Gist of Yojana July 2023: Cooperation To Prosperity

Yojana Magazine is an important source of material for the UPSC exam. The monthly magazine provides details of major government schemes and programmes in various domains. Moreover, coming from the government, it is an authentic source of information for the UPSC Exam. Here, we provide the Gist of Yojana, exclusively for the IAS Exam.
TABLE OF CONTENTS

1. Sahakar se Samridhi: From Planning to Realisation
2. Empowering Agriculture Cooperatives through Digitisation
3. Developing Pathways for Non-Credit Cooperatives
4. Fishery Cooperatives
5. One Pacs One Drone
6. Regenerative Agri-Supply Chain management
7. Strategic diversification of cooperatives and business competitiveness
8. Cooperative Entrepreneurships for Economic Development

1. Sahakar se Samridhi: From Planning to Realisation

For harnessing cooperation for prosperity and progress, the Ministry of Cooperation (MoC) was established as a separate administrative body in July 2021, with a call for “Sahakar se Samriddhi” (prosperity through cooperation). By embracing the cooperative-led movement, India has the potential to promote balanced regional development and empower local entrepreneurs to expand globally.

Overview of the cooperative movement

• India is home to 8.54 lakh cooperatives present in 98% of the villages and has 29 crore members. 80% of these cooperatives are non-credit cooperatives and 20% are credit cooperatives.
• The first recognition of the cooperative movement started in 1904 with the promulgation of the Cooperative Credit Societies Act. 
• After the Maclagan Committee Report on Cooperatives (1914-15), the cooperative movement underwent a transition from primarily focusing on providing relief to becoming a movement with the aim of improving socio-economic welfare.
• Post-independence, the cooperative movement received due recognition in the perspective plans of the Government of India.

Eternal Principles of Indian Cooperatives

Image: Eternal Principles of Indian Cooperatives

• Addressing hurdles and challenges through appropriate policies and effective government interventions is necessary to unleash the full potential of cooperatives. This can be achieved by utilizing the 4 Ps and 4 Es framework.

Image: Prosperity through Cooperation

Source: Yojana

Government commitments to Indian cooperative movements

• Cooperative ‘SQUAD’: The government has formulated a plan which prioritises and explores new emerging areas for cooperatives through the ‘SQUAD’ framework.  

Image: Squad Cooperation

Source: Yojana

• National cooperation policy: Suresh Prabhu committee has been set up to formulate an all-inclusive policy for the uniform cooperative movement.
• Strengthening Primary Agriculture Credit Societies (PACS): 
  • Model By-laws for PACS: 22 states have adopted model-by-laws to enhance operational efficiency, transparency, and responsibility towards collective community development.
  • PACS as Common Service Centres (CSC): PACS can register as CSCs to diversify their business for self-sustenance.
  • Integrating PACS with FPOs: This will help PACS to extend their scope of activities and take up high-income enterprises like beekeeping, mushroom cultivation, etc.
  • PACS in the Oil and Energy Business:  PACS can avail licenses for petrol and diesel dealerships and LPG distributorships, and they will also be engaged in the implementation of various renewable energy schemes.
• National Cooperative University: It will help to establish a comprehensive, integrated, and standardized structure of cooperative teaching and training and meet the demand for capacity building of the existing workforce.
• Cooperative database: The Ministry of Cooperation is developing a comprehensive cooperative database to capture authentic and updated data on cooperatives of all sectors to support policy formulation.
• Other initiatives:

• • Computerization of 63,000 functional primary agricultural credit societies.
  • Cooperative societies as registered buyers and sellers on the Government e-market platform (GeM).
  • Setting up the National Export Cooperative Society to promote exports from cooperatives.
  • Establishing a national organics cooperative society to promote organic products.
  • Setting up the National Export Seed Cooperative Society to promote production preservation certification and distribution of quality seeds.
  • Creating 2 lakh new multi-purpose PACs to cover all 2.54 lakh panchayats.

Challenges in ensuring smooth and sustainable growth of the cooperative sector:

• Addressing regional and sectoral imbalances in cooperative expansion.
• Navigating complex regulatory landscape across states.
• Enhancing governance, leadership, and operational systems and ensuring professional management of cooperatives.
• Establishing effective dialogue and coordination among central, regional, and state registrars of cooperatives.
• Strengthening basic infrastructure and fostering the formation and promotion of new cooperative societies and social cooperatives.

Conclusion:

• The contribution of cooperatives will have a multiplier effect on the goal of achieving a five trillion dollar Indian economy while boosting farmers’ income. 
• The true fulfilment of the Sahakar se Samriddhi vision hinges on community business units effectively tapping into the inherent potential of people’s collective action and aligning with the core philosophy of the cooperative-based model for socio-economic progress.

2. Empowering Agriculture Cooperatives through Digitisation

Introduction: Cooperative credit institutions have long been instrumental in driving social and economic development in India. These institutions, particularly in rural areas, play a crucial role in credit mobilization for agricultural production.

About Cooperative Credit Institutions 

• The short-term rural cooperative credit structure (STCCS) is a 3 tier structure which comprises State Cooperative Banks (StBs), District Central Cooperative Banks (DCCBs) and Primary Agriculture Credit Societies (PACs) at the village level. 
• They are regulated by the Reserve Bank of India (RBI) and supervised by the National Bank for Agriculture and Rural Development (NABARD).
• They provide essential credit mobilization in agriculture production but also serve as catalysts for self-help, grassroots community participation, and social control over resource allocation and mobilization.

Challenges Confronting Cooperative Credit Institutions

• Face stiff competition from commercial banks and microfinance institutions inthe rural credit sphere.
• Inability to adopt cutting-edge technologies.
• Reliance on conventional services (short-term loans) rather than tapping into services such as financial advisory and marketing. 
• Lack of innovation.

Way Forward: Empowering Cooperative Credit Institutions through Technology 

Technological adoption and process digitisation can empower cooperative institutions.

• Digitization of STCCS: 
  • Centralized Online Real-time Exchange (CORE) based Banking Solutions (CBS) have automated State Cooperative Banks (StBs) and District Central Cooperative Banks (DCCBs), improving regulatory mechanisms and enabling anytime, anywhere banking. 
  • Efficiency and governance across cooperative banks can be improved by adopting standardized technology-driven office management systems. 
• Technology Adoption for PACS: 
  • While DCCBs require the digitization of business processes, PACS need to be computerized as a fundamental step towards efficiency. 
  • The computerization of PACS aims to enhance service delivery, digitize operations, and integrate them with DCCBs and StBs. 
  • However, challenges such as inadequate rural infrastructure, power supply, internet connectivity, and computer skills must be addressed.
• Technology Adoption for Customer Interface, Service Delivery, and Decision Making: 
  • Need to adopt technologies such as mobile banking, internet banking, drones for field monitoring, and blockchain for cybersecurity and transparency. 
  • Need for collaborative partnerships with fintech firms to facilitate customer acquisition, credit profiling, advisory services, financial products, and development of user-friendly digital interfaces

Conclusion: 

Digitization holds immense potential for empowering cooperative credit institutions and driving rural development. Digitization enables seamless integration, better service delivery, and financial inclusion. With the right policy support and a focused approach, cooperative credit institutions can leverage digitization to effectively address the evolving needs of Indian agriculture, contributing to the prosperity of rural communities.

3. Developing Pathways for Non-Credit Cooperatives

Introduction: 

• With approximately 8.5 lakh cooperative societies and a membership of 29 crore people, cooperatives have played a significant role in the Indian economy. 
• However, the growth and evolution of cooperatives vary across states due to diverse focus areas adopted by state administrative machinery. 

Structure of Cooperatives in India: 

• Cooperatives operate under the Cooperative Society Act 1912, which includes the Cooperative Thrift Society Act and the Multi-State Cooperative Societies Act 2002. 
• There are two types of cooperative structures: 
  • State Cooperative Societies (come under state government) 
  • Multi-State Cooperative Societies (come under the central government)

Impact of Globalization on Cooperatives: 

• Amul, HOPCOMS, and IFFCO have been success stories despite the fear that globalization would affect the growth of cooperatives.
• Their success can be attributed to  
  • well-functioning end-to-end supply integration chain 
  • diversification of products and marketing
  • technological advancements 
  • professional management 
• These success stories highlight the potential of cooperatives, especially in the food processing sector, to contribute to India’s economy.

Way Forward: 

Non-credit cooperatives in India require a tailored approach due to their diversity. Recognizing this, it was decided to establish a national-level cooperative society for agriculture products. 

• Convergence: 
  • Cooperatives in India can register as MSMEs on the Udyam Portal
  • Cluster-based programs provide funding for common facilities, processing centers, and skill development. 
  • Udyam certification can be considered as the primary document to access program benefits.
  • This streamlined approach aligns with the “Whole of the Government Approach” and grants cooperatives MSME status for priority sector lending.
• Awareness, Training, and Mentoring: 
  • Creating awareness about cooperatives among students as a viable career option. 
  • Capacity building through training programs and skill development to cooperative staff. 
  • Mentorship programs can foster collaboration between larger cooperatives and state-level cooperatives engaged in similar activities. 
  • Promoting knowledge exchange and creative cooperation.

In this regard,  the Government of India has announced formation of 

(a) National level Multistate Cooperative Seed Society, which would act as an apex organization for production,  procurement,  processing,  branding,  labeling,  packaging,  storage,  marketing and distribution of  quality seeds;  and strategic research and development. 

(b) A Multi State Cooperative Organic Society to act as an umbrella organization for aggregation,  certification,  testing,  procurement,  storage,  processing,  branding,  labeling,  packaging,  logistic facilities,  and marketing of organic products. 

• Technology and Digitization: 
  • Upgrading technology, production, and business models while embracing digitization are vital for cooperatives to remain competitive. 
  • Government support, including subsidies and credit facilities, can assist cooperatives in this transition. 
  • Creating physical infrastructure and linking cooperatives with relevant cluster schemes. 

Conclusion: The government’s focus on cooperation and development underscores its commitment to community-led socioeconomic progress. By integrating state cooperatives into multi-state entities and emphasizing convergence, awareness, training, mentoring, technology upgradation, and digitization, India can unlock their full potential.

4. Fishery Cooperatives

Introduction:

• The fisheries sector in India is diverse, with sub-sectors like marine, inland, and brackish water, besides cold water and ornamental fisheries.
• The sector has immense economic potential in India, with a coastline of over 8,000 km, an exclusive economic zone of over 2 million square km, and extensive freshwater bodies.

Role of Fishery Cooperatives:

• Fishery cooperatives can provide livelihood security, nutritional security, and social security to vulnerable groups in society.
• Around 4 million people are economically benefited through primary fishery cooperatives in India.
• The role of fishery cooperatives must be considered at every level in the changed economic scenario, and they should be supported with funds to develop infrastructures and a progressive supply and value chain for sustainability.

Fishery Development: Government of India’s Thrust:

• Atmanirbhar Bharat Abhiyaan: The Prime Minister announced a Rs 20 lakh crore economic package to create jobs in the fisheries sector.
• The Pradhan Mantri Matsya Sampada Yojana (PMMSY): Launched in 2019-20 with a total project outlay of Rs 20,050 crore to boost India’s economy through the fisheries sector. Know more about the Pradhan Mantri Matsya Sampada Yojana in the link.
• Fisheries & Aquaculture Infrastructure Development Fund (FIDF): A dedicated fund of Rs 7,522 crore was established to develop fisheries and aquaculture infrastructure.
• Blue Revolution: Introduced in 2014, it promotes fish production and infrastructure development in the fisheries sector. Read more about the blue revolution in the link.

Fishery Cooperative Movement in India:

• The fishery cooperative movement in India began as early as 1913 when the first fishermen’s society was organised under the name of the ‘Karla Machhimar Cooperative Society’ in Maharashtra.
• With the establishment of the Ministry of Cooperation, fisheries cooperatives have received priority attention and real focus.  

National Database of Fisheries Cooperatives:

• A decision has been taken to organise fishery cooperatives covering each panchayat of the country to reach a figure of 2 lakhs in the coming five years.
• The National Fisheries Development Board (NFDB) and FISHCOPFED have been assigned to speed up the work in coordination with the concerned State/UT authorities.
• The database can help identify the gaps in the sector, and efforts will be made to bridge the gaps.

Fishery Success Stories:

• Fishery cooperatives have received priority attention and real focus since the establishment of the Ministry of Cooperation in 2021.
• Matsyafed-Kerala: Established in 1984, this state-level federation excels in fish sales, exports, and retail outlets, and operates its own mat-making and processing plants.
• Gujarat Fisheries Central Cooperative Association (GFCCA): Registered in 1956, GFCCA operates diesel outlets for fishing boats and successful fish retail outlets in Delhi.

Conclusion:

• The fisheries sector is a sunrise sector in India with immense economic potential.
• Fishery cooperatives can play a key role in providing nutritious food to people and generating employment opportunities.
• The government of India is committed to uplifting the fishery cooperative sector through adequate policy and financial support.
• The synergy between the Ministries of Cooperation and Fisheries is expected to drive the sector’s growth.

5. One Pacs One Drone

Introduction:

• The article discusses the use of technology, specifically drones, in the cooperative sector in India.
• A drone is an unmanned aerial vehicle (UAV) that operates without a human pilot, crew, or passengers onboard and can be operated remotely or autonomously.
• The Indian government’s initiatives to promote the manufacturing of drones and strengthen Primary Agricultural Credit Societies (PACS) are paving the way for a brighter future for the rural economy.

Indian Government’s Initiatives: 

• Strengthening Primary Agricultural Credit Societies (PACS):
  • Financial assistance and training are being provided to strengthen PACS.
  • This will enhance services to farmers and promote rural development.
• Liberalised Drone Rules 2021:
  • The Ministry of Civil Aviation announced the liberalised Drone Rules 2021.
  • The rules aim to make India a global drone hub by 2030.
  • Easier and faster approvals for drone operations in India.
  • Creation of a drone promotion council to facilitate a regulatory environment for the drone industry.
• Production-Linked Incentive (PLI) Scheme:
  • The Central Government approved a PLI scheme worth Rs 120 crore for drones and components.
  • Aims to boost drone manufacturing in India and reduce import dependence.
• Strengthening Cooperative Movement:
  • The government is giving increasing focus to strengthen the cooperative movement nationwide.

Drone in Agriculture:

• Challenges in the agriculture sector: Low yield, soil erosion, lack of irrigation facilities, inefficient use of inputs, unscientific use of fertilizers, lack of post-harvest management, and limited access to financial services.
• Potential of Fourth Industrial Revolution technologies: Digital tech-based agriculture can unlock a value of $65 billion by 2025, with a significant impact on GDP.
• Role of drones in agriculture: Drones offer solutions such as land mapping, agrochemical spraying, seeding, crop yield assessment, and drone-based analytics.
• Benefits of agrochemical spraying with drones: Cost savings of 25-90% on inputs, 90% reduction in skin exposure, and improved crop yield.
• Importance of mapping: Precision agriculture and the reduction of land disputes can be achieved through drone-based land mapping.
• Low levels of farm mechanization in India: Northern states have adoption rates of 70-80%, but still lower compared to countries like China, Brazil, and the United States. Drones can help increase productivity and minimize input costs.
• Pest control: Drones can effectively spray pesticides, fungicides, and liquid fertilizers to combat pest infestations and their impact on crops.
• Support for farmers: Drones offer cost reduction and optimization of input use, with various applications like surveying, seeding, spraying, and pollination.

One PACS One Drone: Action Required & Benefits

• Multipurpose PACS establishment nationwide with one drone each
• Grant of 75% of agricultural drone cost for PACS, similar to FPOs
• Drones can transform Indian agriculture, increase GDP by 1-1.5%
• Create 5 lakh new jobs and usher in a digital era of prosperity
• Eligible rural entrepreneurs with pilot licenses can fly agricultural drones
• Guidelines provide a net annual profit range of Rs 5 to 6 lakhs for PACS members.

Conclusion:

• The use of drones in the cooperative sector in India has the potential to revolutionize the rural economy. The government’s initiatives to promote the manufacturing of drones and strengthen PACS are steps in the right direction. With the right policies and investments, India can become a global leader in the drone industry and achieve its goal of ‘Sahakar se Samriddhi’.

6. Regenerative Agri-Supply Chain management

Introduction:

• Agriculture Supply Chain Management (ASCM) is concerned with the effective flow of agricultural commodities from farm to fork via logistics flows, transporters, shops, procurement, warehousing, inventory management, and processing.
• Factors such as climate change, supply chain disruptions, market volatility create challenges for supply chain.
• The transition to smart regenerative supply chain relives agriculture from social and environmental pressures. 

Importance of Supply Chain Management:

• It provides food security and long-term agricultural development by connecting stakeholders.
• It helps farmers in procuring, marketing, and distributing commodities. 
• It necessitates the proper allocation of resources to deal with storage issues, transportation issues, and inventory management.

Role of Cooperatives in Agriculture Supply Chain:

• Cooperatives help the agricultural supply chain by offering technical, financial, and operational support services. 
• Cooperatives like Farmer Producer Organizations (FPOs) are responsible for business activities such as bulk purchasing of agricultural inputs,  amd facilitating credit requirements.
• They serve as a platform for information transmission, marketing, transportation, and distribution of commodities. 
• They help to get quality produce by supplying agri input (seeds, fertilisers, etc.) and extending credit facilities. Their focus has shifted to quality produce in addition to marketing and processing. 
• Cooperative marketing societies have progressed towards better storage facilities, efficient management of resources, timely payment to farmers and minimisation of waste.
• They have transformed to regenerative supply chains by adopting sustainable practices.  

Primary Agricultural Credit Society (PACS) Storage & Supply Chain Management:

• Multi-service centres: Primary Agricultural Credit Society (PACS) act as multi-service centres that assist the farmers in procuring and marketing of agricultural produce along with meeting the credit requirements.
• Quality inputs for farmers: The storage of agriculture implements, and agri-inputs by PACS can help ensure availability of quality inputs for farmers. 
• Common service centers: PACS are functioning as common service centres by facilitating the delivery of services to villages. 

Source: Yojana 

 Initiatives taken:

• The Ministry of Cooperation has set up of three sector-specific national level cooperative societies: 
  • Seed societies: helps with seed production, processing, storage and distribution
  • Export societies: helps in procurement, storage, processing, marketing, branding, packaging
  • Organic societies: offers certification and standardization to the market via laboratory networks 

Way Forward:

• Expansion of knowledge on the by-products and their use needs to be explored. 
• Sensitisation: Success depends upon how well the members are sensitized about the recent advances in supply chain and their applications towards effective management.
• Managing supply chain risk: Cooperatives need to manage supply chain risks attached to quality standards, available human resources, climate factors, marketing, etc. Supply chain risk can be managed through digitalisation and data analytics.

Conclusion: The transformation towards a regenerative supply chain has provided cooperatives with economic, social, and environmental benefits.

7. Strategic diversification of cooperatives and business competitiveness

The Union government is placing emphasis on strengthening the existing primary cooperatives and creating additional 200,000 primary-level cooperatives within the next 4 to 5 years. In this context, it is crucial to strategically diversify cooperatives, from the community level to the national level, to ensure their competitiveness and continued relevance in the market.

Need for Business Diversification:

Image: Need for business diversification

Types of diversification cooperatives can incorporate:

Advantages of Strategic Diversification for Cooperatives

• Achieve growth and competitive advantage in new markets and product lines by leveraging the unique strengths and capabilities of cooperatives.
• Expand customer base and reduce reliance on specific markets.
• By aligning diversification opportunities with their mission and values, cooperatives can better serve their members’ needs.
• It allows cooperatives to develop advantageous positions in the market compared with corporates.
• Through strategic diversification, they can generate business profits while promoting inclusiveness in their activities.

8. Cooperative Entrepreneurships for Economic Development

India has a long history of both entrepreneurship and cooperative movements. In India, the cooperative movement has always used financial and social resources to promote inclusion and community growth. 

Cooperative Entrepreneurship: 

Cooperative entrepreneurship is a type of collective or joint entrepreneurship. A “cooperative entrepreneur” is a social leader with the vision to develop effective plans for running businesses democratically rather than just for one’s benefit. Democratic governance based on one person, one vote, and equality are the pillars of governance of cooperatives.  

Focus and Importance of Cooperative Entrepreneurship:

• Focuses on quality employment generation.
• Wealth creation.
• Optimal use of available resources at the community level. 
• Potential to deliver goods and services at the grassroots.
• Social bonding and cohesion.
• Control and dignity of the workplace.

Current Situation: 

• In India, cooperatives account for:
  • 19% of our agricultural financing
  • 35% of fertiliser distribution and 30% of fertiliser production
  • 40% of sugar production
  • 13% of wheat procurement and 20% of paddy procurement
• Numerous cooperative business models exist around the country that serve the requirements of both members and non-members. 
  • Sixteen Indian cooperatives have been featured in the ‘Turnover over GDP Per Capita’ category of the World Cooperative Monitor 2022. This includes:
    • Indian Farmers Fertiliser Cooperative Limited, New Delhi (IFFCO)
    • Gujarat State Cooperative Milk and Marketing Federation, Anand, Gujarat
    • Seven state cooperative banks e.g. Kerala, Maharashtra Karnataka and Pradesh, etc.

Growth Potential:

• Finding opportunities for the formation of cooperatives can be done effectively through the solving of community problems and the observation of sectoral trends. 
• There is a substantial opportunity to establish and grow cooperatives in developing economic sectors such as manufacturing, services, renewable energy, tourism, transportation, handloom, handicraft, health, student/campus consumer cooperatives, etc.
• There is tremendous potential in the social welfare sector that is usually not economically viable for other types of commercial enterprises. 

Challenges: 

• Difficulty in gaining access to capital.
• There are often legal restrictions on the range of operations or membership.
• The operations and processes are expensive and time-consuming due to democratic decision-making, etc.

Way Forward:

• Cooperative entrepreneurship must aim to improve cooperative society operations through strategic management, innovation, and creativity. 
• The governance mechanisms of the cooperative society must be dynamic.
• Qualified, competent, and committed human resources must be employed.
• modern management techniques to realize the goals of unity.

Conclusion: 

Better expansion of the sector is expected with government backing through campaigns like Sahakar se Samridhi and the creation of a separate Ministry of Cooperation, etc. Additionally, the inclusion of women and young people with cooperative values and knowledge can be helpful for faster growth. 
The eleven vows mentioned earlier in the article are the best formula for living a simple and happy life. It is the best representation of ‘Live and Let Others Live’.

Gist of Yojana July 2023: Cooperation To Prosperity:- Download PDF Here