The co-operative movement in the Indo-Pakistan subcontinent is more than a century old, although it was institutionalised in 1904 through the promulgation of an act known as the Co-operative Societies Act. The object of the Act was to provide loans to small farmers through their own associations (co-operatives) so as to free them from the clutches of the traditional money lenders, popularly known as Mahajans or Sahookars, who used to charge exorbitant rates of interest.
The co-operative act succeeded to a great extent, in providing easy credit to the needy farmers. With the passage of time its scope was extended to other areas. These included supply of seeds, manure and agricultural implements as well as marketing of farm produce.
The primary farmers' co-operatives were later on federated into secondary and apex societies to improve their performance. Necessary funds were also provided to them to enhance their management acumen. For this purpose the cooperative Act 1912 was enforced.
This legislation enabled the co-operatives to organise central co-operative banks at the district level which in turn federated to form provincial co-operative banks at the tertiary level.
Urban co-operative societies were also later on organised for credit, housing and distribution of consumer goods. Thus the co-operative movement had taken firm roots and the number of co-operative societies continued increasing fast.
On gaining independence with the mass exodus of non-Muslim businessmen and industrialists (predominantly controlling business activities in our part of the subcontinent) there was disruption of the entire economic life, particularly in the Punjab.
To fill this void the co-operative movement was called upon to extend and accelerate its activities. Accordingly, the central co-operative banks also started commercial lending to individuals. As a result a number of co-operatives were established to deal in foodgrains, distribution of essential commodities, and run evacuees' rice husking mills and cotton ginning factories.
Unfortunately the co-operative movement that had done a good job during the crisis period subsequently lost its direction and became a handmaid of a few profit-seeking persons who managed to obtain large sums of co-operative credit for investing in private business through the registration of spurious co-operatives. This state of affairs naturally retarded most of the progress made all this time.
The co-operative movement in Pakistan could not succeed as it should have due to a variety of factors. Some of the obstacles hampering the progress were inherent in the system itself. Others relate to the social, political and administrative environments in which co-operatives have to function.
However, the basic causes of decline failure of co-operatives in the country are identified as poverty, illiteracy, the prevalent economic set-up, social traditions, individualistic attitudes of the people, opposition from vested interests, lack of public commitment of policy makers, dearth of conviction among those responsible for the promotion of co-operatives and last but not the least the generally low ethical standards of social conduct.
However, co-operative efforts paid appreciable dividends in the housing sector. Besides the establishment of a few other co-operative housing societies the one known as the Pakistan Employees Co-operative Housing Society (PECHS) in Karachi proved a great success which was emulated in various other parts of the country. Another success story relates to the Defence Co-operative Housing Society in Karachi popularly known as the Defence Housing Authority.
Still the very dependable tool of co-operatives could not be used judiciously in the agriculture sector to increase productivity of land and streamline other allied operations for obtaining optimal benefits.
Had the element of co-operative been included in various agricultural packages announced by the government from time to time for grant of land at concenssional rates, free of cost supply of seeds and pesticides at cheaper rates, the situation would have been much better.
Similarly other measures like progressive increase in the government administered prices of various crops, availability of agricultural machinery/implements at subsidised rates, tube-well subsidies etc could have been more effective through the involvement of co-operative societies.
Co-operative farming: An effort was made to induct cooperation in the farming sub-sector in the 50's when about 150 million acres of agricultural land was distributed among the landless cultivators and then co-operatives were organised by the Punjab provincial co-operative department.
About 120 farmers co-operative societies in 120 villages were established for the purpose.
Each member of a society was allotted 12.5 acres for cultivation and one Kanal land for residential purpose. The cost of the land was fixed at Rs 20 per produce index unit (PIU).
As a result of well-conceived planning by the co-operative department of Punjab the project started bearing fruit in due time. Necessary infrastructure required to carry out various agricultural operations consisting of a chain of tube-wells was provided. Besides, community halls, mosques, schools, society offices, and residential quarters were also constructed by the allottees themselves in every village.
Thus, under the project 80 villages in Multan, two in Sahiwal, 10 in Pak Pattan and two each in Okara and Toba Tek Singh were set up in 1962 with the introduction of mechanised farming. With the purchase of 400 tractors and import of improved American wheat seed agricultural productivity improved manifold.
The wheat yield rose from 10 maunds to 40 maunds per acre. Thus the village initiated a green revolution in this part of the country. It was bad luck that after putting in such strenuous effort in transforming a desert area into prosperous land, the project took a reverse gear.
The root cause of this misfortune was the insistence of the provincial co-operative department on charging the cost of land at exorbitant market rates as against the original fixed price of Rs 20 per PIU.
Although some allottees managed to deposit this unjust enormous cost of land to the government exchequer the majority failed to follow suit and had to abandon the land. It is learnt that this abandoned land is now being given free of cost to landless farmers.
Other nations' experience. We must also learn some lesson from other countries' experience which works together in selfless cooperation with one another.
In most of the developed countries like France, Germany and Denmark co-operatives are established in various spheres of economy at a scale large enough to compete successfully with other types of businesses. But co-operatives are more successful in the agriculture sector.
The bulk of agricultural produce is marketed through co-operatives in the USA and Australia. The California Cotton Co-operative is the biggest enterprise of its kind in the world, handling about three million bales of cotton annually.
In certain other countries, like Canada, agricultural inputs (fertilisers co-operatives) have surpassed other types of enterprises both in respect of turnover and efficiency.
Besides industry, the co-operative approach has also been extended to the commerce and trade sector. A novel idea of paying instant day-to-day dividend to member shareholders has been introduced in various Canadian food and departmental stores running as co-operatives.
In order to give a fillip to the co-operative movement in Pakistan the following measures should be taken.
1) As distinct from the hitherto welfare approach a business approach may be adopted for organising co-operatives to ensure their economic viability.
2) Some pilot co-operatives may be organised in different parts of the country to prove the worth of the co-operative approach initially, which may be confined to some specified economic activity.
3) The areas, which are considered more suitable for the success of co-operative approach, are dairy farming, agro-processing supply of inputs, rural housing and rural electrification provided appropriate economic incentives are given.
4) There is an immediate need to streamline the co-operative credit system (presently suffering from a number of drawbacks) for the welfare of the small farmers and ultimately for the benefit of the nation at large.
5) There is also a need to educate the people right from college/university level by introducing well-designed courses on cooperation as people at large are not fully conversant with the working of co-operative societies.
6) In order to win the battle on the co-operative front a committee be set up to inquire into the causes of failure of co-operative movement in Pakistan.
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