The Role of Cooperative Organizations in Rural Community Development in Nigeria: Prospects and Challenges


The Role of Cooperative Organizations in Rural Community Development in Nigeria: Prospects and Challenges


Cooperative organizations/societies emerged as self help entities to combat economic and social inadequacies (Baarda, 2006). Cooperative organizations serves as an effective community development vehicle by their nature they build economic self reliance and civil society. The benefits of cooperative organizations accrue to the larger society because they create local jobs, re invest locally, emphasis on education and skills raises local management capacity, reduce migration and concentration of capital. People come together in cooperative societies to pool their resources together so as to meet individual needs that could not be resolved by individual limited financial capacity (Birchall, 2004). The aim of cooperative societies is to produce goods and deliver services, and to satisfy the legitimate needs of members and also to promote cooperation, relations, participation and consequently to promote interpersonal connections. Cooperative societies provide services that benefit both
members and the local community. It was also observed that it is an essential tool for
development of less economically developed communities (Ibrahim, 2004).
Naturally, developing sustainable economic cooperation among individuals will be more profitable further than the creation of conflicts. It is only for this strictly pragmatic reason (and not for any other moral reasons as in the case of other social philosophies), that it is justified to found institutions that minimize conflicts and promote cooperation (Fairbairn,1994). eighteen century. Friendly societies emerged among working class group to protect
themselves against life hazards through mutual insurance, numbering over a million by 1834.They were seen as a self help movement, being a response to the insecurities of reliance on wage labour arising with industrial revolution.
In Nigeria the development of cooperative was influenced by government policies.This could be traced back to 1926 when the department of Agriculture started to organize Cocoa farmers around Abeokuta and Ibadan in western Nigeria, to sell their cocoa cooperatively
(Ibrahim, 2001).
A cooperative is an organization in which those who transact with (i.e. patronize) the
organizations also own and formally control the organization, and derive significant benefits from those of transactions over and above any financial returns they derive from their investment in the organization (Ijere,1992).
This definition captures the patronage-based returns aspect that appears to
distinguish Cooperatives from other forms of organization.
According to International cooperative alliance (1995):
Cooperative organization is an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a
jointly-owned and democratically- controlled enterprises.
Another definition provided by Mladentaz (1933) cited by Ibrahim (2001) describes
Cooperatives as:
“Association of persons, small producers or consumers, who have come together
voluntarily to achieve some of common purpose by a reciprocal exchange of services
through a ollective economic enterprise working at their common risk and with resources to which all ontribute’’.Cooperative Principles According Baarda (2006) the cooperative principles are as follows Voluntary and open.

membership: Cooperative societies are voluntary organizations, open to all persons able to
use their services and willing to accept the responsibilities of membership, without gender,social, racial, political or religious discrimination.

Democratic member control: cooperative organizations are democratic organizations controlled by their members, who actively participate in setting their policies and making decisions. Men and women serving as elected representatives are accountable to the membership. In primary cooperative organizations members have equal voting rights (one member one vote) and cooperatives at other levels are organized in a democratic manner.Member economic participation: members contribute equitably to and democratically control the capital of their cooperative. At least part of the capital is usually the common property of the cooperative. They usually receive limited compensation if any, on capital subscribed as condition of membership. Members allocate surpluses for any or all of the following purposes: developing the cooperative, possibly by setting up reserves, part of which at least would be indivisible; benefiting members in proportion to their transactions with the
cooperative; and supporting other activities approved by the membership.

Autonomy and Independence: Cooperative organizations are autonomous self help organizations controlled by their members. If they enter into agreements with other organizations, including governments, or raise capital from external sources, they do so on terms that ensure democratic control by their members and maintain their cooperative autonomy.

Education, Training and Information: cooperative organizations provide education and training for their members, elected representatives, managers and employees so they can contribute effectively to the development of their cooperatives. They inform the general public, particularly young people and opinion leaders about the nature and benefits of cooperation.

Cooperation among cooperatives: cooperatives serve their community most effectively and strengthen the cooperative movement by working together through local, national, regional,and international structures.Concern for the community: while focusing on member needs, cooperatives work for the sustainable development of their communities through policies accepted by their members.

Types of Cooperative Organizations
The following are some of the types of cooperative organization

1. Labour cooperative organization: These organizations are formed by staff of the same organization in order for buying and selling of products at subsidized rates for the members of the organization. It also makes contracts with firms for the provision of services. Example of Usmanu Danfodiyo University Multi-purpose Cooperative society and host of others

2. Processing cooperative organizations: this type of organization is responsible for processing of various products example fish processing, Meat, Poultry and Agricultural products amongst others.
3. Storage Processing Organization: this are formed for the provision of storage
facilities to its members on perishable and non-perishable goods at a subsidized
4. Farming cooperative organizations: these organizations are formed by farmers in orders to help themselves by providing large scale farming tools like tractors,threshers and harvesters etc.
5. Credit Cooperative organization: these are formed for the financial assistance of its members. They provide loans to members at subsidized rates for the purchase of
either seeds, fertilizer, cattle and other farm implements.
6. Producer’s cooperative organizations: they are produced by small producers.
Members produce goods in their houses or at a common place. The raw material,
money and tools are to be provided by members. The produce are sold by the
organizations at a whole sale price (Kareem, R. O., Arigbabu, Y. D., Akintaro, J. A.
& Badmus, M. A., 2012)

The Role of Cooperative Organizations on the Rural Community Development
Tretcher (2001) stated that “Cooperative organizations has helped reduced costs and improve
the quality of Local government services while helping communities maintaining local
autonomy. It also provides both purchasing and marketing functions for their affiliates local
cooperatives. A unique aspect of cooperative organization that affects their local economic

Cooperative organization tend to be locally owned and transfer the benefits of that ownership
to the local community, this potentially generates a greater economic impact than business
that are not locally owned and which distribute the benefits of ownership outside the
community where business is conducted.(Crooks,2004).
A cooperative organization reinforces the fact that they contribute to rural economy.
Cooperative organizations also provide specific results that can be used to educate the public and policy makers less familiar with cooperatives about their impacts throughout the nation (Folsom, 2003).
Employment opportunities are provided by cooperative organizations to the teeming
population of the rural populace which helped greatly towards Socio –Economic
development of both urban and rural areas (Ibrahim, 2001).
community (Macpherson, 1995).


The Role of Cooperative Organizations in Rural Community Development in Nigeria: Prospects and Challenges

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