Co-operative society, its expansion and future possibilities in context of Bangl adesh Co-operative Society: A Co-operative society is essentially

an association of pe rsons who joined together in a voluntary basis for the further once of their com mon economic interests. Short Overview on Co-operative Society: The co-operative movement began in Europ e in the 19th century, primarily in England and France, although The Shore Porte rs Society claims to be one of the world s first co-operatives, being established in Aberdeen in 1498. The industrial revolution and the increasing mechanization of the economy transformed society and threatened the livelihoods of many worke rs. The concurrent labor and social movements and the issues they attempted to a ddress describe the climate at the time. The first co-operative may have been founded on March 14, 1761, in a barely-furn ished cottage in Fenwick, East Ayrshire, when local weavers manhandled a sack of oatmeal into John Walker s whitewashed front room and began selling the content s at a discount, forming the Fenwick Weavers Society. In the decades that followed, several co-operatives or co-operative societies fo rmed including Lennoxtown Friendly Victualling Society, founded in 1812. The early attempts at forming co-operatives met with varying degrees of success, and it was not until 1844 when the Rochdale Society of Equitable Pioneers estab lished the Rochdale Principles on which they ran their co-operative, that the basis for development and growth of the modern co-operative movement was establi shed. Robert Owen (17711858) is considered the father of the co-operative movement. A W elshman who made his fortune in the cotton trade, Owen believed in putting his w orkers in a good environment with access to education for themselves and their c hildren. These ideas were put into effect successfully in the cotton mills of Ne w Lanark, Scotland. It was here that the first co-operative store was opened. Sp urred on by the success of this, he had the idea of forming "villages of co-oper ation" where workers would drag themselves out of poverty by growing their own f ood, making their own clothes and ultimately becoming self-governing. He tried t o form such communities in Orbiston in Scotland and in New Harmony, Indiana in t he United States of America, but both communities failed. The Rochdale Society of Equitable Pioneers was a group of 28 weavers and other a rtisans in Rochdale, England, that was formed in 1844. As the mechanization of t he Industrial Revolution was forcing more and more skilled workers into poverty, these tradesmen decided to band together to open their own store selling food i tems they could not otherwise afford. With lessons from prior failed attempts at co-operation in mind, they designed the now famous Rochdale Principles, and ove r a period of four months they struggled to pool together one pound sterling per person for a total of 28 pounds of capital. On December 21, 1844, they opened t heir store with a very meager selection of butter, sugar, flour, oatmeal and a f ew candles. Within three months, they expanded their selection to include tea an d tobacco, and they were soon known for providing high quality, unadulterated go ods. The Co-operative Group formed gradually over 140 years from the merger of many i ndependent retail societies, and their wholesale societies and federations. In 1 863, twenty years after the Rochdale Pioneers opened their co-operative, the Nor th of England Co-operative Society was launched by 300 individual co-ops across Yorkshire and Lancashire. By 1872, it had become known as the Co-operative Whole sale Society (CWS). Through the 20th century, smaller societies merged with CWS, such as the Scottish Co-operative Wholesale Society (1973) and the South Suburb an Co-operative Society (1984). By the 1990s, CWS s share of the market had declined considerably and many came to doubt the viability of co-operative model. CWS sold its factories to Andrew R egan in 1994. Regan returned in 1997 with a 1.2 billion bid for CWS. There were a llegations of "carpet-bagging" - new members who joined simply to make money fro m the sale - and more seriously fraud and commercial leaks. After a lengthy batt

le, Regan s bid was seen off and two senior CWS executives were dismissed and im prisoned for fraud. Regan was cleared of charges. The episode recharged CWS and its membership base. Tony Blair s Co-operative Commission, chaired by John Monks , made major recommendations for the co-operative movement, including the organi sation and marketing of the retail societies. It was in this climate that, in 20 00, CWS merged with the UK s second largest society, Co-operative Retail Service s. Its headquarter complex is situated on the north side of Manchester city centre adjacent to the Manchester Victoria railway station. The complex is made up of m any different buildings with two notable tower blocks of New Century House and t he solar panel-clad CIS tower. Other independent societies are part owners of the Group. Representatives of the societies that part own the Group are elected to the Group s national board. Th e Group manages The Co-operative brand and the Co-operative Retail Trading Group (CRTG), which sources and promotes goods for food stores.[3] There is a similar purchasing group (CTTG) for co-operative travel agents. Co-operative communities are now widespread, with one of the largest and most su ccessful examples being the Mondragn Co-operative Corporation in the Basque count ry of Spain. Co-operatives were also successful in Yugoslavia under Tito where W orkers Councils gained a significant role in management. In many European count ries, co-operative institutions have a predominant market share in the retail ba nking and insurance businesses. In the UK, co-operatives formed the Co-operative Party in the early 20th century to represent members of co-ops in Parliament. The Co-operative Party now has a permanent electoral pact with the Labour Party, and some Labour MPs are Co-opera tive Party members. UK co-operatives retain a significant market share in food r etail, insurance, banking, funeral services, and the travel industry in many par ts of the country Co-operative Society, context of Bangladesh: Co-operative in Bangladesh has pass ed its century of walking. In initial stage though it functioned with agricultur e only, now it is working with economic spheres. Considering its competency and effective utility in post-independent Bangladesh Co-operative Society is constit utionally recognized as on the most important sectors of the economy. Truly Co-o perative is established as a social issue. And for this reason the man who contr ibuted much is Dr. Akther Hamid Khan. Types of co-operative society: Various types of co-operative are functioning in our country to meet the utmost requirements of the members. Some of them with th eir numbers, members and related co-operatives with these are stated below: 1. Industry Co-operative society: Related central and primary co-operative societies with this sector are: Central and Primary weaver co-operative society, Central spinning co-operative society, central handicraft co-operative foundati on, primary ceramic co-operative society and other co-operative societies. Now in country the numbers of this type of co-operative societies are 1168 and members of such kind of societies are 2,44,334. 2. Fishery Co-operative society: Primary fishermen co-operative society, ce ntral co-operative society and Bangladesh co-operative society are related with this sector. Number of this type of societies are 3425 and human members of thes e societies are 2,87,920. For socio-economic development of fishermen as a natio nal co-operative society Bangladesh national fishermen co-operative society was fo rmed in 1960. Lions share of fishermen of country are human member of this society an d organizational members it has are 91. It has share capital of 13.66lacs taka a nd savings deposit of 44.17lacs taka. 3. Women co-operative society: Interrelated central and primary co-operativ

e societies with this sector are: central and primary women co-operative society , primary co-operative society of baseless women etc. Number of this type of soc ieties are 27,606 and human members of these societies are 8,25,244. On the other hand Bangladesh national women co-operative society is also i ncluded in this sector. Organizational members it has are 39 with share capital of 10,000 taka per member. 4. Transport co-operative society: Interconnected central co-operative soci ety with transport sectors are: central truck driver co-operative society, centr al maxi driver co-operative society. And interconnected primary co-operative soc iety with transport sectors are: auto rickshaw driver co-operative society, prim ary maxi driver co-operative society, primary MISHUK driver co-operative society . At present number of this type of co-operative societies are 769 and human mem bers of this co-operative are 56,020. Along with this four central co-operative societies are also linked with t his sector. They are: 1. Bangladesh public transport driver co-operative society , 2. Bangladesh human holler driver co-operative society, 3. Bangladesh auto ric kshaw driver co-operative federation and 4. Bangladesh auto tempo/ porter cab/ t axi cab driver co-operative society 5. Housing co-operative society: Primary building construction is related t o this sector. The number of this type of societies is 117 and human members it has are 23,533. Apart from this Bangladesh co-operative housing foundation is al so linked with it. For developing and supervising the activities of primary soci eties, this federation was formed in 1983. Now it has 41 organizational members. 6. Milk co-operative society: Primary milk co-operative society and Banglad esh milk producing co-operative union (Milk Vita) are interrelated with this sec tor. At present there are 1404 primary milk producing co-operative. Milk Vita: It was formed in 1973 as a co-operative society of national ran ge. Primary societies under this have members of more than 70,312, share capital of 238.11lacs taka and saving deposit of 105.14lacs taka. 7. Saving and Credit co-operative society: The co-operative credit union le ague of Bangladesh, Credit co-operative and primary savings and credit co-operat ive society are associated with this sector. The number of this type of societie s is 2,912 and human members it has are 3,16,817. 8. Accommodation co-operative society: Correlated co-operatives with this s ector are: shelter co-operative society and accommodation co-operative society. These societies are organized and directed by the projects generalized with dire ct supervision of government and Prime ministers office. 632 accommodation co-ope rative societies have been formed throughout the country and these societies hav e membership of 69,776 people. Members share capitals are 31.55lacs taka and savi ngs deposits are 217.32 lacks taka. 9. Insurance co-operative society: Bangladesh co-operative insurance ltd an d Bangladesh co-operative life insurance ltd are interconnected with this sector . Details of them are given below: Bangladesh co-operative insurance Ltd: It was formed in 1984 with as a result of governments approval for expanding insurance in private sector along with govern ment sector. It has 803 of total members and 60.03lacs taka of total share capit al. Bangladesh co-operative life insurance Ltd: For ensuring self development and se curity of all the members of co-operative societies of the country, this co-oper

ative society was formed. At present 605 members. 10. Poultry Co-operative society: Primary poultry co-operative society, cent ral co-operative society and Bangladesh co-operative society are related with th is sector. Number of this type of societies are 2975 and human members of these societies are 278865. For socio-economic development of poultry men as a nationa l co-operative society Bangladesh national poultry co-operative society was formed in 1975. Most of the poultry men of country are human member of this society and organizational members it has are 75. It has share capital of 12.75lacs taka and savings deposit of 42.68lacs taka. Performance of Co-operative Society: The united development efforts made by lowe r and middle class people with a view to achieving employment opportunity and po verty reduction is the main theme of Co-operative. Along with individual develop ment, Co-operative helps to attain some social and national development concerni ng. Though there are no specific yardsticks to measure the success of Co-operati ve Society, there are some indicators by which the performance of Co-operative S ociety can be seen. Primary Co-operative Society is the main basis of Co-operati ve Society. Some indicators of Primary Co-operative Society are shown below by w hich we can have an entire idea about previous years performance: 1. Number of Co-operative Society: As a result of Co-operatives effectivenes s and acceptance in our country it has spread among people of various levels and thats why in every notable amount of Co-operatives are registering. Along with d irect co-ordination of Co-operative corporation, others governmental and nongove rnmental organization also play role in setting up of various categories Co-oper ative. In present time the trend of raising Primary Co-operative is higher than of any others. The graph shows that in last five years rate Co-operative is grad ually increasing. In fiscal year 2006-2007 the number of Primary Co-operative so ciety has increased to taka 155995. 2. Members of the Co-operative: Peoples participation in development progra m is important indicator of improvement. Though it overwhelmed as an organizatio n of poor but now it has selected as a yardsticks of development by mass people from every stage. Co-operative contributes not only in economic development but also in social development. In fiscal year 2006-2007 number of members of all Co -operative has increased to taka 8089596. In last 5 years the growth rate of mem bers has increased to 8.80%.

3. Share Capital: The main policy for attaining the goal of Co-operative is combining the scanty savings of poor to create a creditable or useable capita l. The main source of capital is the money from selling share to the members. In last five years the amount of collected share capital has increased to taka 293 1300000, which is 52% more than of fiscal year 2002-2003. At the same time the c apital per Co-operative has increased by 36.6% which is 18791 in taka.

4. Savings Deposits: Deposits play important role in raising Co-operatives c apital after share capital. Members deposit a fixed amount of money in a particul ar time in Co-operative and invest the money in profitable businesses. After 200 2-2003, the rate of deposits is increasing gradually. In 2006-2007 it has increa sed to taka 17790000, which is 12% more than fiscal year 2005-2006. It is noted that the deposits per Co-operative is also increasing. In fiscal year 2006-2007 savings deposits per Co-operative is taka 46013, which is 9% more than of previo

us year. 5. Reserve Fund and Funds from Net profit: Reserve Fund and other funds are made of a part from net profit. These funds are also considered as Co-operatives capital. In fiscal year 2002-2003, amount of reserve and other funds of primary Co-operatives was taka 528782000 and in 2006-2007 it has increased to taka 8598 99000, which is 63% more than of 2002-2003.

6. Serviceable Capital: The share capital, share deposits and reserve fund of Co-operative create lions share of serviceable capital of Co-operative. Till J un 2007, the amount of serviceable capital of primary Co-operatives is taka 1909 3829000. In recent five years, serviceable capital has increased to taka 7166200 000, which is 60% more than of fiscal year 2002-2003. 7. Investment: During fiscal year 2006-2007, the primary Co-operatives have invested taka 5566043000 in various financial activities. In recent five years, investment of Co-operative has increased to taka 1755700000, which is 68% more than of fiscal year 2002-2003.

8. Receiving Audit fees: In fiscal year 2006-2007 Government has received t aka 9771000 as audit fee from all Co-operative society, which is 58% more than o f fiscal year 2002-2003. 9. CDF: Co-operative development fund or CDF is created by 3% of net profit . 1% of this fund is used for training purpose and remaining 2% is used for othe r development activities. In fiscal year 2006-2007 the amount of CDF of every ty pes of Co-operatives is taka 10347000. In fiscal year 2002-2003 the amount was t aka 473000 so the amount of 2006-2007 is 120% more than that of 2002-2003. 10. Distribution of Profits: In fiscal year 2006-2007 all primary Co-operati ves have distributed a sum of taka 135000000 among their shareholders. In fiscal year 2002-2003 the amount was taka 75500000 so the amount of 2006-2007 is 79% m ore than that of 2002-2003. Performances of Primary Co-operatives over the last 5 years are shown below in p ercentage of each year GDP: Subject 2002-03 2003-04 2004-05 Partial Capital 0.064 0.064 Savings Capital 0.105 0.155 Reserve Fund 0.017 0.019 Serviceable Capital 0.397 Investments 0.129 0.131 Advance Loan 0.081 0.074 Loan Repayment 0.081 0.086 Profit Distribution 0.002 GDP in current market price taka 40000000000 taka 4.2500000000 taka 2005-06 0.07 0.127 0.019 0.401 0.133 0.143 0.122 0.003 2006-07 0.066 0.161 0.02 0.462 0.132 0.145 0.142 0.004 0.072 .178 .021 0.497 .517 .134 .144 .159 0.011 .016 3.710000000

Factors serving as causes of failure of co-operative societies in Bangladesh:

Being a third world country, in Bangladesh co-operative societies can perform im mense role in order to improve the economic status of poor and middle class peop le. But co-operative societies are still failed to make any positive influence i n our economy, as some factors serve negatively to its smooth functioning. The factors can be articulated into two types (1) (2) Traditional Factors Factors Found from Our Research

Traditional factors: These are the factors that have been affecting our co-operative soci eties for years. They areInefficient management: Proper managing of co-operatives requires good s kills and better experience of managers which is not seen in our country. Illiteracy of members: As majority of members associated with co-operati ves are illiterate, their ignorance about the rules and procedures as well as pu rposes of co-operative serves as barriers. Lack of unity and collaboration: Co-operative society stands upon its me mbers unity and support. But in practice we see a regular inequity and dispute am ong its low-class members. Lack of sacrifice and earnestness: Sacrifice and sincerity among members are prerequisites for success of co-operative. But practically there is serious want of members having a mentality of help and sacrifice. Lack of stimulation and enthusiasm: After certain time members of co-ope ratives get dispirited and feel less interest when they realize the greater ineq uality in competition with large business organization. Lack of wealth: Co-operative is the association of poor or lower level p eople. So there is frequent want of adequate capital and thus fail to utilize th e opportunities. Inadequate training: Proper training can let our talents out. But in Ban gladesh, for want of effective training facility, the skills of members can not grow. Corruption and nepotism: As we know Corruption entered every single part of our society, the co-operatives are not free from it by means of cheating the illiterate members by powerful individuals. And nepotism in providing loans and other spheres inhibit its growth. Limited operating scope: Due to its limited scopes in agricultures, smal l and cottage industry, microfinance, feeding domestics etc., the growth of co-o peratives get stable. Lack of government amenities: Development of co-operatives requires prop er government patronizationproviding economies within its policy, planning, train ing etc. But in Bangladesh government pays less concentration about co-operative s. Apart from these lack of proper planning, lack of expansion, unusual amount of b ad debts, lack of modernization, limited operation scope, limited advertise, sha re complexity etc. also playing role for its failure. Factors Found from Our Research: High amount of loan in the total capital: If we look toward the total am ount of capital we can see 75%-85% or more of the total comes from loan. Because the members of a co-operative society do not have the capability to invest larg e amount of capital.

Uncertainty of net income and limited distribution of dividend: Co-opera

tives can not produce alternative income and they never know whether their will be net income or net loss due to scarcity of capital and inefficient management. As such members find very little dividend and often no dividend, that dispirit them from investment in co-operatives.

Rejected from registration: If we look toward various fields of co-opera tives, we will be able to find out huge number of rejection from registration of co-operatives compared with new registered. It is considered a bad sign that pr events various sectors of co-operatives from staring the business.

Less participation of female members: Equal participation of male and fe male members could enrich our co-operative sectors. But in Bangladesh women part icipation is neglected in comparison to men. It is a great obstacle to the devel opment of co-operatives and national economy. Initiatives can be taken for the expansion of co-operative societies: Creation of contemporary co-operative law: Co-operative laws should be m ade time related by initiating as well as co-operative administration must be re arranged by the government. Highlight the co-operative contributions: The contributions made by the co-operative sectors should be highlighted in the national development deed. Reformation of district wise central co-operative bank: District wise ce ntral co-operative banks are in need to be reformed to facilitate the implementa tion of rural economic development program and structure build up. Co-operative banks are to be allowed to perform Para banking activities that helps finding ou t the emerging honest leaders. Rejecting registration of inactive societies: The registration of inacti ve co-operative societies should be rejected. Ensuring the well treatment of credit programs: The credit programs shou ld be well treated and well controlled by the government through making contempo rary co-operative law and ordinance. Establishment of co-operative based permanent market system: Establishme nt of co-operative based permanent market system is necessary to ensure the agri cultural producers the availability of goods at a reasonable price and to remove the middlemen. Producers, consumers and transporting co-operative societies sho uld be integrated to lessen the price of goods. Arrangements for duty escape: The government should make arrangements of duty escape in the importing process of commodities through co-operatives. Creating better grounds to export: It is the responsibility of governmen t to make better grounds to export agricultural and small and cottage industry produ cts through co-operatives. Providence of dealership to successful societies: Successful co-operative societies of every single district could be provided with dealership to import goo ds and to sell local goods in order to controlling the price of daily commoditie s. Ensuring timely distribution of agricultural ingredients: The distributi on of agricultural ingredients such as- manure, seed, fuel, insecticide, modern technology etc. must be made timely to rural successful societies. Allotment in the national budget for the development of co-operatives: T he government should keep allotment in the national budget for the development o f various co-operative societies. The co-operative members should be allowed to take loans at a low interest rate. Reviving missed and illegally occupied co-operatives: Various missed cooperatives like salt producing co-operative societies and illegally occupied union multipurpose and central union multipurpose co-operative societies could be revived

. Involvement of youths to income generating projects: Effective youth cooperative societies should be formed that will help youths to involve in the sel f-depending and income generating projects. Formation of effective women co-operative societies: Effective women cooperative societies following Karika could be encouraged to form to strengthen wom en. These societies need to be well patronized. Involvement of co-operatives to social programs: Co-operative societies should be involved in different social programs taken by the government such as mass education, birth control, confronting natural calamity, tree plantation et c. to let people realize their importance. Providence of modern training to co-operative personnel: The co-operativ e personnel and members must be provided with proper training in home and abroad to modernize this sector and to ensure its development. Making short films & documentaries on successful societies: The general people can be instigated toward making co-operative by creating and telecasting short films or documentaries on successful societies. Termination of bureaucratic and political interference: The very typical bureaucratic and political interference in the co-operative enterprises must be terminated to ascertain the existence of the principle Freedom and Autonomy. Secular Trend of previous performance of co-operatives by using Moving average tr end: We have shown performances of co-operative earlier. We have used Moving average t rend to reveal secular trend of performances of three years. Charts of secular tr end are shown below: 1. Number of co-operative society: Years Number of Co-operatives Secular Trend 2002-2003 141000 2003-2004 147000 146000 2004-2005 150000 150000 2005-2006 153000 153000 2006-2007 156000

Chart: 2. Share Capital: Years Amount 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 of Share 190 220 250 270 290 Capital (In Crore) 220 246.67 270 Secular Trend

Chart: 3. Number of members: Years Number of Members (In Lacs) 2002-03 74.5 2003-04 76.3 76.27 2004-05 78 77.77 2005-06 79 79.3 2006-07 80.9

Secular Trend

Chart: 4. Investment: Years 2002-03 2003-04 2004-05 2005-06 2006-07 Amount of Investments Secular Trend 3810300000 4210900000 4316866667 4929400000 4804700000 5273800000 5256414333 5566043000

Chart:

5. Savings Deposits: Years 2002-03 2003-04 2004-05 2005-06 2006-07 Amount 310 390 480 620 710 of Deposits (In Crore) 393.33 496.67 603.33 Secular Trend

Chart:

6. Reserve fund and fund from net profit: Years 2002-03 2003-04 2004-05 2005-06 2006-07 Reserve 50 60 68 78 84 fund & net profit fund (In Crore) 59.33 68.67 76.67 Secular Trend

Chart:

Some pragmatic propositions as expansion of co-operative society in context of B angladesh: Consumer co-operative society in confronting price hike: Now-a-days pric e hike is the most central issue among people in Bangladesh. People are badly su ffering from this hike and the standard of living is deteriorating. It should be notified to people that consumer co-operatives can play a vital role in the pre sent circumstance of price hike. Medicine supply through co-operative: In pastoral areas of Bangladesh th ere is less availability of medicine. Moreover in some cases people are to buy e xpired medicine. By setting effective co-operative there can be radical change i n providing medicine to people according to their desire. Establishment of co-operative based garments factory in rural areas: Mos t of the garments factory are city oriented. Co-operative members can set up gar ments factory in rural areas that can help meet local demand and reduce unemploy ment problem. Distributing furniture through co-operative: For improper allocation of furniture between city and village, rural people are deprived of using modernize d home turf. In contrast urban people are unable to use sophisticated items. To solve these problem co-operatives can ensure proper transportation for better di stribution. Co-operative based educational institution: In under developing areas th ere is scarcity of educational institution and if there is any institution they are not standardized. Co-operatives can recover this problem by setting up some modernized educational institutional which will meet up members along with socia l interests. Documentary on successful co-operatives: Co-operative is an economic agitates. The soul of this agitates is primary co-op eratives. Numerous of socio-economic activities are executed by all the co-opera tives diffusing hear and there of Bangladesh for their self benefits as well as the interests of the country. Although all co-operatives have some pros with som e cons but some primary societies are doing very nice what gives co-operatives a respectable base. Information about some successful co-operatives of 2007 is st

ated below: 1. Mukta Bangla Bohumukhi Co-operative society Limited: It was founded in 20th J uly of 1992 with a view to improving the socio-economic condition of members and to making them self sufficient. Society has completed building a ten stairs in Mirpur-10. Now its 539 shops are allotted among its members and this allotment h as facilitated employment of its members. At present, society is working for pro ject of market building and it is intended to buy land for solving the housing p roblem of its members. Some important information of this co-operative are exposed: Particulars Amount Number of Members 240 members Share Capital 25,000 taka Other Funds 17,72,23,661 taka Saving Deposit 15,98,772 taka Net Profit 27,37,772 taka Profit Distribution 16,53,025 taka Giving Loan 1,28,304 taka Investments 17,55,89,851 taka Total immovable assets and chattel 77,20,784 taka Employee Salaried 7 employees 2. Nagri Christian Somobay Wrendan Somity: It was constituted for escalating thr iftiness, raising sense of savings and developing financial condition of the mem bers. It typical activities are: giving loan, resolving housing problem, directi ng welfare activities and providing co-operative with elementary education to th e members. It operates its credit scheme by gathering little savings of its memb ers. It also helps its members in purposes like: healthcare, housing, going abroad, b usiness and education etc. Some important information of this co-operative are disclosed: Particulars Amount Number of Members 4346 members Share Capital 2,97,40,883 taka Other Funds 17,73,25,534 taka Saving Deposit 4,42,99,256 taka Net Profit 1,01,874 taka Profit Distribution 19,33,423 taka Loan Given 5,69,45,536 taka Investments 17,55,89,851 taka Total immovable assets and chattel 13,15,15,683 taka Employee Salaried 16 employees