Functions and Objectives of a Processing Co-operative Society

3. Functions and Objectives

Objectives. The broad objectives of a processing co-operative society are:

• to process the raw produce of its members into finished or semi-finished goods;
• to secure for members a fair and remunerative price for their raw produce by capturing the value added in processing;
• to free members from dependence on private processors and middlemen who would otherwise take that value;
• to market the finished goods efficiently and profitably; and
• to promote the overall economic and social development of the producer-members and the rural area around the society.

Functions. To meet these objectives, a processing co-operative society performs the following functions:

1. Collecting members' raw produce. It arranges to procure raw material from members — for example, harvesting and transporting sugarcane from members' fields to the factory, or collecting milk from members at village collection centres.

2. Processing the produce. Its core function is to operate the processing plant — crushing cane into sugar, pasteurising milk and converting it into butter, ghee or milk powder, ginning and pressing cotton, crushing oilseeds into oil — using machinery jointly owned by the members.

3. Grading and quality control. It grades the raw material and maintains the quality of the finished product, so that the output meets market standards and commands a good price.

4. Storage and warehousing. It arranges storage of raw material and finished goods until they are processed or sold, protecting them from spoilage and price fluctuations.

5. Marketing the finished goods. It sells the processed goods in local, national and, in some cases, export markets — either directly or through a co-operative marketing federation — and returns the proceeds to members.

6. Providing finance and inputs to members. Many processing co-operatives advance credit, seeds, fertilisers and technical guidance to their producer-members so they can raise a better crop, recovering the advance from the price paid for the produce. …