International Day of Cooperatives | 05 Jul 2022

Why in News?

Recently, 100^th International Day of Cooperatives was observed.

• India celebrated the day under the theme “Building a Self-Reliant India and a Better World through Co-operatives”.

What is International Day of Cooperatives?

• Historical Perspective:
  • The International Day of Cooperatives was declared by the United Nations General Assembly on 16^th December 1992, on the first Saturday of July.
  • The purpose of this festival is to promote cooperatives globally and foster an environment that will foster their expansion and profitability.
  • The occasion highlights the cooperative movement's contributions to tackling the major issues addressed by the United Nations as well as to enhancing and expanding the alliances between the cooperative movement internationally and other actors.
• Significance:
  • It aims to raise awareness of cooperatives and further the values of the movement—
    • International solidarity,
    • Economic efficiency,
    • Equality,
    • Global peace.
• Theme for 2022:
  • Cooperatives Build a Better World.

What are Co-operatives?

• About:
  • Co-operatives are people-centered enterprises owned, controlled and run by and for their members to realize their common economic, social, and cultural needs and aspirations.
  • Cooperatives bring people together in a democratic and equal way. Whether the members are the customers, employees, users or residents, cooperatives are democratically managed by the 'one member, one vote' rule.
    • Members share equal voting rights regardless of the amount of capital they put into the enterprise.
• Indian Perspectives:
  • India has the greatest cooperative movement in the entire globe. Cooperatives, which currently account for over 8.5 lakh villages in India, are essential institutions for fostering socioeconomic development for inclusive growth in both rural and urban areas.
  • Some of the well-known success stories of the cooperative movement in India include,
    • AMUL(Anand Milk Union Limited),
    • IFFCO(Indian Farmers Fertilizer Cooperative Limited),
    • KRIBHCO(Krishak Bharati Cooperative Limited),
    • NAFED(National Agricultural Cooperative Marketing Federation of India Ltd).

What are the Related Government Initiatives?

• Recently, the Ministry of Cooperation was established by the Union Government in July 2021. Following its creation, the ministry has been actively working on developing a new cooperation policy and programmes.
• There is an immense potential for the development and empowerment of farmers, agriculture, and rural areas of the country in the cooperative sector.
• The computerization of Primary Agricultural Credit Societies (PACS) has recently been approved by the Union Cabinet, strengthening the cooperative sector by enhancing PACS' efficiency, bringing accountability and transparency to their operations, and enabling PACS to diversify their business and offer a variety of products and services.

What are the Challenges faced by the Cooperatives?

• Neglected by the Policy Makers: The role of cooperatives has been overlooked by policymakers at various levels due to their lack of visibility.
• Lack of Awareness: There is a lack of awareness about business strategies and knowledge about how the market works.
• Lack of Funding and Capabilities: Whether public or private sector, both are not showing any amount of confidence in this sector, as there is little or no financial support for cooperatives, so this harms their potential.
• Poor Management: In some cooperatives, due to the lack of understanding of the market and poor level of skill set of workers, many cooperatives underperform and are not able to provide the desired results.

Way Forward

• Dual Status for Cooperatives: Cooperatives role in society and economy should be accomplished and further support should be provided by various stakeholders including government, corporates, etc, by bringing their most significant competitive advantage to the table, namely their dual status as associations and enterprises (as they are businesses which are run by local communities for example members of a village).
• Role of Government: The government needs to work upon enhancing their capabilities by providing them with proper guidance and support from market and business communities so that they can get the desired level of skill set and knowledge of running an enterprise.

Source: PIB