Agricultural Cooperative structure in India.pdf

regarding agricultural cooperative structure in India pre independence, post independence scenario

1. DESIGNED AND DEVELOPED UNDER THE AEGIS OF
NAHEP Component-2 Project “Investments In ICAR Leadership In Agricultural Higher Education”
Division of Computer Applications
ICAR-Indian Agricultural Statistics Research Institute

2. Course Details
CourseCodeAG12
Course
Name
Agricultural Finance & Cooperation
Lesson 15
Agricultural cooperation in India-cooperative credit structure in
India-credit, marketing, consumer and multi-purpose
cooperatives, farmers’ service cooperative societies, processing
cooperatives, farming cooperatives, cooperative warehousing
Disclaimer : Presentations are intended for educational purposes only and do not replace independent professional
judgement. Statement of fact and opinions expressed are those of the presenter individually and are not the opinion or
position of ICAR-IASRI. ICAR-IASRI does not endorse or approve, and assumes no responsibility for the content, accuracy or
completeness of the information presented.
1

3. Name Role University
SaddikutiHymaJyothi Content Creator
Acharya N.G. RangaAgricultural
University,Guntur
Dr.Sudhakar Dwivedi Course Reviewer
Sher-e-Kashmir University of Agricultural
Sciences and Technology of Jammu ,Jammu
Created by
2

4. CooperativeCreditStructureinIndia
GovernmentofIndiarealizedthatcooperativesweretheonly
alternativetoincreaseagriculturalcreditanddevelopmentof
ruralareas,asrecommendedbyAIRCSCheadedbySri.
Gorwala.
Hence,cooperativesreceivedsubstantialhelpingetting
creditfromReserveBankofIndiaandlarge-scaleassistance
andencouragementfrombothcentralandstategovernments
fortheirgrowthanddevelopment.
Cooperativestructurewasdelineatedintotwotypesviz.,
i)three-tierstructureforprovidingshort-termandmedium-
termloans
ii)two-tierstructureforlong-termloansinallstatesexcept
Bihar,JammuandKashmir,MaharashtraandUttarPradesh,
wherethestructureisunitaryi.e.concentratedatasingle
point. •4

5. •5

6. State Cooperative Banks (SCB’s):
Thesearetheapex/highestcreditorganizationsexisting
atthestatelevel.
DistrictcooperativeCentralBanks(DCCB’s)andprimary
agriculturalcooperativecreditsocietieswillactas
membersofthesebanks.
TheseSCB’swillsupervisetheactivitiesofthemember
banksandmobilizeanddeploythefinancialresources
amongthememberbanks.
TheyserveasabridgebetweenRBIandPACS.
SpecificfunctionsofSCB’sare
1.Theyhelpthestategovernmentsinformulating
developmentalplanspertainingtocooperative
institutions.
2.Theyalsohelpingcoordinatingthecooperativeswith
thegovernment.
•6

7. 3.Theyformulateandimplementuniformcreditpolicies
pertainingtocooperativedevelopmentinthestate.
4.TheyactasBankersBanktoDCCBs.
5.Theywillgrantsubsidiesforthesmoothfunctioningof
DCCBs
6.Similartoanyothercommercialbank,theyalsoperform
thenormalbankingoperations.
District Cooperative Central Banks (DCCBs):
Theyactaslinkbetweenstatecooperativebanksand
primaryagriculturalcooperativesocieties.InDCCBsthe
areaofoperationvariesfromerstwhiletaluktodistrict,but
inmostofthemitisconfinedonlytotaluks.
InDCCBsmembershipisopentoindividualsandother
societiesfallingunderitsareaofoperation.Marketing
societies,consumers’societies,Farmingsocieties,urban
banksandPACS’willusuallyenrollasitsmembers.
•7

8. SpecificfunctionsofDCCBsare:
1.Theysuperviseandinspecttheactivitiesand
functionsofPACS’andhelpthemtofunctionsmoothly.
2.Apartfromprovidingguidancetheyalsoprovide
leadershiptoPACS’
3.Theyalsoundertakenon-creditactivitieslikesupply
ofseeds,fertilizersandalsoconsumeritemslikesugar,
keroseneetc.
4.Theyproviderequisitecreditforsocietiesundertheir
control.
5.Theyacceptdepositsfromthemembersocietiesas
wellasfrompublic.
•8

9. Primary Agricultural Cooperative Credit Societies
(PACS’):
WiththeenactmentofCooperativeSocietiesActof1904,
PACS’cameintoexistencefollowingtheguidelinesof
Raiffeissenmodel.
Thesesocietieswillfunctionatvillagelevel/grassrootlevel
providingthefarmerstherequiredshorttermand
mediumtermloans.
Specific functions of PACS are:
1.TheyborrowadequateandtimelyfundsfromDCCBs
andhelpitsmembersbyprovidingrequiredfinances.
2.Soastoinculcatethehabitofthrifttheyattractlocal
savingsofmemberstowardssharecapitalanddeposits
fromthevillagers.
3.Theysupervisetheenduseofcredit.
•9

10. 4.Theydistributefertilizers,seedsandpesticidestothe
needyfarmers.
5.Theyprovidemachinerytothefarmersonhirebasis.
6.Theyalsoassociatethemselveswiththeplansand
programmesmeantforthesocio-economicdevelopmentof
thevillage.
7.Theyhelpthefarmersinmarketingoffarmproduce.
8.Theyprovidestoragefacilitiesandmarketingfinance.
9.Theyhelpinsupplyingcertainconsumergoodslikerice,
wheat,sugar,kerosene,clothesetcatfairprices.
Central Land Development Bank (CLDB):
CentralLandDevelopmentBankisanapexbankinthe
two-tiercooperativecreditstructureprovidinglong-term
credit/financetoPLDBsanditssubsidiary/affiliated
branches.ThebranchesofCLDBs,PLDBsandindividual
entrepreneursarethemembersofCLDB.
•10

11. NationalBankforAgricultureandRuralDevelopmentand
LifeInsuranceCorporation(LIC)subscribeforits
debentures.
NABARDisarefinancingagencytotheCLDBs.
CLDBisalinkbetweenNABARDandgovernmentinlong-
termtransactions.
Specific functions of CLDB are:
1.CLDBinspects,supervisesandguidesPLDBsintheir
bankingoperations.
2.Itfloats/invitesdebenturesforraisingthenecessaryfunds.
3.Itinculcates/developsthespiritofthriftamongthemembers
bymobilizingsavingsandstimulatingcapitalformationi.e.
asstcreation.
4.Itprovidesloanstothememberbanksfortheredemptionof
olddebts,developmentofland,purchaseofmachineryand
equipmentanddevelopmentofminorirrigationetc.
•11

12. Primary Land Development Banks (PLDBs):
Theestablishmentoflandmortgagebanksoncooperative
lineswasinitiatedinPunjabduringtheyear1920’sitself.
Duringthe1920-29i.e.intheexpansionphasemanyLand
MortgageBanks(LMBs)wereestablishedinMysore,
Madras,AssamandBengal,Bombayetc.
Eventhoughtherewasslowprogressofthesebanksuntil
1945,goodprogressofthesebankswasachievedinthepost
independenceerai.e.1948-53.Duringthisperiodonlylarge
andaffluentfarmersobtainedfromtheLMBsandsmall
andmarginalfarmerswerebenefitedverylittle.
LateronLMB’sreceivedmassivesupportfrominstitutional
agencieslikeRBI,SBI,LICandARDC.WiththisLMBs
directedtheirlendingpoliciestowardssmallandmarginal
farmersemphasizingagriculturaldevelopment.
•12

13. Intheyear1974,LMBswererenamedasLand
developmentBanks(LDBs)inAndhraPradesh.The
areaofoperationofPLDBwasaterstwhiletaluklevel.
Specific functions of PLDBs are:
1.Toprovidelong-termcredittotheneedyfarmersforthe
landdevelopmentincreasedagriculturalproductionand
productivityofland.
2.Theyprovideloansforminorirrigation,purchaseofland
andforredemptionofolddebts.
3.Theyfinancefarmersinpurchaseoftractors,machinery
andequipment.
4.Theyprovidefinancetofarmersfortheconstructionof
farmbuildings.
5.Theymobilizeruralsavings.
•13

14. Single Window System of AP:
Till1987thefarmersinAndhraPradeshdependedon
primaryagriculturalcreditsocietiesfunctioningunder
threetierstructureforshort-termandmedium-term
creditrequirementsandonprimarylanddevelopment
banksfunctioningundertwo-tierstructureforlong-term
creditneeds.
Withthisbackdrop,tomakecooperativesrenderingtheir
usefulservices,thegovernmentofA.Pthoughttobring
someappropriateorganizationalchangesintheworking
ofcooperativesinthestate.Subsequently,acommittee
underthechairmanshipofSri.MohanKanda.
ThecommitteesubmitteditsreportinMay,1985and
recommendedtheestablishmentof“SingleWindow
System”andabillwaspassedforitsestablishmentinthe
APstateassemblyinJanuary,1987.
•14

15. Themainintentionandideaofintroducingthesingle
windowsystemistosupplyalltypesofagriculturalcredit
neededbythefarmersthroughPACSandprovide
adequatemarketingfacilitiestofarmproducethrough
DistrictCooperativeMarketingSocieties(DCMS).
Major functions of PACS under single window system
are:
1. To advance short, medium and long term loans.
2. To supply required farm inputs like seeds, fertilizers and
pesticides.
3. To distribute essential commodities like rice, wheat,
sugar, kerosene etc.
4. To arrange fore marketing of farm produce of the
members through DCMS.
•15

16. •16

17. CreditCo-operative:Afinancialorganizationowned
andcontrolledbyitsmembers,whocanborrow
atlowinterestratesfromanamountofmoneythey
havesavedasagroup.Creditco-
operativesprovidefinancialservicestopoorandlow-
incomepeople.
MarketingCooperative:Co-operativemarketing
organisationsareassociationofproducersforthe
collectivemarketingoftheirproduceandofsecuring
forthememberstheadvantagesthatresultfrom
large-scalebusinesswhichanindividualcultivator
cannotsecurebecauseofhissmallmarketable
surplus.
•17

18. Consumer Cooperative:
Thesesocietiesareprimarilyforconsumerswhowish
tobuyhouseholdgoodsatlowerprices.Thesociety
buysgoodsorproductsinbulkamountsdirectlyfrom
theproduceronwholesaleratesandsellsthemtothe
members,thuseliminatingtheneedforamiddleman.
Thepurchasedgoodsaresoldtomembersandnon-
membersincash.
Capitalisraisedbyissuinglowdenominationalshares
tothememberswhoalsogetdividendsontheshares.
Theyensurearegularsupplyofgoodsatreasonable
rates.
Theysetupstoresoroutletstosellgoodsandavail
hugetradediscountsfromproducers.Someofthebest
examplesofaconsumerco-operativesocietyareSuper
BazarandApnaBazar.
•18

19. Processing Cooperatives:
Cooperativesthatinvolveinprocessingofagriculturaland
alliedactivitiesproducearecalledprocessingcooperatives.
Indiabeinganagrarianeconomy,processingofagricultural
produceisofvitalimportance.Itnotonlyhelpsinvalue
addition,butalsoinemploymentgenerationandexportsof
agri-produce.
NCDChasbeenpromotingcooperativesinvolvedin
processingoffoodgrains,plantationcropsandoilseeds,by
providingfinancialassistancethroughStateGovernments,
aswellasdirectlytotheprocessingsocieties,tomeetthe
needsofthesecooperatives.
Cooperativewarehousing:Thesewarehousesareowned,
managedandcontrolledbyco-operativesocieties.They
providewarehousingfacilitiesatthemosteconomicalrates
tothemembersoftheirsociety.
•19

20. Farmers Cooperatives:
Anagriculturalcooperative,alsoknownasafarmers'
co-operative,isacooperativewherefarmerspooltheir
resourcesincertainareasofactivity.
Abroadtypologyofagriculturalcooperatives
distinguishesbetween 'agriculturalservice
cooperatives',whichprovidevariousservicestotheir
individuallyfarmingmembers,and'agricultural
productioncooperatives',whereproductionresources
(land,machinery)arepooledandmembersfarm
jointly.
Multi-PurposeCooperativeSociety(MPCS):
Thecooperativesformedfordifferentpurposessuchas
credit,marketing,production,consumptionetc.,are
calledasmulti-purposecooperativesocieties.
•20

21. Farmers Service Societies (FSS)/ Farmers Service
Cooperative Societies (FSCS)
FarmersServiceSocietiesarewellorganizedand
registeredunitsfunctioningontheprinciplesof
cooperation.Asmanycooperativesarerenderingtheir
servicesonlytoaffluentfarmers,theNational
CommissiononAgriculture(NCA)stronglyfeltthat
separatesocietiesformeetingtheneedsofweaker
sectionsinruralareasareenvisaged.
HencewiththerecommendationsofNCA,theFSSwere
organizedintheyear1971,oncooperativelinestoprovide
integratedcreditservicestoweakersectionsofruralareas
viz.,smallfarmers,marginalfarmersandagricultural
labourersandruralartisans.
•21

22. Important functions of FSS are:
1.Tosupplyalltypesofloansi.e.croploans(ST),MTand
LTLoanstoweakersections.
2.Toprovideadequatesuppliesofrequisiteinputsand
technicalguidancefortheirdevelopment.
3.Toencouragedairy,poultry,fisheries,farmforestryand
othersubsidiaryoccupationsinruralareas.
4.Tomakearrangementsforbringingabout
improvementsinagriculturemarkets.
5.Tomobilizedepositsandsmallsavingsfromweaker
sectionsbyprovidingincentives.
•22

23. Large-Sized AdivasiMultipurpose Cooperative
Societies (LAMPS):
InlinewiththeobjectivesofFSS,LAMPSwere
organizedforthefirsttimeinDecember,1971n
recommendationsofBawateamappointedby
GovernmentofIndiaintribalareasofthecountry.
ObjectivesofLAMPS:
1.Toprovidealltypesofcreditincludingconsumption
credit.
2.Intensificationandmodernizationofagriculturewith
appropriatetechnicalguidance.
3.Improvingthemarketingofagriculturalandforest
productsintribalareas.
•23

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