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Exercises · Q8

Q."A service co-operative society frees the small farmer from exploitation." Explain this statement with reference to its advantages.

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The statement is true, and it captures the single greatest social advantage of a service co-operative society. The small farmer was traditionally exploited on three fronts, and the service society counters each one:

1. Freedom from the moneylender (through cheap credit). Before co-operatives, the small farmer had to borrow from the village moneylender at exorbitant interest, sinking deeper into debt with every season. By advancing short- and medium-term loans at fair, moderate rates of interest, the society rescues him from this high-interest trap and reduces rural indebtedness.

2. Freedom from profiteering traders (through fair-price supply). For seeds, fertilizers, implements, and everyday consumer goods, the farmer was earlier at the mercy of traders who charged high prices and sometimes supplied adulterated or short-weighed goods. The society buys these in bulk and distributes them to members at fair prices with assured quality, protecting him from profiteering.

3. Freedom from exploitative middlemen (through collective marketing). When selling his produce individually, the small farmer had weak bargaining power and was often cheated by commission agents and middlemen. By marketing members' produce collectively, and by providing storage so produce need not be sold at once at a low post-harvest price, the society secures him a fairer price and stronger bargaining power. …

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