and democratically control it to meet their economic, social, and cultural needs and aspirations.

Brief History of Cooperative Societies

The concept of cooperative societies dates back to the 19th century, with the first cooperative society established in Rochdale, England, in 1844. The Rochdale Society of Equitable Pioneers was founded by a group of weavers who were frustrated with the poor quality and high cost of goods available to them. They decided to pool their resources and establish a cooperative society that would enable them to purchase quality goods at affordable prices. The Rochdale Pioneers established the principles of cooperation, including democratic control, distribution of surplus, and education of members.

Importance of Cooperative Societies

Cooperative societies are important because they promote economic, social, and environmental sustainability. They enable individuals to pool their resources and collectively address their needs, creating economies of scale that can lower costs and increase efficiency. Cooperative societies esenyurt escort empower their members by providing them with a voice and a stake in the decision-making process, enhancing their sense of ownership and responsibility. They also promote social cohesion and community development by fostering mutual aid, solidarity, and shared values. In addition, cooperative societies can contribute to environmental sustainability by promoting sustainable production and consumption practices.

Also read: What is co-operative society?

Types of Cooperative Societies

There are several types of cooperative societies, including consumer, producer, marketing, housing, credit, agricultural, and service cooperative societies. Each type has unique characteristics, functions, and benefits.

Consumer Cooperative Societies

A consumer cooperative society is a type of cooperative society that is owned and operated by its consumer members. These societies are formed to meet the needs of consumers by providing them with goods and services at a fair price. Consumer cooperative societies are usually formed in industries where the consumers face monopolies or oligopolies and have little bargaining power.

Characteristics:

The key characteristics of consumer cooperative societies are:

  1. Voluntary membership: Membership in a consumer cooperative society is voluntary, and anyone who shares the values and principles of the society can become a member.
  2. Service motive: They are not profit-driven and aim to provide goods and services at a fair price.

Producer Cooperative Societies

A producer cooperative society is a type of cooperative society that is owned and operated by its producer members. These societies are formed to provide collective bargaining power to the producers and to improve their income and working conditions.

Characteristics:

The key characteristics of producer cooperative societies are:

  1. Voluntary membership: Membership in a producer cooperative society is voluntary, and anyone who shares the values and principles of the society can become a member.
  2. Democratic control: Each member of a producer cooperative society has an equal say in how the organization is run. Decisions are made democratically, with each member having one vote.
  3. Collective bargaining power: Producer cooperative societies provide collective bargaining power to their members, allowing them to negotiate better prices for their products.
  4. Limited return on capital: The return on capital invested by the members is limited to a certain percentage. This ensures that the society is not operated for profit but for the benefit of its members.

Marketing Cooperative Societies

A marketing cooperative society is a type of cooperative society that is owned and operated by its marketing members. These societies are formed to provide a market for the products produced by the members and to improve their income and working conditions.

Characteristics:

The key characteristics of marketing cooperative societies are:

  1. Voluntary membership: Membership in a marketing cooperative society is voluntary, and anyone who shares the values and principles of the society can become a member.
  2. Market access: Marketing cooperative societies provide market access to their members, allowing them to sell their products at a fair price.
  3. Limited return on capital

Housing Cooperative Societies

A housing cooperative society is a type of cooperative society that is owned and operated by its housing members. These societies are formed to provide housing to their members at a fair price. Housing cooperative societies are usually formed in urban areas where housing is expensive and hard to find.

Characteristics:

The key characteristics of housing cooperative societies are:

  1. Voluntary membership: Membership in a housing cooperative society is voluntary, and anyone who shares the values and principles of the society can become a member.
  2. Affordable housing: Housing cooperative societies provide affordable housing to their members, allowing them to live in a home that they can afford.

Credit Cooperative Societies

A credit cooperative society is a type of cooperative society that is owned and operated by its credit members. These societies are formed to provide credit to their members at a fair interest rate. Credit cooperative societies are usually formed in areas where access to credit is limited and expensive.

Characteristics:

The key characteristics of credit cooperative societies are:

  1. Voluntary membership: Membership in a credit cooperative society is voluntary, and anyone who shares the values and principles of the society can become a member.

Agricultural Cooperative Societies

An agricultural cooperative society is a type of cooperative society that is owned and operated by its agricultural members. These societies are formed to improve the income and working conditions of farmers by providing them with services and support.

Characteristics:

The key characteristics of agricultural cooperative societies are:

      1. Voluntary membership: Membership in an agricultural cooperative society is voluntary, and anyone who shares the values and principles of the society can become a member
      2. Joint ownership and control: Members of an agricultural cooperative society jointly own and control the organization. They share in the risks and benefits of the society.
        1. Voluntary membership: Membership in a service cooperative society is voluntary, and anyone who shares the values and principles of the society can become a member.

Affordable services: Service cooperative societies provide affordable services to their members, allowing them to access services that they might not otherwise be able to afford.Service provision: Agricultural cooperative societies provide services to their members, such as marketing, purchasing, and input supply.

Service Cooperative Societies

A service cooperative society is a type of cooperative society that is owned and operated by its service members. These societies are formed to provide services to their members at a fair price. Service cooperative societies are usually formed in areas where access to services is limited and expensive.

Characteristics:

The key characteristics of service cooperative societies are:

  1. Voluntary membership: Membership in a service cooperative society is voluntary, and anyone who shares the values and principles of the society can become a member.
  2. Affordable services: Service cooperative societies provide affordable services to their members, allowing them to access services that they might not otherwise be able to afford.

Comparison of Cooperative Societies:

While each type of cooperative society has its own specific characteristics and examples, there are some general similarities among them. Additionally, all cooperative societies provide benefits to their members, such as improved income, access to services, or affordable housing.

However, there are also differences among the types of cooperative societies. For example, producer cooperative societies focus on production and input supply, while marketing cooperative societies focus on marketing and sales. Similarly, agricultural cooperative societies focus on services for farmers, while service cooperative societies focus on services for a broader range of members.

In general, the type of cooperative society that is most appropriate for a given situation will depend on the needs of the members and the specific circumstances of the situation. However, cooperative societies can be a powerful tool for improving the lives of their members and promoting economic development in their communities.

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Advantages and Disadvantages of Each Type of Cooperative Society:

  1. Consumer Cooperative Society:

Advantages:

  • Members can access products and services at a lower price due to economies of scale
  • Members have a say in the decisions of the cooperative society
  • The society can negotiate better deals with suppliers due to its collective buying power

Disadvantages:

  • The society may not be able to compete with larger retailers on price or selection
  1. Producer Cooperative Society:

Advantages:

  • Members can access inputs and supplies at a lower price due to economies of scale
  • Members have a say in the decisions of the cooperative society
  • Members can receive a higher price for their products by collectively marketing and selling them

Disadvantages:

  • Members may not have the necessary expertise to effectively manage the cooperative society
  • The society may struggle to compete with larger producers on price or quality
  1. Marketing Cooperative Society:

Advantages:

  • Members can access larger markets for their products due to the collective marketing efforts of the society
  • Members have a say in the decisions of the cooperative society
  • The society can negotiate better deals with buyers due to its collective selling power

Disadvantages:

  • Members may not have the necessary expertise to effectively manage the cooperative society
  • The society may struggle to compete with larger marketing organizations on price or selection
  1. Housing Cooperative Society:

Advantages:

  • Members can access affordable housing that they may not be able to afford individually
  • Members have a say in the decisions of the cooperative society
  • The society can negotiate better deals on mortgages and other expenses due to its collective buying power

Disadvantages:

  • Members may not have the necessary expertise to effectively manage the cooperative society
  • The society may struggle to compete with larger housing organizations on price or quality
  1. Credit Cooperative Society:

Advantages:

  • Members can access credit at a lower interest rate than they would through traditional lenders
  • Members have a say in the decisions of the cooperative society
  • The society can offer more flexible repayment terms than traditional lenders

Disadvantages:

  • Members may not have the necessary expertise to effectively manage the cooperative society
  • The society may struggle to compete with larger lending organizations on interest rates or service offerings
  1. Agricultural Cooperative Society:

Advantages:

  • Members can access inputs and supplies at a lower price due to economies of scale
  • Members have a say in the decisions of the cooperative society
  • The society can negotiate better deals with buyers and suppliers due to its collective bargaining power

Disadvantages:

  • Members may not have the necessary expertise to effectively manage the cooperative society
  • The society may struggle to compete with larger producers on price or quality
  1. Service Cooperative Society:

Advantages:

  • Members can access services at a lower price due to economies of scale
  • Members have a say in the decisions of the cooperative society
  • The society can negotiate better deals with service providers due to its collective buying power

Disadvantages:

  • Members may not have the necessary expertise to effectively manage the cooperative society
  • The society may struggle to compete with larger service providers on price or selection

Conclusion

In conclusion, cooperative societies are powerful tools for promoting economic, social, and cultural development. They come in various forms, including credit unions, agricultural cooperatives, housing cooperatives, and consumer cooperatives, among others. Each type of cooperative society serves a unique purpose and provides benefits to its members and the community.

Credit unions offer financial services to members, while agricultural cooperatives help farmers to access better markets and inputs. Housing cooperatives provide affordable housing options to members, and consumer cooperatives allow consumers to purchase goods and services at lower prices. All types of cooperative societies share common principles of cooperation, mutual assistance, and self-help, which guide their operations.

By joining and supporting cooperative society, individuals and communities can achieve their shared goals and aspirations. Cooperative society promote equality, sustainability, and social inclusion, and empower their members to take control of their economic and social lives. Therefore, it is crucial for everyone to support and participate in cooperative society to promote a better world for all.

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