one of the most remarkable people i have met this year is shashi rajagopalan. a member of the Nabard and RBI boards, she has worked with credit cooperatives and farmers’ agri-processing units through much of her life. in this chat, she talks about why cooperatives are needed, and how to revive them. (this follows the interview with the RBI’s Dr KC Chakrabarty where he spoke about the need to revive co-ops)
all other businesses in the system are capital controlled, capital sensitive and capital rewarding. they are formed on the basis that the person who puts in the capital is a risk-taker and must be rewarded. in cooperatives, you say, there is another way of conducting business where, those who have common needs come together and fulfill those needs through a joint enterprise. in these businesses, while the members put in capital, capital itself is not rewarded. it is a necessary part of the business but it is not the reason why the business succeeded. the business succeeded because the members came together and serviced themselves through that enterprise.
any returns from the business go to each member in proportion with the business he or she did with that enterprise. also, unlike the other form of business, where you have one share one vote, here you have one person one vote. so the concept of stake is understood differently. cooperatives respect the fact that there are also capital owned businesses. but believe that unless user owned businesses are also given the same space in the marketplace, capital owned businesses will be irresponsible. that is the basic theory. if the market is to behave, there must be enough user-owned institutions in the marketplace using different paradigms and therefore forcing the market to think differently.” (from the original, unedited transcript)