Economy

The Role of Cooperatives in Agriculture Sector

The Centre for Study of Developing Societies (CSDS), which is based in Delhi, conducted a survey in five thousand agrarian households spread across 18 states in India. From the findings of the survey, it became evident that seventy-six per cent of the farmers would in reality, prefer to engage in some other means of earning a livelihood. There is also an observable pull towards the urban areas, as sixty-one per cent of the farmers confirmed that they would like to be employed in urban area owing to better opportunities available there in terms of health, education and occupational avenues. Agriculture has been increasingly becoming lesser and lesser attractive due to repeated losses as a result of unprecedented weather conditions, floods, droughts and pest attacks. The situation was further being compounded by mounting debt.

The government has been taking measures to address the issues of farmers, however, it has been observed that the real beneficiaries of such schemes were the big farmers who have large landholdings. In fact, only a ten per cent of the surveyed poor and small farmers have actually been able to benefit from the provisions of the government, including schemes and subsidies. A major reason for this discrepancy is the lack of symmetry in information. Among the surveyed farmers themselves, seventy-four per cent of them admitted to not even having been aware of the support provided by the government. Sixty-two per cent of the farmers were completely unaware of even the Minimum Support Price (MSP) scheme offered by the government. Even among those who were aware of it, sixty-four per cent of the farmers were unsatisfied with the prices offered by the government.

All the facts mentioned above reflect the agrarian scene in India. The incidents of farmer suicides and the debt trap further cripple the agricultural sector. To tackle the agrarian crisis in India, which has historically been a primary contributor to the Indian economy, hence becomes a pressing issue. Innumerable measures have been introduced in this regard and efforts are being actively taken to address such concerns. One among the many such measures taken was the integration of the idea of co-operative farming organisations.

Co-operatives are essentially voluntary associations of people with common economic, social and cultural needs, and aspirations. These are largely autonomous and are jointly owned and democratically controlled by its members. There are co-operatives present in various sectors of the economy, including food, finance, marketing, healthcare, insurance and credit, among others. Similarly, co-operatives have also been established in the agriculture sector, wherein a number of farmers come together with the intent of protecting their ways of live and to secure their livelihoods. This becomes significant considering that eighty five per cent of India are small or marginal farmers.
In co-operatives, the profits are consolidated, kept with and shared between all the members themselves. Thus, the involvement of middlemen is completely eradicated and this ensures protection from exploitation by these middlemen. Moreover the profits are consolidated and shared between the members of the co-operative equitably, thereby bridging the gap between small and poor farmers and the big and rich farmers. Co-operative organisations also help in availing loans at reasonable interest rates. This reduces the chances of falling into a debt-trap by borrowing from local loan sharks and landlord moneylenders who charge exorbitantly high rates of interest. Co-operatives also help in procuring and providing manure, seeds, pesticides and other agricultural implements to the farmers on hand which helps to solve many problems related to availability and procurement of inputs by small farmers.

There are various social and educational benefits as well to forming co-operative organisations. It encourages and teaches many life values such as toleration, brotherhood, condemnation of exploitation and social evil, coherence and the like which ultimately go on to facilitate harmonious development among the farmer communities and help to combat exploitation by moneylenders and landlords. Through co-operatives, the farmers and their families also get hands-on training and education regarding how a democratic set up works and this works to compliment the functioning of the larger democratic political and economic system as well. It also promotes self-governance and provides sufficient training in this front. It also enhances and encourage local leadership among the farmer communities. It also works in developing responsibility among the members, individual and collective. Co-operatives also work as a bridge between the government and the agriculturalists at large and provides a means to participate directly in development.

Co-operative organisations in the agriculture sector have lent a significant hand in dealing with problems of poverty, job security and employment generation as well among the farmer communities. It is seen that co-operative organisations have immense potential to in delivering goods and services where both government and private players were unable to do so. With the cooperatives exhibiting such potential, there has also been a tendency for people to move back to the rural areas due to the self-employment opportunities that have now become beneficial to them. Moreover, many such organisations and institutions form self-help groups and this has also played a significant role in and actively contributed to rural and agricultural development in the social, communal and economic aspects.

Working through these cooperatives has also led to the development of suitable faring systems that are capable of generating year-round employment and income through crops, livestock, fruits and vegetables. Various co-operatives had even taken initiatives for promoting and practicing Agro Forestry by means of combining the plantations of fruit, fuel and forest tress in an effort to contribute towards improving the ecology and overall climate of the wastelands. Not only has this enhanced ecological resilience but also enhanced livelihood and opportunities within the community. With the sharing of knowledge and technology among the members of the co-operative, they have been benefited immensely by the increased efficiency of various agricultural inputs. This has led to an increase in overall productivity and has brought back higher profits than before.

The Indian cooperative movement was formally launched in India in 1904. Ever since its initiation, the movement has played a very important role in the Indian economy. The co-operative organisations born hence have proved instrumental in the development of the agricultural and rural sectors in particular by combining the merits of both the public and the private players. This has proven especially successful in the support given to poor and marginal farmers. The Planning Commission of India had accorded due importance to the principle of co-operation in the Five Year Plan documents up till the Eighth Five Year Plan. Accordingly, budgetary allocations were made and the cooperative movement has made tremendous progress since then. For instance, the dairy cooperatives, fertiliser cooperatives and cooperatives in the rural credit sector, environment and livelihood improvement, among many others, have been very successful.

India is a witness to the commendable success of co-operatives, especially in the field of agriculture. Some of the many examples of successful co-operatives in India include the Indian Farmers Fertiliser Cooperative Ltd. (IFFCO), the Krishak Bharti Fertiliser cooperative Ltd. (KRIBHCO), Anand Milk Union Limited (AMUL), etc.

The success of KRIBHCO gives a better idea of how these co-operatives work.  KRIBHCO is essentially a co-operative organisation in the manufacturing of fertilisers. It has been registered under the Multi-State Co-operative Societies Act, 1985. KRIBHCO has even established an entire fertiliser manufacturing complex in Gujarat dedicated to the manufacture of Urea, Ammonia and Bio-fertilisers. Considering all this, the major objectives of the cooperative is to increase the installed capacity of Urea and to maintain its share in the market. It also tries to ensure that the existing machinery and plants are utilised efficiently and optimally.

The Indian Farm Forestry Development Co-operative or the IFFDC is another example of an agricultural co-operative in India. This is also multi-state co-operative society and it has been promoted by IFFCO. It has been carrying out projects related to afforestation in various states like Uttar Pradesh, Rajasthan and Madhya Pradesh. An important step taken towards the promotion and implementation of afforestation activates in wastelands is the establishment of Primary Farm Forestry Co-operative Societies (PFFCS). Another notable achievement of this co-operative is the high involvement of women in its functioning.

Thus, it can be seen how significant a role co-operatives play in the field of agriculture. It is also important to note that other than in an economic sense, co-operatives have social, communal, educational, ecological and political benefits that can ultimately benefit the country as a whole. They have also addressed various social issues and opened up a new of avenue of participation for women as well. In a country like India especially, where about sixty five per cent of the country’s total population still have agriculture as their primary occupation, the formation of such co-operatives is a necessity in order to not only help develop the sector but also to safeguard the interests of marginal and small farmers. It is also, therefore, a step towards a just and equitable society.

Picture Credits: countercurrents.org



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