Cooperative societies may be classified into different categories based on the objectives, purposes and nature of activities performed by them. When some cooperative units are formed for achievement of specific economic objectives, others are formed either with the purpose of social upliftment of the members or to help consumers, small farmers or small producers, Based on that the main type of cooperative societies are:
1. Consumers’ Cooperatives:
These societies are formed by the members with an objective to provide goods and services at the cheaper rate by eliminating middlemen commission by establishing direct relationship with the manufactures or wholesalers. They purchase bulk goods and services directly from the manufacturers or wholesalers and sell those among the members in small lots. The profit which usually wholesalers or retailers avail are passed on by the societies to the members in form of cheaper rate and balance as dividend. The main advantage of this type of societies are that members of this society enjoys the steady supply of goods and services at reasonable price without compromising the quality.
2. Producers’ Cooperatives:
These type of cooperative societies are formed to assist the manufacturers/industrial units in (i) setting up units (ii) producing goods and services, as well as (iii) marketing their products. It assists the members in procuring the plants and machineries, raw materials and other necessary factors of production so also taking the responsibility of marketing those products too. Thus, the members of societies are left with only producing the goods and services. Small producers are mainly benefitted out of this process and they concentrate only on production side.
3. Marketing Cooperatives:
Such cooperatives are established with a view to carrying on the marketing job of producers directly by eliminating middlemen’s profit. It is rather an association of similar type of producers to market their products. It purchases all the products produced by the small manufacturers in small lot, store the same in their warehouses and market them when the market is favourable or at proper places where there is demand for the same.
4. Housing Cooperatives:
Housing cooperative societies are those voluntary associations of members who come to the rescue of needy people in getting their dream of having a own house fulfilled. These societies engaged in acquiring the land from genera public, develop them, construct houses as per the choice of the members and then transfer the said houses in favour of the members. In consideration to that members pays the due price for the house may be on easy installment basis spread over as long years. Cooperative societies at times arranges finance/loans for the members from different financial institutions to bear the cost of the house. Some societies also sales plots to their members for construction of house at their level.
5. Credit Cooperatives:
Credit cooperative societies are formed for providing finance to the poor farmer and needy members of the society at lower rate of interest. The society collects funds from its members in form of share capital as well as accepts deposits from general public. It also avails loans from state cooperative banks. The fund so collected are used in providing loans to the needy people, generally to the members as loans and advances on easy terms and conditions. This process of financing people save them from exploitation by the money lenders who usually charges high rate of interest and stiff terms and conditions.
Credit cooperative societies are two types. Agriculture credit cooperatives and Non- agriculture credit cooperatives. An agricultural credit cooperative society extends credit to the rural people both for productive and non-productive purposes. A non-agricultural society is meant for urban masses and meet their short-term financial requirement.
6. Cooperative Farming Societies:
In order to achieve higher rate of return from economies of scales, small farmers and marginal farmers of a particular area may join their hands, form a cooperative society and go for mass farming instead individual farming. They contribute capital, land and labour and jointly go for any farm activity. This becomes beneficial to the members in many ways like – (i) mass production, (ii) maximum output, (iii) application of advanced technologies, fertilisers and manuals, (iv) pooled resources, land, labour and others, (v) proper irrigation, (vi) no shortage of capital to meet day-to-day expenses etc.
a. Cooperative Better Farming Societies:
These societies are started to improve the methods of fanning among the members. They arrange the machineries, seeds, fertilisers for the farmers. Farmers get higher output by utilising the same. The members in turn, pay some charges for this service rendered by the society. Thus, both the members as well as the societies are benefitted by that.
b. Cooperative Joint Farming Societies:
In this type of society, the land of the individual members are taken by the society, but the ownership remains at the members. The members are allowed to spare their labour in consideration to wages for doing work on the land. The outputs are sold by the society and any profits realised are distributed among the members in the ratio of their land values.
c. Tenant & Joint Farming Societies:
This type of farming society takes the land on leasehold or freehold basis. The land is distributed among the members and they cultivate those lands and grow agricultural products. The members pay the rent for the utilisation of the land. Landless labourers having manpower strength are more benefitted by this type of societies. In joint farming ownership lies with the society. Whatever products are produced belong to the society. But in tenant farming society members enjoy the output produced in the land owned by others and only pays certain amount of charges for cultivating the land of others.
d. Collective Farming Societies:
The land is owned by the society. Members work collectively on the land. The members are paid with the wages. Surplus of the society, if any, are distributed among the members in the ratio of their wages. It is different from joint farming society in terms of ownership of land.