consumer cooperative movement in the first consumer cooperative society was established by rochdale

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  • CHAPTER I1

    CONSUMER COOPERATIVE MOVEMENT IN INDIA

    2.1 Introduction

    The basic aim of the cooperative movement is to achieve the

    advancement of the members concerned and to protect them from exploitation.

    With this purpose different types of cooperatives have been formed. Consumer

    cooperatives are organised to serve as the best custodians of the unorganised

    consumers by supplying quality products and services at reasonable prices and

    in correct weights. The first consumer cooperative society was established by

    Rochdale P~oneers in the year 1844 in Manchester in England. A batch of

    twenty eight weavers in Rochadle formed the 'Rochdale Society of Equitable

    Pioneers on 2 4 ~ October 1844 and started business on 21 December 1844 to set

    an example to the world by making collective purchases and distribution of

    consumer goods for cash at reasonable prices and bonus was declared at the end

    of the year against the purchases made. The period that England passed through

    (during the Industrial Revolution) when the Rochdale Society had been founded

    was popularly known as the "hungry forties" (Cole, 1944)'.

    Over the years, England and Sweden which are the forerunners of the

    consumer cooperative movement in the world has proved that consumers

    cooperatives can serve as effective guardian and spokesman of the consumers. . Some of the contributory factors for the successful working of consumer

    I Cole, G.D.H. (1944) A Century ~f~('ooprrotion, George Allen and Unwin Limited for the Cooperative Union Limited. Oxford. p I

  • cooperatives were identified as the involvement of responsive members with a

    spirit of cooperation, uniformity of needs and preferences of consumers due to

    better standard of Iivmg and the positive attitude of the governments with a

    well-desrgned and supportive legal framework for the development of people's

    organisations like consumer cooperatives.

    2.2 Consumer Cooperative Movements in Asia

    Pradit Machima (1994)' suggests that consumer cooperative movements

    in Asian countries can be classified into three groups - strong, medium, and

    weak. Strong movements compr~sing Japan and Singapore have high standard

    of living among the consumers. The countries which have consumer

    cooperatives with medium performance are South Korea, Malaysia, Thailand,

    Sri Lanka and parts of India. The weak movements include Bangladesh, parts

    of India, Indonesia, Pakistan, Philippines and Vietnam, where socio-economic

    conditions are not conducive to consumer cooperative development. Further,

    organisationally, the consumer cooperatives in Asia can be divided into five

    main categories, as follows:

    1. Purely consumer cooperatives They are organised or owned by members

    comprising general public and widely exist in Japan, Singapore and

    Thailand

    2. Multi-purpose cooperatives: Their activities are mixed such as credit, farm

    supply, marketing, processing. consumer activities, insurance etc. This type

    of cooperatives exist in Sri Lanka, Vietnam, Indonesia and South Korea

    2 Pradit Machima (1994) "Consumer Cooperative Movements in Asia", I C A N C T Sub- regional Seminar on ('onslrmer Cooperative. Bombay 24' April to 3rd May 1994, p.25-26.

  • where consumer cooperatives are not in existence but are organized or

    operated as a unit or section of agricultural cooperatives.

    3. Institutional cooperatives: Institutional cooperatives are those cooperatives

    which are organized among workers, employees or civil servants or m e d

    forces, who work in the same organization or institution. They exist in many

    countries like Bangladesh, India, Indonesia, Japan, Malaysia, Philippines, Sri

    Lanka and Thailand.

    4. Student/ University Cooperatives: The student/university cooperatives were

    organlsed by the students and teachers as members and these societies

    prowde student related artlcles for students and teachers. These societies

    also help to cultivate cooperativisam among students. These societies are

    very popular in almost all Asian countries except Sri Lanka and Vietnam.

    5. Village and rural cooperatives: The ultimate objective of village and rural

    cooperative is to supply essential articles to the rural people and thus serve

    the rural areas. Among the Asian countries, it is widely spread and popular

    only in lndia.

    2.3 Consumer Cooperative Movement in lndia

    In lndia the erstwhile Madras state was the pioneer in the field of

    cooperative movement. The first consumer cooperative society was set up in

    Madras, namely 'The Triplicane Urban Cooperative Society Limited' in 1904

    with the prime aim of supplying necessities of life to its members and it has

    grown up as one of the largest consumer cooperative societies in lndia'. With

  • the passing of Cooperative Credit Societies Act, 1904, the Madras state gave

    registration to the Triplicane Urban Cooperative Society followed by the

    registration to the Coimbatore Cooperative Society in 1906. However the

    consumer cooperatives got legal recognition only after the enactment of the

    Cooperative Societies Act of 19 12, which repealed the Cooperative Credit

    Societies Act of 1904. Further, the Cooperative Societies Act, 1912 abolished

    the dishnct~on between the rural and urban societies and in its place a new basis

    for classificahon, namely limited and unlimited liability societies were

    introduced.

    As a consequence of the above mentioned measures the number of

    cooperative stores which was 23 in 1912 rose to 78 at the close of the World

    War 1'. The post World War I period witnessed high prices and scarcity for

    essent~al goods and commodities. The inevitable result was a fillip to

    cooperative consumers stores which continued their upward march till 192 1.

    In 1919, on the basis of Montogue-Chelmsford reforms, cooperation

    became a provincial subject and accordingly state laws were passed

    subsequently to enable the state governments to effectively administer the

    cooperatives organised for various economic activities.

    The consumer cooperative movement received great stimulus after the

    transfer of administrative powers and control of cooperative societies to popular

    ministries in the provinces of lndia. In a country like lndia inhabited by 315

    millions of people there were only 596 consumer cooperative stores (1920) as

    against 37.000 agricultural and non-agricultural credit cooperatives in the

    4 Sapre A.R. (1993 ) op.cit.. p.27.

  • country.' With the sole exception of Madras province where primary stores

    were established in rural areas, the cooperative store movement in lndia was

    concentrated in both urban and semi-urban areas. In the initial years, the

    consumer cooperative movement received sufficient support and patronage from

    the consumers

    In the succeeding paragraphs, an attempt is made to evaluate the progress

    of consumer cooperatives in lndia spread over a four tier structure consisting of

    primary socletles. district wholesale societies, state level federations and

    national level federat~on. While discussing the progress it is appropriate to

    explain from top to bottom, but the available data on consumer cooperatives is

    very comprehensive only for priniary societies. Further, the district, state and

    national level societies were started little late also. Hence, considering the

    convenience for explanation, we have followed bottom to top sequence.

    Progress of Primary Consumer Cooperative Societies in lndia

    Table 2.1 Progress of Primary Consumer Cooperative Societies during the post World

    War I Period (I92 1 to 1929)

    Number of Societies with Membership

    1927 1929

    Memb ership ership ershlp ership

    Assam 2283 20 2475

    -----.

    Contd ...

    5 Kulkami K.R (1962). Theory and Procrice qf Couperotion in India and Abroad. Vol. IV, Cooperators' Book Depot. Dadar. Bombay. P.38

  • ! j Number of Societies with Membership

    1 1921 -.L-?---

    Bihar & Orisssa / 23 1 3066 23 / 4399 / I7 1 3032 / 18 / 2831 / c'p(centra', 30 13357 1 9 11431 1 10 11814 1 l l 1 1 8 4 8 1 Province)

    -

    Punjab 106 1 7698 3 153 3672

    U.P +-T- I 21 I1440 13 1220 1131 1216 --

    ource: Annual A d r n ~ n ~ s t r a t i v ~ ~ e ~ o r t s , Quoted from Goyal S.K. (1972), Consumer Cooperative Movement in India, Meenakshi Prakashan, Meerut, p.55

    As seen from Table 2.1 this era of growth in the store-movement was,

    only a temporary phase of expans~on as it slackened subsequently. The people's

    patronage to consumers cooperative stores were ceased as soon as the control of

    commod~ties of every day use like rice, kerosene and sugar were lifted.

    With the outbreak of World War 11, there was shortage of essential goods

    in the country. As the private traders indulged in profiteering and black

    marketing along with manipulations in prices, the government had to control the

    prices as well as the distribution of essential commodities. In order to check the

    nefarious activiti

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