Cooperative Governance and Globalization Strengthening Professionalism in Cooperatives to increase Competitive Edge in the Open Economy ByG.N.Saxena SGM (CS &AM) IFFCO

What is Governance? “Governance" means a compact interdependable system in which all components of an organisation i.e. Stakeholders, end beneficiaries and the facility created by stakeholders work in harmony for the expressed goals. (Contd…)

Governance comprises of: Governance comprises of: accountability accountability transparency transparency anticipation anticipation participation participation  Governance reflects the quality of affairs in an organisation organisation

Globalization Extension of market forces beyond national borders. borders. Shift from administratively controlled prices to prices determined by market forces. Shift from administered quantities to market determined quantities. Withdrawal of government patronage and encouragement to transform into being self reliant, professionally managed. (Contd…)

Withdrawal of restrictions on interest/lending rates to being determined by market forces. to being determined by market forces. Reduced domination of bureaucracy in decision- making and autonomy to producers,suppliers and consumers. Advancement in technologies and their transfer across international borders.

Globalisation and Cooperative Values: 1. Globalisation has brought pursuit for power and larger profits - Dominance, Acquisitions & Mergers larger profits - Dominance, Acquisitions & Mergers whereas Cooperatives stand for cooperation and whereas Cooperatives stand for cooperation and coexistence. coexistence. 2 Imposed goods and brands in the name of modernisation - Needs of the society not been modernisation - Needs of the society not been reflected/ considered reflected/ considered 3. Disparities among society & class consciousness has been created. has been created. (Contd…)

4. Introduction of goods and services for a limited section of the society. section of the society. 5. Exploitation of local/natural resources for benefit of rich. rich. 6. Fast Depletion of natural resources has posed serious ecological problems. 7. Quality of life has been compromised.

Challenges of Globalization to Cooperatives: Challenges of Globalization to Cooperatives: Identity crisis for cooperatives Need for Reforms in Cooperative Laws Professionalism Competition and Cost effectiveness Due to resource constraints, limitations in scale of operations/adoption of technology Management of changed business environment

Globalisation is the order of the day. Cooperative need to face the challenges posed and leverage their strengths for a platform for future growth

Growth in international trade Growth in international trade Technical revolution Technical revolution Foreign direct investment Foreign direct investment Privatisation and free market Privatisation and free market Role of Government as a regulator Role of Government as a regulator Globalisation has led to:

Meeting the Challenges  Identifying the genuine needs of the members/ society and fulfilling them.  Reforms in Cooperative laws to provide autonomy and enable collective decision making by members  Structural reforms for efficiency in decision making and cost reductions.  Economic activities without compromising on ownership issues /autonomy (Contd…)

Producing good and services of the standards acceptable to the local and global markets. acceptable to the local and global markets. Weeding out inefficiencies by adopting best practices. Build on expanded growth opportunities for cooperatives through strategic alliances and cooperatives through strategic alliances and diversification of activities diversification of activities Value Based Management and demanding higher accountability and better results from professional accountability and better results from professional management management

Governance in Cooperatives: Legal and Policy Environment Professionalisation Quality of Service Organs of Governance General Body, Board of Directors, Board of Supervisors/Auditors Sub Organs of Governance Official Sub-Committees, Informal Advisory Groups Users & Target Groups Members of Cooperative, General Public Community, Users of Service Professionals General Managers, Managers, Accountants,Legal advisors

Blue Print for strengthening Cooperatives: Human Resource and Cooperative Development Programmes aimed towards enlightening members on Cooperative Principles, Laws and Values Motivation for larger member participation/ involvement in decision making Empowerment of members shall equip them for anticipation as insulators for strategic decisions against political and governmental interference. Member -driven management in cooperatives rather than acting on trusted government programme- based cooperatives

Cooperatives should generate an effective and fast mode of communication with members/other related cooperative organisations at National /International level. Cooperatives to create alliance/networking with the Self Help Groups, NGOs towards achievement of socio-economic objectives. Establishment of Apex Sector/Industry Specific Cooperative Forum at International Level for resource sharing and developing regulatory price mechanism for commodities.

Present Status of Governance in South Asian Cooperatives: China China Cooperatives have gained recognition as important Cooperatives have gained recognition as important force to prosper rural economy force to prosper rural economy Their achievements have prompted Govt. to create Their achievements have prompted Govt. to create environment conducive to cooperative development. environment conducive to cooperative development. Bangladesh Bangladesh Cooperatives share dynamic relationship with Cooperatives share dynamic relationship with Government in strengthening socio-economic Government in strengthening socio-economic development. development.

Nepal Nepal Enactment of 1992 Cooperative law led to formation Enactment of 1992 Cooperative law led to formation of National Cooperative Federation in 1993 of National Cooperative Federation in 1993 Cooperative development given prominence in Cooperative development given prominence in Governmental development plans Governmental development plans Sri Lanka Sri Lanka Amended Cooperative Laws have led to powers Amended Cooperative Laws have led to powers being vested on General membership and autonomy being vested on General membership and autonomy begin accorded begin accorded Compulsory representation of at least two youth in Compulsory representation of at least two youth in Board of Management Board of Management

Policy Reforms for strengthening cooperatives in India: Multi State Cooperative Societies Act 2002  Role of Registrar redefined as facilitator;  New legislation has reduced the role of Government;  Encouraged decision-making by professionals. National Cooperative Policy 2002  Facilitates all round development of the cooperatives;  Necessary support, encouragement and assistance, provided to cooperatives for democratic management.

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