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Role of Cooperatives in Food Security

  • Last Updated : 29 Nov, 2021

A cooperative society is a voluntary organization of people with similar needs who band together to pursue a shared economic goal. Cooperatives are created to obtain low-cost loans, acquire agricultural and household supplies and equipment, sell products and even secure a variety of services. A cooperative is a commercial 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 mutual aid.  

‘A minimum of 10 members over the age of 18 years, with shared economic activity, such as farming, consuming, fishing, and so on, can organize a Co-operative Society,’ according to the Co-operative Societies Act of 1912. Though the ‘Cooperative Societies’ is under the State Subject (List II of Seventh Schedule to Constitution), this Co-operative Societies Act, 1912 is a Central Act.

Also in rural communities where agriculture is the primary source of employment and income. They confront severe entrance obstacles, such as outmoded farming practices, lack of infrastructure, restricted credit to access financial institutions, and lack of market knowledge. Thus, such cooperative societies in India are playing a significant role in ensuring food security by helping individual farmers to enhance food output.

Some of the major roles that Cooperative societies address:

1. To offer consumers vital and non-essential items at reasonable costs: 

Cooperative societies’ main purpose is to provide goods and services to their members at reasonable costs. Consumer cooperatives set competitive market prices for goods and services. The key distinction between consumer cooperatives and other types of enterprises is that the primary purpose of a consumer cooperative association is to deliver high-quality goods and services to its members at the lowest possible cost. 

2. They aim to avoid the exploitation of society’s weakest members: 

It strives to encourage self-help among economically disadvantaged persons of the society. It is a type of organization in which “economically weak” persons join a business to achieve their mutual economic and social objectives, such as ending capitalism’s exploitation, eliminating intermediaries, and bringing the customer and producer closer together. Cooperative structures enable 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 and symptoms of poverty.

3. They help farmers by giving them access to resources:  

In contrast to an investor- or dividend-oriented corporation, farmers might own and control a user- or service-oriented business through cooperatives. Producer ownership empowers them to choose services and activities that enhance their individual agricultural profitability rather than the cooperative’s earnings. Cooperatives help farmers earn more money in a variety of ways. Cooperatives can operate more efficiently—at lower costs per unit—than farmers do individually by pooling supply purchases, sales, and handling and selling expenditures. 

4. They ensure the product buyer supply chain for better value of crops: 

Cooperatives are important for connecting farmers to markets, providing a collective platform for negotiating with buyers, providing aggregating, marketing, and processing services, providing primary product distribution channels, and providing training, services such as business planning and capacity building are available. Many marketing cooperatives fulfill the demands of large-scale purchasers better than individual farmers by grouping products of a specific grade or quality. When the price of a commodity lowers, demand rises in response. As an outcome, the supply chain is activated by the demand for cooperative food. Farmers receive financial assistance from cooperatives, allowing them to cultivate high-quality crops with high yields; farmers get a great profit in the long run as a result of this, and they are able to conduct good farming and earn high returns on their investments.

5. To keep the environment stable :  

Cooperative associations allow their members to access markets under better technological conditions, increasing productivity and competitiveness while reducing negative environmental repercussions. These societies care about the community and the environment. Cooperatives respond to environmental deterioration by conserving and managing accessible natural resources in a sustainable manner. 

6. Put food in cold storage and sell them in heavy demand at marginal rates:  

In the post-harvest storage and distribution of perishable commodities and food items, cold storage is essential. Co-operative marketing systems often have their own huge facilities. Farmers can thus keep their crops in these facilities while waiting for higher pricing. Besides this, these cold storage facilities decrease the risk of rain, theft, insects, birds, rodents, and rats harming the crops.

7. For boosting the agricultural sector:

Agricultural cooperatives link farmers to markets, providing 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. 

8. For increased market knowledge for a better price: 

Many cooperatives have drastically decreased their expenses as a result of better management. Management training programs can help in making better use of the resources. General member education is also necessary to ensure that democratic control is implemented wisely and in ways that are consistent with efficient operations and long-term viability. Technical skill training may also aid in the most effective operation of equipment and facilities. As a result, cooperatives assist farmers in improving their expertise in order to obtain a higher price for their products.

Conclusion:

In India, cooperative groups play an important role in maintaining food security and financial assistance to agricultural workers. Consumer cooperatives have been useful in mitigating the negative impacts of monopoly. They have also contributed to a more equitable distribution of wealth in their own way. Cooperative benefits are difficult to quantify. Some of them are concrete or immediate, such as net margins or savings. Others, such as the impact of cooperatives on market pricing levels, quality, and service, are intangible or indirect. Even a person with minimal resources may join a co-operative and benefit from all of the benefits that come with it. Consumer cooperatives have also aided in the creation of socially beneficial goods. Consumer co-operatives are not run for profit, but if there is any disposable surplus at the conclusion of the year’s work, a portion of it is transferred to the reserve fund. Ordinary individuals create these organizations in order to get their daily needs for commodities at lower costs. Such societies organize consumer co-operative stores for this aim. These organizations buy in bulk from wholesalers at wholesale prices and resell the items to their members at market pricing. If more cooperatives are established in society, disparities in the economy can be addressed, and everyone can have a sufficient supply of food at decent prices. 

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