VASANTRAO NAIK MARATHWADA AGRICULTURAL

UNIVERSITY,PARBHANI

POST GRADUATE INSTITUTE OF AGRI-

BUSINESS MANAGEMENT,CHAKUR

ASSIGNMENTS

Management Of Agri-Business Cooperatives

Acadmic Session:- 2021-2022

Course No:- ABM-527
Semester :- 3rd Sem

Submitted By:-
Mast. Pratik Narayanrao Moghe
Reg No:- 2020/MBA/18/MC

Submitted To:-
Prof. Sudhakar More
(Dept of Agri-Business Cooperative Mgt)
 PGI-ABM,Chakur.

COOPERATIVE MOVEMENT IN INDIA

Cooperatives in India

 In 1844 the Rochdale Pioneers founded the modern

Cooperative Movement in Lancashire, England, to
provide an affordable alternative to poor-quality and
adulterated food and provisions, using any surplus to
benefit the community. Since then, the cooperative
movement has flourished, extending across the globe
and encompassing all sectorsof economy.
 1904: Sir Frederic Nicholson was hailed as the pioneer
of the cooperative movement in India, he noted.
 Sir Frederic Nicholson was also the ‘Father of
Fisheries’ in the Madras presidency.
 The first Cooperative Law of India The Cooperative
Credit Societies Act, 1904 was passed on 25th March
1904.
 Agricultural Credit Cooperative Society, of
Kanaginahal village of Gadag District in Karnataka
was the first cooperative Society formed under First
Cooperative law of India.
 This was launched on 8th July 1905 by the villagers of
Kanaginahal under the leadership of Shri
 Siddanagowda SannaRamanagaowda Patil with the
initial share capital of Rupees two thousand.
 India has a history of successful cooperative movements. India
is an agricultural country and laid the foundation of World’s
biggest cooperative movement in the world.
 Cooperatives in India were formally introduced through the
Cooperative credit Societies Law enacted by the British
government in 1904 to provide relief to Indian peasants from
the clutches of money lenders.
 It enabled the formation of ‘agricultural credit cooperative’
under government sponsorship in India.
 There have been many success stories of Cooperatives in India,
the two most important being –
o Green Revolution

o White Revolution

 Examples of cooperatives in India are Amul India and Lijjat

Papad.


COOPERATIVES MOVEMENT IN INDIA

 Pre- Independent India:-

1. The Cooperatives were first started in Europe and the British
Government replicated it in India to mitigate the miseries of
the poor farmers, particularly harassment by the
moneylenders.
2. The term cooperative Societies came into existence when the
farmers of Poona (now Pune) and Ahmednagar led
unsettlement against the moneylenders who were charging
exorbitant rates of interest.
3. This is when the British Government proffered and passed 3
acts namely the Deccan Agriculture Relief Act (1879), the
Land Improvement Loan Act (1883) and the Agriculturists
Loan Act (1884).
o In 1903, with the support of the Government of Bengal,

the first credit cooperative society was formed in

banking. With the enactment of the Cooperative Credit
Society in 1904, it got definite shape.
o It was registered under the Friendly Societies Act of the
British Government.

 Post- Independent India:-

 Cooperative Societies became an integral part of Five-Year

Plans, post independence.
 In 1958, the NDC recommended a National Policy on
Cooperatives for training of personnel and setting up of Co-
operative Marketing Societies.
 To remove the myriads of laws governing the similar types
of societies, the Multi-State Cooperative Societies Act was
enacted in 1984.
 The most important success stories lie behind the success
of White Revolution, which made the country the world’s
largest producer of milk and milk products; and Green
Revolution and the conversion of villages into model
villages have assumed great importance in the wake of the
Green Revolution.
 Timeline of Laws on Cooperatives in India

1. 1904 – First cooperative credit society act was enacted and

gave Cooperative a definite structure and shape.
2. 1912 – Cooperative Societies Act, a more comprehensive
legislation, was enacted. It provided for registration of
cooperative societies and creation of the post of registrar for
the societies.
3. 1919 – Cooperatives became the provincial subject and were
authorized to make their own cooperative laws under
the Montague Chelmsford Reforms, 1919.
4. 1929 – An apex promotional organization, the National
Cooperatives Union of India – NCUI was established to
promote and strengthen the cooperative sector.
5. 1935 – Cooperatives were treated as provincial subjects
under the Government of India Act 1935.
6. 1942 – The British India passed the Multi-Unit Cooperative
Societies Act for cooperatives that had units in more than one
state.
7. 1945 – Cooperative planning committee was appointed by
the Government to plan the development of cooperatives in
the country.
8. 1958 – Co-operative Marketing Societies were set up and a
National Policy on Cooperatives was recommended by
the National Development Council – NDC.
9. 1984 – The Multi-State Cooperatives Act 1942 was replaced
by the Multi-State Cooperatives Act 1984.
 10. 2002 – Government of India announced a National
Policy on Co-operatives. The Multi-State Cooperatives Act
2002 was enacted, amending and enhancing the Multi-State
Cooperatives Act 1984. This act provided more freedom of
operation to cooperatives and greater autonomy in the
decision-making process. It also reduced the nomination of
government on the boards.

Names 10 best cooperative societies in

India
List of Co-operative societies in India
1. Amul
2. Horticultural Producers’ Cooperative Marketing and
Processing Society (HOPCOMS)
3. Indian Coffee House
4. Indian Farmers Fertilizer Cooperative Limited (IFFCO)
5. Kerala Dinesh Beedi workers’ Central Co-op Society
6. Karnataka Milk Federation(KMF)
7. Kerala Co-operative Milk Marketing Federation (KCMMF)
8. Pratibha Mahila Sahakari Bank
9. Orissa State Cooperative Milk Producers’ Federation
10. Anyonya Co-operative Bank Limited
 COOPERATIVE CREDIT STRUCTURE IN
INDIA

Cooperative movement in India was started primarily for dealing

with the problem of rural credit. The history of Indian cooperative
banking started with the passing of Cooperative Societies Act in
1904. The objective of this Act was to establish cooperative credit
societies “to encourage thrift, self-help and cooperation among
agriculturists, artisans and persons of limited means.”

Many cooperative credit societies were set up under this Act. The
Cooperative Societies Act, 1912 recognized the need for
establishing new organizations for supervision, auditing and
supply of cooperative credit.

The Co-operative Credit Institutions in India can be classified as

under a three-tier structure.

(i) Primary Credit Societies at the bottom

(ii) Central Co-operative Bank at the middle

(iii) State Co-operative Bank at the top

The short-term cooperative banks are three tiered

operating in different states.These are:

State Cooperative Banks:

 They operate at the apex level in states

State cooperative banks are the apex institutions in the

three-tier cooperative credit structure, operating at the
state level. Every state has a state cooperative bank

State cooperative banks occupy a unique position in the

cooperative credit structure because of their three
important functions:
(a) They provide a link through which the Reserve Bank of India
provides credit to the cooperatives and thus participates in the
rural finance,
(b) They function as balancing centers for the central cooperative
banks by making available the surplus funds of some central
cooperative banks. The central cooperative banks are not
permitted to borrow or lend among themselves,
(c) They finance, control and supervise the central cooperative
banks, and, through them, the primary credit societies.
 District Central Cooperative Banks:
They operate at the district levels

A District Co-operative Central Bank (DCCB) is a cooperative bank

operating at the district level in various parts of India. It was
established to provide banking to the rural hinterland for the
agricultural sector with the branches primarily established in rural
and semi-urban areas.

 Structure:

The banking model consists of a district central bank for each

district in every state of India known with a name as a respective
District Central Co-operative Bank. The members and their
elected directors who represent a multitude of professional
cooperative bodies like milk unions, urban cooperatives, rural
cooperatives, agricultural and non-agricultural cooperatives, and
various others in turn elect the bank's president. These banks are
collectively represented by a State Apex Central Co-operative
bank for each state and it acts as the ultimate bank and apex body
for the DCCBs in each state. It has been widely observed all over
the country that the local politicians who hold the sway over the
cooperatives get elected as President of the DCC bank and a
president post would mean nurturing for their future political
ambitions.However, this trend, which has become a national
phenomenon, carries its own advantages and disadvantages.

Primary Agricultural Credit Societies:

They operate at the village or grass-root level.
  Primary agricultural credit society forms the base in the three-tier
cooperative credit structure. It is a village-level institution which
directly deals with the rural people. It encourages savings among
the agriculturists, accepts deposits from them, gives loans to the
needy borrowers and collects repayments.
 It serves as the last link between the ultimate borrowers, i.e., the
rural people, on the one hand, and the higher agencies, i.e.,
Central cooperative bank, state cooperative bank, and the Reserve
Bank of India, on the other hand.
 A primary agricultural credit society may be started with 10 or
more persons of a village. The membership fee is nominal so that
even the poorest agriculturist can become a member.
 The members of the society have unlimited liability which means
that each member undertakes full responsibility of the entire loss
of the society in case of its failure. The management of the society
is under the control of an elected body.

Likewise, the long-term structures are further divided into —

1. State Cooperative Agriculture and Rural Development

Banks (SCARDS) — These operate at state-level.

2. Primary Cooperative Agriculture and Rural

Development Banks (PCARDBS) — They operate at
district/block level.

 Two Tier Structure:-

Land Development Bank:- The main objective of the land
development bank is to promote the development of
agriculture and increase agricultural production.

1. Central Land Development Bank :

It acts as a link between NABARD and government in the long
term banking transactions. It supervise amd making guidelines for
PLDBs for smooth functioning of various banking
operations.Sanctions loans to the members bank s and provide
training for lower functionaries.

2. Primary Land Development Bank:

To saction long term loans for long term improvement on the

farmers field such as purchasing tractor, construction of farm
belonging ,land reclaimation,etc. It attracts local savings.
ROLE OF LEADERSHIP IN COOPERATIVE
MANAGEMENT

 Leadership :

 The action of leading a group of people or an organization.

 The ability of leading a group of people or an organization,

and getting work done by acting and getting others to act.

 Leadership is a process of guiding, directing and motivating the

people to achieve organization goals.

 Leadership involves:

 .Leading the people.

 .Establishing a clear vision,

 Sharing that vision with others so that they will follow willingly.

 .Providing the information, knowledge and methods to realize

that vision.

 .Coordinating and balancing the conflicting interests of all

members and stakeholders.

 .A leader steps up in times of crisis, and is able to think and act

creatively in difficult situations.

 .The act of inspiring subordinantes to perform and engage

in achieving a goal.

 .Co-ordinates with Manager and Plays an middle role

between Manager and employee
 .Management do things right; Leaders do right things.

 Major Role of Leadership:

 Initiates Action

 Motivation

 Supervision & Guidance

  Building Confidence

*Initiating Action:
Leader is a person who starts the work by communicating the policies
and plans to the subordinates from where the work actually starts.

*Motivation :
A leader proves to be playing an incentive role in the concern's
working. He motivates the employees with economic and non-
economic rewards and thereby gets the work from the subordinates.

*Supervision & Guidance:

The supervision includes observe and direct the work.
A leader has to not only supervise but also play a guiding role for the
subordinates. The way they have to perform their work effectively and
efficiently.

*Building Confidence:
Confidence is an important factor which can be achieved through
expressing the work efforts to the subordinates.
It is also important to hear the employees with regards to their
complaints and problems.
 *Building Morale:
Morale as leader denotes willing co-operation of the employees
towards their work and getting them into confidence and winning their
trust.

*Builds Work Environment:*

Management is getting things done from people. An efficient work
environment helps in sound and stable growth. Therefore, human
relations should be kept into mind by a leader.
HUMAN RESOURCE MANAGEMENT
(HRM)
Introduction:
Human Resource Management (HRM) basically deals with
finding the right people, placing them in the right job, at the
right time, training and developing them for better
performance.
The human resource planning is assuming increasing
importance for the cooperative sector because of the growth
and expansion of business, the need for adopting modern
technology calling for exercise of newer skills, the changing
concept of cooperative management involving the
introduction involving the introduction of professionalism,
the need to ensure viability to cooperatives by keeping the
man-power costs etc.
Inadequate human resource development has crippled their
financial solvency, economic viability, productivity and
profitability.
An effort has been made to conceptualize the future
strategies to be adopted for ushering an era of self-reliant,
self-sustained and economically viable cooperatives
organization.
The HRD managers of cooperatives have encountered the
problem of labour turnover in cooperatives, especially in the
field of skilled employees.
 Today’s HRM depends not only on the simple logic of
authority and responsibility but also on a dynamic
motivational system in place to retain the loyalty of the
workforce.
A highly motivated workforce is vital for any organization
seeking good results. This tendency demands proper human
resources planning at the micro as well as macro level.

 Concerns of Human Resource Management (HRM):

1. Concern with outputs, outcomes, process and inputs
2. Concern with planning
3. Concern with measurement and review.
4. Concern with continuous development and improvement
5. Concern for communication HRM is concerned with
communications
6. Concern for stakeholders
7. Ethical concerns -
 Respect for the individual
 Mutual respect
 Procedural fairness
 Transparency

 Factors affecting performance

Performance of human resource managers are affected by a number of
factors, all of which should be taken into account. These comprise:
• Personal factors – the individual’s skill, competence, motivation
and commitment.
• Leadership factors – the quality of encouragement, guidance
and support provided by the managers and team leaders.
• Team factors – the quality of support provided by colleagues.

• System factors – the system of work and facilities provided by

the organization.
 Contextual (situational) factors – internal and external
environment pressures and changes.

 Steps to improve HRM in cooperatives

Cooperative organizations have been called upon to continually
evaluate their policies, review their plans for expansion and growth and
assess their return and risk of this new competitive environment.
In addition, there is the added problem of cooperatives failures, many
of these failures have been associated with managerial mistakes,
tightening prudential standards,multiple control, outright fraud and a
more volatile and uncertain economy that demands new standards for
professional management.
1. Member education, including methodologies for increasing
members participation.
2. Increasing women and youth participation through suggestions,
schemes and quality circles.
3. Development of leadership skills.
4. Introducing HRM techniques such as work system studies, self
renewal systems and performance appraisal system etc.
5. Establishment of modern personnel policies such as manpower
planning, scientific and objective recruitment, selection and placement,
wage and salary structure, career planning and promotional schemes,
performance appraisal, potential appraisal and development feedback
and performance coaching, organizational development, reward,
training, employee welfare and quality of work life, human resource
information, provision for reddressal of grievances etc.
6. Starting training adopts the entire training systems.
7. Training of trainers, training directors and policy makers.
8. Commitment from the top management including cooperative
federations for HRD programmes.

9. Improving work culture: Team work, communication, discipline,

operating consistency, respect for the dignity and worth of individual,
individual recognition for contribution, participative problem solving
etc.
10. Introduction of modern / appropriate technology and information
system.
11. Ensure long-term strategy for HRD in cooperatives, population
control, literacy programme, employment generation, vocational
training, entrepreneurship development programme, medical and
health care service, environment protection activities, drinking water
supply, house construction, consumer education etc.

Scope of high performance of fully realized process of HRM:

• There is no uniformity in the provisions of State Cooperative Acts
regarding working of HRD. A few states which have promulgated
parallel State Cooperative Acts, the Acts in the other states have
restrictive provisions which effect autonomous functioning of
cooperative.
• Further, there is no specific HRD policy as such and recruitment
of staff is not based on merit and competence.
• The budgetary head under HRD does not indicate adequate
funding, there is lack of infrastructure facilities at the branches of bank
in terms of building reflecting proper standards, audio-visual
equipment, training halls and library facilities.
• On the top of this, there is indifference of staff particularly old
staff and even members towards attending various education and
training programmes.
• Hence, it is the need of the hour that there must be a uniformity
in the provisions of the State Cooperative Acts for the development of
HRM.
It is imperative that cooperatives have failed to us their human
resources more productively, on account of lack of professionalisation.
Hence, there is a constant erosion in the productivity and profitability
of cooperative enterprises. The effective and efficient utilization of
human resources therefore underlines the need for professionalisation
of management, thus professionalism of management has become
inevitable, in the cooperative for the following reasons:
1. To render qualitative service and to avoid competition.
2. To meet the challenges arising due to changing business
environment.
3. To have some creative and innovative performance in the area of
management mainly to make the cooperatives as role model to other
organizations. This is possible only by professionalisation of
management.

• In short, best practice HRM process are part of a holistic approach

to managing the performance, which is concern of everyone in the
organization. This is carried out with varying degrees of success and
commitment from employees.
• The above discussion reveals that, it is the need of the hour
for the cooperatives to adopt and practice the concept of
professionalism of management to make cooperative more viable.