A case study of Sri Lanka which discusses the role of co-operatives in poverty alleviation. The author focuses on one of the most controversial, yet vital components of the Sri Lankan social and economic infrastructure. The study is a critical examination of the extent to which the co-operative system in Sri Lanka has been effectivein the lives of the people it was designed to serve. The study, while examining the effectiveness of the co-operative system in poverty alleviation in a developing country such as Sri Lanka, also attempts to trace its successes and strengths and also its inherent weaknesses.