What Are Cooperative Societies, History of cooperatives

In this section, you will get to know “What are cooperative societies”, and how they are different from companies.

What is a cooperative society | cooperative?

Cooperatives are people-centered enterprises owned, controlled and run by its members for their own welfare and to realize their common economic, social, and cultural needs and aspirations.

Cooperatives bring people together in a democratic and equal way. Whether the members are the customers, employees, users or residents, cooperatives are democratically managed by the \’one member, one vote\’ rule. Members share equal voting rights regardless of the amount of capital they put into the enterprise.

( Note:Remember that cooperatives are not capital centered.)

Cooperative movement can be explained as a “Voluntary movement of the people, carried out democratically by pooling together their resources or carrying on the given activity, with the purpose of achieving or securing certain benefits or advantage which given to people cannot get individually and with the purpose of promoting certain virtue and values such as self help, mutual help, self reliance and general goods of all.”

According to the International Cooperative Congress: “A cooperative is 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.” This definition has a universal acceptance.

ORIGIN OF WORD COOPERATION.

The term cooperation is derived from the Latin word cooperari, where the word co means ‘with’ and operari means ‘to work’.

Thus, cooperation means working together. So those who want to work together with some common economic objective can form a society which is termed as “cooperative society”.

It works on the principle of self-help as well as mutual help.

Cooperatives allow people to take control of their economic future.

Since, they are not owned by shareholders, the economic and social benefits of their activity stay in the communities where they are established. Profits generated are either reinvested in the enterprise or returned to the members.

Cooperative Principles

Coperatives are driven by various principles, called Rochdale Principles. which were set out in 1844 by the Rochdale Society of Equitable Pioneers in Rochdale, England.

The original Rochdale Principles were officially adopted by the International Co-operative Alliance (ICA) in 1937 as the Rochdale Principles of Co-operation. Updated versions of these principles were adopted by the ICA in 1966 as the Co-operative Principles.

These principles aim at infusing honesty, integrity, openness, transparency and democratic sense into the cooperatives and they are enumerated below:

  1. Voluntary and Open Membership; Co-operatives are voluntary organizations and are open to all.
  2. Democratic Member Control; here each member, irrespective of gender and amount of investment, has an equal say in the affairs of the cooperatives. They follow one member-one vote rule.
  3. Members’ Economic Participation; Members contribute equitably to, and democratically control, the capital of their co-operative.
  4. Autonomy and Independence; Co-operatives are autonomous, self-help organizations controlled by their members.
  5. Education, Training and Information; Co-operatives provide education and training for their members, elected representatives, managers, and employees so they can contribute effectively to the development of their co-operatives
  6. Co-operation among Co-operatives; Co-operatives serve their members most effectively and strengthen the co-operative movement by working together through local, national, regional and international structures.
  7. Concern for Community; Co-operatives work for the sustainable development of their communities through policies approved by their members.

Many of the principles that cooperatives work upon, also act as the guiding principles of the companies. So what is the difference between a company and a cooperative.

let’s look at the following table to know about the differences between a company and a cooperative.

History Of Cooperative Movement In The World

The co-operative movement first emerged in Europe during the nineteenth century. Although scholarly research remains in disagreement about exactly where the movement began, many trace its origins back to a number of cooperative experiences that developed in Britain and France in the eighteenth century, especially in the farming industry and consumer organizations

During the years of the industrial revolution, co-operatives (co-ops) spread across all Western countries as a reaction to the negative side-effects of industrialization.

At that time, cooperatives became a means of economic organization for workers.

Regardless of their type, size, geographical location, or purpose, cooperatives provided a tool by which to achieve one or more economic goals, such as improving bargaining power when dealing with other businesses, bulk purchasing to guarantee lower prices, obtaining products or services otherwise unavailable, gaining market access or broadening market opportunities, improving product or service quality, securing credit from financial institutions, and increasing income.

The earliest cooperative were started by weavers and workers in cottage industries. The earliest record of a cooperative comes from Fenwick, Scotland where, in March 14, 1761, in a barely furnished cottage local weavers manhandled a sack of oatmeal into John Walker’s whitewashed front room and began selling the contents at a discount, forming the Fenwick Weavers’ Society.

In 1844, a group of 28 artisans working in the cotton mills in the town of Rochdale, in the north of England established the first modern co-operative business, the Rochdale Equitable Pioneers Society.

These weavers faced miserable working conditions and low wages, and they could not afford the high prices of food and household goods.

They decided that by pooling their scarce resources and working together they could access basic goods at a lower price, which they were otherwise unable to do.

The real co-operative movement can be credited to Rochdale Equitable Pioneers  who established the cooperative consumer store in North England, which can be called as the first in the cooperative consumer movement.

Cooperative Movements in different Countries

We can find the following global cooperative movements during different periods.

  • Great Britain: In Great Britain, Robert Owen (1771-1858) established self contained semi-agricultural, semi-industrial communities and Dr. William King (1757-1865) helped to spread Owen’s doctrine.

Robert Owen (1771-1858), is generally regarded as the founder of the modern co-operative movement

  • India: The cooperative movement in India began in the early twentieth century, and then it spread to other Asian and African countries. It also spread into capitalist countries such as the United States of America, Canada, Israel and Australia.
  • Germany: Germany is the birthplace of co-operative Agfricultural credit movement in the World. In India, the inspiration for the co-operative movement come largely form Germany. F.W. Raiffeisen and Herrman Franz Schulze Delitzsh, helped farmers and laborers, started making experiments with various methods of relief. In 1850, Schulze established his first credit society to raise funds to be lent to its members.
  • Israel: The first agricultural collective settlement at Dagania in the Jordan Valley during 1908 is the main cooperative movement.
  • Italy: Luigi Luzzati was the first and Dr. Leone Wollemburg was the second Pioneer in cooperative movement of Italy during 1880s. They concentrated on improving the conditions of the poor people.
  • Sweden: During 1870, the cooperative movement stared in Sweden in industrial sector.
  • Canada: In 1861, the coalminers had started a co-operative store in Novascotia, followed by the 1911, Saskatchewan Elevator Co. in support of the government to set up a Wheat Board for agricultural farmers.
  • Denmark: Credit associations were started in 1850 to solve problems of the credit through a special law.
  • Russia: The first attempts in Russia made during 1864 through organizing co-operative stores and credit societies
  • Japan: In 1879, the cooperative movement was stated in the form of consumer’s cooperatives as a reaction to soaring prices.
  • China :Famines, floods, mutual quarrels and Japanese war were the major causes of cooperative movement in China. In 1912, the founder of Chinese Republic, Dr. Sun Yet Sen, pioneered the cooperative moment.

International Cooperative alliance

It is a non-governmental cooperative federation representing the global cooperatives and the cooperative movement and it was founded in 1895.

it’s headquarter is at Brussels, Belgium.

Total members:313 cooperative federations.

It publishes an annual report called, “World Cooperative Monitor” since 2011. It’s purpose is to develop a multi-dimensional database reporting on the socio-economic value and impact of cooperatives both within a global scenario and in their regional and national contexts. The World Cooperative Monitor is the successor to the former Global 300 project. 

International day Of Cooperatives (Coops Day).

Coops day is an annual celebration of the cooperative movement observed on the first saturday of each july since 1923 and started by International Cooperative Alliance.

This year, that is in 2021, 3rd july was celebrated as “international Cooperation Day” with the theme, “Rebuild Better Together“. On this day, cooperatives from all over the world demonstrated how they are responding to Covid-19 pandemic.

It was formally declared as an international day by United Nations general Assembly on 16 december 1992 and then celebrated since the centennial of ICA in 1995 (ICA was established in 1895, if you remember the previous lessons).

since 1995, the International Cooperative Alliance and the UNcommittee, named as “committee for the promotion and advancement of cooperatives (COPAC), jointly determine the theme of the Cooperative day.

This year’s cooperative day was UN’s 27th international day (counted since 1995) of cooperatives and 99th international cooperative day.

Themes of International Days Of Cooperation in different years.

YearTheme
2020 cooperatives for climate change
2021 rebuild better together
2010cooperative enterprise empower women

Note: 2012 was designated as the international year of cooperatives by the UN general Assembly.

This was all about the history of cooperative societies. We are sure that you will find this section on history of cooperative societies very useful and hope that you will share them with your friends.

Famous Quotations About Cooperative Societies

Some of the famous quotations about Cooperative Societies are tabulated below:

QuotationsGiven By
Acquiring knowlege is one of the first principles of cooperation.William King
One man- one voteMc Lagen Committee
(found) Lack of training, both before and after registration.Mc Lagen Committee
No competition, no money, no profitRobert Owen
Man by birth is neither too good nor too bad. It is the circumstances that make him good or bad.Robert Owen
By birth, men were neither too good nor too bad.Robert Owen
All our enthusiasm in the world will not be enough unless we have trained cooperatives.J. L. Nehru
As for me, I am a cooperator, but in the economic structure of India, cooperation is not even a choice. It is a necessity.J. L. Nehru
The cooperative way is a civilised way of working.J. L. Nehru
Better farming, better business and better living is the essence of a cooperation.Horace Plunket
Cooperation is a universal instrument.Horace Plunket
Cooperation is self help made effective by organisation.Horace Plunket
Find Raiffeisen.Frederick Nicholson
Create cooperators before creating cooperatives.Frederick Nicholson
Cooperation is a crime, when there is no mutual respect and confidence.Gandhi Ji
Cooperation has failed in India, but it must suceed.Gorwala Committee
Cooperation is something more than a system.M Darling
Cooperation is an educational programme employing economic activities.Mirdha Committee
If cooperation fails, there will fail the best hope for rural India.Royal Commission
In seeking the good of others, we find our own. Plato
Cooperation can help the transformation from capitalism and finally to communalism.Lenin
Self help and mutual help are the essence of cooperation.Malcolm Darling
One village, one societyMalcolm Darling

Difference between a company and a cooperative

FeatureCooperative societycompany
ObjectiveInterest of members and communitySelf interest of management and share holders
ManagementChairperson is elected by the Board of Directors from among themselves. The Managing Director / Chief executive is appointed by the Board of DirectorsUsually, Chairperson / Managing Director are persons with maximum number of shares in the company
Voting powerMember of a cooperative society have right of only one vote, irrespective of the number of shares held of any denominationVoting rights depend directly on the holding of shares
Workers participationProvision for workers participation in the management through a representative existsNo such provision for workers

 Impact Of Cooperative societies In The World.

  1. There are around 3 million cooperatives in the world that contribute to sustainable growth, economic stability and long term employment.
  2. Around 12% of humanity is in one or the other way involved with the cooperative movement.
  3. The top 300 cooperatives have an annual turn over of over 2.1 trillion US dollars.
  4. The cooperatives provide jobs or work oppurtunities to around 280 million people across the globe.

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