weaker sections. The objective is to improve their economic status and protect themselves from exploitation by businessmen. But in India, the co-operative movement was initiated and established by the government. Wide participation of people is lacking.
Therefore the benefit of the co-operatives has still not reached many poorer sections. iv. Benefit to rural rich Co-operatives have benefited the rural rich and not the rural poor. The rich people elect themselves to the managing committee and manage the affairs of the co-operatives for their own benefit.
The agricultural produce of the small farmers is just sufficient to fulfill the needs of their family. They do not have any surplus to market. The rich farmers with vast tracts of land produce in surplus quantities and the services of co-operatives such as processing, grading, correct weightment and fair prices actually benefit them. v.
Inadequate rural credit Co-operative societies give loans only for productive purposes and not for personal or family expenses. Therefore the rural poor continue to depend on the money lenders for meeting expenses of marriage, medical care, social commitments etc. Co-operatives have not been successful in freeing the rural poor from the clutches of the money lenders. vi.
Lack of managerial skills Co-operative societies are managed by the managing committee elected by its members. The members of the managing committee may not have the required qualification, skill or experience. Since it has limited financial resources, its ability to compensate its employees is also limited. Therefore it cannot employ the best talent.
Lack of managerial skills results in inefficient management, poor functioning and difficulty in achieving objectives. vii. Government intervention Co-operative societies are subject to excessive government regulation which affects their autonomy and flexibility. Adhering to various regulations takes up much of the management’s time and effort.
viii. Misuse of funds If the members of the managing committee are corrupt they can swindle the funds of the co-operative society. Many cooperative societies have faced financial troubles and closed down because of corruption and misuse of funds. ix.
Inefficiencies leading to losses Co-operative societies operate with limited financial resources. Therefore they cannot recruit