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Organisation : Co-operative

How to Form a Co-Operative

The National Co-operative Development Corporation established in 1963 under an Act of Parliament has been promoting and financing a wide range of economic activities in rural areas through cooperatives. The corporation provides assistance to agro processing units like cotton ginning and pressing units, spinning mills, oil mills, solvent extraction plants, edible oil refineries, sugar mills and similar other agro-based cooperatives units.

The National Cooperative Union of India (NCUI) is the oldest of the apex organizations representing entire cooperative movement. It was established in 1929 as All India Cooperative Institutes Association and was re-organised as Indian Co-operative Union through the merger of Indian Provincial Co-operative Banks’ Association with All India Coloperative Institutes Association and later in 1961 as National Cooperative Union of India.

Organizational Structure







The co-operative marketing societies have both two-tier and three-tier structure. In the states of Assam, Bihar, Kerala, Madhya Pradesh, Karnataka, Orissa, Rajasthan and West Bengal, there is a two-tier pattern with primary marketing societies at the taluka level and state marketing federation as an apex body at the state level. In other states, there is three-tier system with district marketing society in the middle. At the national level, NAFED serves as the apex institution.

The pattern of the three-tier structure

Base level

At the base level, there are primary co-operative marketing societies. These societies market the produce of the farmer members in that area. They may be single commodity or multicommodity societies, depending upon the production of the crops in the area. They are located in the primary wholesale market, and their field of operation extends to the area from which the produce comes for sale, which may cover one or two tehsils, panchayat samitis or development blocks.

Central/District Level

At the district level, there are central co-operative marketing unions or federations. Their main job is to market the produce brought for sale by the primary co-operative marketing societies are members of these unions in addition to the individual farmer members. In the two-tier structure, the State societies perform the functions of district level societies by opening branches throughout the district.

State Level

At the state level, there are apex (State) co-operative marketing societies. These state level institutions serve the state as a whole. Their members are both the primary co-operative marketing societies and the central co-operative unions of the state. The basic function of these is to coordinate the activities of the affiliated societies and conduct such activities as inter-state trade, export-import, procurement, distribution of inputs and essential consumer goods, dissemination of market information and rendering expert advice on the marketing of agricultural produce. The cooperative marketing network of the country includes 29 state level marketing federations, 173 district/regional marketing co-operative societies, 2478 general purpose primary marketing societies and 5028 special commodities societies.


There are two types of members of co-operative marketing societies:

  • Ordinary Members

Individual farmers, co-operative farming societies and service societies of the area may become the ordinary members of the co-operative marketing society. They have the right to participate in the deliberations of the society, share in the profits and participate in the decision making process.

  • Nominal Members

Traders with whom the society establishes business dealings are enrolled as nominal members. Nominal members do not have the right to participate in decision making and share in the profits.