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20th April 2024 (18 Topics)

How rural co-operatives can be strengthened


The Indian agricultural sector, particularly small and marginal farming, requires robust support systems to facilitate various activities like accessing quality inputs, receiving timely crop advisories, and securing fair prices for produce. Co-operatives play a crucial role in providing this support and act as a link between private and public sector initiatives.

Importance of Co-operatives in Agriculture:

  • Anchor for Agricultural Activities: Co-operatives serve as a crucial anchor in supporting small and marginal farmers by providing quality inputs, timely advisory services, and ensuring fair prices for their produce.They facilitate activities such as arranging seeds, fertilizers, and manure, thus contributing to the overall agricultural productivity.

Ministry of Co-operation Initiatives:

  • The Ministry of Co-operation, formed in July 2021, initiated several path-breaking measures to strengthen co-operatives:
  • Formulation of model bye-laws for Primary Agricultural Credit Societies (PACS) to undertake multi-purpose activities.
  • Development of a National Co-operative Policy.
  • Launching schemes for computerization of functional PACS, creation of a National Cooperative Database, and promoting multi-State co-operative societies for various agricultural activities.
  • Inclusion of State Co-operative Banks (StCBs) and District Central Co-operative Banks (DCCBs) as member lending institutions with CGTMSE.

Ways to Strengthen Rural Co-operatives:

1. Governance and Culture Improvement:

  • Handholding Approach: State Cooperative Banks (StCBs) should mentor affiliated District Central Co-operative Banks (DCCBs), which in turn should mentor primary societies.
  • Fair Elections: Establishing dedicated State Co-operative Election Commissions for fair and transparent elections is necessary.
  • Leadership Development: Enhancing governance and leadership skills of elected board members should be systematically undertaken to ensure effective decision-making.

2. Technological Upgradation and Business Diversification:

  • Financing Agri Value Chain: Rural credit co-operatives should lead in financing activities across the agricultural value chain, integrating production, processing, storage, transport, and marketing.
  • Leveraging Technology: StCBs and DCCBs should offer digital services like internet/mobile banking, Unified Payment Interface (UPI), and others to attract customers and improve services.

3. Human Resource Development and Capacity Building:

  • Recruitment and Training: Transparent recruitment policies and capacity building measures should be adopted to ensure quality manpower.
  • Members' Education: Emphasis on educating members about co-operative principles, management, rights, and duties is essential.
  • Encouraging Innovation: Promoting start-ups in the co-operative sector can bring fresh ideas and innovation, fostering growth and sustainability.

Policy Goals and Targets:

  • Increase in Agricultural Credit Share: The aim should be to increase the share of rural co-operative banks in agricultural credit from 11% to 20% by 2030 and to 40% by FY 2047.
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