The Indian cooperative movement is said to be one of the largest people’s movements in the world. The dairy giant Amul and the restaurant chain, Indian Coffee House are some well-known examples.
More than half a million cooperative societies exist in contemporary India. These first came into being during the start of the previous century when village credit societies were formed.
A cooperative can be defined as an association of people who voluntarily come together to meet common economic, social and cultural needs through jointly-owned and democratically-controlled enterprises.
Cooperatives play an important role in the transformation and revitalization of the rural economies and empower people. Their role in battling poverty, food insecurity and unemployment is widely recognized.
Trying to understand the factors that contribute to the development of successful cooperative structures, Dr. Amalendu Jyotishi, Associate Professor at Amrita School of Business, Bengaluru, embarked on a case study of the Central Arecanut and Cocoa Marketing & Processing Co-operative Limited (CAMPCO).
The study is funded by the Sir Ratan Tata Trust Small Grant from Institute for Social and Economic Change in Bengaluru, which supports interdisciplinary research and training in social sciences.
CAMPCO came into being in 1970-71, when falling world prices for arecanut and cocoa, caused considerable concern in India.
For instance, the states of Karnataka and Kerala, which are joint partners in the cooperative, together account for the world’s largest supply of arecanuts. Nearly six million people are engaged in its cultivation, processing and trade.
“CAMPCO was meant to create an organized market structure for the two plantation crops, arecanut and cocoa, in the backdrop of falling market prices,” explained Dr. Amalendu.
“When prices are changing, it becomes difficult to sustain the cooperative model,” he added. “Growers may prefer to sell their product in the open market, unless the structure of the cooperative is robust.”
“Therefore, it is important to understand what sustains a cooperative model in the face of rising or falling prices. CAMPCO makes for an interesting case study, because its cooperative model has successfully been in existence for a fairly long period of time now.”
“The lessons learnt from CAMPCO can be useful to understand factors influencing evolution, growth and sustainability of cooperative models in India. A successful cooperative system requires a winning combination of financing, marketing strategy and most importantly, an institutional structure that enables large participation of the producers on a sustainable basis,” he concluded.
April 13, 2011
School of Business, Bengaluru