The Impact of Co-Operative Organization in the Economic Development of Enugu State

THE IMPACT OF CO-OPERATIVE ORGANIZATION (MULTI PURPOSE) IN THE ECONOMIC DEVELOPMENT OF ENUGU STATE. (A CASE STUDY OF ENUGU METROPOLIS)

Co-operative organization has become a house-hold name in Nigeria because people get essential commodities and their products easily without being cheated through the services of co-operative organization. According to Agubike, Co-operative is a voluntary association of persons for the satisfaction of their economic needs.

Co-operative organization has existed even in the ancient world. The ancient people had joint action and mutual aid they had their own customary arrangement for security assistance from neighbors. Their assistance include joint savings and lending, joint possession of crops and animals and joint management.

They developed so many methods of mutual assistance to each other, which was of their custom, and tradition and this is by the authority of the elders.

According to Enyeribe O. co-operative organization movement can be regarded as an invention of necessity, originating from the industrial revolution in eighteen and nineteenth century in England.

Co-operative organization was a defense adopted by the suffering working class to elevate them from their pitiable conditions.

The working class suffered the following in the hands of the merchants, hardship poor living standard, long hours of work and other evils. They were also exploited in other many ways in the late eighteenth and nineteenth centuries.

The plight of these working class were horrible. Though, Robert, a wealthy factory owner was among the humanitarians who felt concern about the workers condition. He treats his own workers with human tenderness and kindness he was one of the critics of capitalism.

In August 1844, a group of 28 workers launched the first ever successful co-operative organization in a small village of Rochel near Manchester Equitable pioneers and that was a consumer type of co-operative.

In Nigeria, the foundation of co-operative organization led by the enactment of co-operative organization in 1935. Despite the fact that people have been practicing one co-operative or the other, but it was not official. The enactment of the law, followed by the submission of the Strickland report of 17^th April 1934. The following was pointed out by the report:

1. That Nigeria was fit for introducing co-operative organization.
2. The objectives of co-operative
3. The nature of co-operative organization, which is most suitable.

According to Strickland (1934) the aim of forming co-operative organization.  In Nigeria was to improve agricultural crops and methods of improve people’s standard of living, extension of education and economic development.

In Nigeria, co-operative laws was based on the industrial experience.

In 1036, the first registrar of co-operative organization in Nigeria was appointed. He was given the following task;

–        To improve the quantity of cocoa.

–        Re-organization of the cocoa farmer society.

–        Introducing some sound credit system.

–        Fostering of co-operative spirit among members.

In 951, each region in Nigeria registrar became the adviser of the three regions.

2.2     MEANING OF CO-OPERATIVE ORGANIZATION.

According to Okonkwo J.P “Co-operative organization is a voluntary association of free and independent persons; for the betterment of their economic conditions.” In this definition, there are three words with much emphasis, voluntary free and economic.

Membership is voluntary and there is no compulsion of any type. It is primarily an economic organization.

A co-operative organization in not a cultural association rather, it is a philanthropic organization like red cross society. It is not of course a political association.

TYPES OF CO-OPERATIVE ORGANIZATION

1. CONSUMER CO-OPERATIVE ORGANIZATION

Consumer co-operative organization deals mostly on consumer goods. The main function is to ensure that members buy or obtain goods at the nearest cost. They operate primarily to improve the cost of  living of their members.

2. FARMERS CO-OPERATIVE ORGANIZATION

Farmers co-operative organization owns farm plantation. They either produce individually or collectively. Their by-laws provide that they sell the farm out put through the co-operative organization especially, if the farm was financed by the organization.

3. MULTI-PURPOSE CO-OPERATIVE ORGANIZATION

While other farms of co-operative organization tends to specialize but the multi-purpose co-operative society combine different activities such as making consumer goods, credit and loan etc. hence, multi-purpose co-operative organization does not exist on its own. The term multi-purpose by the virtue of  the name multi-purpose co-operative organization, the organization is allowed to understand any form of co-operative organization and its members.

4. THRIFT CREDIT AND LOAN CO-OPERATIVE ORGANIZATION.

The functions of thrift credit and loans co-operative organization is to raise investment. Members pay an agreed sum of money every month into common fund. The fund generated is disbursed interest rate. This type of co-operative is popular amongst traders, artisan, and peasant farmers.

5. PRODUCTION (INDUSTRIAL) CO-OPERATIVE ORGANIZATION.

Production co-operative organization is made up of skilled services such as traders, carpenters, and mechanics panel beater etc.

Each of the above services runs a co-operative organization under the umbrella of the production co-operative organization.

2.3     BASIC PRINCIPLES OF CO-OPERATIVE ORGANIZATION.

According to Enyeribe O. “There are universally accepted rules guiding co-operative organization in the world over this is known as “Co-operative principles. “The co-operative principles have continued to under go changes but originally the principles were as follows:

1. Open and voluntary membership: This entails that every body is free to join the co-operative organization. There is no restrictions for those who want to enter no body can compel you to enter or join co-operative organization it is voluntary.
2. Democratic control: Co-operative organization is democratically ruined. This is because each member is entitle to one vote. It is not like joint stock company where the number of vote depends on the number of shares a member had in co-operative organization, one  is entitle to vote irrespective of the amount of money he contributed.

3. POLITICAL AND RELIGION NEUTRALITY:

People of different religion and political parties can belong to the same co-operative organization. Co-operative organization is neutral as regards  the religions and political belief of the members.

4. DIVISION OF DIVIDENDS IN PROPORTION: To the Amount of patronage. The principle made it clear that members who made more purchases from the co-operative consumer ship will receive a higher dividend than others no matter the number of share you have.

5. LIMITED INTEREST ON CAPITAL: The amount paid as interest to share holders limited. This is to prevent too much emphasis on capital.

6. AT MARKET PRICE: Though co-operative organization attempt to sell their goods at moderate price, but they sell at market price because they think selling below market price will send negative meaning that their goods are of inferior types.

7. CASH SALES ONLY: Giving of credit is prohibited during Rochadale days, they were giving credit. Hence, so many people refused to pay. This reduced the fund of the co-operative org.

8. EDUCATION MEMBERS:

The Rochadale equitable pioneers paid so much attention to the education of their members which was included in their guiding principles. Some members were voted for the education of members and employers at all levels.

The above principles were under circumstance quite different from what we have today. Hence, the following principles are now being discarded and do not apply universally. According to Unobi C.C

1. CASH SALES ONLY:
2. SALES AT MARKET PRICE.
3. DIVIDEND IN INTEREST SHARE
4. LIMITED IN INTEREST SHARE.

After the international co-operative constant examinations the following principles continue to stand the test of time:

1. Open and voluntary membership
2. Democratic control
3. Political and religion Neutrality

2.4     STRUCTURE OF CO-OPERATIVE ORGANIZATION

According to Ahukannah L.I, “The Federal structure of the co-operative movement can be represented as in below. They are made up of the following:

–        The state co-operative produce marketing Association.

–        The state co-operative financial Association

–        The co-operative bank (Government Approved).

The international co-operative alliance made up of individual countries.

The co-operative federation of Nigeria made up of representatives of the union in individual states.

The co-operative union of the state also known as the state co-operative federation made up of representative from the apex.

The apex of the co-operative movement in the state

The secondary societies made up of individual primary societies.

The primary societies made up of individual persons.

 2.5     THE ROLE OF GOVERNMENT IN CO-OPERATIVE DEVELOPMENT.

According to Ifeanyi I. “Government has played a lot of positive role to enhance the performance of co-operative organization. Each government in power has to introduce one programme or the other that5 will enhance co-operative organization and will also give them the positive effect.

Presently, the government has introduced family economic advancement programme. This body gives loans to co-operative organization when the co-operative in formed based on “Agricultural and processing” Roles of government which encouraged the development of co-operative organization are:

1. LEGISLATION

The first of it was passed 1935, from 1951, the country grew into regions, prompting regional and 1956, each have North enacted their. A federal co-operative law was enacted in 1993 by the military.

2. 2. TECHNICAL ASSISTANCE:

Since co-operative organization involves peoples of different race and ideology government renders to them technical assistance in the area of providing them with finance (accounting and auditing) Engineers etc. This will enable them carryout their work successfully.

3. EDUCATION DEVELOPMENT:

One of the principles of co-operative organization is the development in the area of education amongst members. Government assists the org. in training their officials. Also government has introduced co-operative economics as a course run in most polytechnics, colleges, of education and universities.

For instance, in IMT we have co-operative economics department and it is also being run at ESUTH, most time the government provide fund for the training of co-operative staff outside the country.

4. ADMINISTRATION AND SUPERVISION:

Government provide administrative assistance to the co-operative societies through the appointment of the registrars and other officials, who see to the day to day administration of the organization and government check the quality and quantity of what to be produced. This motivates them to produce in  a high standard. All these are necessary in order to ensure that co-operative societies are run in accordance with the healthy co-operative laws and regulation.  Co-operative organization development and improve the standard of living of the people Enugu.

2.6     AGRICULTURAL AND RURAL DEVELOPMENT:

Most of the problems facing agricultural development in Nigeria especially Enugu Metropolis include lack of agricultural credit, lack of good road network etc. The rural farmers are low-income earners and there fore can not afford those necessary amenities. Though they suffer little or no attention from the government in the area of agricultural development. This negligence necessitates the employment of co-operative organization in order to better their lots, more especially in the area of agriculture in Enugu and Nigeria in general.

When co-operative organizations come together, they collectively cultivate large area of land by mechanization. In turn, they improve and increase out put and help in agricultural development.

1. Another necessity of agricultural development is road network; since the agricultural produce need to be distributed to the town where there is high want for them, the transportation become a necessity. Though, bad roads have been one of the factors militating against the agricultural development in the rural areas. In other to the agricultural objectives, co-operative orgs. Engages in the construction of roads. This could be achieved by the way of attracting government attention or by government subventions to the co-operative.

2. TRANSFER F AGRICULTURAL INNOVATION:

Technological innovation has been a problems to the agricultural development in Enugu and Nigeria in general. A lot of effort has been made to achieve the distribution of improved crops, fertilizers, insecticides, herbicides etc. But the rate at which it is adopted is very lows more especially to the peasant farmers who are constrained by lack of knowledge of application etc.  Co-operative  organization has done a lot in achieving  this by impacting the knowledge to its members at a reduced cost. When this new innovations like new seeds, chemicals, insecticides etc are introduced they do test it in a group farm and their members copy and use them in their various farms. Co-operative organization do reduce the cost of technical innovation in agriculture.

3. MOBILIZATION OF SAVING:

In the developing countries saving is relatively low. In case of Enugu state in particular as a result of low income level of the people, there are little or no financial institution to mobilize people to save.

Co-operative organization plays an important role in the mobilization of saving. The credit and thrift types of co-operative organization have it as the main function the collection of member saving for production. Social and economic ventures have a great impact in the economics development in Enugu. Co-operative organization contribute regularly to the development in the rural and urban areas. The spirit of saving which the financial institutions should encourage is being done by the co-operative organization.

4. EMPLOYMENT GENERATION:

In the developing countries, unemployment has been a usual problem confronting them even in some advance countries too. Government of these countries strive to create employment opportunity and also encourage other agencies to do so. The co-operative organization is among  other agencies through which employment opportunity can be created. For instance co-operative is formed to observed a lot of people in the society especially the unemployed. Take for example the farmers c-operative organization, this organization owns a farm plantation and engage in production processing and marketing. These activities involves a lot of work force and as such reduce unemployment and improve the economic development of Enugu un particular.

5. PROVISION OF EDUCATION SERVICES:

One of the principles of co-operative organization is to provide education for their members. For the proper management of the co-operative organization, members are sent on course to acquire the knowledge for the management of the organization. The co-operative organization has to finance the seminar working that may be organized for its members.

6. CONTROL OF INFLATION:

When the aggregate supply is cost than the aggregate demands, we can say that there is inflation. One of the ways to control inflation is by the way of adequate supply and improved distribution net work which can cause the availability of the commodities and relatively reduction  in the price. Hence, co-operative organization help in large scale production processing distribution and marketing of farm produce. The supply of such products in a substantial quantity and the relative reduction of the cost therefore helps in the control of inflation.

2.7     ACHIEVEMENT OF CO-OPERATIVE ORGANIZATION:

According to Unobi G.C “The achievement of co-operative organization in Nigeria cannot be overemphasized, this is because the principle and the practice of co-operative which have been able to make some remarkable achievement.  The following are the achievements of co-operative organization.

Firstly, the improvement of members economic interest, satisfaction of need profitably at a near cost.

Peasant farmers prior to the introduction of co-operative organization suffered out of ignorance: Poor storage facilities and poor price arising from lack of good bargaining power. These days, farmers have learnt to organize themselves into co-operative in order to get better prices for their products. Also the quantity of their products have improved due to the improved and mechanized assistance from co-operative organizations.

Also the agricultural produce marketing union concentrates on collective marketing of export crops such as Kola nuts, cotton etc.

Members of the union do work collectively to ensure better price for their product. Their activities resulted to the increase of farm  income which in turn lead to increase farm investment.

The continues education of members which exists in the co-operative organization helps in enlightening members on issues like principles to apply for the success of their relevant business. Hence, members are able to known the role of co-operative in the alleviation of their economics needs.

Co-operative organization has helped to a lot of peasant farmers in attaining the commercial level of farming making them to produce enough for the family and at the same time have surplus to sell. This has in great extent improved their standard of living.

Farmers can also obtain loan from co-operative organization. Several seminar workshops are being organized by the co-operative organization in the rural areas for building leaders in the state.

Another achievement of the co-operative is “Linking people and the government”. Because of the active role of the co-operative and their deep participation in the economic needs of the people, the government attach stringent recognition to co-operative organization they convey government policy to the people.

Co-operative organization encourages productivity reduces wastage and  ensures a greater financial benefits to members consequently, it better the life of the people in so many ways, which an individual can not achieve unilaterally.

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