Presentation

On
Co-operative
Society
Presented by:
Rohit Mishra
Prabhat Mani Tripathi

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 Objective

To explore employment opportunities in the

growing cooperative sector.

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 Introduction

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.
“International Co-operative Alliance (ICA)”

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 Types of cooperative societies

Housing cooperative
Building cooperative
Retailers' cooperative
Utility cooperative
Worker cooperative
Business and employment co-operative
Social cooperative
Consumers' cooperative
Agricultural cooperative
Cooperative banking (credit unions and cooperative savings banks)
Federal or secondary cooperatives
 Cooperative wholesale society
 Cooperative Union
 Co-operative party

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Producer Company or commodity company - Features

 The Companies Amendment Act 2000 made it possible to create coop

societies as companies.
 The objects of such Company should include production, processing
manufacture and sale of primary produce and allied matters.
 Primary producers and persons connected with primary produce can
become members.
 Members’ equity is not publicly traded, but can be transferred with
approval of the Board of Directors of the company.
 Producer Companies are not vulnerable to takeover by MNCs and
other companies.
 Existing cooperative society can be converted into a producer
company and re-converted into an interstate cooperative society, if the
majority so desires.

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 Characteristics of Co-operative Society

Open membership
Voluntary Association
State control
Sources of Finance
Democratic Management
Service motive
Separate Legal Entity
Distribution of Surplus
Self-help through mutual cooperation

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 Scope of cooperative society worldwide (Statistics)

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 United States

In the United States, 4 in 10 individuals is a member of

a co-operative (40%).
In the United States more than 30 co-operatives have
annual revenue in excess of USD 1 billion. In 2003 the
top 100 US co-operatives had combined revenues of
USD 117 billion. In addition, approximately 30% of
farmers' products in the US are marketed through 3,400
farmer-owned co-operatives.
270 telephone co-operatives provide service to two
million households
250 purchasing co-operatives offer group buying and
shared services to more than 50,000 independent
businesses
More than 6,400 housing co-operatives provide homes
for 1.5 million households
Nearly 10,000 U.S. credit unions have 84 million
members and assets in excess of US$600 billion.

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 South America
In Argentina, there are over 17,941 co-operative societies with 9.1 million
members.
In Belgium, there were 29,933 co-operative societies in 2001.
In Colombia over 3.3 million people are members of co-operatives or 8.01%
of the population (Source: CONFECOOP. Sector Cooperativo Colombiano
2005)
Costa Rica count over 10% of its populations as members of co-operatives.
In Belgium, co-operative pharmacies have a market share of 19.5%.
In Benin, FECECAM, a savings and credit co-operative federation provided
USD 16 million in rural loans in 2002.
In Brazil, co-operatives are responsible for 72% of the wheat production,
44% of barely, 43% of soya, 39% of milk, 38% of cotton, 21% of coffee and
16% of maize. Agricultural co-operatives exported over USD 1.3 billion.
In Bolivia, Cooperativa de Ahorro y Crédito "Jesús Nazareno" Ltda. (CJN)
handled 25% of the savings in Bolivia in 2002.

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 Europe
In 2004, co-operative banks in Europe had over
 150 millions clients (one third of the EU
population)
 60,000 banking desks
 50 million members
In France, 21,000 co-operatives provide jobs to 700,000
people.
In Germany, 8,106 co-operatives provide jobs for
440,000 people.
 In Germany, there are 20 million people who are
members of co-operatives, 1 out of 4 people.
Finnish co-operative groups within Pellervo were
responsible for
 74% of the meat products,
 96% of dairy products; 50% of the egg production,
 34% of forestry products
 34.2% of the total deposits in Finnish banks.
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 Africa
Kenya co-operatives put their contribution to GDP at 45%
with 31% of national savings and deposits. They have:
 70% of the coffee market
 76% of the dairy
 90% of pyrethrum and
 95% of cotton.
 Kenya 1 in 5 is a member of a co-operative or 5.9 million
and and 20 million Kenyans directly or indirectly derive their
livelihood from the Co-operative Movement.
 In Moldova, the Central Union of Consumer Co-operatives
were responsible for 6.8% of the consumer market.

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 Asia Region
In Korea agricultural co-operatives have
 A membership of over 2 million farmers (90%
of all farmers)
 An output of US$11 billion.
 The Korean fishery co-operatives also report a
market share of 71%.
In India, over 239 million people are members of
a co-operative.
In Japan, the agricultural co-operatives report
outputs
of USD 90 billion with 91% of all Japanese
farmers in membership
China has180 million members

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 Asia Region

Malaysia has 5.4 million members which is 20% of the population

In Malaysia, 5.5 million people or 20% of the total population are
members of co-operatives (2005).
Japan Around 1 in 5 of all Japanese households belongs to a local retail
co-op and 90% of all co-op members are women. Nearly 6 million
households belong to one of the 1,788,000 Han groups. Agricultural co-
operatives report outputs of US$90 billion with 91% of all Japanese
farmers in membership. 1 out of every 3 families is a member of a co-
operative and there are 14 million consumer co-op members.
In Singapore, consumer co-operatives hold 55% of the market in
supermarket purchases and have a turnover of USD 700 million
In Singapore, 50% of the population (1.6 million people)
are members of a co-operative.

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 Co-operatives create Employment

Co-operatives provide over 100 million jobs

around the world, 20% more than
multinational enterprises.
In Canada, co-operatives and credit unions
employ over 160,000 people. The Desjardins
movement (savings and credit co-
operatives) is the largest employer in the
province of Québec.
In Colombia, the co-operative movement
provides 109,000 jobs and an additional
379,000 as owner-workers in workers co-
operatives. They provide 23% of jobs in the
health sector, 18% of the jobs in the
transport sector, 13% in the worker/industrial
sector, 11% in the financial sector and 9% in
the agricultural sector.

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 Employment

In Slovakia, the Co-operative

Union represents more 700 co-
operatives who employ nearly
75,000 individuals.
In Kenya, 250,000 people are
employed by co-operatives.
In Slovakia, the Co-operative
Union represents more than 700
co-operatives who employ nearly
75,000 individuals.

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 Demographic Profile of India

The Demographics of India are overall remarkably diverse. India's

population of approximately 1.13 billion people (March 10, 2008)
comprises approximately one-sixth of the world's population.
India is basically an agrarian economy with 72% of its total population
residing in rural areas .
Due to lack of Facilities Indian villagers and labors are facing disgust
unemployment this can be understood as over employed capacity or
natural resources .
India is having huge opportunity since it is a geographically diverse
and major part of our economy is undeveloped so there is a great
scope .
Major problem of India is related with population in case of industry
limited capacity can’t serve greater employment demand.

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 Presence of Cooperatives in India
During the British rule , Nicholson a British Officer in India
suggested to introduce Raiffersen model of German agricultural
credit Cooperatives in India. As a follow-up of that recommendation,
the first Cooperative Society Act of 1904 was enacted to enable
formation of “Agricultural Credit Cooperatives" in villages in
India under Government sponsorship. With the enactment of 1904
Act, Cooperatives were to get a direct legal identity as every
agricultural Cooperative was to be registered under that Act only.
The National Cooperative Union of India (NCUI) was established in
1929 as an apex promotional organization for strengthening of
cooperatives.
National Cooperative Development and Warehousing Board was set
up in 1956.

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 Growth of Cooperatives in India
National Cooperative Development Corporation (NCDC) was established in
1963 under NCDC Act 1962 to promote production, marketing and export of
agricultural produce.
Number of Cooperatives Societies increased from 35 thousand in 1965-66 to
545 thousand in 2002-03.
Today, Cooperatives cover each & every village of India.

Role of Cooperatives in Indian Economy

During the year 2002-03, Cooperatives accounted for:

 46% of Agriculture Credit disbursement.

 36% of fertilizer distribution.

 59% of Sugar production.

 32% of Wheat procurement.

 65% of Storage facility.

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 Developments so far

In fertilizer production and distribution the

Indian Farmers Fertiliser Cooperative (IFFCO) with a domestic annual
capacity of producing 4.3 million tonnes of phosphatic fertilizers and
4.2 million tonnes of nitrogenous fertilizers commands over 35 percent
of the market with more than 50 million farmers associated with it and.
In the production of sugar the cooperative share of the market is over
58 percent and in the marketing and distribution of cotton they have a
share of around 60 percent.
 The cooperative sector accounts for 55 percent of the looms in the
hand-weaving sector.
 Cooperatives process, market and distribute 50 percent of edible oils.
 Dairy cooperatives operating under the leadership of the
National Dairy Development Board and through 15 state cooperative
milk marketing federations has now become the largest producer of
milk in the world. (operation flood)
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 Government Policies
The Union Cabinet first time approved the National Cooperative Policy,
aiming at:
 Minimizing the say of the Government in Cooperatives.
 Redefining the role of Registrar of Coop. Societies as a facilitator for
Coop. Societies.
 Repatriation of the Government’s equity in the Cooperatives by infusion
of equivalent cooperative shares.
Cooperative Law
 Multi-State Cooperative Societies Act- 2002 ensures functioning of
Cooperatives as autonomous Institutions on sound Cooperative
Principles.
 The new legislation reduces the role of Government and provides
professionalism in Cooperatives to withstand competition.
 Government participation in the equity is allowed only when requested by
the Society.

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 Grey Areas Of Cooperative Sector

Poor infrastructure,
Lack of awareness,
Lack of quality management,
Over-dependence on government,
Dormant membership,
Non-conduct of elections,
Lack of strong human resources policy,
Neglect of professionalism,
Restricted coverage
Cooperatives are also unable to evolve strong communication and
public relations strategies which can promote the concept of
cooperation among the masses.

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 Role of Managers

Motivating cooperatives
Enabling employee high performance
Creating an environment for innovation
Team leadership
Organizational issues:
 Direction to organization
 Goals, vision, mission and values
Functional Management ( Financial , Operational etc )
Facilitate Communication and Public relations
Quality management

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 Suggestions
Large-scale enterprises in the cooperative sector require huge funds.
Cooperatives should be encouraged to enter capital market and mobilize
funds by means of deposits, debentures etc.
The state governments can act as venture capitalists
Cooperatives can evolve deposit-insurance scheme, to instill confidence
among the depositors, both in urban and rural areas.  Effective deposit
mobilization will help them to build their own bendable resources, for
profitable and diversified lending.
In order to complete in the new economic environment, it should intensify
its linkages with NGOs or Self-help Groups or panchayats and
promotional bodies like NCDC to attract funds and other forms of
assistance from international agencies like world bank, Asian
development bank, EEC, FAO, ILO, etc. for specific development projects
in the cooperative sector.

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 Suggestions

Recommended by Expert committee

 Incorporates co-op principles
 Ensures autonomy & independence of co-ops
 Specifies role of federation
 No Gov’t control – participation in equity
 Incorporates provisions for self-regulation
 Enables co-ops to create their support services e.g. audit
HRD; consultancy, financial systems
 Incorporates provisions for simplifying registration;
mergers; division; liquidation

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 Conclusion
Malthusian theory suggest the relationship between population growth and
food production (production of food grains in G.P. while population growth is in
A.P.). So this creates disequilibrium between subsistence need and population
growth in developing countries .So in this regard tendency toward primary sector
can minimize this problem with proper cooperation.
Cooperative Society is one of the Largest sector Provides nearly 800

million. India is
Employees more employee than to any other country in the world .
Being Agriculture based India’s most population is situated in rural areas
nearly 2/3 of total . So this gives clear indication of scope of cooperative society
also Employment opportunities in this area .
Much can be done to improve efficiency in cooperative society with proper
management implementation and Government policies .

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 Conclusion Cont..
The Corporate culture will also bring sustainable efficiency and thereby
cooperatives can compete with strong private players.
Professionalism in the management of the cooperative enterprises will
upgrade the quality of the staff with latest developments and also develop
a proper and cordial relationship between the managers and members of
board of directors. There must be proper and continuous training for both
cooperative leaders and profession executives.
There are a number of agricultural commodities like rice, sugar, fruits,
vegetables; spices etc. that have strong competitive advantage in export
markets. Agricultural cooperatives can take this advantage in foreign
market.

The leadership with vision, dedication, commitment and above all

innovative approach can help in preserving Cooperative Identity in an Era
of Competition.

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 Sources

 http://www.ica.coop/al-ica/
 http://www.ibef.org
 Annual Reports : http://www.ica.coop/publications/ar/index.html
 ICA2005
 ICA2006
 http://www.iffco.nic.in
 Book:
 Managing The Cooperative Difference : by Peter Davis

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 Peace and social well-being are not only relevant to co-
operatives but co-operatives are relevant to the peace
making process in communities and societies throughout the
world.
Yehssusdah Paz, winner of the 2006 Dove of Peace award

Thank you
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