Cooperatives are people-centred enterprises owned, controlled, and run by and for their members to for realise their common economic, social, and cultural needs and aspirations. With the enactment of the Cooperative Credit Societies Act, 1904, the British tried to replicate the cooperative movement of Europe in India.

The evolution of cooperatives and their contribution to the development of agriculture in India could be traced in the following two phases:

• Pre-independence phase:
  • Indigenous activities: Even before the passing of the 1904 Act, the practice of the concept of cooperation and cooperative activities was prevalent in several parts of India. For instance, creation of village tanks, village forests etc. by village communities, Chit Funds in erstwhile Madras Presidency etc.
  • Statutory support: Cooperatives received a major boost in the form of the 1904 Act and the Cooperative Societies Act of 1912. It was believed that statutory backing would solve the issue of poverty and indebtedness among Indian farmers and their dependence on moneylenders.
  • State protection for the cooperatives: In 1945, the Cooperative Planning Committee recommended state protection for the cooperative sector. However, acceptance of this recommendation led to erosion of the cooperative principles thereby contributing to the inefficient functioning of the cooperatives in India.
• Post-independence phase:
  • Initiatives taken by the State: These include making cooperatives an integral part of Five-Year Plans and encouraging every village to have at least one cooperative society, Further, a National Policy on Cooperatives, 2002 was adopted and the Multi-State Cooperative Society Act was enacted in 2002.
  • Constitutional Provisions: Article 43B and Part IXB, on cooperatives, were inserted into the Constitution through Constitutional amendments.
  • Separate Ministry: Recently, the government established a Ministry of Cooperation, which aims to further strengthen the cooperatives movement by ensuring wider reach to the grassroots level, ensuring ease of doing business for cooperatives, etc.

The cooperatives have contributed to the agricultural development in India in the following ways:

• Providing agricultural credit: Agricultural credit cooperatives in India constitute one of the largest rural financial systems in the country, which include Primary Agricultural Credit Societies (PACS), District Central Cooperative Banks (DCCBs), State Apex Cooperative Banks (SACBs), Land Development Banks (LDBs), etc. With a share of 11 per cent of total agricultural credit, cooperatives are covering 19 per cent of farmers in India.
• Providing agricultural inputs: Cooperatives provide various agricultural inputs for farmers such as fertilizers, developing irrigation infrastructure, providing extension services, etc. For example, Indian Farmers Fertiliser Cooperative Limited (IFFCO), a cooperative society, engages in the production and distribution of chemical fertilisers.
• Facilitate marketing and distribution of farm produce: Cooperatives have played a pivotal role in eliminating intermediaries in agricultural marketing and securing a large share of profits for the producers. Cooperatives also provide crucial services such as storing, transporting and processing of farm produce.
• Act as a driver of agricultural reforms: Cooperatives have played a crucial role in steering various agricultural reforms in India such as the Green Revolution of the 1960s, facilitating land reforms, etc.

Thus, from providing vital inputs to ensuring production efficiency and facilitating the distribution and marketing of agricultural produce, cooperatives are pivotal for the development of the agricultural sector in India.