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PolicyImpact upon Development of Co-operatives in Nepal ( A Concept Paper for PhD)

 PolicyImpact upon Development of Co-operatives in Nepal ( A Concept Paper for PhD)

PolicyImpact upon Development of Co-operatives in Nepal

 

 

 

 

 

A Concept Paper

 

 

 

 

 

 

Submitted to:

….., University, ….

 

 

 

 

 

 

Submitted By:


 

Policy Impact upon Development of Co-operatives in Nepal

Introduction

 

Nepal is an agricultural country. More than 60per cent of its population is dependent on agriculture. Some major constraints are poor irrigation facility, commercialization of inputs, land fragmentation, dearth of right kind of human resources, high cost of production and low return of output; poor food security mechanism etc.Major agriculture crops include paddy, maize, wheat, potato, buckwheat, vegetables and fruits,  sugarcane, tobacco etc. Moreover, livestock also is major sector of agriculture and includes cow, buffalo, poultry, fish etc. In the context of unavailability of modern agricultural technology, institutional loan, storage facilities, market, cooperative is an appropriate device was introduced as one of the important segments under the First Five Year Plan (1956-61). The cooperative development activities have been continued until the present Interim Plan.

The Cooperative Movement of Nepal has dramatically been changed by the enactment of Cooperative Act, 1992. But the cooperatives have numerical growth, the performance is still poor. The National Cooperative Federation of Nepal Limited [NCF], an apex body of the cooperative movement of Nepal, registered on June 20, 1993 under the Cooperative Act, 1992, was voluntarily and jointly organized by cooperatives of different levels on the basis of universally accepted cooperative principles. At present NCF has a membership of 3 Central Co-operative Unions, 1 National Cooperative Bank, 58 District Level Co-operative Unions and 7 Single Purpose Primary Co-operative Societies.

Besides the Ministry of Agriculture & Cooperatives and the Department of Cooperative, there is also a government institution, the National Cooperative Development Board, which is responsible for the development of cooperative policy and facilitation of cooperative business. The Cooperative Training Centre has been established for conducting cooperative training and education, a government owned institution. Others sectors which are of significance in Nepal are the dairy cooperatives, savings and credit cooperatives and women’s cooperatives.

Cooperatives are businesses owned and controlled by the people who use them. Cooperatives differ from other businesses because they are member owned and operate for the benefit of members, rather than earn profits for investors. Co-operative is a form of business enterprises, or community organization, incorporated in service to its members and users, in order to meet their common economic, social and cultural needs and aspirations. Co-operative is jointly-owened and democratically controlled by its members and users on the basis of one member, one vote.

Co-operatives follow democratic, participatory and transparent decision-making processes and organizational structures so that their members and users (i.e. owners, workers and consumers) may be directly responsible for benefiting themselves and the society in general. Co-operatives are based on the value of self-help, mutual help, self-responsibility, democracy, equality, equity and solidarity. Co-operative members believe in the ethical values of honesty, owners, social responsibility and caring for others.

Co-operation as a form of human organization has been in existence since the beginning of civilization. In a broad sense, the differenttypes of exchangeand reciprocal relations which existedin pre-industrialsocieties and which were crucial for survival of its members could be regarded as co-operative action. These types of co-operation are however different from what we now understand as the co-operative movement. The origins of co-operation as a formal movement can be traced to the first half of the nineteenth century in the philosophy of Robert Owen(Bhowmik, 1988). The first co-operative was started bya handful of weavers in England in 1844 and was known as the Equitable Pioneers of Rochdale(Bhowmik, 1988). The basic principles governing the functioning of this co-operative were later adopted by the co-operative movement all over the world. These were, “one vote for each member, sale at market prices and division of profits among shareholders on the basis of the extent of patronage(Hough, 1966, p. 44).”

Co-operatives in the present do not function merely as mutual benefit societies. They have in addition certain social obligations which are spelt out in the principles of co-operation. The commission on co-operative principles, appointed by the International Co-operative Alliance in 1964, noted in its report that "co-operation at its best aims at something beyond promotion of interests of the individual members ...(Report of the Commission on Co-operative Principles, 1976)”. Its object is rather to promote the progress and welfare of the humanity. It is this aim that makes a co-operative society something different from an ordinary economic enterprise and justifies its being tested, not simply from the standpoint of its business efficiency, but also from the standpoint of its contribution to the moral and social values which elevate human life above the merely material and animal. This implies that there is a qualitative difference between the earlier forms of co-operation and the present co-operative societies. The earlier exchange relations were a result of the existing socio-economic formations. These relations were not aimed at altering the economic relations in the society they operated in.

On the contrary, they played a functional role and contributed towards perpetuating the system. The co-operative movement on the other hand grew out of a need to change the existing society. The early co-operators such as the Rochdale Pioneers and Robert Owen in England, Herr Schulze and F W Raiffeinsenin Germanypropagatedthe co-operative movement as an alternative to the exploitative nature of capitalist society in nineteenth century Europe(Bhowmik, 1988). Co-operation for them was a vehicle through which capitalist exploitation couldbe replacedby an egalitarian and just society. They envisioned co-operatives not as bodies which were functional to their respective societies but as instruments for transforming their societies. In this way, the objectives of co-operatives differ not only from those of private enterprise but also from traditional forms of exchange and reciprocal relations.

Thus, in the context of Nepal, by Ashadh 2068 B.S.(16th July 2011)there are 23,301 registered co-operatives(2011). More than 50% co-operatives are of agricultural: agriculture, dairy, consumer, vegetables & fruits, , coffee, herbs, bee-keeping, poultry farming, fish keeping, etc. Among them,  Co-operatives are 103 in total. Out of them, 48  Co-operatives are existing only in Ilam District, eastern part of Nepal. There are 1,327 male members and 253 females(Statistical Record of Co-operative Organization in Nepal Ashadh 2068 B.S., 2011).Every organization is guided and affected by the co-operative policies.  Co-operatives are also not aloof from it. Hence, the research on policy impact upon development of cooperatives is essential.

Objectives of the study

            The importance and possibilities of the co-operative in the socio-economic development of the poor and marginal people are multifarious. They have a number of contributions in the local resource generation and mobilization through the joint effort of the community. However, all these possibilities are promoted as well as limited because of the co-operative policy. Hence, the proposed study aims to undertake a survey amongst co-operative societies to assess, identify and evaluate the business, financial, social and managerial aspects of the selected co-operatives.

The specific objectives of the study are as follows:

·         To find out the socio-economic, managerial and operational performance, constraints and prospects of  co-operatives;

·         To identify the promotion and obstruction of co-operative policies to gain the best outstanding of the  co-operatives;

·         To provide recommendations to the future researchers on the ease and difficulties of co-operative policiesupon  co-operatives.

The Research Problem

 

What is the role of co-operative policy in the development of co-operatives?

What is the role of co-operatives to address the three pillars of the national economic policy and what must be in the future?

What will be the role of co-operatives in federal Nepal?

What is the role of  co-operatives to uplift the socio-economic status of rural

people?

What is the impact of Co-operatives in each village program launched by the

previous government (Gaungaun ma sahakarigharghar ma bhakari)?

Methodology

The methodology be adopted in this study to explore the tension identified above adopts a mixed method (qualitative and quantitative research) approach, essentially built around case studies. Qualitative research operates from a different platform and mindset to quantitative research approaches. It is embedded in understanding individuals’ experiences of their worlds and how they make sense of these. Thus, an appreciation of an individual’s perspective of the  co-operative business structure and behaviour is an end in itself (Patton, 1990), whether or not one can generalize from these personal experiences to all  co-operatives. Nevertheless, these individual reflections can provide insights that are pertinent to others involved in  co-operatives in Ilam District.

 

Bibliography

Alliance, I. C.-O. (1995). Centennial Congress of the International Co-operative Alliance, Man International Co-operative Alliance. Retrieved from The ICA Statement on the Co-operative Identity: http:// www.coop.org/ica/

Bhowmik, S. K. (1988, Dec 17). Ideology and the Co-operative Movement: Worker Co-operatives in the Tea Industry. Economic & political weekly, 23, 2703-2708.

Birchall, J. (1994). Co-op: the People's Business (First ed.). Manchester: Manchester University Press.

Craig, J. (1993). The Nature of Co-operation. Montreal, Quebec: Black Rose Books.

Hind, A. (1997). The Changing Values of the Co-Operative and its Business Focus. American Journal of Agricultural Economics, 79(4), 1077-1082.

Hough, E. (1966). The Co-operative Movement in India. Calcutta: Oxford University Press.

NCDB. (1993). Sahakarita Ko Bhawi Disha (Future Directions of Cooperatives).

Patrie, W. (1998). Creating 'Co-op Fever': A Rural Developer's Guide to Forming Co-operatives. (No. RBS Service Report 54 July 1998): Patrie, W. (1998). Creating 'Co-op Fever': A Rural Developer's Guide to Forming Co-operatives ( USDA's Rural Business-Co-operative Service (RBS) and the North Dakota State University (NDSU) Agricultural Experiment Stat.

Patton, M. (1990). Qualitative Evaluation and Research Methods (2nd ed.). Newbury Park, CA: SAge Publications, Inc.

(2011). Preliminary Report of Census 2011. Kathmandu: Central Beuraue of Statistics.

Putterman, L. (1993). Ownership and the nature of the firm. Journal of comparative Economics, 17, 243-263.

Rai, R. (2012). Central Tea Co-operative Association Ltd Nepal : An Introduction. National Tea And Coffe Development Board.

(1976). Report of the Commission on Co-operative Principles. Delhi: National Co-operative Union of India.

(December, 1984). Rural Co-operative Project in Nepal. Asian Development Bank.

Staatz, J. (1987). The Structural Characteristics of Farmer Co-operatives and their Behavioural Consequences. In J. In Royner (Ed.), Co-operative Theory: New Approaches (Service Report 18). Washington: The Agricultural Co-operative Service-United States Dep.

(2011, Dec). Statistical Record of Co-operative Organization in Nepal Ashadh 2068 B.S. Kathmandu: Co-operative Department, Nepal Government, Agriculture & Co-operative Ministry.

University of Wisconsin Centre for Co-operatives, (. (2012). Definition of Co-operatives. Retrieved May 5, 2012, from http://www.wisc.edu/uwcc/icis/def-hist/def/what-is.html

(1995). Why Cooperatives Are Organized? U.S. Department of Rural Business and Cooperative Development.

 

 


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