Cooperatives ( Sociology Optional)

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Meaning and definition of cooperation and Cooperatives

• The word cooperation has many meanings, but in common discourse it means working, living and thinking together.
• The focus is on

(a) jointly owned systems,

(b) voluntary participation, and

(c) democratic functioning.

• As per International Labour Organization (ILO), a cooperative society is an association of persons, who assemble for their common cause and work together voluntarily on democratic lines.
• According to International Cooperative Alliance (ICA), a cooperative is an association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly owned and democratically controlled enterprise.
• It means that cooperatives are based on the values of self-help, self– responsibility, democracy, equality, equity and solidarity in the tradition of their founders.

Principles of cooperation

• Voluntary and open membership
• Democratic member control
• Members’ economic participation
• Autonomy and independence
• Education, training and information
• Cooperation among cooperatives

History of the cooperative movement

• Cooperation dates back as far as human beings have been organizing for mutual benefits. Tribes were organized as cooperative structures, allocating jobs and resources among each other, only trading with the external communities.
• The cooperative movement is fueled globally by ideas of economic democracy. Economic democracy is a socioeconomic philosophy that suggests an expansion of decision-making power from a small minority of corporate shareholders to a larger majority of public stakeholders.

Evolution in India

• Considering the situation of the rural sector, the importance of the Panchayati system and cooperatives was recognized and these institutions were assigned specific roles.
• The main task assigned to these institutions was to work for community development, to eradicate rural poverty, to reduce inequalities and to eliminate privileges.
• In a village, the cooperative society enjoys a focal position as an important socio-economic institution.

Thinker view

• Robert Owen is considered as the father of the cooperative movement. Owen believed in putting workers in a good environment with access to education for themselves and their children
• The main objective of the cooperative society is to save poor providing goods at a lower price from the market price, and to eliminate the middle man. - Robert Owen
• William King believed in starting small societies and realized that the working classes would need to set up co-operatives for themselves.
• According to Calvert, a cooperative denotes a form of organization wherein persons voluntarily associate together based on equality, for the promotion of economic interests of themselves.

Women and Co-operatives: Co-operative Women's Guild

• Alice Acland and Mary Lawrenson recognized the need for a separate women's organization within the Cooperative Movement.
• They began organizing a "Woman's League for the Spread of Co-operation" in 1883. The Guild organized around working women's issues and expanding the Cooperative Movement.
• The Guild also opened the Sunderland cooperative store in 1902, which catered to poor working-class women.
• It engaged in many political campaigns concerning women's health, women's suffrage and pacifism. Until recently the organisation participated in social justice activism, but has now closed.

Case studies from India: Lijjat Papad

• Shri Mahila Griha Udyog Lijjat Papad, popularly known as Lijjat, is an Indian women's worker cooperative.
• It is involved in manufacturing of various fast-moving consumer goods.
• The organisation's main objective is empowerment of women by providing them employment opportunities.
• Started in 1959 by seven women in Mumbai with a seed capital of only Rs.80, it had an annual turnover of more than Rs.1600 crore in 2019.
• It provides employment to 45,000 (in 2021) women across the country.
• These women are the owners of the brand. Even a lowest paid worker can rise to highest position in the organization.
• Lijjat started out as a cottage industry in an urban area, but spread to the rural areas.

Agricultural Cooperative

• An agricultural cooperative or a farmers' cooperative is a cooperative in which farmers pool their resources in certain areas of activity.
• Examples of agricultural production cooperatives include collective farms, the kibbutzim in Israel, collectively-governed community shared agriculture, etc.

Case study of Amul

• In India, dairy farming based on the Anand Pattern, with a single marketing cooperative, is the largest self-sustaining industry and its largest rural employment provider.
• Here small, marginal farmers with a couple or so heads of milch cattle pour milk from their small containers into the village union collection points.
• The milk after processing at the district unions is then marketed by the state cooperative federation nationally under the Amul brand name, India's largest food brand.
• With this pattern three-fourths of the price paid by the mainly urban consumers goes into the hands of millions of small dairy farmers.
• These farmers are the owners of the brand.

Cooperatives and SHGs

• When the Self-Help Group Initiative was launched to provide the poor with access to formal financial services, it was somehow expected that cooperatives would step in to provide these services.
• Already existing small local level institutions with their readily available support structure were placed to serve as outlets for financial services to SHGs. Eg. as seen in the case of the agricultural credit
• Despite these advantages, agricultural credit societies and cooperative banks have played a limited role in the programme of linking SHGs to formal financial
• In India , Padma of Karapalli village in Ganjam district, Orissa, is an example of what micro credit could do if only they took a leaf from the cooperative movement.
• Also, The Primary Agriculture Cooperative Credit Societies at the district level are all set to play a new role as Self-Help Promoting Institutions (SHPI). This is to promote self-help groups as well as extend credit to them.
• This is for the first time that the cooperative credit institutions in the district are going to forge credit linkage with the SHGs.

Growth of cooperatives in India

• The size and volume of cooperative business during the post-independence period has shown rapid growth and multiplied many folds.
• The coverage of villages by cooperatives, which was 30% in 1950-51, has reached 100%.
• Cooperatives have entered into every sphere of economic activity and emerged as one of the significant segments of Indian economy.
• Their contributions in shaping the rural economy also are substantial.
• The share of cooperatives in rural credit disbursement amounted to more than 50% during 2020-2021, fertilizer distribution was 36.0%, fertiliser production 29.0%, sugar production 59.0%, branded oil marketing, wheat procurement 36.0%, jute procurement 21%, fishermen’s cooperatives 11%, rural fair price cooperatives 28%, salt manufacture 7% and employment was created for 15.1 million people.
• The contribution of milk cooperatives in milk production, procurement and distribution is significant.

Assessment and evaluation

• The education and training networks of cooperatives have promoted awareness regarding development, advantages and techniques of living under the umbrella of cooperatives. This has helped in curbing the migration of the rural people from rural to urban areas.
• The cooperative venture and its programmes have also promoted diversification in crop production; effective use of chemical fertilizers, insecticides and better seeds; new techniques for improving the fertility of the land and various ancillary activities.
• The setting up of marketing and processing cooperatives has not only helped the farmers in ensuring better prices for their produce but have also generated significant rural employment.