History of Cooperatives

8/7/2019 History of Cooperatives

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UNIT 1

CO-OPERATIVES


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CO-OPERATIVES

y Derived from Latin word

y Co together

y Opus to work

y Co-operatives working together

y Main principle EACH FOR ALL AND ALL FOR

EACH


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HISTORICAL BACGROUND


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ROBERT OWEN

y By the end of 18 th century Industrial revolution completely matured in

England

y Capitalism came into existence

y The cooperative movement began in Europe in the 19th century, primarily

in Britain and France

y Robert Owen (17711858) (England)

y Father of the cooperative movement

y Industrialist by occupation


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ROBERT OWEN

y Owen believed in putting his workers in a good environment with access to

education for themselves and their children.

y Started labour exchanges, formed labour colonies and helped them in the

production of various things whereby their income increased

y For labour class improvement, put a demand before the parliament of England

to have separate act for them


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CHARLES FOURIER

y Franois Marie Charles Fourier(7 April 1772 10 October 1837)

y A French utopian socialist and philosopher.

y Tried to find out alternative to capitalism

y The main evil of capitalism, according to Fourier, was the conflict of indi-vidual

interests.

Hence the phalanstere was designed to eliminate conflicts of interest by making each member a cooperative owner as well

as a wage earner.


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CHARLES FOURIER

Each member would draw his or her share of income not only as a laborer

but also as a capitalist (shareholder) and manager

Each cooperative member had a voice in the management of the phalanstere

His proposals for the establishment of phalanxes

gained considerable support by practitioners


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DR WILLIAM KING

Owen & Fourier were followed by Dr William King (17861865)

A British physician and philanthropist from Brighton.

took his ideas and made them more workable and practical.

Started shops using cooperative principles in England

but could not succeed in that


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ROCHDALE SOCIETY OF EQUITABLE PIONEERS

y Put the co-operative efforts in reality by Rochdale villagers in England.

y 1840 Period of hungry forties

y Roschdale worst condition of Woolen and cotton milling town

y In 1844, a group of 28 weavers with an initial capital 28 set up the

Rochdale Equitable Pioneer Society under Friendly Societies Act


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y On 21 December 1844, they opened their store with a very meager selection

of butter, sugar, flour, oatmeal and a few candles.

y Within three months, they expanded their selection to include tea and

tobacco, and they were soon known for providing high quality,

unadulterated goods.


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y Ten years later, the British co-operative movement had grown to nearly

1,000 co-operatives.

y

Considered the first successful co-operative enterprise


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DEVELOPMENT OF INDIANCO- OPERATIVE MOVEMENT


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1] First Stage ( 1904 - 1912)

2] Second Stage ( 1912 to 1918)

3] Third Stage ( 1919 -1929)

4] Fourth Stage ( 1929 - 1939)

5] Fifth Stage ( 1939 -1947)

6] The Sixth Stage ( 1947 -1970)

7] The Seventh Stage ( 1970 - 2000)

8] The Eighth Stage ( 2000 onwards )


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First Stage ( 1904 - 1912)y Beginning Period of Co-operative Movement in India

y Agricultural sector badly affected due to famines and droughts

y People being pushed deep into poverty

y

Farmers were burdened with huge amounts of debt taken frommoney lenders

y In order to overcome the problems, Co-operative Credit Society Act

passed in 1904


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First Stage ( 1904 - 1912)

y Focused only on credit provision for the agri-sector y Primary stage in the development of co-operative societies because

the promoters had no idea of co-operation and had very less

experience about it.y Not successful in solving the problems of people


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Second Stage ( 1912 to 1918)

y

Period of Harried Expansiony Act 1904 various loopholes

y To curtail the deficiencies in the act of 1904, Govt. passed another act in 1912.

y Focused not only on the credit aspect of co-operatives but also on all the other

functions that co-operatives could carry out

y Broad layout for formation of all types of co-operatives from agricultural to

industrial, and from credit to consumer

y Co-operative Movement was shooted for expansion.


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Third Stage ( 1919 -1929)y Period of Unplanned Rapid Development

y The matter of cooperation was entrusted to the provincial govt. due to

passing of reforms act in 1919.

y The co-operative movement flourished thereafter in many provinces.

y Provincial govt. appointed committees to study the co-operative movement.

y Depending upon the situation of the province various acts were passed by

the respective provincial govt. to develop the co-operative movements in

their provinces.


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Third Stage ( 1919 -1929)

y

Due to 1919 Act, the co-operative movement boosted up and there was atremendous development in the no. of societies providing credit.

y Why defined as Unplanned Development. ?

y

During 1919- 1929 only quantitative growth of societies would be seen.y No proper attention was given to qualitative growth.


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Fourth Stage ( 1929 - 1939)

y

Period of Consolidation and Re-organizationy Great depression in 1929 preceding world war II hit the world

y Development of co-operative movement in India hampered due to non-

repayment of loans

y The co-operative credit societies had invested their capital in agricultural

activities.

y The price of agricultural produce went down and so did returns to farmers

thus the arrears increase


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y

The existence of co-operative societies was in danger.y Affected the co-operative movement in Punjab, Haryana, Bihar and Bengal.

y The ratio of loans to arrears was 20% in 1927-28 which increased to 40% in

1932-33.

y The percentage of arrears went up to 93% in Bombay in 1938-39.

y During this period about 50% of co-operative societies went into

liquidation.


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y

The Indian Central Banking Enquiry Committee (1931) also stressed onstrengthening the co-operative movement

y In 1935 Reserve Bank of India was established. A separate section for

providing agricultural credit was opened. (Rural Credit Development)

y In 1937 this section studied various problems of Indian co-operative movement

and submitted its report stating that development of co-operative societies

should be given priority.


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Fifth Stage ( 1939 -1947)

y

Period of Recoveryy The atmosphere of world war proved to be beneficial for the co-operative

movement.

y The price of the agricultural produce started increasing thereby there was an

increase in the income of the agriculturists and their repayment capacity went to

a higher level.

y Financial depression of Indian co-operative movement had been removed and

this movement was again on the path of its development.


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y

The consumer co-operative stores prospered due to the restriction imposedduring war time.

y The industrial co-operative societies came into existence for the purpose of

providing war materials.

y Non-profit supplying societies and multipurpose societies had developed.


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y

The development of co-operative movement during 1929 to 1947 can be seenfrom the following table:

Y earNo. of societies

(in 000s) Membership (in

lakhs )

Capital

(in crores )

1939 122.00 53.07 106.47

1943 146.00 69.01 121.14

1946 172.00 91.6 104.00

1947 139.00 90.00 156.00


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Sixth Stage ( 1947 -1970)

y

After attaining independence the government felt that co-operatives should play an important role in the development of rural areas.

y The late prime ministers Jawaharlal Nehru and Lal Bahadur Shastri stressed

on the importance co-operatives.

y Co-operatives were included in 5 year plans.

y Co-operatives encouraged to enter into new sectors of rural economy

dairy, food processing, agro processing, etc.


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Seventh Stage ( 1970 - 2000)

y

The government laid more importance on the development of rural bankingsectors.

y Co-operatives were asked to develop rural banks.

y

The formation of NABARD as an apex bank was formed for monitoring theco-operative bank.

y The government also took the initiative in replicating the Anand pattern

Model for dairy co- operative across the country.


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Eighth Stage ( 2000 onwards )

y

The rise of the new millennium has thrown many challenges to the co-operatives.

y The WTO restrictions and the threat from global competition have grown.

y

The co-operatives have to face direct competition from multinationals.y The government is providing adequate support and help to the co-operatives

by building brands, distribution network and also in exporting their products

to global market.

Documents

History of Cooperatives