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Cooperative Societies in India

Last Updated : 16 Aug, 2023
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A cooperative society is an organization owned and run by the people using its goods and services. They are a worldwide phenomenon with various definitions and diverse structures. They are an association of users or small firms, or sometimes households, aiming to serve the community as a whole. 

They aim for the replacement of capitalism with cooperation, are non-discriminatory, prioritize discussions, and follow the ideals of self-help and mutual understanding.

Cooperative Societies

Cooperative Societies in India

Cooperative Societies

A cooperative society is important for maintaining food security and financial assistance to agricultural workers. It has been useful in mitigating the negative impacts of monopoly and also contributed to a more equitable distribution of wealth in their own way.

Other impacts of cooperatives on market pricing levels, quality, and service are intangible or indirect. Cooperatives are not run for profit, but if there is any disposable surplus at the conclusion of the year&#x2019s work, a portion of it is transferred to the reserve fund. They are basically for the lower-wage poorer who barely get any dietary food.

According to the United Nations Committee on World Food Security, food security means that all people have physical, social, and economic access to sufficient, safe, and nutritious food that meets their dietary needs for an active and healthy life at all times.

Food security is comprised of the three components listed below:

  1. Food availability refers to the availability of food in sufficient quantities and on a consistent basis. It considers stock and production in a given area, as well as the ability to bring food in from elsewhere via trade or aid.
  2. Food access means that people must be able to obtain adequate quantities of food on a regular basis, whether through purchase, home production, barter, gifts, borrowing, or food aid. 
  3. Food consumption: Food consumed must have a nutritional impact on people. Cooking, storage, and hygiene practices, individual health, water and sanitation practices, feeding and sharing practices within the household are all covered.

Household resources, disposable income, and socioeconomic status all have a strong impact on food security. It is also inextricably linked to other issues such as food prices, global climate change, water, energy, and agricultural expansion. 

What are Cooperative Societies in India?

A Cooperative Society is a voluntary organization of people who band together to pursue a shared economic goal with similar needs. These societies have created to obtain low-cost loans, acquire agriculturally and household supplies and equipment, sell products and even secure a variety of services.

It is an organization owned by the people who consume its services with equal power over all members. Its main goal is to serve the poorer sectors of society by using the principles of self-help and equality.

Members with shared economic activity, such as farming, consumption, fishing, and so on, can organize a Co-operative Society,&#x2019 but there should be a minimum of 10 members the age of 18 years. Though the &#x2018Cooperative Societies&#x2019 is under the State Subject (List II of Seventh Schedule to Constitution) but this Co-operative Societies Act, 1912 is a Central Act. In India, cooperative societies play an important role in the food security system, particularly in the country’s southern and western regions.

Role of Cooperatives in Food Security

Some of the Main Roles that cooperative plays are,

To Provide consumers with essential Food grains at reasonable costs

The main purpose is to provide goods and services to the poorer or weaker section of society at reasonable costs. These cooperatives set competitive market prices for goods and services. The primary purpose of a consumer cooperative association is to deliver high-quality goods and services to its members at a price lower than the market price.

For Example, Around 94 percent of fair shops in Tamil Nadu are run by a cooperative society.

Reduce the exploitation of society&#x2019s weakest members

This society encourages the weaker section of society to become self-sufficient economically. It is a type of organization in which economically weak or weaker persons or sections of society join a business to achieve their mutual economic and social objectives to end all exploitation such as ending capitalism&#x2019s exploitation, eliminating intermediaries, and playing a role in bringing the customer and producer closer together.

It enables the communities in developing and transitioning countries with limited access to capital, education and training to pool their resources to solve issues, define common goals, and tackle the causes of poverty.

White Revolution

There are so many milk and milk products cooperative companies like Verka, Mother Dairy, Amul, etc have bought the White Revolution in the country.

For Example, Mother Dairy has made progress by providing milk and vegetables to the consumers at a controlled rate decided by the Delhi government. Another successful cooperative story is Amul in milk and milk products to ensure the availability of products at prices lower than the market.

Development of Food Grains Bank

As for higher profitability, Food Grain banks are essential for the post-harvest storage and distribution of perishable commodities and food items. Cooperative marketing systems already have their own huge facilities which farmers can use to keep their crops in these facilities while waiting for higher pricing. Apart from these, cold storage facilities also help decrease the risk of rain, theft, insects, birds, rodents, and rats harming the crops.

For Example, The Academy of Development Science In Maharashtra has organized training programs for NGOs and established a network of NGOs for the development of grain banks in different regions.

Boosting Agriculture Sector

Cooperatives help the farmers to connect with the markets and to provide a collective platform for bargaining with buyers, aggregating marketing, and processing services, main product distribution routes, and training and capacity development services to its members.

Access to Resources

Cooperatives help the farmers in their own services or corporate-oriented business. It also helps the producer ownership empower them to choose services and activities that enhance their individual agricultural profitability rather than the cooperative&#x2019s earnings. With the help of farmers can enhance their profit or revenues. A cooperative society can work more efficiently at lower costs per unit than farmers do individually by pooling supply purchases, and sales, and handling and selling expenditures.

Features of Cooperative Society

  • They are voluntary associations of cooperative societies. Anyone who is interested is free to join or leave a cooperative anytime they want to.
  • It is based on the principle of “one man one vote”.
  • It needs to be registered under Cooperative Societies Act. It makes it a separate legal entity.
  • The main objective is to provide service to members and to maximize profit.
  • Dividends and bonuses are out of the profits of cooperatives.

Functions of Cooperatives in Food Security

The functions of cooperatives in food security are as follows:

To provide goods and services at a reasonable price

Be it in the form of affordable loans at reasonable interest rates from cheap goods at discounted rates to affordable housing from housing societies.

Aim at eliminating middlemen

 Societies do this by coming together with members to sell their products and members can even purchase these at discounted prices.  Middlemen are known to increase the prices of products and create artificial shortages at the market. For this, cooperative societies bring together various producers and suppliers of different products together and sell directly to consumers.

Prevent exploitation of the weaker members of society

Such societies are set up to protect the interests of producers and artisans, They aim to fight against big capitalists and enhance the bargaining power of self-employed workers and small to medium producers.

Protect the rights of people as both producers and consumers

The needs of their members are focused on, which includes both producers and consumers and also provide financial and technical support to members.

Contribute to the more sustainable food system

 Agricultural cooperatives mostly participate along the supply chain and help small-scale farmers access markets, inputs, credit, and technical support.

Empowering vulnerable and old people

Housing cooperation provides housing for its members who only pay a reasonable membership fee.

Protection of Environment

Cooperatives take measures to respond to environmental degradation as well as protect and sustainably manage the available natural resources.

Related Links

  1. Food Security in India
  2. What are the measures taken by India to reduce Poverty?
  3. Programmes to Improve Food Security in India
  4. Impact of Globalization on India

FAQs on Cooperative Societies in India

Q 1. What are cooperative societies in India?


A cooperative society is an independent group of people who have come together voluntarily to address their common economic, social, and cultural needs and goals through a jointly owned and democratically controlled enterprise.

Q 2. How many cooperative societies are there in India?


In India, approximately 8 lakh cooperative societies are officially recognised, the majority of which are in the agricultural, banking, and housing industries.

Q 3. What are the factors contributing to the success of food security?


Strategic planning, member’s participation, human capital, structural and relational capital are among the identified factors.

Q 4. What Is the most important responsibility of cooperatives?


The most important responsibility of the cooperatives is to optimize their economic, social and cultural needs by the members.

Q 5. What are some of the main impacts of cooperatives on the economy?


Facilitating job creation, economic growth and social development.

Q 6. How can cooperatives help reduce poverty?


Cooperatives help their members and the society at large, access to household supplies like clothing, food and other products.

Q 7. Which section of society is more prone to food insecurity?


Scheduled caste and scheduled tribes are the section of society, who have either less land or very low land productivity. Some of the insecure people who are affected by natural disasters migrated to other areas in search of work.

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