IMPORTANCE OF STUDYING ECONOMICS OF CO-OPERATION AS A QUALIFYING SUBJECT
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IMPORTANCE OF STUDYING ECONOMICS OF CO-OPERATION AS A QUALIFYING SUBJECT
Chapter 1: Introduction 1.1 Background of the Study.
The complete evolution of a company enterprise in a specific country necessitated different institutional frameworks.
One example of such an institutional framework is the cooperative business venture.
The term “cooperative” might be interpreted differently. In layman’s terms, it means working together or mutually. Another meaning, which is where our emphasis falls, refers to a distinct sort of commercial organisation.
The cooperative has been characterised by various schools of thought, but the difference is in the degree of emphasis on one feature over the other.
One school of thinking defines a co-operative as a commercial venture owned and run by voluntary associations to provide members with labour and salaries or goods and services.
However, the International Co-operative Alliance (ICA) defines a cooperative as “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 enterprise.”
The role of economic cooperation in business is critical to the economy’s growth and development. Cooperatives have justified their crucial role in socioeconomic and political growth, notably in industrialised countries such as England, which is recognised for consumer cooperatives, and Germany, which is known for credit cooperatives. Likewise in underdeveloped countries such as Nigeria.
Cooperative movement is a global phenomenon in which countries have progressed from simple traditional forms (8) of mutual institutions to sophisticated formally organised institutions.
Because of its significant significance, this institution has garnered international recognition. It has contributed to the economic development of a number of countries, notably developed countries.
The economic success of a cooperative always has social consequences. Co-operative management produces a higher yield, which leads to a higher income and, in turn, better housing, health, a higher standard of life, and a better education for members and their families.
The economic success of co-operative societies has proven invaluable in co-operative company enterprises. This can be seen in the field of cooperative credit associations, which are:
1. CTLS: Cooperative Thrift and Loan Societies. (Chukwu, S.C. 1990.)
2. CTCS: Cooperative Thrift and Credit Societies.
1.2 Statement of the Problem
The project effort aims, among other things, to investigate the numerous issues experienced by co-operative and cooperative field workers in the process of establishing and maintaining co-operative commercial operations.
Some of the issues encountered throughout this process include ignorance, or a lack of understanding of the nature and purpose of cooperative business organisations.
Another issue confronting the government and ministerial officials is the process of reaching out to the people at the grassroots in order to establish cooperative economic businesses for their mutual benefit.
Another issue is with business cycles. The difficulties of organising cooperative firms have been exacerbated by fluctuations in business cycles.
Finally, the project activity is to highlight the absence of education among co-operative members. As members of the co-operative, it is their responsibility to operate it and assure its future existence.
(Igwe C.C., 1993).
1.3 PURPOSE OF THE STUDY
The initiative aims to highlight the role and performance of cooperative societies in promoting economic interests and providing appropriate services to its members.
Furthermore, the goal of this research is to shed more insight on the formation of cooperative economic businesses in terms of what inspires distinct individuals. It could be for societal or emotional causes, as well as external pressure.
1.4 Significance of the Study
The significance of this research, economics of co-operative business enterprises, may be seen in special co-operative banks that have been established in various states of the federation to fund co-operative development initiatives.
The federal government established two financial institutions, the Central Bank of Nigeria (C B N) and the Nigeria Agricultural and Co-operative Bank (N A C B), in 1973.
These institutions provide loans and advances to cooperatives on favourable terms. Currently, the Federal Government has established the “FEAP Loan Scheme” to finance small-scale business companies under the cover of a cooperative organisation.
1.5 Scope and Limitations of the Study
The primary goal of this research was to determine the significance of studying economic cooperative business enterprises as a qualifying subject for the award of an O.N.D. in co-operative economics and management.
The study’s focus is confined to evaluating the numerous definitions of co-operative by several schools of thought, as well as how the economics of co-operatives evolved and the various stages of growth the subject has undergone.
Most importantly, the study aimed to reveal the progress made in studying the economics of cooperatives in higher institutions, as well as their importance in the growth of any economy. The limitations of this study are due to a lack of time, insufficient funding, and an inability to get relevant resources.
a) Time constraints: One of the most significant drawbacks of this endeavour is a shortage of time. The researcher had limited time to conduct the research since he was involved in one or more academic activities. This was a significant constraint for this investigation.
b) Inadequate Funding: Conducting research requires a significant amount of capital. Most people who are interested in research cannot afford to fund the study themselves. The government and commercial sectors of the economy do not offer adequate funding to support research. This is an obstacle constraint to the study.
c) Inability to get Relevant Materials: The majority of the data sought by the researcher was not easily available or current. Some critical information materials were classed as data and are rarely made available to researchers.
1.6 Definition of Terms
The majority of the terminology used in this project report may be unfamiliar. It may have a distinct meaning and connotation. The terms are as follows:
1. Agricultural cooperatives are associations that produce, process, market, and distribute agricultural products.
2. Fishery Cooperatives: These are groups of people who catch fish in the deep sea and then sell them to other members at a lower cost.
3. Economic End Result: Services are the principal economic result, whereas surpluses are modest.
4. Dividend: This is the surplus generated by co-operative societies and dispersed annually for share hinders in accordance with business organisation.
5. Political and Religious Mentality: This is regarded as one of the principles of cooperative societies, which prohibits religion or political affairs from interfering with day-to-day activity and the admission of new members.
6. Producer Cooperative Society: A producer’s association. They primarily try to purchase production factors in bulk.
7. Credit & Thrift Co-operatives encourage their members to save by offering loans at extremely low interest rates.
8. Surplus: This is the extra created via cooperative exchanges, but in the case of a firm, it’s called profit.
9. Patronage rebate: This means that members are given money back based on their purchasing power or capacity to contribute to the cooperative’s development.
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