Co-operation · Ch 6 — Service Co-operative Society
Functions of a Service Co-operative Society
Functions of a Service Co-operative Society
The usefulness of a service co-operative society lies in the wide range of functions it performs for its members. In a typical village service society these functions can be grouped as follows.
1. Provision of credit. This is usually the most important function. The society advances short-term and medium-term loans to its members — for buying seeds, fertilizers, and implements, for meeting cultivation expenses, and sometimes for consumption needs during lean months — at reasonable rates of interest. In doing so it rescues the small farmer from the village moneylender, whose high interest charges were the main cause of rural indebtedness. The society itself raises the funds for this lending from members' deposits and from the District Central Co-operative Bank.
2. Supply of agricultural inputs. The society purchases in bulk, and distributes to its members at fair prices, the inputs needed for farming — quality seeds, chemical and organic fertilizers, pesticides, and small implements. Bulk buying by the society secures a lower price and assured quality that an individual small farmer could never obtain alone.
3. Supply of consumer goods. Many service societies run a small store to distribute essential consumer goods of daily use — foodgrains, sugar, edible oil, kerosene, cloth, and household necessities — to members at fair prices, often acting as a fair-price (public distribution) outlet in the village. This protects members from adulteration, short weight, and profiteering.
4. Storage and warehousing. The society provides godown and storage facilities so that a member can safely store his harvested produce instead of being forced to sell it immediately at a low post-harvest price. Safe storage lets the farmer wait for a better market and reduces losses from moisture, pests, and spoilage.
5. Marketing of members' produce. The society helps members sell their agricultural produce collectively, either directly or by linking them to a marketing co-operative. Collective sale gives members better bargaining power, protects them from exploitation by traders and commission agents, and secures a fairer price than selling individually would.
6. Other welfare and developmental services. Depending on local needs, the society may also arrange allied and welfare services — hiring out tractors, pump-sets, or threshers; helping with irrigation; spreading improved farming methods and co-operative education among members; and encouraging the habit of thrift and saving through deposits.
The main functions, summarised
(1) Credit to members · (2) supply of seeds, fertilizers and implements · (3) supply of consumer goods · (4) storage/warehousing of produce · (5) help in marketing members' produce · (6) allied welfare and developmental services (machinery hire, guidance, thrift).
Functions at a glance:
| Function | What the society does | Benefit to the member |
|---|---|---|
| Credit | Advances short- and medium-term loans at fair interest | Freedom from the high-interest moneylender |
Loans given for a relatively short period — short-term credit (up to about a year) for seasonal cultivation and consumption needs, and medium-term credit (a few years) for buying implements or making small improvements — which a service society advances to members at fa …
The service society's provision of godown and storage space so that a member can safely hold his harvested produce and sell it later at a better price, instead of being forced to sell immed …