Principles of Cooperation

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PRINCIPLES OF COOPERATION

CO-OPERATIVE PRINCIPLES

Rochdale Principles

The General Assembly of the International Co-operative Alliance in 1937 heldat Paris formulated the following Co-operative Principles and named them as the

Rochdale Principles, of which the first four were termed as essential and the other

three as non-essential or directive.

1. Open membership

2. Democratic control

3. Limited interest on capital

4. Distribution of surplus to members in proportion to their transactions. 5. Political and religious neutrality.

6. Cash trading

7. Promotion of education

Reformulated Principles of Co-operation

1. Voluntary and open membership

Membership of a co-operative society should be voluntary and available without

artificial restriction of any social, political and religious discrimination to all personswho can make use of its services and are willing to accept the responsibilities of

membership.

2. Democratic Control

Co-operative societies are democratic organizations. Their affairs should be

administered by persons elected or appointed in a manner agreed by the members

and agreeable to them. Members of primary societies should enjoy equally the right of

voting (one member one vote) and participation in decisions affecting their societies.

In other than primary societies, the administration should be conducted on a

democratic basis in a suitable form.

3. Limited interest on share cap ital

Share capital should only receive a strictly limited rate of interest, if any.

4. Patronage dividend

Surplus or saving, if any, arising out of the operations of a society belong to the

members of that society and should be distributed in such a manner as would avoid

one member gaining at the expense of others. This may be done



(a) By provision for development of the business of co-operatives.

(b) By provision of common services, or by distributing it among the members

in proportion to their transactions with the society.

5. Promotion of education

All co-operative societies should make provision for the education of their

members, officers and employees and the general public in the principles and

techniques of co-operation, both economic and democratic.

6. Mutuality

All co-operative organizations in order to best serve the interests of their

members and their committees should actively co-operate in every practical way with

other co-operatives at local, national and international levels.

NEW CO-OPERATIVE PRINCIPLES

Definition

“ A Co-operative is an autonomous association of person united voluntarily to

meet their common economic, social and cultural needs and aspirations through a

jointly owned and democratically controlled enterprise.”

Values

Co-operatives are based on the value of the self-responsibility, democracy,equality, equity and solidarity. In the tradition of their founders, Co-operative members

believe in the ethical values of honesty, openness, social responsibility and caring for

others.

Principles

The Co-operative Principles are guidelines by which Co-operatives put their

values into practice.

First Principle: VOLUNTARY AND OPEN MEMBERSHIP

Co-operatives are voluntary organizations, open to all persons able to use their

services and willing to accept the responsibilities of membership, without genderm,

social, racial, political or religious discrimination.

Second Principle: DEMOCRATIC MEMBER CONTROL

Co-operatives are democratic organizations controlled by their members, who

actively participate in setting their policies and making decisions. Men and women

serving as elected representatives are accountable to the membership. In primary



Co-operatives, members have equal voting rights (one member, one vote), and Co-

operatives at other levels are also organized in a democratic manner

Third Principle: MEMBER ECONOMIC PARTICIPATION

Members contribute equally to, and democratically control, the capital of their

Co-operative. At least part of that capital is usually the common property of the Co-

operatives, members usually received limited compensation, if any, on capital

subscribed as a condition of membership. Members allocate surpluses for any of the

following purposes: developing their Co-operative, possibly by setting up reserves,

part of which at least would be indivisible; benefiting members in proportion to their

transactions with the Co-operative; and supporting other activities approved by the

membership

Fourth Principle: AUTONOMY AND INDEPENDENCE

Co-operatives are autonomous, self-help organizations controlled by their members. If

they enter into agreements with other organizations, including Governments, or raise

capital from external sources, they do so on terms that ensure democratic control by

their members and maintain their Co-operative autonomy.

Fifth Principle: EDUCATION, TRAINING AND INFORMATION

Co-operatives provide education and training for their members, elected

representatives, managers, and employees, so they can be elected representatives,

managers, and employees and can contribute effectively to the development of their

Co-operatives. They inform the general public particularly young people and opinion

leaders - about the nature and benefits of Co-operation.

Sixth Principle: COOPERATION AMONG CO-OPERATIVES

Co-operatives serve their members most effectively and strengthen the Co-

operative movement by working together through local, national, regional and

international structures.

Seventh Principle: CONCERN FOR COMMUNITY

Co-operatives work for sustainable development of their communities through policies

approved by their members.



" RURAL INDEBTEDNESS :

The BURNING ISSUE . "

Summary of Article by C.R.L.Narasimhan

on the Report submitted to Central Govt

by the Expert Committee headed by Prof Chandrasekhar

on "RURAL INDEBTEDNESS. "

( Summary by konthai )

The declined earnings of farmers affect their repayment capacities

resulting in default and triggers them to commit suicide.This makes rural

indebtedness a major issue for an in depth study.The expert committee set up by the Central Govt, headed by Professor Radhakrishnan ,has submitted

recently its report.

Prime Minister,Dr Manmohan Singh in his Independence day speech this year,

reiterated the Govt's commitment to Agriculture, and in token of this

announced the setting up of a special programme for this sector entailing an

investment of Rs 25,000 crores soon.

The expert group have made a detailed analysis of the longstanding

problem,lasting for more than the last two decades, arising out of neglect of

agriculture in the planning process. They have traced the factors responsible

for this and have focused the causes to

a) an agricultural crisis, reflected by low growth and declining productivity,and

b)an agrarian crisis, caused by the high dependence of the population on

agriculture.

The large number of suicides by farmers reported in different parts of

the country reflect the obvious tragic manifestation of these maladies.

However, their conclusion is that the root cause is not indebtedness alone

and suicides are only a symptom.In doing so, they have traced the other

primary causes to stagnation in agriculture, increasing production and

marketing risks, collapse of the extension system , a growing institutional

vacuum, and lack of other opportunities for livelihood .



Some of the other findings are:

(a) average household borrowings by themselves have not been excessive,

(b) the enormous expansion of credit needs of agriculture, consequent on

modernisation and expansion ,

(c) Non-filment of targets by banks, poor performance of co-operatives and

regional rural banks ,_ all these contributing to deficiencies in agricultural

credit .

They have also suggested encouragement of a positive repayment culture

for bank loans in the long run, by rewarding those who repay promptly.

. The expert group's suggested remedial measures are:

(a) the existing package of relief measures covering the 31 distress affected

districts to be better monitored and implemented;

(b) rescheduling of loans and waiver of interest burden up to two years,

c) also grant of fresh loans to farmers affected by natural calamities., the

resulting burden to be borne by State and Centre equally and

(d) an 'one time relief' to be provided by banks through long term loans tofarmers who are paying exorbitant interest to money lenders . For achieving

this , creation of a special fund, called the "Money Lenders Debt

Redemption Fund " with an initial corpus of Rs. 100 crores.

. Since their findings indicate, that more than one half of the farm

households do not borrow either from institutional or non-institutional

sources,they have suggested that Institutional agencies should be placed on

a ‘mission mode’ to extend coverage.

The group have made some more valuable suggestions ,inter alia,for credit

delivery in rural areas and enhance the quality of financial architecture . Some

of them are

: a)expansion of production base of agriculture by appropriate technological

innovations,

b) increase the availability of institutional credit to agriculture,



)adherence to project based lending by banks by taking into account land and

assets created out of loans in evaluating col laterals. This would enable farm

credit to extend to a larger number of farmers

,d) credit counselling to farmers particularly for diversifying of their economic

activities through Self Help Groups organised and helped by

NABARD,(National Bank for Agriculture & Rural Credit)

e)simplifying procedures for mortgages and reducing transaction costs.

Welcome to Co-operative Department

The Department of Cooperation was established in 1948 immediately after the formation of

the state of Himachal Pradesh. The main objective of the Department has been to eliminate

exploitation of common man by middlemen and money lenders by ensuring credit facilities to

farmers at low rate of interest through Cooperative institutions. The focus is on amelioration of

the socio-economic conditions of the people. It also envisages enabling empowerment forpeople to come together for constituting organizations for mutual benefit, build up synergies

and drive economic benefits.

The first H.P Cooperative Societies Act, enacted in 1956 and prior to this Cooperative

Societies were registered under the Cooperative Societies Registration Act, 1912. With the

reorganization of Punjab State in 1966, four more hilly districts namely, Kangra, Kullu, Lahual

Spiti and Shimla were formed. Simultaneously on 1st September, 1972 two more districts viz

Hamirpur and Una were created out of Kangra District and Solan also named as a district

dropping Mahasu District. Reorganization of the State paved the way to enact H.P.

Cooperative Societies Act 1968, because most of the Societies in the new merged area were of

unlimited liabilities as such H.P. Cooperative Societies Rules, 1971 were also framed by theGovernment for strengthening the Cooperative movement in the State.

The statutory duties of, registration of Cooperative Societies, Arbitration, execution,

Liquidation, Inspection and Audit under section 3 of the H.P Cooperative Societies Act 1968

are entrusted to the Registrar, Cooperative Societies H.P. or the person authorized by him.

At present following subjects are being dealt by Cooperative Department as per

Business of the Government of Himachal Pradesh (Allocation) Rules 1971:-

o All work relating to Cooperative Societies of all types and at all levels,

registered under the Cooperative Societies Act, except administration of section

35, 94, and 100 of the Himachal Pradesh Cooperative Societies Act, 1968 in

relation to Himachal Pradesh State Cooperative Milk Producers Federation Ltd;Himachal Pradesh State Cooperative Wool Federation and their constituent

Cooperative institutions.

o Urban Cooperative Bank.

o Land Mortgage Bank.

o Grant of loans and subsidies to Societies.

o Investment in share capital of the Societies.

o Crop Loan Schemes.

o Marketing of Agricultural Produce.

o Distribution of fertilizers, seeds and other Agricultural inputs through the

Cooperatives.

o Cooperative processing and ware-house activities.



o Cooperative Law, Act and Rules.

o Audit of Cooperative Institutions.

o Consumer Cooperative Stores.

o Liquidation, Arbitration and Execution of awards.

o Special schemes of medium and long term credits.

o Registration of Societies under Societies Registration Act, 1860

o Establishment budget and accounts matters

Documents

Principles of Cooperation