Kathmandu. The stakeholders have said that the state should make policy and legal facilitation to increase the role of cooperatives in production, processing and marketing.
Speaking at an interaction on ‘Role played by the cooperative sector in production and the problems faced by the cooperative sector in Baneshwor’ organized by the Society of Cooperative Journalists (CJN) with the support of the Federal Cooperative Department in Baneshwor on Wednesday, the representatives of the cooperative movement and government bodies stressed on policy reforms.
Speaking at the program, Joint Secretary at the Ministry of Land Management, Cooperatives, Federal Affairs and General Administration and Chief of the Cooperative Division, Govinda Rijal, admitted that the issue of production cooperatives has been overshadowed as the state has focused on resolving the problems seen in savings and credit cooperatives for some time.
“It is true that in the past, we had to pay more attention to how financial cooperatives collected, mobilized and collected loans,” he said. ’
He analysed that problems have arisen in some cooperatives due to the anomalies and anomalous activities carried out by some bad people in the responsibility of protecting the savings of cooperatives, which has weakened the people’s confidence towards the cooperatives as a whole.
“The issue of restoring the people’s trust in the cooperative sector is the most important and challenging issue,” he said, adding, “It is important how to turn the negative perception towards cooperatives into positive.” The Ministry has been preparing draft of two separate acts for financial and other cooperatives to address the difficulties surfaced in regulating all subjects and types of cooperatives under a single cooperative act in the past, he said.
On the occasion, representatives of the central cooperative unions related to production said that various issues raised for policy reform could also be resolved through the new Act. “Various commissions and study committees formed by the government in the past have suggested that the promotion and regulation of all cooperatives in a single basket was not effective,” he said, adding, “Therefore, the ministry is preparing the draft of the two acts after obtaining approval in principle from the cabinet.” We will also take suggestions from experts and stakeholders in this regard. ’
He urged the government to give suggestions as the cooperatives tax, electricity tariff, price adjustment and marketization could be incorporated in the Finance Act. Rijal clarified that the government could not use the money deposited in the Cooperative Promotion Fund for the promotion of cooperatives through the cooperative associations, but it was not misused. Presenting the data, he said that Rs 14,13,69,885 has been collected in the fund so far. According to the working procedure, the federation, central union, provincial and district associations have not been distributed. ’
According to him, the problem has also arisen because the state has not taken action by regulating cooperatives effectively in the past. He pointed out the need for the media, cooperative movement and the state to take initiatives to address the anomalies and anomalies seen in the cooperatives. Similarly, Acting President of National Cooperatives Federation Ramesh Pokharel said that the cooperatives sector has been making significant contribution to agriculture production through capital collection and investment.
He said that cooperatives have made important contribution in commercializing subsistence-based agriculture as well as managing market at national and international level.
He said, “Due to the cooperative, an organization called Europe Equity has been selling Nepal’s orthodox tea in the European market.” ’
He complained that although the cooperative sector has been making efforts for production, marketing and modernization by supporting small farmers, various sectoral laws issued by the state have prevented the cooperatives from going to direct production.
“A total of 46 various acts have obstructed cooperatives from operating productive industries,” he said. He pointed out the need for the state to create a conducive legal environment for cooperatives to carry out production and processing activities by amending sectoral acts and providing concessions like customs exemption on the import of agricultural implements. Similarly, acting chairman Pokharel said that although the cooperative act has given the right to distribute up to 15 percent share dividend to the cooperatives, the production cooperatives have not been able to provide dividend to its members as it has to distribute the amount to different funds.
He urged the government to resolve the issues related to branding of the products of cooperatives, complexities in distribution due to the scope of work and problems in market management. He pointed out the need for the government to develop agriculture as a youth-friendly profession by promoting useful education, training and modern technology. He also said that a separate technology study center should be established for this.
Similarly, Chairman of Nepal Federation of Savings and Credit Cooperatives (NEFCO), Chandra Dhakal, said that cooperatives are not involved in production due to lack of production, processing, storage and market potential. According to him, the cooperatives could not be mobilized in production as the government has not formulated thematic policy and programmes prioritizing the cooperative sector.
He said that it was difficult for the cooperatives to go into production as they could not get timely benefits from the money invested due to liquidity problem after the COVID-19 pandemic. He said that instead of establishing many types of cooperatives related to production in the country, all should be integrated. He said that the lack of cooperation and coordination among the associations related to agriculture has not been able to reach a common view in the policy making of the state. Also speaking at the program, President of the Central Cooperative Association of Livestock, Birds and Fisheries, Baburam Adhikari, lamented that the cooperatives have been overshadowed as the state bodies have focused on the problems seen in saving and credit cooperatives.
According to him, the Department of Cooperatives and the then National Cooperative Development Board (NCDB) had stopped the grant programme to the cooperatives in the past. He accused the government of misappropriating the amount of the Cooperative Promotion Fund which was set up by depositing the profit earned by the cooperatives. “Why has the Cooperative Promotion Fund not been distributed so far?” he asked. Can’t be stopped. Earlier, Krishna Prasad Sapkota, senior vice-president of the Central Dairy Cooperative Association, said that farmers associated with dairy cooperatives were facing problems due to subsistence livestock, lack of modern equipment to protect the milk produced and lack of cooling transportation.
Volatility in milk prices, inadequacy and inadequacy of insurance, imbalance between demand and supply, problems of animal health and disease, transportation and storage problems in remote areas have also posed challenges, he added. Vice-president of Central Tea Cooperatives Association Prem Ghimire said that more than 100 tea cooperatives from 14 districts have joined the central federation through five district-level associations.
According to him, 9,100 households associated with the association have cultivated tea in 5,000 hectares of land while the member cooperatives are running 21 industries. He said that around Rs 40 crore is earned from the export of tea. Lack of capital to run the cooperatives processing industry, lack of internationally recognized quality certification, lack of access to tea produced by the cooperatives to the international market and lack of subsidy to the industries run by the cooperatives have posed challenges, he said.
Presenting a working paper on the occasion, Kapil Gautam, Programme Officer of Nepal Agricultural Cooperatives Central Association Ltd., said that weak market infrastructure, unstable market relations, limited value chain, financial and investment limitations and gap in capacity and technology have posed challenges to the cooperatives.
Despite the challenges, the NMA has been providing support to farmers on the issues of availability of quality seeds, fertilizers and agricultural inputs, increasing access to agricultural credit and financial services, agricultural technology, training and capacity building, proper market management, among others.
The program was chaired by CJN President Arjun Khatiwada and hosted by Secretary Madhav Khadka. Vice President Namita Dulal proposed the vote of thanks to the guests.
