THE AYALI KALAN CO-OPERATIVE AGRICULTURAL MULTIPURPOSE SOCIETY LIMITED

A PROJECT REPORT

SUBMITTED IN THE PARTIAL FULLFILLMENT OF THE DEGREE OF MASTERS IN SOCIAL SCIENCES (HONOURS SCHOOL)

Supervised By: Ms. Urvashi Bali Research Scholar (Economics)

Submitted By: Manjot Kaur M.S.Sc. (H.S.) Semester- IV Roll No. 903464

SCHOOL OF SOCIAL SCIENCES GURU NANAK DEV UNIVERSITY AMRITSAR

2012 CHAPTER I

INTRODUCTION
AGRICULTURE Agriculture is the art or science of production of crops and livestock on a farm. Subject matter of agriculture by connotation however has acquired a very broad meaning. It involves cultivation of soil, crop, husbandry, dairying, poultry farming, sericulture, horticulture and plantation. It can be said that it is an economic exploitation of natural resources except mining and quarrying by man through the continuous aid of scientific method and research improvement. Agriculture plays important role in economic development of the country. The significance of agriculture in India arises also from the fact that the development in the agriculture is an essential condition for the development of the national economy. If the process of economic growth is to begin and to be self sustained, it must begin with rural area in general and agriculture in particular. (M.Beal, 327, 1954) The agriculture also play important role in international trade as tea, sugar, oilseeds, tobacco, spices etc. constitute 50% of our export. Agriculture and manufacture with agriculture content contribute to total 70% of Indias export. Agriculture is dependent upon outside finance for its development. Credit helps the farmers in their agriculture operation or in improving their land. Besides, these Indian farmers borrow for unproductive purpose such as celebration of marriages, birth and death. It is a fact to in fact the lesson of universal agrarian history is that an essential need of agriculture is credit. Credit is not only essential but inevitable. Broadly, there are two sources of credit: non credit institutional sources and institutional sources. Non credit institutional sources include moneylenders, traders, commission agents, relative etc. Cultivators depend upon moneylenders for their requirement of cash. Moneylenders freely supply credit for productive and unproductive activities and are easily accessible and maintain a close and personal contact with

borrowers. There are various malpractices which are associated with moneylenders. They charge high rates of interest often about 24% and over. Moneylenders are responsible for many of the ills of Indian agriculture because their main interest has been to exploit the farmers for their benefit and grab their land. (Prasad, 183, 1995) Traders and commission agents supply funds to the farmers for productive purpose much before crop mature. They force the farmers to sell their produce at low prices and charge heavy commission for themselves. Farmers also borrow from their own relatives in cash or kind in order to tide over temporary difficulties. These loans are generally contracted in an informal manner. They carry low or no interest soon after harvest. Though loans from above non- institutional sources are easily available, without much paper work still they suffer from serious defects like: It is based on profit motive and therefore, it is always exploitative. It is very expensive and is not related to the productivity of land. It does not flow into most desirable channels and to most needy persons. It is not available for making agricultural improvements and much of the necessary improvements are not undertaken. CO-OPERATIVE SOCIETIES A co-operative society is a voluntary association of individuals having common needs who join hands for the achievement of common economic interest. Its aim is to serve the interest of the poorer sections of society through the principle of self-help and mutual help. The main objective is to provide support to the members. Nobody joins a cooperative society to earn profit. People come forward as a group, pool their individual resources, utilise them in the best possible manner, and derive some common benefit out of it. The term co-operation is derived from the Latin word co-operari, where the word co means with and operari means to work. Thus, co-operation means working together. So those who want to work together with some common economic objective can form a

society which is termed as co-operative society. It is a voluntary association of persons who work together to promote their economic interest.(Pratt, 109,1914) A Co-operative Society can be formed as per the provisions of the Co-operative Societies Act, 1912. At least ten persons above of 18 years, having the capacity to enter into a contract with common economic objectives, like farming, weaving, consuming, etc. can form a Co-operative Society. Cooperative Societies Act is a Central Act. However, Cooperative Societies is a State Subject (Entry 32 of List II of Seventh Schedule to Constitution, i.e. State List). Though the Act is still in force, it has been specifically repealed in almost all the States and those States have their own Cooperative Societies Act. Thus, practically, the Central Act is mainly of academic interest and as per preamble to the Act, the Act is to facilitate formation of cooperative societies for the promotion of thrift and self-help among agriculturists, artisans and persons of limited means. If the object of any agricultural co-operative society is the creation of funds to be lent to its members, all the members must be residing in the same town, village or group of villages or all members should be of same tribe, class, caste or occupation, unless Registrar otherwise directs. The provision of minimum 10 members or residing in same town/village etc. is not applicable if a registered society is member of another society. (Bulstrode, 196, 1908) The Statement of Objects and reasons states as follows: (a) Cooperative Society can be established for purpose of credit, production or distribution. (b) (c) (d) Agricultural credit societies must be with unlimited liability. Unlimited society is not best form of cooperation for agricultural commodities. Unlimited society can distribute profits with permission of State Government. A society which has as its object the promotion of economic interests of its members in accordance with cooperative principles can be registered as a Society. Similarly, a society established with the object of facilitating operation of such a society can also be registered under the Act. The society can be registered with limited or

unlimited liability. However, unless State Government otherwise directs, (1) Liability of a society of which a member is a registered society shall be limited. (2) Liability of a society of which object is to creation of funds to be lent to members, and of which majority of members are agriculturists and of which no member is a registered society shall be unlimited. Thus, a registered society can be member of another society, but liability of such other society must be limited, unless State Government otherwise directs. The last word in name of society should be Limited, if the Society is registered with limited liability. If a society has limited liability, any individual member of such society cannot have share capital more than one-fifth of total capital. An individual member cannot have interest in shares exceeding Rs 1,000. This restriction of 20% shares or Rs 1,000 shares value is not applicable to a registered society which is member of another society. Thus, if a registered society is member of another society, it can hold shares exceeding 20% or exceeding Rs 1,000 in value. A registered cooperative society can hold property, enter into contracts, institute and defend suit and other legal proceedings and to do all things necessary for the purposes of its constitution. A registered society can give loans only to its members. However, it can give loan to another registered society with permission of Registrar. A society with unlimited liability cannot lend money on security of movable property without sanction of registrar. State Government, by issuing a general or special order, can prohibit or restrict lending of money on mortgage of immovable property by any registered society or class of registered society. (Aldrich, 348, 1892) Registrar, after inspection or inquiry, or on application received from 75% of members of society, may cancel the registration of society, if in his opinion, the Society should be dissolved. Any member can appeal against the order of Registrar within two months to State Government or other Revenue Authority authorized by State Government. If no appeal is filed within two months, the order of dissolution shall become effective. If appeal is filed, the order will become effective only after it is confirmed by appellate authority. Although all types of cooperative societies work on the same principle, they differ with regard to the nature of activities they perform.

Followings are different forms of co-operative societies that exist in our country: Consumers Co-operative Society These societies are formed to protect the interest of general consumers by making consumer goods available at a reasonable price. They buy goods directly from the producers or manufacturers and thereby eliminate the middlemen in the process of distribution. Kendriya Bhandar, Apna Bazar and Sahkari Bhandar are examples of consumers co-operative society. Producers Co-operative Society These societies are formed to protect the interest of small producers by making available items of their need for production like raw materials, tools and equipments, machinery, etc. Handloom societies like APPCO, Bayanika, Haryana Handloom, etc., are examples of producers co-operative society. Co-operative Marketing Society These societies are formed by small producers and manufacturers who find it difficult to sell their products individually. The society collects the products from the individual members and takes the responsibility of selling those products in the market. Gujarat Co-operative Milk Marketing Federation that sells AMUL milk products is an example of marketing co-operative society. Co-operative Credit Society These societies are formed to provide financial support to the members. The society accepts deposits from members and grants them loans at reasonable rates of interest in times of need. Village Service Co-operative Society and Urban Cooperative Banks are examples of co-operative credit society. Co-operative Farming Society These societies are formed by small farmers to work jointly and thereby enjoy the benefits of large-scale farming. Lift-irrigation cooperative societies and pani-panchayats are some of the examples of co-operative farming society. Housing Co-operative Society

These societies are formed to provide residential houses to members. They purchase land, develop it and construct houses or flats and allot the same to members. Some societies also provide loans at low rate of interest to members to construct their own houses. The Employees Housing Societies and Metropolitan Housing Co-operative Society are examples of housing co-operative society. A co-operative society is a special type of business organisation, its characteristics are as under: Open membership The membership of a Co-operative Society is open to all those who have a common interest. A minimum of ten members are required to form a cooperative society. The Co operative societies Act do not specify the maximum number of members for any cooperative society. However, after the formation of the society, the member may specify the maximum number of members. Voluntary Association Members join the co-operative society voluntarily, that is, by choice. A member can join the society as and when he likes, continue for as long as he likes, and leave the society at will. State control To protect the interest of members, co-operative societies are placed under state control through registration. While getting registered, a society has to submit details about the members and the business it is to undertake. It has to maintain books of accounts, which are to be audited by government auditors. Sources of Finance In a co-operative society capital is contributed by all the members. However, it can easily raise loans and secure grants from government after its registration. Democratic Management

Co-operative societies are managed on democratic lines. The society is managed by a group known as Board of Directors. The members of the board of directors are the elected representatives of the society. Each member has a single vote, irrespective of the number of shares held. For example, in a village credit society the small farmer having one share has equal voting right as that of a landlord having 20 shares. Service motive Co-operatives are not formed to maximise profit like other forms of business organisation. The main purpose of a Co-operative Society is to provide service to its members. For example, in a Consumer Co-operative Store, goods are sold to its members at a reasonable price by retaining a small margin of profit. It also provides better quality goods to its members and the general public. Separate Legal Entity A Co-operative Society is registered under the Co-operative Societies Act. After registration a society becomes a separate legal entity, with limited liability of its members. Death, insolvency or lunacy of a member does not affect the existence of a society. It can enter into agreements with others and can purchase or sell properties in its own name. Distribution of Surplus Every co-operative society in addition to providing services to its members also generates some profit while conducting business. Profits are not earned at the cost of its members. Profit generated is distributed to its members not on the basis of the shares held by the members (like the company form of business), but on the basis of members participation in the business of the society. For example, in a consumer co-operative store only a small part of the profit is distributed to members as dividend on their shares; a major part of the profit is paid as purchase bonus to members on the basis of goods purchased by each member from the society.

Self-help through mutual cooperation Co-operative Societies thrive on the principle of mutual help. They are the organisations of financially weaker sections of society. Co-operative Societies convert the

weakness of members into strength by adopting the principle of self-help through mutual co-operation. It is only by working jointly on the principle of Each for all and all for each, the members can fight exploitation and secure a place in society containing the details about the society and its members has to be submitted to the Registrar of Cooperative Societies of the concerned state. After scrutiny of the application and the bye laws, the registrar issues a Certificate of Registration. Requirements for Registration are (1) application with the signature of all members and (2) Bye-laws of the society containing the information on (a) Name, address and aims and objectives of the society; (b) Names, addresses and occupations of members; (c) Mode of admitting new members; (d) Share capital and its division.(M. Beal, 324-328, 1954) A Co-operative form of business organisation has the following advantages: Easy Formation Formation of a co-operative society is very easy compared to a joint stock company. Any ten adults can voluntarily form an association and get it registered with the Registrar of Co-operative Societies. Open Membership Persons having common interest can form a co-operative society. Any competent person can become a member at any time he/she likes and can leave the society at will. Democratic Control A co-operative society is controlled in a democratic manner. The members cast their vote to elect their representatives to form a committee that looks after the day-to-day administration. This committee is accountable to all the members of the society. Limited Liability The liability of members of a co-operative society is limited to the extent of capital contributed by them. Unlike sole proprietors and partners the personal properties of members of the co-operative societies are free from any kind of risk because of business liabilities. Elimination of Middlemens Profit

Through co-operatives the members or consumers control their own supplies and thus, middlemens profit is eliminated. State Assistance Both Central and State governments provide all kinds of help to the societies. Such help may be provided in the form of capital contribution, loans at low rates of interest, exemption in tax, subsidies in repayment of loans, etc. Stable Life A co-operative society has a fairly stable life and it continues to exist for a long period of time. Its existence is not affected by the death, insolvency, lunacy or resignation of any of its members. (Wehrwein, 214,1914) Agricultural Co-operative An Agricultural Co-operative, also known as a farmers' co-op, is a co-operative where farmers pool their resources in certain areas of activity. A broad typology of agricultural cooperatives distinguishes between agricultural service cooperatives, which provide various services to their individually farming members, and agricultural production cooperatives, where production resources (land, machinery) are pooled and members farm jointly. The default meaning of agricultural cooperative in English is usually an agricultural service cooperative, which is the numerically dominant form in the world. There are two primary types of agricultural service cooperatives, supply cooperative and marketing cooperative. Supply cooperatives supply their members with inputs for agricultural production, including seeds, fertilizers, fuel, and machinery services. Marketing cooperatives are established by farmers to undertake transformation, packaging, distribution, and marketing of farm products (both crop and livestock). Farmers also widely rely on credit cooperatives as a source of financing for both working capital and investments.

Why farmers form Cooperatives Cooperatives as a form of business organization are distinct from the more common investor-owned firms (IOFs). Both are organized as corporations, but IOFs pursue profit maximization objectives, whereas cooperatives strive to maximize the benefits they generate for their members (which usually involves zero-profit operation). Agricultural cooperatives are therefore created in situations where farmers cannot obtain essential services from IOFs (because the provision of these services is judged to be unprofitable by the IOFs), or when IOFs provide the services at disadvantageous terms to the farmers (i.e., the services are available, but the profit-motivated prices are too high for the farmers). The former situations are characterized in economic theory as market failure or missing services motive. The latter drive the creation of cooperatives as a competitive yardstick or as a means of allowing farmers to build countervailing market power to oppose the IOFs. The concept of competitive yardstick implies that farmers, faced with unsatisfactory performance by IOFs, may form a cooperative firm whose purpose is to force the IOFs, through competition, to improve their service to farmers. A practical motivation for the creation of agricultural cooperatives is related to the ability of farmers to pool production and/or resources. In many situations within agriculture, it is simply too expensive for farmers to manufacture products or undertake a service. Cooperatives provide a method for farmers to join together in an 'association', through which a group of farmers can acquire a better outcome, typically financial, than by going alone. This approach is aligned to the concept of economies of scale and can also be related as a form of economic synergy, where "two or more agents working together to produce a result not obtainable by any of the agents independently". While it may seem reasonable to conclude that larger the cooperative the better, this is not necessarily true. Cooperatives exist across a broad membership base, with some cooperatives having less than 20 members while other can have over 10,000. While the economic benefits are a strong driver in forming cooperatives, it is not the sole consideration. In fact, it is possible for the economic benefits from a cooperative to be replicated in other organizational forms, such as an IOF. An important strength of a cooperative for the farmer is that they retain the governance of the association, thereby

ensuring they have ultimate ownership and control. This ensures that the profit reimbursement (either through the dividend payout or rebate) is shared only amongst the farmer members, rather than shareholders as in an IOF. In Agriculture, there are broadly three types of cooperatives: a b c

Machinery Pool, Manufacturing/Marketing cooperative, Credit Union: Machinery Pool: A family farm may be too small to justify the purchase of

expensive farm machinery, which maybe only used irregularly, say only during harvest; instead local farmers may get together to form a machinery pool that purchases the necessary equipment for all the members to use.

Manufacturing/marketing cooperative: A farm does not always have the means of transportation necessary for delivering its produce to the market, or else the small volume of its production may put it in an unfavorable negotiating position with respect to intermediaries and wholesalers; a cooperative will act as an integrator, collecting the output from members, sometimes undertaking manufacturing, and delivering it in large aggregated quantities downstream through the marketing channels.

Credit Union: Farmers, especially in developing countries, can be charged relatively high interest rates by commercial banks, or even not available for farmers to access. When providing loans, these banks are often mindful of high transaction costs on small loans, or may be refused credit altogether due to lack of collateral - something very acute in developing countries. To provide a source of credit, farmers can group together funds that can be loaned out to members. Alteratively, the credit union can raise loans at better rates from commercial banks due to the cooperative having a larger associative size than an individual farmer. Often members of a credit union will provide mutual or peerpressure guarantees for repayment of loans. In some instances, manufacturing/marketing cooperatives may have credit unions as part of their broader business. Such an approach allows farmers to have a more direct access to critical farm inputs, such as seeds and

implements. The loans for these inputs are repaid when the farmer sends produce to the manufacturing/marketing cooperative. Supply cooperatives Agricultural supply cooperatives aggregate purchases, storage, and distribution of farm inputs for their members. By taking advantage of volume discounts and utilizing other economies of scale, supply cooperatives bring down the cost of the inputs that the members purchase from the cooperative compared with direct purchases from commercial suppliers. Supply cooperatives provide inputs required for agricultural production including seeds, fertilizers, chemicals, fuel, and farm machinery. Some supply cooperatives operate machinery pools that provide mechanical field services (e.g., plowing, harvesting) to their members. Beginning of the Trend in India Various development activities in agriculture, small industry marketing and processing, distribution and supplies are now carried out through co-operatives. The cooperatives in the State have made an all-round progress and their role in, and contribution to agricultural progress has particularly been significant. The schemes regarding the construction of godowns and the conversion of villages into model villages have assumed great importance in the wake of the Green Revolution. The Co-operative Movement was introduced into India by the Government as the only method by which the farmers could overcome their burden of debt and keep them away from the clutches of the money-lenders. The Co-operative Credit Societies Act, 1904 was passed by the Government of India and rural credit societies were formed . Through the appointment of registrars and through vigorous propaganda, the Government attempted to popularize the Movement in the rural areas. Within a short period, the Government realized some of the shortcomings of the 1904 Act and, therefore, passed a more comprehensive Act, known as the Co-operative Societies Act of 1912. This Act recognized non-credit societies also. But the rural credit societies have continued to be predominant till now. (Aldric,348,1892)

Karnataka has a special place in the Indian cooperative sector, as it is one of the first states to have started the movement. The first agricultural credit cooperative society in Karnataka started in a village called credit cooperative society in Karnataka started in a village called Kanaginahaala, Gadag district, in 1905. In the same year, a consumer cooperative society also started in Bangalore.

Prior to unification of states present Karnataka was divided into various provinces such as Hyderabad, Mumbai, Mysore, Madras etc. All provinces had their own Law relating to cooperative Societies. They are:
Mumbai Cooperative Societies Act, 1925 Madras Cooperative Societies Act, 1932 Madras Land Mortgage Act, 1934 Kodagu Cooperative Societies Act, 1936 Mysore Cooperative Societies Act, 1948 Hyderabad Cooperative Societies Act, 1952 Hyderabad Land Mortgage Act, 1949

After unification of states in 1956, The Mysore Cooperative Societies Act, 1959 was enacted which applies to whole Mysore State. It came into force from June 1, 1950. Mysore State was renamed as Karnataka in 1973 and the Act was also renamed as Karnataka State Cooperative Societies Act, 1959. As on March 2004, Karnataka has 32,804 cooperative societies Under which 27,261 are active. Among these, 15,468 societies are profitable and 12,756 are under loss. Around 9367 Milk cooperative societies, 301 urban cooperative banks and around 2000 credit cooperative societies are some of the sectors in Cooperative field which are profitable in the state. Karnataka has 9,367 milk cooperatives, which are producing over 23 lakh litres of milk every day. The state has over 4,000 Primary Agricultural societies and over 10.12 lakh farmers are benefited from these cooperatives. In Karnataka 100% villages are covered by cooperative Societies. Karnataka is progressive in Cooperative movement. It is pioneers in bringing parallel cooperative law.

The Advantages that Co-operative Marketing System in India can confer on the farmer are multifarious, some of which are listed below: 1. Increases bargaining strength of the farmers Many of the defects of the present agricultural marketing system arise because often one ignorant and illiterate farmer (as an individual) has to face well-organised mass of clever intermediaries. If the farmers join hands and for a co-operative, naturally they will be less prone to exploitation and malpractices. Instead of marketing their produce separately, they will market it together through one agency. 2. Direct dealing with final buyers In cases, the co-operatives can altogether skip the intermediaries and enter into direct relations with the final buyers. This practice will eliminate exploiters and ensure fair prices to both the producers and the consumers. 3. Provision of credit The marketing co-operative societies provide credit to the farmers to save them from the necessity of selling their produce immediately after harvesting. This ensures better returns to the farmers. 4. Easier and cheaper transport Bulk transport of agricultural produce by the societies is often easier and cheaper. Sometimes the societies have their own means of transport. This further reduces cost and botheration of transporting produce to the market. 5. Storage facilities The co-operative marketing societies generally have storage facilities. Thus the farmers can wait for better prices. Also there is no danger to their crop yield from rains, rodents and thefts.

6.

Grading and standardization This task can be done more easily for a co-operative agency than for an individual

farmer. For this purpose, they can seek assistance from the government or can even evolve their own grading arrangements. 7. Market intelligence The co-operatives can arrange to obtain data on market prices, demand and supply and other related information from the markets on a regular basis and can plan their activities accordingly. 8. Influencing marketing prices While previously the market prices were determined by the intermediaries and merchants and the helpless farmers were mere spectators force to accept, whatever was offered to them, the co-operative societies have changed the entire complexion of the game. Wherever strong marketing co-operative are operative, they have bargained for and have achieved, better prices for their agricultural produce. 9. Provision of inputs and consumer goods The co-operative marketing societies can easily arrange for bulk purchase of agricultural inputs, like seeds, manures fertilizers etc. and consumer goods at relatively lower price and can then distribute them to the members. 10. Processing of agricultural produce The co-operative societies can undertake processing activities like crushing seeds, ginning 'and pressing of cotton, etc. In addition to all these advantages, the co-operative marketing system can arouse the spirit of self-confidence and collective action in the farmers without which the programme of agricultural development, howsoever well conceived and implemented, holds no promise to success. The Punjab Cooperative Agricultural Development Banks The Punjab State Co-operative Agricultural Development Bank Limited, which was previously known as The Punjab State Co-operative Land Mortgage Bank Ltd., was registered on 26.02.1958, under the Cooperative Societies Act basically with the object to grant long term loans to the owners of land or other immovable property, to enable them to

discharge their debts, to carry out Agricultural improvements, to acquire land for the formation of economic holdings and other like purposes and thereby to promote thrift and self help among them. At the initial stage, the Bank had started functioning through the Central Cooperative Banks, by appointing them as its Agents. The Agency system was discontinued in the year 1962 when 14 Primary Cooperative Land Mortgage Banks , now known as Primary Cooperative Agricultural Development Banks came into existence and were affiliated to the then The Punjab State Co-operative Agricultural Development Bank, for the purpose of advancing long term loans to the farmers in the State. The long term structure in the Punjab State, as such, is a Federal Structure with Punjab State Cooperative Agricultural Development Bank ( in short, SADB) as an Apex Institution with Primary Cooperative Agricultural Development Banks as its members (in short, PADB). At present, the number of the Primary Cooperative Agricultural Development Banks in the State is 89 besides two other members i.e. Punjab State Electricity Board and Punjab State Tubewell Corporation. Each PADB, while seeking membership to the SADB is required to purchase atleast, one share of the value of Rs. 1000/- and pay Rs. 1000/- as Admission Fee. Initially the Bank started advancing loans for the purpose of Redemption and Purchase of land so as to make land holdings economically viable. After sometime, the Bank also started providing loans for the improvement of Banjar, Alkaline and Saline lands. Thereafter, the Bank played a substantial role in the mechanisation of farming in the State by advancing loans for the purchase of Tractors, Agricultural Implements and installation of Tubewells etc. The substantial contribution of this Bank in ushering in Green Revolution in the State, has always been considered significant. After the Green Revolution, the Bank played meaningful role for the diversification of agriculture loan by providing loans to the farmers for the various allied agricultural activities like Dairy, Poultry, Fishery etc. Now, Punjab is the largest producer of milk and SADB has made a major contribution to this achievement. Today, every third Tubewell installed in the State is financed by this Bank. Similarly, every fourth tractor in the State is financed by this

Bank. The Bank has contributed significantly in White Revolution and Blue Revolution by providing loans for the purposes of Dairy and Inland Fishery. The bank has also prepared an Infrastructure Development Scheme for the construction of buildings of the PADBs in the State. The aim of the scheme is to provide technical and financial assistance to the PADBs out of the Primary Cooperative Agricultural Development Fund by way of soft loan at concessional rate of interest for the purchase of plots and construction of the building thereon with good interiors having common design so as to give a better and uniform outlook, better sitting space to improve the working environment and to provide basic facilities to the employees and the prospective borrowers. This scheme has been approved by the RCS, Punjab. The Bank has also prepared a Common Site Plan for such buildings proposed to be constructed. The Bank has now further decided that PADBs at District Head Quarters would construct their own buildings. At other places the PADBs would advance loans to the land / plot owners for construction of buildings as per the design approved by the Bank. The land/plot owners would further give on rent the above buildings to the PADBs. An Act to supplement the provisions of the Punjab Co-operative Societies Act, 1954, in order to facilitate the working of the Co-operative Agricultural Developments Banks in the State of Punjab with a view to providing for the grant of long term loans to owners of land or other immovable property, to enable them to discharge their debts, to carry out Agricultural improvements, to acquire land for the formation of economic holdings and other like purposes and there by to promote thrift and self help among them. Administrative Setup of Cooperative Societies in Punjab The Department of Cooperation is headed by the Registrar, Cooperative Societies. He has been entrusted with the duties of promoting, sustaining as well as guiding the Cooperative Societies in the State. The statutory functions of the Registrar include the functions as contained in the Punjab Cooperative Societies Act, 1961 and the rules framed there under. These range from registration of the Cooperative Societies to that of the elections of their governing bodies, from inspection of societies to the hearing of arbitration

or appeals in case of any dispute and from execution of awards to the liquidation of the societies. The developmental functions of the Registrar include planning, management and implementation of projects and schemes concerning promotion and development of Cooperatives. The Registrar and the officers appointed to assist him work under the direct supervision, control and guidance of Financial Commissioner (Cooperation) and the Cooperation Minister at Government level. To streamline the working of Inspectors in the field, a massive exercise was carried out to fix the Headquarter and jurisdiction of the 1400 Inspectors of the Department in consultation with the Field Officers. Before issuing orders fixing headquarter and jurisdiction of Inspectors, the workload of each Inspector, the geographical contiguity and convenience of general public was taken into account. All 597 Focal Points in the State have been declared headquarters of Cooperative Inspectors. In order to remove undue controls and do away with the criticism of "Inspectorial Raj", a proposal was made in the year 2000. to redeploy and dispurse the Inspectorial and Ministerial Staff with a view to bring them closer to the people and improve their efficiency in delivery alongwith effective supervision mechanism and the sub-divisional level. Towards this end, a proposal was sent to Finance Department to create 39 posts of Assistant Registrars so as to cover all the 72 Sub Divisions in the State. It was proposed that these posts be created by abolishing a similar number of posts of Cooperative Inspectors and some other redundant posts of the Department. FD has approved the proposal and there would be one Assistant Registrar in each of the 72 Sub-Divisions as against 33 in the year 2000. This would ensure better supervision. In order to operationalise 39 new offices of ARCSs at sub-divisional level, no new ministerial staff was recruited and these offices were operationalised by re-deploying the existing staff.

Cooperation Minister Financial Commissioner-Cooperation Secretary (Cooperation) Registrar Cooperative Societies-Punjab

Add.Regi Additional Additional st-Add. Reg. Registrar(Cre Registrar(D rar(Gener (Industr ies) dit) ist) al)

Additional Registrar (Administration)

Joint Deputy Deputy Deputy Establishm Joint Registra Registr Registrar Registr OS AR Regist DR ent r DCFA ar DCFA EAR JR (F) LAR (Enforceme ar D (Audit) rar (E) (Plannin (Bankin Officer nt) (Legal) (M/S) g) g)

The Registrar is assisted by five Additional Registrars, three Joint Registrars, three Deputy Registrars and three Assistant Registrars at the State level. In the field, there are three divisional Joint Registrars, seventeen Deputy Registrars and 80 Assistant Registrars. These officers are assisted by about 2645 inspectorial and ministerial staff to help and facilitate management and supervision of Cooperatives in the State.

Registrar Cooperative Societies Punjab Patiala Division Joint Registrar Cooperative Societies, Patiala Deputy Registrar, Patiala Asstt. Registrar Patiala Asstt. Registrar Rajpura Asstt. Registrar Derabassi Asstt. Registrar Samana Asstt. Registrar Nabha Asstt. Registrar H.Q Deputy Registrar Sangrur Asstt. Registrar, Sangrur Asstt. Registrar, Malerkotla Asstt. Registrar, Sunam Asstt. Registrar, Moonak Asstt. Registrar, Dhuri Asstt. Registrar, Barnala Asstt. Registrar, H.Q. Deputy Registrar,Ropar Asstt. Registrar, Ropar Asstt. Registrar, Kharar Asstt. Registrar, Anandpur Sahib Asstt. Registrar, Mohali Jalandhar Division Joint Registrar Cooperative Societies, Jalandhar Deputy Registrar, Jalandhar Asstt. Registrar Jalandhar-I Asstt. Registrar Jalandhar-II Asstt. Registrar Shahkot Asstt. Registrar Phillaur Asstt. Registrar Nakodar Asstt. Registrar H.Q. Deputy Registrar, NawanShahar Asstt. Registrar, NawanShahar Asstt. Registrar, Balachaur Ferozepur & Faridkot Division Joint Registrar Cooperative Societies Ferozepur Deputy Registrar, Ferozpur Asstt. Registrar, Ferozpur Asstt. Registrar, Fazilka Asstt. Registrar, Jalalabad Asstt. Registrar, Abohar Asstt. Registrar, Zira Asstt. Registrar, H.Q. Deputy Registrar, Bhatinda Asstt. Registrar, Bhatinda Asstt. Registrar, Talwandi Sabo Asstt. Registrar, Phul

Deputy Registrar, Kapurthala Deputy Registrar, Mansa Asstt. Registrar, Kapurthala Asstt. Registrar Mansa Asstt. Registrar, Bholath Asstt. Registrar SardulGarh Asstt. Registrar, Sultanpur Asstt. Registrar Budhlada Lodhi Asstt. Registrar, Phawara

Deputy Registrar, Ludhiana Deputy Registrar, Amritsar Deputy Registrar, Faridkot Asstt. Registrar, Ludhiana Asstt. Registrar, Amritsar-I Asstt. Registrar, Faridkot (East) Asstt. Registrar, Amritsar-II Asstt. Registrar, Jaito Asstt. Registrar, Ludhiana Asstt. Registrar, Tarn-Taran (West) Asstt. Registrar, Ajnala Asstt. Registrar, Jagraon Asstt. Registrar, Baba Bakala Asstt. Registrar, Payal Asstt. Registrar, Khadur Asstt. Registrar, Khanna Sahib Asstt. Registrar, Raikot Asstt. Registrar, Patti Asstt. Registrar, Samrala Asstt. Registrar, H.Q Asstt. Registrar, H.Q. Deputy Registrar Fatehgarh Deputy Registrar, Gurdaspur Deputy Registrar, Moga Sahib Asstt. Registrar, Gurdaspur Asstt. Registrar, Moga Asstt. Registrar Sirhind (at Asstt. Registrar, Pathankot Asstt. Registrar, Nihal Singh Fatehgarh Sahib) Asstt. Registrar, Dhar Wala Asstt. Registrar Amloh Asstt. Registrar, Dera Baba Asstt. Registrar, Bagha Asstt. Registrar Bassi Nanak Purana Pathana Asstt. Registrar, Batala Asstt. Registrar Khamano Asstt. Registrar, H.Q. Deputy Registrar, Hoshiarpur Deputy Registrar, Muktsar Asstt. Registrar, Hoshiarpur Asstt. Registrar, Muktsar Asstt. Registrar, Asstt. Registrar, Gidderbaha Garhshankar Asstt. Registrar, Malout Asstt. Registrar, Mukerian Asstt. Registrar, Dasuya Asstt. Registrar, H.Q.

Cooperative Audit Department Chief Auditor P.A. to Chief Auditor Joint Chief Auditor Joint Chief Auditor Deputy Chief Auditor(A) Deputy Chief Auditor(C) Estt. Officer Budget Account & Audit Fee Recovery Officer Above Officers are Assisted by Audit Officers

Punjab takes lead in setting new model of Co-operative Societies 400 Primary Agricultural Cooperative Societies ( PACS ) were converted into Multipurpose Cooperative Societies on experimental basis during 2003 to work as Business Hubs in Rural Areas. The main purpose of setting up Multipurpose Cooperative Societies is to encourage farmers to use agricultural machinery and implements on customs hiring basis and for that purpose Agro Service Centres have been set up in almost 1000 societies in Punjab. Besides, these societies are encouraged to undertake various activities like running petrol/diesel outlets, education institutions, consumer stores, local transport etc. Based upon the experience in Punjab, the experiment is likely to be replicated in all States of the Indian Union very shortly. Out of 3452 PACS, 2533 have been converted into Multipurpose Cooperative Agriculture Societies and these societies have opened 731 Agriculture Service Centres and 1760 distribution centres to provide quality inputs as well as consumer articles at the door

steps in rural Areas.786 tractors with 4000 implements are available to farmers on nominal rent through these Multipurpose Societies. Computer training centres, Schools, transportation facilities are some of the numerous activities undertaken by these societies. Positive impact has been felt on the economy of Punjab. The team during its study, in one of the so converted Multipurpose Society namely Sukhanand in Moga District of Punjab, noted that farmers of the village have purchased Diesel worth Rs 1.98 crores from its Petrol pump. Goods worth more than 50 lakhs have been sold by the store of the society. 78 women have been provided occupational training to make them self dependent. Library and health club gym have become very popular in the village. Farmers have stated selling their own tractors as it is economical to lend the same from the society. 14 farmers saved Rs 40 lacs by doing so. 300 out of a total of 739 farmers are using the common machinery. The Primary Agricultural Credit/Service Societies The agricultural co-operative credit structure in the Punjab State is broadly divided into two sectors, one dealing with the short-terms and medium-terms finance and the other with the long-term credit. In the State, the short-term and medium-term credit structure is based on a three-tier system, i.e., the Apex Co-operative Bank at the State level, the Central Co-Coperative Bank at the district/tehsil level and the Primary Agricultural Credit Societies at the village level. The major objectives of the primary agricultural credit service societies are to supply agricultural credit to meet the requirements of funds for agricultural production, the distribution of essential consumer commodities, the provision of storage and marketing facilities and for light agricultural implements and machinery. Owing to an increasing emphasis on the development of land and agriculture, longterm co-operative credit has assumed great importance. There is the Punjab State Land Mortgage Bank at the Apex and the Punjab Mortgage Bank at the district/tehsil level. These Primary Land Mortgage Banks advance loans to the farmers for long term purposes. At the operational level, there exists a primary co-operative to extend credit to the farmer. This unit epitomizes the vitality and service potential of the Co-operative Movement in India. The organization of these societies dates back to 1904, when the first Co-operative Societies Act was passed. These societies were started with the object of providing cheap credit to the agriculturists in order to free them from the clutches of the

rapacious money-lenders. The agricultural primary credit society is the foundation-stone on which the whole co-operative edifice is built. Even now these societies dominate the cooperative picture.(Prasad, 183, 1995) The first Agricultural Credit Society in the Firozpur District was registered on 4 October 1911, at the Village of Khalchi Kadim in the Firozpur Tehsil. Originally, the movement was confined to the credit societies only and, thus, credit dominated till the partition (1947). After the partition, the Co-operative Movement began to spread to other field, viz labour, construction and farming. Agricultural co-operative Marketing Societies Marketing has occupied a far smaller place in the co-operative picture in India than in many countries, notably Denmark and the USA, but not other non-credit line of cooperation, with the possible exception of the consolidation of land holdings and joint farming enterprises, seems to hold greater possibilities of help to the agricultural population of India. The development of co-operative marketing in India is closely bound up with the problem of credit-the claims of the money-lenders commonly inhibiting the cultivators freedom of action in disposing of his crop. The full utilization of loans advanced depends upon the arrangements for the marketing of surplus produce. For this purpose, there the Punjab State Marketing Federation at the State Level, wholesale societies at the district level and marketing societies at the market level. These societies also provide other agricultural facilities and make arrangements for the supply of domestic items in the rural areas. At the State level, the Punjab State co-operative Supply and Marketing Federation (MARKFED) is playing an important role in building up an integrated structure for remunerative marketing and storing of agricultural produce. It has played an important role in hastening the Green Revolution in the State by arranging ready supplies of essential farm inputs needed by the cultivators. CHALLENGES BEFORE CO-OPERATIVES The Indian Co-operative Movement has earned distinction of being the largest in the world. This is true in terms of membership and Co-operative network which spread

over almost all the villages in the country and the number of Co-operative Societies. In our country, there are about 5.5 lakhs of cooperative Societies with membership of more than 22crores. It covers a wide range of commercial activities and nearly 50% of them are engaged in agriculture and agriculture related matters. Nearly 70% of the Indian population being dependant on agriculture, is thus, connected with agricultural Co-operatives. Cooperatives have covered 100% of villages and 67% of rural households. Co-operative sector contributes 50% of total agricultural credit and distributes 35% of total fertilizer consumption in the Country. They are procuring 60% of total sugar-cane. They are also playing crucial role in the agro-processing sector i.e. processing of sugar-cane, milk, cotton and oil seeds etc. Dairy Co-operatives have excelled in their area of operation and have enabled India to attain top position in milk production in the world. Edible oil marketed through Co-operative channel is estimated at 50% and handloom Co-operatives account for 55% of the total out-put. But in spite of being largest movement in the world and strongest link, it faces number of challenges like lack of internal resources and poor mobilization of external resources, inadequate infrastructure, competitive tier structure, apathy of members towards management, lack of accountability, increasing sickness, dormancy, low level professionalism, excessive government control, political interference, dominance of vested interest over the management, lack of human resources development, education and training. Despite all challenges, Co-operatives have to be sustainable over a period of time for which professionalism is a must. Co-operatives have been looking for Governmental help. But they have been paying it like official domination and interference in their day-today working etc. The Co-operatives have undergone a crisis of identity being neither government nor private. He further said that Co-operatives need to be more efficient and competitive, but at the same time they cannot sacrifice the basic tenets of co-operation. Inefficient Co-operatives will have to either pull up their socks or down their shutters. Cooperatives have many advantages in tackling problem of poverty employment generation and food security. They also have the potential to deliver goods and services in areas where both the State and Private sectors have failed. Over the past few years, steps like the enactment of mutually aided Co-operative Societies Act by some States and the Multi-State Co-operative Societies Act have been taken to give the Co-operative sector a boost. The

Co-operatives registered under the Mutual Aided Act have certain constraints and deficiencies, which may be Lack of supervision and inspection by Registrar of Co-operative Societies resulting into financial misuse and disproportion institutional development. Government is not to entrust any important government work since it does not have any participation. These Cooperatives are away from the mainstream. The Co-operative Banks and other important institutions are not prepared to admit them as members. NABARD and RBI are not agreeing for conversion of Central and Urban Co-operative Banks. R.B.I. has also objection about the use of word "Co-operative" since Banking Regulation Act uses the word "Co-operative Society". Mischievous persons may take advantage of the situation to cheat the general public.When the Government are exploring the possibility of regulating the Nongovernmental organizations having vast experience, it is doubtful as to whether the mutually aided Co-operatives in various field can give desired result. The circumstances and the situation give rise to the Co-operative Movement in the Country are still prevalent. The market is still not accessible to small and marginal farmers. Supply of agricultural credit is not adequate. About 50% of our rural and tribal household still have no facility for institutional credit. The Co-operatives are today at the cross road at their existence, particularly in view of the fast emerging economic liberalization and globalization. The Cooperatives still continued to function in a traditional way with poor governance and management, poor resource mobilization, outside interference, dependence on Government and lack of professionalization, tough competition from MNC's, They face a lot of government intervention i.e the various policies and legislations that affect these cooperatives, inadequacy of professional and dynamic managers with complete knowledge and understanding, inadequacy of capital, the extent of participation by the members and method of empowerment of members should be revised. The Co-operatives are neither member-driven nor functioned professionally in a transparent manner with accountability to members. In spite of all these, no doubt, the Cooperatives have contributed a lot to the agriculture development of the Country. We cannot afford to see that these institutions wither away. It needs reform. It is not-worthy to say that

in the National Common Minimum Programme of present UPA Government it has been mentioned to bring constitutional amendment to ensure the democratic autonomous and professional functioning of Co-operatives. The constitutional amendment may limit itself with the timely conduct of elections, timely conduct of audit, uniform tenure of managing committee, conduct of general body meetings, right of a member for access to information and the accountability of the management.(Rahman, 47-53, 1977) In this context our strategies may be as follows. Co-operatives need to be member-driven; stakeholders should have a command over its affairs and activities. There is need for more transparency, more of interaction and confidence -building measures. Aggressive marketing strategy be adopted for sensitizing members and general public about the service and quality rendered by the Co-operatives. Commitment to best service and pursuit for excellence should be the hallmark of Co-operative. Every society should adopt their customers' or members' charter and should meticulously adhere to this charter. Co-operative should compete with other players in prevailing market forces without any protectionist or discriminator approach. In respect of short-term, medium-term, long-term sector and Urban Bank sectors, restrictions have been stipulated by Reserve Bank of India, NABARD in respect of finance. These restrictions need be liberalized which would help Co-operative to optimize its lendable resources and provide finance to members. Strengthening information and database of Co-operatives is of utmost importance. MIS need to be adopted by the process of computerization and inter-connectivity to provide best services to members and customers with anytime and anywhere service. Professionalization of management is one of the basic prerequisites of Cooperatives. Both the personnel as well as directors of committee of management should be exposed to regular training, interaction and orientation.

Adoption of scientific planning for deployment of human resources on the principle of 'right man for the right post at right time' would help Co-operatives to accelerate the pace of reforms. Human resources need be proactive. Motivation, recognition for good work and leadership be inculcated for augmenting productivity. Basic tenets corporate governance be adopted like fair play, transparency and accountability.

The PACS, as the foundation of the Co-operative system are meeting the development needs of the farmers by providing credit, inputs and storage and processing and marketing facilities. The Co-operative federated at the district and State level constitutes the Co-operative system. But it is found that the Apex institutions have grown stronger whereas the primaries and in some cases, Central Co-operatives have gone weaker. The situation has to be changed and the primaries have to grow stronger. The business of the Primary Societies have to be diversified.

CHAPTER II

REVIEW OF LITERATURE
In the present chapter an attempt has been made to review the various studies related to Agricultural cooperative societies, national and international levels. Jodha (1989) in a study, brought out the results that per household received total credit comprising of money lenders and relatives 8.2% by institutional credit, 23.4% by money lenders, 46.3% by traders, 10.1% by large farmers and 12.0% by relatives. He further analyzed that in total provision of credit facilities, only 18.2% is used for current production purposes whereas 70% is used for current consumption purposes which in turn retards the growth of agriculture sector. Paul (1997) found the relationship between agricultural finance and large farmers. According to him during the early years of green revolution the big farmers because of their easy access to credit and capacity to bear the risk were the first adopters of new technology with their enhanced income they had a tendency to enlarge their farm size either by leasing of land or by purchasing it from small farmers. So credit agencies were needed so that the small farmers were able to escape from the clutches of large farmers who actually acted as money lenders. Patel (1998) have pointed out in his study that the cooperative movement has an important place in Indian economy, yet the progress made is not very satisfactory. Cooperatives have yet to cover a substantial part of agriculture regional disparities, managerial deficiencies, lack of financial resources, lack of loyalty among member, establishment of non- genuine societies which pose serious threat and challenge to the movement. Satyasai K.J.S and Badatya, K. (2000) in their study examined the need for agricultural credit in rural area, the sources which provide the credit and their performance and drawbacks. As India is an agricultural country, the farmers need credit for short term, medium term and long term. The share of non- institutional agencies in agricultural credit

provided to farmers has declined while the share of institutional agencies has increased substantially. Shankar (2001) In his article he raised a question whether the farming community should be assisted to increase productivity of land by subsiding fertilizers, by offering liberal and very cheap credit facilities to the working peasantry free of interest for investment purposes. Kumar (2003) showed that credit was an important input in the production process of agriculture or industrial sector. Credit is a financial asset of a bank and a liability of borrowers; Indian agriculture is of a seasonal character and depends on nature and technological changes. With the advent of new agricultural technologies, the demand for farm credit has increased manifold. The traditional sources of institutional finance, the cooperatives could not cope with the increased demand for credit due the inadequate supply of funds with them for the various types of farm investment. The share of rural credit in total credit increased around three times, but it is far less than the desired expectations. Todaro M.P (2006) In his study showed that credit has become an indispensable input to the practitioners of modern agriculture. In spite of better productivity and income compared to traditional agriculture, the higher cash outlays have substantially increased the demand for credit. Good credit, if it is well utilized, could play a vital role in the growth of farms. A major share of the priority sector lending is disbursed as short term production oriented credit, the crop loans. The validity of intended programme rather than credit worthiness of person is the basic criterion of finance and disbursement should coincide with the beginning of the crop season and recovered immediately after harvest. Recovery performance, as a measure of operational efficiency and managerial competence of financial institutions, can have a creative influence on the public. Gupta (2007) viewed that in general cooperatives were seen as an organizational set up to reorient agriculture after land reforms as it was visualized that in the absence of such organized mechanism, the beneficiaries of land reforms i.e. especially medium and small farmers will succumb to the remnants of many classical features of under development as well as interlocked markets. If land reform was to remove feudal landlords

and transfer land to cultivators, the farmers are individuals who would face certain constraints in the open market. Lekhi R.K (2008) In his study, emphasized that agricultural credit makes an important contribution to the growth in agricultural output. The contribution has accrued through facilitating land, labour and intermediate inputs with complimentary capital augmented techniques. Financial sector reforms cannot guarantee adequate flow of credit to agriculture and weaker sections. Minimum interest rate suggested by bank rate was 12 % only. The loans provided at this rate of interest were inadequate to the needed farmers. 50 % of farmers availed of the institutions credit for crop production and the amount of credit used was hardly sufficient for the purchase of fertilizer alone.

CHAPTER III

CASE STUDY: THE AYALI KALAN CO-OPERATIVE AGRICULTURAL MULTIPURPOSE SOCIETY LIMITED
Introduction Though the Agricultural Multipurpose Societies may not be very famous or in limelight in this modern competitive era as our Indian economy is a mixed economy where primary sector was given most of the preference at the time when India got its independence in the year 1947 as we know even at the time of British Raj it had been known as Sone ki Chiriya due to its wealth and rich and fine agriculture and even in first five year plan charismatic leader prime minister Pandit Jawahar Lal Nehru gave more importance to primary sector as it was the backbone of the Indian economy at that time. Gradually in the modern context now more preference is shifted towards the Tertiary or the Service Sector which led to the development of IT and Industrialization but India is famous for its Agriculture worldwide has always contributed in the growth and development of the Indian Economy, especially the states like Punjab, Karnataka, Uttar Pradesh etc. Today Government is again focusing on the revival of these societies for the welfare of the society and the country as whole. Background The Ayali Kalan Co-operative Agricultural Multipurpose Society Limited is situated in village Ayali Kalan, Ludhiana. This Society got established and registered on 17th March 1929. At that time the total number of members of the Society was 14 only, these members were the farmers who were rich. Now the number of members have increased to 743 among which 235 are the members from the village itself and 508 are from the other nearby villages. Administration President is elected by members and the village panchayat through election procedure, Vice President, General Secretary, Accounts Manager , Chief Security Officer,

2 Salesmen and One Cleaner. As such there is no proper rule or guidelines for a person to become a chairperson or President or he does not need to have a specific qualification for the designation but able to understand basic accounts, and agricultural activities and on the faith of the village panchayat and Society members he has to perform his duties for the proper functioning and maintenance of the society and its activities. Work Area: This Society works in following eight core areas like: 1. 2. Providing loans to the poor farmers at low interest rate. Providing Insecticides, Pesticides, Manures and Fertilizers and other Farm Sprays, Agriculture Seeds to farmers at subsidized rates. 3. Selling and lending Agriculture Tools, Machinery, Tools and Equipment to farmers at lower subsidized rates as compared to the market rates. 4. 5. The Society owns and runs its own middle school in the village for children. It also conducts Educational and Training monthly sessions for farmers in various agriculture activities for better output and productivity. 6. The Society has its own bank for financial assistance and for security deposits of villagers. 7. 8. The Society also owns and run a Daily Needs Shop. The Society has a agency of Ambuja Cement and it sell it at comparatively lesser price then market. THE FOREIGN TIE-UPS AND VISITS MADE BY THE FOREIGN DELEGATES: The Society is often visited by foreign delegates from agricultural universities of different countries due to its marvelous performance in agriculture sector and welfare of the farmers. Recently Minister of Agriculture David Carter (Ministry of Agriculture and Forestry, New Zealand) with his team visited the ayali kalan multipurpose agricultural society with Dr. Kirpal Singh Aulakh (Vice Chancellor, Punjab Agriculture University, Ludhiana) and the agriculture engineers and research fellows, and they were impressed by

the performance of the society and have decided to tie-up and provide more technical knowhow and appliances for the better performance and productivity . In a workshop organized by the Punjab Agricultural University in Ludhiana stress was laid on making the cooperative movement in the state effective in agriculture sector. The cooperative sector in India is the largest in the world and it plays a pivotal role in employment generation, poverty alleviation and food security. According to an estimate there are more than 500,000 co-operative societies working to bring about a change in the country. Through the workshop themed Relevance of Cooperative Movement in Agriculture, the Punjab Agricultural University aimed to help farmers adopt new technologies that they generated. According to the officials, the role of cooperative sector is extremely important in agriculture sector, as it supplies agricultural credit and funds and has the potential to deliver goods and services in vital areas where state and private sectors have not been able to do very much. In Punjab, cooperatives are playing a critical role in creating mass awareness too. Punjab is an agricultural state and our main focus during these days is to reduce the cost of production and enhance the per unit productivity level. It is only possible if we create the awareness among the masses that how we can reduce the cost of cultivation. Our second thrust area is to rationalize the use of resources available with us. At all the forums, we always cry that water table is declining, soil health is degraded, so with the cooperative department till date their main focus was to arrange the supply of the inputs which are considered very crucial for the agriculture sector. The cooperative movement in Punjab is on strong footing with 60,000 societies that have a total turnover of around four billion dollars. Small and marginal farmers are able to take up new technologies and even go in for alternative farming, as credit is easily available at Cooperative Banks. In Punjab, many educated unemployed youth too have benefited from self-employment schemes run by the cooperative societies. There is tremendous scope for employment. We need passion to improve the conditions in farming. About 300,000 farmers in Punjab have per capita five acres of land and they need our help. So there is no

doubt that a number of people can get employment. Cooperatives are one of the biggest employers at the world level. Around 10 million people are already employed by it. They can get employment in cooperatives like Markfed, Milkfed, housing federation, cooperative banks and development banks because after the retirement of the old staff, new recruitments will take place, so it offers good employment opportunities. Dairy farming is one of the main thrust areas of economic development in Punjab, and cooperatives like Milkfed and the Punjab State Cooperative Milk Producers Federation Limited have achieved impressive results posting massive gains since their inception in 1973. In fact, provisions have been so made that small and landless rural families are able to supply their milk with convenience to the urban consumers with the help of cooperative Unions. Agriculture continues to be an extremely important sector of Indias economy and the cooperative movement has a crucial role to play in bringing about its transformation.

CHAPTER IV

ASSETS HOLDING, DATABASE & METHODOLOGY

Banking Activities The Society is engaged in the banking activities like it takes the money from the villagers and farmers, opens their accounts and deposits their money. The Society deposits the money at 4.5% interest rate per annum and fix deposits it in the bank at 8.50%. Following Table shows the amount collected by the bank and fix deposit in the bank:YEAR 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 Daily Needs Shop The Society initiated the sale of daily needs commodities in the year 1994-95. At present the sale of daily needs have reached up to Rs 25000/- each day. Following Table shows the sale of daily needs in last 7 years:Year 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 Ambuja Cement : Sale of Daily Needs % 34.29 36.91 45.42 45.74 56.32 73.76 83.73 % 2.28 2.41 3.10 3.00 3.75 4.42 5.12 0.15 0.15 0.18 0.25 0.32 0.35 0.32 Commission Expenditure % COLLECTED AMOUNT % 964.24 1864.40 1832.31 1841.68 1714.95 1513.72 1691.88 FIX DEPOSIT IN BANK % 885.51 1801.40 1866.46 1847.20 1602.91 655.93 1058.21

The Agency of Ambuja Cement was taken by the Society in the year 2000. The Sale of Ambuja Cement is continuously increasing every year and gives more profit. Following Table shows the sale of Ambuja Cement in last 7 years:Year 2004-05 2005-06 2006-07 Sale of Ambuja Cement (%) 11.40 19.36 31.87 Commission (%) 1.56 1.42 1.63 Expenditure (%) 0.58 0.06 0.10

2007-08 38.49 2008-09 30.46 2009-10 23.54 2010-11 17.79 Agriculture Tools, Machinery and Equipment

1.27 1.62 1.09 0.84

0.02 0.10 0.11 0.06

The Society provides the farmers and the members with the Agriculture Tools, Machinery and Equipment on rent or sale at lower price as compared to the market price. This program was initiated in the year 1994. The Society possesses such assets worth Rs 21.64 lakh, like rotavator, laser levelers, tractors etc. This helps the farmers in reducing their expenditure of about Rs1 crore. Most of the members of the Society make best use of this facility. Following Table shows the sale, earnings and expenditure from the Agriculture Tools, Machinery and Equipment in last 7 years:Year 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 Middle School No. of Agriculture Tools, Machinery and Equipment 17 18 20 20 22 29 29 Earnings (%) 0.75 0.87 0.97 1.16 1.18 1.14 1.22 Expenditure (%) 0.35 0.32 0.23 0.21 0.48 0.79 0.34

The Society runs its own Middle School in the village ( Guru Hargobind Public School ) from year 2004. At present from nursery to eighth standard total 178 students are studying. There are 12 Graduate and Post Graduate Teachers along with 1 office clerk, 1 peon, 2 cleaners, 2 bus drivers for 2 buses which bring children from nearby villages. Following Table shows the earnings and expenditure from the School in last 7 years:Year 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 Earnings (%) 2.23 3.76 4.29 4.57 8.70 10.00 10.11 Expenditure (%) 2.40 3.36 4.09 6.01 8.77 8.88 12.62

Providing Loan to Members: The Society began to provide loans from its funds to the members from the year 2002, Loans like Car Loan, Tractor Loan, Two Wheeler Loan, N.F.C, R.C.C limits are issued at 8% interest rate per annum. The payback of loans given are 99%. Profit: Year Profit (%) Turnover (%) 2004-05 8.39 Lkh 63.34 Cr 2005-06 16.03 Lkh 164.96 Cr 2006-07 50.27 Lkh 193.36 Cr 2007-08 113.57 Lkh 172.36 Cr 2008-09 97.61 Lkh 230.78Cr * 2010-11 Trading Profit & Loss A/C, Balance Sheet, and the R&D reports:-

CHAPTER 5

SUMMARY AND WORK CONDUCTED

Training of 6 weeks from (13th June,2011 to 25th July, 2011), in the Ayali Kalan Co-operative Agricultural Multipurpose Society Limited, Ludhiana was an life time wonderful experience as lots of new things were got to known in agricultural area, administrating various departments of the Society , managing the books of accounts, the procedure how to give loans and other banking activities like deposits in bank, I dealt with number of various kind of people with different problems like loans, funds etc , and the best part was interacting with school children and teachers. It was a warm welcome and friendly environment, The Administration also offered me a job to teach the subject of social sciences to students after completing my masters as I told them about the degree. There were also the opportunities to attend an educational and training sessions for farmers regarding agricultural activities to increase output and productivity by minimizing cost, which gave a lot of information. The Society organized an official visit to village houses and nearby villages to aware people about kisan credit schemes, educating their children, and other benefits and services provided by the Society especially to the farmers. The Society Administration also gave the task to suggest some programs or schemes which help the organization to perform well and serve the people best and also prove beneficial to the organization and maximize profits, Programs like, to decline the farmer suicide cases, providing them facilities which decrease their problems of loan repayment or expenditure on farms etc, also to enter the health sector like maternity services for women free of cost and blood donation camps, free medical treatment dispensaries and even a small veterinary cell for treatment of sick animals like buffaloes and cows of farmers. Programs which help the uneducated farmers to sell their crops in the market through the intervention of the Society as an intermediary so that they do not get cheated and get the expected reasonable amount for it in return, the Society may charge a small amount of commission from this as another source of income or profit. Steps like that they can heir people and generate employment can be undertaken like these people can provide their services in the agricultural activities or work on their farms which can prove to be a great help for the old farmers or who do not further have any person to take care of their fields and can be paid

on the monthly basis, out of this income of the employed people the Society can charge its commission or some portion out of this, it will be a two way process both beneficial to unemployed people as they now work and earn and even profitable to the Society as well as it brings money in. Rather it does not even involve any expenditure. They liked my viewpoints and suggestions and will be implementing them in some areas of interest. Overall it groomed my administrative skills and leadership qualities.

BIBLIOGRAPHY

Aldrich, Wilbur, Farming corporations, Aldrich & co, New York, p.348,1892 Bulstrode, W, Co-operative farming, King Publications, London, p.196,1908 Case Study : Data Provided By The Ayali Kalan Co-operative Agricultural Multipurpose Society Limited Gupta K.R. (2007) Issues on Indian Agriculture, Atlantic Publications, New Delhi, p.175178. Jodha N.S.(1989) Role of credit in Farmer Adjustments against Risk in Arid/ Tropical Area of Punjab, Economic and Political Weekly, Vol XVI No.42. Kumar, (2003) Rural development and challenges, Omshri Publisher, Kolkatta p.443. Lekhi, R.K (2008) Economics of Development and Planning, Kalyani Publication, New Delhi, pp.94-11 M. Beal, George, The roots of participation in farmer cooperatives, Iowa State College, Iowa City, p. 324-328,1954 Patel Kanti (1998) Agricultural Credit in India- An overall View, Indian journal of Agricultural Economics, Vol.53, No.3, pp.509-511. Paul Satya (1997) Green Revolution and Poverty Among Farm Families in Haryana, Economic and Political Weekly, Vol. XXV, No. 39, pp. A-105. Prasad, Arbind, Indian Agricultural Marketing, Mittal Publications, p.183, 1995 Pratt, Edwin A, Agricultural organization, its rise, principles, and practice abroad and at home, P.S. King & Son, London, p.109, 1914 Rahman, Mahfoozur, Genesis of Agricultural Co-operative Credit Societies in India, Bookrays Publishers, New Delhi, p. 47-53, 1977 Sankar Kripa (2001) Tubewells Promote Growth, Economic and Political Weekly, Vol. XXV,No.26, pp.1380. Satyasai K.J.S and Badatya, K. (2000) Reconstructing Rural Credit Cooperative Institutions, Economic and Political Weekly, Vol. XXXV,No.26, pp. 307.

Todaro M.P,(2006)Economic Development in the Third World (7th Edition), New York, p.387 Wehrwein, Austin, Co-operation in agriculture, marketing, and rural credit, University of Texas, Texas, p.214, 1914

CONTENTS

CHAPTER NO.

TOPIC

PAGE NO.

ACKNOWLEDGEMENT CERTIFICATE 1 2 3 INTRODUCTION REVIEW OF LITERATURE CASE STUDY: THE AYALI KALAN CO-OPERATIVE MULTIPURPOSE SOCIETY LIMITED ASSETS HOLDING, DATABASE & METHODOLOGY SUMMARY AND WORK CONDUCTED BIBLIOGRAPHY 1-27 28-30 31-34

4 5.

35-42 43-44 45-46

ACKNOWLEDGEMENT
I express utmost thanks to my supervisor Ms. Urvashi Bali, Research Scholar, School of Social Sciences, Guru Nanak Dev University, Amritsar. This Project Report is complete in the time due to her valuable guidance, constant encouragement, supervision and sparing her valuable time whenever I approached her for help throughout the course of project work. I cannot afford to forget to express my thanks to my friends, The Ayali Kalan CoOperative Agricultural Multipurpose Society Limited, Ludhiana and its entire staff, who co-operated and provided necessary data related to my study. My sincere regard and thanks to Dr.(Mrs.) Anjali Mehra, Assistant Professor School of Social Sciences, Guru Nanak Dev University, Amritsar for her cooperation and help. I also wish to thank my family for their constant encouragement, inspiration and support with whose blessings the work has been successfully completed.

Ms. Manjot Kaur Bhangu

CERTIFICATE
This is to certify that the project entitled, THE AYALI KALAN COOPERATIVE AGRICULTURAL MULTIPURPOSE SOCIETY LIMITED, LUDHIANA, Submitted by Ms. Manjot Kaur Bhangu, School of Social Sciences, Guru Nanak Dev University, Amritsar in the partial fulfillment of the requirement for the degree of Masters of Social Sciences is a bonafide research work carried out under my guidance and supervision. This is an original piece of work and no part of this dissertation had ever been submitted in part or full or any other degree to this or any university. The assistance and help received during the course of investigation has been fully acknowledged.

Dated:

Ms. Urvashi Bali Research Scholar, School of Social Sciences, Guru Nanak Dev University, Amritsar.