Econ-205 Agricultural Finance Lecture 14

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Questions and Answers

What is the primary purpose of agriculture credit provided by cooperative institutions?

To supply farmers with necessary tools and equipment

To offer warehousing facilities for agricultural products

To assist farmers with marketing their produce

To increase agriculture production by providing loans (correct)

How do cooperative institutions contribute to agriculture distribution?

By providing direct financial aid to farmers

By managing agricultural markets on behalf of farmers

By delivering agricultural inputs to farmers at their doorsteps (correct)

By regulating the prices of agricultural products

What role do cooperative societies play in agriculture marketing?

They pool produce and provide marketing linkages (correct)

They charge farmers for storage of their produce

They restrict farmers from accessing wider markets

They control the production rates of agricultural goods

Which of the following best describes the service provided by cooperative societies related to agricultural implements?

They provide expensive agricultural implements for rent Signup and view all the answers

What benefit do agro-based industries supported by cooperative institutions provide to farmers?

They enhance direct employment opportunities for farmers Signup and view all the answers

What was one of the key suggestions made by the Mac Lagan committee regarding the loan process?

There should be a careful scrutiny of applications before advancing loans. Signup and view all the answers

During which period was the cooperative movement in India referred to as the 'Golden Era'?

1919-1929 Signup and view all the answers

Which recommendation was made by the Agricultural Finance sub-committee in 1944?

Assess the credit-worthiness of farmers based on repayment capacity. Signup and view all the answers

What was identified as a barrier to the progress of cooperatives in 1945?

The Laissez-faire policy of the Government. Signup and view all the answers

Which act was introduced in 1932 to support the growth of the cooperative movement?

Madras Cooperative Societies Act Signup and view all the answers

What principle did Mac Lagan committee stress should guide the extension of loans?

Honesty should be the main criterion. Signup and view all the answers

What financial institution was created in 1924 for the cooperative movement?

Land Mortgage Banks (LMBs) Signup and view all the answers

What was the primary aim of the Planning Commission established in 1950?

To prepare a five-year plan promoting cooperatives. Signup and view all the answers

What was identified as a main drawback of cooperative credit according to the All India Rural Credit Survey Committee?

It was inadequately distributed and favored large cultivators. Signup and view all the answers

During which plan was the National Cooperative Development and Warehousing Board established?

Second five year plan Signup and view all the answers

What recommendation was made regarding the size of membership in a cooperative according to the Committee on Cooperative Credit?

Membership should not be too large, with villages no more than 3-4 miles apart. Signup and view all the answers

Which committee stressed the importance of providing loans under distressed conditions specifically?

Committee on Taccavi loans and cooperative credit Signup and view all the answers

What was a key focus during the Third five year plan initiated in 1961?

Increased emphasis on cooperative credit and farming Signup and view all the answers

What was one of the recommendations made by the All India Rural Credit Survey Committee to improve cooperative effectiveness?

Enhance coordination between credit, marketing, and processing Signup and view all the answers

What was established in 1963 as part of the efforts to strengthen cooperative efforts?

National Cooperative Development Corporation Signup and view all the answers

Who chaired the All India Rural Credit Review Committee constituted in July 1966?

Sri.B.Venkatappaiah Signup and view all the answers

Which phase of the cooperative movement in India introduced the Cooperative Credit Societies Act?

Initiation phase (1904-1911) Signup and view all the answers

What was one of the significant changes introduced by the Cooperative Societies Act of 1912?

Legal protection for all types of cooperatives Signup and view all the answers

Which important observation was made by the Mac Lagan committee regarding cooperative societies?

Illiteracy among the members Signup and view all the answers

During which phase of cooperative development did recommendations from the Indian Famine Commission lead to the formation of credit societies?

Initiation phase (1904-1911) Signup and view all the answers

What principle was specified in the Cooperative Credit Societies Act of 1904?

One man one vote Signup and view all the answers

Which phase is characterized by the growth of rural cooperatives on both credit and non-credit fronts?

Modification phase (1912-1918) Signup and view all the answers

What was a notable shortcoming of the cooperative movement identified in the Mac Lagan committee's report?

Misappropriation of funds Signup and view all the answers

Which classification of cooperative societies is noted in the Cooperative Credit Societies Act of 1904?

Rural and urban societies Signup and view all the answers

What was a primary focus during the Tenth Five Year Plan regarding cooperatives?

Evaluating competitive efficiency in globalization context Signup and view all the answers

Which initiative was part of the Eleventh Five Year Plan concerning loans?

Offering concessional loans to disabled individuals for self-employment Signup and view all the answers

What was emphasized during the Twelfth Five Year Plan to support rural economic stability?

Encouraging micro credit groups and women cooperatives Signup and view all the answers

What aspect of cooperatives was highlighted in the studies during the Tenth Five Year Plan?

Challenges posed by globalization and competitive efficiency Signup and view all the answers

What type of modernization strategies were considered for cooperatives in the Twelfth Five Year Plan?

Applying automation and ICT in cooperative operations Signup and view all the answers

What key issue was addressed regarding regional disparities in cooperatives during the Tenth Five Year Plan?

Identifying and promoting cooperatives in underdeveloped states Signup and view all the answers

What measure was suggested for enhancing human resources in cooperatives during the Tenth Five Year Plan?

Conducting training and skill development programs Signup and view all the answers

What significance do agricultural cooperatives hold in India even after a century of the cooperative movement?

They continue to be a vital part of the rural economy Signup and view all the answers

What was one of the key recommendations made in the 1969 report regarding agricultural development?

Creating Small Farmers Development Agency (SFDA) Signup and view all the answers

Which plan emphasized the establishment of the National Bank for Rural Development (NABARD)?

Sixth Five Year Plan Signup and view all the answers

During which Five Year Plan was the new concept of transport cooperatives initiated?

Third Five Year Plan Signup and view all the answers

What was a significant focus of the Seventh Five Year Plan?

Organizing special cooperative loan recovery camps Signup and view all the answers

What was a major focus during the Ninth Five Year Plan regarding cooperative societies?

Framing of national policy on cooperatives Signup and view all the answers

Which aspect was emphasized in the Eighth Five Year Plan?

Strengthening of milk and processing cooperatives Signup and view all the answers

What feature was included in the proposed amendment during the Ninth Five Year Plan?

Expansion of NCDC’s scope to include various agricultural sectors Signup and view all the answers

Which recommendation was proposed for the reorganization of primary societies?

Reorganization into economically viable units Signup and view all the answers

Study Notes

Econ-205 Agricultural Finance and Co-operation (2+1) Lecture-14

Lecture covers the history of cooperative development in India and the role of cooperatives in Indian agriculture.

History of Cooperative Development in India

Pre-Independence Era divided into four phases:
- Initiation phase (1904-1911):
  - Indian Famine Commission and a committee headed by Sir Edward Law recommended credit societies based on the Raiffeissen model.
  - This led to the enactment of the Cooperative Credit Societies Act (1904).
  - Classified societies into rural and urban based on member composition (4/5th farmers/non-farmers).
  - Societies were controlled by a Registrar of cooperatives.
  - Loans were given based on personal and collateral security.
  - The principle of "one man, one vote" was established.
- Modification phase (1912-1918):
  - Cooperative Societies Act of 1912 addressed shortcomings of the 1904 Act.
  - Provided legal protection to all types of cooperatives.
  - Led to the formation of rural cooperatives (credit and non-credit).
  - Growth was not uniform across regions.
- Expansion phase (1919-1929):
  - This period was considered a "Golden Era" for the cooperative movement.
  - Cooperatives gained momentum as they became a provincial subject under the Montague Chelmsford Act of 1919.
  - Economic prosperity during 1920-1929 boosted cooperative growth.
  - Land Mortgage Banks (LMBs) were established initially in Punjab, then Madras and Bombay.
- Restructuring phase (1930-1946):
  - Indian Central Banking Enquiry Committee (1931) highlighted issues like loan delays and inadequate credit.
  - Madras Cooperative Societies Act (1932) aimed to enhance cooperative movement.
  - Agricultural Finance sub-committee (1944) under Prof. D.R. Gadgil recommended adoption of limited liability, assessing creditworthiness based on repayment, subsidizing administration costs, and linking credit to marketing.
  - Cooperative Planning Committee (1945) under Sri. R.G. Saraiya pointed to the impact of government policy (Laissez-faire) and illiteracy on progress.
Post-Independence Era(no dates provided):
- Planning commission introduced 5-year plans (starting in 1951).
- Objectives focused on rural development programs, credit systems, and extending cooperatives into different sectors like farming, industry, housing, and marketing.
- Personnel training was also prioritized in cooperatives.
- All India Rural Credit Survey Committee (AIRCSC, 1951) noted cooperative credit uneven distribution favoring larger landowners/farmers.
- Second Five-Year Plan (1956-1961):
  - National Cooperative Development and Warehousing Board (NCDWB) established.
  - Formation of cooperatives for production and processing were also initiated.
  - Membership limitations were proposed.
- Third Five-Year Plan (1961-1966):
  - Increased focus on cooperative credit and farming.
  - National Cooperative Development Corporation (NCDC) established.
  - Other key activities included reorganizing primary societies, checking overdue payments, and flexibility in loan conversions.
  - Creation of loan application simplification was considered.
- Fourth Five-Year Plan (1969-1974):
  - Rehabilitation and reorganization of District Cooperative Credit Societies.
- Fifth and Sixth Five-Year Plans (1975-1979 and 1980-1985):
  - Introduction of new fertilizer projects.
  - National Bank for Rural Development (NABARD) established to support agricultural and allied activities.
  - Dairy cooperatives gained importance during these years.
- Seventh and Eighth Five-Year Plans (1985-1990 and 1992-1997):
  - Special loan recovery campaigns were organized.
  - Strengthening national and state consumer federations, and the milk and processing sectors, occurred.
- Ninth Five-Year Plan (1997-2002):
  - Focus on developing a national policy for cooperatives and finalization of a new Multi State Cooperative Societies Bill.
  - Expansion of NCDC's scope to include diverse areas like animal husbandry, forestry, etc., was considered.
- Tenth Five-Year Plan (2002-2007):
  - Special study on the role of cooperatives, constraints, and improvement of viability, commercialization, etc.
  - Focus on quality improvement and technology upgradation were prioritized.
  - Development of cooperatives in underdeveloped areas and consumer cooperatives were also reviewed.
- Eleventh Five-Year Plan (2007-2012):
  - Loans for self-employment were provided to disabled people with favourable conditions.
- Twelfth Five-Year Plan (2012-2017):
  - Supporting micro credit groups and women cooperatives.
  - Focus on cooperative development with improved facilities in dairy cooperatives, and automation of cooperatives.

Indian Cooperatives and Agriculture

Cooperatives have significantly contributed to agriculture in several areas:
- Agriculture Credit,
- Distribution,
- Marketing,
- Service,
- and Industry.

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Description

This lecture delves into the history of cooperative development in India, focusing on its evolution and the significant role that cooperatives play in Indian agriculture. It covers key phases from the pre-Independence era, detailing legislation and structural changes that shaped cooperative societies.