Tapping Economies of Scale and Scope in Consumer Cooperation – A Case Analysis of Possible Cooperation among Selected Cooperatives

Abstract

Because of its narrow and negative perspective of safeguarding the interests of only poor consumers against unethical practices of the private traders, consumer cooperation in India seems to have failed, except probably in some isolated pockets. A number of social welfare functions like poverty alleviation and public distribution of essential items of consumption have been imposed on them at the cost of their basic economics. With the basic micro and macro-economic rationale for consumer cooperatives as a positive form of economic organization being lost sight of, they seem to be facing enormous problems both historically as well as currently in an era of economic liberalization. Their worries seem to have been compounded with the threat of impending competition from large private enterprises – both domestic and foreign, which highlights the need for evolving strategies to rectify their systemic weaknesses and tackling the competition head on. This case has attempted to document just such an initiative through a round table conference with several doyens of the consumer cooperative movement in India such as Warana Bazar and Amalsad Mandali as well as some fledgling consumer cooperatives from West Bengal which are already in existence for some time or contemplating entry into this field. The roundtable conference organized in the spirit of ‘Cooperation among Cooperatives’ attempted to evolve strategies to capture economies of scale and scope in order to take on the competition, as well as to facilitate dissemination of ideas and information across the country.