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1
 Cooperatives - how is that?  Professor paramjit Sharma 
sharmapjit@rediffmail.com 
 
2
Cooperatives - how is that? 
Historically, cooperatives are in existence in this world for more than a century and half.In many countries cooperatives served their objectives for which these were created and inmany countries there has long been confusion in the mind of the public on to whatconstitutes a Cooperative and the Governments are not sure about their role in thedevelopment of a country. They are not sure to whether to continue development processthrough cooperatives or adopt some other alternative.Cooperatives are simply a special type of business enterprise within the formal marketsystem, both economic and social in character, which reflect a deep sense of social andenvironmental responsibility.
True
cooperatives could be those which come in the ambit of this statement. The word
true
cooperatives may again raise some controversy. What is atrue cooperative? The one which achieve its objectives or the one which distributehandsome dividend to its members or the one which earns profits or the one professionallymanaged or the one which applies the cooperative principles and values or the one whichhas enlivened all the characteristics mentioned thereof.According to the definition formulated by International cooperative Alliance, Cooperativesare,
 ‘autonomous associations of persons united voluntarily to meet their commoneconomic and social needs through jointly-owned and democratically-controlledenterprise'.
If this definition is analyzed, there are four-five conceptual characteristics of cooperatives i.e. autonomous organizations, united voluntarily, meeting economic andsocial objectives and jointly-owned and democratically-controlled enterprise'. Autonomousorganization signifies that cooperatives are independent organizations having the freedomto work independently. It needs to be validated, whether cooperatives are autonomousorganizations or not. The
second
important characteristic is, members are unitedvoluntarily. This is also not true always. The
third
characteristic is, meeting economicand social objectives of the members. That means increasing the income of the membersand helping to raise their social status. Large numbers of cooperatives are defunct andincreasingly incurring losses. So there is some amount of doubt about this characteristictoo. The
fourth
one indicates, members jointly own the cooperative. Ownership bymembers is ok on paper, but the members in cooperatives are hardly involved in decisionmaking. Last characteristic says cooperatives are democratically controlled institutions, which means board of the cooperatives is democratically elected. There are numerousexamples to nullify this characteristic if we look at the role of the registrar, big farmers incase of agricultural societies, businessmen & industrialist in case of urban Banks.----------------------*Professor & Head, Centre for IT, VAMNICOM, Pune
 
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 The question than comes,
what are cooperatives doing or done 
?
Are they justifying thecharacteristics imbedded in its definition? The answer may be sought in terms of aquestion, which is often asked by bowler in a cricket match to an Umpire. Whileappealing, the bowler raises his voice to say
- how is that?
Such appeals can be made bythe bowler or the field men against the batman, when according to them the batsman iseither leg before wicket, or run out or caught or hit his wicket or handed the ball etc. Theumpire who is expected to be knowledgeable about the rules of the cricket declares thebatsman out or not out. The umpire never declares that the batsman is either out or notout. While in doubt he refers the matter to the third umpire, who helps the field umpiresin taking right decision No doubt cooperatives can not be compared with a game of cricket. But we can certainly ask a question to know whether cooperatives have achievedthe purpose for which they have been created or not and may be to what extent? Actuallya
true
cooperative must comply with entire
five
characteristics of the definition for beingeligible to be called a cooperative. Therefore, it may be pertinent to analyze thecooperatives as such through a question about its justification & credibility.
Purpose of cooperatives -
needs of members or board.
 
As mentioned earlier the cooperatives are formed to meet the economic and social needs of the members. If we look at formation of consumer cooperatives in India, these wereformed after Chinese invasion. More out of the need of the state, rather than the need of the public. Industrial Cooperatives are mostly one family institution. What ever may be thereasons for the formation of sugar cooperatives, now these are serving as launchinggrounds into politics. The labour cooperatives are often formed to get labour contractsrather than collectively joining to enhance their bargaining power or income. The urbanbanks are mostly formed by businessmen and industrialist to serve their own interestsand housing cooperatives formed by the builder. Members contact point is only annualgeneral meeting which is hardly attended by the members. It is the board, whichfunctions supreme rather than the members, who hardly shows their presence in theAGM’s, not because they are not interested but the board invokes them in a manner tomake them disinterested in the affairs of the organization.
Cooperative Governance - who are the leaders?
Who comprise the board members of the cooperatives? In case of Credit cooperatives, theyare often big landlords who may or may not require credit. In case of sugar cooperatives,they could be from a political family inspiring to be member of legislative Assembly orparliament. In case of Urban Bank, they may be industrialist, who can facilitate their well wishers to make use of the facilities of the Bank. Very rarely, competent and professionalperson find place amongst the board.
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