By Balasubramanian Iyer
The creation of the new Ministry of Cooperation has been greeted with euphoria and jubilation by members of cooperatives across India. The general public was left wondering what ‘cooperation’ was all about and the political class up in arms about usurping of state rights. Therein lies the challenge and the opportunity for the new Ministry – educate the public about cooperatives as people-centered enterprise model, shed the political and bureaucratic baggage, and create an environment to revitalize and rejuvenate the cooperative movement.
Cooperatives have been in existence in India for 117 years! The first cooperatives were started under British Rule in response to agricultural distress and indebtedness. Since then, they have grown across sectors and today there are around 850,000 cooperatives with over 290 million members (roughly 20% of the population)! Over time, new forms such as Self-Help Groups (SHGs) and Farmer Producer Organizations (FPOs) have been promoted to address internal (governance) and external (interference) deficiencies. Cooperatives worldwide adhere by the Statement of Cooperative Identity (SCI) which carries the definition, values and principles. Cooperatives are businesses, maintain autonomy and address economic, social, cultural, and increasingly environmental needs. However, in India, the essence of cooperatives, adherence to values and principles, maintaining autonomy have eroded over the years. The Ministry of Cooperation can start by reinforcing its stated purpose to, “help deepen Cooperatives as a true people-based movement reaching up to the grassroots.”
The 97th Constitutional Amendment enacted in 2011, enshrines the fundamental right of citizens to freely form cooperatives and asks the state to promote democratic control and professional management of cooperatives. The Amendment is in line with SCI than the regular cooperative law. The 97th Amendment is stuck in the Supreme Court on the grounds that it is not within the competence of Parliament to enact the amendments as coperatives are state subjects. A fresh start could be made by the Ministry in the spirit of cooperative federalism by bringing the states together and seeking their support in the passage of the law. The Ministry of Cooperation needs to promote all forms of collectives be it cooperatives, SHGs, FPOs, self-reliant cooperatives which espouse the values and principles enshrined in the SCI. The laws also need to be amended to make it easy to form cooperatives, for cooperatives to raise money without diluting their distinct identity and equal treatment on par with other economic actors.
The three Farm Bills passed by the Government of India aim to free farmers from the shackles of middlemen, provide freedom to trade, and increase their ability to bargain. There is vociferous discussion on the merits and demerits on the bills. India has hundreds of million farmers, most of them are marginal or small farmers with fragmented landholdings with low productivity and limited in their bargaining power. According to the National Federation of State Cooperative Banks (NAFSCOB), in 2018-19, there were 95,995 Primary Agricultural Cooperative Societies (PACS) with 132 million members. Of these PACS, 68% (65,691) were viable and another 18% (17,904) were potentially viable. Of the 132 million member, 79% (104,860,000) were from the small and marginal farmer category. The 65,000 readily viable PACS can be immediately mobilized to look at all aspects for farmer services. Cooperative have the potential as Multi Service Centres to undertake collective purchase of inputs, deliver post-harvest marketing, storage and processing, and develop the financial and physical supply chain. The Ministry of Cooperative can ensure NABARD, State Governments and State Cooperatives Banks revive already existing cooperatives and enable them to meet the emerging needs of farmers.
Start-ups, are the mantra of the young these days. What better startup is there than a cooperative? A group of people with felt need come together, invest their own money and share the profit, own the enterprise, are responsible for making it a going concern, and invest in themselves and the community. Start-ups are not just the domain of the private sector or the venture funds. The Ministry of Cooperation could reform policies to include cooperatives as part of the Start-up India Mission. Millennials rate social and economic inequality as the top challenge the world faces globally and locally. Sustainable growth is a concern for them and a matter of economic common sense. Millennials favor working in a place where they derive a sense of purpose, and fulfillment. Where the focus is on people and purpose, not just products and profits. What better model then cooperatives? However, there is hardly any venue for them to learn about cooperatives as it is not taught in our schools and universities. The Ministry of Cooperation needs to work across ministries to create spaces (clubs, text books, research, incubators, laboratories) where models like cooperatives, social economy, social enterprises can be taught. The Ministry of Cooperation needs to recognize, educate and promote successful cooperatives and create a robust database which cooperatives contribute to all sectors of the economy.
Many cooperatives in India are male dominated with limited diversity, especially when it comes to gender. Even when talking about farmers it is the ‘kisan bhai’ who dominates farm discourse. Women account for 33 per cent of the farm labor force and as much as 48 per cent of the self-employed farmers. Entrenched patriarchy results in women being discriminated against, especially around land inheritance, membership, and ownership. The COVID-19 pandemic has had a devastating impact on women. Women entrepreneurs have been disproportionately affected by the contraction as their activities are concentrated in consumer-facing sectors (services, hospitality, retail, trade) where demand shock has hit hardest. Cooperatives have played a key role in collectivizing women and increasing their bargaining for productive assets, enhancing financial inclusion, and generating employment and jobs. The Ministry of Cooperation can again work across ministries to have country-wide drive to get women into self-help groups or cooperatives and strengthen their position Similar to the Farmer Producer Organization, the Ministry of Cooperation could look at creating Service Provider Organization, which could be register not just as company, but a company based on cooperative values and principles.
It is oft said, Cooperation has failed. But, cooperation must succeed.” The Ministry of Cooperation can provide a bulwark to nurture, support and strengthen cooperatives. The Ministry needs to ensure that it does not tighten the reins of control but provide the space for cooperatives to self-govern and succeed. The onus is on cooperative to respect centrality of members; provide space for leaders with real interest, root out vested political interest, improve governance, professionalize management, strengthen bottom line, adopt technology, and counter fraud. The Ministry of Cooperation needs to protect the fundamental right of citizens to organize and encourage cooperative institutions that put people at the center and provide them choice and voice!
-Balu G. Iyer, Regional Director
ICA Asia & Pacific
(Views expressed are in a personal capacity and do not reflect that of ICA)