Indian PM Narendra Modi salutes co-op movement at its national congress

Modi praised the sector's support for small farmers but urged the 3,000 delegates to stay ahead of the game on digital tech

Agricultural development, honest governance and digital banking were among priorities highlighted for India’s co-op sector by prime minister Narendra Modi, at the movement’s national congress.

The 17th Indian Cooperative Congress, held by the National Cooperative Union of India (NCUI) in New Delhi from 1-2 July, gathered more than 3,000 delegates, with speakers including a number of government figures.

Highlighting the sector’s role in the national economy, Modi said his government was spending “Rs 6.5tn yearly on agriculture and farmers”. He praised co-ops for making India the world’s leading milk producer and one of the top sugar-producing countries, and urged the sector to help make the country self-reliant in the production of edible oil.

Co-operatives have become a huge support system for small farmers in many parts of the country, he added. The government plans to create 200,000 new multipurpose primary agricultural societies, he said, and is supporting the creation of 10,000 new farmer producer organisations, 5,000 of which have already launched. 

Famer producer organisations and primary co-ops will “give great power to small farmers” and are “a means of making small farmers a big force in the market”, said Modi.

Related: Indian government approves grain storage scheme for co-operatives

But Modi warned that the co-op sector also needs to become “a model of transparency and corruption-free governance”.

The country’s co-operative banking sector has witnessed a series of closures and fines in recent years due to deficiencies in regulatory compliance. In 2022 alone the regulator Reserve Bank of India cancelled the licenses of 12 co-operative banks.

Modi also urged the co-op sector to promote digital systems. India is “known in the world for its digital transactions”, he added, and co-operative societies and banks should “stay ahead when it comes to digital transactions”.

He also highlighted the NCUI’s new Cooperative Extension and Advisory Services platform, which offers e-learning and an online query service on co-operatives.

Delegates also heard from the minister of co-operation, Shri Amit Shah, who took up the role in 2021 when the ministry was created to provide “a separate administrative, legal and policy framework for strengthening the co-operative movement in the country”.

Some members of the opposition questioned the move at the time, arguing that most co-operatives were already regulated at state level and multi-state level co-ops were governed by the Multi State Cooperative Societies Act of 2002.

But Shah stressed the importance of the co-op sector, which has a national share of about 29% of agriculture credit distribution, 35% of fertiliser distribution, 25% of fertiliser production, 35% of sugar production, about 30% of spindle sector, almost 15% of milk production, procurement and sale, 13% of wheat procurement, and 20% of paddy procurement.

Co-ops need to accept “self-discipline and reforms in order to bring computerisation, modernisation and an openness in co-operatives”, he said.

An amendment has been proposed to the Multistate Cooperative Societies Act, said Shah, which will bring uniformity to co-op law and make the expansion of co-ops easier. Bylaws suggested by the ministry have already been accepted by 26 states and union territories, he added, which will bring 85% of the country under the same co-op law after September.

The expansion of co-ops is a controversial topic within the sector, including recent tensions between the milk co-operatives of Karnataka and Kerala. A recent attempt by Nandini brand to expand to the neighbouring state of Kerala were opposed by the Kerala Cooperative Milk Marketing Federation, which feared a negative impact on its its own Milma brand.

The ministry says it is working to enable better collaboration between co-ops and common service centres to make primary agricultural co-ops viable and put them at the centre of rural services. The government is also investing in a food grains storage scheme which, said Shah, will grow the share of co-ops in the storage system to more than 35% in the next five years.

An inter-ministerial discussion is under way to set up a Cooperative University, he added. There are already 630 training institutes working in the co-operative sector across India, and the university will work closely with them, he said.

The conference also heard from the director general of the International Labour Organization, Gilbert F. Houngbo, who addressed delegates via a video message in which he highlighted the role of co-ops in helping people come out of poverty and being a critical component in ensuring that the Sustainable Development Goals are achieved.

Mr Satoshi Sasaki, OIC and Deputy Director, ILO DWT/CO-New Delhi also spoke at the conference, where he described how co-ops can serve as catalysts in formalising the economy while providing their members with opportunities for decent work and livelihood creation.

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