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Cooperative Centenary in India
Sanjay Kumar Verma
National Cooperative Union of India
New Sector Magazine, Issue No 61, April/May 2004
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This year marks the centenary of the cooperative movement in India. Cooperatives
of all sizes have geared themselves up for the big occasion. A people' movement
totalling a 100 years of development signifies the strength of Indian democracy.
A diverse movement
The seeds of cooperation in India were sown in 1904 when the first Cooperative
Societies Act was passed. Since then, the cooperative movement has made
significant progress.
Cooperatives have extended across the entire country and there are currently an
estimated 230 million members nationwide. The cooperative credit system has the
largest network in the world and cooperatives have advanced more credit in the
Indian agricultural sector than commercial banks. In fertiliser production and
distribution the Indian Farmers Fertiliser Cooperative
(IFFCO) commands over 35
percent of the market. In the production of sugar the cooperative share of the
market is over 58 percent and in the marketing and distribution of cotton they
have a share of around 60 percent. The cooperative sector accounts for 55
percent of the looms in the hand-weaving sector. Cooperatives process, market
and distribute 50 percent of edible oils. Dairy cooperatives operating under the
leadership of the National Dairy Development Board and through 15 state
cooperative milk marketing federations has now become the largest producer of
milk in the world. The groundwork for this was laid in the early 1970's when the
largest dairy development programme in the world - Operation Flood - was
launched. Operation Flood was a national marketing strategy linked to a dairy
infrastructure development programme that created a chain of dairy processing
plants, collection stations and a national milk transportation grid.
Democratic reform and greater autonomy
With the rapid growth of the cooperative sector, a supportive climate has been
created for the development of cooperatives as democratic and autonomous
businesses providing them with the opportunities for diversification. The
cooperatives have long been demanding that the Central Government introduce
democratic reforms in their regulation, supervision and functioning. With the
persistent efforts of the National Cooperative Union of India, the Central
Government recently passed the Multi-State Cooperatives Societies Act and also
formulated a national cooperative policy that provides greater autonomy to
cooperatives.
The National Cooperative Union of India is the apex organisation promoting the
cooperative movement in the country. With the passage of the Insurance Act,
cooperatives have been allowed to entry into the insurance business. Insurance
is a field where the immense potential of cooperatives still remains untapped.
The Indian Farmers Fertiliser Cooperative has recently teamed up with a Japanese
company and formed a joint venture for undertaking general insurance business in
India. This signifies that Indian cooperatives have come of age in formulating
strategic alliances.
In the new economic environment, cooperatives at all levels are making efforts
to reorient their functions according to the market demands. The failure of the
public sector in several cases is a worrisome trend. Privatisation has also
failed to make an impact in the rural areas. The government has therefore pinned
a consider amount of hope on the cooperative sector. In comparison to the
step-motherly treatment of the past, cooperatives are now considered an
important plank of development. The government is committed to cooperative
development and it wants cooperatives to succeed. The government knows that
cooperatives have inherent advantages in tackling the problems of poverty
alleviation, food security and employment generation. Cooperatives are also
considered to have immense potential to deliver goods and services in areas
where both the state and the private sector have failed.
Cooperative pitfalls and challenges
There are however several pitfalls. Poor infrastructure, lack of quality
management, over-dependence on government, dormant membership, non-conduct of
elections, lack of strong human resources policy, neglect of professionalism,
etc. are the limiting factors. Cooperatives are also unable to evolve strong
communication and public relations strategies which can promote the concept of
cooperation among the masses.
In the year of centenary celebrations, the cooperatives should look back at
their achievements with pride. However, they should also push forward by
developing effective strategies for overcome existing weaknesses and for
continuing growth of the sector.
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