Q. Define cooperative society.

Discuss in detail various types of cooperative

societies?

Ans. Cooperative society and its types.

Question Outline:

 Introduction
 Definition
 Explanation
 Types of cooperative society
 Conclusion

Introduction:
Cooperative society is a form of business organization formed under the Societies
Act 1925. It is an association of persons who voluntarily pool their resources for utilizing
them for the mutual welfare of members itself. Cooperative society is formed for the
promotion of thrift, self help and mutual assistance of the members.

Definitions:

By Mr. H. Calvert:
“A cooperative society is a form of organization, wherein persons voluntarily
associate together as human beings on the basis of equality for the promotion of
economic interests of themselves.”

By Talmaki:

“It is an association of the weeks who gather together for common economic need
and try to lift themselves from weakness in to strength through business organization.”

Explanation:
In the light of above definitions we can say, a cooperative is a non-profit making
voluntary organization where members associate on the basis of equal rights to obtain
economic and social benefits for themselves.

TYPES OF COOPERATIVE SOCIETIES

Cooperative societies are of various types depending upon their objects and nature
of work. Some of the cooperatives have been formed to help consumers and other have
been established to help producers. There are some societies which help the farmers in
providing credit for the purchase of fertilizers and seeds etc. and some help them in the
promotion of trade.

Some of the important types of cooperative societies are as under.

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1. Producer’s cooperative societies.

The producer’s cooperatives are established by the small producers. The

members of the society produce goods in their houses or at common place. The raw
material, tools money etc. is provided to them by the society. The output is collected by
the society and sold in the market at the wholesale rate. The profit is distributed among
the member in proportion to the goods supplied by each member.

2. Consumer’s cooperative societies:

Consumer’s cooperatives are established to remove middlemen from the field of

trade. These societies purchase foods at he wholesale prices and sell these goods to the
members at cheaper rates than the market prices. However, the goods are sold to the non
members at the market rates. The profit, if any, is distributed among the members in the
shape of bonus according to their purchase ratio.

3. Marketing cooperative societies:

The marketing cooperative societies are formed by the small produces for the
promotion of trade. The two main objectives of these societies are, to sell the good at
reasonable prices by eliminating middlemen and to make the ready for the product of the
member. These types of societies are formed by the small agriculturalist and artisans.
Theses societies collect the products of its members and make its grading and keep them
in warehouses and sell them in the market at whole sale rate when the market is ready for
these products. The profit is distributed among the member according to the ratio of
goods supplied by them.

4. Credit cooperative societies:

These cooperatives are formed for the financial help of the members. These
societies provide loans to the members at low rate of interest. In rural areas these provide
loans to the farmers for the purchase of seeds, fertilizers and cattle. In urban areas these
societies provide loan to its members for the purchase of raw material and tool.

5. Farming cooperative societies:

These solicits are formed by the by the small agriculturalist to get the benefits of
larges scale forming. These societies provide help to the farmer for the improve method
of cultivations by providing large scale forming tools such as tractors, threshers and
harvesters etc.etc.

6. Housing cooperative societies:

These societies are formed for the procurement of land for the construction on
houses on homogeneous basis. These societies are formed by those members who are

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intended to construct their own home. These societies provide loan to the members for
the construction of houses. These also purchase construction material in bulk and
provide this material to its member at cheaper rates.

7. Insurance cooperative societies:

Theses societies make contract with insurance companies for the purchase of
different insurance policies for its member at lower premium. This society may take a
group insurance policy for its members. The main object of the society is to minimize
the risk of its member.

8. Transport cooperative societies:

These societies are formed to provide the services of transport to its members at
lower rates. Welfare bus scheme is an example of this type of society. A pass is handed
over to the member for traveling on approved routes.

9. Storage cooperative societies:

These societies are formed for the provision of storage facilities to its member for
perishable and non perishable goods at lower rates. These societies also provide grading
and distribution services to its members.

10. Labour cooperative societies:

These societies are formed by unskilled labour for selling their services at
reasonable wage rate. This type of society makes a contract with different firm for the
provision of labour to them.

11. Miscellaneous societies:

Some other important societies, in addition to the major form of societies

discussed above are, Processing cooperative societies, Fisheries cooperatives societies,
Forestry and poultry forming etc.etc.

Conclusion:

All types of cooperative societies are formed for the welfare of the people, either
these are produce’s cooperative, consumer cooperative, farming cooperatives. The main
object of all theses types of societies is not to earn profit but the welfare of its members.

Prepared By: Prof. Hafiz Muhammad Amir

Punjab College of Commerce,
Sargodha,
E-mail. [email protected]

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