Assessment of Role of Assessment of Role of Leadership in Dairy Co-Leadership in Dairy Co-

operatives of Indiaoperatives of India

Sushila KaulSushila KaulDivision of EconometricsDivision of Econometrics

Indian Agricultural Statistics Research Indian Agricultural Statistics Research Institute, New Delhi, India.Institute, New Delhi, India.

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IntroductionIntroduction

The co-operative movement of India has The co-operative movement of India has witnessed history of about 100 years. witnessed history of about 100 years.

Co-operatives are one of the means of Co-operatives are one of the means of bringing about striking changes in the bringing about striking changes in the rural economy. rural economy.

The co-operative sector in India has The co-operative sector in India has emerged as one of the largest in the emerged as one of the largest in the world and is playing an important role in world and is playing an important role in socio-economic development of the socio-economic development of the country. country.

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IntroductionIntroduction India’s milk output is India’s milk output is

estimated to be 88 million estimated to be 88 million tonnes.tonnes.

There is sustained growth in There is sustained growth in the availability of milk and the availability of milk and milk products for the milk products for the burgeoning population of the burgeoning population of the country.country.

Most important, dairying has Most important, dairying has become an important become an important secondary source of income secondary source of income for millions of rural families for millions of rural families and for millions more, has and for millions more, has assumed the most important assumed the most important role in providing employment role in providing employment and income.and income.

The per capita availability of The per capita availability of milk has also increased to a milk has also increased to a level of about 221 g. per day.level of about 221 g. per day.

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Dairy Co-operativesDairy Co-operatives

Co-operatives play an important role in Co-operatives play an important role in animal husbandry and dairying sector, animal husbandry and dairying sector, which contributes about one-fourth of which contributes about one-fourth of agricultural GDP of the country. agricultural GDP of the country.

There are There are 75,000 dairy co-operative75,000 dairy co-operative societies, spread all over the country with societies, spread all over the country with a membership of 10 million. a membership of 10 million.

Dairy co-operatives all over India help Dairy co-operatives all over India help small and marginal farmers to take small and marginal farmers to take initiatives in shaping their destiny. initiatives in shaping their destiny.

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Dairy Co-operativesDairy Co-operatives

They serve more than 10 million farmers in They serve more than 10 million farmers in over 80,000 villages.over 80,000 villages.

The structure of dairy co-operatives The structure of dairy co-operatives consists of primary milk producer societies consists of primary milk producer societies at the primary level and milk supply at the primary level and milk supply unions at the district level. unions at the district level.

The primary milk societies are federated The primary milk societies are federated into unions, while state federations are into unions, while state federations are functioning in some states. functioning in some states.

At the national level, there is a National At the national level, there is a National Co-operative Dairy Federation. Co-operative Dairy Federation.

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Dairy Co-operativesDairy Co-operatives

The progress of co-The progress of co-operatives in dairy operatives in dairy sector is not uniform sector is not uniform throughout the throughout the country. country.

In some regions and In some regions and states, this sector states, this sector has shown has shown promising progress, promising progress, whereas in others it whereas in others it is not so. is not so.

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Dairy Co-operativesDairy Co-operatives

This variation in growth This variation in growth may be attributed to may be attributed to several economic and several economic and non-economic factors non-economic factors including role of including role of leadership. This leadership. This variation in growth may variation in growth may be attributed to several be attributed to several economic and non-economic and non-economic factors economic factors including role of including role of leadership. leadership.

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•The progress and performance of dairy co-operatives in recent years have also been examined.•Role of leadership in promoting the dairy co-operative movement in various states. •Factors affecting leadership have been examined.

9

Data

Secondary data have also been obtained from various issues of the publications of NABARD and CSO, New Delhi.

The data on different variables have been obtained from a Report entitled, “Some Aspects of Farming”, (2005) published by NSSO, Govt. of India.

10

Methodology

to examine the role of leadership in the growth and promotion of dairy co-operative societies, an effort has been made to develop an appropriate leadership index. In evolving this index, it is hypothesized that leadership is positively influenced by the level and extent of education, the level of general awareness of people and their affiliation with registered and other organizations. Keeping this in view, it was assumed that states with better educational level of farmers will show better leadership. Similarly, in states with larger proportion of farmers having knowledge of minimum support prices as well as world trade organization will show better leadership traits.

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Methodology

State-wise information was also obtained on the association of farmers with registered organizations and self-help groups. Proportion of farmers in a state with membership of co-operatives was also taken into consideration. An equal weight was assigned to all these variables and an index was worked out.

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Methodology

The leadership index has been developed by estimating the relationship between milk procurement per society and literacy rate as well as per capita agricultural income in the state.

13

Methodology

It has been assumed that higher the literacy rate and per-capita income, the better is the leadership available in the state, to the co-operative sector.

The equations using least square technique have been estimated.

14

Methodology

This leadership index was analysed and the impact of various variables were obtained using the following regression model:

L1 = a+bX1+b2X2+b3X3+b4X4+b5X5+b6X6+e

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Methodology

Where,

L1 = Leadership Index ( no.)X1 = Proportion of male farmer’s literacyX2 = Proportion of household knowing minimum support pricesX3 = Proportion of farmers knowing WTOX4 = Proportion of farmers belonging to registered

organizationsX5 = Proportion of farmers belonging to self help groupsX6 = Proportion of farmers who are members of co-

operativesa and b are constant and coefficients respectively ,e is error term

16

Methodology

Impact on Leadership For estimating the impact of different variables on

Leadership the following equations have been estimated:

L1 = a+b6X6 + e L1 = a+b4X4+b5X5 +b6X6+ e

L1 = a+ b1X1+ b2X2 + b3X3 +

b4X4+b5X5 +b6X6+ e

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Methodology

Role of Leadership in Dairy Co-operatives: In order to study the role of leadership on the

development of dairy co-operatives, the regression equations have been estimated using the following model:

Y = a+b1X1+b2X2+b3X3+b4X4+b5X5+b6X6+X7+uWhere,Y is dependent variable defined as follows; Number of members per DCS (No.) Volume of milk procured per DCS (Kg.) Volume of milk marketed per DCS (Kg.)

18

Methodology

And the dependent variables are as:X1 = Leadership IndexX2 = Proportion of literate milk farmersX3 = Proportion of farmers having knowledge of MSPX4 = Proportion of farmers having knowledge of WTOX5 = Proportion of farmers belonging to registered organizationsX6 = Proportion of farmers belonging to self help groupsX7 = Proportion of farmers who are members of co-operatives a and b are constant and coefficients respectively,e is error

term

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Methodology

The following equations have been estimated using Y as dependent variable:

Number of members per DCS (No.)

Y = a+b1X1+u

Y = a+ b1+X1+b2X2+b3X3+b4X4+u Volume of milk procured per DCS (Kg.)

Y = a+ b1+X1+b2X2+b3X3+b4X4+u Milk Marketed per DCS (kg.)

Y = a+ b1+X1+u

Y = a+ b1+X1+b2X2+b3X3+b4X4+b5X5

+b6X6+b7X7+u

2020

Table 1 : Status of Dairy Co-operatives in India different states of India(2003-04)

S.No.S.No.Name of StateName of State DCSDCS

OrganisedOrganised(No.)(No.)

FarmerFarmerMembersMembers

(‘000)(‘000)

Rural MilkRural MilkProcurementProcurement(000kg./Day)(000kg./Day)

MilkMilkMarketingMarketing(000 L/day)(000 L/day)

1.1. Andhra PradeshAndhra Pradesh 50725072 756756 950950 898898

2.2. AssamAssam 6565 33 44 88

3.3. BiharBihar 47374737 241241 402402 451451

4.4. GoaGoa 169169 1919 4343 8989

5.5. GujaratGujarat 1140011400 23602360 51025102 21012101

6.6. HaryanaHaryana 42194219 230230 331331 153153

7.7. Himachal PradeshHimachal Pradesh 283283 2121 2525 1515

8.8. KarnatakaKarnataka 92939293 17371737 22432243 15181518

9.9. KeralaKerala 25782578 706706 614614 738738

10.10. Madhya PradeshMadhya Pradesh 51325132 250250 312312 324324

11.11. MaharashtraMaharashtra 1834918349 15821582 26802680 14211421

12.12. NagalandNagaland 7676 33 22 44

13.13. OrissaOrissa 16541654 122122 127127 132132

14.14. PondicherryPondicherry 9696 3232 5454 5353

15.15. PunjabPunjab 68926892 402402 744744 496496

16.16. RajasthanRajasthan 96439643 534534 10361036 855855

17.17. SikkimSikkim 189189 77 99 77

18.18. Tamil NaduTamil Nadu 75787578 19881988 16641664 511511

19.19. TripuraTripura 8484 44 22 99

20.20. Uttar-PradeshUttar-Pradesh 1810418104 824824 814814 436436

21.21. West-BengalWest-Bengal 22872287 172172 324324 3030

TotalTotal 107891107891 1199311993 1748217482 1024910249

2121

No. of Dairy Cooperative Society vs Members ('000)

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

DCS Organised (No.)

Farmer Members (‘000)

2222

Milk Procured vs Milk Marketed ('000 L/ day)

0

1000

2000

3000

4000

5000

6000

Rural Milk Procurement (000kg./Day)

Milk Marketing (000 L/day)

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ResultsResults

Available evidence indicates that the Available evidence indicates that the number of dairy co-operative number of dairy co-operative societies was maximum in Uttar-societies was maximum in Uttar-Prades(18104). Prades(18104).

This was second highest in Gujarat. This was second highest in Gujarat. The states in the eastern part of the The states in the eastern part of the

country had relatively smaller country had relatively smaller number of such societies. number of such societies.

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ResultsResults

The states of Karnataka, Tamil Nadu, The states of Karnataka, Tamil Nadu, Maharashtra, Punjab and Rajasthan Maharashtra, Punjab and Rajasthan showed good growth of societies. showed good growth of societies.

In terms of membership of these societies, In terms of membership of these societies, the state of Gujarat ranked first. the state of Gujarat ranked first.

This was followed by Tamil Nadu, This was followed by Tamil Nadu, Karnataka and Mahrashtra. Karnataka and Mahrashtra.

The membership was very less in all states The membership was very less in all states located in eastern India. located in eastern India.

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ResultsResults As for the As for the

procurement of milk procurement of milk was concerned, about was concerned, about one-third of total milk one-third of total milk procured by these co-procured by these co-operatives comes from operatives comes from Gujarat. Gujarat.

It was followed by It was followed by Maharashtra, Maharashtra, Karnataka and Tamil Karnataka and Tamil Nadu.Nadu.

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ResultsResults

LL11 =0.683+ 2.625 =0.683+ 2.625****XX66 R R22 = 0.653 = 0.653

LL11= 0.681+4.858X= 0.681+4.858X44+0.873X+0.873X55+2.083+2.083****XX66

RR22 = 0.770 = 0.770

LL11=0.093+0.824=0.093+0.824****XX11+1.113+1.113****XX22

+0.770+0.770****XX33+1.818X+1.818X44+0.685X+0.685X55

+1.095+1.095****XX66

R2 = 0.993R2 = 0.993

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ResultsResults

Number of Members per DCS as dependent Number of Members per DCS as dependent variable:variable:

Y = -48.582 + 102.211Y = -48.582 + 102.211****XX11

RR22 = 0.380 = 0.380

Y = 44.45 + 251.435Y = 44.45 + 251.435**XX11 + +

(-)306.464X(-)306.464X22 +(-)373.275X +(-)373.275X33

+55.864X+55.864X44

RR22 = .559 = .559

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ResultsResults

Milk Procured per Society:Milk Procured per Society:

Y = 22.008+81.525XY = 22.008+81.525X11 RR22 = 0.146 = 0.146

Y = 441.787 + (-)917.648XY = 441.787 + (-)917.648X11

+181.801X+181.801X22 +983.535X +983.535X33

+ 717.845X+ 717.845X44+5176.604X+5176.604X55

+ 90.966X+ 90.966X66 + 1397.172X + 1397.172X77 RR22 = 0.733 = 0.733

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ResultsResults

Milk Procured per Society:Milk Procured per Society:

Y = 22.008+81.525XY = 22.008+81.525X11 RR22 = 0.146 = 0.146

Y = 441.787 + (-)917.648XY = 441.787 + (-)917.648X11 + + 181.801X 181.801X22 +983.535X +983.535X33 + 717.845X+ 717.845X44 +5176.604X +5176.604X55 + 90.966X + 90.966X66 + 1397.172X + 1397.172X77

RR22 = 0.733 = 0.733

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ResultsResults It is evident from the results of regression It is evident from the results of regression

analysis that when the variables pertaining analysis that when the variables pertaining to male farmer’s literacy, household to male farmer’s literacy, household knowing minimum support prices and knowing minimum support prices and WTO, farmers belonging to registered WTO, farmers belonging to registered organizations and self-help groups and organizations and self-help groups and proportion of farmers who are members of proportion of farmers who are members of co-operatives are included in the analysis, co-operatives are included in the analysis, as independent variables, the leadership as independent variables, the leadership index ,which is the dependent variable, index ,which is the dependent variable, has Rhas R22 of 0.993. of 0.993.

The co-efficients of education level, The co-efficients of education level, farmers knowing WTO and proportion of farmers knowing WTO and proportion of number of co-operatives are statistically number of co-operatives are statistically highly significant.highly significant.

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ResultsResults In another set of analysis, 77 percent In another set of analysis, 77 percent

variation in the leadership index was variation in the leadership index was explained by proportion of farmers explained by proportion of farmers belonging to registered organizations belonging to registered organizations and self-help groups, as well as and self-help groups, as well as farmers who are members of co-farmers who are members of co-operatives in the state. operatives in the state.

The co-efficient associated with the The co-efficient associated with the last variable is statistically highly last variable is statistically highly significant.significant.

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ResultsResults

In another set of analysis, 77 percent In another set of analysis, 77 percent variation in the leadership index was variation in the leadership index was explained by proportion of farmers explained by proportion of farmers belonging to registered organizations belonging to registered organizations and self-help groups, as well as and self-help groups, as well as farmers who are members of co-farmers who are members of co-operatives in the state. operatives in the state.

The co-efficient associated with the The co-efficient associated with the last variable is statistically highly last variable is statistically highly significant. significant.

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ResultsResults When regression of leadership index When regression of leadership index

on proportion of members of co-on proportion of members of co-operatives was studied, the Roperatives was studied, the R22 was was 0.65 and co-efficient was statistically 0.65 and co-efficient was statistically significant.significant.

Leadership plays a big role in better Leadership plays a big role in better organization and management of co-organization and management of co-operative societies in general and operative societies in general and dairy co-operatives in particular.dairy co-operatives in particular.

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ResultsResults

Milk MarketedMilk Marketed

Y = -11.003 + 72.932Y = -11.003 + 72.932**XX11

RR22 = 0.247 = 0.247

Y = 188.459Y = 188.459**+(-)86.595 X+(-)86.595 X11++

(-)139.628X(-)139.628X22 +(-)89.180X +(-)89.180X33

+465.858X+465.858X44 +1076.459X +1076.459X55

+ 397.938X+ 397.938X66 + 214.757X + 214.757X77

RR22 = 0.791 = 0.791

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ResultsResults

A perusal of regression equations for A perusal of regression equations for number of members per Dairy Co-number of members per Dairy Co-operative Society (DCS) in the states operative Society (DCS) in the states indicates that the variable of leadership indicates that the variable of leadership explains 38 percent of variation in it. explains 38 percent of variation in it.

Independent variable of leadership index, Independent variable of leadership index, literacy, knowledge of MSP and WTO literacy, knowledge of MSP and WTO explained about 56 percent variation in explained about 56 percent variation in

number of members in state. number of members in state.

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ResultsResults

Milk Procured per dairy co-operative Milk Procured per dairy co-operative society was studied using similar society was studied using similar variables. variables.

Leadership variable could explain more Leadership variable could explain more than 14 percent of variation in it, than 14 percent of variation in it,

while all seven variables taken together, while all seven variables taken together, could explain more than 73 percent of could explain more than 73 percent of variation in milk procured per society. variation in milk procured per society.

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ResultsResults

It is also evident from the analysis It is also evident from the analysis that, amount of milk marketed in the that, amount of milk marketed in the state is positively affected by the state is positively affected by the independent variables independent variables

The leadership index variable could The leadership index variable could explain more than one fourth of explain more than one fourth of variation in the milk marketed variation in the milk marketed

This shows that the leadership is an This shows that the leadership is an important contributory factor in the important contributory factor in the development of dairy cooperatives.development of dairy cooperatives.

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ConclusionsConclusions

It has been observed from the analysis that dairy It has been observed from the analysis that dairy co-operatives have done well in Western and co-operatives have done well in Western and Northern part of the country. Northern part of the country.

The study further indicated that literacy rate and The study further indicated that literacy rate and better general awareness as well as association better general awareness as well as association of people with registered organizations in the of people with registered organizations in the state affected the leadership index in a positive state affected the leadership index in a positive manner. manner.

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ConclusionsConclusions

In turn the leadership trait could help in In turn the leadership trait could help in better spread and development of dairy better spread and development of dairy co-operative activities in the states co-operative activities in the states

In future, with the improvement in general In future, with the improvement in general awareness of people and better socio-awareness of people and better socio-economic conditions, there is a strong economic conditions, there is a strong possibility of more efficient and better possibility of more efficient and better managed dairy co-operatives in rural India. managed dairy co-operatives in rural India.

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References:

Central Statistical Organization ‘Statistical Abstracts of Central Statistical Organization ‘Statistical Abstracts of India’, (various issues) Deptt. Of Statistics, Ministry of India’, (various issues) Deptt. Of Statistics, Ministry of Planning, New Delhi.Planning, New Delhi.

Kaul, Sushila (2004) ‘Problems and Prospects of Women Kaul, Sushila (2004) ‘Problems and Prospects of Women Co-operatives in Indian Dairy Sector’ Paper presented at Co-operatives in Indian Dairy Sector’ Paper presented at 3rd Asia Pacific Research conference of ICA at Chiangmai, 3rd Asia Pacific Research conference of ICA at Chiangmai, Thailand, Nov.30, 2004.Thailand, Nov.30, 2004.

Kaul, Sushila (2005) ‘Economic Analysis of Regional Kaul, Sushila (2005) ‘Economic Analysis of Regional Variation in Dairy Co-operatives of India’ accepted for Variation in Dairy Co-operatives of India’ accepted for presentation in International Co-operative Research presentation in International Co-operative Research conference ,held at Cork,Ireland,Aug.10-14,2005.conference ,held at Cork,Ireland,Aug.10-14,2005.

Mamoria, C.B.(1982) ‘Agricultural Co-operative Structure Mamoria, C.B.(1982) ‘Agricultural Co-operative Structure in India’, Kitab Mahal.in India’, Kitab Mahal.

NSSO(2005) ‘Some Aspects of Farming’, Govt. of India, NSSO(2005) ‘Some Aspects of Farming’, Govt. of India, New Delhi.New Delhi.

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