Unit 2: Consumer Co-operatives

Consumer Co-operatives 

Consumer co-operatives are organizations formed by consumers to purchase goods collectively at fair prices.
Their main purpose is to protect consumers from exploitation, ensure quality products, and supply essential goods at reasonable rates.

Need and Importance of Consumer Co-operatives

A. Why Consumer Co-operatives are Needed?

Consumers face several problems:

• High prices due to middlemen
• Low-quality or adulterated products
• Lack of price transparency
• Irregular supply of essential goods
• Exploitation during inflation or emergencies

B. Importance

Consumer co-operatives help in:

• Providing essential goods at fair prices
• Ensuring quality control
• Eliminating middlemen, thus reducing costs
• Promoting consumer awareness
• Preventing hoarding and black marketing
• Providing credit and ration services to consumers

Origin and Development of Consumer Co-operatives in India

Origin

• Began in India in the early 20th century.
• First consumer co-operative formed in 1904 (Madras).
• Expanded after the Cooperative Societies Act of 1912.

Key Development Phases

• Post-Independence (1950s–70s): Govt promoted co-operatives to control prices and ensure availability of essential goods.
• 1965: Establishment of NCCF (National Cooperative Consumers’ Federation of India).
• Public Distribution System (PDS) strengthened leading to growth of ration shops run by cooperatives.
• 2000s–Present: Adoption of IT, online procurement, and modern retail practices.

Structure of Consumer Co-operatives in India

Consumer co-operatives follow a three-tier structure.

Diagram – 3-Tier Structure

                   APEX LEVEL
            (State / National Federations)
                         |
               -----------------------
               |                     |
       District / Central Societies  |
                         |
               -----------------------
               |                     |
          Primary Consumer Stores  Consumers
                (Village/Local)

Working of Consumer Co-operative Societies

A. Primary Consumer Co-operatives

(Located at village / town / urban local level)

Functions

• Sell essential goods: food grains, oil, sugar, soaps, stationery.
• Purchase goods directly from wholesalers/manufacturers.
• Maintain fair price shops under PDS.
• Provide credit facilities to members.
• Maintain quality and transparency.

Examples Local cooperative stores in Kerala, Maharashtra, Tamil Nadu.

B. District / Central Consumer Co-operatives

(Operate at district level)

Functions

• Supply goods to primary stores.
• Bulk purchase of consumables.
• Establish warehouses for storage.
• Coordinate with manufacturers and state agencies.
• Provide training and guidance to primary societies.

C. Apex Consumer Co-operatives

(State or National-level federations)

Functions

• Large-scale procurement from manufacturers.
• Import essential items during shortages.
• Promote fair price distribution.
• Provide financial assistance to lower-tier cooperatives.
• Marketing, quality control, branding initiatives.

NCCF – National Cooperative Consumers’ Federation of India

Established: 1965
Headquarters: New Delhi

Objectives

• Promote distribution of consumer goods at fair prices.
• Strengthen primary and district consumer co-operatives.
• Ensure availability of essential commodities across India.

Functions

• Wholesale distribution of goods to cooperatives.
• Procurement from central agencies like FCI, NAFED.
• Import of essential commodities during shortages.
• Organize training, research, and consumer awareness.
• Support in PDS operations.

Consumer Co-operatives and Supermarkets

How Cooperatives Operate Supermarkets?

• Follow modern retail format
• Sell products at lower margins
• Bulk procurement to reduce cost
• Emphasize quality and transparency

Examples in India

• Apna Bazaar (Mumbai)
• Sahakari Bhandar (Maharashtra)
• Kendriya Bhandar (Central Govt Employees)
• Super Bazaar (Delhi – earlier famous cooperative supermarket)

Recent Developments in Consumer Co-operatives

Modern Trends

• Adoption of digital payment, POS machines
• Online ordering & home delivery
• Better inventory management systems
• Collaboration with government for PDS
• Introduction of supermarket-style cooperative stores
• Expansion into rural retail through e-governance kiosks

Government Support

• Subsidies for modernization
• Financial assistance via NABARD
• Support during inflation for price stabilization

Problems Faced by Consumer Co-operatives

Problem	Explanation
Poor Management	Lack of trained staff and professional managers
Political Interference	Leadership influenced by local politics
Financial Weakness	Low working capital, delayed payments
Competition from Private Retail	Malls, supermarkets, online retailers
Inventory & Supply Issues	Poor stock management, outdated systems
Lack of Modernization	Slow adoption of technology
Member Apathy	Low participation by members in decision making

Summary Table for Quick Revision

Topic	Key Points
Need & Importance	Fair prices, quality goods, eliminate middlemen
Origin	1904; major growth post-independence
Structure	Primary → District → Apex
Primary Societies	Local stores, fair price shops
District Societies	Bulk supply, warehouses
Apex Societies	State/national level, procurement & distribution
NCCF	National body for consumer cooperatives
Recent Developments	Modern retail, digital payments
Problems	Poor management, competition, financial issues