Cooperative Society

Presentation

On

Co-operative

Society

Presented by:

Rohit Mishra

Prabhat Mani Tripathi

Objective

To explore employment opportunities in the growing cooperative sector.

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)”

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

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.

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

Scope of cooperative society worldwide (Statistics)

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.

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.

EuropeIn 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.

AfricaKenya 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.

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

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.

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.

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.

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.

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.

Growth of Cooperatives in IndiaNational 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.

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)

Government PoliciesThe 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.

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 coverageCooperatives are also unable to evolve strong communication and

public relations strategies which can promote the concept of cooperation among the masses.

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

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.

Suggestions

Recommended by Expert committeeIncorporates co-op principlesEnsures autonomy & independence of co-opsSpecifies role of federationNo Gov’t control – participation in equityIncorporates provisions for self-regulationEnables co-ops to create their support services e.g. audit

HRD; consultancy, financial systemsIncorporates provisions for simplifying registration;

mergers; division; liquidation

ConclusionMalthusian 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 .

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.

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

Thank you

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

Cooperative Society

Business

Transcript of Cooperative Society