India and international year of cooperatives

Tags: Op-ed
India and international year of cooperatives
AFP
MILKING SUCCESS: Indian visitors walk in the grounds of The Amul Dairy Plant in Anand, in Gujarat. Kurien rightly diagnosed that a major ailment of the cooperative sector is the absence of professional management
The United Nations has declared this year as the International Year of Cooperatives. FAO chose for the World Food Day on October 16, the theme “Agricultural Cooperatives — Key to Feeding the World”. According to FAO, cooperatives across all sections provide over 100 million jobs around the world, 20 per cent more than multinational enterprises. In 2005, the Indian Dairy Cooperatives, with 12.3 million members, accounted for 22 per cent of the milk produced in the country.

Sixty per cent of members are landless or have very small plots of land. Women make up 25 per cent of the membership.

Cooperative credit societies are performing a valuable role since they extend credit to farmers at a low interest rate.

They occupy 7.4 per cent of the financial space in the economy according to B Yerram Raju.

Raju also points out in a recent article (Inclusion, July-Sept 2012) that there is an unfortunate fall in the share of cooperatives in the rural credit market from around 62 per cent in 1992-93 to about 34 per cent in 2002-2003. The Constitution (97th Amendment) Act 2011 enacted by Parliament is designed to aid the promotion, ownership, control and management of cooperatives by members and seeks to reduce state control in partnership. It is to be hoped that all state governments will formulate new Cooperative Acts in line with the 97th Amendment before too long. Yerram Raju also points out that while there are as many as 97,410 cooperative banks, of which more than 98 per cent are rural cooperatives, barely 50 per cent of them are active in the rural credit system. The National Commission on Farmers called for the revitalisation of the cooperative credit system and suggested that the rate of interest should be 4 per cent for loans extended to farmers.

Some state governments like Madhya Pradesh are giving loans at interest rates even lower than 4 per cent.

The rejuvenation of the cooperative credit system is essential for achieving the goal of “financial inclusion”. In addition to the financial sector, there is need for cooperatives both at the production and post-harvest phases of farming.

Thanks to the late V Kurien, and the late Tribhuvandas Pa tel, the cooperative sector assumed a dominant role in our dairy industry, particularly in Gujarat. The Gujarat Cooperative Milk Marketing Federation is one of the largest organisations of its kind, handling nearly Rs12,000 crore worth of dairy produce. ‘Amul’ has become a household name. Kurien rightly diagnosed that a major ailment of the cooperative sector is the absence of professional management. He had difficulty in finding competent managers for the new dairies set up under the Operation Flood programme. This led to the organisation of the Institute of Rural Management at Anand. He also set up a Vidya Dairy in the Anand Agricultural University.

This is a unique training school imparting practical experience from milking to marketing.

In our country, with a very large number of small and marginal farmers and with the growing feminisation of agriculture, the cooperative pathway is the most beneficial one for enhancing rural livelihood and nutrition security. The achievements of the dairy sector provide many lessons to policy makers such as the following: First, there is need for an end-to-end approach for ensuring the success of the dairy or other farm enterprises. Convergence in the provision of services relating to breeding, nutrition, healthcare and processing and marketing is an essential requirement for success. Second, a quality literacy movement should be launched to spread knowledge of Codex alimentarius standards of food safety as well as animal hygiene and sanitation. Third, cooperatives should be professionally managed and authority and accountability should go together at all levels. Fourth, human resource development is important both at the farmer and professional levels. Farmer level capacity building can be done in Krish Vigyan Kendras, Vidya Dairies, as well as in the farms of outstanding dairy entrepreneurs (farmer to farmer learning). Fifth, public policies in the fields of import and export of animal feed (concentrates), input and output pricing and investment and infrastructure development should ensure the sustainability and survival of small-scale dairy farming. Finally, the fact that women play a pivotal role in dairy farming should be kept in view, while developing support systems.

Gender specific needs, such as creches for infants and medical help for adults should be met.

Among outstanding examples of the success of cooperatives, mention may be made of the Indian Farmers Fertiliser Cooperative (IFFCO), which is a unique venture with 39,824 cooperative societies as members. The Krishak Bharati Cooperatives (KRIBHCO) has become the world's premiere fertiliser producing cooperative.

NCF has suggested that even where cooperative societies do not function well, cooperation can be promoted among farming families in a village based on shared goals and enlightened self-interest. The self help group model which is now helping women to get the power of scale in small scale enterprises could also be adopted in farming. Farmers can form eco-societies, which will ensure that environmentally benign technologies like integrated pest management, integrated nutrient supply and scientific water management are adopted. Contract farming is another pathway for providing the advantages of group cooperation in production and marketing.

Section 25 companies can also be promoted where farmers are engaged in enterprises such as hybrid seed production and the manufacture of the biological software essential for sustainable agriculture.

We have nearly 25 per cent of the world's farmer population and poverty and malnutrition are widely prevalent among marginal, small farm and landless labour families. Farm size is diminishing and prime farmland is being sold for nonfarm purposes. A socially viable method of getting small scale producers together, either in the form of cooperatives or selfhelp groups is urgently needed to maintain young farmers' interest in farming. If farm economics or ecology go wrong, nothing else will go right in agriculture.

(M S Swaminathan is an agricultural scientist who led India's green revolution )

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