www.kuberpokharel.blogspot.com: 2011

notes

Chapter -5

5.1 Nature of rural based industries.

The industries which are basically depend upon rural means and resources are considered as rural based industries. These industries are using rural farm product for production. Such as timber, bamboo, jute, and agro product. The natures of rural based industries are given below:

It is unorganized in nature.
It is small in size.
It establish for the thresh hold population.
Easy to establish.
Less capital is required.
Self sustain of local technology.
Labor intensive,
Traditional technologies and ideas are applied.
The family labors are using more.
Local resources are used.
High employment generates due to labor intensive.
The market is rural area.
It oriented to the local peoples need not for the other.
Low production

5.2 Role of cottage and rural based industries in rural development.

The cottage and small industry sector contributes about sixty-five per cent to total export and fifty-eight per cent to total value addition. Of the total industrial sector, this sub-sector constitutes about ninety-five per cent. It has been estimated that Nepal’s traditional cottage and small industries, such as basket making, the weaving of cotton fabrics, the manufacture of floor covering and ghee-making employ one million workers. In general, cottage and small industries are involved in food processing, cereal and oil milling and ghee-making despite the fact that there is a trend towards cereal and oil milling by special mechanized units, cottage and small-scale industry production for the market comprises chiefly textiles (cotton fabrics and floor coverings) and bamboo products. In the recent times, cottage industries have been defined as manufacturing establishments with a fixed investment. Most manufacturing is of cottage or small scale type. Light consumer goods industries dominate the structures of manufacturing. More than half of these enterprises are light industries such as carpet, rug and furniture manufacturers, grains, sawmills and tiles. Intermediate and capital goods manufacturing activities have made limited progress in Nepal during the last four decades. Ownership in cottage industries has been found to be private in the form of either a private firm or a private limited or partnership company. According to the Central Bureau of Statistics in 1992, in the first nine months of 1990-1991, one thousand and one hundred and twelve cottage and small industries were registered with the Department of Cottage Industry, with a total investment of twelve thousand and two hundred and sixty-two million. Of these, nine hundred and sixty-four were private firms, forty-three private limited companies and one hundred and thirty-two partnership firms. Among the various types of cottage and small-scale industries registered in the afore-mentioned department were polyester hosiery, woolen yarn, metallic utensils, food processing, cotton textiles, electrical appliances, stationeries, paints, bricks, tile, stone and concrete, wax candle and footwear units that produced basic needs type commodities. Until recently hand knitted woolen carpets and handicrafts were the two leading items which contributed heavily to export earnings. The Nepal Textile and Cottage Enterprises Extension Office were established in 1993 B.S. in order to create industrial consciousness through the propagation of cottage industries. Due to this institutional initiative in the course of time the present day cottage and small Industry Development Department, Cottage Industry Committee and Industrial Enterprises Development academy are involved in this sector through their branches in different parts of the country. The Industrial policy 2049 and Industrial Enterprises Act 2049 have also placed emphasis on the development of cottage and agro-based industries based on local means and resources. With a per capita cultivated land of only about 0.2 hectare, farming does not provide full employment to the entire rural labor force of our country. In this context, cottage industries can play a very important role in augmenting the income from farming for the marginal and landless farmers. According to a report published by the International Labor Organization in 1980, the rural poor are expected to benefit a great deal from the expansion of cottage and small-scale industries. Despite advantages from cottage and small-scale industry, the technology applies in such industry is of subsistence nature and fails to maintain equality and costs at desired levels. As a result, such industries are unable to compete with foreign goods. It is too late to bring in suitable and low cost technology and familiarizes entrepreneurs with it. Shortfalls have been felt on the part of the affiliated bodies in the variety of training programs. In fact, it is believed that the training programs can be conducted smoothly through accumulation of fund from district development committees and other non-governmental organizations. Each district development committee has sufficient budget allocated for this purpose. It has also been realized that training and marketing should be conducted for the staff of handicrafts sales centre and retail outlets in different districts in order to make them competitive. The producers should be able to link with such retail outlets so that they need not rely on intermediaries for selling their products and buyers need to wander in the quest of such products. Women can play a significant role in promoting cottage and small-scale industries. In this regard, income generating schemes are also being carried out at the local level under the heading of small enterprises. Women who received three-month skill development training have not been able to use their new skills on a commercial basis because such a short training is unable to impart adequate knowledge and competency to launch their products in the market for sale and run a small industry. According to the trainees, the three-month course is only suitable for imparting general knowledge and it can no longer establish one on a vocational footing. What most trainees think is that the duration of training needs to be extended; they need to be familiarizes with modern equipment apart from providing better trainers. Today, unemployment has been an acute problem in our country. The development of cottage and small industries helps increase employment opportunities. A monumental effort to develop and expand cottage and small industries by utilizing traditional skills and local resources can create more employment opportunities. Export-oriented industries such as woolen products and metal curios can earn a huge chunk of foreign exchange and also provide adequate employment opportunities. The Ninth Plan aims at promoting cottage and small-scale industries that can generate self-employment, making licensing and registration procedures flexible as well as simple, conducting management training and introducing a program package with technical support for creating employment in the non-agricultural sector in order to raise income levels and the purchasing capacity of rural people. Such entrepreneurship is of immense importance in Nepal because it takes one towards self-reliance with the use of limited capital and locally available resources. Today, poverty has plagued about half of the total population of the country. With the reinvent of democracy in 1990 poverty has been become the main objectives of development planning and the present Ninth Plan singles out poverty as the sole development objectives using area-based program infrastructure to the more undeveloped and isolated regions and targeting indigenous people, the oppressed and downtrodden, women and children. The low capital requirement is one of the striking features of cottage and small-scale industries, which makes it significant in any strategy for poverty alleviation in Nepal.

Rural based industries are the main backbone of the developing countries like Nepal. These industries play vital role in the process socio economic development of a country. The rural based industries are labor intensive industries which can generates more employment opportunities’ to the unemployed and disguised employed people. Nepal’s agriculture sector is unlimited supply of labor those labors can utilize in the rural based industries which provides the alternative means of earning in the rural area of Nepal, where the 50% farmer are underemployed. The roles of rural based industries in rural development are listed below:

· It generates the employment opportunities to the local people.

· Utilization and development of local means and resources.

· This is alternative means of earning to the agricultural labors, who are underemployed.

· These types of industries play vital role in the national capital formation.

· Increase in the export business.

· It develops the living standard of the rural people, and develops the remote and rural areas.

· It makes equal distribution of the national incomes.

· It contributes in the nation building process.

· It utilizes the local means and resources for the production of goods.

· It makes self sufficient to the nation.

· This provides knowledge and capital to establish the large scale industries.

5.3 Silent feature of cottage industries.

The industrial policy act 1992 has classified labor intensive industries, industries related to country’s tradition, art, culture and traditional industries mobilizing special skills or local row materials and resources as traditional cottage industries. The group of industries which have capital investment up to 7 lakhs, annual production up to 15 lakhs and 10 hours power machineries are used. For example handlooms, clothes, carpets, curio goods, hand made paper, etc the main features of cottage industries are listed below:

unorganized in nature
It is not a mass producer of commodities.
labor intensive and utilizes traditional techniques in production process
Easy to establish.
Promotion of local and skills.
Less capital is required.
Participation of family members.
Utilization of local resources.
Easy to sustain in local market.
To maintain the trade balance inside the country.
Self sustain with local technology.
Easy to manage (not necessary managerial skills)

5.4 Problem and prospect of cottage industries.

The problems of cottage industries are given below:

· Lack of financial support from the government.

· Lack of basic infrastructures in the rural area.

· Competition with large industries.

· Shortage of raw materials.

· Lack of skill development to the manpower.

· Market is limited and small market in the rural are.

· Lack of proper policy to promote the cottage industries.

· The technology is not modern still the technology is primitive.

· Lack of industrial and other security.

· The exploitation of intermediary in the market.

· Political instability.

· Frequent change in the industrial policy.

· Lack of subsidy policy to the cottage industries.

5.5 Cottage industry, main stay of rural development.

There are different cottage industries in the county. They are based on different sectors such as agriculture, horticulture, livestock, handicraft, herbal, metal, paper and paper product. The above industries are providing the following benefits to the country directly or indirectly. The development of cottage industry play positive role in country with multiplier affect such as the development of cottage industries which increase the earning capacity of the rural people. The agriculture sector also develops due to the development of cottage industry. For the all round development of a country development of the rural and remote area in general and agriculture and cottage industries in particular. Due to the following reason the cottage and rural industry play a very crucial role in the process of economic development of developing country like Nepal. Which are listed below.

· It increases the per capita income of local people.

· It utilizes the local resources which are selling at thrown away price.

· It provides the subsidiary occupation to the underemployed people.

· It provides the base to the development of large scale industry in the country.

· It preserves the traditional art and culture through the production of curio goods.

· It terminates the social evils which are the result of unemployment.

· It supplies the consumer goods which makes the nation independent.

Chapter- 6

6. Land in agriculture

Land is the basis of agriculture, virtually all types of production depends upon land in general and agricultural production depends upon it in particular. It is the main factor of production, which provides space for any productive enterprise to take place and also acts as the repository of all the elements necessary for the growth of plants and animal. Land has been mans most significant input in his production enterprise and it continues to be so, more particularly in the least developed countries by a family unit determines its economic and social positions in the society. Historically mans poverty depend upon his control over farm land. Now situation has been changed, so far as the role of land in agriculture is concerned it serves as the sources of food and fiber production pastures and grazing lands and forests. Desire of land is also stimulated because of its permanent value, indestructibility and immovability. These qualities have tended to inflate the value of land and the prestige of its possessor. Land is also held to be safest form of saving and insurance against a future financial crisis. With the population rising fast the demand for land for various uses shall ever rise and increase its value continuously. Investment in land has therefore all along mode a more prestigious asset, than cash or other movable assets. With demographic explosion on the one side and the poor employment capacity of the non farm sector on the other, the demand of land is about to increase. Land is factor of production in agriculture has some important characteristics not common to the other factor of production, which is given below:

Land is heterogeneous in quality.
Land is limited in supply.
Land is subjected to the law of diminishing returns.

Due to peculiarities of lands character, there is heterogeneity of land quality. The productivity of land is in place to place. The heterogeneity of land arise with the different types of soil qualities, ecological condition, land topography and other factor also lead to wide varieties in the quality of land. The agricultural productivity is differs with the quality of soil and availability of factors of productions such as irrigation facilities, high yielding seeds, fertilizers, pesticides, skilled manpower and seasonal support by nature. The proper combination of land labor and capital, the productivity of land can be increased.

6.1 Agricultural production

Production is a process whereby certain goods or services are used to create goods and services of a different nature. Production is the name given to the process of conversion of certain inputs into a consumable form. Farm production likewise refers to the producing of food, fiber and livestock by using several kinds of inputs. Land is used by the farmers as a factory which helps them produce the desire crops. To this manufacturing, land, labor and capital are added to cultivate plant and harvest the crop when it is necessary, fertilizer is also added by the farmer. Water may be either is provided by rain fall or by artificial irrigation methods. Application of all these inputs results in desired output. Agriculture production concerned with the quantitative relationship which are basic to production process in agriculture. These relationships take them form of input output patterns and various types of interactions among the individual inputs themselves and among the products which contribute to the output. It is also concerned with the levels of factor costs and product prices and with the nature of production patterns which allow the attainment of certain desired optima, like profit maximization or cost minimization. The subject matters of production cover all agricultural problems that falls under the scope of resources allocation and marginal productivity analysis. There are three main features of production land, labor and capital. It is the job of a farmer to use these three inputs in combination on the farm. In the first place the farmer has to act as an entrepreneur and in second he has to act as chief executive or farm manager. These both functions of the farmer are concerned with the fundamental problem of ascertaining and adopting the optimum combination of land, labor and capital at the disposal of the farmer.according to the National Productvity and Economic Development centre(NPEDC) 1990 “Agricultural productivity can be defined as th efficient use of resources such as land, labor, capital and technology for the production of agricultural goods and services.it also implies effictiveness and efficiency in individual and organizational performance.”

6.2 Methods of measuring productivity

There are three types of the measurement system of productivity of land .which are given below:

· Total productivity = total output

Total input

· Partial productivity = output

Partial input

· Total factor productivity = total output

Labor + capital

· Agricultural productivity= total production

Total area

6.3 Characteristics of agricultural goods

6.3.1 Agriculture marketing

The marketing of farm products is a matter of great interest to the farmer, the consumer and the middle man. To the farmer, it provides a channel of communication between him and the society and gives him continuous information about the demand for his products. The consumer views it as a means of supplying his needs. The middleman depends upon it for his livelihood. These diverse interests lead the farmer to seek a high price market for his products, the consumer a low price market and middleman a margin between the farm price and consumer’s price. With the advanced in intensive cropping, processing, storage and marketing of agricultural production are becoming more and more important. In the absence of sound marketing facilities in Nepal, the Nepali farmers have to depend on local traders and middleman to sell their farm product which is sold at through away prices. In the case of small and marginal farmers, marketing of product is still more critical. Since the amount of product they are able to sell is small and overhead expenditure on processing, transport and marketing of the product is heavy. For the development of the agricultural marketing so as to match with the production surplus resulting from technological innovations and exploitation of the existing land and water resources.

6.3.2 Problems of the market of the agricultural goods.

Marketing of the agricultural goods is more complicated than the marketing of other non agricultural goods for the following reasons;

· The output of agricultural is largely a raw material, after processing it turns into food other variety.

· The products are more bulky and perishable.

· The quantity and quality of agro products varies year by year due to uncertainty in the natural system.

· The products are scattered in the different parts and small in size in the different parts of a country.

· Lack of infrastructures of the development of market.

· Existence of middleman in agro marketing.

· Lack of wholesale markets in the rural areas.

· Lack of collection center of agro products.

· Lack of grading system of agro products.

6.3.3 Measures taken to solve the problem

The following measures should be taken to solve the above problems of agriculture marketing.

· Infrastructures should be developing in the rural areas of a country such as road, construction of cold storages, store houses and other necessary things.

· Should eradicate the existing middleman from the agriculture marketing.

· Should develop the wholesale marketing in the rural areas.

· Govern should fix the agro products price in time.

· Government should provide subsidies in the agricultural input and subsidies in the product.

· Cooperative marketing should open in the rural areas.

· The agro goods grading and standardization should start.

· Extension of agriculture services in the rural areas.

6.4 Role of government in rural development

The government has different role in the rural development are given below:

Policy maker.
Construction of development infrastructure in the remote and rural area.
To promote the private sector in the development activities.
To play a facilitator role among the development agencies involved in the development activities.
Supervisor and evaluator of development activities.
Control and direction in the development activities if necessary.
Welfare to the weaker section of the society.
Provide good environment for the development activities.
Provide securities to its people inside the country and security of boarder.

6.5 strategies for rural development and their dimensions

There are different strategies are applied in the process of rural development. Some of them are describe below.

a) Growth oriented strategy

This strategy is based on the philosophy that rural people are rational decision makers, who, when given adequate opportunity and proper environment will try to maximize their incomes. The role of the state in this strategy is to build infrastructures and maintain a favorable climate. To stimulate the growth of rural enterprises. The regulation and coordination of the activities of private and public agencies is primarily through market mechanism. The critical assumption of increased production will gradually trickle down to the poor.

Welfare strategy.

This strategy seeks to provide the well being of the rural people in general and rural poor in particular, through large scale social program like the basic needs program, school Tiffin program etc. the primary means used in this strategy are free distribution of goods and services in the rural areas. The critical assumption of this strategy is that the people are not able to identify and resolve their problems and that the government should identified their needs and meet them with financial and administrative resources available with the government. The role of villagers is that of passive receptors of services. The performance of the program is judged by the quality of goods and services. It creates local people dependency, and needs huge amount of budgets.

Responsive strategy

This strategy is aimed at helping rural people help themselves through their own organization and other support system. It concern with responding to the felt needs of rural people as defined by them. The role of government is to facilitate the self help effort of villagers by providing technologies and resources that are not locally available. The critical assumption of this strategy is that the rural people will identify and resolve their problems, if provided with minimum support and left to their own devices and initiatives, community participation in the control and directing the project activities is the primary performance indicator of this strategy.

Integrated strategy

This strategy is the combination of all the positive features of the earlier three strategies, and is designed to simultaneously achieve the goals of growth, welfare, and equity and community participation. This paradigm takes a very comprehensive but integrated view of the basic problems of poverty, unemployment and inequality and seeks to address the physical, economic, technological, social, motivational, organizational and political bases of these problems. The multiple goals of this strategy are sought to be achieved by building the capacity of the community to involve itself in development partnership with the government. The critical assumption underlying this approach is that the government can restructure societal power relationship and centralized bureaucracies’ can learn to share power with the community groups. Successful implementation of this strategy requires complex decentralized matrix structures, with permanent mechanism for vertical and lateral integration, a combination of specialist and generalist skills, institutional leadership, social intervention capability and system management.

Chapter- 7

7.1 Concept of cooperation

The word cooperation is derived from the Latin word cooperari, co means together and operari means to work, which means working together for common goals or objectives. It means in a boarder sense, self help, mutual help and assistance. The motto behind cooperation is each for all and all for each. Thus cooperation is association with human being in all walks of life. It teaches us to maintain a disciplined life and coordination among each other; from ant community we get the identification of instinctive cooperation.

According to Prof. Paul Lambert defines it as “an enterprise formed and directed by an association of users, applying within itself the rules of democracy and directly intended to serve both its own members and the community as a whole.”

According to Dr M .ladenatz “cooperative enterprises are association of persons, small producers or consumers who come together voluntarily to achieve, some purpose by reciprocal exchange of services through an economic enterprise working at their own risk and with resources to which all contribute.”

According to M.L.Darling “something more than a system, it is a spirit which appeals to the heart and the mind. It is a religion applied and business. It is a gospel of self sufficiency and service.”

Anotoina Antoni describes “cooperative is an association of persons pursuing aims of social, economic and educational character and farming for their attainment an enterprise which operate in accordance with the principles of democracy and collective ownership.”

I.L.O. defines “it as an association of persons varying in number, who are grappling with the some economic difficulties’ and who, voluntarily associate on a basis of equal rights and obligation, endeavor to solve those difficulties, mainly by conducting at their own risk and undertaking to which they have transferred one or more of such of their economic functions as correspond to their common needs and utilizing this under taking in joint cooperation for their common materials and moral benefits.”

According to ICA (international cooperative alliance) “a cooperative is an autonomous association of persons united voluntarily for the fulfillment of their common economic, social and cultural needs and aspirations through a jointly owned and democratically controlled enterprise.”

Cooperatives are economic organizations run by their members on the basis of one person one vote with their trading surplus being distributed among the members in an agreed manner. Membership can their fore be seen as an extension of corporate shareholding except that in cooperatives decision making on democratic principles. Unlike conventional firms a capital stake is not necessarily the crucial element conferring decision making rights. Indeed, the return on capital holding is generally fixed at a low level, leaving the bulk of the surplus to be allocated according to member transactions. Decision making authority derives from the characteristic of the democratic collective such as consumer, worker, for example in consumer cooperatives membership derives from the act of purchase and profit are distributed according the amount spent. In agro- cooperative members are private farmers who join forces for production. In 1844 the first cooperative was opened in Toad Lanc Rochdale, by twenty eight Lancashire workers who developed the seven cooperative principles which are still form the basis of the international cooperative movement. These are open members, limited return on capital allocation, democratic control, mutuality, and stress on education, religious and political neutrality. They are reviewed by the international cooperative movement.

7.2 objectives of cooperatives

Cooperative is an economic system which aims at eliminating all social and economic miseries. It is a social revolution which occurs without any blood full violation. It makes social revolution in the existing social structure in peaceful manner. It teaches us to be self reliant in every sphere of activity; cooperation seeks to bring change in a society with the peaceful manner, which will stop the social exploitation from the middle man local money lender and broker. The objectives of the cooperative can be describe as bellows,

Economic objective

The economic objective of cooperative is to improve the economic status of the rural people by the provision of self help, mutual assistance and protects their freedom. In a society all people are not equal. The needs of individuals differ from one another. Cooperative societies have a distinct social and economic aim viz., to correct the present inequality of wealth and substitute for the competitive system on industry controlled by all for the common interest and distributing on principle of equity and reason, mutually agreed on the wealth produced. The cooperative credit society provides to its members at a reasonable rate of interest and it promotes the habit of saving among its members. The consumers cooperative supply the consumer goods at a fair price and protect them from the exploitation of the brokers, trader’s commission agents and the middleman. In the same way the producers cooperative facilitate in production process by minimizing the cost of production and maximizing the benefits of large scale production.

Moral or ethical objective.

Cooperative runs with the ethical values such as love honesty and other virtues. The knot of friendship is tightened by the help of cooperation. It teaches us to fight for the sake of common welfare. It changes our attitude in the progress and revolutionize in their thinking for common welfare.

Social objective

Cooperation is a social movement which eradicates all the social evils from the society. In the cooperative organization, income is distributed with the spirit of equity. It eliminates competition; it improves the traditions and customs of society. It teaches its member self help, concerted effort, effective utilization of credit and democratic principles. It controls harmful expenditure and encourages harmless expenditure. Service motive is substituted for competition.

7.3 Characteristic of cooperatives

Cooperation is the main motto of cooperative. Each for all and all for each is the main ethic of the cooperative organization. It has strange character from the other organization some of them are listed below:

It is based on the spirit of cooperation.
It is based on the unity and joint action.
Common interest of the members.
Economic democracy and fiscal transparency.
Management through the democratic principle.
Open membership for the interested group.
Equal distribution of the income.
Emphasis on the ethical and social norms.
Fair return on capital.
Cash transaction.
Corporate status.
Neutrality from the political and religious system.
Elimination of profit motive.

7.4 Principles of cooperatives

Generally principles refer to the code of conduct, which governs the activity of the organization. Similarly cooperative principles are the set of rules and regulations to regulate and govern the activities of cooperative enterprise. Every economic system is based on certain fundamental principles. Cooperative as an economic activity which is not an exception to the economic principle such as.

It is an association of persons.
It is a business enterprise.
Voluntary enterprise based on democratic principles.
It is an embodiment of virtues such as mutual help, self help and equality.
It promotes the bond of friendship.

The first cooperative movement was started by a group of workers. They formed cooperative societies, which was based on certain objective such as elimination of profit motive and equal distribution of surplus earning among its members. These principles were based on Rochdale principle many countries adhered to this principle while forming cooperative societies. The international cooperative alliance in 1937 prescribed the following principles of cooperation which are still principles of cooperative societies.

· Voluntary, active and open membership.

· Democratic control.

· Limited interest on capital.

· Self help and mutual help.

· Equitable distribution of surplus.

· Cooperative education.

· Cooperative among cooperatives.

7.5 Comparison between cooperatives and private business

There are certain similarities between private business (capitalism, Joint Stock Company) and cooperative listed below.

Both are organization.
Both need capital to carry on their activities.
Both depend upon the efficiency of the business.
Both secure capital by shelling of shares.
Both establish according to law.
Both have liabilities.
Both are competent to enter into a contracted and hold property in their own names.
Both need management, staff and chain of command.

But fundamentally they are different from one another. Some of them are listed below

Cooperatives

Private business

It is established and registered under the Nepal cooperative act 2049.
It aims at protecting their interest.
It is established for welfare motive.
Equitable distribution of economic surplus to its members.
There are at least 25 members to open the cooperative but no upper limit.
Each member has only one vote i.e. one man one vote.
Government provides facilities and subsidies to promote the cooperative Such as subsidy in income tax, registration fees.

It is established and incorporated under Nepal company act.
It aims at exploitation to the poor.
It is established for profit motive.
Profit is distributed according to the share capital.
There is no limitation to start the pvt business.
Voting rights depend upon the number of shares i.e. one share one vote.
Government does not provide privileges to the pvt. Business.

Chapter-8

8.1 Development of cooperative organization in Nepal

Cooperative society is a voluntary association in which persons of limited means associate together for promoting their common interest and economic ends in democratic way. From the ancient time, while doing some work there was the tradition of helping each other with the view of cooperation. Traditionally agriculture, land, seeding, planting and reaping the crop, there was system of help in the different part of a country such as in ktm valley manka guthi, in thakali community dhikuri in gurung community rodhi. The government was also have cooperative named dharma bhakari, which provided credit to the farmer in planting season and taking return in harvesting season, with nominal rate of interest. The modern history of cooperative development in Nepal is only about 50 years old. In its development, department of cooperative was established under food and agriculture ministry in B.S. 2010. Under this department the first multipurpose cooperative Rapti valley development project was started in 2011BS. The development history of cooperative can be listed in the following points.

There was different social organization were development in the past. Such as parma, mangaguthi, bheja, dhukuri dharma bhakari.
2000BS, the ranas started for the feasibility study of the cooperative.
2010BS, establishment of cooperative department.
2013BS, first cooperative society was registered.
2016BS, commencement of cooperative act.
2019 BS, establishment of cooperative training centre.
2020BS, establishment of cooperative bank.,sajha(prakashan, yatayat,and swasthya sewa)
2047BS, cooperative advisory committee formed.
2048BS, cooperative act was passed through the house of representative.
2049BS, cooperative by act commenced by the hmg. National cooperative board act 2049 passed.
2054BS, national cooperative was involved in ICA.
2057BS, agricultural ministry change its name as ministry of agriculture and cooperative.
2061BS, National cooperative bank was established.

8.2 Prerequisites of cooperative organization.

The prerequisite of cooperative organization are

Provision of formation of cooperative organization.( preliminary cooperative organization at least 25 members, subject wise cooperative org. 5 preliminary cooperatives, district cooperative union 5 preliminary or 5 subjective cooperativemembers is required, and for the central cooperative union 5 preliminary and 5 subjective cooperative member is required including preliminary cooperative, subject wise cooperative and district cooperative union at least 15 members required.
Preliminary meeting.( this is the first meeting in this meeting the presented possible members discuss about to open cooperatives society and they discuss about the place to open, name of the cooperative, purposed cooperatives by laws, price of the share etc.)
Application for registration ( approved cooperatives by laws and working plan of the cooperative, the decision of preliminary meeting are necessary to register the cooperative in the department of cooperative)
Certificate of registration ( the cooperative department will evaluate the application of the cooperative, is it according to cooperative laws or not if yes the registration officer provides the certificate of registration of cooperative)

8.3 Cooperative banks

Cooperative bank is a mutual society formed composed and governed by working people themselves for encouraging regular shaving and providing loans on easy terms of interest and repayment. It is a poor people’s bank, its main duty is to democratize credit and place it in the hands of the poor who though they may be entitled scarcely get recognition in the hands of commercial bank. Cooperative credit society means a cooperative society, which provide financial accommodation to its members and includes a cooperative land bank too. The objectives of cooperative bank are listed below.

· To run the banking programmed, small farmer’s development program, production credit for rural women in the rural area for the targeted group.

· Group formation in rural areas and providing loan in group guarantee to its members.

· To provide financial service to the small farmers, labors, low income people and economically marginalized people.

· To collect capital from the rural people and utilized them in the productive sector.

· To provide short term, long term, loan to the economically marginalized group for the upliftment their income status.

· To provide soft loan to the targeted people and fulfillment of the lack of banking in the rural areas.

8.4Cooperative department

The cooperative department was established in 2010 BS; in 2027 BS it is under the land reform department till 2048. in 2049 this department is under the agriculture ministry. This department was established for the all round development of cooperatives in the country. This departs give different supports and advice to the cooperative societies. It provides the technical service to the development of managerial skills and human development of the cooperatives.the functions of cooperative department are given below:

To register the cooperative organization.
To provide legal security.
To develop the skilled manpower for the development of the cooperative in the country.
To create awareness about cooperative to the cooperative members and possible members.
To produce the educational instruments of the cooperatives.
To research on the cooperative education and trainings.
To extend technical assistance to co-operatives.
To conduct the required studies and research work for co-operative development.
To organize the trainings for the targeted groups.

8.5 Agriculture development bank

Established about 3 decade ago, Agriculture Development Bank has proved to be the major institutional source of agricultural credit in Nepal. As of mid- April 2005, lending by agriculture Development Bank totaled Rs. 20.81 billion to agriculture sector. It provides rural credit mainly for agricultural cultivation, livestock holding, agro based industry, and plantation and improvement in land. The function of agriculture development bank is:

To provide short term, medium term, and long term loan to the farmer and cooperatives for the development of the agriculture sector.
For the development of agriculture it provides fertilizers, machineries, pesticides to the farmers as loan.
It provides loan to tenant to buy his tenancy land.
It provides loan to the small and cottage industry.
It provides loan to the farmers group in group guarantee.
It provides banking facilities to the local people in the remote and rural area of Nepal.
It accepts cash transaction from the small farmer.

8.6 Sajha

Sajha is the name of sajha which means community in Nepali. It is established as to develop the cooperative movement in Nepal. The government has changed cooperative name to sajha in 2032BS. This is the development program of government which main goals are to increase the national income as well as farmer’s income and to mobilize and collect the rural capital of the rural area. The functions of sajha are as follows:

· To provide agricultural loan in crops collateral.

· To manage store houses for agriculture products.

· To provide the daily consuming goods to the farmer at reasonable price, such as sugar, rice, kerosene, salt and clothes etc.

· It has opened the rural banks in rural areas in the name of BACHAT BANK.

· To promote the industries in rural are, it has provided the raw materials of small and cottage industries in rural area.

· To aware its members about mutual help, self help, and integrity in working.

8.7 Cooperative history of India

The cooperative movement in India was originated for supply of adequate rural credit and bringing a fundamental change in the existing rural economic structure. On the recommendation of fanine commission 1901, emphasis was given to start credit societies in India.

· 1904A.D. first cooperative credit act passed.

· 1912AD, the act was rectified, it made provision for purchase, sale, production, insurance and housing.

· 1914AD, Sir Edward Mac lagan was appointed as a chairperson of a study committee of cooperative.

· 1915AD, this committee suggested for the establishment of central bank to meet the requirements of the primary societies.

· 1935AD, the reserve bank of India established and with the through study, it recommended to establish the village credit societies into multiple purpose societies.

· 1944AD, the government of India appointed the agriculture finance sub committee under chairmanship of Proff. DR. Gadgil, this committee suggested with the view that cooperation would provide the best and the most lasting solution for the problem of agriculture credit.

· 1945AD, the cooperative planning committee was set up R.G. Sariya expressed his view that the supply of credit touched only one aspect of life of a cultivator, the activities of the primary societies should be so extended as to cover the whole of his life.

During planning era in India, the first five year plan was started in 1951, which recognized cooperation as an instrument of planned economic action in democracy. All five year plan accepted the cooperative as a main tool of the development in the rural area of a country through credit delivery. The achievements of the cooperative movement can pointed as the following points.

· Supply of cheap credit.

· Spread of banking habits.

· Benefits to agriculture sectors.

· Better prices to cultivator.

· Creation of more employment.

· Development of Self help, mutual help, working with team spirit and integrity.

· It encourage in the leadership among the members.

· It develops the sense of responsibility and honesty among the members.

8.8 History of cooperative in England

The first cooperative movement was started by a group of weavers of Rochdale in 1844AD which was established by the 28 labors .1925A.DThe department of Agriculture was established with the help of cooperative wholesale society. In 1959AD parliament passed the horticulture act. In 1967 agriculture act was passed, in this period the government promoted for the development of cooperative provided coordination to establish the cooperative. In England there are different cooperatives are active still.

· Industrial and service cooperative societies.

· Insurance cooperative societies.

· Housing cooperative societies.

· Financial cooperative societies.

· Cooperative credit societies

· Consumers cooperative societies

8.9 History of cooperative in Germany

In Germany the cooperative movement was started through the cooperative saving and credit in 1849. In Germany F.W. Raiffeisen, Francis schulze, Dr Hais are the pioneer leader of cooperative in Germany. They worked in different field in differently. Raiffeisen worked in rural poor farmer and the labors, Scholz paid his attention in urban poor people and Dr Hais paid his attention to rich and middleclass people in city dwellers. Dr Hugard established a cooperative society in 1849 named society for relief in sickness.

1867 AD, cooperative act passed.
1877AD, the grand union of rural cooperative society.
1949 AD, German cooperative bank was established.
Till 1983 there are 9 lakhs cooperative members in Germany.

The development pillar of Germany is considered as a cooperative movement. The cooperative credit society is a main pillar in the economic and social development. Cooperative is involved in housing education, production, consumer, distribution, industrial development and tourism.

8.10 History of cooperative in Israel

Israel was ruled by the British Empire till 1948.in 1948, 25th may it declared a independent country. Four brother of Jewishin 1881, they started the cooperative settlement. In 1881 the society for planning Moshavot in the holy land settled the cooperative settlement. The history of cooperative in Israel was started before 1908AD. since 1912AD, KAPAL is working for the socio cultural economic development of laborsn and provided employment and shelter for the migrated Jewish. In 1908Ad there was cooperative society which was known as Ein Ganin. In Israel HISTADRUT the general federation of labor is the pioneer cooperative organization. The AMAL (cooperative of carpenters) was also existed there. There are different cooperatives in Israel such as primary cooperative societies, financial cooperative societies, agriculture cooperative societies, Moshavim ovdim and olim consumers cooperative, pension fund, and account cooperative societies.The cooperative movement of Israel is best example of the world in the cooperative settlement. It is said that the cooperative movement is derived from the communism philosophy in

Israel

. Chapter 10

Introduction to National Co-operative Development Board

1. Introduction:

National Co-operative Development Board (NCDB) was formed by the Government in August 1991. The creation of the board represents a significant step of the Government to re-orient and strengthen the Co-operative movement of the country in the newly regained democratic environment. The board is entrusted with both advisory and co-operating responsibilities.

Subsequently, in October 1992, NCDB was given a statutory status by an act of parliament. In its new form the board has been mandated to be a specialized agency between the Government and the Co-operative movement. The scope of its activities has also been broadened with an added emphasis on technical as well as financial supports for Co-operatives.

2. Objectives:

Section (3) of NCDB Act 1992 defines the objectives of the board as follows: "The National Co-operative Development Board has been established at the national level with the objective of assisting in the development of different types of Co-operative societies and unions by formulating policies and relevant plans for the economic and social advancement of lower strata of people in accordance with Co-operative principles."

3. Functions and Role of NCDB:

As specified in section 6 of the National Co-operative Development Board Act 1992; the functions, duties and powers of it are the following:

a) To assist this majesty's government in formulating plans and policies concerning co-operative development.

b) To facilitate the implementation of co-operative policies.

c) To create and maintain or co-operative development fund with a view to providing Co-operatives with loans or grants for development purposes.

d) To participate in the share capital of co-operative societies, unions or banks.

e) To stand surety for co-operatives.

f) To extend technical assistance to co-operatives.

g) To bring about co-ordination between co-operatives and other related government as well as non-government agencies, organizations, and thereby; encourage co-operatives to expand their business services.

h) To facilitate joint investment of his majesty's Government, co-operatives and other national as well as foreign organizations for the industrial development in the co-operative sector.

i) To conduct the required studies and research work for co-operative development. and,

j) To carry out all other functions as may be deemed necessary for promoting the co-operative movement.

4. Executive Committee:

The executive committee is the chief organ of NCDB. Chaired by Minister for agriculture, the committee consists of 23 members more than half of which are non-official representatives. The Co-chairperson is the chief executive position of NCDB supported by the member secretary, both are Government nominee.

5. Sources of Fund:

NCDB gets the fund to finance its activities from both internal as well as external sources. The internal finances, mostly generated by fixed assets it owns, are generally adequate to meet the cost of operation, including the cost of regular promotional or technical support services.

For special projects and also for augmenting the newly created co-operative development fund, however, NCDB has to depend on external sources. It has, so far, received financial assistance from the Government, NRB and ADB/N.

6. Organizational Structure:

Executive Committee

Co-chairperson

Secretariat

Member Secretary

Director

..................Technical ad. group

Finance Administration Promotion Planning & Technical

Division Division Division Division

1. Income expenditure 1. Adm. & Mgmt. 1. Communication 1. Technical services

And accounts 2. Women devt. And research

2. Co-operative devt. fund 3. Co-operative 2. Planning & int.

Promotion relation

Co-operative Training Centre (CTC)

1. Introduction:

The Co-operative Training Centre (CTC) was established in 2019 B.S. under the Co-operative Department. It was established with the objective of:

Ø Co-operative training

Ø Co-operative education

Ø Advice to the co-operators

Ø Research and innovation in the field of co-operative

After the political change of 2046 B.S. the new Co-operative Act 2048 has designed CTC as a vehicle for education and extension of co-operative movement in the country.

2. Objectives:

Promotion of co-operative ideas and awareness toward co-operation.
Timely education, training to all the people who involve in this field.
Refreshment training and education to the employees for the enhancement of knowledge and technique.
To improve the management process of co-operatives, research, study and advisory service.
To develop professionalism in the co-operative institutions societies.
Co-ordination among the people of government, non government and co-operative sector with positive aspect of co-operative development through meetings, conferences and other policy issues.

3. Targeted group for the training and skill development:

Employees of co-operative sectors
Office bearer of co-operative societies
Ordinary members of all types of co-operatives
Members of women co-operatives
Managers and social mobilizes of co-operative societies
Possible members of co-operatives
Training to Government and non government employees those are related in the field of promoting co-operative.

4. Functions of CTC:

Launching co-operative education and training programs in the central as well as local level.
Research, study and problems finding in the co-operative sector.
Managerial advisory service to co-operatives.
Meeting, seminars, conference and educational observation visit regarding the co-operatives.
Educational and training package publication to help primary & district union of co-operative.
Human resource development for the co-operative education and training.

5. Major Training Programs:

v Basic Co-operative Management training

v Co-operative market management training

v Instructor training programs

v Saving mobilization training

v Member education camp

v Leadership development training

v Co-operative accounting training

v Co-operative business promotion training

v Population education camp

v Managerial training

v Accounting committee training etc.

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