1. Rural Co-operatives in Asia: Issues in development

by KK Taimni

Rural, or more precisely agricultural Co-operatives exist in all parts of Asia; their contribution, to social and economic development, thought is not uniform everywhere. The evolution and growth of agricultural co-operatives, in Asia, can be viewed, on a continuum, with relief and service type co-operatives, on the one end, and highly developed, integrated co-operatives, and integrated co-operative structures, providing an entire range of services to their members, on the other. Generally, primary co-operatives without structural support are relatively weak, vulnerable and ineffective. Environmental factors particularly, the role of the government, and quality and motivation of local leadership, seem to have decisively influenced growth, pattern and effectiveness of agricultural co-operatives in Asia.

Although co-operatives everywhere profess their adherence to co-operative principles, yet the degree to which, rural co-operatives are really democratic, varies considerably, so does the extent of members involvement and participation. The processes of professionalisation of management and development of management consultancy services, have been slow, which in turn have diluted the effectiveness of co-operatives.

In the fast changing competitive environments, where growth is guided by market forces, co-operatives are required to compete on equal terms, with larger corporations. In order to be able to do so, co-operatives need capital-a lot of it. Ideological and past practices however inhibit co-operatives from approaching capital markets. Government could and do help, and provide capital but, with that, also comes government control, and a certain loss of autonomy. But then, how to meet growing requirements of capital ?

In a way, the most formidable challenge before agricultural co-operatives in Asia lies in evolving a mutually acceptable, but balanced frame work for interacting with the government. If there is a large number of rural co-operatives in Asia today, it is due to the support and role of the governments, but if these co-operatives have not been able to reach there full potential, that is also due to the role of the governments. Some practical arrangements will have to be devised and put into practice, if only to pave a way for orderly growth and development of viable, democratic, performing rural co-operatives.

In order to monitor the performance of co-operatives, it is necessary that co-operatives evolve, and install appropriate systems of monitoring and evaluation (M&E).What, besides the usual economic parameters, have to be monitored and evaluated need to be decided, before M&E systems can be designed. The system of social audit - a concept which is gaining ground elsewhere - can well be adopted by rural co-operatives in Asia.

The impact of rural co-operatives in Asia has varied from time to time, and place to place. This impact has generally depended on the extent of members’ involvement, quality of leadership, government policies and programmes, availability of trained and qualified staff and structural support, but above all, the intrinsic ability of co-operatives to serve their members, and help them increase their incomes. Where co-operatives have evolved themselves into integrated structures, and are, inspired by dedicated leaders and managed by professional staff, and offer an entire range of services these tend to have a high degree of impact.

Finally, the success of a rural co-operative - and success here means a process of moving from a low impact state to a high impact state - seems to depend on two major variable; the climate within which these co-operatives function and conditions of their working. Climate here includes such variables as macro - environments; land and market reforms, sources, costs and availability of investment and working capital; and quality and character of government-co-operative relations. The conditions for success, include democratic character, availability of trained and skilled staff; economic viability of operations; and the ability to effectively and efficiently meet members’ need for goods and services, and there-by help them increase their incomes. The real challenge in the future shall lie in creating supportive climate and necessary conditions for the success of rural co-operatives in Asia.