What is a Co-op
A Co-op which is generally referred as cooperative or co-operative is a an autonomous association which is formed and directed by people who get together with common goals and needs, be it economical, social or cultural. The ownership of these associations are shared by the members and democratically directed by them. Creating value for the customers is their motto rather than gaining huge profits. Co-ops retain the economic benefits within their own community of members.
The establishment of co-operative was successfully marked in the year 1844, when 28 workers in the Rockdale England joined together to form a co-operative society. There were engineers, tailors, shoemakers, weavers, hatters and printers who jointly formulated a set of principles to operate their food co-operative. These simple ideas were instigation for changing the outlook of the relationship between the consumer and producer and also helped a long way in the development of social and economic aspects of small and large scale communities. Later after 51 years, the establishment of International Co-Operative alliance (ICA) in the year 1895 has set another landmark in the history of commerce. The goal of ICA is successful promotion of co-operative development and worldwide trade.
There are seven ruling principles which serve as a guide to all co-operative organizations and has also been accepted by the International Co-operative Alliance. They are-
- Voluntary and open membership
- Democratic member control
- Member Economic Participation
- Autonomy and Independence
- Education, Training and Information
- Co-operation among Cooperatives
- Concern for Community
There are several types of co-operatives which are operated with various purposes like housing, utility services such as electricity, telecommunications or water, agricultural service, banking and credit unions. Let’s briefly understand the operation of these common types of co-operatives.
- A co-operative meant for housing follows a mechanism for ownership of the society where the residents have membership and also occupy the house by paying rent or subscription or the residents might own shares in the co-operatives real estate business. There are also basic structures for equity holding that is formulated collectively by the co-operatives.
- Agricultural co-operatives as the name implies are for the welfare of the farmers who get together with their resources for common economic benefit. These co-operatives are broadly classified into for production purposes and supply purposes. Agricultural production co-operatives refer to pooling of production resources like machinery and land and jointly farm. Whereas Agricultural supply co-operatives combines storage and purchases and distributes farm inputs to the members at reduced costs.
- A utility co-operative is responsible in delivering public utility services like water, electricity or telecommunication services to the members. These co-operatives have proved very helpful in many countries.
- Co-operative banks and financial institutions are widely known form of co-operatives which is controlled and owned by the members again. These co-ops are tasked with providing financial services that banks generally do.
Thus co-ops which is in existence for more than 150 years now, still continues its heritage of serving millions of working people all over the world.