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STRENGTH AND WEAKNESS OF COOPERATIVE SOCIETIES

CHAPTER ONE

1.0     INTRODUCTION

Abia State is one of the states that was created in August 1991 by General I. B. Babangida. The head of state inherited a total number of 3.758 cooperative societies from Imo State. But this figure increased immensely as a result of individual desires and government encouragement together with the benefit from the formation of cooperative societies.

This cooperative society is formed when a group of people with common interest decide to cooperate, rather than in dealing with a common set of supplier. Cooperative is wide spread and very important to both the members, customers entire public and the government as well as those in marketing, production, distribution etc of good and services at a fair price to those that need them.

Despite the energetic efforts towards the development of the system customers have not yet been fully convinced since it has been known that the aim of private traders is to buy cheap and sell at higher price but are theoretically restrained in the price that can change consumers or the users of their goods because government regulates prices for a whole range of commodities regarded as necessities. Infact ministry seems to regard the elimination of private middlemen as desirable. Cooperatives are set up with government encouragement and guidance goods from given localities and take them to a grouping centre to sell to the public, these goods could be vegetables such as potatoes, meats, onions, beans, rice etc. The various types of cooperative societies in Abia State are farmers, multipurpose cooperative society, Golden Guinea Breweries, Multipurpose Cooperative Society Ltd. Umuahia timber Dealers Multipurpose Cooperative Society Ltd.

1.1     BACKGROUND OF THE STUDY

The strength and weakness of cooperative societies can be treated with reference to some of the major tasks of cooperative societies which is to bring to the customers the best quality food and goods at reasonable price. Majority of farmers in Abia State are food crop producers in receptive there is increasing fluctuation in the price and supply of food crops in the state. To determined by the force of demand and supply in the market quality and quantity of these products that enter the market from many producers and indeficit to market their products existed in Nigeria and are designed to produce the living standard of the class during inflation.

1.2     STATEMENT OF PROBLEM

Some members of cooperative societies are experiencing considerable difficulties in the sale of their product like food crop by unscrupulous marketing agents. In Abia State today self-sufficiency in food production is very important to the government in view of the apparent wide special food shortage due to neglect of Agriculture. This in effect has led to food production being carried out by small scale farmers in rural areas mostly for home consumption. Majority of consumers complain that cooperatives operate like a close-shop to the exclusion of non-members. While the cooperators themselves complain of instability for production, storage, distribution and marketing of food crops as a result of which are incurred due to spoilage and loss of quality. Inadequate capital or fund makes it difficult for the cooperative to provide efficient and effective production facilities and equipment many retailers, producers, distributors etc see cooperative as a dumping ground for their products. This research will look into these weakness and more with a view to providing solutions/recommendations to tackle them.

1.3     OBJECTIVE OF THE STUDY

The objective of this study generally is to find out the strength and weakness of cooperative society in Abia State to be specific this study is meant to determine the efficiency of cooperative period and present local firm being sheltered from internal and external completion from/exploiting consumers. Price control are regarded as a mere officious alternative to income redistribution or over all wage. Thus, produce should not be exploited by merchants so in an attempt to maintain stable prices of there products and many producers buyers, consumers etc have succeeded to form cooperative societies in the state. There sole aims are:

1.  To market the products of their members to their advantages. 

2.  Raising of fund from which loan can be granted to members production purpose.

3.  To obtain loan unbehalf of members from financial institutions.

4.  To obtain supply of raw material.

5.  The provision of other service to their members.

However the cooperatives performance in terms of marketing turnover, maintaining fair and stable price for food crops, gross margin, distribution cost, loan situation and other objectives are of the opinion that cooperatives have not been efficient in their activities. This is why it becomes important and necessary to examine the strength and weakness of cooperative societies in Abia State. To suggest way of enhancing their performance.

-  To identify the problems of cooperative in carrying out their operation in the state.

-  To identify the importance of cooperative in the state.

-  To recommend ways and means by, these cooperation to the satisfaction of needs and wants of both their members and potential customers.

1.4     SCOPE OF THE STUDY

Abia State is the focus of this study. It is made up of seventeen local government area. Because of time available for this study, it will not be possible to conduct the survey in all local government areas in the state, as such I will conduct study on three local government areas in Abia State, therefore, the three local government areas in Abia State studies for the purpose of this research are:

1.  Ukwuano Local Government

2.  Aba North Local Government

3.  Arochukwu Local Government

1.5     RESEARCH QUESTIONS

1.     Do you understand and what is meant by cooperative society?

2.     Do you know the functions and activities of cooperative society?

3.     Do cooperative society encounter any problem?

4.    What is the impact of the policies on cooperative societies?

5.     What managerial problems plague cooperative societies?

6.     Do cooperative societies have enough funds to operate. 

1.6     SIGNIFICANCE OF THE STUDY

This research will reveal the need and usefulness of cooperative in Abia State that will provide and confirm on how to improve the operation satisfaction on both member and their customers. The strengths and weakness of cooperative societies in the state cannot be over emphasized since they play a prominent role in the price stabilization of food crops in the state and other services they minimize the excesses of middlemen. Although state government encourages the cooperatives if adequate fund is provided and financial institutions grant them loan easily I believe that cooperative societies will be able to satisfy the needs and wants of people by providing adequate goods and services to the members and the community as a whole but adequate fund need to be provided financial institution as well need to grant them loan easily so as to be able to carry their functions and activities more effectively.

1.7     LIMITATION OF THE STUDY

This research contains some constraints which ought to be high lighted for a proper appreciation of the methodology adopted and conclusion drawn. One of the limitation is that it is explanatory and descriptive in nature (research design) it’s inhibitive out look is that it manifested in terms of depth and more so, not all the research design option were applied. Another limitation is the dearth of materials or publication on marketing and cooperatives by indigenous writers (Nigerians and or Abia State indigenes). Most of the published data of the research work especially on marketing have a foreign touch. The pancity of fund met by the researcher in carrying out the research, more so as the student researchers income sources was narrowly based. The unstable Nigeria economy through the economics policies of federal and state governments resulted in the transport fares. The scarcity of petroleum product equally contributed immensely to this like this increase in transportation fares meant that the researcher drawn more on transportation.

1.8     DEFINITION OF TERMS

Acumen: The ability to understand and judge things.

Agriculture: Science or practice of cultivating the land and keeping or breeding animals for food.

Cooperative society: An association of persons who have voluntarily joined together to achieve a common end through the formation of a democratically controlled business organization, making equitable contributions to the capital required and accepting a fair share of the risks and benefits of the undertaking in which the members actively participate.

Market: The potential buyers of a given product.

Strength: The good qualities of ability that a thing or person has.

Unscrupulous: Not honest of fair without moral principle.

Weakness: A fault or lack of strength or problem.

Wholesale: Selling of goods in a large quantity

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