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Definition of Co-Operation: Objectives
Definition of Co-Operation: Objectives
means who organize themselves for self-help and mutual benefit from an enterprise. A cooperative does
not aim to earn benefit like other type of organizations but is only to render service to its members.
Cooperative societies can help farmers with such a facility at affordable cost and ensure better
economic returns.
Definition of co-operation
Late Shri V.L. Mehta preferred to express its non-profit and selfless characteristics by describing
cooperation as voluntary association of individuals having common needs who combine towards the
achievement of common economic needs.” In a similar tone,
Mr. H. Calvert who defined cooperation “as a form of organization wherein persons voluntarily
associate together as human beings on a basis of equality, for the promotion of the economic interests
of themselves”
Objectives
The basic objective of cooperation is to provide services through self-help and mutual help which
eliminates exploitation of consumer by trader, the workers by the employer, the borrower by the lender
and tenant by landlord.
Principles of co-operation
The first to state the co-operative principles were the Rochdale Pioneers. The principles include:
open membership; democratic control; limited interest on capital; distribution of surplus to members in
proportion to their transactions; political and religious neutrality; cash trading; and promotion of
education. But these principles were formulated mostly from the point of view of consumers co-
operatives whereas cooperative movement is now working in the context of wide range of socio-
economic conditions operating in various countries. The International Co-operation Alliance, on the
request of the International Co-operative Congress held at Bournemouth in 1963, appointed a
Commission to formulate the fundamental principles of co-operation. The Commission which was
headed by Prof. D.G. Karve, recommended that the following should be considered as essential for
genuine and effective co-operative practice.
1. Voluntary and open membership;
2. Democratic control;
4. Patronage dividend;
Democratic Administration
The management of this organization is fully democratic where all members are
treated equal for voting and participation in decisions affecting their societies.
The individuals are not distinguished on the basis of property and status. It is now
fully recognized that supreme authority in a co-operative society vests in its
general body of members.
The Commission remarked that “all co-operative societies should make provision
for the education of their members, officers and employees and the general
public in the principles and techniques of co-operation, both economic and
democratic.” In order to secure intelligent participation of the members in the
working of societies it is necessary that continuous system of education be
evolved and members kept informed of the decisions and 4 activities of the
society. The Rochdale Pioneers laid great stress on the continuous education of
the members and even began to set aside a fixed sum out of the surplus for
education purposes.
Mutuality
The principle relates mostly to the mutual co-operation among the co-operatives
for organizing resources on the basis of mutual help and for sharing benefit.
Cooperation implies an enterprise of those who are financially weak individually
and can not derive material advantage which rich people with all their resources
and connection can. In order to convert their weakness into strength the
members pool their resources and work together for mutual benefit. The mutual
aid is, in fact, a means of self help.
Functions:
Co-operative marketing
(i) Lack of spontaneity: The co-operative movement in India did not spring
from the people themselves. The movement was not voluntary in the
real sense and the people did not come forward to organize societies to
satisfy their needs. The government officials who ran the movement
were ignorant of the ideals of co-operation. They were neither properly
trained, nor were they aware of the needs of the farmers.
(ii) (ii) Lack of funds: A basic weakness of the co-operative movement has
been the lack of funds and these do not command adequate resources
in the form of share money and deposits. The central and the sate co-
operative credit societies could not attract as much deposits from 19 the
general public as was anticipated. On account of weakness in financial
working of credit societies the overdue rises to 40-45 per cent of the
loan.
(iii) (iii) Loans for productive purposes only: The co-operative credit societies
did not help the farmers in meeting all their credit requirements. They
give loans only for agricultural operations. But the farmers require loans
to meet many of their other requirements also for which they have to
depend upon the money-lenders and thus farmers do not become full
supporters of the cooperative movement.
(iv) (iv) Provision of credit only: The co-operative societies provided loans to
the farmers but did not help the latter in any field of non-credit shares..
In certain areas different societies were started for different purposes.
But there is need to establish co-operative societies to meet all the
needs of the farmers.
(v) (v) Problem of overdues: The major problem faced by co-operatives is
mounting levels of overdue with a ratio of overdues to demand being 40
to 42 per cent. The total overdue of co-operative credit institutions is
estimated to be between Rs. 9,000 to Rs.10,000 crores. Lack of will and
discipline among cultivators to repay loan, defective landing policy and
apathy of management in taking quick action against defaulters created
such a situation. It has further been aggravated by frequent loan
waivers, concessions in various forms towards repayment of principal
and payment of interest, writing off the debts etc. It is disquisting to
note that out of 1,12,309 PACS with a membership of around 12 crores
in the country, 62 per cent are viable, 30 percent potentially viable and
eight per cent are either dormant, defunct or under liquidation. The
problem of overdues is a matter of serious concern as it affects the
recycling of funds and credit expansion on one hand, and economic
viability of cooperatives, on the other. Various suggestions to lower this
financial drain in co-operative sector have remained unimplemented at
the levels of state governments. Some serious thinking is required to
remedy the situation at the higher level before the entire system of
credit supply to rural sector is crippled.
(vi) (vi) Competition from private agencies: From the very beginning, the
co-operative movement met with competition from powerful vested
interests. In villages, the moneylenders and traders worked for the
failure of the village societies.
(vii) (vii) Lack of co-operation on the part of the people: In India, people have
been largely illiterate, ignorant and extremely conservative. For one
thing, most of them did not understand the real meaning and objective
of co-operation. Co-operation can not succeed unless there is
willingness and complete co-operation from the people.
(viii) (viii) Defective management and leadership: The failure and liquidation
of many societies in rural areas was directly due to the defective
management and leadership. As mentioned earlier, the village economy
is dominated by the landlords. But these landlords did not care much
about the success of the co-operative movement.
(ix) (ix) The attitude of the Government: The Government was correct in
encouraging the movement in all possible ways. The mistake it made
was to convert co-operatives into almost a government department
with all the rigidities and short sightedness associated with a
government department. The tendency was to officialise the movement
too much and leave little to private initiative. 20
(x) (x) The nature of Indian rural society: Conditions in Indian rural society
did not promote cooperation among people. The average Indian farmer
is illiterate and ignorant and has not been able to understand the
significance and utility of co-operation. Even after a century of operation
of cooperatives people have not developed much faith in the movement
and still regard it as a government agency for the grant of loans and
other services