Going the extra mile to help out farmers

Raj Kumar and Harsimranjit Kaur Mavi

THE growth of Indian economy is not possible without the progress of its rural areas. Public/private sector banks, charitable trusts, non-government organisations, joint firms and cooperative societies contribute to the development of these areas. Cooperatives originated in the West during the middle of the last century and were introduced in India in 1904 with the promulgation of the Indian Cooperative Societies Act. Rural indebtedness was the key trigger for the formation of cooperatives in India. Initially, these were there just to provide credit to the farmers. Non-credit societies came up in 1912. With the formation of the Reserve Bank of India (RBI) in 1935, the development of more cooperative societies was prioritised. The main aim of the cooperatives was to get the poor and indebted farmers out of poverty and free them from the clutches of money-lenders. Within a short span of time, the role of cooperatives extended beyond agricultural credit. It started covering activities such as production, farming, marketing and processing.

The National Cooperative Development Corporation Act was enacted in 1962 in order to provide for the incorporation and regulation of a corporation for the purpose of planning and promoting programmes for production, processing, marketing, storage, export and import of agricultural produce, foodstuffs, industrial goods, livestock, certain other commodities and services on cooperative principles.

Cooperatives are now playing a very significant role in the socio-economic development of our country, especially in rural India. Cooperatives cover more than 97 per cent of Indian villages. These are autonomous societies which help farmers fulfil their economic, social and cultural needs. The members have ownership and authorisation to utilise facilities/services of the society. The main function of these societies is to help its members in the form of kind or cash. People come forward in groups and utilise the resources in the best possible way to gain maximum profit.

In Punjab, there are a total of 18,948 cooperative societies, of which 3,961 are Primary Agricultural Cooperative/Credit Societies (PACS). The cooperative societies include Joint Collective Farming Societies, Primary Marketing and Processing Societies, Milkfed, Markfed, Poultry Cooperation Societies and Sugarcane Supply Cooperative Societies. Besides, State Agricultural Development Bank (SADB) and Primary Agricultural Development Banks (PADB) are also there to assist farmers. Ludhiana district has the highest number of PACS (387) in the state, followed by Hoshiarpur (305) and Sangrur (286). The highest number of PADB are in Ludhiana (8) and Sangrur (8), followed by Patiala (7) districts. Nearly 52 per cent of the PACS are running in profit and about 37 per cent in loss. The remaining are barely breaking even. There is a dire need for improvement in the condition of these societies.

Cooperative societies can improve farmers’ economic and domestic conditions if they continue to work independently. It is difficult for small farmers to survive today as agriculture is becoming unsustainable and unviable. Cooperative societies can purchase farm inputs in bulk at comparatively low prices which can help reduce the cost of cultivation. In Punjab, there are many cooperative societies which not only provide farm inputs but also other services like agriculture credit, agri machinery, implements and create employment for agricultural labour. Interference by politicians and other influential persons is detrimental to the performance of the societies as well as their member farmers. In Punjab, 3,961 cooperative societies are working, of which the ones which are running autonomously showed exemplary progress; they have their own petrol/diesel pumps and agro-processing complexes. These also take land on lease by which they create employment for fellow farmers.

Marginal (owning up to 2.5 acres) and small (2.5 to 5 acres) farmers constitute 33 per cent of the total operational holdings in the state but they possess only 9.7 per cent of the total agricultural land. They are unable to bear huge farm expenses on the purchase of modern machinery and implements. In such a situation, the role of cooperatives in supplying agricultural machinery and implements cannot be overestimated. Cooperative societies can help in eradicating poverty, enhancing food security and creating job opportunities. It is imperative for all stakeholders to look after these societies and ensure that they operate as successful and profitable organisations. After all, the cooperative’s profit is nothing but the farmer’s profit.

Agricultural cooperative/credit societies and banks in Punjab

Total cooperative societies of all types 18,948

Primary Agricultural Cooperative/Credit Societies 3,961

Primary Agricultural Development Banks (PADB) 89

State Agricultural Development Bank (SADB) 1

Punjab State Cooperative Bank (PSCB) 1

Joint Collective Farming Societies 83

Primary Marketing-cum-Processing Societies 82

Apex Marketing Federation, Punjab (Markfed) 1

Primary Cooperative Milk Producers’ Societies (Milkfed) 6,521

Poultry Cooperative Societies 91

Sugarcane Supply Cooperative Societies 7

Kumar is Principal Extension Scientist (Agricultural Economics) and Mavi is Scientist (Agricultural Marketing), Dept of Economics and Sociology, PAU