Syllabus: GS3/Economy
Context
- Amul’s parent company, Gujarat Cooperative Milk Marketing Federation Ltd, is ranked as the top co-operative in the world in the ICA World Cooperative Monitor 2025 rankings.
About
- The ranking is based on the ratio of turnover over gross domestic product (GDP) per capita.
- Amul has a three-tier cooperative structure, encompassing more than 18,600 village dairy cooperatives and 36 lakh milk producers, the majority of whom are women.
- Amul is a brand owned entirely by farmers. They manage everything from milk collection and manufacturing to marketing.
- The Indian Farmers Fertiliser Cooperative Limited (IFFCO) has been ranked second in the ICA World Cooperative Monitor 2025 rankings.
- IFFCO has maintained its No. 1 rank for several years, which is a testament to IFFCO and its management’s cooperative principles.
- Founded in 1967, IFFCO is one of the world’s largest cooperative fertiliser producers.
| The World Cooperative Monitor – It is a project designed to collect robust economic, organizational, and social data about cooperatives worldwide. – The publication reports on the world’s largest cooperatives including rankings of the Top 300 and sectoral analysis. International Cooperative Alliance – It is a non-profit international association established in 1895 to advance the cooperative social enterprise model. – The ICA works with global and regional governments and organizations to create legislative environments that allow cooperatives to form and grow. |
What are Cooperatives?
- A cooperative (or co-op) is an organization or business that is owned and operated by a group of individuals who share a common interest, goal, or need.
- These individuals, known as members, participate in the cooperative’s activities and decision-making process, typically on a one-member, one-vote basis, regardless of the amount of capital or resources each member contributes.
- The main purpose of a cooperative is to meet the economic, social, or cultural needs of its members, rather than to maximize profits for external shareholders.
- The UN SDGs recognize cooperatives as crucial drivers of sustainable development, particularly in reducing inequality, promoting decent work, and alleviating poverty.
| 97th Constitutional Amendment Act 2011 – It established the right to form cooperative societies as a fundamental right (Article 19). – It included a new Directive Principle of State Policy on the Promotion of Cooperative Societies (Article 43-B). – It added a new Part IX-B to the Constitution titled “The Co-operative Societies” (Articles 243-ZH to 243-ZT). – It authorizes the Parliament to establish relevant laws in the case of multi-state cooperative societies (MSCS) and state legislatures in the case of other cooperative societies. |
Benefits of Cooperatives
- Democratic Control: Members have a voice in decision-making.
- Economic Participation: Profits are distributed based on usage or contribution, not capital invested.
- Community Focus: Co-ops often aim to benefit local communities by keeping resources and profits within the group.
- Better Services/Prices: By pooling resources, cooperatives often offer better services or prices than for-profit businesses.
Challenges Faced:
- Weak Governance: There are issues of poor management, corruption, and political interference, leading to inefficiency and lack of transparency.
- Limited Access to Credit: Many cooperatives struggle with access to financing, which hinders their ability to expand or improve their operations.
- Competition from Private Sector: Cooperatives often face stiff competition from large private enterprises and multinational corporations, especially in sectors like retail and agriculture.
- Technological Gaps: Many cooperatives, especially in rural areas, lack access to modern technology or are slow to adopt new systems that could improve efficiency.
Legal Framework and Support for Cooperatives:
- In India, cooperatives are governed by the Cooperative Societies Act, which is implemented at both the state and national levels.
- The Multi-State Cooperative Societies Act (2002): This law regulates cooperatives that operate in more than one state.
- The National Cooperative Policy (2002): Aimed at creating an enabling environment for the cooperative movement, it focuses on improving governance, member participation, and financial sustainability.
- The Ministry of Cooperation: Established in 2021, this ministry focuses on supporting the growth of cooperatives in India, including reforming their governance and providing financial support.
Way Ahead
- Cooperatives in India have proven to be an essential tool for economic empowerment, especially for marginalized groups, and contribute significantly to rural development.
- With the right support and reforms, cooperatives can continue to contribute to inclusive growth and social development in India.
Source: LM
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