Free No.1 Study Notes on International Co-operative Alliance

International Co-operative Alliance

Free No.1 Study Notes on International Co-operative Alliance
Free No.1 Study Notes on International Co-operative Alliance


Efforts were made in 1886 to establish an International Cooperative Alliance at the international level with the feeling that co-operation should be inspired at the international level as well as the development of the association should attain international status and a platform should be available at the international level. Yodor Boyvac, an expert on cooperation in France, began to conceptualize this. Later, cooperative societies in many countries including England started efforts in this direction. In 1895, the General Conference of the International Cooperative Congress was held in London, England.

The International Cooperative Alliance (ICA) was established in this convention. Through this organization, the problems of cooperative organizations in the world are solved and studies are done on that problem. Cooperation is guided. “International Co-operative Organization is a federation formed by the cooperative societies of many countries of the world.”

Objectives of International Co-operative Alliance

1) To represent all cooperative societies following the principles of cooperative societies. (International level)

2) Promotion and spread of co-operation and propagation of co-operative principles and methods throughout the world.

3) To promote the interest of cooperative movement.

4) To create good and cordial relations in cooperatives affiliated to international cooperatives.

5) To create friendly relations of cooperative organizations at the international level.

6) To create peace and security at international and national level through cooperation.

7) To remove the obstacles in harmonizing the co-operative movement at the international level.

8) Remaining neutral towards political and other institutions.

9) To create a strong and progressive economy with the help of cooperative movement.

International Co-operative Union Committee Review (1937, 1966, 1995)

The International Co-operative Alliance has established committees in 1937, 1966, 1995 to review the principles of co-operation.

a) Committee of International Co-operative Union 1937

In 1937, a committee was set up by the International Co-operative Alliance to review the principles of co-operative movement. This committee had determined the following four principles.
1) Cooperative should have open membership.
2) Co-operative societies/movements should be democratically controlled.
3) Dividend should be paid according to the business / Profit should be distributed.
4) To pay limited interest on capital.

b) Committee on International Co-operative Union 1966

This committee was functioning under the chairmanship of Prof. D. G. Karve. America, England, Russia, Germany were working as representative members.  A committee headed by Prof. Karve studied cooperative organizations and movements in various countries and accordingly this committee determined eight principles of cooperation.
1) Principle of thrift
2) Principle of Service
3) Principle of equality
4) Popularity principle
5) Principle of human service
6) Social property principle
7) Principle of brotherhood
8) Principle of Local Autonomy

c) Committee on International Co-operative Union 1995

Dean of the University of British Columbia, A group under the chairmanship of Dr. Eoin McPherson was formed by the International Co-operative Society. The committee of this group determined (recommended) principles of cooperation after the study considering the co-operative sector and the changing global situation, the onset of globalization.

1) Members should have open or voluntary membership.

2) Community interest should be given priority over individual interest.
3) A member should be able to leave the organization as per his wish.
4) Control over cooperative movement through democratic means.
5) There should be fair distribution of profit.
6) Industry should be included in the cooperative (cooperative basis) and exchange of goods and services should be done on the basis of the market.
7) Members of co-operative societies should take decisions democratically.

Problems in Cooperative Sector

1) The number of inactive co-operative societies / institutions in financial ruin is increasing day by day.

2) The amount of bad debt of cooperative societies is increasing.

3) Vaidyanathan Committee recommendations are not actually implemented 100%.

4) Many co-operative societies in India do not have sufficient financial resources of their own, so they have to take loans from other senior institutions. E.g. With District Central. Banks State Co. Borrow from Bank / NABARD.

5) Unnecessary interference of political persons and government is increasing day by day in cooperative sector.

6) Office bearers of some co-operative societies commit financial malfeasance with the help of officers and employees / by putting political pressure on them.

7) There is a lack of political will to the required extent for the development of cooperatives.

8) Competent management and administration is also partly a problem.

9) Due to loan waiver, the sentiment of the members is not to repay the loan.

10) Due to government policy and changes due to globalization this cooperative movement is also in trouble.

11) Non-Performing Assets (NPAs) of many organizations are seen increasing.

12) Employees working in co-operative societies do not get adequate job/service facilities.

13) Co-operative Societies find it difficult to function as there is no clear policy or policy in government policy. E.g. Regarding loan waiver, different G.R. And the constant change in online information.

Challenges in the Cooperative Sector

1) Many cooperatives have closed down due to the financial situation of the cooperatives.

2) Depositors’ deposits seem to be vulnerable due to large scale financial malpractice in some co-operative societies.

3) The work of encroaching on the basic principle of cooperation is being done by the government system.

4) There is increasing political interference in the co-operative sector.

5) Demonetisation in 2016 has affected co-operative banks and institutions like nationalized banks.

6) Political interference due to government aid continues to increase as productivity in cooperatives declines to some extent.

7) Changes made in the Cooperative Act in 2012 through the 97th Amendment have created some challenges.

8) It is noticed that some organizations do not audit the financial accounts documents within a certain period.

9) It is becoming a necessity to start management of cooperative societies in a professional manner.

10) The challenge has arisen how to keep the amount of NPAs to a minimum.

11) Increasing loan arrears of cooperative societies is a challenge.

12) Dealing with globalization is a challenge.

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