Context:
Union Home Minister and Minister of Cooperation will inaugurate a day-long mega conclave “Strengthening PACS through FPOs” in New Delhi on July 14, 2023.
More on News:
- The mega conclave is being organised by the National Cooperative Development Corporation (NCDC) in collaboration with the Union Ministry of Cooperation.
- The conclave is aimed at discussing ways to strengthen Primary Agricultural Credit Societies (PACS) through Farmer Producer Organisations (FPOs).
About Primary Agricultural Credit Societies (PACS):
- PACS are village-level cooperative credit societies.
- They serve as the last link in a three-tier cooperative credit structure headed by the State Cooperative Banks (SCB) at the state level.
- The PACS have around 13 crore farmers who are primarily engaged in short-term credit and distribution of seeds, fertilisers, etc.
Functioning of PACS:
- Credit from the SCBs is transferred to the District Central Cooperative Banks, or DCCBs, that operate at the district level.
- The DCCBs work with PACS, which deal directly with farmers.
- Since these are cooperative bodies, individual farmers are members of the PACS, and office-bearers are elected from within them.
Concern:
- Political Influence: Political compulsions often trump financial discipline, and the recovery of loans is hit.
- Limited Spread in North-East: Though geographically active PACS cover about 90% of 5.8 villages, there are parts of the country, especially in the north-east, where this coverage is very low.
- Inadequate Resources: The resources of the PACS are much too inadequate in relation to the short-and medium-term credit needs of the rural economy.
Significance:
- Last Mile Connectivity: They offer last mile connectivity to farmers in disbursing credit.
- Hassle Free Loans: PACS have the capacity to extend credit with minimal paperwork within a short time.
Additional Information:
About Farmers Producer Organisation (FPO)
- It is one type of Producer Organisation where the members are farmers.
- Small Farmers’ Agribusiness Consortium (SFAC) is providing support for promotion of FPOs.
- Objective: To form the FPOs is to enhance production, productivity and profitability of agriculturists, especially small farmers in the country.
- Functions:
- The FPO will provide loans for crops, livestock, machines, purchase of tractors, pump sets, construction of wells, laying of pipelines, sheds etc
- FPOs will liaison the linkages with financial institutions, producers, processors, traders and consumers.
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News Source: PIB
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