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Exercises · Q10

Q.Distinguish between the advantages and the limitations of a service co-operative society (give at least three points on each side).

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A complete answer sets the society's benefits against its practical problems, with at least three points on each side.

Advantages of a service co-operative society:

  1. All essential services in one place. Being multipurpose, the society gives members credit, inputs, consumer goods, storage, and marketing help through a single village organisation — saving time, travel, and cost.
  2. Freedom from exploitation. Cheap credit frees members from the moneylender, fair-price supply protects them from profiteering traders, and collective marketing shields them from exploitative middlemen.
  3. Gains of bulk buying and collective bargaining. Acting together, members enjoy lower input prices and better sale terms than any of them could obtain alone.
  4. (Further) Fair, moderate interest rates; promotion of thrift and self-help; and equal democratic control ('one member, one vote'), all contributing to overall rural development.

Limitations of a service co-operative society:

  1. Shortage of capital. Members are small farmers of limited means, so funds are scarce and the society leans heavily on borrowings and government help.
  2. Heavy overdues and bad debts. Loan recovery is often poor because repayment depends on an uncertain harvest, which weakens the society's finances.
  3. Weak and inexperienced management. The elected committee of ordinary villagers may lack the training and business skill to run the society efficiently.
  4. (Further) Small size and limited area, over-dependence on government, lack of co-operative awareness/unity, and the risk of political interference.

In short: the advantages describe what the society achieves for its members when it works well, while the limitations describe the real practical difficulties that can prevent it from working well — which is why member education, professional management, better loan recovery, and less outside interference are the constant themes of co-operative reform. …

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