Q.Explain the meaning of a processing co-operative society and discuss its main advantages to the producer-members.

A processing co-operative lets producers own the plant that processes their own produce, so the gains of processing reach the farmer rather than a private processor.

Every advantage flows from the fact that the producer and the processor are the same people.

Meaning. A processing co-operative society is a voluntary association of producers — usually farmers — who join together to process their own raw produce into finished or semi-finished goods and to market it. Its members are, at the same time, the suppliers of the raw material, the owners of the processing plant, and the beneficiaries of the surplus it earns. Because the producers themselves own the processing unit, the value added by processing is retained by them instead of going to a private processor or middleman. Such societies are registered under the Maharashtra Co-operative Societies Act, 1960.

Main advantages to producer-members:

1. Better and remunerative price. By processing the produce themselves and capturing the value added, members receive a higher, fairer price than they would by selling raw produce.

2. Elimination of middlemen and exploitation. The society deals directly with members and directly with the market, cutting out intermediaries who would take a margin.

3. Assured market for produce. Members have a guaranteed outlet, since their own society is bound to accept and process their crop or milk — vital for perishable produce.

4. Retention of value addition. The profit of processing stays with the producers, which is the whole purpose of the co-operative form.

5. Economies of large-scale operation. Processing the pooled produce of many members in one large plant gives lower per-unit costs than any member could achieve alone.

6. Better quality and standardisation. Central processing with grading yields standardised, better-quality goods that fetch a higher price.

7. Employment and rural development. Plants create local jobs, and large sugar co-operatives often fund schools, hospitals and roads, spreading development.

8. Access to finance and government support. Registered societies can obtain share capital, loans and guarantees from the government and co-operative institutions.

9. By-product utilisation. Profitable use of by-products (molasses and bagasse in sugar, oil-cake in oil mills) adds a further income stream for members.