A cooperative is a type of organisation that encompasses different types of individuals or businesses with the same needs or goals. A cooperative society, therefore, is an economic enterprise whose primary purpose is to improve the financial status of its members. In New Zealand, there are different types of cooperative societies, and they differ depending on the end goals of their members. Read on to learn more about these different types of cooperatives.

Types of Cooperative Societies in New Zealand

1. Consumer Cooperatives

These are cooperative societies that are formed by consumers with the aim of obtaining their daily needs at reasonable prices. Therefore, a consumer cooperative society usually purchases goods directly from suppliers such as wholesalers or manufacturers to eliminate the costs of middlemen.

As such, a consumer cooperative works to protect middle- and lower-class members of the society from being exploited by profit-hungry middlemen. The profits made by the cooperative society are usually distributed among its members. The amount that each member gets depends on the number of purchases they made from the society during the year.

2. Producer Cooperatives

Also known as industrial cooperatives, these are voluntary associations of small-scale producers who combine forces in order to improve their productivity and competitiveness. Producer cooperatives can be either:

• Industrial Service Cooperatives

Here, members of the cooperative operate individually but sell their industrial yields to the cooperative. The work of the cooperative is to supply its members with the necessary raw materials and machinery. The society also markets the output generated by its members.

• Manufacturing Cooperatives

Here, the cooperative views its members as its employees and thus even pays them for their work. The work of the cooperative is to provide its members with the required raw materials and equipment to produce their products. The society then takes the finished products, sells them, and then distributes the profits accordingly.

3. Marketing Cooperatives

These are cooperative societies comprising of independent producers looking to sell their products at better prices. The cooperative pools the outputs of the different producers and sells them through a centralised agency. This eliminates the role of middlemen, thus allowing them to make more money. The proceeds are then distributed among the members according to the ratio of their contributions.

Since the cooperative society acts as a central sales agency, the cooperative may, therefore, also perform vital marketing tasks such as processing, grading, packaging, storing, and selling the goods.

4. Cooperative Farming Societies

These are associations that comprise of small-scale farmers who team up to derive the economic benefits of large-scale farming. Farmers with small land-holdings tend to also be economically weak. Thus, in their individual capacities, they are unable to access modern technology, seeds, and fertilisers.

By joining a cooperative farming society, these farmers are able to pool their lands together and do farming collectively. Additionally, the cooperative allows them to obtain access to modern technology, which enables them to increase the overall quality and quantity of their agricultural yields.

5. Housing Cooperatives

These are voluntary associations comprising of low- and middle-income individuals living in urban areas and are looking to have their own homes. There are different types of housing cooperatives. Some associations work by pooling resources to purchase large tracts of land that is then divided into plots and then distributed to the members, who can then construct their own homes.

Other societies help their members get loans from government agencies and financial institutions, while other associations construct houses and then give them to the members.

6. Credit Cooperatives

These are associations formed by low-income individuals. The aim of credit cooperatives is to provide financial assistance to their members in addition to imparting them with financial knowledge. Another role of these societies is to protect low-income individuals from exploitation from money lenders who usually charge exorbitant interests.

Cooperative societies are incredibly beneficial, especially for low-income individuals. They allow them to pool their resources and obtain access to technology, products, and services that would have otherwise been out of their reach. Are you looking to join a cooperative society? Contact us today, and we will be glad to help.