Brief Context
Context A report by Forum of Enterprises for Equitable Development (FEED) highlights that less than 25% of Indias marginal farmers are members of agricultural cooperatives, despite making up nearly 60-70 percent of the country’s agricultural households. What are Cooperatives? A cooperative is an organization or business that is owned and operated by a group of individuals who share a common interest, goal, or need.
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Syllabus: GS3/ Agriculture; Economy
Context
- A report by Forum of Enterprises for Equitable Development (FEED) highlights that less than 25% of India’s marginal farmers are members of agricultural cooperatives, despite making up nearly 60-70 percent of the country’s agricultural households.
What are Cooperatives?
- A cooperative is an organization or business that is owned and operated by a group of individuals who share a common interest, goal, or need.
- These individuals, known as members, participate in the cooperative’s activities and decision-making process, typically on a one-member, one-vote basis, regardless of the amount of capital or resources each member contributes.
- The main purpose of a cooperative is to meet the economic, social, or cultural needs of its members, rather than to maximize profits for external shareholders.
Role of Primary Agricultural Credit Societies (PACS)
- Primary Agricultural Credit Societies (PACS) are credit societies that are registered under the Cooperative Societies Act of the State concerned.
- They are grassroots-level institutions in villages with individual farmers, artisans, and other weaker sections as member shareholders.
- They form the lowest tier of the federated short-term cooperative credit structure with District Cooperative Banks (DCCBs) and/or State Cooperative Banks (StCBs) in their upper tiers.
- They serve as the closest institutional interface for farmers to access;
- Agricultural credit
- Inputs such as seeds and fertilisers
- Procurement and marketing channels
- Public services including PDS and digital services.
Key Findings of the Report
- Marginal farmers, defined as cultivators owning less than one hectare of land, form the structural backbone of India’s agrarian economy.
- Barriers to Inclusion in Cooperatives:
- Complex membership procedures and documentation requirements.
- Long physical distance to PACS, raising transaction costs.
- Limited capital availability within cooperatives, reducing their effectiveness.
- Persistent social exclusion based on caste, class, and gender.
- Digital Divide Limits Benefits: Digital adoption by cooperatives remains low, particularly in states like Tripura and Bihar. Digital skills gaps among farmers, especially older and women farmers, further constrain uptake.
- Gender and Leadership Gaps: Cooperatives continue to be male-dominated, especially in leadership roles. While 21.25 lakh women are registered as cooperative members, only 3,355 women serve as directors on cooperative boards nationwide.
- Positive outcomes of the Cooperative Access:
- 45 percent of cooperative-linked marginal farmers reported an increase in household income.
- 67 percent of cooperative members accessed credit and financial services through PACS.
- 42 percent of marginal farmers linked to cooperatives reported improved crop yields.
Government Initiatives
- Formation and Promotion of Farmer Producer Organisations (FPOs): The Central Sector Scheme for Formation and Promotion of 10,000 FPOs focuses on small and marginal farmers.
- It provides handholding support, equity grants, and credit guarantee cover.
- Digital Agriculture Mission: Aims to build a digital public infrastructure for agriculture, including farmer registries and land records.
- National Cooperative Development Corporation (NCDC) Support: NCDC provides financial assistance and capacity-building support to cooperatives.
- It focuses on strengthening cooperatives in credit, marketing, processing, and storage.
Way Ahead
- In India’s agrarian structure those who dominate agriculture numerically remain institutionally marginalised.
- Strengthening PACS, simplifying cooperative membership, bridging the digital divide, and promoting genuine gender inclusion are essential to make cooperatives effective instruments of inclusive rural development.
- For India’s agricultural transformation to be equitable and resilient, marginal farmers must be placed at the centre of cooperative reform.
Source: DTE