SETH PADAMCHAND JAIN INSTITUTE,

KHANDARI, AGRA

An
Assignment
on

CO-OPERATIVE
MANAGEMENT
A RURAL MANAGEMENT TOPIC

CONTENTS
1. Rural Management: an intro..................................................................3

2. Highlighting Cooperative Management.................................................4

3. Some important definitions......................................................................4

4. Meaning of Cooperative Management....................................................5

5. Features of Cooperative Marketing Societies.........................................6

6. Methods of business adopted by Marketing Cooperatives....................7

7. Cooperative Credit Societies in India.....................................................10

8. Case of NDDB...........................................................................................12

9. Bibliography..............................................................................................14

RURAL MANAGEMENT

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 An introduction

Rural management is the study of planning, organising, directing, and controlling of co-
operatives, agribusiness and allied fields.

It merges the knowledge of management studies and applying it in the rural context.

Rural development in general is used to denote the actions and initiatives taken to improve the
standard of living in non-Urban neighbourhoods, countryside, and remote villages.

These communities can be exemplified with a low ratio of inhabitants to open space.

Agricultural activities may be prominent in this case whereas economic activities would relate to
the primary sector, production of food stuffs and raw materials.

Rural development actions mostly aim at the social and economic development of the areas.

These programs are usually top-down from the local or regional authorities, regional
development agencies, NGOs, national governments or international development organizations.
But then, local populations can also bring about endogenous initiatives for development.

The term is not limited to the issues for developing countries. In fact many of the developed
countries have very active rural development programs.

The main aim of the rural government policy is to develop the undeveloped villages.

HIGHLIGHTING COOPERATIVE MANAGEMENT

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Cooperation has been differently understood by different scholars.

The whole process of cooperation is however, voluntary and initiated for those who are supposed
to belong to weaker sections of society, both socially and economically.

They come together to use available or likely available resources for collective welfare.

SOME IMPORTANT DEFINITIONS...

"Cooperation is a form of organisation in which persons voluntarily associate together as

human beings on the basis of equality for the promotion of economic interest of
themselves." -H. Calvert.

" Cooperative society is an organisation for the purpose of joint trading, originating among
the weak and conducted always in an unselfish spirit on such terms that all those who are
prepared to assume the duties of membership may share its reward in proportion to the
degree in which they make use of association." - G.R.Fay.

MEANING OF
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 COOPERATIVE MANAGEMENT

Cooperative management means to:

 foster free circulation of information within the company,

 establish, support and reward behaviors based on trust and mutual help,

 make sure that the company’s best interest is also the best interest of its employees
in order to induce them into participating,

 mobilize human skills, processes, as well as financial and technological resources so

that the company’s goals can be reached.

Cooperatics believe that cooperative management is not only beneficial from a human and
social point of view, but also a key competitive asset for a company.

FEATURES OF CO-OPERATIVE MARKETING SOCIETIES

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The marketing co-operative societies have certain special features of their own, which
distinguish them from other concerns engaged in marketing of the agricultural produce.

These societies assist their members to maximise their income. The features are:

1. Open membership.

2. One man one vote.

3. Limited reward to capital.

4. Distributive justice.

5. Teaching gospel of co-operation.

6. Self government.

7. Service motto.

METHODS OF BUSINESS ADOPTED BY

MARKLETING CO-OPERATIVES

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The Co-operative Marketing Societies do their business of handling the members produce by
three methods which are:

1. Outright Purchase and Sale-

It implies the actual buying of commodities by paying cash at the ruling prices in the market
and then reselling to others.

MERITS:

i. Immediate cash requirement is assured helpful for farmers to tide over their financial
difficulties and other obligations with social and psychological strings.

ii. Co-operatives are following the usual practices prevalent in the market and , therefore,
the farmers are conversant with them.

DEMERITS:

i. The co-operatives have to take for granted the risks along with the purchase.

ii. More and more working capital is warranted to make the purchase as immediate cash is to be
paid.

iii. Co-operatives have to appoint skilled managerial personnel for carrying on such a
tremendous business effectively and efficiently.

2. Agency Method-

The relationship of members and society is that of agency, wherein the society buys and sells
the produce of its members as an agent.

MERITS:

i. The farmers obtain the prices which the quality of their products can fetch in the open market,
i.e., the co-operatives help the members to obtain higher prices with wider contacts working with
least development in the markets.

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ii. As an agent of the members , the co-operatives don't make the payment for the price
immediately, they pay only when they sell and collect the bill from the buyers. Resultantly, the
working capital requirement are minimum possible.

iii. Co-operatives don't assume the risks which are the botheration of farmers themselves ; thus
associated with the price fluctuations or even stock piling are avoided.

DEMERITS:

i. The marketing co-operatives are compelled to charge higher rate of commission. Since, the
cost of maintaining records and keeping of accounts and conducting actual business is more.

ii. As the societies are interested in getting commission, they may fail in obtaining higher price
for the member's produce.

3. POOLING-

According to BAKKEN and SCHAARS, Pooling is defined as , " the comingling of products of
many producers and after deducting average expenses, paying the average price received for the
same usually on the basis of established grades."

MERITS:

i. It helps in minimising the risk of loss due to fire, theft, damage, etc,.. This method provides for
the loss arising out of price fluctuation.

ii. Orderly marketing of products is facilitated by this method. The surplus quantities are stocked
and the quantity demanded in the market is released, thus encouraging the better prices.

iii. On account of orderly marketing, the bargaining capacity of farmers, also increase via co-
operatives, as the pooling facilitates standardization and grading.

iv. Pooling also results in reduced cost of transportation, grading and storage, as they are in
larger quantities. It assists in finding out new markets for the members' produce and expanding
the operation of existing markets.

DEMERITS:

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i. The demerits of Pooling system are not very severe and, therefore, we have conveniently left.
It can be said that the merits outweigh the demerits and, therefore, the defects are not being given
hair splitting importance.

CO-OPERATIVE CREDIT SOCIETIES IN INDIA

Agricultural credit and rural indebtedness is a major problem of rural India. To solve the

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problem, it is very essential that co-operative network should be widespread. There are primary
agricultural credit societies, which advance credits to the agriculturists.

Though the working and share capital of the societies are increasing, problems relating to
management, membership, supervision, and control are there.

India needs loans , long term as well as short and medium term.

At the lowest level, the primary society is the first tier of the structure.

These societies combine together as a federation into a Central Co-operative Bank. At district
level, the Bank as the second tier of the structure stands.

At the next stage, such banks together form an apex Bank which is at State level or is the third
tier of the structure.

The whole system revolves around primary credit cooperative societies. For meeting these loan
needs, the borrower is expected to apply to the primary society at the village level.

In case, the funds are not available, the society applies to the Central Bank at the district level
and State level( if needed).

Gadgil Group opined, " The three tier system also allows a rationalised flow of resource from
the metropolitan centres to villages and combine this with fairly low cost of operations."

 PROBLEMS WITH AGRICULTURAL CREDIT COOPERATION

Problem of over dues.

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 Problem of supervision.

High rate of interest.

Internal frictions.

No secrecy.

No easy disposal of security.

Undependable loan.

Shortage of fund.

IN THE CASE OF

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 THE NATIONAL DAIRY DEVELOPMENT BOARD

The National Dairy Development Board is an institution of national importance setup by

an Act of Parliament of India. The main office is located in Anand, Gujarat with regional
offices throughout the country. NDDB's subsidiaries include Mother Dairy, Delhi.

It was founded by Dr. Verghese Kurien and Dr. Amrita Patel is the current Chairman of
the National Dairy Development Board, Anand.

The National Dairy Development Board (NDDB) was created in 1965, fulfilling the desire
of the then Prime Minister of India - the late Lal Bahadur Shastri - to extend the success of
the Kaira Cooperative Milk Producers' Union (Amul) to other parts of India.

That success combined the wisdom and energy of farmers with professional management to
successfully capture liquid milk and milk product markets while supporting farmer
investment with inputs and services. The major success of this mission was achieved
through the World Bank financed Operation Flood, which lasted for 26 years from 1970 to
1996 and was responsible for making India the world's largest producer's of milk. This
operation was started with the objective of increasing milk production, augmenting farmer
income and providing fair prices for consumers.

NDDB has now integrated 96,000 dairy co-operatives in what it calls the Anand Pattern,
linking the village society to the state federations in a three-tier structure.

NDDB launched its Perspective Plan 2010 with four thrust areas: Quality Assurance,
Productivity Enhancement, Institution Building and National Information Network.

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 FINDINGS ABOUT THE CASE.....

I. Farmer Empowerment

NDDB empowered millions of small & marginal farmers through village dairy cooperatives.
AMUL pattern societies across the country made farmer rich in terms of tangible & intangible
wealth.

II. Women Empowerment

As per 'year 2001 census' population of India stands to be 1027 million where 496 million are
female inhabitants, i.e. 48% of total population consist of women. For sustainable economic and
social development to take place in any country, it is necessary that people participate in the
necessary economic and social process. The process of participation is complex and it is by no
means clear that it is comprehensively inclusive. By this, we mean that it is not possible to
assume that all sections of the population take part effectively in the economic, social and hence
political and democratic processes of society. There are many reasons why people may not
participate from apathy to a sense of helplessness. Women are one side of a coin, half in every
respect, then why not in socio-economic and political power? National Dairy Development
Board, India, an apex development organisation initiated by Government of India to replicate
successful white revolution movement amongst small farmers, by affirmative actions empowered
women and made them involved in socio-economic activities. The paper discusses various
schemes launched by NDDB and its benefits to women and society.

BIBLIOGRAPHY

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* National Dairy Development Board CASE- en.wikipedia.org

* Cooperative Management- google.com

* Rural management- google.com

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