An agenda for the ministry of cooperation

At the local level, cooperative societies should continue to cater to the needs of their members across segments of the primary sector. At the national level, they must emerge as organisations capable of competing with the behemoths of the private sector
Prime Minister Narendra Modi and BJP leader and minister of cooperation Amit Shah. (HT Archive) PREMIUM
Prime Minister Narendra Modi and BJP leader and minister of cooperation Amit Shah. (HT Archive)
Updated on Aug 03, 2021 06:46 PM IST
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ByBandana Preyashi

Cooperatives — as an organic idea and an organisational platform — are relevant, if re-imagined and implemented skilfully. Carving out a ministry for cooperation must be understood in the context of the sector’s immense transformative power that has been unevenly realised so far.

The objective of the new ministry is to strive towards creating a legal, administrative and policy framework, facilitating the “ease of doing business” for cooperatives and helping the emergence of “multistate cooperative societies”. The emphasis is on transforming cooperatives from small entities to big enterprises, facilitated and sustained by enabling businesses to address the problem of entry and growth barriers.

At the local level, cooperative societies should continue to cater to the needs of their members across segments of the primary sector. At the national level, they must emerge as organisations capable of competing with the behemoths of the private sector.

Successful business models exist in at least two sectors — dairy and fertilisers. Organic leadership, the involvement of members, techno-managerial efficiency, economies of scale, product diversification, culture of innovation, commitment to customers and sustained brand promotion are factors that account for their success. These practices can be replicated for other sectors as well.

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Segments of the primary sector can be successfully scaled up and turned into cooperatives, followed by segments of secondary and tertiary sectors. There will also be a need to promote the brand of cooperatives through upgradation and value addition to the quality of products and services delivered by them. This will entail expanding production, operation, distribution and scale of the economy.

When scaling up, the organisational matrix of cooperatives will need to be redefined. The Act, rules and by-laws will be required to provide flexibility to keep abreast with the business environment. Further, the management of multistate cooperative societies will have to be vested in the hands of market-driven managers capable of ensuring efficiency. The board of directors of multistate cooperative societies will have the responsibility to oversee business decisions to ensure they don’t lose sight of ethics and social responsibility.

Cooperation is essential because the market cannot take care of the needs of the vulnerable. Wherever cooperatives have succeeded, they have addressed the issue of market distortions. They have also compressed the supply chain by removing intermediaries, ensuring better prices for producers and competitive rates for consumers. Cooperative societies, equipped with basic infrastructure and financial resources, prevent distress sales and ensure bargaining power. They have the potential to realise the paradigm of decentralised development. Just as panchayati raj institutions carry forward decentralised rural development, cooperative societies can become the medium to cater to business requirements.

The equation between the government and cooperatives, between control and autonomy, is fraught with dilemma. With over-regulation, cooperatives will end up losing their autonomous character. With the government leaving cooperative societies to fend for themselves, these societies can flounder. It is difficult but desirable that this dichotomy is resolved.

The government will have to ensure that processes are transparent. The integrity of the managing committees and their operational autonomy is necessary. Cooperative departments will have to evaluate the training needs of cooperatives, along with designing and imparting training interventions to ensure that they are at par with the current business environment.

On the back of professional management, cooperative institutions can be scaled up. All stakeholders including the government, institutions for cooperative development and the entire cooperative movement will need to collaborate to achieve the aim of community- and people-centric development involving modern business practices at the local and national level. It is hoped that the new ministry will create the necessary synergy in the system and will act as a force multiplier.

Bandana Preyashi, an IAS officer, is secretary, cooperative department, government of Bihar

The views expressed are personal

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Monday, January 24, 2022