ABSTRACT
Healthy cooperatives will flourish in a society which invests in people and which encourages a great diversity of economic enterprises. Cooperatives tend to flourish where middle peasants flourish: that is, where there is relatively less inequality in land distribution, combined with a broad sense of identity and political power unifying smaller and larger producers. Commercialization tends to enhance the skills and resources of middle peasants, making them more innovative and effective as cooperative organizers. Members contribute raw materials to sugar and dairy cooperatives in western India. State management of rural cooperatives is unjust, because it imposes arbitrary and authoritarian controls on the farmers, denying them opportunities to manage their own affairs and solve their own problems. In particular, if a cooperative requires heavy investment in capital equipment, large producers become concerned with capacity utilization, since high utilization is the only way to make a heavy investment in capital equipment pay off.
