Problems of Rural Labour, Bondage, Migration in India

Bondage can be conceptualized as a social condition when a person sells himself away’ to his employer on condition of specific economic privilege. It is a system of institutionalized slavery where the labour does not have independence and freedom of right to work. The service is rendered for debt or in lieu of the interest accruing to the debt.

Bonded Labour

Labour which remains in bondage for a specific period for the debt incurred are called bonded labour. The debtor agrees to mortgage his service or services of any or all members of his familyfor a specified or unspecified period.

Two basic features

1. Indebtedness
2. Forced labour

Types of Bondage : National Commission on Rural Labour spelled out those four kinds of bonded labour
practice present in India:

1. Inter-generational bondage
2. Loyalty bondage
3. Bondage through land allotment (attached)
4. Bondage of the distressed widows.

Causes of bondage: The main causes of origin, growth and perpetuation indebtedness and bonded labour system are economic. Though the social and religious factors too support the custom.

Economic factors

1. Extreme poverty of people
2. Inability of people to find work for livelihood
3. Inadequate rise of land- holdings to rapport family
4. Lack of alternative small scale loan for the rural and urban poor
5. Natural calamities like drought flood etc
6. Meagre income from forest produce (tribes)
7. Inflation and constant rising price.

Social factors

Expenses on occasions like marriage, death, feast, birth of a child etc., leading to heavy debt (R.S.Sharma) Caste based discrimination

1. Lack of concrete social welfare schemes to safeguard against hunger and illness
2. Non-compulsory and unequal educational system
3. Migration.

Religious factors :

References from religious texts are given and religious arguments are used to convince the people of low castes that religion enjoins upon them to serve people of high castes. Illiteracy ignorance, immaturity and lack of stability and professional training sustain such attitude.

Broadly speaking it may be concluded that bondage originates mainly from economic and social pressures.

1. Utsa Patnaik : Persistence of Feudalism in Indian agriculture is greatly responsible for the continuity of bondage in the countryside. In rural sector feudalism is persistent because traditional landlords do come from upper caste and hence relationship between caste and agriculture is absolutely profound. Low castes either work as tenants or share-croppers going for traditional method of contract and low caste of untouchables who are landless in order to avoid distance migration opt for bonded labour.
2. Ashok Rudra, Pranav Vardhan and Arvind S. Das : Bonded labour persists under the disguise of attached labour in capitalist agriculturalist market More intensive is the capitalist development highest is exploitation that results in consolidation of bonded labour.
3. Shashi Kumar : When man migrates from village the women and children are reduced into bonded
   labour by the local landlords.
4. Lahiri : In West Bengal Baramasic contract system is a form of disguised bonded labour. In this system the labourer is given some advance, free food, shelter to work for the master throughout the year. Due to poverty borrowing continues so is attachment with the family.
5. Hanumanth Rao : Bonded labour is a product of regular natural disaster, uneven distribution of land in countryside, fragile ecology, intensive caste based exploitation, perpetual poverty, lack of alternate source of livelihood.
6. Jodhka : Bonded labour practice in the country is the product of the survivalist necessity of the rural poor corresponding with the innovative saving techniques identified by rural rich.
7. Due to Green Revolution the states like Punjab and Haryana received high rate of migrant labour from poor states who got trapped in bondage.

Today’s Scenario – Magnitude of Bondage in India : Bonded labour system has been enlisting in Indian Society among agricultural labourers in the name of beggar and ryots. Today it has extended to workers working in brick kilns, bidi factories, stone quarries, glass factories and in detergent, carpet, gem stones and many other factories.

1. The cultural environment of exploitation under which the practice of bonded labour flourished witnessed all forms of exploitation and oppression ranging from child labour to the sexual exploitation of bonded women.
2. Nadeem Hasnain in his study of Kolta bonded labour found that untouchables were barred by custom from owning land It was further compounded by the social ban on keeping or touching gold thus making him totally vulnerable to any economic exigencies when a Kolta would be having nothing except his body which becomes a ready object of mortgage.
3. Foundation and National Labour Institute in combined study of bonded labour in 1978 found out that around 2.6 Lakh of workers in India are either bonded worker or are attached workers. It is based on survey of thousand villages spreading in ten states.
4. National Commission on Rural Labour in a study found out that bonded labour is largely used in agriculture sector, plantation sector. Child labours in bonded from is greatly used in hazardous sectors.
5. Among many socio-economic disabilities the untouchables have been suffering form their customary landlessness, the scheduled castes of today are the worst victims of dept bondage.
6. Deccan Development Society found out in its study that 533 children and 786 adults are pushed into the state of bonded labour.
7. NHRC in a case brought before it found out in Jharkhand how a person was forced to work for 20 years because of non-payment of Rs.2000.

Steps taken and Suggestions :

1. Constitution prohibits begar (forced labour) under Acticle 23.
2. Through Bonded Labour System (Abolition) Act 1976 the Government tried to tackle debt bondage head on.
3. NHRC has developed a core groups for the identification and rehabilitation of bonded labour.
4. Centrally-sponsored scheme is launched for the abolition of bonded labour for the provision of offering Rs.20000 to every bonded labourer rehabilitated.

This scheme has been revised in 2016.The quantum of financial assistance has been increased from 20 thousand to1 Lakh rupees. While the most deprived and marginalized like disabled female and children rescued from trafficking, sexual exploitation and transgender will get Rs. 3 Lakhs. The special category comprising of Females and minors who will now get Rs. 2 Lakhs.

One of the special features of the new scheme is that it aims ot address new forms of bondage such as organized begging rings, forced prostitution and child labour for which females, disabled and trans genders are mercilessly used by the powerful elements.

5. Different NGOs like Sahyog, Mahila Samakhya, Sankalp and Bachpan Bachao Andolan are working in the area of the abolition of bonded labour.
6. The problem of bonded labour should be understood from the perspective of larger social situation.
7. Various policies to eradicate it need to emphasise on poverty alleviation measures.
8. Elimination of feudalistic ideology.
9. Intensive caste based inequality need to be checked.

Feminisation of Agriculture

Indian agriculture is facing contradictory situation. On one hand rural rich is doing contract forming, employing new technology. While rural poor are migrating to cities in search of letter job opportunities.

A regular migration of the small formers and agriculture labour to the urban areas or to other activities
have led to tremendous pressure on rural women. They are forced to do agriculture on their own with what ever possible means.Also the percentage of women is agricultural labour has been on rise. This points to feministaion of agriculture in India.

It has positive as well as negative consequences for women. Lets see positive one first

1. Feminisation has helped women to be come independent and to take independent decision
2. They have become responsible enough to go to the block officers or to the panchayat executives for their grievance redressaL
3. They have also learnt skills of alternative employment.
4. Urvashi Jain in her study of kasaba area of Bihar found that they are engaged in money types of activities.

They are rearing goats, chicken and sometimes also selling vegetables in the market Nevertheless, It also affected them in negative ways.

1. Social cleavages and gender discrimination come into way of entrepreneurial forming
2. Low level of skilling, know-low and absence of social capital / networks has led to low level of production for them.
3. Women are paid less as agriculture labouress then men. So it has led to exploitation
4. Agriculture as informal orientation so women suffer from lacunas of informal sector.Such as absence of social security, seasonality of work, low pay and absence of gendered need such as crash facilities, much maternity benefits and toilet facilities.

Thus feminization of agriculture do contributing to upliftment of women but still it has not crossed the
mark of good business for women. Indian agriculture needs modernization along with feminization to cater to women’s need of employment and business opportunities.

Labour Migration

Labour migration is an important factor affecting the course of socio-economic development in India. Accelerated movement of people originating mainly from the rural and backward areas in search of employment has been one of the most important features of the labour market scenario in India during the post-Independence period.

According to the 1991 Census, 226 million persons have changed their places of residence within the country. Such large scale labour migration obviously has raised a number of concerns in relation to the social and economic policy framework in India. Concern has been expressed over the economic, social and political marginalization of migrant workers, especially of those unskilled people moving from relatively deprived and depressed areas in search of gainful employment and living.

Nature of Labour Migration :

1. As majority of the occupation in which migrant labourers are engaged do not prefer women workers, most of migrants are males who migrate individually.
2. This is, however, not the case in certain occupations in which family migrations is cheaper for the employer. Sugarcane is a case in point Brick kiln and construction are other examples which attract family labour.
3. Majority of the migrants belong to the backward and scheduled castes as well as scheduled tribes being either landless or too poor.
4. Labour migration is a complex phenomenon and encompasses different streams which vaiy in duration, nature of origin and destination areas and characteristics of migration process.
5. The nature of contemporary labour migration can be examined at various levels depending on the degree and extent of vulnerability to which the migrant worker is exposed.These levels are : migration for survival subsistence.

Magnitude of Migration :

Of the 226 million persons who changed places within the country as per the 1991 Census, only 17.3 million or 8.8 per cent persons are reported to have moved for employment reasons. Several studies and reports on migration, however, have indicated that the Census data suffers from several limitations while estimating labour migration for employment The main limitation is that the data ignores or severely underestimates short duration and seasonal/circular migrants. The extent of this under reporting is very clearly brought out by the National Commission on Rural Labour (1991). The Commission estimates more than 10 million circular migrants in the rural areas alone.These include an estimated 4.5 million inter-State migrants and 6 million intra-State migrants.

Main reasons for Labour migration :

1. Accelerated development of capitalist form of agriculture i.e. non-participation of family labour among the rich and middle peasants and changes in frequencies of cropping due to the adoption of advanced technology in agriculture,
2. Reduced demand for permanent labour due to mechanized farming and marginalization of farmers and artisans in rural areas due to resource constraint and compulsion to augment their earnings by seasonal labour also affect the migration,
3. Other reason which cause the migration are failure of land reforms, Depletion of resource base for tribes. High rates of population growth in the rural areas, Increase in the proportion of landless labourers, and
4. Lack of adequate expansion of non-farm employment.

Condition of Migrant Labourers and there Exploitation :

1. The migrant workers are generally exploited They are made to work for long hours and the wages paid to them are lower than the local labourers, in fact, below the level of prescribed minimum wage.
2. Taking advantage of their illiteracy and poverty, middle-men practice exploitative recruitment practices and in many cases, retain a major portion of their wages as their own commission. Moreover, wages are adjusted only at the end of the season and workers are paid some advance, which are not at all sufficient to meet even the basic requirements.
3. The conditions of women labourers are far more unsatisfactory. Contrary to provisions of equal Remuneration Act, women migrant labourers are invariably paid lesser wages as compared to their male counterparts in many sectors.Sexual exploitation of the women migrant labouerers especially the tribals is also a matter of deep concern.
4. In addition, migrant workers do not have access to the public distribution system or other municipal services. They are provided with free medical facilities.
5. Their non-inclusion in electoral rolls also deprives them of political patronage and results in their extreme political marginalization.
6. The employers and contractors also adopt exploitative practices against the migrant labour. They employ various methods to circumvent the provisions of the Inter-State Migrant Workmen Act (ISMW) framed by the Centre in 1979to regulate the employment of inter-State migrant workers.The contractors inter-alia, split establishment in such a way so that license is not required as envisaged under the Act for employing more than 5 migrant workers.
7. The contractors also evade the provisions of the ISMW Act by registering migrant labour with the local employment exchange and then contend that ISMW Act does not apply.
8. A major shortcoming of the ISMW Act is that it does not apply to those migrants who undertake migration on their own and also to long distance migration whether voluntary or sponsored within the state boundaries.Thus, a significant proportion of migrants are excluded from the purview of the Act.
9. The effective implementation of the ISMW Act hinges on its Section 20, which provides for appointment of inspectors to inspect whether provisions of this Act, in relation to payment of wages, conditions of service and facilities are being complied with. But none of the State governments have evolved any institutional modalities for carrying out inspections outside States for enforcement of the Act.

Some interesting insights on migration provided by Census of India 2001

1. During the reporting period 30% reported as migrants by place of birth.
2. During the last decade (1991-2001), the number of migrants in India (excluding J & K) rose by 32.9%, the total number of migrants by place of last residence in India (excluding J & k) grew by 34.7% during1991- 2001.
3. High growth (53.6%) among inter-state migrants was also observed
4. Total migrants by last residence (0-9 yrs.) accounted to 98.3 million.
5. 43.8% moved due to marriage, 21.0% moved with their households, 14.7% migrated due to work, 6.7% moved after their birth, 3% for educational purpose, 1.2% for business and 9.7%specified other reasons.
6. About 42.4 million migrants out of total 65.4 million female migrants cited marriage as the reason for migration.Among males the most important reason for migration was ‘Work/Employment’,12.3 million out of 32.8 million total male migrants migrated due to this reason.
7. During the decade, out of the urban growth of 30.3 per cent, 6.6 per cent is accounted for by migration to urban areas.
8. If one takes away those migrants who moved due to marriage, the total number of migrants falls from 98.3 million to 55.2 million. Total number of migrants among males and females were 32.2 million and 22.9 million respectively.
9. Migration streams (during the last decade)
   • Rural to rural migration within the country: 53.3 million
   • Rural to urban migration: 20.5 million
   • Urban to rural migration: 6.2 million
   • Urban to urban migration:14.3 million.
10. Uttar Pradesh (2.6 million) and Bihar (-1.7 million) were the two states with largest number of net migrants migrating out of the state.
11. The total number of inter-state migrants was 42.3 million and those who were born abroad account for 6.1 million. About 97% of these migrants by last residence were from the eight neighboring countries (including Afghanistan).

Major Problems Encountered By Migrant Labourers :

Some major problems encountered by the migrants in their areas of employment include,

1. Premature termination of job contracts,
2. Hanging the clauses of contract to the disadvantage of the workers,
3. Delay in making payments,
4. Violation of minimum wage standards,
5. Forced over-time work without returns,
6. In the case of most intra-state and inter-state unskilled and semiskilled migrants, migrant labourers run high risks of exploitation for they are exposed to large uncertainties and lack access to information and knowledge. Thus making it very difficult for them to switch jobs in case of dissatisfaction with the current employer.
7. Because of their optionless situation, these labourers lack bargaining power and thereby fail to negotiate reasonable pay scales and fair working conditions with the contractors.
8. Most migrants live in open spaces; make shift shelters or illegal settlements, which lack the basic infrastructure and access to civic amenities. They have no local ration which can provide them their food at subsidized rates through the Public Distribution system.
9. They are highly prone to occupational health hazards and vulnerable to epidemics including HIV/AIDS.
10. Since the migrants are mobile, their children have no creche facilities or access to schooling. They do not come under the purview of either the local government or the NGO Programmes for they do not belong to that particular region. So citing the problem of monitoring, most agencies leave them outside the scope of development intervention.
11. In India, migrant labours are largely found in the developed states. The traditional migrants coming from underdeveloped regions of the country are the most marginalized sections of society, namely the Tribals and the Scheduled Castes.These migrants are entirely without legal protection or social security. They are “invisible”,and are not acknowledged They are denied access even to basic amenities in most of the cases. They have no identity in the places where they live and no voice in the places they have left behind
12. Migration offers a very fertile ground for traffickers. In India, migrants who leave their homes in search for better employment opportunities and marital prospects, fall easy preys to traffickers for want of adequate information. Alongside cross-border trafficking, internal trafficking of women, children and men for purpose of sexual exploitation, domestic servitude, bonded labour and indentured servitude too is widespread.

Cooperatives

The modern cooperative movementin India was started in1904 with the enactment of cooperative societies act, having the major objective to free of the farmers from the clutches of zamindars and money lenders from being exploited and oppressed Initially it was limited to agricultural credit only but slowly its area of action was elongated to cover marketing, consumers, agriculture, bank and housing.

Characteristically modern cooperative is organized on certain principles. Sociologically one of the important principles is: equality among members and democratic rule in management, eventually it establishes equality on one side and removes exploitation on the others.

The Simple meaning of cooperative is working together of the people associatively under common interests to achieve some specific goal. In India it was planned to achieve these goats through cooperative societies. It could be seen in two ways :

1. Cooperation between individual and cooperative institution.
2. Cooperation between collectivity and cooperative institutions in India,

Cooperatives work at the following levels:

1. Cooperative credit society- for credit purposes;
2. Cooperative agriculture society – for agricultural needs;
3. Industrial cooperative society – small and cottage industry/marketing;
4. Consumer Cooperative society – like Milk and milk products
5. Housing cooperative society
6. Multi-purpose tribal cooperative society- for tribal’s vivid needs.

Emergence of cooperatives in India : Background

1. Though, in India, the emergence of cooperative is traced from 1904 and it was functional in some areas, but a consensus could not have developed for the same owing to a low level of awareness among people towards it Leaders like Gandhi and Nehru accompanied by the socialist and communist leaders advocated cooperative farming to eradicate agrarian inequality and exploitation and to increase agricultural production at low cost along with bringing awareness among the people.
2. It was believed the cooperative was an important element (source) to bring institutional change through land reforms. In this reference, in 1949, the congress Agricultural Reformation Committee (Kumarappa Committee) suggested that the states should be given rights to implement different cooperatives according to different levels of farming. It was also found Nehru was ardent supporter to it and he was greatly in favour of Chinese Model the positive consequences of which were boastfully presented.
3. To ascertain the reality, two Indian delegates, one of planning commission and other of Food and Agriculture Ministry, were sent to China. Both reached to almost same conclusion and favoured heavily to cooperative farming. Therefore, it was estimated that agri production could be increased by 25.35% through it.

Nagpur convention, 1959 (AICC) also proposed that nature of farming in future should be cooperative.

Suggestions

1. Establishment of Cooperative Societies
2. Time – Duration:Nation-wide in the next three years
3. Removal of property/Land-owning class through compulsion, if required

(It was vehemently opposed, Consequently Nehru deleted the element of compulsion).Workers would be trained to request and make people understand the meaning of cooperative farming and to
agree to it But it failed to operate properly. Furthermore, cooperative farming was seen at two levels:

1. At the Initiation of Landowners: Objective was to escape land-reforms and to get the maximum benefit provided by, state. It would demoralize small farmers.
2. In the form of Pilot project. It was applied to infertile land distributed among landless. The plan of action was to make it fertile before cultivation. But being highly cost-ridden it also failed.

Service Cooperatives :

To avail farmers different agriculture based services so that they could enhance productivity individual
issues were included.

Social Consequences of Credit System :

In 1951-52 – Total Credit Rs. 23 Crore
In 1960-61 – Total Credit Rs. 2 billion
In 1992-93 – Total Credit Rs. 49 billion

1. But most of the benefits went in the hands of big landowners Daniel Thorner, T.K. Oommen and Surinder Jodhka have corroborated it in their studies.
2. Wolfe who, was fully aware of the demerit of cooperative movement, instead he commented in the annual note of World Bank that cooperatives have benefited millions of farmers in India and without it rural India can not be properly imagined and portrayed.
3. It has improved upon all socio-cultural-eco-politico aspects of farmers life and they have oriented towards educational mobility.

Cooperatives and Caste in Maharashtra : A case study (B.S. Baviskar)

1. Cooperatives in Sugar Mills : 28 Mills in Ahmednagar alone there are 8 cooperative mills under his study.
2. Established in 1953 and started operating in 1955-56 which ‘he named ‘Kisan’

Conclusion : Kisan has played an important role in the transformation of social and economic life in the nearby areas. In this Baviskar proves that among different examples, the sugar mills of Maharashtra have been excellent examples in cooperatives. They have not only shown different dimensions of success but also have paved the way to abolish exploitation and oppression in the concerned area. It has been phenomenal in creating a world view among people regarding cooperatives.

Anand Model :

Another successful example of cooperatives in Gujrat’s Kaira (Khera) districts Anand’ milk producers initiated with 250 litres milk.

Important Leaders : Gandhian Tribhuvan Das Patel; Vergese Kurien.

The Union started with 2 village cooperative institutions and 100 members. In 1995, total number of
institutions rose to 954 and membership – 5 lakh 37 thousand Milk production increased from 250 per litres day to 10 lakh liters per day and today it is at the level 10 million liters/day. The surplus is used for the production of milk powder, butter, cheese, etc. for which the union used the term AMUL, which left behind many big companies like Nestle and Glaxo.

Social Consequences :

1. Enhancement of life-style of villagers especially of poor farmers – 50% of their total income comes from Dairy.
2. Some part of cooperatives income – for civic amenities and schools etc.
3. Establishment of democratic functioning – so no discrimination.
4. No discrimination on the basis of caste, class, sea, religion.
5. Its success incited in then PM Lib, Shastri to appeal the people to adopt Anand ModeL On his initiative, NDDB National Dairy Development Board was established in 1965.
6. As study done by World Bank Evaluation Department of ‘Operation White Flood’ (Wilfred Kaller and Nalini Kumar) reveals a great success of Anand Model. The positive Consequences of which are spread almost all parts of the country. Its great success is seen in women’s empowerment and children’s (especially female) education. With the help of SEWA, nearly 6000 women dairy cooperative committees have been set up.

Anand Model : Operating also for fruits, vegetables oil production, salt production etc.NDDB’s ‘Dhara’ brand is equally famous like AMUL. Inspired by its success, people (experts) from many developed countries come here to study, which is a great achievement of India.

Evolution of Cooperative in India: An article by Daniel Thorner

1. The First Plan approached the issue more judiciously and recommended that small and medium farms in particular should be encouraged and assisted to group themselves into cooperative farming societies. The Plan did not talk of any enforcing powers to the state, thangh it did envisage some amount of compulsion when it suggested that if a majority of the owners and occupancy tenants in a village, owning at least half the land of the village, then their decision should be binding on the village as a whole.
2. The early planners had hoped that the village panchayat activated by motivated party workers and aided by the trained workers of the newly launched Community Development programme (in October 1952) would not only help implement rural development projects but would help bring about critical institutional changes in Indian agriculture, for example by assisting in the implementation of land reforms, by organizing voluntary labour for community work and by setting up of cooperatives. Further, there was a high and growing level of expectation, in the initial years, regarding how much such institutional changes, particularly cooperativization, would substitute for investment outlay in agriculture, in achieving the planned targets of rapid increases in agricultural production.
3. The Second Plan reflected this expectation by declaring that ‘the main task during the Second Five-Year Plan is to take such essential steps as it will provide sound foundations for the development of cooperatives so that over a period often years or so, a substantial proportion of agricultural lands are cultivated on cooperatives lines. However, even the ambitious plan of having a ‘substantial’ proportion of agricultural lands under cooperatives within ten years soon appeared to be too modest once exaggerated reports started pouring in of the dramatic increases in agricultural output achieved by China through measures such as cooperativization. (It was many years later, after Mao’s death in 1976, that this myth was destroyed By one estimate, China agricultural growth rate between 1954 and 1974 was only 2 per cent, which was actually lower than India’s which was 2.5 per cent).
4. In the middle of 1956 two Indian delegations, (one of the Planning Commission, the other of the Union Ministry of Food and Agriculture), consisting of leaders of the cooperatives movement in India, members of parliament, bureaucrats involved with cooperatives, technical experts and planners, were sent to China to study how they organized their cooperatives and achieved such rapid increases in agricultural output Underlying these visits was the feeling that the targets of agricultural growth envisaged by the Second Plan were inadequate and required an upward revision and the Chinese experience could show how these targets could be achieved without significant increases in outlay.
5. The two delegations arrived at quite similar conclusions. It was reported that China had achieved remarkable increase in food grains production and extension of the agricultural infrastructure through cooperativization. They both recommended a bold programme of extending cooperative farming in India. Jawaharlal Nehru, who was deeply committed to the idea of cooperativization, started putting pressure on the states to emulate the Chinese example and commit to higher food production on the basis of institutional changes in agriculture, i.e., without demanding additional funds for investment in agriculture. The National Development Council and the AICC now set targets even higher than the one envisaged by the Second Plan, proposing that in the next five years agricultural production be increased by 25 to 35 per cent if not more, mainly by bringing about major institutional changes in agriculture such as cooperativization. The states, however, resisted any large-scale plan for cooperativization, agreeing only to experiments in cooperative farming and that too if they remained strictly voluntary.
6. The Congress under Nehru’s persuasion continued to mount pressure in favour of an agricultural strategy based critically on institutional change.
7. The Third Plan, in sharp contrast to the Second reflected the mellowed position regarding cooperativization and took a very pragmatic and cautious approach. As regards cooperative farming, it accepted a modest target of setting up ten pilot projects per district At the same time it put in the caveat that ‘cooperation in credit, marketing, distribution and processing, the growth of rural industry, and the fulfilment of the objectives of land reform. This sounded like a wishful platitude not a plan of action.

Structure and Significance of Co-operatives

The cooperative structure in India consists of different constituents.At the bottom of this structure are the primary societies which render various types of services. Of this large number about 80% is concerned with agriculture. Most of these societies, about 60% deal with credit only.Thus a large majority of primary societies are related to agriculture and credit They perform various functions such things as credit, irrigation, marketing, transports etc. These are generally divided into two groups:

1. Credit societies, and
2. Non-credit societies.

Each of these two sub-groups is further split up into sub groups :

1. Agricultural societies, and
2. Non-agricultural societies.

Agricultural societies (both credit and non-credit are found in urban areas. For supervision and financial assistance to cooperative credit societies there are central banks and state cooperative banks. The central banks supervise the functioning of the primary societies of a district or part of a district and offer financial assistance to them. Their capital is drawn from public deposit, share capitals and loans from other sources. Because of variety of sources from which these banks can draw money, they act as a link between cooperative societies and the money market They function as balancing centers by diverting funds of surplus societies to the needy societies; they also perform ordinary banking functions also.

At the top of the cooperative credit are the state cooperative banks, at the state level known as the apex bank. It controls the working of central banks and provides finance to them. It also acts as the link between Reserve Bank of India from which it borrows and the central banks and primary societies. It directs the cooperative movement in the state. Its capital comes from share capital, public, deposits and loans and advances from the state and Reserve Bank of India. The National Cooperative Union of India is the apex organization promoting the cooperative movement in the country.

All the above mentioned institutions are concerned with short and medium term credit of people. Long term loans are given by Land Development banks, which have a unitary structure having branches at different places. These banks obtain their funds from share capital, reserves, deposits, issue of bonds and debentures. However, the major part of their resources is drawn from the floating of ordinary debentures in the market.

The investors in these debentures are LIC, commercial banks, cooperative banks, central and state
governments and Reserve Bank of India, Cooperation in a vast country like India is of great significance because:

1. It is an organization for the poor, illiterate and unskilled people.
2. It is an institution of natural help and sharing.
3. It softens the class conflicts and reduces the social cleavages.
4. It reduces the bureaucratic evils and follies of political functions.
5. It overcomes the constraints of agricultural development
6. It creates conducive environment for small and cottage industries.

Limitations of cooperativization

Given the policy stalemate reached, it is not surprising that the progress that the cooperative movement in India, by and large, fell far short of the goals set by its early proponents. Most of the weakness that Daniel Thorner, the noted economist, had observed during his survey of 117 of the ‘best’ cooperatives all over India between December 1958 and May 1959 remained largely true in the years to come.

As for joint farming, two types of cooperatives were observed :

1. First, there were those that were formed essentially to evade to land reforms and access incentives offered by the state. Typically, these cooperatives were formed by well-to-do, influential families. Forming a cooperative helped evade the ceiling laws or tenancy laws. The influential members got the lands tilled by the bogus members who were essentially engaged as wage labour or tenants. Moreover, forming these bogus cooperatives enabled the influential families to take advantage of the substantial financial assistance offered by the state in the form of a subsidy, as well as get priority for acquiring scarce agricultural inputs like fertilizers, improved seeds and even tractors, etc.
2. Second these were the state-sponsored cooperative farms in the form of pilot projects, where generally poor, previously uncultivated land was made available to the landless, Harijans, displaced persons and such underprivileged groups. The poor quality of land lack of proper irrigation facility, etc., and the fact that these farms were run like government-sponsored projects rather than genuine, motivated joint efforts of the cultivators led them to be generally expensive unsuccessful experiments.
3. In any case, the hope that the service cooperatives would facilitate the transition to cooperative farming was completely belied Cooperative farming had spread to negligible levels beyond the government projects and the bogus cooperatives.
4. The service cooperatives not only reflected the iniquitous structure of the Indian countryside but also tended to reinforce it Typically, the leadership of the cooperatives, i.e., its president and treasurer, consisted of the leading family or families of the village which not only owned a great deal of land also controlled trade and money lending.These well-to-do families, the’big people’ or the ‘all in alls’ of the village were thus able to corner for themselves scarce agricultural inputs, including credit In fact, quite often, low interest credit made available through cooperative rural banks was used by such families for non-agricultural business, consumption and even money lending.
5. It was a case of public subsidy being used by a non-target group for private investment. These institutions were taken over by the dominant section in the village, which used them to further buttress their economic and political influence.
6. The village poor got little out of these institutions in the early years. An example at hand is the constant refusal to implement the elaborate recommendation made by the Reserve Bank of India in 1954 that rural credit cooperatives were to give credit to the cultivator as the producer of a crop and not as the owner of land This refusal of the cooperatives to issue ‘crop loans’ or loans in anticipation of the crop being produced and their insisting on credit being given on land as security, meant that the landless were essentially excluded from this scheme.In 1969, The Reserve Bank observed that tenant cultivators, agricultural labourers and ‘others’ secured only 4 to 6 per cent of the total credit disbursed The Report of theAll-India Credit Review Committee, 1969, and the Interim Reporton Credit Services for Small and Marginal Farmers produced by the National Commission on Agriculture,1971, confirmed the virtual exclusion of the landless and added that the small and marginal farms were also ata considerable disadvantage vis-a-vis die bigger cultivators in accessing credit from the cooperatives and even from the nationalized banks.
7. A common shortcoming of the cooperatives movement was that instead of promoting people’s participation it soon became like a huge overstaffed government department with officials, clerks, inspectors, and the like, replicated at the block, district, and state levels. A large bureaucracy, generally not in sympathy with the principles of the cooperatives movement and quite given to being influenced by local vested interests, instead of becoming the instrument for promoting cooperatives, typically become a hindrance.
8. Yet, over time, the service cooperatives, particularly the credit cooperatives, performed a critical role in Indian agriculture. The Primary Agricultural Credit Societies (PACS), which were village level cooperative societies performed better.
9. The cooperative credit societies, however, suffered from a major drawback, that of failure to repay loans and, consequently, a very large percentage of overdues. Between 1960 and 1970, overdue of the primary societies rose from 20 to 38 per cent of the credit disbursed The situation continued to deteriorate with the all India average of overdue. Rising to 45 per cent in the mid-seventies and many provinces reaching totally unviable figures, like 77 per cent in Bihar. Quite significantly, it has been observed that the defaulters were not necessarily the poor and small farmers but more often the well-to-do ones. With the growing political and economic clout of the well-to-do peasant, the problem of overdues had reached dangerous proportions, affecting the viability and growth rate of rural credit institutions. Populist measures like the decision of V.P. Singh’s National front government in 1990 to write-off all rural debts up to Rs 10,000 not only put a heavy burden on the national exchequer but further eroded the viability of rural credit institutions.
10. Service cooperatives had started to play a very important role in rural India. Their role in making available a much increased amount of cheap credit to a wider section of the peasantry was critical. They not only helped in bringing improved seeds, modern implements, cheap fertilizers, etc., to the peasants, they also provided them with knowledge of how to access them.And, in many areas they also helped to market their produce. In fact, in many ways they provided a necessary condition for the success of the Green Revolution strategy launched in the late sixties, which was based on intensive use of modern inputs in agriculture.
11. A study done by the World Bank of Operation Flood details how the effort to replicate the Anand Pattern’ paid rich dividends. A brief summary of the finding of this study how the complex multi-pronged, similar to those achieved in Gujarat, were now spread to other parts of the country.
12. The obvious impact of Operation Flood was the considerable increase in milk supply and consequent increase in income of the milk producers, particularly the poor. While national milk production grew at 0.7 per cent annum till 1969. it grew at more than 4 per cent annually since the inception of Operation Flood Further, village level enquiries showed that dairying was increasingly becoming an important activity of the farmer and in some cases becoming the main source of income, particularly among the poor. It was estimated that 60 per cent of the beneficiaries were marginal or small farmers and landless, and the extremely poor and needy (destitute, widows, landless, and near landless) in certain “spearhead” villages (was) unusually noteworthy. Milk cooperatives thus proved to be a significant anti-poverty measure.
13. In this connection, the Work!Bank report highlighted an important lesson learnt from Operation Flood a lesson with major politico-economic implications. The ‘lesson’ was that ‘by focusing a project on a predominant activity of the poor, “self-selection” is likely to result in a major portion of the beneficiaries being poor’ thus reaching ‘target’ groups which generally prove ‘elusive to reach in practice’. Further, it may be added that the Anand type milk cooperatives reached the poor irrespective of caste, religion or gender, without targeting any of these groups specifically.Similar objectives were met by the Employment Guarantee Scheme first launched in rural Maharashtra in the mid-seventies, followed by a few other states includingAndhra Pradesh.The chief beneficiaries of this scheme were the landless who were predominantly from among theScheduled Castes or Scheduled Tribes, i.e., they got ‘self-selected’ though the scheme did not exclusively target these groups. Such programmes had the important advantage of reaching certain deprived section without exclusively targeting them. This prevented an almost inevitable opposition or even a backlash among the groups excluded which has so often been witnessed in scheme in India as well as in other countries, such as the US, where benefits were sought to be given exclusively to a particular community or group.
14. As in the case of Anand the impact of milk cooperatives and Operation Flood went way beyond just increase in milk supply and incomes. As the World Bank study reported A by-product impact of Operation Flood and the accompanying dairy expansion has been the establishment of an indigenous dairy equipment manufacturing industry (only 7 per cent of dairy equipment is now imported) and an impressive body of indigenous expertise that included animal nutrition, animal health, artificial insemination, management information system, dairy engineering, food technology and the like. The indigenization of the infrastructure and technology and the training of rural labour for performing a wide range of technical functions is said to have considerably lower costs, making it possible to procure and account for minute quantities of milk brought in by the producers, without raising costs to an unviable level.
15. Operation Flood spread and even intensified the impact of the milk cooperatives on women and children and on education. Realizing the potential of empowering women through this movement, Operation Flood in cooperation with NGOs like SEWA (Self-Employed Women s Association) established about 6,000 women dairy cooperative societies (WDCS) where only women were member and the management committees also were constituted exclusively of women. These cooperatives were seen to be generally more efficiently run than the male-dominated cooperatives. They gave women a greater control over their lives through the milk income accruing to them and also enabled them to participate in decision-making outside their homes, giving full play to their managerial and leadership potential Further, field level observation showed that the milk income in the poorer villages often made it possible for children to attend school while in better off villages it contributed to children staying in school longer, that is, it reduced the dropout rate. In still wealthier villages, where all children went to school a part of the earning of the cooperative was used to improve the facilities in the school The field surveys also confirmed that increased school attendance for girls was perceived as a very common effect of the dairy cooperative societies. Greater family income and the women involved in dairying being able to stay at home instead of going out for wage labour relieved children from having to earn a wage or look after household chores. Instead, they attended school.
16. The spread of the ‘Anand Pattern’ was not to be limited to milk. Cooperatives for fruits and vegetable producers, oilseeds cultivators, small-scale salt makers and tree growers were started at the initiative of the NDDB. Again the Kaira Union provided the technology as well as the trained personnel to help this process. Often the resistance from vested interests, particularly the powerful oilseeds traders, was vicious. In some regions of the country, the NDDB team which tried to make the initial moves towards setting up cooperatives was threatened with physical violence and there were cases where workers died in ‘mysterious’ circumstances. Yet, the movement has progressed In many parts of the country cooperative of fruits and vegetables are beginning to be as common as milk outlets.The ‘Dhara’ brand of vegetable oils, a child of the NDDB effort, is beginning to represent in the area of vegetable oils what ‘Amul does in the area of milk and milk products.

Conclusion

This has been one of the major achievements of post-independence India.The search for cooperatives led to Indian delegations going to China in the mid-fifties; today scores of countries send delegations to India to study and learn from the Anand experience.An indication of the impact this experiment had at the grassroots level was the statement made by a poor farmer in a village near Anand in 1985, ‘Gujarat is fortunate to have one Kurien; if only God would give one Kurien to every state, many of India’s problems would be solved.’ This poor Gujarat peasant who in his personalized way trying to explain to us the magnitude of the success of this experiment with reference to Kurien, a Syrian Christian from Kerala, will surely feel out of tune with the Hindu communal upsurge his state witnessed in early 1999, where Christians were hounded and attacked their religion presumably making them anti-National!