Features of Producer’s Cooperative Society
The cooperative society is dynamic in all countries worldwide and is represented in all the sectors including agriculture, food, finance, healthcare, etc. In Producer’s Cooperative Society, producer-owned and democratically-controlled organizations serve their members (who may or may not be themselves cooperatives) through cooperative marketing, support and/or purchasing. The members of this organization collect capital, render a great attempt to operate the organization with a view to earning a profit and distributing as well as. To protect the interest of weaker sections, the co-operative society is formed. It is a voluntary association of persons, whose motive is the welfare of the members.
Every organization has some characteristics based on these features producers’ cooperative society has formed and operated. According to these features producers’ cooperative society is differentiated from others. These features are as follows:
- Capital is collected by the members of the organization. Thus, capital contribution does not enjoy the same importance as in the case of other forms of business. However, capital rewarded with a small rate of interest.
- Profit distribution must he followed rules and regulations. Profits earned by the society are distributed amongst its members according to the extent of business transacted by the member with the society.
- Omitting the middleman, co-operative Societies are largely formed by people with limited economic means.
- Products supply at the most favorable price in this organization and consumers. There is no trading in credit, as liquidity and -safety of funds is very crucial.
- The risk of production is limited by the paid-up capital of a shareholder. If any surplus is generated, it is distributed amongst the members as a dividend in conformity with the bye-laws of the society.
- Generally, small mechanics producers and small industrialists are the members of this type of cooperative society. A registered cooperative society enjoys certain privileges and exemptions granted by the Central and State Governments.
- As it is a voluntary association, the membership is also voluntary. A person is free to join a cooperative society, and can also leave anytime as per his desire.
- There is limited liability of the members of a co-operative society. Liability is limited to the extent of the amount contributed by members as capital.
- An elected managing committee has the power to take decisions. Members have the right to vote, by which they elect the members who will constitute the managing committee. Members elect a Board of Directors, who manage the affairs of the society on behalf of the members and are answerable to the members of the society.
From the above discussion, we say that producers’ cooperative society is the most popular among all producers of an industry and also society. The objective of a cooperative society is not profit, but mutual gain, based on mutual trust. The easy formation, low capital, and production emphasis are the features producers’ cooperatives society which gives extra popularity. There is no provision for sale or transfer of shares held by a member of the society in the capital of the society.