Transforming Primary Agricultural Credit Societies through model bye-laws
Prosperity through Co-operation

Dr N Ranjana Devi *

Who dreams of Primary Agricultural Credit Societies (PACS) at the villages undertaking more than 25 business activities which inter alia include dairy, fishery, setting up of godowns, procurement of food grains, fertilizers, seeds, LPG/CNG/Petrol/ Diesel distributorship, short-term and long term credit, custom hiring centres, common service centres, Fair Price Shops (FPS), community irrigation, Business Correspondent activities, Common Service Centre, etc.

Primary Agricultural Credit Societies has been playing an important role in sustaining the rural economy of the country by providing short term and medium term credit to the farmers. There are more than 95,000 Primary Agricultural Societies (PACS), 352 District Central Cooperative Banks (DCCBs) and 34 State Cooperative Banks (SCBs) in our country.

The PACS at the grassroot level has a total membership of 13.12 crore farmers across the length and breadth of the country. However income generated from the credit business alone is not sufficient to sustain the operations of the PACS.

Presently, the economic activities undertaken by PACS are restricted by their respective bye-laws, which in most cases, are decades old and need to be revised. These societies are expected to cater to the needs of the farmer member in respect of credit, input, fertilizers, warehousing, marketing, agro service, processing etc.

However, due to lack of resources, restricted provisions in their bye-laws, lack of awareness, lack of professional approach and many other factors the PACS are still not in a position to provide required services to their members effectively inspite of their existence at the village level.

As an aggressive initiative to increase the viability of PACS and diversify their business activities to make them vibrant economic entities at village level, a committee with representatives of NABARD, State Cooperative Banks, Vaikunth Mehta National Institute of Co-operative Management (VAMNI-COM), National Council for Cooperative Training (NCCT) etc. was formed by the Ministry of Co-operation, Government of India to prepare draft model bye-laws for PACS.

The draft model bye-laws were circulated to all the States/Union Territories, Ministries, Departments concerned in Government of India, NABARD, NAFSCOB, State Cooperative Banks, District Cooperative Banks etc. on 1st July, 2022 for their suggestions/inputs.

More than 1500 suggestions were received by the committee from all the stakeholders, which were suitably incorporated in finalizing the model byelaws and circulated to all concerned Secretary (Co-operation) and RCS of all States and Union Territories for needful action.

The model byelaws will enable PACS to diversify their business activities into than 25 sectors (agriculture & non-agriculture, credit and non-credit), thus converting them into Multi-Purpose Primary Agricultural Credit Societies (Bahu-Uddeshiye PACS).

Some of the indicative business activities which can be taken up by PACS as per the model byelaws are:
short-term, medium-term and long-term credit,
fertilizer and pesticide distribution,
seed distribution,
fisheries/ dairy/poultry activities,
farm machineries/implements,
custom hiring centers,
floriculture, beekeeping,
fish/ shrimp farming,
chicken, sheep, goat,
pig farming, silk production, milk production,
procurement of food grains,
collection, grading, cleaning activities,
activities related to packaging,
branding and marketing of agricultural products,
agriculture product processing,
storage facility (warehouse and cold storage),
community centre, hospital, education, fair price shops,
LPG/petrol/diesel dealership,
Bank Mitra/ Business Correspondence, insurance facility,
common service centre/data centre, locker facility, etc.

This will contribute significantly in comprehensive development of agriculture in the country.

The Model Byelaws contain the best practices from across the States/UTs and necessary provisions related to legal and administrative structure, expansion of area of operation of PACS; diversification in the loan portfolio; provision of long-term loans; expansion in business related services; membership related provisions; Board of Directors (BoD), General Body and Management related provisions; audit, etc. have been incorporated.

They would provide an enabling legal and administrative framework to PACS in order for them to have improved governance, viable business operations and efficient functioning, thus serving as multi-service centres and single window agencies catering to the needs of member farmers in rural areas.

The model byelaws will also be dovetailed with the Computerization of PACS project, under which a single ERP based software is being developed covering all the business activities mentioned in the model byelaws.

In order to provide support to the PACS such as providing Gram Sabha/Govemment land for infrastructure development, Fair Price Shops (FPS) licenses and designating PACS as agency for procurement of food grains at Minimum Support Price (MSP), a communication has already been sent by Union Minister of Cooperation to all the Chief Ministers of States and Union Territories.

These Model Byelaws are only indicative in nature and PACS concerned may adopt them after suitable modifications as per their respective State Cooperative Acts. The Co-operative movement in India with 8.5 lakh cooperatives with more than 29 crore members is the largest suited model for fighting against collective social change.

It is a model that exemplifies Atmanir-bharta in thought and in action in agriculture and allied sectors, handloom, processing, consumers, fisheries, production and fertilizer distribution, marketing, dairy etc.

With the historic creation of a separate Ministry of Co-operation under the leadership of the Prime Minister Shri Narendra Modi realizing the vision of Sahakar se Samriddhi' (prosperity through Co-operatives) is an opportunity before us to create India a self-sustained co-operative based economic development model. Co-operative is the only instrument through which inclusive economic growth can be achieved by involving the poorest person at the village level.

The Primary Agricultural Credit Societies are the backbone of agricultural credit system. With the adoption of Draft Model Bye laws by the PACS, ample business opportunities will be created by expanding activities.

Status of Primary Agricultural Credit Co-operatives in Manipur According to the Annual Administrative Report 2021-22 of the Department of Cooperation, Government of Manipur, there are 12394 Co-operative Societies with a membership of 667708 in Manipur.

There are 271 Agricultural Credit Cooperatives, 151 GPLMPCS, with 55350 members in the Valley, 104 Large Area Multipurpose Societies with 58934 members in the Hill Region and 16 Service Co-operatives with 250 members and total membership reaching 114534 farmers in the State.

According to a recent study conducted during 2021 by the Co-operative Affairs Sub-committee constituted by Board of Management of the Manipur State Co-operative Bank to identify the issues in the PACS, more than 95% of the respondents from the selected PACS expressed about the non-availability of credit and other services from their respective PACS.

During 2019-20, the average paid up share and working per society remained at Rs 1.79 lakh and 2.59 lakh respectively, which is quite inadequate to perform any kind of economic activity to help the members.

The Manipur State Co-operative Bank Ltd., which was established on 24th June, 1956 and registered on 2nd July, 1956 under the then Manipur Co-operative Societies Act, 1947 has undergone various ups and downs in its journey of 66 years in providing the credit to the cooperative members.

The Bank in the recent years with the full support from the State Government as well as NABARD RO, Manipur and the Board of Management of the Bank already started gearing up its activities by providing credit and other facilities to PACS through KCC and by forming JLGS & SHGs for taking up different activities in agriculture, fisheries, animal husbandry, dairy, livestock etc.

Strengthening of Primary Agricultural Co-operatives (PACS) will fulfill the vision for bringing inclusive economic growth by involving the grassroot level farmers who are socially and economically backward.

Subsequent to various policies and schemes being created by the Ministry of Co-operation, Government of India, the opportunity before us is to fit the model bye-laws with local requirements and suitable modifications to provide the best services to the PACS members.

Creating awareness amongst the members and also potential member of PACS through awareness campaigns, sensitization programmes, seminars„ education & training is the need of the hour so as to enable them to grab the opportunities before them through the Cooperative Movement in the true spirit.