In a move to bolster the rural economy and embrace the concept of ‘prosperity through cooperation’, the Indian government is set to establish agriculture-focused cooperative societies in every village where they are currently absent. This initiative, spearheaded by Ramesh Chand, a member of the National Institution for Transforming India (NITI) Aayog, aims to invigorate the cooperative movement and bring about comprehensive rural development.
The strategy involves the creation of agricultural cooperatives in each village, focusing initially on agri-business activities. As Ramesh Chand explained in an interview, the objective is to empower these cooperatives to evolve into multi-sector entities, not just limited to farming produce but encompassing a diverse range of products and services.
“A significant shift towards rural cooperatives is underway. The government’s vision is to establish at least one cooperative in agri-business within every village lacking such an entity. This is the target,” emphasized Chand. He further outlined the progressive approach, stating that in the subsequent phase, these cooperatives would expand their horizons, encompassing storage of produce and even enabling exports.
An integral component of this movement is the empowerment of farmer producer organizations (FPOs). To this end, Prime Minister Narendra Modi launched the on-boarding of 1,600 FPOs onto the Open Network Digital Commerce (ONDC) last month. This pioneering step is poised to revolutionize agricultural marketing by enabling FPOs to directly sell to wholesalers, businesses, and consumers. Chand hailed ONDC as a “game changer,” noting that electronic transactions conducted via ONDC are not governed by state-level agriculture produce marketing committee (APMC) Acts.
Chand clarified that integrating FPOs into ONDC wouldn’t necessitate additional budget allocation, as the required capacity-building measures would be undertaken by an agency under the agriculture ministry.
The overarching goal of these endeavors is to enhance the income of farmers. The government is actively exploring ways to cultivate entrepreneurship among farmers and foster community-based development through cooperatives. This initiative takes center stage at a time when the implementation of three new farm laws aimed at attracting private sector investment in the agriculture sector has met with opposition in some regions due to farmer protests.
Parallel to these efforts, the government is actively developing a comprehensive national database of cooperatives. This database will facilitate a granular understanding of the distribution of cooperatives across geographical regions and aid in the formulation of effective policies.
In a bid to consolidate the financial viability of cooperative entities, the government has taken several noteworthy steps. For instance, it permitted over 100,000 farm credit societies with roughly 130 million farmer members to establish decentralized grain storage facilities. This move aims to optimize sales planning for farmers and reduce wastage of agricultural produce, capitalizing on the last-mile reach of cooperative societies and their vital role in rural economies.
Furthermore, recognizing the importance of the cooperative sector, the government extended multiple tax concessions. Newly established cooperative societies venturing into manufacturing activities before the end of March next year are eligible for a 15% corporate tax rate, aligning them with new manufacturing companies.
