Tap export markets, create economic zones for co-ops, says expert panel
Some of the recommendations, such as priority for export-oriented cooperatives, are already under implementation
A high-level experts’ panel set up by the Amit Shah-headed cooperation ministry to frame a new policy for cooperatives has recommended special economic zones for the bodies and tapping of export markets to boost the sector, according to excerpts of a draft report reviewed by HT.
The panel, headed by former Union minister Suresh Prabhu, in draft report to be made final within a month has recommended setting up of so-called cooperative economic zones pivoted towards export-oriented enterprises.
Cooperatives are collective businesses jointly owned by participating members who share profits and losses. The popular milk brand Amul, for instance, is owned by a cooperative; the largest fertilizer maker, IFFCO is one too.
Aside from being a large provider of employment, the cooperative sector also has nearly 38000 viable primary agricultural cooperative societies (PACS), which are now being digitized in broad push to modernise the sector.
Some of the recommendations, such as priority for export-oriented cooperatives, are already under implementation, an official with knowledge of the matter, said, separately.
In August, Shah, the minister for cooperation and home affairs, launched the country’s first multi-state cooperative society for exports to provide a global platform for the country’s organic products. The enterprise, The National Cooperative Export Limited (NCEL), is one among three national cooperatives being planned by the Modi government.
The draft report also wants more multi-state cooperative banks to be set up, which will boost “internal financial security” of the country. It has also sought a review and “handholding” of all sick units to revive them, with a focus on creating a level-playing field for the cooperation sector.
Positioned as a premier enterprise, the NCEL will extend a range of services to ramp up overseas shipments of organic produce. In January, the Cabinet had given its approval for the launch of the NCEL. The government is also in the process of setting up two more multi-state cooperatives for promoting seed businesses and organic farming.
NCEL will connect the ministries of commerce and industry, external affairs and Indian embassies to boost market linkages and supply chains for export of farm produce, Shah said. It will develop into a “complete export ecosystem”, covering procurement, storage, processing, marketing, branding, labeling, packaging and certification, the ministry said in a statement . According to its proposed business model, at least 50% of profits will go to farmers.
In its monsoon session in July, Parliament passed The Multi-States Cooperative Societies (Amendment) Bill, 2022, as part of reforms by the Modi government to modernize the country’s 115-year-old cooperative sector.
The law seeks to bring transparency in the governance of cooperatives, paves the way for a “cooperative election authority” to bring electoral reforms and prevent malpractices in the cooperative sector, measures which will be recommended by the Prabhu-led panel in its final report, according to a person aware of the development.
Under the Constitution’s Seventh Schedule, which divides responsibilities between the Centre and states, state governments have jurisdiction over cooperatives. However, the Centre has control over policy-making for cooperatives that operate in more than one state, known as multi-state cooperatives.