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The Hindu
05-07-2025
- Business
- The Hindu
Cooperative societies: Key to equitable development
Cooperative societies have a long history spanning more than a century in India. The concept of collaboration and cooperative activity was widespread throughout our nation even before legislation established cooperative organisations. It existed in the form of building assets like community tanks as well as community-managed forests in villages. Different regions had varied forms of cooperation, such as kuris, chit funds, bhishies, and phads. There have been instances of villagers pooling food grains after an enduring harvest to lend to those in need before the next harvest. On International Day of Cooperatives, observed on July 5, let's look at the emergence of cooperative organisations and their contributions to the welfare of the people in the country. What are cooperative societies? They are an independent or self-governed group of people who voluntarily come together to work for economic, social and cultural goals through a collectively owned business. Cooperative societies are formed to help their members, who are mainly from the economically weaker sections. The different types of cooperative societies include agricultural cooperatives, consumer cooperatives, housing cooperatives, and banking cooperatives. Modern cooperative movement in India In the late 19th Century, the aftermath of the Industrial Revolution shaped the modern cooperative movement in India. The rural population was widely displaced, with many choosing agriculture as a means of livelihood. However, this did not solve their issues – farmers faced mounting challenges like erratic rainfall, leading to poor crop yield, and a growing dependence on moneylenders who offered them high-interest loans. Taking cognisance of these challenges, a committee, appointed by the government of India and headed by Sir Edward Law, enacted the Cooperative Credit Societies Act on March 25, 1904, which outlined the framework for establishing cooperative societies, registration, liabilities, etc. In the same year, on August 21, India's first cooperative society was established at Tirur in Tiruvallur district of Tamil Nadu. Then in 1912, the Cooperatives Societies Act addressed the shortcomings of the 1904 Act, broadening the focus to encompass handloom weavers, marketing groups, and other artisan societies. The first Cooperative Housing Society, the Madras Cooperative Union in 1914, the Bombay Central Cooperative Institute in 1918, and other establishments in Bengal, Bihar, Orissa, Punjab, and other states emerged following the 1912 Act, further fuelling the impetus of the cooperative movement. The success story of Amul Prior to 1946, India's dairy industry was highly unorganised. Milk collection and distribution were controlled by private traders and merchants who exploited the poor farmers by arbitrarily fixing low procurement costs. During this time, the demand for milk was high in cities, but the transportation and preservation of something as perishable as milk was a herculean task for the dairy farmers. To end the persistent woes, dairy farmers in the districts of Anand and Kheta came together to form cooperatives to have more control over the production and sale of milk. These cooperatives grew into the Gujarat Cooperative Milk Marketing Federation Ltd., which later came to be known as Amul, marking the beginning of the White Revolution. It was established under the supervision of Indian independence activist and lawyer Tribhuvandas Patel. It was Dr Verghese Kurien and H.M. Dalaya who expanded the scope and development of the cooperative. Amul, which stands as an abbreviation for Anand Milk Union Ltd., empowered the small farmers by establishing a three-tier structure to form a hierarchical network. The three-tier structure involved having village cooperatives at the local level, district cooperatives at the district level, and a state federation at the state level. Milk collected by the village cooperatives from farmers is sold to the district cooperatives who sell aggregated milk to the state federation. The state federation then sells the milk and milk products under the Amul brand across India. In addition, the district and state federations played a pivotal role in providing managerial and technical support to the village cooperatives. Farmers now gained access to high-end technology and greater bargaining power. They also had access to loans and insurance and other financial incentives from banks through cooperatives. Consumers also had access to high-quality and affordable dairy products. All in all, this decentralisation shaped the course of Amul to become one of the Fast-Moving Consumer Goods (FMCG) brands in India. How have cooperative societies helped in the rural economy of India? As India houses 65% of its population in rural India, with agriculture and dairy farming as a source of livelihood for farmers, cooperative sectors have played a significant role in the upliftment of the rural economy by fostering financial inclusion – giving farmers access to credit and financial services and offering loans to those who might not qualify for availing loans from commercial banks. One such example is the Primary Agricultural Credit Societies (PACS) providing credit, input supply, and other financial services to farmers. By supporting local industries, cooperative societies are instrumental in the creation of jobs, leading to a rise in economic activities in the area. With over 8,00,000 cooperative societies categorised in 29 different sectors, India has the highest number of cooperative societies in the world. Several initiatives, including the computerisation of PACS, tax benefits to the cooperative societies, participation of PACS in LPG distributorship, and the convergence of the PM Kusum scheme, have been launched by the government, further strengthening and expanding the model of cooperative network worldwide.
Indian Express
03-05-2025
- Business
- Indian Express
Opinion In India's cooperative boom, women need to be at the centre, not the margins
Women have been written out of the history of cooperatives in India. While the formal history of cooperatives is more than 100 years old, dating back to 1904, when the Cooperative Credit Societies Act was passed in pre-independent India, the practice of cooperation and cooperatives' activities is considered more than 1,000 years old in the country. There are many documented examples from all parts of the country of resources like food grains or funds being pooled by groups to lend to members, who included men and women. Women were integral to kuries and bhishis, the earliest forms of chit funds, which originated in the Malabar region of Kerala and in Kolhapur in Maharashtra. Women formed the groups, managed finances and distributed funds. Those women who could not contribute funds contributed grains by saving a fistful of rice from every meal. However, women's contribution to these ancient cooperative practices is a footnote that has barely been examined. This may explain why women are relegated to the margins in modern cooperatives. There has been a renewed focus on cooperatives since the Covid pandemic and rising global challenges like climate change and conflicts, which have drawn attention to livelihoods and the need for inclusive growth and sustainable development amidst economic uncertainty. The United Nations has declared 2025 the International Year of Cooperatives with the theme 'Cooperatives Build a Better World'. The launch of the International Year of Cooperatives, was held in India in November 2024 — fittingly, as India has been taking the lead in promoting and strengthening cooperatives from the top levels of government since the new Ministry of Cooperation was formed in 2021. Cooperatives, by their very model of being people-centred enterprises, owned and controlled by members and based on their economic and social needs, are suitable for women, who face a higher threshold to enter the economy globally. This is particularly acute in India, which despite its rapidly growing economy has chronically low labour force participation by women. Women in India also face severe time poverty — females spend 16.4 per cent of their time on unpaid domestic work in a day, whereas the figure is just 1.7 per cent for males, the new Time Use Survey (January-December 2024) conducted by the National Statistics Office shows. This keeps them from participating in paid work. India has one of the largest cooperative movements in the world, with about 8.5 lakh cooperatives in the country, of which the share of women-only cooperatives is 2.52 percent, according to a 2023 report by Niti Aayog. The number is surprisingly low, considering women's participation in cooperatives has been highly visible, with successful initiatives like SEWA (a trade union with 3.2 million self-employed women), Amul (3.6 million women dairy farmers as members) and Lijjat (which introduced decentralised production for 45,000 female members to produce and earn from home). Numerous studies show that cooperatives have helped rural women to improve their financial literacy and entrepreneurship skills, and increase their savings and household incomes. Aside from economic empowerment, India's experience shows that cooperatives have been instrumental in enabling women to gain social and political empowerment while also improving their access to essential services like banking, housing, insurance, health, nutrition, education and childcare. Cooperatives help women access social capital through networks of trust, reciprocity and collective action, which in turn help build resilience. Ministry of Cooperation data from 2023 showed that out of 24,264 women's cooperatives, only 10,806 were functional, while the rest were dormant or under liquidation. Madhya Pradesh had the highest number of women's cooperatives, followed by Rajasthan, Assam and Telangana. The ministry has taken initiatives to support women's participation in mixed cooperatives, where the average male-to-female ratio is 74:26, and there is persistent underrepresentation of women in leadership roles. New guidelines mandate the reservation of two seats for women on the board of multi-state cooperative societies and the presence of women directors on the board of primary agricultural credit societies. The ministry is also providing affordable loans to women's cooperatives along with training and business expansion workshops. It is not yet known how effective these initiatives have been but they may not be enough to plug the gaps. The unusually high number of dormant women's cooperatives (11,869), demonstrates that women face barriers in maintaining and sustaining them. Most women's cooperatives are small, have limited resources and are nearly invisible to policymakers. Women members have limited access to education, skills training and financial literacy. They are also restricted by cultural norms like the burden of unpaid work and limited mobility, particularly in rural areas. A 2021 study on a women's dairy cooperative in Punjab brought out how members were lacking in confidence and decision-making skills and sought constant handholding from official functionaries for the administration of their cooperative. Most women's cooperatives need professional support and supervision to establish themselves and continue to function effectively, show studies by SEWA. There are green shoots of hope for women's cooperatives. Increased digitisation is expanding access to markets for women while growing recognition of the care economy by policymakers addresses women's time poverty by advocating for care services and infrastructure. Cooperatives have the potential to transform rural economies and to empower women. The International Year of Cooperatives provides the impetus to put the necessary frameworks in place.
