Seminar on Producers Organizations and Cooperatives

 
WELCOME
 
TO
SEMINAR
UNION IS STRENGTH
 
1
 
SEMINAR
ON
Producers Organizations
AND
Cooperatives
Bharath Kumar, T.P
III Ph.D Student
PALB 1027
 
2
Flow of seminar
3
Producers
organization
and
cooperatives
INTRODUCTION
 
4
Objectives of Seminar
 
5
Concept of the PO
 
PO’s are groups of rural producers coming together based
on the principle of membership, to pursue specific common
interests of their members and developing technical and
economic activities that benefit their members and
maintaining relations with partners operating in their
economic and institutional environment. 
(Anonymous.2004).
 
6
FAO, 2006
  
 Producers Organizations (POs) are
essential institutions for the
empowerment, poverty alleviation and
advancement of farmers and the rural
poor.
 
7
National Commission on Farmers , 2004
“Producers’ organizations should be
promoted to combine the advantages of
decentralized production and centralized
services,  post-harvest management, value
addition and marketing”
 
8
What are the essential features
of a PO?
It is formed by a group of producers
It is a registered body and a legal entity
Producers are shareholders in the organization
It deals with business activities related to the
primary produce
It works for the benefit of the member
producers
A part of the profit is shared amongst the
producers
Rest of the surplus is added to its owned funds
 
9
Need for PO
Ensure better income
 
 
To enhance the benefit of economies of scale
 
 
To overcome the problems of intermediaries
 
 
Increased bargain power of the producers
 
More services can be made available to farmers
through a single point
 
 
10
Contd…..
 
PO influence policies and demand for required services.
Farmers can participate in the decision making process
Service system becomes more effective and
accountable
They get better access to latest markets and technology
POs can involve in Farmer and market led extension
activities
Build interactions between research, extension and
farming systems
 
 
11
Different Types of Producers
Organizations
FIGs
CIGs
Cooperatives
Farmers’ associations
Federations
Farmers producers organization
Producer Company
Non-Profit Society
Trust
 
12
Different legal forms of PO
1.
Cooperative Societies Act/ Autonomous or Mutually Aided
Cooperative Societies Act of the respective State
 
2.
Multi-State Cooperative Society Act, 2002
 
3.
Producer Company under Section 581(C) of Indian Companies
Act, 1956, as amended in 2013
 
4.
Section 25 Company of Indian Companies Act, 1956, as
amended as Section 8 in 2013
 
5.
Societies registered under Society Registration Act, 1860
 
6.
Public Trusts registered under Indian Trusts Act, 1882
 
13
What are the taxation systems /
laws governing the POs
Immediately after incorporation, a PO has to
procure
1.
PAN number from the Income Tax Department
 
2.
TIN number from the Commercial Tax
Department
 
3.
The company has to register itself for Service
Tax from Commercial Tax Department and
 
4.
VAT from Excise department
 
14
Can there be a PO for non-farmers
Who owns the PO
Who provides support for promotion of PO
Can an NGO promote PO
Is registration mandatory for a PO
Can a person become member of more than one PO
Who will manage the PO –BoM, POPI
Can a PO procure produce from non-members
 
15
Benefits of Producers
Organizations
Space for participation
Improving  members economic and social
situation
Generation and Management of financial
resources
 
16
Important activities of a PO
a.
Procurement of inputs
b.
Disseminating market information
c.
Dissemination of technology and innovations
d.
Facilitating finance for inputs
e.
Aggregation and storage of produce
f.
Primary processing like drying, cleaning and grading
g.
Brand building, Packaging, Labeling and
Standardization
h.
Quality control
i.
Marketing to institutional buyers
j.
Participation in commodity exchanges
k.
Export
 
17
Basic purpose envisioned for the
POs
For backward linkage for inputs like
seeds, fertilizers, credit, insurance,
knowledge and extension services; and
Forward linkages such as collective
marketing, processing, and market-led
agriculture production
 
18
 
 
19
 
 
 
20
 
21
 
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22
Optimal size and parameters of Producer
Organisation (PO)
a.
It is desirable to have a PO’s for farmers having their
lands in contiguous micro-watersheds
b.
The productive land under an PO may be around 4000
ha.
c.
The PO may cover generally one or two contiguous
Gram Panchayats for ease of management.
d.
The number of farmer producers that need to be
covered may be around 700 to 1000.
e.
The cost of managing a PO’s of the above nature may
be around Rs. 2 lakh per month or Rs. 24 lakh per
annum.
 
23
Producer Organization
Promoting Institution (POPI)
 
An NGO
A bank branch
A government department
A cooperative society
Any association or
Federation
 
24
Roles and Responsibilities of POPI
1.
Cluster identification
2.
Diagnostic and Feasibility Studies
3.
Business Planning
4.
Mobilisation of Producers and Registration/
Incorporation of PO
5.
Resource Mobilisation
6.
Development of Management Systems and
Procedures
7.
Business Operations
8.
Assessment and Audit
 
25
Limitations of a Producer organizations
1.
A PO’s should register as per the laws and act
2.
Registration of a PO’s is a bit difficult process
3.
Requires the services of a consultant
4.
The registration is a time consuming process
5.
The members cannot transfer their shares freely
6.
Getting a professional CEO at an affordable cost is little
difficult
7.
It is difficult for the illiterate members to understand statutory
provisions of laws
8.
Taking members in group is a biggest challenge
 
26
How much expenses will be incurred
for registration of a PO
 
27
Financial support available for
PO
Small Farmers Agribusiness Consortium
(SFAC)
1.
SFAC operates a Credit Guarantee Fund to
mitigate credit risks
2.
SFAC provides matching equity grant up to
Rs. 10 lakh
 
NABARD
 provides financial support to
the POs only through project mode
 
28
 
 
 
29
Concept of the cooperatives
Cooperatives are “autonomous associations of
persons united voluntarily to meet their
common economic, social and cultural needs
and aspirations through a jointly owned and
democratically controlled enterprise”
 
 
30
COOPERATIVES - VEHICLE FOR
AGRICULTURE/RURAL DEVELOPMENT
“Coops – An Economic miracle of 19th Century”
-
Late Honorable President of India Dr. S. Radhakrishnan
 
Cooperatives in Rural Milieu
“Cooperatives” - basically designed and oriented to
meet economic and societal needs of rural
segments, particularly the poor.  Starting with
agricultural credit, cooperatives encompassed all
rural economic activities.
 
“Cooperatives” - single largest business model in the
country account for 20% of rural credit supply, 35%
of fertilizer supply, 60% of sugar production, 30% of
wheat procurement, 45% of cotton procurement,
40% of cloth production, 48% of milk production
etc.
 
31
 
32
MEANING OF CO-OPERATION
Co-operative Society ’ means
A voluntary association of persons
 
Working together with common economic objective
 
Providing support to the members
 
Self-help and mutual help
 
Non-profit motive
 
Pooling individual resources for group welfare
 
Common benefit
Cooperatives can be
registered in this acts
 
Cooperative Societies’ Act of Individual State
Autonomous Cooperative Societies’ Act existing in
many States (minimal State intervention)
Multi State Cooperative Societies’ Act, which is a
Central Act
 
33
 
34
 
35
The Cooperative Principles
Cooperatives are non-profit companies and their
members’ liability is limited to the capital they invest.
Cooperatives have extended across the entire country
and there are currently an estimated 230 million
members nationwide.
Cooperatives have advanced more credit in the Indian
agricultural sector than commercial banks
80% is concerned with agriculture
60% deal with credit only
Cooperatives there are two types of benefits for
members –
Monetary benefits and
Services
 
36
Share of Co-operatives in National
economy
Rural Net work (villages covered) - 100%
Agricultural Credit disbursed by Co-
operatives - 46.15%
Fertilizer disbursed (6.049 million Tonnes) -
36.22%
Fertilizer production (3.293 M.T. - N&P)
Nutrient - 27.65%
Sugar produced (10.400 million tonnes) -
59%
Capacity Utilization of Sugar Mills - 111.5%
Wheat Procurement (4.50 million toones) -
31.8%
Animal Feed Production/Supply - 50%
Retail Fair Price Shops (Rural + Urban) - 22%
Storage Facility (Village level PACS) - 65.0%
Rubber processed and marketed - 95.0%
Arecanut processed and marketed - 50%
Milk Procurement to Total Production -
7.44%
Milk Procurement to Marketable surplus -
10.5%
Ice Cream Manufacture - 45%
Oil Marketed (Branded) - 50%
Spindlage in Co-operatives (3.518 million) -
9.5%
Cotton Marketed / Procurement - NA
Cotton yarn/Fabrics Production - 23.0%
Handlooms in Co-operatives - 55.0%
Fishermen in Co-operatives (Active) - 21%
Direct employment generated - 1.07 million
Self-Employment generated for persons -
14.39 million
Salt Manufactured (18,266 Metric Tonnes) -
7.6%
 
37
Types of cooperatives
 
1.
The Primary Agricultural Credit/Service Societies
2.
Agricultural Non-Credit Societies
3.
Agricultural co-operative Marketing Societies
4.
Co-operative Farming Societies.
 
38
CAUSES OF SLOW PROGRESS
Government Interference
Mismanagement and manipulation
Lack of Awareness
Restricted Coverage
Functional Weakness
 
39
Characteristics of cooperatives
 
Membership Is Voluntary
Members Have Strong Common Interests
Members Own The Business, And Therefore Own Both
The Tangible And Intangible Assets (Such As Brands
And Reputation);
Members Are Jointly Liable For The Enterprise’s
Conduct And Actions
It Is Intended That The Association Will Be Permanent
.
 
40
Differences between PO's and Cooperatives
 
41
Contd…
 
42
Advantages of PO’s and cooperatives
 Increased Capacity And Bargaining Power
Access To New Markets Through Alternative Marketing Channels
Access To Credit And Support Programmes
Access To Better Technical And Market Information
More Opportunities For Exchanging Experiences
Greater Access To Training Programmes.
 
43
Challenges of PO’s and
Cooperatives
To Achieve Clear And Efficient Internal Organization
To Build Trust In The Managers’ Decisions
To Get Members To Pledge To Deliver Products, Abiding By
Previously Agreed Volumes, Conditions And Deadlines
To Run Associations Profitably And Efficiently
To Design And Implement Efficient And Transparent Administration
Mechanisms
To Establish Proper Communication And Participation Mechanisms
 
44
Role of Extension in Promotion of 
PO’
s and
Cooperatives
 
The role of extension vary with the role of the
POs, the sectors in which the organization
operates, the services offered, and the
organizational form used.
The  role of Extension in  promotion of Producers
Organizations (Chamala, 1990) :
(1)
Empowerment Role
(2)
Community-Organizing Role
(3)
Human Resource Development Role
(4)
Problem-Solving and Education Role
 
45
1. Empowerment Role.
 
The role extension is to help farmers and rural communities
organize themselves and take charge (empowerment) of
their growth and development.
 
The idea here is
  
Releasing the latent energy hidden in the community
and building collective actions for the common good,
rather than from merely redistributing power from the
haves to the have-nots.
 
46
2. Community-Organizing Role
Extension workers must learn the principles of
community-organizing and group management
skills
Understanding the structure of community will
help extension worker to plan, implement, and
monitor their programmes
 
Skills required for extension worker are
Conflict resolution
Negotiation
Persuasive communication help to develop PO
leaders and members
 
47
3. Human Resource Development
Role
Development of technical capabilities of members and
it must be combined with management capability
The idea is
Encouraging rural communities to understand their
personal and group styles of managing themselves
To improve their planning, implementation, and
monitoring skills
 
48
4. Problem-Solving and Education
Role
 
Role is prescribing technical solutions to
empowering POs to solve their own
problems
Education role is training farmers on
learning by doing approach.
 
49
STEPS IN ESTABLISHING 
PO’s
 AND
COOPERATIVES
1.
Understanding the village community-(need and problems)
2.
Identifying potential leaders in the community
3.
Talking to the identified leaders and seeking cooperation from
others
4.
Helping local leaders to call community meetings
5.
Establishment the PO (selection of leaders in group)
 
50
Source: CHAMALA, S., 1990, Establishing a group: A participative action model. Brisbane: Australian
Academic Press. P. 13-38
 Contd..
6.
Developing an organizational structure for the PO
(selection of management)
7.
Developing the PO's management through education and
action learning
8.
Gearing up for action (planning)
9.
Implementing selected activities (actual start of
activtities)
10.
Monitoring and evaluating the PO's progress
 
51
Studies related to PO’s and
cooperatives
52
Avirat Agro Business
Producer Company Limited.
 
Nalini Bikkina 
et al.(2015)
 
 
Farmer Producer Organizations as
Farmer Collectives: A Case Study from
India
 
53
Shikshan Ane Samaj Kalyan Kendra (SSKK), a network
NGO
1980 in Amreli District of Gujarat
Avirat Agro Business Producer
Company Limited
SSKK was instrumental in establishing
watershed associations at the village level
Watershed-plus : land assessment, micro-irrigation, high
yielding varieties of seeds, organic cultivation, reduction in
costs of production, capacity-building and skill acquisition
,increase in productivity . enhancement of selling price ,
development of market linkages.
 
54
Avirat Agro Business Producer
Company Limited
Watershed associations of 16 villages -formed
the first Board of Directors
1600 farmers and Rs.5,000
Agro Service Centre –
Supply of quality pesticides at affordable
prices.
Kiosk to provide information on agricultural
Centre serves farmers from more than 50
villages
Input supply and technical services
 
55
Ma
jor findings
Input supply:
Avirat’s services facilitates purchase of government
approved seeds with price advantages of up to 10-
15%.
Pesticides, and other inputs like farm implements and
equipment to the tune of up to 50%.
Avirat is able to provide these subsidies through
negotiation with input suppliers on a bulk basis for
price advantage.
Farmer Members of Avirat have reported a collective
benefit of up to Rs. 10-15 lakh through lower input
prices.
 
56
 
57
Ma
jor findings
Technical services 
:
 
Trainings, demonstrations and
exposure visit
 
Kalubhai Vora A 
Sarpanch 
of the Village gave a
feedback that
 – “enhance the income of other
farmers in the village through proactively seeking
training programmes from Avirat. As a result of
the efforts of Avirat there has been a decline in
out- migration of farmers”
Other Major technical service that Avirat provides through
uses of  information technology
 Particularly the internet, and mobile messaging
Extensively to facilitate timely (2-3 times in a month)
 
58
The nature of information
disseminated by Avirat using 
ICT
Information Such As Market Trends
Prices Of Commodities In The Market And
Varieties
Stock Positions, And Minimum Support Prices
Rainfall Forecast
New Irrigation Methods
Innovations In Farm Implements and
equipment
 
59
Financial services
Extension of credit is critical for small farmers but
is not being taken up by Avirat for two reasons.
1.
First, regulatory provisions do not allow
organizations such as Avirat to disburse loans.
2.
Second, Avirat does not have enough capital on
its own to disburse loans.
Insurance
Weather insurance to the farmers at affordable
premiums
 
60
Market linkages
Due to training of Avirat, produce were poolled
by the farmers in the village and transported and
sold in the urban areas at higher prices, thereby
eliminating middlemen.
This resulted in fetching higher prices for the
produce in this area.
Avirat also organize 
farmer 
melas 
seasonally to
create visibility and enhance income of the
farmers through sale of fresh produce directly to
local consumers.
 
61
Networking support
Avirat is reported - facilitated networking among
farmers
Avirat is networking with agricultural universities - in
the state to update the farmers on latest farm
technology and agricultural practices, thereby
facilitating transfer of knowledge from lab to the
farm.
Shyamjibhai Sarvaiya 
too state that:
Membership of Avirat facilitated networking among
farmers which lead to improved farmer-to-farmer
learning.
 
62
IMPACT ANALYSIS OF COMMODITY
BASED ASSOCIATIONS
GOPALA, Y.M.
2014
 
63
 
 
 
64
Ten CBAs were established in the RBRC
project area during the period of 2005-
10 and they are:
Rural Biofuel Growers Association, Hadonahally
Chawki Rearing Centre, Gangasundra
Organic Farming Farmers Association, Karnala
Jack Growers Association, Hadonahally
Federation of Women SHGs, Tubagere
Fish Farmers Association, Tubagere
Flower Growers Association, Hadonahally
Corn Growers Association, Hadonahally
Fruits & Vegetables Growers Association, Hadonahally
Agro Processing Centre, Melekote
 
65
Selection of the respondents for the
study.
 
66
 
 
67
Overall attitude level of members towards
commodity based associations
.
 
 
68
Overall participation of members in the
activities of CBAs
Impact of CBAs on annual income,
employment generation and social status.
 
(n=250)
**: Significant at 1 per cent level of probability.
 
69
Conclusion
 
70
THANK YOU
 
71
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This seminar focuses on the concept of Producers Organizations (POs) and cooperatives, highlighting the role of extension services in strengthening these entities. It covers the establishment steps, reviews related studies, and emphasizes the benefits of POs for rural producers. The essential features of a PO are outlined, emphasizing its role in empowering farmers and the rural poor.


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  1. UNION IS STRENGTH WELCOME TO SEMINAR 1

  2. 2 SEMINAR ON Producers Organizations AND Cooperatives Bharath Kumar, T.P III Ph.D Student PALB 1027

  3. 3 Flow of seminar Introduction Objectives of the seminar Concept of the PO s and cooperatives Producers organization and cooperatives Role of extension in strengthening of PO s and Cooperatives. Steps in establishing PO S and cooperatives. Review of studies related to PO s and cooperatives Conclusion

  4. 4 INTRODUCTION

  5. 5 Objectives of Seminar To organizations and Cooperatives know the concept of Producers 1 To strengthening of PO s and Cooperatives. study the role of extension in 2 To know the steps in establishing PO s and cooperatives. 3 To review some of studies related toPO s and cooperatives 4

  6. Concept of the PO 6 PO s are groups of rural producers coming together based on the principle of membership, to pursue specific common interests of their members and developing technical and economic activities that benefit their members and maintaining relations with partners operating in their economic and institutional environment. (Anonymous.2004).

  7. FAO, 2006 7 Producers Organizations (POs) are essential institutions for the empowerment, poverty alleviation and advancement of farmers and the rural poor.

  8. 8 National Commission on Farmers , 2004 Producers organizations should be promoted to combine the advantages of decentralized production and centralized services, post-harvest management, value addition and marketing

  9. What are the essential features of a PO? 9 It is formed by a group of producers It is a registered body and a legal entity Producers are shareholders in the organization It deals with business activities related to the primary produce It works for the benefit of the member producers A part of the profit is shared amongst the producers Rest of the surplus is added to its owned funds

  10. Need for PO 10 Ensure better income To enhance the benefit of economies of scale To overcome the problems of intermediaries Increased bargain power of the producers More services can be made available to farmers through a single point

  11. Contd.. 11 PO influence policies and demand for required services. Farmers can participate in the decision making process Service system becomes more effective and accountable They get better access to latest markets and technology POs can involve in Farmer and market led extension activities Build interactions between research, extension and farming systems

  12. Different Types of Producers Organizations 12 FIGs CIGs Cooperatives Farmers associations Federations Farmers producers organization Producer Company Non-Profit Society Trust

  13. Different legal forms of PO 13 1. Cooperative Societies Act/ Autonomous or Mutually Aided Cooperative Societies Act of the respective State 2. Multi-State Cooperative Society Act, 2002 3. Producer Company under Section 581(C) of Indian Companies Act, 1956, as amended in 2013 4. Section 25 Company of Indian Companies Act, 1956, as amended as Section 8 in 2013 5. Societies registered under Society Registration Act, 1860 6. Public Trusts registered under Indian Trusts Act, 1882

  14. What are the taxation systems / laws governing the POs 14 Immediately after incorporation, a PO has to procure 1.PAN number from the Income Tax Department 2.TIN number from the Commercial Tax Department 3.The company has to register itself for Service Tax from Commercial Tax Department and 4.VAT from Excise department

  15. 15 Can there be a PO for non-farmers Who owns the PO Who provides support for promotion of PO Can an NGO promote PO Is registration mandatory for a PO Can a person become member of more than one PO Who will manage the PO BoM, POPI Can a PO procure produce from non-members

  16. Benefits of Producers Organizations 16 Space for participation Improving members economic and social situation Generation and Management of financial resources

  17. Important activities of a PO 17 a. Procurement of inputs b. Disseminating market information c. Dissemination of technology and innovations d. Facilitating finance for inputs e. Aggregation and storage of produce f. Primary processing like drying, cleaning and grading g. Brand building, Packaging, Standardization h. Quality control i. Marketing to institutional buyers j. Participation in commodity exchanges k. Export Labeling and

  18. Basic purpose envisioned for the POs 18 For backward linkage for inputs like seeds, fertilizers, credit, insurance, knowledge and extension services; and Forward linkages such as collective marketing, processing, and market-led agriculture production

  19. STRUCTURE OF PO 19 Producers Organization 1. Input supply 2. Financial 3. Technical 4. Insurance 5. Procurement 6. Packaging 7. Marketing 8. Networking General Body (GB) Executive Body 2 Representative per FIG Board of Directors Planning Implementation Management General Manager PO staff Local Resource person

  20. 20

  21. Retailers/Processors MSP Link to Consultant Banks NSPOT/NCDEX SFI/KVK HR Plan Marketing PHI/VIUC GBY VCA NMFP RKVY HRD Support CSC Ecosystem for sustainable PO Banks Infrastruc ture Credit NBFCs 21 Inputs BDS/ERP WHR Mechanization Krishidoot FPOs as sourcing point for rural products FPOs as rural retail points for consumer products/services Services (Technical) Retailing

  22. Producer Organizations (POs) Typical range of services provided 22 Input supply Financial & technical (Seed, fertilizer, machinery) (Credit, savings, insurance, extension) PO Marketing linkages (contract farming, procurement under MSP) Training and Networking (HRD, policy advocacy, documentation)

  23. Optimal size and parameters of Producer Organisation (PO) 23 a. It is desirable to have a PO s for farmers having their lands in contiguous micro-watersheds b. The productive land under an PO may be around 4000 ha. c. The PO may cover generally one or two contiguous Gram Panchayats for ease of management. d. The number of farmer producers that need to be covered may be around 700 to 1000. e. The cost of managing a PO s of the above nature may be around Rs. 2 lakh per month or Rs. 24 lakh per annum.

  24. Producer Organization Promoting Institution (POPI) 24 An NGO A bank branch A government department A cooperative society Any association or Federation

  25. 25 Roles and Responsibilities of POPI 1. Cluster identification 2. Diagnostic and Feasibility Studies 3. Business Planning 4. Mobilisation of Producers and Registration/ Incorporation of PO 5. Resource Mobilisation 6. Development of Management Systems and Procedures 7. Business Operations 8. Assessment and Audit

  26. Limitations of a Producer organizations 26 1. A PO s should register as per the laws and act 2. Registration of a PO s is a bit difficult process 3. Requires the services of a consultant 4. The registration is a time consuming process 5. The members cannot transfer their shares freely 6. Getting a professional CEO at an affordable cost is little difficult 7. It is difficult for the illiterate members to understand statutory provisions of laws 8. Taking members in group is a biggest challenge

  27. How much expenses will be incurred for registration of a PO 27 Particulars Item of expenditure Amount (Rs.) Application for Name of PO Fees 500 Digital signature Fees 2600 Stamp duty Memorandum of Association and Articles of Association 1500 Registration/Filing fees MoA, AoA, Form-1, Form-18, Form- 32 17200 Fees of Chartered Accountant or Company Secretary Stamps cancellation Consultancy charges 10000 300 Affidavit expenses Fees of Notary 500 Share transfer fees and Processing 5000 Miscellaneous expenses 2000 Total 39600

  28. Financial support available for PO 28 Small Farmers Agribusiness Consortium (SFAC) 1. SFAC operates a Credit Guarantee Fund to mitigate credit risks 2. SFAC provides matching equity grant up to Rs. 10 lakh NABARD provides financial support to the POs only through project mode

  29. 29

  30. 30 Concept of the cooperatives Cooperatives are autonomous associations of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly owned and democratically controlled enterprise

  31. COOPERATIVES - VEHICLE FOR AGRICULTURE/RURAL DEVELOPMENT 31 Coops An Economic miracle of 19th Century - Late Honorable President of India Dr. S. Radhakrishnan Cooperatives in Rural Milieu Cooperatives - basically designed and oriented to meet economic and societal needs of rural segments, particularly the poor. Starting with agricultural credit, cooperatives encompassed all rural economic activities. Cooperatives - single largest business model in the country account for 20% of rural credit supply, 35% of fertilizer supply, 60% of sugar production, 30% of wheat procurement, 45% of cotton procurement, 40% of cloth production, 48% of milk production etc.

  32. MEANING OF CO-OPERATION 32 Co-operative Society means A voluntary association of persons Working together with common economic objective Providing support to the members Self-help and mutual help Non-profit motive Pooling individual resources for group welfare Common benefit

  33. Cooperatives can be registered in this acts 33 Cooperative Societies Act of Individual State Autonomous Cooperative Societies Act existing in many States (minimal State intervention) Multi State Cooperative Societies Act, which is a Central Act

  34. 34

  35. The Cooperative Principles 35

  36. Cooperatives are non-profit companies and their members liability is limited to the capital they invest. 36 Cooperatives have extended across the entire country and there are currently an estimated 230 million members nationwide. Cooperatives have advanced more credit in the Indian agricultural sector than commercial banks 80% is concerned with agriculture 60% deal with credit only Cooperatives there are two types of benefits for members Monetary benefits and Services

  37. Share of Co-operatives in National economy 37 Rural Net work (villages covered) - 100% Milk Procurement to Total Production - 7.44% Agricultural Credit disbursed by Co- operatives - 46.15% Milk Procurement to Marketable surplus - 10.5% Fertilizer disbursed (6.049 million Tonnes) - 36.22% Ice Cream Manufacture - 45% Fertilizer production (3.293 M.T. - N&P) Nutrient - 27.65% Oil Marketed (Branded) - 50% Spindlage in Co-operatives (3.518 million) - 9.5% Sugar produced (10.400 million tonnes) - 59% Cotton Marketed / Procurement - NA Capacity Utilization of Sugar Mills - 111.5% Cotton yarn/Fabrics Production - 23.0% Wheat Procurement (4.50 million toones) - 31.8% Handlooms in Co-operatives - 55.0% Fishermen in Co-operatives (Active) - 21% Animal Feed Production/Supply - 50% Direct employment generated - 1.07 million Retail Fair Price Shops (Rural + Urban) - 22% Self-Employment generated for persons - 14.39 million Storage Facility (Village level PACS) - 65.0% Rubber processed and marketed - 95.0% Salt Manufactured (18,266 Metric Tonnes) - 7.6% Arecanut processed and marketed - 50%

  38. Types of cooperatives 38 1. The Primary Agricultural Credit/Service Societies 2. Agricultural Non-Credit Societies 3. Agricultural co-operative Marketing Societies 4. Co-operative Farming Societies.

  39. CAUSES OF SLOW PROGRESS 39 Government Interference Mismanagement and manipulation Lack of Awareness Restricted Coverage Functional Weakness

  40. Characteristics of cooperatives 40 Membership Is Voluntary Members Have Strong Common Interests Members Own The Business, And Therefore Own Both The Tangible And Intangible Assets (Such As Brands And Reputation); Members Are Jointly Liable For The Enterprise s Conduct And Actions It Is Intended That The Association Will Be Permanent.

  41. Differences between PO's and Cooperatives 41 Parameters Producer organization's Cooperatives Cooperative Societies Act Registration Indian Companies Act Area of Operation Entire Union of India Restricted Regionally Primarily agencies to provide marketing solutions to pooled produce Primarily service and delivery agencies Nature of Business Based on concept of shareholding Based on ownership of land Membership Share Transferable Not transferable Commensurate with volume of business Limited dividends on shares Profit sharing

  42. Contd 42 Parameters Producer organization's One member, one vote. Members not having transactions with company cannot vote Cooperatives One member, one vote, but Government and Registrar of Cooperatives hold vot power Voting rights Federated into the District Central Cooperative Banks (DCCB). Business conducted is based on the policies of the DCCB. Receive financial, technical and administrative support from the government Stand-alone, self-reliant bodies with self-governing capabilities Governance Reserves Mandatory Created if there are profits More freedom and more alternatives available. POs are allowed to raise capital from external sources Borrowing Power Restricted to loans granted and disbursed by the cooperative bank to which the PAC is linked

  43. 43 Advantages of PO s and cooperatives Increased Capacity And Bargaining Power Access To New Markets Through Alternative Marketing Channels Access To Credit And Support Programmes Access To Better Technical And Market Information More Opportunities For Exchanging Experiences Greater Access To Training Programmes.

  44. Challenges of POs and Cooperatives 44 To Achieve Clear And Efficient Internal Organization To Build Trust In The Managers Decisions To Get Members To Pledge To Deliver Products, Abiding By Previously Agreed Volumes, Conditions And Deadlines To Run Associations Profitably And Efficiently To Design And Implement Efficient And Transparent Administration Mechanisms To Establish Proper Communication And Participation Mechanisms

  45. Role of Extension in Promotion of POs and Cooperatives 45 The role of extension vary with the role of the POs, the sectors in which the organization operates, the services organizational form used. The role of Extension in promotion of Producers Organizations (Chamala, 1990) : offered, and the (1)Empowerment Role (2)Community-Organizing Role (3)Human Resource Development Role (4)Problem-Solving and Education Role

  46. 1. Empowerment Role. 46 The role extension is to help farmers and rural communities organize themselves and take charge (empowerment) of their growth and development. The idea here is Releasing the latent energy hidden in the community and building collective actions for the common good, rather than from merely redistributing power from the haves to the have-nots.

  47. 2. Community-Organizing Role 47 Extension workers must learn the principles of community-organizing and group management skills Understanding the structure of community will help extension worker to plan, implement, and monitor their programmes Skills required for extension worker are Conflict resolution Negotiation Persuasive communication help to develop PO leaders and members

  48. 3. Human Resource Development Role 48 Development of technical capabilities of members and it must be combined with management capability The idea is Encouraging rural communities to understand their personal and group styles of managing themselves To improve their planning, implementation, and monitoring skills

  49. 4. Problem-Solving and Education Role 49 Role is prescribing technical solutions to empowering POs to solve their own problems Education role is training farmers on learning by doing approach.

  50. STEPS IN ESTABLISHING POs AND COOPERATIVES 50 1. Understanding the village community-(need and problems) 2. Identifying potential leaders in the community 3. Talking to the identified leaders and seeking cooperation from others 4. Helping local leaders to call community meetings 5. Establishment the PO (selection of leaders in group) Source: CHAMALA, S., 1990, Establishing a group: A participative action model. Brisbane: Australian Academic Press. P. 13-38

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