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Monthly Archive July 2019

Agriculture Economy – How Local Governments can help?

The new Local Government Act is in force now and the new administrative set up under this act is expected to take roots in a year time.  The new system has envisioned separate urban & rural council along with its associated concerns it certainly has certain advantages for the administration. Tehsil council being the representative of the rural areas only will have the opportunity to focus more on improving the rural economy. It’s important to see how the candidates and parties push the narrative during the campaign. Whether the understanding of the mandate and functions of the council is translated into the election campaign or only the National rhetoric will take the lead in the camping.  It’s more important that the potential candidate starts exploring the new Act and exploring various plans they may offer with respect to their functions during the campaign.

Agro-economy is the main source for the rural population however its productivity and profitability has caused some serious damage to the industry. The farmers are continuing just for the sake of living and not there are no much profits for a sustainable living for small farmers. For small farmers, due to the small holding size, there are limitations to various offers, though Govt has certain programs for small farmers. Going by the experience of the Netherlands and the challenges our small farmers facing, its time we turn to the co-operative culture. Co-Operative societies Act 1925 provides the legal structure for establishing and working of Co-Operatives however it needs certain amendments to make it compatible with the foregoing proposals.

Our prospective candidates for the Tehsil Councils should start pondering and developing solutions that may help the constituents (mainly farmers/growers) to get more with the less. A Tehsil council may help them by way of providing guarantees for the cooperative (mind the conflict of interest) in securing credit. Financially assisting in improving irrigation systems, setting up solar tube wells, setting up warehouses for the common purpose and affording them opportunities of better management of crops in post-harvest and in market access. Value of money can be increased if such services are provided to the co-operatives instead of individual farmers. On top of the requirements of the Co-operative Societies Act, a Tehsil Council may put up some other conditions.

Let’s take a case of a Tehsil Council encouraging Co-Operatives and has set up its own budget and policy for the support purpose. The policy is such that it set up certain mandatory requirements to be full filled. Like the appointment of qualified persons, periodic soil/water tests, periodic levelling and boundary verifications etc. Only such Co-Operatives shall be eligible who are registered with the Registrar of Co-operative Societies and have minimum twenty-five acres of land (preferably compact) under its management for the purpose of farming. The members of the Co-Cooperative (Say 5-7) serve as the Board members and they exercise their authority through resolutions. They appoint a qualified person as Farming Manager, Wearhouse & Marketing Manager and any other administrative staff or workers required time to time.  By resolution, they authorize the Farming Manager to represent & protect their interests whenever attending the meeting with the Agriculture Department for seeking new technology or seeds or other farming assistance, Tehsil Council in securing support, Financial institutes in securing credit and so on. The Farming Manager so appointed shall serve as Principle accounting officer and keep a record of all the directions and decisions of the board, Inventory of the Co-Operative/Farm, all the expenditures occurred for the production of any crop.

After harvesting, the Wearhouse & Marketing Manager shall protect the interests of the Co-Operative by preserving the crop, adding value to it and adequately marketing and collecting all proceeds. Under Punjab Agriculture Market Regulatory Authority Act a grower or association of them can set up their own market without registration requirements. After receiving all the costs and incomes from the sales of crops, the Farming Manager shall complete the report of expenditures & incomes for the season and share the profits/Loss equitably among all the members of the Co-Operative as per their share of Landholdings/Investment. As a Policy of the tehsil council, it shall require such a report to be submitted to it for its analysis and taxation purposes.

Co-Operative seeking support shall remain valid for a Minimum period of 5 years. Any interests in the land subjected to the Co-operative transferred by virtue of inheritance or sale shall remain subject to the holding of the Co-Operative till the completion of the validity of the Co-Operative. Co-Operatives made to work as such under the support policy of a Tehsil Council can increase the utilization of various assets and thus increasing productivity and efficiency. Qualified Managers appointed can speed up the pace of knowledge & technology transfer. Deployment of qualified persons in the farming will increase the productivity and efficiency of the sector which we certainly need the most. Currently, our farmers are not educated info to take advantage of the modern technologies and financially it’s not feasible for every small farmer to deploy qualified persons or special technology or equipment. However, when small farmers join hands and increase their landholding subject to common purpose, they become capable of appointing a qualified person to take care of all of their lands and also can afford to adopt new equipment’s. The Economy of scales plays its role.

With all these efforts, the Tehsil council where it will increase the income of its constituent and their spending ability, it will raise more revenues directly and indirectly. Under such a support package, the council may either agree for a fixed percentage share in the profits of Co-Operative or it may subject all Co-Operatives within its jurisdiction under a special income tax. The increasing culture of the Co-Operatives will reduce the spending of their constituents in procuring sperate machinery or tube wells. The common farming practice will increase the utilization of the inventory. We as a country need to improve the efficiency & productivity in our agriculture sector and solution to it is clusters & Co-Operatives supported and encouraged by the Local Governments.

Can the prospective candidates & Party Leadership focus more on their mandate & functions of the LGs in the upcoming campaign session and less on the national rhetoric?


Featured Image Credits: Institute of Entrepreneurship Development