AGRICULTURAL CO-OPERATIVES, ITS CONCEPT AND IMPLICATION IN NEPALESE AGRICULTURE

Prepared By:JAY NEPALRoll No 42B.Sc. Ag. 7th semester,Subject: Agribusiness management , marketing and cooperativesIAAS, PaklihawaDecember, 2014

WHAT IS A CO-OPERATIVE ??

Derived from Latin words “Co”= Together & “Operari”=Work ; Therefore, Co-Operatives means Working Together!!

Simply, Co-operative can be defined as a group of people working together to fulfill certain objectives.

“An autonomous association of persons united voluntarily to meet their common economic, social & cultural needs and aspirations through a jointly owned & democratically controlled enterprise”- Int’l Co-operative Alliance (ICA)

WORKING TOGETHER !!!

A COOPERATIVE IS A FOR-PROFIT CORPORATION

A cooperative is a user-owned and user-controlled corporate business in which benefits are received in proportion to use.Main Motto: “One for all, All for One”

In Co-Operatives

The people who own control and finance the co-operative are those who use it.

Origin of Co-Operatives

Robert Owen (1771–1858) was a social reformer and a pioneer of the cooperative movement. Also known as “Father of Co-Operative Farming.

A Global MovementOver 750 000 cooperativesOver 800 million individual members – many

of them womenOver 100 million jobs createdOver 50% of global agricultural output is

marketed through cooperatives

7 BASIC PRINCIPLES !!! Voluntary & Open Membership

Democratic member control

Member economic participation

Autonomy & Independence

Education, Training & Information

Co-operation among co-operatives

Concern for Community

Co-ops Principles and PracticesCo-operative Principles and Practices Principles PracticesVoluntary and open membership Member recruitment policy, rules of

admission, equal opportunities,

Democratic member control Constitution, voting rights, role of the board, members and management

Member economic participation Economic performance, rewards to members, capitalization and how surplus is used

Autonomy and independence Relations with government, other organisations and institutions and market position,

Education, training and information Member, board and management training and public relations

Co-operation among members Federation, networks, joint enterprises, movement building

Concern for community Policy on community development, environment and networking

5 Co-operative Values !!!

Self-help;

Self-responsibility;

Democracy;

Equality;

solidarity.

TYPES OF CO-OPERATIVES !!!

Agricultural Co-operatives

Small Farmer Cooperatives (SFCL)

Saving & Credit Cooperatives

Health Cooperatives

Science & Technology Cooperatives

Consumer Cooperatives

Multipurpose Cooperatives

Other Cooperatives

TYPES OF FARMER’SCO-OPERATIVES

Production Cooperatives

Farm Supply Cooperatives

Service Cooperatives

Marketing Cooperatives

Processing Cooperatives

Environmental Cooperatives

Tourism Cooperatives etc..

Type of activities

Economic activities agricultural marketing & supply; savings & credit consumer good supply transport shared services (business) handicrafts and small industries services

Type of activities …

Social services Housing Social reintegration HIV-AIDS care Medical services

Others Musician co-operatives Soccer fans co-operatives

Organizational Make-Up

Members

Board of Directors

Manager

Employees

Primary Co-op Structure

Co-operative

Member MemberMember

Secondary Co-op StructureCo-operative

PrimaryCo-op

MemberMember

LocalCo-op

Member Member

Tertiary Co-op StructureCo-operative

MemberMember

PrimaryCo-op

SecondaryCo-op

SecondaryCo-op

PrimaryCo-op

PrimaryCo-op

MemberMember

CO-OPERATIVES IN NEPAL

One of the successful modern, participatory and effective approach amongst farmers.

Farmers are involved from planning process up-to harvest, and the profit is shared.

Becoming popular amongst progressive farmer groups especially in rural Nepal.

Co-Operatives movement with reference of Nepal

Modern co-operative initiative date back to 1956 with the establishment of thirteen credit cooperatives in Chitwan District to assist Flood victims.

Establishment of Co-operative Bank in 1963 (later ADB in 1968)

Establishment of National Cooperatives Development Board in 1991.

Co-Operatives Act- 1992

Formed in August.1991 for designing a strategy for revitalizing the cooperative movement so as to make it self-reliant and people managed.

More specifically, the main tasks of NCDB included the following:

formulate cooperative policies;

help set up the structure of the cooperative movement from bottom to top;

coordinate the activities of cooperatives in different sectors; and

establish necessary infrastructures required for facilitating the process of cooperative development.

CURRENT SITUATION IN NEPAL

Total Number of Cooperative in Nepal : 26,501

Total Number of Member : 4,647,549

Total Number of employment by Cooperative: 39,752

Total Share capital of Cooperative : NPR 27,095,151.00

Total Deposit in cooperative : NPR 139,543,971.00

Total Loan disburse by Cooperative : 134,033,495.00 Source: Department of Cooperatives Fiscal year 2068/69

SUCCESSFUL CO-OPs

Integrated Cooperative Development Program in Nawalparasi district.

Amliso (Bamboo grass) Production and Marketing in Ilam an Jhapa districts.

Ginger Production and Marketing in Salyan district.

Institutional Marketing of coffee in Gulmi district.

Goat rearing activities and Marketing in Tanahu district.

Cardamom Production and Marketing in Panchthar district. Etc.

Example…

Panchakanya Agriculture Cooperative Ltd.

Run exclusively by women

Advantages of Cooperatives

Economic and social growth in communities Creates more employment opportunities Possibility to change something that’s not working Better access to products and services Strong customer loyalty Access to new markets Bring solutions to problems Land integration We-Feeling amongst farmers etc

AGRICULTURAL CO-OPs

The importance of food means there has to be maximum and safe utilisation of agricultural land.

The best way to achieve proper organisation of agricultural land is on a cooperative basis.

The land in Nepal is fragmented, hence not suitable for Commercial Agriculture.

Land is very important in the psychology of farmers, so a proper cooperative system has to be built up to give farmers a sense of ownership of their land and permanent rights to the land while it is managed cooperatively. This will also give a better outturn.

Impact of Co-Ops in Nepalese Agriculture

Direct & Indirect impacts on Socio-economic development.

Creation of Productive employment.

Women Participation & Mobilization.

Important role in Crop production, Marketing , Processing and also Seed Production.

Easy access to Savings & Credit at low cost.

Social & economic protection/insurance to Farmers.

Role in Conflict solving & peace building.

Cont..

Source of Loan and Loan Utilization.

Diversification, Profitability & Profit use.

Increasing in Purchasing capacity of local farmers.

Market extension.

Uplifting of living status

Participation & Empowerment

Present Scenario & Challenges

Despite the efforts by governmental agencies, international institutions, Non-governmental Organizations and other Stakeholders, The results are far from Satisfactory.

Most profitable co-operatives are urban based

Rural co-operatives lack regular guidance , trainings, credits & insurance etc. from GON, NGOs etc.

Lack of Creditability, managerial skills & professionalism.

cont…

Governmental negligence and lack of clear policies.

Lack of Proper Monitoring and Evaluation

Lack of inclusion of every sector of the society including Dalits, Janjatis, Women etc.

Lack of vision, commitment and willingness by Political Parties and non-profit organizations.

Lack of training, research and extension outreach to co-operative formation, feasibility studies, management and their promotion.

THE WAY OUT…FUTURE AGENDA

Making MONITORING and EVALUATION act professional and independent.

Periodic, special themes, big projects and not driven by donors.

Carrying out impact evaluation of donor assisted projects through independent evaluation sponsored by the government/client-ownership building.

Participatory and involvement of donors

Strong organization of evaluators/networking

Code of conduct for the evaluators.

Dissemination of results/priority.

THANK-YOU !!!