Intro To Cooperatives

Introduction to
Co-operatives
Need of cooperation
• In earlier days population was very small
• Needs for commodities were limited
• Rise of exchange economy
• The concept of money gave rise to inequality in distribution of income
• Rise of capitalist economy
• Excess profit
• Overproduction of unnecessary goods
• Concentration of wealth
• Rise of socialist economic
• Lack of initiative and enthusiasm in people
• Cooperatives act as balancing factor
• Rise of cooperative economy
• Can work in public, private and cooperative sector
• Limited resources are put to rational use
• H. Calvert, “co operation is a form of organisation in which persons
voluntarily associated together on the basis of equality for the
promotion of their economic interests. Those who come together,
have a common economic aim which they cannot achieve by
individual and isolated acting because of weakness of the economic
position of a large majority of them.
• Dr. Kalilash Nath Katju has observed “co operation is self help as well
as mutual help. It is joint enterprise of those who are not financially
strong and cannot stand on their own legs and therefore come
together not with a view to get profits but to overcome disability
arising out of adequate financial resources and thus better their
economic conditions.”
Principles of cooperatives
Cooperatives around the world generally operate according to the same core
principles and values, adopted by the International Co-operative Alliance in
1995. Cooperatives trace the roots of these principles to the first modern
cooperative founded in Rochdale, England in 1844.
1. Voluntary and Open Membership
Cooperatives are voluntary organizations, open to all people able to use its
services and willing to accept the responsibilities of membership, without
gender, social, racial, political or religious discrimination.
2. Democratic Member Control
Cooperatives are democratic organizations controlled by their members—
those who buy the goods or use the services of the cooperative—who
actively participate in setting policies and making decisions.
3. Members' Economic Participation
Members contribute equally to, and democratically control, the capital of the
cooperative. This benefits members in proportion to the business they
conduct with the cooperative rather than on the capital invested.
4. Autonomy and Independence
Cooperatives are autonomous, self-help organizations controlled by their
members. If the co-op enters into agreements with other organizations or
raises capital from external sources, it is done so based on terms that ensure
democratic control by the members and maintains the cooperative’s
autonomy.
5. Education, Training and Information
Cooperatives provide education and training for members, elected
representatives, managers and employees so they can contribute effectively
to the development of their cooperative. Members also inform the general
public about the nature and benefits of cooperatives.
6. Cooperation among Cooperatives
Cooperatives serve their members most effectively and strengthen the
cooperative movement by working together through local, national, regional
and international structures.
7. Concern for Community
While focusing on member needs, cooperatives work for the sustainable
development of communities through policies and programs accepted by the
members.
Cooperatives Have Unique features
User - Owner
User - Control
User - Benefit
User-Owner feature
The people who own and finance the

cooperative are those who use it.
User-Control feature
The people who use the

cooperative are those
who control the
cooperative
Members Exercise Control By
• Voting at annual and

membership meetings
• Electing Board of Directors
• Making decisions on major
cooperative issues
User-Benefit feature
The cooperative’s sole purpose

is to provide and distribute
benefits to members on the
basis of their use
User-Benefits
Bargaining Reduced Costs
Power
Market Access Quality products

and services
Community Economic
Strength Enhancement
Competitive
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Intro To Cooperatives

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Intro To Cooperatives

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Introduction to

The people who own and finance the

The people who use the

• Voting at annual and

The cooperative’s sole purpose

Market Access Quality products

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