Meaning and Definition of a Processing Co-operative Society

1. Meaning and Definition

Meaning. A processing co-operative society is a voluntary association of producers — usually agriculturists — who join together to process their own raw produce into finished or semi-finished goods, and then to sell those goods at a better price than the raw produce would have fetched. The essential idea is that the members are, at the same time, the suppliers of the raw material, the joint owners of the processing unit, and the beneficiaries of the profit it earns. Instead of selling raw sugarcane, raw cotton, oilseeds, or milk to a private processor who keeps the profit of processing, the producers themselves capture that profit through a society they own and control.

Processing adds value to raw produce. Sugarcane on its own is a bulky, perishable crop that must be sold quickly and cheaply; the same cane converted into sugar becomes a durable, standardised, higher-value product. A processing co-operative exists precisely to move its members up this value chain — from selling a low-value raw crop to selling a higher-value processed product.

Definition (general). A processing co-operative society is a co-operative organisation formed by producers of raw agricultural or allied produce for the purpose of processing that produce into finished goods and marketing it, so that the value added by processing is retained by the producer-members themselves. …