Cooperatives and an Overview of Land Reforms

Cooperatives

The national movement’s leaders, such as Mahatma Gandhi, Jawaharlal Nehru, Socialists, and Communists, believed cooperativization would significantly improve Indian agriculture, especially benefiting the poor. Although cooperatives were part of the agenda for land reform, there was no widespread consensus, particularly among the peasantry.

Learning Outcomes

1. Understand the role of cooperatives in India’s agricultural reforms.
2. Identify the evolution of government policies towards cooperatives.
3. Recognize the limitations and challenges faced in cooperative development.

1. Congress Proposals (Post-Independence): Tentative plans were set to organize pilot cooperative farming schemes on government land. However, cooperativization was to be voluntary, requiring the goodwill and agreement of the peasantry without coercion.
2. Kumarappa Committee (1949): Proposed a bolder approach, recommending state powers to enforce varying degrees of cooperation for different farm types. It also suggested that below-basic holders should cultivate jointly.
3. First Five-Year Plan: Adopted a moderate view, encouraging small and medium farms to group into cooperative societies. It also suggested majority consent in a village for cooperative management but avoided using state powers for enforcement.
4. Community Development Programme (1952): Aimed to support institutional changes like land reforms and cooperatives, expecting these changes to substitute significant investment outlay in agriculture.
5. Second Five-Year Plan: Set a goal to establish cooperative farming on a large scale over ten years, inspired by exaggerated reports of China’s success in agricultural output through cooperatives.
6. Indian Delegations to China (1956): Two delegations reported remarkable growth in China’s food production through cooperativization. Recommendations to extend cooperative farming in India followed, with Nehru pressuring states to adopt the Chinese model.
7. Nagpur Resolution (1959): Called for cooperative joint farming, where land would be pooled for joint cultivation, but property rights would be retained by individual farmers. This bold vision faced opposition within Congress and the public, leading Nehru to reassure that cooperatives would be voluntary.
8. Shift in Policy: After the Chinese aggression and internal resistance, the Congress reframed its position, emphasizing service cooperatives and voluntary cooperative farming. However, this was a huge challenge, requiring the creation of 6,000 cooperatives per month.
9. Third Five-Year Plan: Adopted a pragmatic approach, aiming for ten pilot cooperative farms per district, reflecting a more cautious policy stance on cooperativization.

Important Note: The notion of cooperatives was central to India’s agrarian reforms, but it became evident over time that compulsion in cooperative farming was not sustainable.

Limitations of Cooperativization

Despite ambitious plans, cooperative farming fell far short of expectations. Two types of cooperatives emerged:

1. Bogus Cooperatives (Evasion of Land Reforms): Wealthy families created cooperatives to evade land ceilings and access state benefits such as subsidies and priority for agricultural inputs. These cooperatives employed laborers or tenants under false pretenses, reflecting manipulation of the system.
2. State-Sponsored Cooperative Farms: These pilot projects were designed to assist the landless and underprivileged, often on uncultivated land. However, poor land quality and ineffective management led to their failure.

Table: Comparison of Cooperative Types

3. Service Cooperatives: Though more successful, they were dominated by village elites who controlled inputs like credit and seeds. These wealthier families often misused cooperative benefits for personal or non-agricultural purposes.
4. Credit Access Issues: The landless were virtually excluded from rural credit cooperatives. For instance, tenant cultivators and agricultural laborers received only 4-6% of the total credit in 1969.
5. Bureaucratic Hindrances: The cooperative movement turned into a large bureaucratic system, often controlled by local vested interests, which further alienated the village poor.
6. Positive Role of Service Cooperatives: Despite shortcomings, service cooperatives expanded credit access and helped bring about the Green Revolution. They played a crucial role in providing modern inputs such as fertilizers and credit to small farmers.

Important Note: The dominance of village elites in service cooperatives reflected the inequitable power structure in rural India, limiting benefits for the poorer sections.

Milk Cooperatives: Operation Flood

The Kaira District Cooperative Milk Producers’ Union (later known as Amul) exemplified the most successful cooperative experiment in India, catalyzing the White Revolution.

1. Formation (1946): The cooperative was established with the support of Sardar Patel and Morarji Desai, following complaints from Kaira’s farmers about exploitation by milk traders.
2. Leadership and Growth: Under the leadership of Tribhuvandas Patel and Dr. Verghese Kurien, the cooperative rapidly expanded from handling 250 liters of milk daily to nearly 1 million liters per day by 2000, with over 574,000 members.
3. Diversification of Activities: The union developed factories for producing milk powder, butter, cheese, and even baby food using buffalo milk. It also introduced artificial insemination services, veterinary care, and fodder seed production.
4. Democratic Functioning: The cooperative model was democratic, with direct producers involved in decision-making. The cooperative also encouraged participation from the landless and low-caste members.

Table: Key Milestones in Amul’s Growth

5. National Impact: The success of Amul led to the formation of the National Dairy Development Board (NDDB) and the launch of Operation Flood in 1965 to replicate the Anand Pattern across India. By 1995, 69,875 village dairy cooperatives were formed, benefiting 8.9 million farmers.
6. Operation Flood Impact: Milk production increased, and it became a significant anti-poverty measure. Studies estimated that 60% of beneficiaries were marginal farmers or landless. It also led to the growth of an indigenous dairy equipment industry and expertise in areas like artificial insemination and animal health.

Important Note: The success of the Anand Pattern was driven by self-selection, where poor farmers benefited naturally without targeted aid programs.

Land Reforms: An Overview

India’s land reforms were unique in that they were implemented without the violence seen in countries like China or the Soviet Union.

1. Democratic Reforms: India transformed its colonial agricultural structure into a more capitalist farming system. Landlords and moneylenders were gradually sidelined as cooperative credit institutions expanded.
2. Credit Growth: Loans to farmers increased significantly, from Rs 0.23 billion in 1950-51 to Rs 7.75 billion in 1972-73, marking a major shift from reliance on moneylenders.
3. Motivation for Agricultural Improvement: Tenants and sharecroppers who gained ownership rights were more motivated to invest in their land, leading to higher productivity.
4. Community Development Projects: The state invested heavily in agricultural research, irrigation, and rural infrastructure through Community Development initiatives and other programs.
5. Agricultural Growth: Indian agriculture grew at over 3% per annum during the first three Plans, compared to only 0.4% in the colonial period. This growth was driven by both area expansion and increased yields per acre.

Table: Land Reform Impact

6. Continuing Challenges: Despite the reforms, the landless problem persisted. The caste system left a large portion of the rural population landless, and the rapid population growth compounded the challenge.
7. Failure of Cooperative Joint Farming: The vision of cooperative joint farming to solve rural poverty failed due to resistance from better-off farmers who controlled these initiatives.

Important Note: Though India avoided forced collectivization, its capitalist agricultural reforms eventually led to productivity gains, benefiting both small and medium farmers.

Conclusion

The cooperative movement and land reforms in India have brought significant, albeit uneven, improvements to the agricultural sector. While certain cooperative models like Amul succeeded spectacularly, broader efforts to promote cooperative farming faced challenges due to elite dominance and structural issues in rural society.

MCQ: What was the key factor behind the success of the Anand Pattern of cooperatives in India?

a) Government subsidies
b) Self-selection of poor farmers
c) Use of advanced technology
d) Mandatory farmer participation

Answer: b) Self-selection of poor farmers

Table: Key Concepts from Cooperatives and Land Reforms