Importance of Co-operation

Co-operation is important not only as a form of business but as a force for the economic and social betterment of ordinary people. Its importance can be studied under economic and social heads.

Economic Importance

1. Provides cheap and easy credit — Co-operative credit societies supply loans to farmers, artisans, and small traders at reasonable rates of interest, freeing them from the exploitation of moneylenders who charge very high interest.

2. Eliminates middlemen — By buying and selling directly through their own societies (consumer stores, marketing and processing co-operatives), members remove the chain of middlemen who take away a large part of the value. Producers get better prices and consumers pay fairer prices.

3. Encourages savings and capital formation — Co-operatives encourage members of limited means to save small amounts regularly and pool them, building up capital that can be used for the members' benefit and for the development of the economy.

4. Promotes agricultural and rural development — Credit, marketing, processing, and irrigation co-operatives directly strengthen agriculture — the backbone of the rural economy. Co-operative sugar factories and dairies, in particular, have industrialised rural areas and raised farmers' incomes.

5. Generates employment — Co-operative factories, banks, dairies, stores, and marketing societies create large-scale employment, especially in rural areas, and help reduce migration to cities.

6. Ensures fair prices and pure goods — Consumer co-operative stores supply pure, unadulterated goods at fair prices and help check profiteering and hoarding by private traders, protecting the ordinary consumer.

7. Balanced regional development — By spreading economic activity (sugar, dairy, banking, processing) into backward and rural areas, co-operatives help bring about more balanced development across regions.

Social Importance

1. Promotes equality and unity — The 'one member, one vote' principle and open membership treat rich and poor alike, promoting equality, brotherhood, and a spirit of unity among members.

2. Develops self-reliance and mutual help — Co-operation teaches people to solve their own problems by their own united effort, building self-confidence and a habit of helping one another.

3. Checks exploitation — By providing cheap credit, fair prices, and direct marketing, co-operation protects weaker sections from exploitation by moneylenders, middlemen, and profiteers.

4. Inculcates moral and civic values — Democratic working, honesty in dealings, and the discipline of managing a society together develop moral values, leadership, and a sense of civic responsibility among ordinary people, especially in rural areas. …