Co-operative Organization – Meaning, Features & Benefits

"Unity is strength!" – Where members unite for mutual benefit.

What is Co-operative Organization?

Definition: A voluntary association of persons who join together with the motive of welfare of members rather than just profit.

Motto: "Each for all, all for each"

Governed by: Co-operative Societies Act, 1912 (and state acts)

Famous Examples in India

1. AMUL (Anand Milk Union Limited)

• 2.36 lakh farmers (members)
• ₹38,000+ crore turnover
• "Taste of India" 🥛

2. IFFCO (Indian Farmers Fertilizer Cooperative)

• 35,000 cooperatives as members
• Largest fertilizer producer

3. Saraswat Bank

• India's largest co-operative bank
• 900+ branches

4. Housing Societies

• Millions across India!

Key Features

1. Voluntary Membership

• Open to all (no discrimination)
• Can join/leave freely
• Example: Any farmer can join AMUL co-operative!

2. Democratic Management

• One member, one vote (not based on shares!)
• Example: Small farmer = 1 vote, Big farmer = 1 vote ✅

3. Service Motive

• Primary goal: Member welfare, not profit
• Profit is secondary
• Example: AMUL ensures farmers get fair price, not maximize profit!

4. Separate Legal Entity

• Can sue/be sued
• Own property in its name
• Example: Housing society owns land

5. Limited Return on Capital

• Fixed interest on shares (e.g., 6%)
• Extra profit distributed as bonus or kept as reserves
• Example: Member invested ₹10,00 → Gets 6% fixed, rest distributed equally

6. Distribution of Surplus

• Based on transactions/patronage, not shares
• Example: Member who supplied more milk gets more bonus!

7. Government Support

• Tax benefits
• Low-interest loans
• Example: Co-operatives get subsidies!

8. Registration Compulsory

• Must register under Co-operative Societies Act
• Minimum 10 members required
• Example: Register at Registrar of Co-operative Societies

Benefits/Advantages

1. Empowerment of Weaker Sections

• Small farmers, artisans unite
• Example: Single farmer can't negotiate price, 1000 farmers can!

2. Affordable Services

• No profit motive → Lower prices
• Example: Co-operative banks give cheaper loans!

3. Democratic Functioning

• Every member has equal say
• Example: Even new member can vote in elections!

4. Economic Benefits

• Fair prices for products
• Bulk buying power
• Example: AMUL pays farmers better rates than private buyers!

5. Government Support

• Subsidies, tax exemptions
• Low-interest credit
• Example: Housing societies get development grants!

6. Social Benefits

• Community building
• Mutual trust & cooperation
• Example: Housing society members help each other!

7. Eliminates Middlemen

• Direct producer-to-consumer
• Example: AMUL – No middlemen between farmer & consumer!

Types of Co-operatives

1. Consumer Co-operatives

• Buy goods in bulk, sell to members
• Example: Kendriya Bhandar, NCCF stores

2. Producer Co-operatives

• Produce & sell collectively
• Example: Handloom co-operatives

3. Marketing Co-operatives

• Sell members' produce at better rates
• Example: AMUL markets farmers' milk

4. Credit Co-operatives

• Provide loans to members
• Example: Saraswat Bank, District Co-operative Banks

5. Housing Co-operatives

• Provide housing to members
• Example: Bombay Housing Society

6. Farming Co-operatives

• Collective farming
• Example: Sugarcane cooperatives

Quiz

💡 Final Wisdom: "Co-operative is like a potluck dinner – everyone brings something, everyone eats together, everyone benefits!"