(2) The larger cultivators will be called upon to contribute a relatively higher proportion of their borrowings towards share capital while the smaller cultivators will invariably be extended the facility of paying their share amount in convenient instalments.
(3) Stress will be laid on effective implementation of crop loan system. To ascertain whether the small farmer is receiving adequate attention, it is intended that the credit limit statements are so separated so as to identify small farmers vis-a-vis others.
(4) Loaning policies of land development barks will be liberalised, e.g., liberalisation in respect of valuation of landed property offered as Security, issue of joint loans for groups of small cultivators, emphasis on the operational and economic viability of the proposed investment and not merely the value of tangible security and phasing of the repaying programme in accordance with the capacity of the small cultivators.
(5) Bigger cultivators who can repay loans in shorter periods will be encouraged to avail of medium term credit for investment, so that larger volume of long- term credit can be made available for small farmers from land development banks.
Cooperative Marketing 19.19 Compared to cooperative credit, the development of cooperative marketing of agricultural produce is of recent origin. Following the recommendations of All India Rural Credit Survey Report, an integrated programme of cooperative marketing was taker up in the Second Plan and followed up in the Third. As a result, cooperative marketing structure has been built up at various levels. On the eve of the Fourth Plan, there were nearly 3300 primary marketing societies, of which 500 were special commodity marketing societies. The higher level of cooperative marketing structure consists of 20 apex marketing societies and three commodity marketing federations at the State level and one National Agricultural Cooperative Marketing Federation at the all India level. There are also 173 central marketing societies including 15 special commodity societies, mainly at the district level.
9.20. Consistently with the programme for increasing agricultural production, steps will be taken to strengthen the existing cooperative marketing structure, especially at the primary level. Necessary provision for this purpose has been made in the State Plans. The marketing federations at the State and national level will be strengthened to enable them to reach optimum efficiency and to provide the requisite leadership, financial support and guidance to their affiliated institutions.
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9.21. At present, only marketing cooperatives in Gujarat and a few processing cooperatives in other areas have adopted the system of grading and pooling. Efforts will be made to introduce this and other improved marketing techniques in as many cooperatives as possible. As further measures to improve marketing practices of the cooperatives, the schemes initiated in the previous years for establishing grading units with equipment and suitable trained personnel and for maintenance of price fluctuation funds which enable the societies to make outright purchases of agricultural produce from small growers, will be continued.
9.22. Cooperatives will aim at handling in the last year of the Fourth Plan, 8 million tonnes of foodgrains, 36 million tonnes of sugarcane, 0.6 million tonne of groundnut, 10,000 tonnes of fruit and vegetable and 1.8 million bales of cotton. At current prices, the value of agricultural produce likely to be handled by marketing and processing cooperatives is expected to be of the order of Rs. 900 crores in 1973-74. Cooperatives are also expected to handle agricultural commodities worth Rs. 25 crores in interstate trade and Rs. 10 crores in the export trade.
Cooperative Processing 9.23. Considerable success has been achieved in the establishment of sugar factories in the cooperative sector. This was facilitated by the licensing policy of Government and the assistance provided by the Industrial Finance Corporation. A concerted programme to develop cooperative processing of other agricultural produce was taken in hand from Second Plan onwards. It has been accelerated in recent years. By the end of 1968-69, 1596 cooperative processing units had been organised. These included 79 cooperative sugar factories, 237 cotton ginning and pressing units, 26 cotton spinning mills. 784 paddy pressing units, 188 oil mills, and 38 fruit and vegetable units. Recently the need and scope for further developing of cooperative processing in the context of increased agricultural production was examined by an expert committee. Keeping in view its recommendations and the available resources, the Fourth Plan envisages the organisation of additional 550 units. A commodity-wise, breakup of these units is given in the Annexure II.
9.24. A review made by an expert committee on planning of cooperative agricultural processing units has indicated that the tendency has been to set up processing units on the basis of stereo- typed schemes. In the Fourth Plan, it is proposed that Organisation of new processing units should be preceded by proper feasibility studies, advance locational planning with reference to supply of raw material, storage and marketing (if finished products and overall economics of each projects. Facilities to provide technical advice are already being developed in various apex marketing societies. Efforts will be made to strengthen this technical machinery. Attention will also be paid to the need to consolidate and maximise the operational efficiency of existing units and ensure the fuller utilisation of their installed capacity.
Cooperative, Handling of Agricultural Inputs 9.25. With the development of intensive agriculture, there will be a substantial step-up in the demand for inputs such as chemical fertilisers, seeds, agricultural implements and plant protection material. It is proposed that cooperatives intensity their activities and enlarge, their distribution system. The expectation is that, by 1973-74, cooperatives will be handling fertilisers worth about Rs. 650 crores, improved seeds Rs. 50 crores, pesticides Rs. 50 crores and implements Rs. 15 crores. To enable the cooperatives to handle the distribution of inputs of this order, it will be necessary for them to have access to adequate bank finance. For this purpose, a provision has been made to cover a part of the requisite margin money to be provided by the cooperatives.
9.26. Cooperatives have recently made a beginning in the production of agricultural inputs. Some marketing cooperatives in the States have organised granular fertiliser mixing units. Production and processing of improved seeds, formulations of pesticides manufacture of small agricultural implements have also been taken up in the cooperative sphere in increasing measure. A major venture is the establishment of the fertiliser project of the Indian Farmers Fertiliser Cooperative Ltd. with an investment of about Rs. 85 crores. This project is proposed as a complex of gas-based ammonia and urea plants at Kalol and phosphate plant at Kandla in Gujarat State. This fertiliser factory is expected to produce 318,500 tonnes of ammonia, 382,000 tonnes of urea and 637,000 tonnes of complex fertilisers. per annum. Another factory in the cooperative sector in Maharashtra State is also proposed to be set up.
Storage 9.27. A network of cooperative godowns has been established during recent years. On the eve of the Fourth Plan, there are 15,000 rural godowns and about 4000 mandi level or rail-head godowns. The total capacity is estimated to be of the order of 2.6 million tonnes. So far, the programme of storage has been financed entirely by Plan funds. In the Fourth Plan, it is expected that cooperatives will, for this purpose, have increasing recourse to bank finance and that the provision made in the Plan will be used essentially as margin money. On this basis, it is visualised that cooperatives will establish in the Fourth Plan an additional storage of about 2.0 million tonnes.
Consumer Cooperation 9.28. The broad institutional framework of consumer cooperatives comprises a National Federation
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to which 14 State federations are affiliated. The State federations, in turn, comprise 371 central or wholesale consumer cooperative societies. Linked to the central cooperatives are about 2800 branch stores (including department stores). There are also about 14,000 primary consumer cooperatives. Apart from the consumer cooperatives organised for the general urban population, cooperatives have also been set up for specific consumer groups such as employees in industrial undertakings and university students,
9.29 With the organisation of various central and wholesale stores, practically all districts with an urban population of 50,000 or above have been brought within the area of operation of such stores. In the Fourth Plan, therefore, stress will be laid on consolidation and strengthening of existing consumer cooperatives at different levels rather than the organisation of new institutions. On the institutional side, the weakest link in the consumer cooperative movement lies at the level of primary consumer cooperatives. While over 14,000 primary consumer cooperatives have been registered, about 3500 or them are dormant. The rest are mostly engaged in distributing rationed and controlled foodgrains and other commodities. One of the major tasks hereafter to be undertaken is a survey of the existing primary consumer cooperatives with a view to identifying the institutions that are viable or are potentially viable so that. on a selective basis, such primary consumer cooperatives could be further strengthened and developed.
9.30. Attention will also be paid to the reorganisation and strengthening of central wholesale consumer cooperatives with a view to building them up as large-sized multi-retail unit cooperative societies. The superstructure of the consumer cooperative movement comprising the State federations and the National Federation will have to be strengthened with a view to enabling these institutions to play an effective role in procurement of Supplies, besides promotional and service functions. At the retail stage, the structure is lopsided. It comprises, on the one hand, big retail outlets in the form of department stores with a large assortment of goods and, on the other, very small retail outlets in the form of single-roomed shops primarily dealing in rationed and controlled items. The latter category accounts for over 96 per cent of the total outlets through which the consumer movement is currently operating. These stores have practically no impact on normal consumer trade. To correct this imbalance, efforts will be made to develop retail outlets of the intermediate size, diversify the range of business of consumer cooperatives and improve their operational efficiency and economic viability.
9.31. In the rural areas. retailing, of consumer articles is conceived essentially as the responsibility of primary agricultural credit societies supported by marketing cooperatives. In this field, the expansion in business has been significant. The progress. however, has been largely accounted for by distribution of foodgrains and other controlled articles. Moreover the progress has been extremely uneven and has been confined to a few States. In the Fourth Plan, efforts will be made to spread and diversify this activity with a view to enlarging the number of village and marketing cooperative involved in it. The effort will be develop an effective consumer service so that cooperatives become part of a permanent distributive set up for making available a wide range of essential consumer goods in the rural areas. With the expansion and greater diversity of operations of consumer cooperatives and marketing cooperatives there is need for evolving appropriate working relationships between them. Steps will be taken to this end.
Rural Electric Cooperatives 9.32 One of the significant developments contemplated in the Fourth Plan relates to the involvement of the cooperative form of organisation in the programme of rural electrification. Pilot rural electric cooperatives are in the process of being set up in five States. The licencing of these cooperatives is among the functions allotted to the Rural Electrification Corporation. The objectives of the cooperatives include the supply of electricity for agricultural and agro-industrial purposes and the encouragement of active participation of the people by giving them some degree of control on electricity supply.
Urban Cooperative Banks 9.33. In urban areas, the salary carriers' societies all the primary urban cooperative banks can make an important contribution to future development. The salary earners' societies have proved highly successful in a large number of governmental departments and organisations and non-official corporations all over the country. They have proved valuable for providing consumption finance and mobilising savings. The primary cooperative banks, in the selected urban areas in which they have come up, have been financing activities of small producers and traders and are perhaps the most suitable types of organisation for this purpose. It is necessary for cooperative departments and the State Cooperative Banks to take active interest in the wider establishment and sound working of the Cooperative organisations. It is envisaged that the operations of the urban cooperative banks will be considerably expanded especially in regard to the financing, of small scale industries and small industrialists. In order to enable urban banks to discharge this responsibility, it will be necessary to strengthen their share capital base. The Reserve Bank has recently approved a scheme for giving
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loans to the State Governments for share capital participation, on a selective basis, in such of these urban banks as are engaged or interested in productive activities related to the financing of small scale industries. It is expected that the State Governments will take advantage, of this scheme.
Other Types of Cooperatives 9.34. While the focus of development will be on the cooperatives concerned with agricultural credit, marketing, processing and consumer needs, other types of cooperatives will also continue to receive attention. The programme relating to dairy, poultry and fisheries cooperatives and forest labour cooperatives and industrial cooperatives has been dealt with elsewhere. In cooperative farming, priority will be given to the revitalisation of the existing weak and dormant societies. New societies will be organised only in compact areas and if they have a potential for growth. Attention will be given to the strengthening of the labour contract societies and other types of non-agricultural cooperatives.
Management, Training and Education 9.35. Placing of adequate, competent and trained staff in key positions in cooperative institutions banking, marketing, processing, consumer stores is crucial for their successful functioning. At present, a majority of these institutions are managed by personnel on deputation from Government, who have no continuing stake in the growth of the institutions and often lack aptitude for business. It is essential for the institutions to reduce this dependence on borrowed personnel. For attracting the right type of persons, it is necessary to have mangement pools in different sectors in each State to be operated by the federal organisations like the apex banks, land development bank, apex marketing federation and State federation of consumer cooperatives. In due course, such pools could become the nucleus for establishment of cadres of key management personnel in different sectors. A beginning has been made in recent years in some States. it is proposed to pursue this programme vigorously.
9.36. The programme of cooperative training and education will be increasingly linked with the cooperative activities envisaged. The Vaikunth Mehta National Institute of Cooperative Management will be further developed as an apex institute of study and research in cooperation. The cooperative training colleges for intermediate personnel and cooperative training centres for junior personnel will be adequately equipped for training the requisite personnel.
9.37. In a strategy of cooperative development, 'there is need for continuing to stress the role of a well-informed and enlightened membership in the promotion and working of cooperative societies. A programme essentially directed towards the education of office-bearers and members of primary agricultural credit societies through peripatetic instructors has been in operation for some time. Of late, there has been a perceptible indication of dissatisfaction with the content and effectiveness of this programme. In some areas and even states, the programme has been curtailed or drastically modified. The programme is proposed to be revised in the light of an evaluation study recently brought out by the Programme Evaluation Organisation of the Planning Commission. It is necessary to ensure that the Peripatetic instructors are liked with the cooperative training centres. Efforts will also, be made to ensure that the member education programme for village cooperatives is supported and supervised by central cooperative banks, marketing societies and other functional federations.
II
COMMUNITY DEVELOPMENT AND PANCHAYATI RAJ 9.38. The Community Development programme was started in 1952. It now covers the whole country. Its unit remains the block and its aim that of chieving rural development through people's paricipation and initiative. The assistance from Government, so far as resources would allow, took the shape of a budget grant for the block and a team of extension workers under a Block Development Officer. The latter was to, coordinate all schemes of a developmental character within the, block. In the integrated programme, divided into stages of five years each, agricultural development occupied the foremost position.
9.39. The next step was that of attempting to weld together Panchayati Raj and Community Development. This objective followed from the acceptance of the recommendations of the Study Team of the Committee on Plan Projects (Balwantrai Mehta Committee). The three- tier Panchayati Raj system, together with its modifications in diffe- rent States, thus set the pattern of local development administration. At each level-village or group of villages, block or group of blocks, and district--there was to be a link between the administrative apparatus and elected representatives.