VASANTRAO NAIK MARATHWADA AGRICULTURAL UNIVERSITY,PARBHANI

POST GRADUATE INSTITUTE OF AGRI-

BUSINESS MANAGEMENT,CHAKUR

PRACTICAL MANUAL

Management Of Agri-Business Cooperatives

Acadmic Session:- 2021-2022

Course No:- ABM-527
Semester :- 3rd Sem

Submitted By:-
Mast. Pratik Narayanrao Moghe
Reg No:- 2020/MBA/18/MC

Submitted To:-
Prof. Sudhakar More
(Dept of Agri-Business Cooperative Mgt)
PGI-ABM,Chakur.

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 CERTIFICATE
This is certify that Mr./Miss Mast. Pratik Narayanrao Moghe
Registration No__2020/MBA/18/MC student of Post Graduate
Institute of Agri-Business Management has successfully compleled
all the Practicals of the Course No.ABM-527(MANAGEMENT OF
AGRI-BUSINESS COOPERATIVE) during 3rd semester of Academic
Year 2021 - 2022 .

Place:Chakur Course Teacher:-

Prof. Sudhakar More

Date: /04/2022

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3
 Index
Practical Title Page Date. Sign
No. no.

1 Cooperative credit Structure in India ,Study of

Cooperative movement in India.

2 Visit and Study of Primary Agricultural

Cooperative Credit Society(PACCS)

3 Visit and Study of District Central Cooperative

Bank(DCCB)

4 Preparation of loan Proposal for crop

Production

5 Preparation of loan Proposal for Horticultural

Garden

6 Preparation of loan Proposal for Dairy

Enterprises

7 Preparation of loan Proposal for Poultry

Enterprise

8 Visit to different cooperative credit institution

9 Visit to agribusiness cooperatives

10 Problems in cooperatives and remedies to

overcome the same

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 Practical No.1
Title: COOPERATIVE CREDIT STRUCTURE IN INDIA, STUDY OF
COOPERATIVE MOVEMENT IN INDIA
➢ Meaning:
A credit union is a member-owned financial cooperative, democratically controlled by its
members, and operated for the purpose of promoting thrift, arranging credit at competitive
rates, and providing so many other financial services to its members.
The Co-operative Credit Institutions in India can be classified as under a three-tier
structure.
(i) Primary Credit Societies at the bottom
(ii) Central Co-operative Bank at the middle
(iii) State Co-operative Bank at the top
The primary societies are functioning in the various towns and villages, the Central Banks at
the district headquarters and the State Co-operative Banks at the state capitals forming the
apex of the system. The Reserve Bank of India assists the co-operative structure by
providing concessional finance through NABARD in the form of General Lines of Credit for
lending to agricultural & allied activities. Thus, the whole system is integrated with the
Banking structure of the country.
(i) The Primary Agricultural Credit Societies:
A primary society is an association of borrowers and non-borrowers residing in a particular
locality and taking interest in the business affairs of one another. As membership is
practically open to all inhabitants of a locality, people of different status are brought together
into the common organization.

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(ii) District Central Co-operative Banks:
They operate at the district levels
A District Co-operative Central Bank (DCCB) is a cooperative bank operating at the district
level in various parts of India. It was established to provide banking to the rural hinterland
for the agricultural sector with the branches primarily established in rural and semi-urban
areas.

(iii)State Co-operative Banks:

At the top of the co-operative banking, there are State Co¬operative Banks, organized with
the object of attracting deposits from the rich urban classes. These Banks are also more
suitably equipped to serve as channel between the co-operative movement and the joint stock
banks.

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 Cooperative Movement In India
1904: Sir Frederic Nicholson was hailed as the pioneer of the cooperative movement in
India, he noted. Sir Frederic Nicholson was also the ‘Father of Fisheries’ in the Madras
presidency.
The first Cooperative Law of India The Cooperative Credit Societies Act, 1904 was passed
on 25th March 1904. Agricultural Credit Cooperative Society, of Kanaginahal village of
Gadag District in Karnataka was the first cooperative Society formed under First
Cooperative law of India. This was launched on 8th July 1905 by the villagers of
Kanaginahal under the leadership of Shri Siddanagowda SannaRamanagaowda Patil
with the initial share capital of Rupees two thousand.
• In India cooperation has its origin in the last quarter of 19th Century in attempts to
provide relief to the farmers from the clutches of money lenders.
• The cooperative movement was introduced in India as a State policy and owes its
inauguration to the enactment of the Cooperative Societies Act, 1904.
• In the pre-independence era the movement has passed through various stages of
development and has seen ups and downs.
• The dawn of Independence in 1947 and the advent of planned economic
development ushered in a new era for cooperatives. Cooperation came to be
considered as an instrument of planned economic development.
• Our first Prime Minister Pandit Jawahar Lal Nehru was a great admirer of
cooperatives and he conceived to convulse the country with cooperation. In five year
plans, the agricultural sector was given highest priority and as a result cooperatives
registered big expansion in different sectors.
• Cooperatives play a vital role in the economy of India.
• At present the Indian Cooperative system is one of the biggest in the whole world. It
is one of the strongest pillars on which agriculture and allied sector is flourishing.
• In India there are 0.85 million cooperative societies of all kinds with membership of
290 million covering almost 100% of villages and 30% national population in
membership.
• About 17 national cooperative societies, 390 state level federations, 2705 district
federations and 97961 Primary Agricultural Societies (PACS) leading and guiding
the cooperative movement of the country.

❖ COOPERATIVE SOCIETIES:-

▪ AMUL
India is the world’s largest producer of milk, this was the achievement of White Revolution in
India, which was spurred by AMUL.

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• It is an Indian dairy cooperative society.
• AMUL is located in Anand, Gujarat.
• AMUL was established in 1946.
• Dr Verghese Kurien is known as the father of White Revolution. He was the chairman of
GCMMF for more than 30 years.
• Gujarat Cooperative Milk Marketing Federation Ltd. (GCMMF) is the cooperative body
which manages the brand of AMUL.
• GCMMF is currently owned by apex body of 13 District Milk Unions, (3.6 million) milk
producers in Gujarat, spread across 13,000 villages of Gujarat.

▪ Indian Farmers Fertiliser Cooperative (IFFCO)

1. It is headquartered in New Delhi.

2. IFFCO is the biggest cooperative in the world by turnover on GDP per
capita.
3. It was founded on 3rd November, 1967
4. IFFCO is India’s largest fertiliser manufacturer.
5. IFFCO reaches over 50 million Indian farmers, with around 35,000 member
cooperatives.

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 Practical No.2
Title:- Visit and Study of Primary Agricultural Cooperative
Credit Society(PACCS)
❖ What are Primary Agricultural Credit Societies?
• PACS are the ground-level cooperative credit institutions that provide short-term, and
medium-term agricultural loans to the farmers for the various agricultural and farming
activities.
• It works at the grassroots gram Panchayat and village level.
❖ Features
• The Primary Agricultural Credit Societies are the association of persons, unlike in the
case of the Joint Stock Companies, where there is just accumulation of capital.
• Primary Agricultural Credit Societies confers equal rights to all its members without
considering their holding of share and their social standing.
❖ Organizational Structure
• General Body of PACS: Exercise the control over board as well as management.
• Management Committee:Elected by the general body to perform the work as
prescribed by the society’s rules, acts, and by-laws.
• Chairman, Vice-Chairman, and Secretary:Work for the benefit of the members by
performing their roles and duties as assigned to them.
• Office Staff: Responsible for performing day to day work.

❖ Functions of PACS
• To provide short and medium-term purpose loans to its members.
• Borrowing an adequate amount of funds from central financial agencies.

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 • Maintaining the supply of the hire light machinery for the agricultural purpose.
• Promotes savings habits among its members.
• To make the arrangement of supplying of the agricultural inputs. Example -seeds,
fertilizers, insecticides, kerosene etc.
• It helps its members by providing marketing facilities that could enhance the sale of
their agricultural products in the market at the proper prices.

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 .

❖ Funds of Primary Agriculture Credit Societies (PACS)

A Primary Agriculture Credit Societies (PACS) can raise funds for carrying out its activities
by following means:

• By way of share capital to be raised from members and indirect govt.

• Share capital contribution through the apex co-operative bank and the district central
co-operative bank.
• Deposits from members
• Loans
• Donations
• Entrance fee

❖ Significance
Primary agriculture co-operative credit societies as financial institutions that play a very
important role at the grass roots level in the development of local areas. They are
multifunctional organizations that dispense a host of activities like banking, on out supplies,
marketing produce and trading in consumers goods.

Hence effective performance of primary agriculture co-operative credit societies is crucial.

The first Primary agricultural Credit Society (PACS) was formed in the year 1904. Since then
these societies have been playing a significant role in providing short-term and medium term
credit to the farmers. Till early seventies, this was the only institutional credit agency available
to the people in rural areas. The PACS functioning at the base of the co-operative banking
system constitute the major retail outlets of short term and medium term credit to the rural
sector.

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 Practical No.3
Title: Visit and Study of District Central Cooperative
Bank(DCCB)
Introduction
Cooperative banks that are operating at the district level in various parts of India are known
as District Cooperative Central Banks (DCCB).It was established with the main of providing
banking facilities to the rural livelihoods especially in the agriculture sector. Therefore, the
branches were primarily established in the rural and semi-urban areas. The District
Cooperative Central Bank (DCCB’s) have three primary sources of funds: DCCBs own
share capital and reserves, Deposits from the public, and DCCBs loans from the state co-
operative banks.

▪ Banking Model:
The Banking model typically consists of a
district central bank to be established in
each district of every Indian state.
Collectively, these banks shall be represented
by a State Apex Central Cooperative Bank that
is established for each state. This shall act as
an apex body for the DCCBs
.The President of the DCCB is elected by its
members and elected directors who represent
a multitude of professional cooperative
bodies. The bodies include; milk unions, rural
cooperatives, urban cooperatives, agricultural
and non-agricultural cooperatives.
Trends from the past few years reveal that the
local politicians get elected as the president.
They hold sway over the cooperatives
and getting elected help to nurture their political ambitions. Besides, the banks have a
few private individuals who provide finance and management.
▪ Functions of DCCB:
1. DCCBs meet the credit requirements of member societies
2. .They shall also perform the banking business and provide facilities relating to it. DCCBs
act as a balancing center for Primary Agricultural Credit Societies (PACS).
3. This is done by diverting the surplus funds of some societies to those who face shortages
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 of funds.
4. DCCBs can also perform non-credit activities. DCCBs maintain close and continuous
contact with the PACS. This means they shall provide leadership and guidance to them.
5. Further, DCCBs supervise and inspect PACS such that a safe place is provided for the
investment the PACS resources
▪ Board of DCCB:
The Board of District Cooperative Central Bank comprises

Elected Chairman of the PACS,Representatives of the State Government, and Representatives

of the State Cooperative Bank.The board periodically reviews the performance of the bank.
This is essential for the board to provide a policy.DCCBS performs its functions under the
administrative control of the Registrar of the cooperative societies.

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Loans & Advances:
1. Short Term Production Loans: These loans are extended for raising the crops and
are routed through PACS.
The Government of India has introduced the subvention scheme. Under this scheme loans up
to INR 3 lakhs are granted.
These loans are extended to farmers at an interest rate of 7 percent.
The government of India provides an interest subsidy of 2 percent to the banks also.
2. Kisan Credit Card: This is an innovation brought about in the banking system.
Short-term credit is made easy, convenient, and flexible for the farmers.
It requires only one-time documentation.
There is a single limit for whole years requirement.
Users are granted any number of drawls and repayments.
If the account is regular, there is a facility of automatic renewal.
Besides, there are additional features like personal accident insurance. This is provided
through collaboration with insurance companies.
3. Term Loans: The term loans are offered by the cooperatives to the farmers.
The term loans are delivered either through the PACS or directly to the farmers by DCCBs.
Higher lending agencies like NABARD offer DCCBs an option to refinance. These higher
lending agencies can channelize these funds through the State Cooperative Banks.
Term loans can be granted for numerous purposes like excavation of wells, purchase of
pump sets, horticulture, rural transport, animal husbandry, and other farming equipment.
Recruitment :
Each District Cooperative Central Bank issues its vacancy through a notification. Usually,
posts are for Staff Assistant and clerks. Candidates must apply within the given
period.Candidates who aspire to apply for these DCCBs posts must be graduate in any
discipline from a recognized university and know English with proficiency in the local
language.The candidates who wish to apply for any of the posts must be with the age group
of 18 to 30 years.However, there is some relaxation provided for SC/ST/OBC/PWD and
women candidates.

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 Practical No.4
Title:- Preparation of loan Proposal for crop Production
About Crop Loan
Farmers are given a lot of offers and benefits to assist them in their endeavour of farming.
They need help with irrigation, land loans, modern equipment procuring, livestock
purchasing and most importantly crop loans.
Crop loans are a type of short-term advance offered pre-dominantly by primary co-operative
societies within the area, to cover the cost of cultivation. It can be used for purchase of
quality seeds, fertilizers, manure, etc. This loan can be repaid once the crops have been
harvested.
The loan amount is fixed based on the cultivation area and the type of crop
being cultivated. The District Technical Committee (DTC) fixes the scale of financing
required for each crop in that particular area. The loan amount would be based on that report.

✓ Uses of Crop Loans

• To meet short-term credit requirements of cultivation of crops
• Post-harvest expenses
• Produce marketing loan
• Consumption requirements of farmer household
• Working capital for maintenance of farm assets and allied activities of agriculture
• Investment requirement of agriculture and allied activities

✓ Eligibility for Crop Loan

• Farmers – individually or jointly
• Tenant farmers, farm land lessee & share croppers
• Self Help Groups and Joint Liability Groups of farmers
• Age group – 18-70 years

❖ Steps to get a Secured Loan on Credit

• Compare all the lenders and the rates that the lender is providing for the crop loans.
Look into private sector as well as specified organisations.
• Based on your initial check, choose certain lenders and make a list so that you know
who to approach for different purposes.
• Run a background checks on the lenders and look into their financial stability and
those who have a good customer service.

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 • Approach a lender and get a quote and then approach the remaining lenders and try to
negotiate the rates.
• Choose a lender that is understanding of your situation and who is willing to go out of
his way to help you.
• Prepare a document that includes details of your previous performance of the crop that
you wish to use as a collateral to avail the loan. You must include information on your
asset, current liabilities and other relevant information. Include information that may
have negatively impact your crop production as well.
• Finally submit the application along with the required documents.

✓ Interest rates
For crop loans up to Rs. 3 Lakhs, the interest rate is fixed at 9%. The government
further gives an interest subvention of 2%, bringing down the effective interest rate to
7%. Further, for farmers with good credit standing and repaying the loan within one
year of loan disbursement date, an interest concession of 3% is given, bringing down
the actual interest rate to 4%.
For loans above Rs. 3 lakhs, the interest rates are based on the RBI guidelines and the
banks lending rates.

✓ Repayment
It is usually fixed at 1 year for regular crops and at 18 months for crops like sugarcane,
banana, pineapple, etc. However, an annual review is conducted, and the credit limit
may be upgraded based on the customer requirements.

✓ Security/Collateral
The loans are offered under two conditions – with tie-ups or back-up by Government
agencies and non-tie-ups.
For tie-up loans: RBI guidelines allow banks to offer loans of up to Rs. 3 lakhs
without any security or collateral but only hypothecation of the crops.
For non-tie-up loans: The banks may require security/collateral for loans above Rs. 1
lakh

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 Practical No.5
Title:- Preparation of loan Proposal for Horticultural
Garden
HORTICULTURE IN INDIA
Horticulture has emerged as one of the potential agricultural enterprise in accelerating the
growth of Indian economy. India, with its wide variability of climate and soil, is highly
favorable for growing a large range of horticultural crops such as fruits, vegetables, potato,
tropical tuber crops, ornamental crops, medicinal and aromatic plants, spices and plantation
crops like coconut, cashew, cocoa, tea, coffee and rubber. Its role in the country's nutritional
security, poverty alleviation and employment generation programs is becoming increasingly
important.
To boost the growth in this area, govt and banks offers loan facilities for horticulture
❖ Features and Benefits
• Horticulture loans to facilitate farmers with credit for the purchase of inputs,
machinery, poly houses, drip irrigation installation, domestic consumption, etc.,
• Suitable for development of plantation crops, flowers, fruits and vegetable crops
• Loan available up to 85% of asset/project cost*
• Minimal paperwork
• Hassle free processing
• No hidden charges or heavy penalties
• Longer repayment period
• Loan is provided for
• Development plantation crops (Rubber, Tea, Coffee, Coconut, Arecanut, Pepper,
Cardamom etc.)
• Flowers in open and green houses (roses, carnation, chrysanthemums, jasmine etc.)
• Vegetable crops (potato, tomato, brinjal, gourds, peas etc.)
• Fruit orchards (mango, Guava, Grapes, etc.,)
• Short term fruit crops(banana, pineapple etc.).

✓ Eligibility
Minimum age - 18 years.
Maximum age - 75 years at the end of loan tenor.
For borrowers above the age of 70, co-borrower less than 60 years old is mandatory. Such a
co-borrower should be legal heir / immediate family member.
✓ DOCUMENTS REQUIRED

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 • Proof of Identity (Passport / Voters ID card/ Driving License/PAN Card)

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 • Recent Passport size photograph
• Address Proof (Ration card Tel/ Electricity Bill/ Lease agreement/ Passport/Trade
license /Sales Tax certificate)
• Proof of agricultural land/property- Tax receipts
• Land records Quotation / estimates for the costs to be incurred. For large projects,
detailed project report shall be submitted
• The loan repayment starts after the completion of the gestation period varying from 3
to 7 years for different crops.
• Repayment Options
• Repayment commences from the time the crop gives economic yield and is linked to
the income generation of each crop every year and varies between 7 years to 15 years.

✓ Loan Amount
Up to Rs. 50,000/- 100 % of the cost of the asset / project cost is provided as loan.
For loans above Rs 50000/- 85 % of the cost of the asset / project is given as loan.
Short term loans for meeting working capital under Kisan Credit Card scheme.
✓ Security
Hypothecation of the assets created / Mortgage of land.

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 Practical No.6
Title:- Preparation of loan Proposal for Dairy
Enterprises
Introductio
n :
Individuals who wish to start and operate their own farms or make improvements to their
existing farms can now make the most of dairy farm business loans. The reasons for taking
out a loan like this can be to establish small dairy units that have two to four mulch cattle, to
collect, process, and distribute milk, to establish a new medium or large dairy unit, to
manufacture milk products, to construct cattle shad, or to buy crossbreed or improved mulch
cattle.
❖ Purpose of availing Dairy Farm Loan

Given below are the reasons for which you can avail a dairy farm loan:

1. To establish a new dairy farm unit or expand an already exisiting dairy farm unit

2. Purchasing of mulch animals for small dairy units

3. For the rearing of calves and crossbreeding of mulch cows and buffalos

4. To purchase milk machineries

5. To grow fodder for cattle

6. Construction, expansion, or renovation of cattle sheds

7. Cold storage services

8. Dairy marketing outlets

9. Purchasing of dairy equipment, chaff cutters, etc.

10. Dairy manufactured goods transportation services

✓ Eligibility Criteria for Dairy Farm Business Loan

The amount of money that is granted to applicants can range up to Rs. 100,000 for the
hypothecation of live stocks. Loan amounts offered to customers can also exceed Rs.
100,000 for the hypothecation of live stocks, or land mortgage .
profit margin - 15% to 25%
The repayment period - between five and six years ( most lenders also provide a moratorium
period of two to three months )

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• Goal : bettering dairy farming, the organisation recently launched the Dairy
Entrepreneurship Development Scheme (DEDS).
This scheme offers financial assistance to those who want to take up dairy farming. It also
aims at increasing employment opportunities in modern dairy . [ ] Dairy Business Loans
Fees and Charges
• Interest rate : May depend from bank to bank
• Tenure of loan : 3 years and 7 years
• Pre-closure charges : Nil
• Repayment mode : EMIs
• Processing fees : 2% of the loan amount.
✓ Documents Required

The list of documents you will need to apply for a dairy farm loan is:

1. Proof of identity such as PAN Card, Aadhaar Card, voter id, driving license, etc.

2. Proof of address such as utility bills, ration card, Aadhaar Card, etc.

3. Salary slips for past 6 months

4. Passport size photographs

5. Proof of registration of dairy business

6. Property deeds

✓ How to apply for a dairy farm loan :

1. You can visit the official website of the lender who offers this type of loan and apply for a
dairy farm loan.

2. All you have to do is fill the application form and submit it along with the necessary
documents.

3. The bank will review the application form and if they found to be correct, they will
approve your loan application and will disburse the said loan amount to your bank account.

4. You can also apply for a dairy farm loan offline as well.

5 . All you have to do is visit the branch of the bank which offers a dairy farm loan along
with the necessary documents.

6. A representative from the bank will help you with the process of applying for a personal
loan.

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 ❖ Uses of dairy farm business loans

With the help of a dairy farm business loan, one can use the funds for numerous purposes.
Some of the purposes include:

• Buying automated milk collection systems

• Buying bulk chilling units

• Setting up of milk houses or society offices

• Buying vehicles for the transportation of milk on time

• Processing and storing milk in quality cold storage units .

[ ] top lenders in India offer Dairy Farm Loans

• NABARD

• IDBI Bank

• State Bank of India

• IDBI

• Central Bank of India

• Bank of India

➢ Grace period if you avail a dairy farm loan

generally a grace period ranging between 3 months and 6 months is provided. However, not
every lender may provide this facility and hence you must ensure you check with the lender
whether a grace period is provided before availing a dairy farm loan.

➢ Mudra Loan for dairy farming purposes

We can now avail Mudra Loan under Pradhan Mantri Mudra Yojana if you wish to raise
capital for your dairy farming business. We can also avail Mudra Loan if you own or wish to
own fisheries, poultry farms, honeybee farming, silk industry etc. and need capital to kick off
your business.

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 Practical No.7
Title:- Preparation of loan Proposal for Poultry Enterprise
Poultry farming :
Poultry farming implies raising of domesticated birds commercially, to increase the
production of eggs and meat. Birds that are raised in farms are usually chicken, turkey,
ducks, and geese for food. However, chicken has a universal market where broilers are raised
for meat and layers for eggs.
The poultry farming sector, , is the fastest-growing section of the agriculture sector
clocking 8% to 10% annual growth. It employs nearly 3 million people and contributes
nearly 1.2% to the country’s GDP. Although poultry farming is a competitive business, with
the right planning and complete knowledge of every aspect, the poultry farming business can
be profitable
❖ Apply for the loan for starting the poultry business :
1. Check the eligibility criteria before applying for a loan
2. Fill the application form and provide basic details
3. Submit the loan application along with documents required (for KYC).
4. Once the application is approved along with verification of documents, the loan
amount is transferred to the account of the applicant
➢ Documents required for a poultry loan :
1. Duly filled poultry farm application form with passport-sized photographs
2. Identity, Age, Address, Income Proofs of applicant, co-applicant
3. Certificate of incorporation
4. Business PAN card
5. Poultry Farm Business Permit
6. The permit from Animal Care Standards
7. Invoice for purchase of equipment, cages, birds
8. Plan and estimate for construction of the building
9. Copies of land records regarding land owned/leased, certified by concerned
Revenue Authorities
10.Insurance Policy
11.Any additional document required by the bank
➢ Poultry Farm Loans in India
• Poultry Loan – MUDRA Loan under PMMY (Allied Agri)
• Interest Rate. - 10.75% onwards
• Nature of loan - Agriculture Term Loan
• Loan Amount - Max. up to Rs. 10 lakh
• Repayment TenureFrom 3 years to 5 years

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 ❖ Bank gives loans for poultry farming:
. There are several banks offering loans for poultry farming, such as HDFC Bank, SBI, PNB,
Federal Bank, IDBI Bank, Axis Bank, Canara Bank, Bank of Baroda, Central Bank of India,
Bank of India, etc.

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 Practical No.8
Title:- Visit to different cooperative credit institutions.
▪ Different Co-operative Credit Institutions in India :
A credit union is a member-owned financial cooperative, democratically controlled by its
members.
The primary societies are functioning in the various towns and villages, the Central Banks at
the district headquarters and the State Co-operative Banks at the state capitals forming the
apex of the system.
The Reserve Bank of India assists the co-operative structure by providing concessional
finance through NABARD in the form of General Lines of Credit for lending to agricultural
& allied activities.
The Co-operative Credit Institutions in India can be classified as under a
three-tier structure.
(i) Primary Credit Societies at the bottom
(ii) Central Co-operative Bank at the middle
(iii) State Co-operative Bank at the top

1. The Primary Agricultural Credit Societies:

A primary society is an association of borrowers and non-borrowers residing in a

particular locality and taking interest in the business affairs of one another. As
membership is practically open to all inhabitants of a locality, people of different
status are brought together into the common organization.

2. Central Co-operative Banks:

A Central Co-operative Bank is a federation of primary societies in a specified

area. Where membership of a Central Co-operative Bank is restricted to primary
societies only, it is known as a ‘banking union’. Nowadays, individuals are also
admitted as members of almost all Central Co-operative Banks.

3. State Co-operative Banks:

At the top of the co-operative banking, there are State Co¬operative Banks,
organized with the object of attracting deposits from the rich urban classes. These
Banks are also more suitably equipped to serve as channel between the co-
operative movement and the joint stock banks.

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Two Tier Structure
Land Development Bank:- The main objective of the land development bank is to
promote the development of agriculture and increase agricultural production.

1. Central Land Development Bank :

It acts as a link between NABARD and government in the long term banking
transactions. It supervise amd making guidelines for PLDBs for smooth functioning of
various banking operations.Sanctions loans to the members bank s and provide training for
lower functionaries.
2. Primary Land Development Bank:
To saction long term loans for long term improvement on the farmers field such as
purchasing tractor, construction of farm belonging ,land reclaimation,etc. It attracts local
savings.

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 Practical No.9
Title:- Visit to agribusiness cooperatives.
❖ Agricultural Cooperatives:
A co-operative is an independent private business association of individuals who are
at once the members and the consumers of the goods they produce and/or the services they
provide. Small businesses can achieve economies of scale this way, competing with large
corporations in the market. Farmers in agricultural coops can get access to supply and
markets that are otherwise beyond their reach. Profit is not the primary goal but can still be
allocated to the members proportionate to their use of or contribution to a cooperative.
Thanks to the “one member, one vote” principle, members can, on a regular basis,
democratically elect representatives among themselves as a board of directors.
Agricultural producers, suppliers, traders form cooperatives to get access to more
supplies and markets at a reasonable cost. Their goal is to reduce cost by increasing the scale
of their economies. In other words, the more agro-producers combine their efforts in a co-op,
the cheaper the total cost of production becomes. Similarly, the traders united under a
cooperative can compete in an open market with large industrial corporations in a fair way.
1. Arts And Crafts Cooperative Organization
As in most other cooperatives, members (artisans and performers) combine their financial
and artistic effort to obtain needed but otherwise unattainable services and supplies, as well
as moral support. Such coops provide their members with studio spaces and various specific
tools at a reduced cost. On top of that, the democratic principle guarantees artistic freedom
and independence.
2. Business Cooperatives
Small businesses of all types can join their efforts to lower overall production and
distribution costs, and form cooperative businesses. These can be retail stores, taxi cab
owners cooperatives, and other types.
3. Childcare And Preschool Cooperatives
This cooperative association is usually formed by students, to provide affordable child care
to the community. What makes them so attractive is that parents can be members as well,
and, consequently, have a say in many decisions. The childcare cooperatives often provide
high quality preschool programmes and services.
4. Credit Unions
Сredit union is a nonprofit type of cooperatives that specializes in providing financial
services (savings, loans) at the lowest possible cost. Members are employees, pensioners,
and even family members over the age of 16.

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5. Food Coops And Buying Clubs
Higher product quality, greater control over production, and lower prices are the main
reasons for such coops to form.
6. Insurance Cooperatives
All members of such a coop are policyholders, and their primary goal is to provide insurance
services. Their secondary goal is to generate revenues that will reduce cost of providing the
services. As usual, members receive the patronage dividends from the available profit and
have an owner-control over the coop.
7. Retail Cooperatives
Benefits for members include discounts and more control over sale policies. Interestingly,
retail cops sell consumer goods to the non-members as well. The accumulated earnings can
turn into patronage refunds for a specific period of time paid back to the members.
8. Student Cooperatives
Students form cooperatives to reduce the cost for basic needs such as food and housing. In
fact there are many types of student coops, ranging from housing to childcare, and even
bookstores. The additional benefit is experience that the students gain from cooperation.
9. Utility Services Cooperatives
Members of these co-ops share the capitalization costs and receive utilities (communication,
electricity, water), usually at lower rates, especially if the users are the owners themselves.
There are many types of utility cooperatives: cable television coops, telephone coops, and so
on.
10. Worker Cooperatives
Members are the workers of their own business. They take part in management, allocate
income and net losses, spread risks among each other, and share profit according to their
contributions. All around the world, workers form cooperatives to ensure steady income and
employment for themselves.
11. Agricultural Cooperatives Up Close
A single modest agricultural producer may struggle with access to supplies and to the
competitive markets, especially where major food production corporations are already
involved. Meanwhile, the risks connected with growing crops or dealing with those big
corporations can be too unbearable, while the loss of profit can put an end to the business
altogether.
Top 8 Agriculture Co-Operatives in India :
1. National Co-Operative Development Corporation (NCDC):
2. National Agricultural Co-operative Marketing Federation of India (NAFED):

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3. Tribal Co-Operative Marketing Development Federation of India Ltd:
 4. Indian Farmers Fertilisers Co-Operative Limited (IFFCO)
5. Indian Farm Forestry Development Co-Operative (IFFDC):
6. Co-operative Rural Development Trust (CORDET):
7. Krishak Bharati Co-Operative Limited (KRIBHCO):
8. National Bank for Agriculture and Rural Development (NAHARD):

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 Practical No.10
Title:- Problems in cooperatives and remedies to
overcome the same
The major problem of cooperatives in India is the Government plus there are some other
problems they are explained as given below
1) Non-accountability:
It is like if a child when given too many benefits it gets spoiled.
The same is the case with cooperatives in India. The government gave too many benefits to
cooperatives like reservation of items extra benefits like finance facilities so also it was also
provided with other support this was a good thing to do, but then there was no further
accountability which led to these cooperatives becoming more and more lethargic.
2) Vested interest of some people:
A lot of times people who are in position in control of cooperatives are actually people who
have joined cooperatives for personal gains. One of the major problems this causes is
conflicting of personal interests with the interest of the cooperatives now this affects the
performance of the cooperatives in a negative way.
3) Lack of coordination:
Generally what happens in cooperatives is that different cooperatives at different level don’t
coordinate this makes the work of cooperatives difficult. Coordination is the key to success
of any organization. The best example for this is AMUL which works best because of
coordination
4) The Internal Free Rider Problem:
This problem arises when:
a) New members who provide very little capital enjoy the same benefits as long-standing or
founding members who have major investments in the cooperative in fixed assets (plant,
machinery, equipment) and working capital;
b) When the patronage of new members does not make the cooperative much more efficient
or competitive by producing significant economies of scale. New members get a “free ride”
on the investments and other efforts of existing members, thereby diluting the returns to
existing members.
5) No Balanced Growth:
The cooperatives in northeast areas and in areas like West Bengal, Bihar, Orissa are not as
well developed as the ones in Maharashtra and the ones in Gujarat. There is a lot of friction
due to competition between different states, this friction affects the working of cooperatives

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6) Political Interference:

Now this is the biggest problem faced by Sugar cooperatives in Maharashtra. The Politicians
use the sugar coops as if they are their personal property and also they use it to their political
advantage.
Remedies to overcome problems in cooperatives
1. Minimization of corruption and nepotism: It should take fruitful steps to minimize the
attitude of corruption and nepotism which creates surrounding the cooperatives society.
That’s why proper management procedure is necessary to develop the cooperative business.
2. Preparation of realistic plan: An effective plan should be formulated considering the
reality for the cooperative society of the country. It is needed to determine where, how and
how much it contributes to the national, central, and preliminary cooperative society.
3. Providing incentive to the executives: The success of the cooperative society depends
on the satisfaction and positive attitude of the executives. Proper incentives must be needed
for motivating the executives in undeveloped and developing country.
4. Strengthening of training programs: The training program should be strengthened.
Immensely in all sectors to accelerate the activities of the cooperative society. For that
reason, supporting must be needed as well as NGOs.
5. Widespread publicity: Widespread publicity should be minimized in the national
media’s on the positive side of the cooperative society. So that people can encourage an
interest in the organization.
6. An increase of govt. cooperation: Though Govt. has a special administration for the
Cooperative but not active. So in all sectors Govt. financial and non-financial cooperation
should be increased.

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 THANK YOU!

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