Q.Explain the Rochdale Principles of cooperation.

The Rochdale Principles are the founding operating rules of the cooperative movement, first practised by the Rochdale Society of Equitable Pioneers in 1844 and since adopted by cooperatives worldwide.

The Rochdale Principles are the founding operating rules of the modern cooperative movement, first practised by the Rochdale Society of Equitable Pioneers (28 weavers who started a cooperative store in Rochdale, England, in 1844), and since adopted, in substance, by cooperative societies worldwide, including in India.

1. Voluntary and open membership: Any person capable of using the society's services can join freely, without discrimination, and any member is equally free to leave after giving due notice — no one is forced to join or to remain.
2. Democratic control: The society is controlled by its members on the basis of "one member, one vote," irrespective of the number of shares held or capital contributed — this keeps ultimate control spread across the ordinary membership rather than concentrated with large capital-holders.
3. Limited interest on capital: Members' capital contributions earn only a limited, fixed rate of interest — enough to attract necessary capital, but kept low so that capital does not become the society's dominant interest.
4. Distribution of surplus in proportion to patronage: After paying limited interest on capital and setting aside reserves, remaining surplus is distributed among members according to how much business each member transacted with the society, not according to shareholding.
5. Cash trading: Business is conducted strictly on a cash basis, avoiding the risk of bad debts and encouraging members to manage their finances prudently.
6. Promotion of education: A portion of surplus is earmarked to educate members, staff and the public about cooperative principles and their benefits, helping the movement sustain and renew itself.
7. Political and religious neutrality: The society neither discriminates against, nor favours, any member on grounds of political affiliation, religion or caste — membership and service are strictly non-discriminatory. Together, these seven principles establish the cooperative society as a genuinely democratic, member-focused, service-oriented form of organisation — which is exactly the feature that most sharply separates it from a joint stock company, where control and reward both follow capital.
   ✓Final answer

   The Rochdale Principles are: (i) voluntary and open membership, (ii) democratic control (one member, one vote), (iii) limited interest on capital, (iv) distribution of surplus in proportion to patronage, (v) cash trading, (vi) promotion of education, and (vii) political and religious neutrality.

A frequent slip is stating the surplus-distribution principle as being based on shareholding — it is deliberately based on patronage (business done), which is the defining cooperative departure from company practice.