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CHAPTER ONE

INTRODUCTION

1.1 Background of the Study       

Cooperatives play a significant role in improving the livelihoods of rural communities the world over. Ortmann and King, (2009) observed that cooperatives originated in Europe, before they spread to other industrialized countries during the late 19th century. However, the development of these cooperatives was taken as a measure to counter extreme conditions of poverty. The history of cooperation is directly related with human being, because, human being traditionally cooperate with each other in its day to day life to overcome their immediate problems and also to share their feelings. Representative body for cooperatives, the International Cooperative Alliance (ICA) define cooperative (also known as cooperative, co-op, or coop) 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." 

Right from the inception cooperative society have always been a solution to scarcity, lack or insufficiency. Necessity is a mother of invention such as cooperatives is a solution to alleviation from poverty. To ensure a better and richer tomorrow among the people, cooperative societies are to be supported and patronize at every level both by the rich and the poor in the society for it is a known fact that cooperation originated as a labor movement- as a shield for the weak and vulnerable. A society that places cooperative society at the back may end up to be a haven for poverty.

Family is the basic unit of a society, and this is the most important component of a country. So in a society that has so many low income earners that can’t sustain their daily needs no doubt needs extra income from other places; cooperative society no doubt is one of those channels that can help in solving that shortages that’s providing that extra income or purchasing power.

According to International Labor Organization (ILO), cooperation is defined as an association of persons varying in number, who facing the same economic difficulty and voluntarily associated on the basis of equal rights, obligation and endeavor to solve those economic problem. 

Cooperative organization can be seen as an association of persons usually of limited means who have voluntarily joined together to achieve economic end through the formation of democratically controlled business organization making equitable contribution to the capital required and accepting a fair share of the risks and benefit of the undertaking.

The general objective of cooperative is to promote the economic interest and general welfare of members in accordance with cooperative principles and values. Despite early establishment of cooperatives across the region and country, cooperatives couldn’t flourish as expected. Past attitude (ideology), lack of committed leadership, lack of good governance (management), lack of working capital, attitude and practice of corruption, lack of knowledge and skill, lack in provision and utilization of improved technology, weak vertical and horizontal linkage within and among cooperatives, lack and inappropriate support from government and other stakeholders were strong factors that limited the growth of cooperatives Pitman and Lynn, (2011).

The economic welfare of a nation or business can often be assessed by reviewing the level of employment and the average financial compensation that is received by workers employed within the system. The societies have become a strong, vibrant and viable economic alternative in a period when many people feel helpless, powerless or disenfranchised to change their living conditions.

The United Nation Research in Social Development said that co-operative societies are all organizations legally organized as such, which are subject to organized supervisions which claim to follow co-operative principles. The International Labour Organization (ILO) has provided what is regarded as an internationally accepted definition of co-operative. It is an established fact that many household in the country today, live below the poverty line, in fact, investigation has shown that the highest percentage of Nigeria's workforce work in the public sector earn their monthly salary of below Ten dollar per day Godwin, (2011).

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