Q.Explain the economic importance of co-operation.

Co-operation matters economically because it changes the position of the ordinary, economically weak person — in credit, in prices, in savings, and in employment.

The economic importance of co-operation can be explained under the following points:

(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 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; 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 capital for the members' benefit and for economic development.

(4) Promotes agricultural and rural development — Credit, marketing, processing, and irrigation co-operatives directly strengthen agriculture; 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, helping reduce migration to cities. …

Students sometimes mix the economic and social importance together — for a question that specifically asks the ECONOMIC importance, keep to economic points (credit, prices, savings, employment, develo …