29 May 2023 – The Indian Express

Let There Be Amul

Context:

• Concern should be expressed about recent objections to Amul’s growth into Karnataka and Tamil Nadu because it is ideal for the cooperative movement to spread throughout the nation.

About:

• In India, there is a distinctive social movement known as “cooperatives” that involves people participating in democracy at the local level.
• A cooperative society is a business that is owned, managed, and used by the people who pay for its products and services.
• Here, the individuals or group members collaborate to pool resources for their overall advantage and advancement.
• The Multi-State Cooperative Societies Act of 2002 and the Cooperative Societies Act of 1912 both govern cooperatives.
• History: Farmers in western Maharashtra revolted against the tyranny of money lenders over agricultural loans in the late 1890s, which led to the formation of cooperative organisations in India. In order to protect the interests of underprivileged farmers in Maharashtra, the British government in India enforced the Cooperative Society Act in 1904.

Spread:

• These cooperative societies in India started out in the agricultural markets and eventually grew into the credit sector, housing and development, fishing markets, banking, etc.

India’s Cooperative Sector:

• The largest cooperative movement in the world, the Indian cooperative movement, is present in over 98% of rural India and has more than 8.50 lakh societies with 290 million members.
• because of prosperous cooperatives like AMUL, KAVIN, and others. India now produces more milk than any other nation in the globe (22.0%) and accounts for 57% of all milk produced in Asia.
• In the top 300 cooperatives list based on the ratio of turnover to GDP per capita and in the agriculture and food industries segment, IFFCO and GCMMFL are ranked first through third globally.
• In India, there are around 8,55,00 cooperative societies, and 13 crore individuals are directly connected to them.
• In 91% of the villages around the nation, cooperative societies exist.
• Cooperatives are crucial in creating facilities for the 86% of small farmers in the nation who are unable to invest in farming themselves, such as cold storage.
• In the nation, there are roughly 6000 Farmer Producer Organisations (FPO).
• In the nation, there are 65,000 Primary Agricultural Credit Societies (PACS).

Indian cooperative success stories:

• Agriculture and Allied Sectors: Sittilingi Organic Farmers Association (SOFA), Co-operative Rural Development Trust (CORDET), National Cooperative Development Corporation (NCDC), National Agricultural Cooperative Marketing Federation of India (NAFED), Indian Farmers Fertilisers Cooperative Limited (IFFCO), AMUL, KAVIN.
• Banking Sector: Bharat Cooperative Bank, Saraswat Cooperative Bank, and Punjab and Maharashtra Cooperative (PMC) Bank.

Problems encountered:

• The limiting issues include inadequate infrastructure, poor management, excessive reliance on the government, dormant membership, failure to perform elections, a lack of professionalism, etc.
• The distribution and use of power at the Board level is a cause for worry, despite the fact that cooperatives are democratic corporate organisations.
• In general, the chairman of the board’s main responsibility is to preside over meetings, assist in developing rational business suggestions, and help the group reach informed judgements.
• Promotional organisations like the National Co-operative Union of India and state cooperative unions/federations must take a larger initiative to develop member education activities in order to raise awareness among cooperative members and the general public. outdoor studies have demonstrated that outdoor initiatives and educational instructors are becoming less successful because of:
• their absence of programming
• absence of funds;
• insufficient availability of support materials; and
• lack of programmes for trainer education.
• Mismanagement and Manipulation: If some secure procedures are not used to administer such cooperatives, a very large membership ends up being mismanaged.
• Money became such a potent instrument in elections for governing bodies that the richest farmers typically held the top positions of chairman and vice-chairman and used the organisation to further their own interests.
• Lack of Knowledge: People are not adequately informed on the Movement’s goals or the policies governing cooperative institutions.
• According to studies, between 90 and 92 percent of PACS members in Uttar Pradesh had never seen a copy of the bylaws governing their own cooperatives.
• Restricted Coverage: The majority of these societies have only a small number of members, and they only operate in one or two communities.
• The Co-operative Movement has struggled due to a lack of adequately qualified staff.

Steps the Government Has Taken:

• The goal of the new proposed National Cooperative Policy 2023 is to strengthen cooperatives as a genuine people-based movement that reaches all levels of society and to create a cooperative-based economic model with a special emphasis on “Make in India.”
• The Ministry of Cooperation 2021 was founded to support the growth of Multi-State Cooperatives (MSCS), to improve the ‘Ease of Doing Business’ for cooperatives, and to enhance cooperatives at the grassroots level.
• With relation to the cooperatives operating in India, a new Part IXB was added by the Constitution (97th Amendment) Act, 2011.
• Article 19(1)(c) of Part III of the Constitution was amended by the addition of the phrase “cooperatives” following the words “unions and associations”.
• By elevating it to the level of a fundamental right of citizens, this permits all citizens to establish cooperatives.
• In the Directive Principles of State Policy (Part IV), a new Article 43B titled “Promotion of Cooperative Societies” has been added.
• ‘Cooperative Societies’ is a State subject included as Item 32 of List-II (State List) in the Constitution’s Seventh Schedule.
• National Cooperative Policy of 2002: It strives to provide cooperatives with all-around development and the required support, encouragement, and help in order to ensure that cooperative societies are an autonomous, self-sufficient, and democratically controlled society.
• National Cooperative Development Corporation (NCDC) was founded in 1962.
• Under the Societies Registration Act of 1860, the National Council for Cooperative Training (NCCT) is registered as an autonomous society.
• The Multistate Cooperative Societies (MSCS) Act of 2002 has been amended.
• Primary Agricultural Credit Societies (PACS) computerization.
• streamlining the cooperative sector’s training and education requirements.
• coordination and convergence of multiple ministries’/departments’ plans and cooperatives’ concerns.
• Urban cooperative banks that are not on the schedule, state cooperative banks, and district central cooperative banks have been informed that they are now eligible to join the scheme as member credit institutions by the Credit Guarantee Fund Trust (CGTMSE). This will extend the CGTMSE scheme’s reach into the cooperative sector and aid in supplying cooperatives with sufficient, affordable, and timely finance to support cooperative-based economic growth models.

Commissions formed:

• The Rural Credit Survey Committee advocated for governmental involvement in cooperatives at all levels in 1954.
• The S.T. Raja Committee was chosen by the Indian government to make recommendations for changes to the Cooperative Law.

Steps to Take:

• First, the Cooperative Society Registrar’s authority needs to be reduced.
• The RCS has evolved into a tool of control and inspection in practically all States, imposing uniform by-laws and amending them when particular societies deviate from them.
• Transferring tasks from the RCS to cooperative federations, like in Singapore, is necessary.
• Second, the distinction between rural and urban areas in cooperative regulation is illusory and out of date.
• When regulation is based on the cooperative nature of organisations, such disparities are irrelevant.
• Third, the National Bank for Agriculture and Rural Development (NABARD) for rural banks and the Reserve Bank of India (RBI) for urban banks should transfer regulation and oversight of cooperative banks to a new agency.
• Fourth, there are important takeaways from the Netherlands, where divided markets have helped cooperative banks succeed.
• Adopting a multi-agency strategy in India has had an impact on the effectiveness of both commercial and cooperative banks, particularly following bank nationalisation.
• Linkages between the commercial bank and cooperative sectors at different levels could instead offer stronger synergy.

Conclusion:

• A well-run and thriving cooperative sector holds great promise for stimulating the economy, reducing poverty, and uplifting the underprivileged, particularly small and marginal farmers. It will assist in accomplishing the goals of sustainable development and doubling farm income. In the end, it will help India grow to a $5 trillion economy by 2024.