HISTORY OF COOPERATIVE
In 1844 a group of 28 artisans working in the cotton mills in the town of Rochdale, in the north of England established the first modern cooperative business, the Rochdale Equitable Pioneers Society. The weavers faced miserable working conditions and low wages, and they could not afford the high prices of food and household goods. They decided that by pooling their scarce resources and working together they could access basic goods at a lower price.
Initially, there were only four items for sale: flour, oatmeal, sugar, and butter.
The Pioneers decided it was time shoppers were treated with honesty, openness, and respect, that they should be able to share in the profits that their custom contributed to and that they should have a democratic right to have a say in the business. Every customer of the shop became a member and so had a true stake in the business. At first, the cooperative was open for only two nights a week, but within three months, the business had grown so much that it was open five days a week.
HISTORY IN NIGERIA
Ever before the coming of the white men to Nigeria, the Nigerian has been practicing co- operative in various forms and in the various aspect of their lives. In Igbo land for instance,
communities co-operated to put up buildings for their members through communal efforts. Tillage, planting and harvesting of crops were also undertaken communally. They existed a system of credit co-operation known as “ISUSU” by which members of a community banned themselves into a union for the purpose of raising fund for their members.
There is a discernible pattern of co-operative development in African and Asian countries which were former colonies of the Europe. Nigeria is no exception. In Nigeria the first hint on co-operative emergence occurred during the first world war. This co- operative which happen to be a consumer was modeled along the Rochdale of England – home of the colonialist. This earliest co-operative society existed to ration out consumer goods – which was very scarce during the world war. Soon after the war ended the consumer co-operatives died a
natural death.
Thereafter, in 1926, the then colonial Agricultural ministry began organizing cocoa farmers around Abeokuta and Ibadan in Western Nigeria to market their produce especially to Europe where the colonial masters needed it for home industries . this was also the patterned development of co- operative in British colonies. After this experiment, the whole western Nigeria embraced co-operative especially marketing types.
DEFINITION OF COOPERATIVE SOCIETY
A cooperative society is a group of individuals who have specific common needs.It is an economic enterprise,the purpose of which is to improve the economic status of owners or members.Most cooperative societies offer their products to their members and others do not
serve non-members.
A cooperative is "an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise"
TYPES OF COOPERATIVE SOCIETY
1) Producer Cooperative:- Involves group of people usually farmers, landowners or owners of fishery operation. If there is adequate cooperation, they may buy farm inputs together, equipments, insurance, sales people, advertise together, etc.
2) Consumer Cooperative society:- They are formed by consumers to obtain their daily requirements at reasonable prices. These societies protect lower and middle class people from the exploitation of profit hungry businessmen.
3) Credit Cooperative:- These societies are formed by poor people to provide financial help and to develop the habit of savings among members. They help to protect members from exploitation by money lenders who charge exorbitant interest from borrowers.
4) Hybrid cooperative society:- involves combinations of cooperative types where people with common interest band together to achieve their goal.
IMPORTANCE OF COOPERATIVE SOCIETY
1) Farming cooperatives helps farmers to pull their resources together to achieve much profit and this also pave way for intensive cultivation by using modern technology.
2) Agricultural service cooperative are instrumental in arranging cheaper transportation, storage facilities and similar such services.
3) Provide financial assistance - A credit cooperative society provides the credit to the members at reasonable interest rate, thereby, protect it's members from the exploitation by local money lenders and others.
4) Increase saving habits:- they encourage members and educate them to reduce unproductive expenditure.
5) Fulfil various needs of members - by providing loans, supply improved seeds, fertilizers, agricultural tools and other necessary services which the members gets under suitable terms and condition.
FUNCTIONS OF A COOPERATIVE SOCIETY
There are more than 120 cooperative society types which possess various functions and aims. Here we will outline the main 8 categories as well as explain the roles of cooperative society.
1) Consumer cooperative society:- The functions and aims of the consumer cooperative societies, catering cooperatives and wholesale trade associations. The functions and aims of the consumer cooperative society
to meet the needs of the consumers in good quality goods and services at an affordable price;
to conduct trading and public catering services;
to serve the population within the trade enterprises (shops, stalls, tents) and within the catering facilities (restaurants, canteens, cafés);
to produce goods, to provide household and production services, including credit and insurance services.
2. Loan cooperative society:- The loan cooperative society functions differ in the loan purpose: the production loan, which is issued to the small and medium-sized enterprises for productive purposes:
to purchase the equipment, raw materials, seeds, lands, to construct the buildings and facilities, etc.;
the consumer loan, which is issued to meet the citizens personal needs (mostly the cooperative members):
to buy clothes, household items,
to pay for education and treatment; to buy an apartment, etc.;
the credit unions, which 2 main functions are: to provide the profitable money savings and the cash loans issuance to these unions members.
3. Agricultural cooperative society:- The primary purpose of the agricultural cooperative society is to help its members in the rational organizing of agricultural production, the processing, and marketing of the cropping output as well as animalproduction also. Thus, such joint activities contribute to strengthening the economic position of agricultural
output in a market economy.
4. Production cooperative society:- These cooperatives are the commercial enterprises and are owned by the people working on them. The purpose of such cooperatives is to get an income through the effective joint production. The high wages and dividends allow the cooperative's members to meet the economic, social, and cultural needs better. The main types of production cooperative society: food and non-food items production,
artisans and craftsmen.
5. Housing cooperative society:- The housing cooperative society purpose is to provide their members with a shelter, cottages, garages and its maintenance. This cooperative society
includes: the house-building the secondary homes-building the housing and rental the housing stock maintenance
BENEFITS OF COOPERATIVE TO THE ECONOMY
Cooperatives play an important role in facilitating access to credit, procurement and storage distribution of input and marketing of products. They create employment opportunities particularly in the rural areas and allow disadvantaged groups to be organized for social and economic benefit.
ADVANTAGES AND DISADVANTAGES OF COOPERATIVE SOCIETY
1. Easy Formation:- Compared to the formation of a company, formation of a cooperative society is easy. Any ten adult persons can voluntarily form themselves into an association and get it registered with the Registrar of Co- operatives. Formation of a cooperative society also does not involve long and complicated legal formalities.
2. Limited Liability:- Like company form of ownership, the liability of members is limited to
the extent of their capital in the cooperative societies.
3. Perpetual Existence:- A cooperative society has a separate legalentity. Hence, the death,
insolvency, retirement, lunacy, etc., of the members do not affect the perpetual existence of a cooperative society.
4. Social Service:- The basic philosophy of cooperatives is self-help and mutual help. Thus,
cooperatives foster fellow feeling among their members and inculcate moral valuesin them for a better living.
5. Open Membership:- The membership of cooperative societies is open to all irrespective of caste, colour, creed and economic status.There is no limit on maximum members.
6. Tax Advantage:- Unlike other three forms of business ownership, a cooperative society is
exempted from income- tax and surcharge on its earnings up to a certain limit. Besides, it is also exempted from stamp duty and registration fee.
7. State Assistance:- Government has adopted cooperatives as an effective instrument of socio-economic change. Hence, the Government offers a number of grants, loans and financial assistance to the cooperative societies – to make their working more effective.
8. Democratic Management:- The management of cooperative society is entrusted to the managing committee duly elected by the members on the basis of ‘one-member one -vote’
irrespective of the number of shares held by them. The proxy is not allowed in cooperative societies. Thus, the management in cooperatives is democratic.
DISADVANTAGES:
In spite of its numerous advantages, the cooperative also has some disadvantages which must be seriously considered before opting for this form ofbusiness ownership. The important among the disadvantages are:
1. Lack of Secrecy:- A cooperative society has to submit its annual reports and accounts with the Registrar of Cooperative Societies. Hence, it becomes quite difficult for it to maintain secrecy of its business affairs.
2. Lack of Business Acumen:- The member of cooperative societiesgenerally lack business
acumen. When such members become the members of the Boardof Directors, the affairs
of the society are expectedly not conducted efficiently. These also cannot employ the professional managers because it is neither compatible with their avowed ends nor the limited resources allow for the same.
3. Lack of Interest:- The paid office-bearers of cooperative societies do not take interest in the functioning of societies due to the absence of profit motive. Business successrequires sustained efforts over a period oftime which, however, does not exist in many cooperatives. As a result, the cooperatives become inactive and come to a grinding halt.
4. Corruption:- In a way, lack of profit motive breeds fraud and corruption in management. This is reflected in misappropriations of funds by the officials for their personal gains.
5. Lack of Mutual Interest:- The success of a cooperative society depends upon its members’ utmost trust to each other. However, all members are not found imbued with a spirit of co-operation. Absence of such spirit breeds mutual rivalries among the members. Influential members tend to dominate in the society’s affairs.
PROBLEMS OF COOPERATIVE SOCIETY
1) Poor Management:- As a result of poor managerial skills of the senior officials, the efficiency of the cooperative is reduced.
2) Illiteracy:- These societies are usually made up of ordinary people who want to get better deals. The members are mostly illiterates thereby creates many problems for the society without realizing it.
3) Lack of Cooperation:- Since members are made up of people from different background and with different experiences, there is usually lack of cooperation since people have different views of things.
4) Insincerity and Dishonesty
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