Cooperatives — REET EVS Notes

What is cooperation?

Cooperation is a system in which a group of people voluntarily come together to form a society, so that shared economic, social and cultural needs can be met through a jointly owned, democratically controlled enterprise. Its core idea is that working together can achieve what an individual cannot achieve alone — small farmers, for instance, can't build a large market by themselves, but by forming a cooperative society and pooling their produce, they can secure better prices collectively than any one of them could negotiate on their own.

Cooperative societies work on the principle of 'one member, one vote' — no matter how much capital a member holds, their vote in decisions counts exactly the same as every other member's. This is exactly what sets a cooperative society apart from a private company, where voting power follows shareholding, so a shareholder with more shares gets more say.

Types of cooperative societies

REET often asks you to match a given example to the right type.

Cooperation in Rajasthan

Saras Dairy (RCDF)

The Rajasthan Co-operative Dairy Federation collects milk from dairy cooperative societies across the state, processes it, and sells it under the well-known 'Saras' brand — this model is based on other successful national cooperative dairy models such as Amul in Gujarat.

PACS

Primary Agricultural Credit Society — the lowest-tier and most basic unit of the cooperative credit structure, operating right at the village level to provide farmers with short-term loans for their farming needs.

Rajasthan State Cooperative Bank

The apex bank of the state's cooperative credit structure, sitting above and linking together the district cooperative banks and the village-level PACS to keep the whole credit chain connected.

IFFCO/KRIBHCO (national level)

National-level cooperative institutions dedicated to fertiliser production and distribution, supplying farmers across the whole country, including Rajasthan's farmers.

Purchase-sale cooperative societies

Active statewide at the block and tehsil level, these societies help farmers access seeds, fertiliser and farm equipment on the buying side, and also help them sell their produce on the selling side.

Benefits of cooperation

Cooperative societies give small and marginal farmers and lower-income groups access to bigger markets, banking and technology that they could never access individually. By organising collectively, they reduce the role of middlemen and increase the chance of both producers and consumers getting a fair price. 'Prosperity through cooperation' has been a foundational idea of India's cooperative movement, built on the belief that combined effort delivers what individual effort cannot.

Cooperative institutions also give rural women a chance to participate in economic activity in ways that weren't previously open to them — for example, Self Help Groups (SHGs) work on the same cooperative spirit of small savings and credit, and play an important role in women's economic empowerment across rural areas.

Core principles of cooperation

Voluntary and open membership

Any eligible person can join the society or leave it voluntarily, without facing any discrimination in the process.

Democratic member control

'One member, one vote' — every decision is based on membership, not on how much capital a member has put in.

Members' economic participation

Members contribute to the society's capital, but when there is a surplus, it is distributed in proportion to each member's usage of or transactions with the society, not in proportion to how much they invested.

Autonomy and independence

A cooperative society is meant to be a self-governed body, free from interference by the government or by outside institutions, so members themselves control how it is run.

Education, training and information

Educating both members and the wider public about the benefits of cooperation, and training members in how the society works, is considered part of a cooperative society's responsibility.

Cooperation among cooperatives

Cooperative societies at the local, state and national level are expected to work together and support one another, strengthening the movement as a whole.

Concern for community

A cooperative society doesn't limit its concern to its own members but also works for the sustainable development of the wider community around it.

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