Q.A processing co-operative society is BEST described as a society formed to:
(A) Lend money to its members at low rates of interest
(B) Process its members' raw produce into finished goods and market it, so the value added is retained by the producer-members
(C) Supply consumer goods to members at fair prices
(D) Provide housing accommodation to its members

A processing co-operative is defined by what it does to raw produce — it transforms it — which sets it apart from credit, consumers' and housing societies.

Its members are producers who supply the raw material, own the plant, and share the surplus.

Why (B) is correct: A processing co-operative society is formed by producers to convert their own raw produce (sugarcane, milk, cotton, oilseeds, grain) into finished or semi-finished goods and to market those goods, so that the value added by processing is retained by the producer-members themselves rather than by a private processor.

Why the distractors are wrong:

• (A) describes a credit co-operative society, whose function is lending, not processing.
• (C) describes a consumers' co-operative society, which supplies goods to members.
• (D) describes a housing co-operative society, which provides accommodation.

Students sometimes confuse a processing co-operative with a marketing co-operative. A marketing co-operative mainly sells members' produce; a processing co-operative first transforms the raw produce into a finished product and then sells it — processing (value addition) is its defining function.