MAY 22, 2023

National Level Multi State Cooperatives: To Revolutionize The Organic Produce Distribution In India

The government’s decision on establishing national multi-state cooperatives and other added factors will enable the Indian organic product market to grow from of Rs 27,000 crore presently to Rs 1 lakh crore in next 5 years

In India, cooperatives are supported by the government through a variety of policies and programs, including financial assistance, training and capacity-building programs, and policy and regulatory support.

The government has also established a number of national-level cooperative institutions, such as the National Cooperative Development Corporation (NCDC) and the National Cooperative Union of India (NCUI) etc. to provide support and guidance to cooperatives.

The government’s “Sahakar Se Samriddhi” (Prosperity through cooperatives) initiative aims to achieve overall prosperity in India by strengthening cooperatives through transparency, modernization, and competitiveness.

Cooperatives can support the distribution of organic produce by increasing access, promoting sustainability, negotiating better prices for farmers, enhancing market presence, improving quality control, supporting small and mid-size farmers, building consumer confidence, and promoting local economies.

To advance the initiative, a new National Cooperation Policy is being formulated, with consultations underway with various stakeholders.

The government has approved the establishment of three national multi-state cooperatives focused on exports, organic products, and seeds respectively: the National Export Society, the National Cooperative Society for Organic Products, and the National Level Multi-state Seed Cooperative Society.

Five major cooperatives - Gujarat Cooperative Milk Marketing Federation (GCMMF), the promoter of Amul brand; National Agricultural Cooperative Marketing Federation of India Ltd. (NAFED); and National Cooperative Consumers’ Federation of India Limited (NCCF); National Dairy Development Board (NDDB); and National Cooperative Development Corporation (NCDC) are collaborating to form a multi-state organic cooperative society. As per the reports, the society will have an authorised share capital of Rs 500 crore.

It will have an initial paid-up share capital of Rs 100 crore where each of the cooperative bodies will initially invest Rs
20 crore which will be gradually increased over time

Cooperatives will support the industry in:

Increased Access to Organic Products: Cooperatives can help increase access to organic products by pooling resources and connecting farmers with consumers. This can make it easier for consumers to find high-quality, locally-sourced organic products.

Improved Sustainability: By working together, cooperatives can help farmers implement more sustainable farming practices, reducing their impact on the environment and promoting long-term viability.

Better Prices for Farmers: Cooperatives will help farmers negotiate better prices for their products as the base price will be already fixed for the given produce. This will ensure a fair price for products making farming economically viable for farmers.

Enhanced Market Presence: Cooperatives can enhance the visibility of organic products in the market thereby increasing demand. For instance, with its extensive reach, Amul can ensure that products reach all corners of the country.

Improved and Easier Quality Control: Cooperatives implement strict quality control measures to ensure consumers receive high-quality organic products. For e.g., Amul has installed milk quality checking technology at every raw milk gathering point, to instantly assess the quality.

This also helps build consumer confidence and trust in the availability of quality organic produce.

Support for Small and Mid-Size Farmers: Cooperatives will provide support and resources for small farmers and FPO’s by helping them overcome the challenges of operating in a highly competitive market.

Promotion of Local Economies: By supporting local farmers and keeping money in the local economy, cooperatives can help promote economic development and growth in rural communities.