COMPETITION OR COOPERATION?

A reflection on the continuing relevance of Mahatma Gandhi’s principle of cooperation on his 156th birth anniversary – and on the role of cooperatives in transforming lives.

Competition versus Cooperation

Competition seems to have become the guiding principle of our age. We see it everywhere – among individuals, communities, organizations, businesses, nations and, not least, political parties. Experts urge us to develop a “competitive edge” or “competitive advantage” to outsmart others and succeed. But has competition completely eclipsed cooperation, or does the latter still have a place in our lives? Have cooperatives, which embody the spirit of cooperation, failed to live up to their promise?

Why Cooperation Matters

We humans are part of nature, where cooperation is fundamental. Atoms form molecules; cells form tissues. Plants and animals depend on one another. Air, water and sunlight together enable photosynthesis. Mountains, lakes, rivers and soil sustain vibrant ecosystems. Even geographical formations emerge from multiple forces acting in concert.

Human progress, too, is built on cooperation. Village communities once shared meals and labour. Scientific breakthroughs – from the Human Genome Project and space exploration to artificial intelligence– are products of collaboration among scientists, universities, institutions and nations. Artists and writers across the world have lamented human isolation and celebrated our shared humanity. Can we afford to ignore the power of cooperation and let competition alone shape modern life?

Gandhi and the Ideal of Cooperation

Mahatma Gandhi placed cooperation at the heart of his struggle, both in South Africa and India. He mobilized masses through collective effort. In Young India, he wrote:

“Inter-dependence is and ought to be as much the ideal of man as self-sufficiency. Man is a social being. Without inter-relation with society, he cannot realize his oneness with the universe or suppress his egotism.”

Gandhi recognized that India lived in her villages, and that the social and economic upliftment of the masses was possible only through mutual cooperation. For him, cooperation among individuals and communities was essential not only for material progress, but also for spiritual growth.

The Cooperative Model – A “Third Way”

The 20th century was dominated by two economic systems: capitalism and communism. Capitalism celebrates individualism, self-interest, free markets and competition; Communism emphasizes collectivism, public enterprise and government control.

Gandhi’s cooperative model offers a “third way.” Moving beyond the “one for oneself” ethos of capitalism and the “one for all” ideal of communism, cooperatives embody “one for all and all for one.” Far from being outdated, cooperation is evermore essential today for sustainable and inclusive development.

The Age of Cooperatives

Those born soon after Independence remember the strong spirit of cooperation Gandhi had championed. In the post-Independence era, cooperatives became integral to the Five-Year Plans. Most state governments set up Departments of Cooperation to promote them.

As a student, I saw cooperatives at work in many fields – agriculture, industry, education, housing and beyond. Our college had a student cooperative selling textbooks and stationery at reduced prices. Kerala even established the first writers’ cooperative to help authors publish their books when funds were scarce.

Cooperatives in India

Cooperation, as we know it today, did not begin in India after Independence. Like societies everywhere, Indian communities have always been rooted in mutual support. As early as 1904, the Cooperative Credit Societies Act was enacted by the British to address rural indebtedness; the 1912 Cooperative Societies Act broadened the scope to non-credit activities.

According to The Hindu newspaper, India today houses 8.14 lakh cooperatives with a membership of 29 crore (290 million), the largest in the world. Twenty percent are engaged in banking; the remaining 80 percent operate in fields as diverse as fisheries, dairy, poultry, floriculture, housing, warehousing, agro-processing, fertilizers, logistics, construction and marketing. About 15 percent of total short-term credit is disbursed to 13 crore farmer-members through 1 lakh Primary Agricultural Credit Societies (PACS). Cooperatives handle 30 percent of India’s sugar production, 35 percent of fertilizer distribution, 20 percent of paddy procurement and 13 percent of wheat procurement. Their share in total direct employment is estimated at 13.3 percent.

Through collective effort, cooperatives have built large enterprises like Amul (Anand Milk Union Ltd) of the Gujarat Cooperative Milk Marketing Federation; fertilizer giants Indian Farmers Fertiliser Cooperative (IFFCO) and Krishak Bharati Cooperative (Kribhco); and marketing major National Agricultural Cooperative Marketing Federation of India (NAFED).

The Taste of India

Among India’s cooperatives, Amul stands out. Founded in 1946 by Tribhuvandas Kishibhai Patel, it is owned by the Gujarat Cooperative Milk Marketing Federation, representing 3.6 million milk producers. I was fortunate to visit the Amul complex in Kheda district in Gujarat a few years ago.

Verghese Kurien, who joined Amul in 1949 and later became its chairman, played a key role in India’s “White Revolution,” making the country the world’s largest producer of milk and milk products. Another example is Dhara cooking oil, an initiative of the National Dairy Development Board, itself a cooperative. I still regularly buy both products.

Cooperatives and micro, small and medium enterprises (MSMEs) have enormous potential for inclusive and sustainable development. Working with small member groups and entrepreneurs, they promote self-reliance, generate employment and ensure bottom-up development by engaging communities in growth processes.

The Failure of Many Cooperatives

The 1991 economic reforms shifted focus to market-driven growth. Moreover, many cooperatives struggled under politicization and inefficiency. While brands like Amul flourished, others that began with zeal later failed. Key reasons included political interference, bureaucratic control, corruption, poor professional management, limited market access, technological backwardness, siloed functioning, poor member participation and weak democratic decision-making – all leading to an erosion of public trust.

The sugar cooperatives of Maharashtra came under the monopoly of powerful politicians; giant cooperative institutions in Bihar, formed with noble intentions, became ghost entities. In northern Kerala, co-operatives were allegedly controlled by a prominent political party.

Efforts at Revival

I personally witnessed efforts to revive cooperatives at the grassroots in the late 1990s. As head of an EEC (now EU) supported project in Bihar, I helped manage 1,500 Primary Agricultural Cooperatives (PACs) with financial assistance, elections, training and practical incentives. Each PAC prepared its own business plan; members received training; and field staff were given motorcycles instead of costly jeeps to navigate difficult terrain. Gradually, the PACs began to prosper.

During a visit to one such cooperative Nalanda district, Bihar I saw first-hand how, with the right support, cooperatives could outperform other business models. Although set up to support farmers, the PAC provided everything villagers needed – from pens and notebooks to rice, fertilizers, pesticides and farm equipment. Unlike the banks they provide an informal atmosphere and free access. Farmers queued for loans for onion cultivation, freeing themselves from private moneylenders. They could mortgage surplus produce, earn a share of the profits, and, buy goods at prices lower than the market. Because they owned the PAC, they had a stake in its success.

At that time, the cooperative’s share capital exceeded ₹1 crore (about US$120,000). With leadership, motivation, ownership, financial discipline and skill-building, cooperatives can thrive. Gandhi’s words rang true: “Without character there is no co-operation.” In these successes I saw the values of self-help, self-responsibility, democracy, equality, equity and solidarity he had championed. The African proverb says it well: “If you want to go fast, go alone. If you want to go far, go together.”

Self-Supporting Cooperatives The idea of enacting legislation on self-supporting cooperatives – free of government and bureaucratic control – was proposed by the late Dr. Kurien. Key provisions included deemed registration if approval was delayed beyond 15 days, and self-financing requirements. Such societies would be on par with any business enterprise, but managed by their own members. Cooperatives, in this vision, would fulfil the dream of every village being self-sufficient with a school, a public health facility and a bank.

A New Beginning

The 97th Constitutional Amendment Act, 2011 gave constitutional status to cooperatives in India. In 2021 the Central Government announced the formation of a separate Ministry of Cooperation to strengthen the movement. Digitalization of cooperative banks, reform of PACS and updates to multi-state co-op laws are underway.

With a focus on skill upgradation, livelihoods, financial support and market access, the PM Vishwakarma scheme aims to support traditional artisans and craftspeople across India.

I am indeed happy to see that cooperatives in India have now gone beyond their traditional boundaries to become mediums for innovation and self-reliance in areas such as digital services, energy and finance. Along with SHGs—Self Help Groups- of women they can transform life at the bottom level.

Challenges Ahead

Despite their successes, cooperatives and SHGs face several challenges like limited access to capital and financial resources; lack of technical and managerial skills; poor infrastructure and logistical bottlenecks; market competition and pricing pressures and regulatory and policy constraints. Addressing these bottlenecks is essential for the movement to achieve its full potential.

A Timely Reminder – International Year of Cooperatives 2025

On 19 June 2024, the UN General Assembly declared 2025 the International Year of Cooperatives under the theme “Cooperatives Build a Better World.” This recognition reaffirms Gandhi’s belief that “individual liberty and inter-dependence are both essential for life in society.” It offers hope to a highly individualistic, fragmented and polarised world through mutual cooperation; people at the grassroots can come together and decide for themselves how they should live.

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