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Union Cabinet approves formation of 3 new cooperative societies

  • Published
    12th Jan, 2023

As per the decision taken by the Cabinet Committee on Economic Affairs (CCEA) headed by Prime Minister, the Union Cabinet has approved the formation of three new cooperative societies to focus on seed availability to farmers, organic farming and exports, benefiting farmers.

  • Need of the initiative: Cooperatives that are associated with farmers, farmers’ income and agriculture production are an important part of rural India. 
  • The Cabinet approved the establishment of the;
  • National Export Society,
  • National Cooperative Society for Organic Products and
  • National Level Multi-state Seed Cooperative Society
  • Significance: These cooperative societies will help realise the vision of “Sahakar Se Samriddhi” (prosperity through cooperatives), and boost rural growth and farmers’ income.

What are Multi-state Cooperative societies?

  • They are societies that have operations in more than one State, for instance, a farmer producers Organisation that procures grains from farmers from multiple states.
  • At present, India has more than 1,500 multi-State cooperative societies, with the highest number being in Maharashtra.
  • The MSCS Act 2002 was passed tgovern such cooperatives whose members and areas of operation are spread across more than one state.

The Cooperative societies Act, 1950:

  • It states that the state government is entitled tappoint a registrar tlook after a cooperative society’s workings and appoint people tassist the registrar.
  • Any society that decides twork for its members with a common vested interest must be registered under this act.
  • A society will be registered under this act only if it has a member count of more than ten persons whhas attained the age of 18 years.
  • The objective of the society is tcreate funds for its members. The word limited must be in use with the name of such cooperative societies.
  • Any questions regarding the membership, such as whether the society has been created for agriculture or non-agricultural purposes, whether the residence of a member will be a town or village etc., will be taken by the registrar and deemed as final.

Related Constitutional Provisions:

  • The 97thConstitutional Amendment Act 2011
  • The right tform cooperative societies is a fundamental right (Article 19).
  • New Directive Principle of State Policy on the Promotion of Cooperative Societies (Article 43-B).
  • A new Part IX-B tthe Constitution is titled “The Co-operative Societies” (Articles 243-ZH t243-ZT).
  • Creation of a new Ministry of Cooperation– which gave more acknowledgment tcooperative societies.

Ministry of Cooperation:

  • The Union Ministry of Cooperation was formed in 2021; its mandate was looked after by the Ministry of Agriculture before.
  • Objectives of creation of the new ministry:
    • Trealize the vision of "Sahakar se Samriddhi" (prosperity through cooperation).
    • Tstreamline processes for ‘'Ease of doing business’' for co-operatives and enable the development of Multi-State Co-operatives (MSCS)
    • Tprovide a separate administrative, legal, and policy framework for strengthening the cooperative movements in the country.
    • Tdeepen the cooperative as a true people-based movement reaching up tthe grassroots level.

Advantages of a cooperative society:

  • These societies are directly associated with the producers themselves. It excludes the chance of people working in the middle and thus provides maximum profit tthe producers and consumers; hence goods are sold at cheap rates here.
  • Instant and easy loans are provided tthe members of these cooperative societies.

Disadvantages of a Cooperative Society:

  • As these organisations work with the economically weaker and backward sections of society, the chances of raising monetary capital are quite low.
  • Due tmembership of such associations being essentially voluntary, there are scopes and instances of mismanagement and chaos in such groups.
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