New Job Opportunities in Agricultural Credit Societies

Dr. Anshu Singh

India is one of the few economies that have achieved incredible economic growth without eliminating the informal economy or the unorganised sector. The unorganised sector is characterised by economic activities performed by workers or economic units that are not adequately covered by formal arrangements. India, predominantly an agrarian economy, also encompasses the informal or unorganised sector, which comprises rural artisans, weavers, craftsmen, retailers, small and marginal producers in dairy, fisheries, handicrafts, textiles, and more. The Indian cooperative movement has made substantial efforts to address issues related to work and employment in the unorganised sector. Recognising the significant contribution of the informal sector to the Indian economy, cooperatives play a crucial role in promoting socioeconomic development and selfemployment. They provide an institutional mechanism through which most of the informal activities in the rural economy can be organised, employing a community-based approach to create economic opportunities at the grassroots level. Primary Cooperative Societies, situated in villages, have offered a means for the rural population to come together and form meaningful economic entities that operate on the principles of cooperation. As the Indian economy undergoes changes and the manufacturing and services sectors contribute more to its growth, cooperatives have had to expand their scope beyond traditional rural and agricultural settings. However, this has proven to be a challenging task, as Primary Cooperative Societies were governed by state laws and largely focused on thrift and credit activities, overlooking the vast entrepreneurial opportunities for income generation in the rural sector. In many cases, outdated legal frameworks hindered the growth of cooperative business activities, lacking provisions for innovation, technology transfer, recruitment, alliances, collaboration, and capital enhancement. Additionally, a lack of skilled human resources, inadequate physical and technological infrastructure, and competition from private players were significant factors contributing to the stagnant growth of Primary Cooperative Societies. Establishment of the Ministry of Cooperation at the Union level on 6th July 2021 was a crucial step towards strengthening the cooperative movement in the country. Prime Minister Shri Narendra Modi’s call for "Sahakar se Samriddhi" (prosperity through cooperation) provided the necessary impetus to reinstate the cooperative sector as a robust economic model, particularly at the grassroots level. The guidance of the Minister of Home Affairs and Cooperation, Shri Amit Shah, has resulted in a series of policy initiatives aimed at expanding the cooperative movement throughout the country, with a specific focus on Primary Agricultural Credit Societies (PACS)..

Primary Agricultural Credit Societies: Broadly, the cooperative sector can be categorised into credit and non-credit cooperatives. In the credit sector, Primary Agricultural Credit Societies serve as the foundational units of the rural credit system, established by and for farmer members at the village level. They operate as credit institutions and play a crucial role in mobilising credit and supporting agricultural production for short-term and medium-term durations. Apart from disbursing credit, their close proximity to the rural population allows them to achieve social, economic, and political objectives, including self-help, self-employment, community participation, asset creation, and resource mobilisation. Each PACS can be viewed as an independent cooperative institution owned and driven by its farmer members, operating under its own bye-laws. At an integrated level, PACS form the bottom tier of the Short-Term Rural Cooperative Credit Structure (STCCS), which comprises State Cooperative Banks (StCBs) at the state level, District Central Cooperative Banks (DCCBs) at the district level, and Primary Agricultural Credit Societies (PACS) at the village level. Farmers are the members and owners of PACS, which are linked to the nearest DCCBs, while DCCBs are members of StCBs. As part of this vertically integrated system, the primary function of PACS is to provide timely, adequate, and affordable cooperative credit to farmer members. Some PACS have diversified their operations into other related areas, such as procurement and warehousing, agri-value chain activities, seed and fertiliser distribution, provision of other financial services, and implementation of government schemes. However, the progress of PACS across the country is uneven, with some functioning effectively and being financially viable, while many others are non-operational and require revival plans. In the non-credit sector, the base-level primary cooperatives in areas such as dairy, fisheries, animal husbandry, textile, horticulture, and more, also serve as community-led models for economic growth and rural development. The cooperative sector's federal nature has seen success in the dairy and credit sectors, where primary societies depend on upper tiers for marketing their produce or conducting routine business activities. However, in states like Kerala, one can find primary societies functioning as independent business entities and multipurpose societies without significant support from the federal structure. On the other hand, many others sustain themselves through aided programs or schematic interventions, while several others are on the verge of closure.

Policy Initiatives for Transformation of PACS: Currently, there are approximately 98,995 Primary Agricultural Credit Societies with a membership base of 13 crore. Similarly, there are around 1,99,182 primary dairy cooperative societies, comprising about 1.5 crore members who engage in activities such as milk procurement from farmers, providing milk testing facilities, sale of cattle feed, and extension services to their members. The Ministry of Cooperation is fully committed to strengthening and expanding the cooperative movement in the country. Some of the key policy initiatives focus on transforming PACS into dynamic economic entities and offering them diverse avenues for business diversification. To this end, the Central Government has drafted model bye-laws for PACS in consultation with various stakeholders, including state bodies, development agencies, federations, academicians, and practitioners. Once implemented by the respective states, these model bye-laws will promote business diversification in PACS, enabling them to undertake a wide range of activities beyond agricultural credit. The bye-laws provide for more than 25 business activities, including dairy, fishery, establishment of warehouses, procurement of food grains, fertilisers, seeds, distributorship of LPG/ CNG/petrol/diesel, short-term and longterm credit, custom hiring centers, common service centers, fair price shops, community irrigation, business correspondent activities, and more. Under the leadership of the Cooperation Minister Shri Amit Shah, the Ministry has also implemented a project worth Rs. 2,516 crore for the computerisation of PACS. This initiative aims to computerise approximately 63,000 PACS over a period of 5 years, enhancing service delivery for small and marginal farmers. It will also enable PACS to digitise their services and establish linkages with DCCBs and StCBs. In addition to the transformation of existing PACS, the Union Cabinet has approved the establishment of 2 lakh new Primary Agriculture Credit Societies and dairy-fishery cooperatives in uncovered villages and panchayats over the next five years, with the aim of expanding the cooperative movement in the country. Currently, there are still 1.6 lakh panchayats without PACS and nearly 2 lakh panchayats without any dairy cooperative society. The formation of new societies will create numerous opportunities for income generation for members and generate sources of employment.

Employment Opportunities

1.      Computerisation and Digitisation of PACS - Most of the cooperative societies, particularly the primary ones, have been slow in adopting technology. In this era of technological advancements and digitisation, computerising PACS is an urgent need. The centre's strong focus on this initiative will bring 63,000 PACS into the digital realm and ensure transparency in all aspects of their business operations. As the initiative gains momentum, highly skilled technical personnel will be needed for implementation, maintenance, and upgrading of hardware and software solutions. The transition from physical to digital processes will require experts in data handling, data entry operators, accountants, and auditing professionals. In the future, computerisation and digitisation will enable PACS to function as extended banking outlets, providing a range of financial services to retail and wholesale customers. Consequently, numerous job opportunities will be created for banking and finance professionals in the cooperative credit sector.

2.      Warehousing - The warehouse market in India is experiencing rapid growth, with a Compound Annual Growth Rate of over 10%. As agricultural activities become more organised, there is a substantial increase in the demand for warehouses. Since the outbreak of COVID-19, the usage of warehousing facilities by e-commerce platforms has also surged. Utilising rural spaces, wastelands, and unproductive assets, warehouse construction and maintenance offer viable business options for PACS. These Credit Societies are also eligible entities to apply for the National Agri Infrastructure Financing Facility for creating warehouses and processing facilities. In the future, cooperative warehouses will require storekeepers, warehouse managers, facility managers, supervisors, and other retail management specialists.

3.      Agrotourism - Agritourism is a niche sector in the tourism industry where people seek an authentic farm experience and a break from the hustle and bustle of urban areas. The proximity of PACS to rural terrains and farmlands presents untapped potential for developing agrotourism as a profitable business proposition. Similar to warehouses, this endeavour would require asset creation and maintenance of physical assets at the ground level. Successful marketing of such sophisticated services would necessitate concerted efforts in branding and promotion. Furthermore, operationallevel jobs would be created for rural residents to manage routine operations at the facilities.

4.      Organic Farming - Increasing health concerns and growing environmental consciousness have paved the way for organic farming worldwide. Considering India's diverse agro-climatic conditions and traditional farming knowledge, organic farming is a natural choice for Indian agriculture. The primary cooperatives of the farming community can play a crucial role in developing organic clusters and the entire supply chain. Currently, India accounts for only 2.70% of the global organic food market, indicating immense potential for expansion. The promotion of organic cooperative societies will require skilled personnel in various functions such as aggregation, certification, testing, procurement, storage, processing, branding, labelling, packaging, logistic facilities, and marketing of organic products.

5.      Promotion of Indigenous Natural Seeds - A national-level, multi-state seed cooperative society has been envisioned to act as an apex cooperative organisation for the production, procurement, processing, branding, labelling, packaging, storage, marketing, and distribution of quality seeds. The apex society is also expected to engage in strategic research and development to create the right systems for preserving Indian traditional natural seeds. Cultivating quality seeds, conducting trials, certification, and distribution will require expertise and know-how in the field. This initiative will create lucrative opportunities for agribusiness and agriscience graduates and researchers

6.      Umbrella Organisation for Promotion of Exports - Indian cooperatives have a presence in almost all sectors, including agriculture (food grains, pulses, oilseeds, etc.), horticulture (fruits, vegetables, flowers, aromatic products, etc.), dairy, poultry, livestock, fisheries, sugar, spices.

Conclusion

The first-ever Minister of Cooperation in India, Shri Amit Shah, has highlighted numerous opportunities that primary cooperative societies can leverage to create employment and income avenues. It is envisioned that the policy initiatives of the Indian Government, along with the collaborative efforts of various stakeholders, have the potential to transform PACS into vibrant multipurpose business units capable of providing decent work and job opportunities for both young and experienced professionals. As these primary cooperative societies grow into sizable business units, specialised functions such as finance, marketing, operations, human resources, and administration will emerge. Consequently, skilled manpower will be required to handle the business processes and functions. The role of cooperative training and education will be of paramount importance in shaping the future workforce for the cooperative sector. Furthermore, cooperative institutions should not only be seen as tools for socioeconomic development but also as avenues for employment and income augmentation in the rural economy. The current policy environment for cooperatives ensures that primary societies participate in potentially growing sunrise sectors of the economy, moving beyond the conventional boundaries of agriculture. In the fast-paced and changing economic conditions, the survival and coexistence of the cooperative model alongside private and public ones reaffirms the faith in the spirit of cooperation for the benefit of the nation.

Cooperative institutions will occupy a prominent position in the journey towards an "Atmanirbhar Bharat" (Self-Reliant India) and are poised to emerge as a strong model of mainstream economic growth.

(The author is an expert in Cooperative Banking and Finance and has worked as a faculty member in VAMNICOM, Pune. She can be reached at knowanshu@gmail.com )

Views expressed are personal