PRINCIPLES OF COOPERATION

CO-OPERATIVE PRINCIPLES

Rochdale Principles

The General Assembly of the International Co-operative Alliance in 1937 held at Paris formulated the following Co-operative Principles and named them as the Rochdale Principles, of which the first four were termed as essential and the other three as non-essential or directive.

1. Open membership

2. Democratic control

3. Limited interest on capital

4. Distribution of surplus to members in proportion to their transactions.

5. Political and religious neutrality.

6. Cash trading

7. Promotion of education

Reformulated Principles of Co-operation

1. Voluntary and open membership

Membership of a co-operative society should be voluntary and available without artificial restriction of any social, political and religious discrimination to all persons who can make use of its services and are willing to accept the responsibilities of membership.

2. Democratic Control

Co-operative societies are democratic organizations. Their affairs should be administered by persons elected or appointed in a manner agreed by the members and agreeable to them. Members of primary societies should enjoy equally the right of voting (one member one vote) and participation in decisions affecting their societies. In other than primary societies, the administration should be conducted on a democratic basis in a suitable form.

3. Limited interest on share capital

Share capital should only receive a strictly limited rate of interest, if any.

4. Patronage dividend

Surplus or saving, if any, arising out of the operations of a society belong to the members of that society and should be distributed in such a manner as would avoid one member gaining at the expense of others. This may be done

(a) By provision for development of the business of co-operatives.

(b) By provision of common services, or by distributing it among the members in proportion to their transactions with the society.

5. Promotion of education

All co-operative societies should make provision for the education of their members, officers and employees and the general public in the principles and techniques of co-operation, both economic and democratic.

6. Mutuality

All co-operative organizations in order to best serve the interests of their members and their committees should actively co-operate in every practical way with other co-operatives at local, national and international levels.

NEW CO-OPERATIVE PRINCIPLES

Definition

“A Co-operative is an autonomous association of person united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly owned and democratically controlled enterprise.”

Values

Co-operatives are based on the value of the self-responsibility, democracy, equality, equity and solidarity. In the tradition of their founders, Co-operative members believe in the ethical values of honesty, openness, social responsibility and caring for others.

Principles

The Co-operative Principles are guidelines by which Co-operatives put their values into practice.

First Principle: VOLUNTARY AND OPEN MEMBERSHIP

Co-operatives are voluntary organizations, open to all persons able to use their services and willing to accept the responsibilities of membership, without genderm, social, racial, political or religious discrimination.

Second Principle: DEMOCRATIC MEMBER CONTROL

Co-operatives 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 Co-operatives, members have equal voting rights (one member, one vote), and Co-operatives at other levels are also organized in a democratic manner

Third Principle: MEMBER ECONOMIC PARTICIPATION

Members contribute equally to, and democratically control, the capital of their Co-operative. At least part of that capital is usually the common property of the Co-operatives, members usually received limited compensation, if any, on capital subscribed as a condition of membership. Members allocate surpluses for any of the following purposes: developing their Co-operative, possibly by setting up reserves, part of which at least would be indivisible; benefiting members in proportion to their transactions with the Co-operative; and supporting other activities approved by the membership

Fourth Principle: AUTONOMY AND INDEPENDENCE

Co-operatives 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 Co-operative autonomy.

Fifth Principle: EDUCATION, TRAINING AND INFORMATION

Co-operatives provide education and training for their members, elected representatives, managers, and employees, so they can be elected representatives, managers, and employees and can contribute effectively to the development of their Co-operatives. They inform the general public particularly young people and opinion leaders - about the nature and benefits of Co-operation.

Sixth Principle: Cooperation among Co-operatives

Co-operatives serve their members most effectively and strengthen the Co-operative movement by working together through local, national, regional and international structures.

Seventh Principle: CONCERN FOR COMMUNITY

Co-operatives work for sustainable development of their communities through policies approved by their members.