Basics of Agricultural Cooperation

1.  Cooperation generally means working
together to achieve a common goal
 “cooperation is a form of organization in
which persons voluntarily associate together
on the basis of equality for the promotion of
their economic interests.”
 Motto of cooperation “each for all and all for
each”

2.  Principle of open and voluntary association
 Principle of service
 Principle of democratic organization
 Principle of selphelp and mutual help
 Principle of distribution of profits and surplus
 Principle of political and religious neutrality
 Principle of education
 Principle of thrift
 Principle of publicity
 Principle of honorary service

3.  1. Initiation stage (1904-1911)
 Dominance of non- institutional agencies debts
 revolting against money lenders (Poona and Ahmadabad)
 Deccan Agriculture Relief Act (1879)
 Land Improvement Loan Act (1883)
 Agricultural loan act (1884)
 Madras (Fed rick Nicholson) study village banks--
cooperative lines– Germany
 Slogan “Find Raiffeissen”
 Indian famine commission (1901)
 Sir Edward law (credit societies)
 Cooperative credit societies act (1904)
 Rural –urban classification (4/5th of farmers)
 Control -societies
 Real (immovable security)


4.  Rectified – cooperative societies act 1912
 Legal protection
 New focus
 Registration of all types of cooperative
societies
 1914, Sir Edward Mac lagan- performance of
societies
 Observations a. illiteracy b. funds c. sanction
of loans 3. repayment of loans
 Effective measures a. awareness b. strictly
confined c. honesty d. scrutinized e.
speculative purpose f. thrift g. strictness h.
savings i. punctual payment.

5.  Montague – Chelmsford act (1919)
 Further impetus to the movement
 Land mortgage banks “Punjab” first madras….
 Indian central bank enquiry committee (1931)
 Madras cooperative societies act (1932)
 Madras land Mortgage act (1934)
 Growth of cooperative movement.

6.  Economic depression (early 30s)
 Vijayaraghava charya committee , madras
 Rehabilitation committee , Travancore and Mysore
Kale committee , Gwalior
Mehta and Bhansali committee , Bombay
Wace committee , Punjab
Second world war (rise in prices)
Recovery of dues
Prof. D.R.Gadgil – argil. Finance sub-committee –
appointed – govt. of India – (1944) – recommended
Cooperative planning committee ( 1945)
R.G. Saraiya – limited progress of cooperative –
laissez faire policy – illiteracy of people.

7.  (1959)- Shri V.L.Mehta- viability of
cooperatives
 Membership (farmers only)
 Distance (3to 4 miles)
 Shri B. P. Patel (1961-1962)
 Cooperatives – agril. Loans – agril. operations
and land development.
 Grass root level (supervision) (PACS)
 Responsibility – Shri V. L. Mehta – district
coop. banks (DCCB) – Supervision (PACS)

8.  Planning commission, march (1950)
 First five year plan (1951)
 Objectives a. rural development b. credit system b. cooperatives
c. training
 All India rural credit survey committee (1951)- RBI- Shri A. D.
Gorwala- cooperative credit – unevenly distributed – lent by –
large cultivators.
 Weakest link PACS
 Good cooperation or sound credit
“Cooperation has failed in India but must succeed “
 Integrated scheme- salient features- report
 State partnership, coordination, development, training.
 (1952) – Bharat sevak samaj and national advisory committee
 Public cooperation
 All India rural credit survey committee (1954)
 National cooperative development and warehousing board
(1956)
 SECOND FIVE YEAR PLAN ………. Was industry based.

9.  National cooperative development
corporation (1963)
 National Federation of cooperative of Sugar
factories (1961-66)
 AIRCRC- Report – B. Venkatappaiah- (1969)-
setting –(SFDA)
 Rural Electrification corporation
 Greater flexibility
 Economic activities
 Strengthening dairy cooperatives
 Transport cooperatives
 (1967) (VAMNICON) –PONNA- establishment-

10.  Rehabilitation and reorganization of DCCB’S
 Smooth flow of coop. credit orgn’s.
 IFFICO- Establishment – Kandla
 New fertilizers project (vista)

11.  Success of fertilizer project
 SIXTH FIVE YEAR PLAN
 NABARD – Establishment
 Strengthen economic activities ,dairy
cooperatives, regional coordination.
 SEVENTH FIVE YEAR PLAN
 Recovery camps, retail sale of fertilizers
 Strengthen – national state consumer
federation
 Introduction- (SINGLE WINDOW SYSTEM) -
credit

12.  Emphasized of ANAND PATTERN – dairy, milk
proccessing
 Cooperatives – only alternatives – providing
loans –rural people- (AIRCARD) Report
 Substantial help by RBI – loan policy
 Development of weaker sections through
cooperative societies
 Structure change in cooperative credit
 Unitary structure- Bihar,U.P.,M.S.,J&K

13. MICROFINANCE CREDIT STRUCTRE
 TENTH FIVE YEAR PLAN
 Removal regional differences between
cooperative credit organizations
 ELEVENTH FIVE YEAR PLAN
 Individual bank – 2000 population area-
cooperative credit basis.

14.  ST and MT loans(three tier) LT loans (two tier)
 State cooperative banks Central land development
 (SCCB) bank (CLDB)
 (at state level) ( at state level)

 District cooperative banks Primary land development
(DCCB) Banks (PLDB)
(at district level) (at taluka level)
 Primary agricultural cooperative
 credit societies (PACS)
 (at village level)

15.  State level
 DCCB’s & PACCS Members
 Supervise, mobilize& deploy
 Link between RBI & PACS
 FUNCTIONS
 Formulating development policies
 Uniform credit policies
 Banker’s bank to DCCB
 Grant Subsidies
 Similar to CB’s (banking operations)

16.  Cooperative credit societies act (1904)
 Link between SCB’s & PACS
 Meet credit requirement of PACS
 Undertake banking business
(cheques,drafts,bills,credit disbursement)
 Confined to Taluka level
 Membership a. societies (farming, consumers)
 Individuals c. working in that area.
 FUNCTIONS
 Supreme & inspect (PACS)
 Guide (PACS) leadership
 Non-credit activities (seeds,manure,
fertilizers,sugar,kerosene)
 Control and accept deposits

17.  RAIFFESON MODEL- suggestions
 ( limited liability , limited area operation ,
honorary management, voluntary participation of
villages)
 Smooth functioning of villages (above
requirements)
 Short-term & medium term loans disursbesment
 Agril. input supply & other essential commodities
 Formulating & implementing agril. Development
plans
 production-finance-marketing cycle fulfillment

18.  Long term finance to PLDB’s & its branches
 Members a. PLDB’s b. enterprenurers c. CLDB’s
branches
 NABARD & LIC (debenture) supply
 NABARD (Refinancing agency) – CLDB’s
 Link between NABARD & govt. (transactions of
 Of long term loans)
 Supervise , inspect, guide PLDB’s
 Floats debenture – raising funds
 Spirit & practice of thrift- (stimulate habit of
savings & capital formation)

19.  Functions
 Give loans to PLDB’s for…..
 Debt clearance, purchase land, land
development, machinery, minor irrigations.

20.  Land mortgage bank on the lines of
cooperative (Punjab) – 1920
 Progress in post independence (madras,
Mysore, Assam, Bengal)
 Only large farmers benefited.
 Supported by RBI, SBI, & GOVT., ARC, LIC
 Reoriented agril. Policies for small and
marginal farmers
 1974- (Land Mortgage Bank )renamed as-
(Land development bank)
 Taluka level (working)

21.  FUNCTIONS
 Long term finance
 Development, production, productivity
 Loan for minor irrigations
 Redemption of old debts
 Purchasing tractors & machinery
 Finance for construction of farm structure
 Savings (encourage)

22.  Credit (three tier structure) Marketing (two tier st.)
 (ST,MT, and LT)
 The A.P. state Cooperative bank The A.P. state
Cooperative
 For Agriculture and Rural Marketing Federation
Ltd.
 Development(APCOBARD) (MARKFED)
 District Cooperative Bank District Cooperative
 For Agriculture and Rural Marketing Societies
 Development (DISCOBARD) (DCMS)
 Primary Agricultural Cooperative
 Credit Societies (PACS)