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August 11, 2020

Getting Cooperatives Moving

By Htun Tin Htun

The Global New Light of Myanmar newspaper, dated 18 July 2017, stated an article, “Fundamental beliefs of General Aung San for Economic Recovery” by Saw Naing (Applied Economics) and translated by Khin Maung Oo, and it was about the importance of cooperative enterprises. It reads: “It is time to launch cooperative enterprises across the nation. … The enterprises will indoctrinate us with the spirit of cooperating together, spirit of desire to live and work in unity, into our inner parts of our minds. … It will help us to bear the spirit of self-help basis, spirit of inventiveness. … At a time of scarcity of investment capital in the country, the system of setting up the cooperative enterprises is the best way to upgrade the national development. …” (excerpted from Bogyoke’s speech at the AFPFL’s 2nd meeting of central leading committee on May 16, 1946). Based on such article, I am writing the following article for the growth, development and advancement of our cooperative enterprises in the Republic of the Union of Myanmar.
Good governance (transparency, accountability, participatory, efficiency and effectiveness, among others) is of paramount importance to become sustainable and successful cooperative enterprises in this world. Effort, wish-to-do, mind and wisdom are four means of accomplishment to make a cooperative enterprise a sustainable and successful business and social enterprise in any country. Take as an example the shares of co-operative enterprises in national economy of one of our neighbourimg countries, the Republic of India: rural network (villages covered) – 100%; agricultural credit disbursed by co-operatives – 46.15%; fertilizer disbursed (6.049 million tons) – 36.22%; nutrient – 27.65%; sugar produced (10.400 million tons) – 59.0%; capacity utilization of sugar mills – 111.5%; wheat procurement (4.50 million tons) – 31.8%; animal feed production/supply – 50%; retail fair price shops (rural + urban) – 22%; milk procurement to total production – 7.44%; milk procurement to marketable surplus – 10.5%; ice cream manufacture – 45%; oil marketed (branded) – 50%; spindles in co-operatives (3.518 million) – 9.5%; cotton marketed/procurement – na; cotton yarn/fabrics production – 23.0%; handlooms in co-operatives – 55.0%; fishermen in co-operatives (active) – 21%; storage facility (village level pacts) – 65.0%; rubber processed and marketed – 95.0%; arcan nut processed and marketed – 50%; direct employment generated – 1.07 million; self-employment generated for persons – 14.39 million; salt manufactured (18,266 metric tons) – 7.6%: these statistics are from the Indian Cooperative Movement, just giving as an example of how cooperative enterprises play key role in helping improve country’s national economy. The statistics here indicate that modern cooperative movement in India has made tremendous progress in every walk of its activities and occupies a major place in the share of the national economy. The Co-operative Movement was introduced into India (Burma and Ceylon, too) as the only method by which farmers could overcome their burden of debt and keep them away from the clutches of the money-lenders. The Co-operative Credit Societies Act, 1904 was passed by the Government of India and since then the rural cooperative credit societies were formed. Through the appointment of registrars and through vigorous propaganda, the government attempted to popularize the movement in the rural areas and within a short period, the government realized some of the shortcomings of the 1904 Act and, therefore, passed a more comprehensive Act, known as the Co-operative Societies Act of 1912. This Act recognized non-credit societies also; but the rural cooperative credit societies have continued to be predominant till now.
It is necessary to know the causes of poor performance of the cooperative movement, despite a rapid growth of the overall progress of cooperative movement during 100 years of its existence is not very impressive, and on that basis take such steps as would promote a faster growth of cooperative movement in India. New generations of cooperative movement in the Republic of the Union of Myanmar need to learn more about neighbouring countries’ cooperative movements’ experiences for good and appropriate lessons to be replicated to help grow more in the national economy. Government needs to provide strong both financial and human resource support to the cooperative movement as peoples’ movement and democracy training ground for all citizens of the country inclusive of youth, women and persons with disabilities as well as for recognition as the second sector of national economy as well.
Cooperative movement will be an important impetus for rapid rural development of the country. Co-operative farming is a compromise between collective farming and the peasant proprietorship and gives all merits of large-scale farming without abolishing private property so that it implies an organization of the farmers on the basis of common efforts for common interests. Observation shows that, under this system, all landowners in a village form a co-operative enterprise for tilling the land; the land is pooled, but each farmer retains the right of property and the produce is distributed by each; they are allowed to withdraw from the cooperative farm whenever they desire. “One man one vote” is the basic principle of cooperative enterprise and this is a democratic practice based on human beings, regardless of share capital held.
Practice at present in India shows that the exceedingly small size of holdings is perhaps the most serious defect in agriculture; if agriculture has to be improved, the size of the holdings must be enlarged. The co-operative farming enterprises, thus, enable the cultivators to enjoy the economies of large-scale farming through the pooling of land management resources. Poor infrastructure, lack of quality management, overdependence on government, dormant membership, non-conduct of elections, lack of strong human resources policy, neglect of professionalism, etc. are the limiting factors. Indian cooperatives are also unable to evolve strong communication and public relations strategies which can promote the concept of cooperation among the masses, it is learnt.
Ending poverty is one of the important Sustainable Development Goals (SDGs) and evidence shows the important fact that the cooperative enterprises surely play a crucial role in reduction and eradication of poverty in the world. Role of Agricultural Cooperative Credit Societies is also important and peasants are still relying on these societies for their cheap credit. Agricultural Cooperative Marketing Societies’ development in India is closely bound up with the problem of credit claims of money-lenders commonly inhibiting the cultivator’s freedom of action in disposing of their crop and the full utilization of loans advanced depends upon the arrangements for the marketing of surplus produce. These agricultural cooperative marketing societies also provide other agricultural facilities and make arrangements for the supply of domestic items in the rural areas, it is learnt.
At the operational level, there exists a primary co-operative to extend credit to the farmer. This unit epitomizes the vitality and service potential of the co-operative movement in India. The organization of these cooperative societies dates back to 1904, when the first Co-operative Societies Act was passed; these societies were started with the object of providing cheap credit to the agriculturists in order to free them from the clutches of the rapacious money-lenders. The agricultural primary cooperative credit society is the foundation-stone on which the whole co-operative edifice is built and even now these societies dominate the co-operative picture of India, it is learnt.
The laws relating to cooperative enterprises are needed to be modified to make it qualitatively stronger. It is also essential that the procedures of the work of cooperatives should be made simple, straight and convenient. It is necessary to spread the cooperative movement as people’s movement; people should not think it as a part of the government or a department of the government; people should own it and manage it; people should be educated about the advantages of this cooperative movement. Vicious circle of poverty manifests in different forms. Educational institutions at various levels, regular radio programmes and FM radios, various TV channels, newspapers, journals, magazines, posters, and other mass media can be used for cooperative mass education purpose. Some beneficial and important changes, during past few years, have taken place in the cooperative movement which has given a quite new and progressive slant; a supportive climate has been created for the development of cooperative enterprises as democratic and autonomous businesses provide them with the opportunities for diversification, it is learnt.
Myanmar has had over 100 years of experience regarding the cooperative enterprises and it is observed between 1970 and 1988 that the cooperatives, as second pillar (sector) of the national economy, ownership in the Gross Domestic Product was reached up to around 18%. Observation shows that “mismanagement and manipulation” is one of the causes of the slow progress of cooperative movement in India; the essence of the cooperative movement is that it gives the farmers the status of shareholders and assures them agricultural, educational and medical facilities. The relationship between the shareholder farmer and the cooperative enterprise is simple: the farmer is committed to contributing a certain amount of cane per season and the cooperative sugar mill is bound to take this cane. The strength of the cooperative movement was the involvement of the farmers who were shareholders in the cooperative sugar mill regardless of the size of their holdings; over the years, this truly democratic idea got corrupted and farmers with larger holdings grew more powerful. In practice, this altered the power structure of the cooperatives in the elections to the governing bodies of the cooperative sugar factories, money became such a powerful tool that the top posts of chairman and vice-chairman usually went to the richest farmers even though the majority of members were farmers with small- or medium-sized holdings, it is learnt.
Observation from the Indian cooperative movement shows that lack of awareness is also one of the major causes of slow progress of the cooperative movement. People are not well informed about the objectives of the movement, the contributions it can make in rebuilding the society and the rules and regulations of cooperative enterprises. Unfortunately, no special efforts have been made in this direction and people look upon these enterprises as means for obtaining facilities and concessions from the government. So long as people expect to get something from the government, they see to it that cooperative enterprises somehow continue to function; lack of education, dirty politics of the village, caste ridden elections to the offices of cooperative societies, bureaucratic attitudes of the government officers at the lower rank are some of the hurdles in spreading the correct information about the cooperative movement and in educating the people about its true character and vital role in the society, it is learnt.

Various studies also show that restricted coverage is one of the causes of slow progress in Indian cooperative movement. The cooperative movement has also suffered on account of two important limitations on its working. One is that the size of these cooperative societies has been very small; most of these cooperative societies are confined to a few members and their operations extended to only one or two villages; as a result, their resources remain limited, which make it impossible for them to expand their means and extend their area of operations. Two, most of the cooperative societies have been single purpose societies; for this reason, these societies are unable to take a total view of the persons seeking help, nor can they analyze and solve problems from different angles; the help these cooperative societies render thus cannot be adequate. By assessing the persons and the problems only from one angle, these cooperative societies neither properly help the person nor make an optimal use of their resources. Under these circumstances it has not been possible for these cooperative societies to make much progress, it is learnt.

It is found that functional weakness is also one of the causes of slow progress. The cooperative movement has suffered from inadequacy of trained personnel right from its inception. Lack of trained personnel has been caused by two major factors, In the first place, there has been a lack of institutions for this purpose of training personnel; secondly, because of the unsatisfactory working of cooperative institutions, efficient personnel did not feel attracted or motivated towards them. The functioning of the cooperative societies, too, suffer from several weaknesses; some of these are, taking no care of the need of credit seekers or their repaying capacity at the time of granting loans, making no adequate provision for the return of loans, unsatisfactory keeping of accounts, factional politics in its management, lack of coordination among various divisions of the cooperative structure, too much dependence on outside sources of finance, lack of adequate auditing. Such weakness have prevented them from progressing on healthy lines, it is learnt.

National policy on co-operative enterprises which is likely to uphold the values and principles of co-operation, recognizing its autonomous characters and attaching priority to professionalism, human resource development and to act as preferred instrument for execution of public policy in rural areas and in sectors where they provide the most effective delivery system; to strengthen their competitive edge in the market, total quality control initiatives, management initiatives and cost reduction initiatives will also be taken up. It is now increasingly recognized that the co-operative system in India has the capacity and potentiality to neutralize the adverse effects emerging from the process of globalization and liberalization, and continue to play an important role in employment promotion and poverty alleviation, both as production enterprises – mainly of the self-employed – and as providers of services to members. Although cooperatives are not instruments of employment promotion, they do effectively create and maintain employment in both urban and rural areas and thus provide income to both members and employees in the form of shares of surplus, wages and salaries or surpluses (profits) depending of the type of cooperatives, it is learnt.

Government interference is another weakness to slow progress in the Indian cooperative movement. The cooperative movement in India was initiated in 1904 under the auspices of British government; right from the beginning the government has adopted an attitude of patronizing the movement; cooperative enterprises were treated as if these were part and parcel of the administrative set up of the government. The government interference thus became an essential element in the working of these enterprises; as a result, people’s enthusiasm for the cooperative movement did not grow. The movement’s independence and self-reliance existed only on paper and files. After attainment of independence, in particular after beginning of the planning, some healthy changes in the attitude of the government did take place; it was not given proper importance that it deserves in any plan. But even the cooperative movement has not become full-fledged people movement. Even today, quite often, cooperative societies are imposed upon the people. This does bring about an increase in the membership of the cooperative societies; but the spirit of cooperation cannot flower fully in these circumstances; neither its growth took place according to any plan nor did it become a people’s movement. It just grew very slowly and that too, haphazardly; it was a state driven institution, it is learnt. May Cooperative Movement in the Republic of the Union of Myanmar be free from all dangers, and be healthy, happy and prosperous in the months to come!!!

Reference: Cooperative Movement in India: Problems and Prospects from the website, July 2017

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