Cooperative domestic production relationships – the basis for agricultural cooperative viability

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Ivane Javakhishvili Tbilisi State University Press
The paper deals with the rules of domestic production relations of agricultural cooperative, its relevance, which gives the possibility of formulating the argumentative position – in the current period, which organizational-legal form in Georgia is closer to the socio-economic mission of the state in the agricultural sector and, therefore, which of them should be given priority in terms of state support. This attitude should be properly reflected in the regulation and support of the cooperative process, since the necessity of producing competitive products in the conditions of modern market economy is the continuity of primary production, processing, storage, shipping and realization processes, along with the technical-technological and organizational-management unity, which in the conditions of the Georgian rural population’s small lands and less material possibilities, the most efficient cooperative conditions are available. Many successful examples of cooperation show that the quality of cooperative labor returns is much higher compared to individual labor and the economic basis for that is the internal production relations characteristic of cooperative. Components of internal production relations of agricultural cooperatives such as democratic management, economic participation, mandatory and additional share payments, associate member, restrictions imposed for non-member persons and others, practically represent the economic mechanisms for the implementation of successful business activities and without their in-depth understanding, they will not be able to maintain their organizational and legal form of the cooperative traits, which essentially differentiate them from other types of business forms, and represents the basis for the viability of this type of enterprises. The paper deals with the experience of legal regulation of the process of cooperation in different countries at the legislative level, which is important for the proper understanding of the process. Many successful examples of these countries provide sufficient material for their practical generalization, based on systematic analysis, as successful economies considered the promotion of functioning organizations on the cooperative basis as the priority direction of development and, therefore, the process based on the origins of solidarity and mutual assistance, in many cases the state played an organizing role. A new, different view of organizational arrangement of rural and agricultural sectors is particularly noteworthy, which is the basis for successful implementation of the agricultural cooperative process: the main goal of the process ongoing in country’s agricultural cooperation is an inclusive socio-economic development of rural population and consequently elimination of poverty in rural areas, stopping migration processes, establishing real prospects for entrepreneurial and social development in the area and the development of agriculture sector is one of the main mechanisms for achieving this goal.
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Agricultural Cooperative; Democratic Management; Economic Participatio;, Pay; Share Deposits; Reserve Fund; Share Fund; Associate Member
Economics and Business, №1, 2019, pp. 70-83