Advantages of Producer’s Cooperative Society

Advantages of Producer’s Cooperative Society

Advantages of Producer’s Cooperative Society

A few small industrialist, labor, or producers establish a cooperative society to gather their limited capability in order to get huge production facilities and this kind of organization is called producers’ cooperative society. As they can’t produce huge products as well as they can’t exist in the competition of selling, so they accumulate their limited ability to establish such kind of organization.

The owners of the small and cottage industry and producers establish this cooperative society to use their limited ability to consume large production facility. More production and increase the ability of distribution is the main goal of this organization. From the viewpoint of different nature, the advantages of producer’s cooperative society are given below:

  • Increase income

Large production facility can be gained as each labor or producers produce combined. It increases the volume of income as well. No single person has to set up the business themselves; they have the support and money of other workers.

  • Elimination of middlemen

To refurbish the interest of small producers to eliminate the exploitation of middlemen. That’s why products purchase and direct marketing collectively. Consequently, it is not needed to depend on others. A cooperative society has a divide legal entity. Hence, the death, bankruptcy, retirement, lunacy, etc., of the members do not distress the perpetual existence of a cooperative society.

  • Removing the unemployment problem

This inventive society not only saves guard of the producers and labors but also it takes new projects and enlarges its activities in accordance with increase the financial ability. It creates employment and removes the unemployment problem. The proxy is not allowed in cooperative societies. Thus, the management in cooperatives is democratic.

  • Marketing facility

The blind competition is declined among small produces due to establishing such kind of cooperative society. Production can be increased to measure the demand of the market. As a result, marketing becomes easier.

  • Safeguarding existence

Producer cooperative society is essential in order to safeguard existence various kinds of disadvantages as well as to exist in the market in comparison with prosperous industrialists. Compared to the formation of a company, the formation of a cooperative society is simple. Formation of a cooperative society also does not involve long and difficult legal formalities.

  • Establishment of good industrial relations

The owners operate the activities labor in this kind of organization. As a result, the disparity between owner and labor is naturally abolished. It creates a good relationship between them. Like company form of ownership, the liability of members is limited to the coverage of their capital in the cooperative societies. Government has adopted cooperatives as an effective instrument of socio-economic change.

  • Using advanced technology and product

It is a goal of producers’ cooperative society that produces various kinds of developed goods; takes various kinds of new projects, as well as to invest in introducing new products. So, members can’ learn the technique of new entrepreneurship. A cooperative society has a divide legal entity. Hence, the death, bankruptcy, retirement, lunacy, etc., of the members do not distress the perpetual existence of a cooperative society.  Thus, cooperatives foster fellow feeling among their members and inculcate moral values in them for a better living.

  • Reduction of cost

The owners perform just like the labor in this organization. Generally, the production cost is reduced, because of huge purchase and production. Besides combine market reduces the cost as well. Besides, it is also exempted from stamp duty and registration fee.

At last, we can say that a lot of advantages of producers’ operative society. These advantages make the producers’ cooperative society more demandable. Each producer wants to gather willingly to be members of this organization to establish their rights. Because they want to survive in society depending on their own status and contribute to the national economy.

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