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Agriculture co-operative societies

Agriculture co-operative societies

An agricultural cooperative, also known as a farmers' co-op, is a cooperative where farmers pool their resources using regions of activity.

A wide typology of agricultural cooperatives distinguishes between agricultural service cooperatives, which provide various services to their individually farming participants, and agricultural development cooperatives, where production resources (land, machinery) are pooled and members plantation jointly. Agricultural development cooperatives are relatively rare in the world, and known examples are limited to collective farms in former socialist countries and the kibbutzim in Israel. Worker cooperatives offer an example of creation cooperatives outside agriculture.

The default meaning of agricultural cooperative in English is usually an agricultural service cooperative, which is the numerically prominent form in the world. You will discover two major types of agricultural service cooperatives, supply cooperative and marketing cooperative. Resource cooperatives source their users with inputs for agricultural production, including seeds, fertilizers, fuel, and machinery services. Marketing cooperatives are proven by farmers to undertake transformation, packaging, syndication, and marketing of plantation products (both crop and livestock). Farmers also widely count on credit cooperatives as a source of financing for both working capital and opportunities.

Why farmers form cooperatives

Cooperatives as a form of business organization are specific from the more common investor-owned firms (IOFs). Both are planned as corporations, but IOFs pursue profit maximization objectives, whereas cooperatives make an effort to maximize the benefits they generate for his or her members (which usually involves zero-profit procedure). Agricultural cooperatives are therefore created in situations where farmers cannot obtain essential services from IOFs (because the provision of these services is judged to be unprofitable by the IOFs), or when IOFs supply the services at disadvantageous terms to the farmers (i. e. , the services are available, but the profit-motivated prices are too high for the farmers). The ex - situations are characterized in economic theory as market failure or absent services motive. The second option drive the creation of cooperatives as a competitive yardstick or as a means of allowing farmers to make countervailing market power to oppose the IOFs. The idea of competitive yardstick implies that farmers, faced with unsatisfactory performance by IOFs, may form a cooperative firm whose goal is to induce the IOFs, through competition, to boost their service to farmers.

A practical motivation for the creation of agricultural cooperatives may also be referred to as "overcoming the curse of smallness". A cooperative, as an association of a large variety of small farmers, serves as a large business entity on the market, reaping the significant benefits of economies of scale that aren't open to its members separately. Three typical examples are a machinery pool, a marketing cooperative, and a credit union. A family plantation may be too small to justify the purchase of a tractor or another piece of farm machinery because of its own use; a equipment pool is a cooperative that purchases the required equipment for the joint use of most its participants as needed. A little farm does not will have the means of transportation necessary for delivering its produce to the market, or else the tiny level of its creation may place it within an unfavorable negotiating position regarding intermediaries and wholesalers; a cooperative will become an integrator, collecting the end result of its small users and delivering it in large aggregated amounts downstream through the marketing channels. A little farmer may be recharged relatively high interest rates by commercial lenders, which are conscious of high transaction costs on small lending options, or may be refused credit altogether due to lack of collateral; a farmers' credit union can raise loan funds at beneficial rates from commercial lenders due to its large associative size and can then distribute loans to its people on the effectiveness of mutual or peer-pressure promises for repayment.

An Integrated Automation Solution for Key Agricultural Co-operative Societies (PACS)

One of the major concerns in virtually any developing market is the efficacy of the rural funding systems that innovations credit to its large human population of rural poor. Such operations are plagued by small size of the loans, limited risk profiling of loanee, large level of transactions, non-standardized businesses, and difficulty in monitoring credit disbursal and collection.

Nelito's MFin brings the benefit for computerization into the field of micro-finance that really helps to achieve the next: -

 
  • Reduction in functional cost
 
  • Standardization of operation
 
  • Production of reports for statutory monitoring and clear operations
 
  • Reduce the chance of lending
 
  • Transacting in cash and kind
 
  • Prudent cutting down habits
 
  • Easiness of installation
 
  • Minimal training

Mfin (Micro Finance) launched during 1996 has been accepted as both private and general population sector banking institutions are aggressively planning to tap the rural potentiality.

Major Functional Modules

 
  • Savings Bank
 
  • Current Accounts
 
  • Cash Credit Accounts
 
  • Daily Deposit Accounts
 
  • Term Deposits
 
  • Recurring Deposits
 
  • Term Loans
 
  • Trading
 
  • Membership Accounting

Key features

 
  • Graphical Individual Interface
 
  • Modular Approach
 
  • Parameterized establish up
 
  • Online Help
 
  • GL Maintenance
 
  • Investment Register
 
  • Gold Lending options (Agriculture & General)
 
  • Kisan Credit Card
 
  • Loans in sorts and Repayment in kinds
 
  • Loans Against Deposit
 
  • TL for Agriculture Allied Activity
 
  • Standing Purchases and Lien Noting
 
  • NPA Marking and Reports
 
  • Reconciliation
 
  • Membership Accounting
 
  • Investment Register
 
  • Reconciliation
 
  • Inventory Control
 
  • Purchase Register
 
  • Sundry Creditors
 
  • Dividend Calculation & Register
 
  • Stock Statement
 
  • Trial Balance
 
  • Trading Account
 
  • Trial Balance
 
  • Profit & Reduction Accounts
 
  • General Ledger
 
  • Balance Sheet
 
  • Statement of Account
 
  • Statutory Reporting

Agriculture cooperatives

Various development activities in agriculture, small industry marketing and control, distribution and equipment are now continued through co-operatives. the co-operatives in the State have made an all-round improvement and their role in, and contribution to agricultural progress has specifically been significant. The schemes regarding the development of godowns and the change of villages into model villages.

The Co-operative Movement was presented into India by the Government as the only path where the farmers could conquer their burden of arrears and keep them away from the clutches of the money-lenders. The Co-operative Credit Societies Action, 1904 was transferred by the Government of India and rural credit societies were produced. Through the session of registrars and through energetic propaganda, the federal government attemptedto popularize the Activity in the rural areas. Within a short period, the Government recognized a few of the shortcomings of the 1904 Work and, therefore, exceeded a more extensive Take action, known as the Co-operative Societies Act of 1912.

The main agriculture credit societies

The agricultural co-operative credit structure in the Punjab Express is broadly divided into two areas, one working with the short-terms and medium-terms financing and the other with the long-term credit. Inside the Status, the short-term and medium-term credit framework is dependant on a three-tier system, i. e. , the Apex Co-operative Lender at the State level, the Central Co-Coperative Loan provider at the region/tehsil level and the Primary Agricultural Credit Societies at the village level. The major targets of the primary agricultural credit service societies are to supply agricultural credit to meet the requirements of money for agricultural creation, the distribution of essential consumer commodities, the provision of storage space and marketing facilities.

Due to an increasing emphasis on the introduction of land and agriculture, long-term co-operative credit has assumed great importance. There is the Punjab State Land Mortgage Bank or investment company at the Apex and the Punjab Mortgage loan Lender at the region/tehsil level.

On the operational level, there exists a primary co-operative to increase credit to the farmer. This device epitomizes the vitality and service probable of the Co-operative Movements in India. The organization of these societies goes back to 1904, when the first Co-operative Societies Function was handed. These societies were started out with the object of providing cheap credit to the agriculturists to be able to free them from the clutches of the rapacious money-lenders. the agricultural key credit culture is the foundation-stone on which the complete co-operative edifice is built.

The first Agricultural Credit Culture in the Firozpur Region was listed on 4 October 1911, at the Community of Khalchi Kadim in the Firozpur Tehsil. Originally, the movements was restricted to the credit societies only and, thus, credit dominated till the partition (1947). Following the partition, the Co-operative Motion began to pass on to other field, viz labour, construction and farming.

Agriculture non-credit societies

While credit is and must stay for some time the chief concern of the Co-operative Activity relatively sluggish, since 1912, when the non-credit societies were helped bring officially under the aegis of the Movement. the World Warfare II (1939-45) arrived as a God send boon with respect to the development of the Co-operative Movement. Prices of agricultural goods commenced to rise and handled new peaks. The repayment of loans was accelerated and debris began to pour in. The amount of societies also rose. Another interesting development in co-operative through the Conflict wast the expansion of the Movements to non-credit activities, viz.

Agriculture co-operative marketing societies

Marketing has occupied a much smaller devote the co-operative picture in India than in many countries, notably Denmark and the united states, but not other non-credit type of co-operation, with the possible exception of the consolidation of land holdings and joint farming enterprises, seems to hold greater likelihood of help to the agricultural people of India. The introduction of co-operative marketing in India is carefully bound up with the situation of credit-the cases of the money-lenders commonly inhibiting the cultivator's freedom of action in disposing of his crop.

The full utilization of loans advanced depends after the arrangements for the marketing of surplus produce. For this purpose, there the Punjab Condition Marketing Federation at the State Level, wholesale societies at the area level and marketing societies at the marketplace level. These societies also provide other agricultural facilities and finances for it for the way to obtain home items in the rural areas.

In the Status level, the Punjab State co-operative Source and Marketing Federation (MARKFED) is playing an important role in accumulating an integrated framework for remunerative marketing and storing of agricultural produce. they have enjoyed an important role in hastening the Green Revolution in the State by arranging ready items of essential plantation inputs needed by the cultivators.

Co-operative farming societies

The Royal Commission payment on Agriculture in 1928 noticed so it co-operation failed, there would are unsuccessful the trust of the Indian agriculturist. Co-operative farming is a bargain between collective farming and the peasant proprietorship and gives all merits of large-scale farming without abolishing private property. It means a business of the farmers on the basis of common work for common interests. Under this technique, all landowners in a community form a co-operativesociety for tilling the land. The land is pooled, but each farmer retains the right of property. The produce is written by each. They are permitted to withdraw fromthe co-operative farm whenever they de3sire. In India, the exceedingly small size of holdings could very well be the most serious defect in our agriculture. If agriculture must be improved, how big is the holdings must be enlarged.

Type of societies

  • Co-operative Weaver's culture
  • Co-operative Consumer's Societies
  • Co-operative Housing Societies
  • Co-operative Women's Societies
  • Co-operative Milk-Societies

Challenges before co-operatives

The IndianCo-operative Motion has earned differentiation to be the largest on the planet. That is true in terms of account and Co-operative network which disperse over virtually all the villages in the united states and the amount of Co-operative Societies. In our country, there are about 5. 5 lakhs of cooperative Societies with account greater than 22crores. It covers an array of commercial activities and practically 50% of them are employed in agriculture and agriculture related matters. Practically 70% of the Indian society beingdependant on agriculture, is thus, linked with agricultural Co-operatives. Co-operatives have covered 100% of villages and 67% of rural homeowners. Co-operative sectorcontributes 50% of total agricultural credit and distributes 35% of total fertilizer usage in the united states. They are really procuring 60% of total sugar-cane. Also, they are playing essential role in the agro-processing sector i. e. handling of sugar-cane, dairy, cotton and oil seeds etc. Dairy Co-operatives have excelled in their portion of operation and also have enabled India to achieve top position in milk production on earth. Edible oil sold through Co-operative route is predicted at 50% and handloom Co-operatives account for 55% of the full total out-put.

However in spite to be largest movement in the world and strongest hyperlink, it faces range of challenges like lack of interior resources and poor mobilization of external resources, insufficient infrastructure, competitive tier composition, apathy of users towards management, lack of accountability increasing sickness, dormancy, low level professionalism, increased government control, political disturbance, dominance of vested interest over the management, lack of human resources development, education and training. Despite all troubles, Co-operatives need to be sustainable more than a time frame for which professionalism is crucial. Co-operatives have been looking for Governmental help. But they have been paying from it like public domination and disturbance in their day-to-day working etc. Dr. Kuriyan, an eminent co-operator in the united states said recently that the Co-operatives have gone through an emergency of identification being neither authorities nor private. He further said that Co-operatives need to be better and competitive, but at the same time they cannot sacrifice the basictenets of co-operation. Inefficient Co-operatives must either take up their socks or down their shutters. Co-operatives have many advantages in tackling problem poverty alleviation, career era and food security. There is also the potential to deliver goods and services in areas where both the Condition and Private industries have failed. Within the last couple of years, steps like the enactment of mutually aided Co-operative Societies Action by some Areas and the Multi-State Co-operative Societies Act have been taken up to supply the Co-operative sector a lift. But I know that the Co-operatives listed under the Mutual Aided Action have certain constraints and deficiencies, which may be -

  • Lack of guidance and inspection by Registrar of Co-operative Societies causing into financial misuse and disproportion institutional development.
  • Government is hesitating to entrust any important federal government work since it does not have any participation.
  • These Co-operatives are from the mainstream. The Co-operative Banks and other important establishments are not ready to acknowledge them as users.
  • NABARD and RBI are not agreeing for change of Central and Urban Co-operative Bankers.
  • R. B. I. has also objection about the utilization of expression "Co-operative" since Bank Regulation Action uses the term "Co-operative Society".
  • Perhaps we aren't prepared or educated or sensitized enough to work without control and supervision.
  • Mischievous persons might take advantage of the situation to cheat the general public.
  • When the Government are checking out the opportunity of regulating the Non-governmental organizations having great experience, it is doubtful as to whether the mutually aided Co-operatives in various field can give desired end result.

The circumstances and the problem give rise to the Co-operative Movements in the Country are still prevalent. The market is still not accessible to small and marginal farmers. Supply of agricultural credit is not sufficient. About 50% in our rural and tribal household still haven't any center for institutional credit. The Co-operatives are today at the cross street at their presence, particularly because of the fast emerging economical liberalization and globalization. The Co-operatives still extended to operate in a normal way with poor governance and management, poor source mobilization, outside disturbance, dependence on Federal government and lack of professionalization. The Co-operatives are neither member-driven nor functioned professionally in a clear manner with accountability to associates. Regardless of all these, no doubt, the Co-operatives have contributed too much to the agriculture development of the Country. We cannot afford to see that these establishments wither away. It needs reform. It is not-worthy to state that in the Country wide Common Minimum amount Programme of present UPA Government it has been described to bring constitutional amendment to ensure the democratic autonomous and professional working of Co-operatives. The constitutional amendment may limit itself with -

  • timely carry out of elections
  • timely do of audit,
  • uniform tenure of controlling committee
  • conduct of basic body meetings
  • right of an associate for access to informations and
  • the accountability of the management.

In this framework our strategies may be as follows. -

  • Co-operatives need be member-driven; stakeholders should have a command word over its affairs and activities. You can find dependence on more transparency, more of connections and self-confidence -building procedures.
  • Aggressive marketing strategy be used for sensitizing associates and public about the service and quality rendered by the Co-operatives. Dedication to best
  • service and pursuit for excellence should be the hallmark of Co-operative. Every contemporary society should take up their customers' or people' charter and should meticulously stick to this charter.
  • Co-operative should contend with other players in prevailing market pushes without any protectionist or discriminator approach.
  • In esteem of short-term, medium-term, long-term sector and Urban Lender sectors, restrictions have been stipulated by Reserve Bank or investment company of India, NABARD according of finance. These restrictions you need to liberalized which would help Co-operative to maximize its lendable resources and offer finance to members.
  • Strengthening information and databases of Co-operatives if of utmost importance. MIS you need to adopted by the process of computerization and inter-connectivity to provide best services to customers and customers with anytime and everywhere service.
  • Professionalization of management is one of the essential prerequisites of Co-operatives. Both workers as well as directors of committee of management should come in contact with regular training, conversation and orientation.
  • Adoption of technological planning deployment of recruiting on the rule of 'right man for the right post at right time' would help Co-operatives to speed up the tempo of reforms. Human resources you need to proactive. Motivation, recognition for good work and leadership be inculcated for augmenting efficiency.
  • Basic tenets corporate and business governance be implemented like good play, transparency and accountability.
  • The PACS, as the foundation of the Co-operative system are interacting with the development needs of the farmers by providing credit, inputs and storage space and control and marketing facilities. The Co-operative federated at the region and Status level constitutes the Co-operative system. Nonetheless it is found that the Apex organizations have grown stronger whereas the primaries and perhaps, Central Co-operatives have removed weaker. The situation needs to be altered and the primaries have to expand stronger. The business of the principal Societies need to be diversified.

Cooperative Credit in Agriculture Development

(Role of agriculture co-operative societies in agriculture)

Now-a-days credit acts as an elevator. It has been recognized as the life span blood of most economic activities. Like all other producers, agriculturists also need credit. Corresponding to an old proverb, "credit helps the farmers as the hangman's rope supports the hanged. " This Affirmation is completely true in the context of Indian farmers. Thus, for rousing the tempo of agricultural creation, an satisfactory and well-timed credit is most essential. The Co-operative Societies Take action, 1904 provided concretized form for establishing key co-operative societies to meet both short and medium-term loan needs of farmers. The provision of these loans did not make any improvement and didn't have any effect on the farmmer's socio-economic status and consequently, these were mind and ears indebt. In order to solve this problem and make the farmers free from the cruel clutches of money lenders, the idea of co-operative long-term credit corporations called Co-operative Agricultural and Rural Development Banking companies/Co-operative Gram Vikas Lenders (before called Cooperative Land Development/Mortgage Banking institutions) was mooted.

Role of agriculture co-operative societies:

  1. An agricultural co-operative modern culture which is authorised by its guidelines to borrow funds may at any time, subject to the provisions of the section and with such consent of the Minister as is mentioned in this Function and if the issue of debentures is or is not authorised, or is or is not forbidden by the rules of such modern culture, issue debentures to any authorised lender for the intended purpose of obtaining to such lender the repayment, with or without interest, of any capital sum of money lent by such lender to such population before the problem of such debentures (whether before or after the passing of this Work) or intended to be so lent at or after such issue, or partly so lent and partly so intended to access.
  2. An issue of debentures shall not be made by an agricultural co-operative culture under this section unless either the committee of such society has electric power under the guidelines of such culture to borrow funds and the total amount to be borrowed on the security of such debentures is within such borrowing vitality or an answer approving of the making of such concern has been passed by a particular meeting of the shareholders of such modern culture convened expressly for the purpose of considering and, if thought fit, moving such image resolution.
  3. The following provisions shall connect with debentures released by an agricultural co-operative population under this section, in other words:-
  1. such debentures may be indicated to charge the amount of money secured thus in either or both of the next ways, that is to say, by means of fixed demand on any given property (including uncalled capital) of such world or by way of floating demand on the resources, property, and starting (either with or without specified exceptions) for the moment and every once in awhile belonging to such contemporary society;
  2. such debentures may contain all or any such provisions for enforcing or making effective the security in that way afforded as are usually contained in debentures granted by a restricted company;
  3. such debentures shall operate and also have effect relative to the terms thereof as far as such terms are authorised by this Act.
  • An problem of debentures created by an agricultural co-operative society under this section may consist either of an individual debenture to secure the whole amount of the amount of cash for the securing which such issue is made or of some debentures for split sums rating pari passu and amounting in the aggregate fully amount of the said sum of money, and in any event shall get ranking in main concern to any issue of debentures subsequently made by such world under this section.
  • An problem of debentures made by an agricultural co-operative culture under this section may be followed and collaterally anchored by the trust deed of the general character usual according of trust deeds came into into for similar purposes in relation to an issue of debentures or debenture stock by a limited company.
  • Whenever a concern of debentures is manufactured under this section by an agricultural co-operative society, the authorised lender to whom such debentures are issued shall, within twenty one days following the concern thereof, apply in the approved form and manner to the Minister for the sign up of such issue in the register, of course, if such authorised lender fails so to apply for such sign up every debenture comprised in such concern shall, upon the expiration of the said amount of twenty-one days, become and be null and void.

FUTURE PERSPECTIVE

Cooperatives are not unaffected by structural adjustments and globalization of product market. As a result, Cooperative Banks must redesign their strategies for sustainability and progress. The monetary reforms initiated by the government of India in 1991 have influenced the Financial Institutions including the Cooperative Financial Institutions. These reforms aim at liberalization and deregulation of Indian market.

The Cooperative Lenders of Punjab have accepted the reforms in Indian current economic climate, especially, the financial reforms in right spirit. Since these Banks have mainly been providing credit to agriculture sector, changes in agricultural current economic climate have an effect on them more tightly. The Banks envisage following situation as a result of liberalized agricultural insurance policy :

Liberalization of agricultural plan would result in greater capital power and borrowed capital requirements of agriculturists. To be able to generate diversification and produce quality products for international market. For this function, Punjab farmers would need better credit support for improved upon technology, seed products and agro-inputs.

Liberalized agricultural insurance policy would reverse the process of fragmentation of land holdings and would result in exodus of occupations from agricultural sector to other sectors of economy. Such as small company enterprises, services and industrial sector.

Liberalization of agriculture would professionalize and modernize agriculture, therefore earning a position of industry getting high skilled pros in agriculture sector.

Liberalized agricultural overall economy would lead to a greater role of private research and development establishments in improving the productivity and quality of agricultural operations.

The liberalized agricultural insurance plan would bring about higher thrust on value addition in agriculture. Therefore, a great deal of thrust would be on agro-processing products.

The liberalized agricultural plan would lead to contract forming for guaranteeing marketing of agricultural produce at better prices.

The liberalized agricultural insurance policy would bring higher thrust on export of raw and value added agro-products.

The liberalized agricultural overall economy would lead to sowing/planting of new crops. Leading to a great deal of crop diversification.

Bibliography:

  • www. wikipedia. org/wiki/Agricultural_cooperative
  • www. agricoop. org/
  • www. agriculture. indiabizclub. com
  • www. consumercourt. in
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