Types of Cooperative Societies

Some of the types of cooperative societies are:- 1. Consumers’ Co-Operative Societies 2. Producers’ Co-Operative Societies 3. Co-Operative Marketing Societies 4. Co-Operative Housing Societies 5. Co-Operative Credit Societies 6. Co-Operative Farming Societies.

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What are the Different Types of Cooperative Societies?

Types of Cooperative Societies – 6 Main Types: Consumers’ Co-Operative Societies, Producers’ Co-Operative Societies, Co-Operative Marketing Societies and a Few Others

Co-operative societies may be classified into different categories according to the nature of activities performed by them.

The main types of co-operative societies are:

Type # 1. Consumers’ Co-Operative Societies:

Consumers’ co-operatives seek to provide a solution to the problems created by middlemen who may not only increase the price up to 30% to 40% for the services provided by them, but also create artificial scarcity of goods in the market. In these societies, consumers voluntarily combine to set up and manage certain businesses which meet their basic needs.

Their role is mainly two-fold:

Firstly, to function as part of the public distribution system by running fair price or ration shops and undertakes distribution of other essential commodities.

Secondly, to develop and adopt a mechanism whereby they are able to keep a check on the open market prices of the consumer goods.

In the consumers’ co-operative structure, a four-tier system is in operation, comprising-

(i) Primary societies at the base level;

(ii) Central/Wholesale societies;

(iii) Co-operative federation at the State level; and

(iv) National Co-operative consumer federation at the national level.

Organisation:

Consumers’ co-operatives run on lines similar to a business. They are formed to undertake distribution for goods of basic consumption. Generally, only shareholders and subscribed members can buy their requirements from such co­operatives. Any person can become a shareholder of such a society by buying a share, or become a member by paying a nominal fee.

Control of the organisation vests in the shareholders and members. The principle of “one-man-one vote” is strictly followed regardless of the investment or capital contribution made by a shareholder or member.

Consumers’ co-operatives are not organised with any profit motive as such, but if there is any disposable surplus at the end of any year’s working, a part of it, is transferred to the reserve fund. Expenses on publicity and provision of amenities to the workers and members are also provided out of this surplus. The balance, if any, is distributed among the members in proportion to the purchases made by them from the co-operatives.

Importance:

Consumers’ co-operatives have played an important role in reducing the effects of monopoly. In their own way, they have also helped in bringing about an equitable distribution of wealth. Even a person with limited means can become a member of a co-operative and receive all the benefits that flow from it. Consumers’ co­operatives have also contributed to the production of socially useful goods.

Type # 2. Producers’ Co-Operative Societies:

Producers’ co-operatives or industrial co­operatives are organisations for collective production. Thus, small producers may organize themselves into co-operatives to face competition with large producers. This may be done in two ways. Firstly, producer members may produce goods on their own (not as members of the society) but with the help of the necessary raw materials, tools and other equipments made available to them by the society. Goods produced by the producer-members can be sold to the society for onward sale or distribution among its members or outsiders.

Secondly, instead of working individually on their own, the producer-members may become employees of the co-operative and work for wages. In this kind of organization also, the society keeps its members supplied with raw materials, tools and other equipments. The goods, thus, produced may be sold by the society to outsiders and/or distributed among its own members.

Importance:

Producers’ co-operatives can be greatly helpful to self-employed workers and artisans who, being poor and backward, may not be on their own, able to collect the necessary raw materials, modern machines and tools and to sell the goods at a time when the return would be the maximum.

Further, producers’ co-operatives can be an effective measure for solving the problem of massive unemployment and under­employment in the country. NAFED, HAFED, Mother Dairy, Amul, etc., are examples of such co-operatives in India.

Limitations:

Producers’ co-operatives have not experienced much progress in India or in any other country of the world. One reason for this is that they often tend to increase their operations much beyond their resources, with the result that paucity of resources soon forces them to go out of business.

Secondly, they concentrate on capital intensive methods of production, ignoring the basic fact that, structurally, labour intensive methods will suit them better. Lastly, for the success of such an undertaking, it is necessary that it receives adequate support from the Government as also from specialised credit and financial institutions. But, as it happens, such support takes very long to materialize.

Type # 3. Co-Operative Marketing Societies:

In co-operative marketing societies, producers come together to sell their output. The production of different members is pooled and the society undertakes to sell these products at a discounted price by eliminating middlemen.

A marketing co-operative is the central sales agency for a number of producers. Goods are sold when market is favourable. The individual producers may not be able to wait for longer periods because of their limited resources.

Sometimes, it also performs other incidental functions, such as processing, grading, storing, packing, assembling, insurance, etc. The societies provide loan or advance to the members to meet their urgent needs. It also collects marketing information and supplies it to the producers for their benefit. The sale proceeds are divided among the members in proportion to their contribution in terms of goods.

For workers and artisans, who lack proper sales guidance and who want to be benefited from bulk selling, such co-operatives are very useful.

Type # 4. Co-Operative Housing Societies:

Housing or building societies are generally formed in urban areas where housing is an acute problem. Membership of such co­operatives is open to all those who desire a house of their own, or who want rented accommodations at rents which they can afford.

But since a large portion of the assets belonging to such co-operatives are in the form of immovable property, and since there is always a need for ready cash to lend to the needy members, the membership is also open to persons who do not satisfy either of the two conditions stated above but who have enough money to invest in such societies. The co-operatives receive deposits from the members and pay interest to them.

The money so received is lent by them to the needy members against mortgage of property or other assets. Besides providing financial assistance to the members, housing co­operatives also sometimes provide them with building material. These societies also provide civic amenities such as roads, street lights, parks, post office, water, electricity, sanitation, etc.

Type # 5. Co-Operative Credit Societies:

Co-operative credit societies in India were first formed under the Co-operative Credit Societies Act, 1912. These are organised to provide short-term financial assistance to members and to promote the habit of thrift.

Credit co-operatives collect their capital by selling shares to the members. To create a feeling of security among outsiders, who are frequently approached for loans, etc., the members of such co-operatives may undertake to bear unlimited liability for the debts owed by the co-operatives. This also induces the members to take a keen interest in the management of the co-operatives.

Co-operative credit societies provide loans to the members for productive or other purposes. Such loans may be secured against mortgage of immovable assets of the members. The co-operatives charge low rates of interest on the loans granted by them.

Kinds of Credit Co-Operatives:

Depending on the field covered by them, credit co-operatives may be divided into-

(i) Agricultural credit co-operatives and

(ii) Non-agricultural credit co-operatives.

Type # 6. Co-Operative Farming Societies:

Co-operative farming societies may be formed to combine the fragmented and sub-divided land holdings into viable economic units. Membership of such societies is restricted to those who own or cultivate agricultural land.

Co-operative farming societies are voluntary associations of farmers formed to reap the benefits of large scale farming on scientific lines. Better farming increases production and improves the economic position of the members. Small farmers who are not able to use improved technology for want of resources and small holdings can get benefitted through these.

In a country like India, where many farmers do not possess economic farm units, co­operative farming societies can play a significant role.

The farming co-operation may be of the following types:

(i) Co-operative Better Farming Societies.

(ii) Co-operative Joint Farming Societies.

(iii) Tenant Farming Societies.

(iv) Collective Farming Societies.

Other Co-Operatives:

In addition to the type of co-operatives already discussed, there may be many other co-operatives to bring the benefits of co-operative effort to their members.

Co-operatives may, for example, be organized to bring together the persons engaged in occupations such as dairy and poultry farming, fisheries, cold storages, processing of agricultural products, such as sugarcane, cotton, oilseeds, etc.

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Types of Cooperative Societies – 6 Principal Types of Business Cooperatives

Co-operatives may be formed practically in any walk of life. Some of them concern themselves with the moral and social uplift of a depressed or weak section of the society, while quite a many of them combine some business activity with service to their members. Since co-operatives are being considered here as a form of business organisation, only those societies which are concerned with some business purpose need an introduction here.

The principal types of business co-operatives are enumerated below:

1. Consumers’ Co-operative Societies.

2. Producers’ Co-operatives.

3. Marketing Co-operatives.

4. Housing Co-operatives.

5. Co-operative Credit Societies.

6. Co-operative Farming Societies.

1. Consumers’ Co-Operative Societies:

These societies are formed by ordinary people for obtaining their day-to-day requirements of goods at cheaper prices. For this purpose, consumers’ co-operative stores are organised by such societies. These societies make their purchases in bulk from wholesalers at wholesale rates and sell the goods to members (sometimes also to non-members) at market prices.

The difference is represented by the surplus which is distributed among the purchasing members in the form of a bonus on purchases. This is the oldest form of co-operative organisation. In India, consumers’ co­operatives have received impetus from the Government attempts to check rise in prices of consumer goods and essential commodities.

2. Producers’ Co-Operatives:

Also called industrial co-operatives, these societies are voluntary associations of small producers formed with the object of eliminating the capitalist class from the system of industrial production. Sometimes consumers’ societies may join hands with the associations of producers. In such cases, the term ‘co-partnership societies’ is used for societies of this type.

These societies produce goods for meeting the requirements of consumers. Sometimes their production may be disposed of to outsiders at a profit being distributed among the producers after earmarking agreed percentages for welfare and general purposes. There can be two types of producers’ co-operatives.

In the first type, the producer-members are required to produce individually and not as employees of the society. The society undertakes to supply raw materials, tools and implements, etc., to the members. The members, on their part, are expected to sell their individual output to the society.

In the second type of such societies, the member-producers are treated as employees of the society and are paid wages for their work. The society supplies raw materials and equipment to the producers and takes up the output for sale and/or distribution among members or outsiders.

3. Marketing Co-Operatives:

The marketing co-operatives or the co-operative sales societies are voluntary associations of independent producers organised for the purpose of arranging for the sale of their output. As the central sales agency for a number of producers, a marketing co-operative quite often performs such important functions of marketing as processing and grading of the produce delivered by the individual producers.

The sale proceeds of the produce or products are distributed among the contributing producers according to their contribution to the pool. Societies of this kind are particularly useful for agriculturists, small producers and artisans.

4. Housing Co-Operatives:

Housing co-operatives are associations of persons who are interested either in securing the ownership of a house or obtaining accommodation at fair and reasonable rent. Such societies are formed mostly in urban areas. Mostly, intending builders of houses join together to form co-operatives of this kind.

Through these societies, they can secure not merely financial assistance, but also the economies of purchase of building materials in bulk. The membership of such a society may be thrown open to all those who are interested in securing housing accommodation as well as to those who are ready to deposit money with the society for interest. Each member has to buy at least one share and his liability is generally limited to his capital contribution.

5. Credit Co-Operatives:

The co-operative credit societies are voluntary associations of people with moderate means formed with the object of extending short-term financial accommodation to them and developing the habit of thrift among them. The funds of these societies consist of share capital contributed by the members. The liability of the members is generally unlimited.

This helps the society in raising funds from outsiders and ensures that every member shows keen interest in the working of the society. In granting loans, the society may show consideration for the poorer people who apply for smaller loans. Besides, loans may generally be granted only for productive purposes.

The society may, or may not, ask for security of immovable property while making loans. The rate of interest charged from the borrowing members is kept as low as possible.

According to their coverage, credit societies may be divided into two types- (i) agricultural credit societies, and (ii) non-agricultural credit societies. An agricultural credit society generally confines its activities to a particular village. In India, the minimum number of members necessary for the formation of such a society is fixed at 10 while the maximum is limited to 100.

The non-agricultural credit societies are formed by people of moderate or limited means in towns and cities. These societies are meant to provide bank accommodation to the members, and may be formed by small artisans in towns or by office clerks, mill workers, etc., in cities.

6. Co-Operative Farming Societies:

The co-operative farming societies are basically agricultural co-operatives formed with the object of achieving the benefits of large-scale farming and maximising agricultural output. Such societies are advocated for those agricultural countries, like India, which suffer from excessive fragmentation and sub-division of agricultural landholdings of farmers. Their membership is generally confined to farmers including those owning land and those who merely till the land.

Miscellaneous Societies:

Besides the more important types of co-operatives discussed earlier, some less important types may also be noted here:

(i) Processing Co-Operatives:

These societies are generally set up in rural areas with the object of processing certain raw materials produced by agriculturists for supply to industries. Co-operatives for processing sugar cane, cotton, jute, paddy, oilseeds, etc., come under this category.

(ii) Labour and Construction Co-Operatives:

These co-operatives are societies of unskilled and semi-skilled workers which may be organised in rural areas for carrying out irrigation and other projects. The chief object of such societies is to progressively diminish the importance of contractors.

(iii) Others:

In recent years, principles of co-operatives have come to be applied to a large number of activities and operations. Co-operatives are now organised even for fisheries, dairying, and supply of sugarcane, cold storage, forestry, and so forth.

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Types of Cooperative Societies

i. Consumer’s Cooperative Societies:

1. Established – To protect the interests of consumers.

2. Members – Consumers desirous of obtaining good quality products at reasonable prices.

3. Functions/Activities – It purchases goods in bulk directly from the wholesalers and sells goods to the members.

4. Aim and distribution of profits – Eliminating middlemen to achieve economy in operations. Profits are distributed on the basis of capital contributions of members or purchases made by them.

ii. Producer’s Cooperative Societies:

1. Established – To protect the interest of small producers.

2. Members – Producers desirous of procuring inputs for production of goods.

3. Functions/Activities – It supplies raw materials, equipment and other inputs to the members and also buys their output for sale.

4. Aim and distribution of profits – Fighting against the big capitalists and enhancing the bargaining capacity of the small producers. Profits are distributed on the basis of contribution of members to the total pool of goods produced or sold.

iii. Marketing Cooperative Societies:

1. Established – To help small producers in selling their products.

2. Members – Producers who wish to obtain reasonable prices for their output.

3. Functions/Activities – It pools the output of individual members and performs marketing functions like transportation, warehousing, packaging etc., to sell the output at best possible price.

4. Aim and distribution of profits – Eliminating middlemen and improving competitive positions of its members by securing a favorable market for the products. Profits are distributed according to each member’s contribution to the pool of output.

iv. Farmers Cooperative Societies:

1. Established – To protect the interest of farmers by providing better inputs at reasonable costs.

2. Members – Farmers who wish to jointly take up farming activities.

3. Functions/Activities – It provides better quality seeds, fertilizers, machinery and other modern techniques for use in the cultivation of crops.

4. Aim and distribution of profits – To gain the benefits of large-scale farming and increase the productivity.

iv. Credit Cooperative Societies:

1. Established – To provide easy credit on reasonable terms to the members.

2. Members – Persons who seek financial help in the form of loans.

3. Functions/Activities – It provides loans to low interest rates out of the amount collected as capital and deposits from the members.

4. Aim and distribution of profits – Protecting members from exploitation of lenders who charge high rates of interests on loans.

v. Cooperative Housing Societies:

1. Established – To help people with limited income to construct houses at reasonable costs.

2. Members – People who are desirous of procuring residential accommodation at lower costs.

3. Functions/Activities – It constructs flats or provides plots to members for construction.

4. Aim and distribution of profits – Solving the housing problems of the members by constructing houses and giving the option of paying in installments.

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Types of Cooperative Societies – Based on the Nature of their Operations

There are various types of cooperative societies, based on the nature of their operations.

They are described below:

(1) Consumers’ Cooperative Societies:

A consumer’s cooperative society is formed by consumers for obtaining good quality products at reasonable prices. The society aims to eliminate the middlemen by purchasing goods in bulk directly from the manufacturers or wholesalers and selling them to the members. The profits or surplus, if any, is distributed among the members either on the basis of their capital contributions or in proportion to their purchases.

(2) Producers’ Cooperative Societies:

Producer’s cooperative society is formed by small producers, who desire to procure inputs for production of goods in order to meet the demands of consumers. They are formed to face the competition from large-scale producers. They are also known as Industrial Cooperative Societies.

The society aims to fight against the big capitalists and wants to enhance the bargaining power of small producers. For this, society supplies raw materials, equipment and other inputs to the members and also buys their output for sale. Profits are generally distributed among the members on the basis of their contributions to the total pool of goods produced or sold by the society.

These societies are established for the benefit of small producers who find it difficult to collect various factors of production and also face marketing problems. The purpose is to improve economic conditions of such small producers by giving them necessary facilities.

(3) Marketing Cooperative Societies:

Marketing cooperative society is a voluntary association of small independent producers who desire to sell their output through one centralised agency. The members consist of producers who wish to obtain reasonable prices for their output.

The production of different members is pooled and the society undertakes to sell these products by eliminating middlemen. These societies also perform marketing functions like transportation, warehousing, packaging, etc., to sell the output at the best possible price. Profits are distributed among the members in proportion to their contributions to the common pool of output.

(4) Farmers’ Cooperative Societies:

A farmer’s cooperative society is formed by farmers to jointly take up farming activities in order to gain the benefits of large-scale farming and higher productivity. These societies are established to protect the interests of farmers by providing better inputs at a reasonable cost. They are also known as Agricultural Cooperative Society.

The society provides better quality seeds, fertilisers, machinery and other modern techniques for use in the cultivation of crops. The aim is to improve the yield and returns to the farmers. Such a society is helpful in consolidating the uneconomic, fragmented and small holdings of land into viable economic holdings.

(5) Credit Cooperative Societies:

A credit cooperative society is formed to provide short-term financial assistance to the members in the form of loans.

The society aims to protect the members from the exploitation of lenders who charge high rates of interest on loans. The society provides loans to members out of the amounts collected as capital and deposits and charge low rates of interest.

(6) Cooperative Housing Societies:

A cooperative housing society is formed by those people who are desirous of procuring residential accommodation at lower costs. Such societies help people with limited income to construct houses at reasonable costs.

The society aims to solve the housing problems of the members and giving the option of paying in installments. The society either constructs the flats or provides plots to members on which the members construct the houses on their own.

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Types of Cooperative Societies – On the Basis of the Nature of Services Offered

There are different types of cooperative societies which are classified on the basis of the nature of services offered by them.

The various types of cooperative societies are as follows:

Type # 1. Consumers’ Cooperative Societies:

Consu­mers’ cooperative societies are set up to ensure a steady supply of essential consumer products of standard quality at fair prices. Such societies aim at eliminating the middlemen by linking themselves directly with the producers or their agents.

This practice leads to procurement of products at lower costs. The profit earned by a consumers’ cooperative society is utilised by the society according to its bye-laws, including the payment of dividend and issuing bonus shares to its members.

Type # 2. Producers’ Cooperative Societies:

These societies are formed by small producers of a particular location to fight against the competitiveness of large producers by helping their members who need capital, equipment, materials, etc., to use their skills in producing goods. These societies also undertake marketing activities to market the products produced by their members.

Type # 3. Marketing Cooperative Societies:

These societies are formed by small producers for undertaking marketing of their products. These societies pool the products of members who are small producers and market the products on large-scale basis thereby relieving the members from selling their products on fragmented basis. The profits earned by the societies are distributed among their members according to the contributions made by these members.

Type # 4. Farmers’ Cooperative Societies:

These societies are formed by small farmers to pool their resources together for cultivating their lands collectively. They aim at organising agriculture on large-scale basis so as to increase agricultural productivity and improve the economic condition of the farmers. Cooperative farming makes possible mechanisation of farming, providing improved seeds and other agricultural inputs, irrigation facilities, etc., to improve agricultural productivity.

Type # 5. Credit Cooperative Societies:

These societies are formed to provide financial assistance to their members in the form of direct loans. Funds are pooled together by contribution of members and loans are provided to needy members at easy terms. These societies may also take loans from financial institutions to increase their lending position if needed. Such societies aim at protecting their members from the onslaught of moneylenders in the unorganised sector who charge very high interest.

Type # 6. Housing Cooperative Societies:

These societies are formed by those who strive to own a flat or a plot for constructing their own house. These societies are mostly located in urban areas where housing problems are acute. These societies purchase land from appropriate owners, including Urban Development Authority. Afterwards, either flats/houses are constructed by the societies to be allotted to the members or plots of appropriate sizes are given to them.

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Types of Cooperative Societies – Consumers’ Cooperative Societies, Producers’ Cooperative Societies, Marketing Cooperative Societies and a Few Others

1. Consumers’ Cooperative Societies:

These cooperative societies protect the interest of the consumers, who want to get good quality products at very reasonable prices. This society buys goods in bulk from the wholesalers and sells them to its members who are consumers at the minimum retail price. Their aim is to eliminate the middlemen and distribute the profit among the members.

2. Producers’ Cooperative Societies:

These protect the interest of small producers, who want a good return on their products. These supply raw materials and other inputs to the producers and in turn buy their products also. They enable the producers to face competition from the big manufacturers. Profits are distributed on the basis of the capital contributed by the members.

3. Marketing Cooperative Societies:

These societies are set-up to help small producers to sell their products at good prices. They pool the production of the members and make arrangement for transportation, warehousing, and packaging in order to sell their products at good and reasonable profits. They help in eliminating middlemen and in this way help them increase their margin of profit. Profit is distributed among members in the proportion of their capital contribution.

4. Farmers’ Cooperative Societies:

These societies provide inputs like seeds, fertilisers and manures and new techniques at very reasonable costs. They help the farmers with small landholdings to come together and jointly take up the farming activities. In this way farmers get the benefit of large scale farming.

5. Credit Cooperative Societies:

These are like cooperative banks. These provide loans to members at low rate of interest with minimum formalities. In this way the members are protected from those lenders who charge high rates of interest and also exploit them. The profit earned is distributed among the members.

6. Cooperative Housing Societies:

These help in solving the housing problems of the members who have limited resources by constructing their houses and allowing them to pay back in instalments. Loans are provided to them out of the capital contributed by them.

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Types of Cooperative Societies

The various types of cooperative societies are described below: 

1. Consumer’s Cooperative Societies:

It protects the interests of consumers. The members comprise of consumers who are desirous of obtaining good quality products at reasonable prices. The society aims to achieve economy in operations by purchasing goods in bulk directly from the wholesalers and selling them directly to the members thereby eliminating the middlemen. Profits, if any, are distributed on the basis of either their capital contributions to the society or purchases made by individual members.

2. Producer’s Cooperative Societies:

It protects the interest of small producers. The members comprise of producers desirous of procuring inputs for production of goods to meet the demands of consumers. The society aims to fight against the big capitalists and enhance the bargaining power of the small producers by supplying raw materials, equipment and other inputs to the members and also buying their output for sale. Profits among the members are generally distributed on the basis of their contributions to the total pool of goods produced or sold by the society.

3. Marketing Cooperative Societies:

They help small producers in selling their products. The members consist of producers who wish to obtain reasonable prices for their output. The society aims to eliminate middlemen and improve competitive position of its members by securing a favourable market for the products by pooling the output of individual members and performing marketing functions like transportation, packaging, etc., and selling the output at the best possible price. Profits are distributed according to each member’s contribution to the pool of output.

4. Farmer’s Cooperative Societies:

They protect the interests of farmers by providing better inputs at a reasonable cost. The members comprise of farmers who wish to jointly take up farming activities. The aim is to gain the benefits of large scale farming and increase the productivity by providing good quality seeds, fertilisers, machinery and other modern techniques for used in the cultivation of crops. This solving the problems associated with the farming on fragmented land holdings.

5. Credit Cooperative Societies:

They extend easy credit on reasonable terms to the members. Such societies provide loans to members out of the amounts collected as capital and deposits from the members and charge low rates of interest. The members comprise of persons who seek financial help in the form of loans.

The aim of such societies is to protect the members from the exploitation of lenders who charge high rates of interest on loans. Such societies provide loans low rates of interest to its members out of the amounts collected as capital and deposits from the members.

6. Cooperative Housing Societies:

They help people with limited income to construct houses at reasonable costs. The members of these societies consist of people who are desirous of procuring residential accommodation at lower costs. The aim is to solve the housing problems of the members by constructing houses and giving the option of paying in instalments. These societies construct flats or provide plots to members on which the members themselves can construct the houses as per their choice.

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Types of Cooperative Societies – 6 Types of Cooperatives Operating in India

All cooperative societies follow a common doctrine, but they differ on the basis of the nature of work they perform.

The types of cooperatives operating in India are as follows:

1. Consumer’s Cooperative Societies:

Consumer cooperative societies are established to obtain a steady supply of essential commodities of approved quality at reasonable prices. These societies buy goods directly from the manufacturers and wholesalers and sell them to the consumers at cheaper rates. Thus, the profits of middlemen are eliminated and a direct link is formed between the manufacturers and the ultimate consumer. The annual profits of the society are distributed among the members in proportion to the purchases made by them during the year.

Educational institutions like school and colleges follow the same practice by opening special book stores for the students within the premises. They purchase books and stationary directly from the publishers and producers and stock them in the school or college book shop. Thus, the students can buy the required articles at reasonable rates.

Kendriya Bhandar (Delhi), Apna Bazar (Mumbai) and Janata Bazar (Karnataka) are a few examples of consumer cooperatives in India working under the government control.

2. Producer’s Cooperatives:

Also known as Industrial Cooperatives, these societies are voluntary associations formed by small producers and artisans who come together to confront the money minded plutocrats.

These societies can be divided into two broad categories:

(i) Manufacturing Cooperative:

These societies consider the members as their employees and pay them for their job. The members receive raw material and tools for production in large quantities from these societies and engage in production under one roof or at their residence. After receiving the output from the members, the societies sell the products in the market and distribute the revenue among the members.

(ii) Industrial Service Cooperative:

In these societies, the producer members work all by themselves and sell their industrial output to the cooperative. These cooperative societies supply raw material and other tools to the members. The society takes charge of marketing the final output of the members. Handloom societies like Haryana Handloom and Boyanika are examples of producer’s cooperatives.

3. Cooperative Farming Societies:

Farming cooperatives give the benefit of cooperative farming to small agriculturists for getting the benefit of large-scale farming. The farmers in India are financially incapable of bearing the expenses of productive farming. Moreover, their land holding is small and they have no sufficient capital to afford modern equipment, high quality seeds, fertilizers, irrigation facilities, etc.

The farming cooperatives make it possible for the farmers to pool their resources and cultivate their land jointly using the modern farming techniques. This leads to increased productivity and reaps more income for the farmers. Pani-panchayats and lift irrigation cooperative societies are examples of farming cooperatives in India.

4. Housing Societies:

These societies are established by people belonging to middle and lower income groups in metropolitan cities to acquire or construct their own houses at affordable rates. +

The housing societies work in two ways:

(i) They take possession of land and sell off the plot to their members for constructing a house of their own.

(ii) They construct houses or apartments for their members and allow them the benefit of paying for the accommodation in installments.

The housing societies also arrange for loans and finance from banks and other financial institutions for the members.

5. Credit Cooperatives:

Poor people dwelling in rural and urban areas form credit cooperatives to get financial aid and cultivate the habit of saving among them. The purpose of these societies is to guard the members from the greedy moneylenders who charge huge interest from the borrowers. They offer short loans to members at economical rates. These societies collect capital by sale of shares. Membership of credit cooperatives is unspecified by the Cooperative Societies Act and minimum 10 persons are needed to form it.

Agricultural credit societies working in rural areas follow the above pattern by providing loans at cheaper rates to the members for agricultural activities. The credit cooperatives in urban areas offer credit facilities to the members for their domestic requirements. Village Service Co-operative Society and Urban Cooperative Banks are examples of co-operative credit society.

6. Marketing Cooperatives:

These are voluntary leagues established with the mission of getting due wages for the goods which are made by small producers like artisans, farmers, etc. These cooperatives work as a central sales agency to collate and sell the output of different members. The revenue generated from sale is divided among the members in proportion to their output.

The marketing cooperatives also perform essential functions like processing, grading and packaging the output handed over by the members, advertising and exporting the products, storage and transportation. Marketing cooperatives eliminate middlemen and thus save the members from bearing the expenses of marketing costs individually.

In India, the National Agricultural Cooperative Marketing Federation (NAFED) and Gujarat Cooperative Milk Marketing Federation Ltd. which sells their products under their famous brand AMUL are well- known cooperative farming societies.

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