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Like many urban Indians, for a long time, my only association with cooperatives was through Amul butter. Later, as a student of sociology, I was exposed to the idea of socialist cooperatives in the Soviet Union, and this model dominated my imagination. It is only very recently that I learnt about the history of the liberal cooperatives’ movement, and its basic principles. But participating in the day long workshop at IRMA left me thinking about more fundamental questions on designing cooperative institutions for greater effectiveness.
Scrutinizing the new cooperative policies
I got the opportunity to attend a day long consultation on the topic of “Autonomy and Independence of Cooperatives in India” organized by IRMA in collaboration with International Cooperative Alliance-Asia Pacific, and Andhra Pradesh Mahila Abhivruddhi Society on September 3rd. Being part of the of the events organized to commemorate the birth centenary of Dr. Verghese Kurien, the consultation was able to attract practitioners, academics and administrators from across the country and ideological spectrum, attended the consultation, who wanted to pay a homage to Kurien’s legacy. The consultation was able to represent several disparate voices in the sector, alongside the dominant voices, to bring about more inclusive policy recommendations.
The consultation was conducted in the light of the formation of a new union Ministry of Cooperation, and Indian Supreme Court’s judgement to declare the 97th Constitutional Amendment act ultra vires. It seemed, since the role of the new Ministry is still evolving, it is being seen with a mix of apprehension as well as hopefulness by the stake-holders. On the supreme court judgment, the participants did not mince their words whether in supporting or opposing the act.
While some considered it unfortunate that the act was struck down based on a mere procedural inconsistency, others like Jaya Prakash Narayan stated, the act violated fundamental rights of citizens, and should be scrapped for good.
Apart from legalities of the act, all participants agreed how it is essential to balance between hand-holding cooperative organizations, and their autonomy. Dr. Thomas Isaac, also focused on the importance of balancing the accumulation and redistributive functions of cooperatives, which is not a consideration for private enterprises. These discussions helped me understand: -
The cooperators coming from different regions and backgrounds can agree upon certain basic principles essential for the sector. However, there is still a need to reach a consensus on how policies can enable them.
More Inclusive Cooperatives: A message from the field
In the next part of the workshop, the practitioners shared their experiences of promoting cooperative institutions and the challenges. They shared several success stories of how cooperatives have been effective in supporting the livelihoods of marginalized sections, like women from the informal sector, small farmers and small rural entrepreneurs.
The concept of “platform cooperatives” seemed like a very interesting idea, along with cooperative incubators. These can not only be useful for creating more sustainable and scalable models for cooperative institutions, but also will help attract the young populations involved in the gig economy and other precarious activities. In fact, they mentioned the cooperatives have been useful in providing social security to its members during the pandemic, through insurance, inexpensive credit, and other services essential for facing the shock. The speakers, also cautioned against overemphasizing the impact of cooperatives, as the cooperatives are often very exclusive.
As for challenges, while the policies featured in the discussions to some extent, the lack of bargaining power seemed like a greater issue for the promoters, although the speakers did not pose it as such. They pointed out how the bureaucratic and procedural constraints, limit the scope of implementing cooperatives in many cases. They mentioned instances of corruption, bureaucratic over-reach as well as negligence. While others mentioned the inability of promoters to mobilize people around policy issues. In that respect, one of the speakers mentioned, one of the speakers mentioned, -
“we are not the primary stakeholders of cooperatives, and unless the primary stakeholders (i.e., the members) are involved, it will not be possible to get the attention of policy makers.”
Aligning diverse views for independent cooperatives
To reduce the lack of bargaining power, the final speaker, Professor Tushar Shah suggested that the scale of operations can be a key, along with member centrality, i.e., how important is the cooperative in the economic life of its members. Cooperatives working at a smaller scale are vulnerable to government interference, as they need to rely on the government for meeting their operation costs, thus, leading to greater bureaucratic pressures, but this can be resisted through greater numbers of economically active members.
While it essentially appears to be an economic argument, I was intrigued by the political implications of it, as it essentially suggests that a cooperative can gain autonomy, not through the benevolence of the government, but by putting political pressure on it. And in that sense, as one of the speakers stated, the cooperatives’ movement, which had historically been an extension of the workers’ movement, can again assume that space to face the economic challenges for both urban and rural poor in the country.
Mirai Chatterjee from SEWA, however, also cautioned against this approach leading to greater centralization within the organization, resulting in excessive dependence on the services provided. Further, Professor Shylendra stated that such an approach based on greater accumulation may undermine commitment to community and other basic principles of cooperatives. In that sense, it needs to be examined how the process of scaling up is taking place.
Through this workshop, I realized that multi-pronged approaches involving innovations, newer institutions and policy recommendations are required to engage with the complex issue of cooperatives functioning. This, however, can only happen through dialogue between all stakeholders, keeping aside major disagreements for the greater cause. As a testament to the points of alignment, it was decided to follow it up with a sort of charter or one-page declaration, with recommendations for the policy makers.
The organizers circulated a draft declaration for recommendations which included the points of agreement. This approach was able to highlight the points which they could agree on and discuss the points which need further clarification. In this way, the workshop ended on a hopeful note of creating greater alignment amongst diverse stakeholders to pursue the cause of cooperatives.
Arnab is a Research Associate with the Living Farm Incomes project at Institute of Rural Management, Anand