Assessment of Role of Leadership in Dairy Co- operatives of India Sushila Kaul Division of Econometrics Indian Agricultural Statistics Research Institute, New Delhi, India.

2 Introduction The co-operative movement of India has witnessed history of about 100 years. The co-operative movement of India has witnessed history of about 100 years. Co-operatives are one of the means of bringing about striking changes in the rural economy. Co-operatives are one of the means of bringing about striking changes in the rural economy. The co-operative sector in India has emerged as one of the largest in the world and is playing an important role in socio- economic development of the country. The co-operative sector in India has emerged as one of the largest in the world and is playing an important role in socio- economic development of the country.

3 Introduction India’s milk output is estimated to be 88 million tonnes. There is sustained growth in the availability of milk and milk products for the burgeoning population of the country. Most important, dairying has become an important secondary source of income for millions of rural families and for millions more, has assumed the most important role in providing employment and income. The per capita availability of milk has also increased to a level of about 221 g. per day.

4 Dairy Co-operatives Co-operatives play an important role in animal husbandry and dairying sector, which contributes about one-fourth of agricultural GDP of the country. Co-operatives play an important role in animal husbandry and dairying sector, which contributes about one-fourth of agricultural GDP of the country. There are 75,000 dairy co-operative societies, spread all over the country with a membership of 10 million. There are 75,000 dairy co-operative societies, spread all over the country with a membership of 10 million.75,000 dairy co-operative75,000 dairy co-operative Dairy co-operatives all over India help small and marginal farmers to take initiatives in shaping their destiny. Dairy co-operatives all over India help small and marginal farmers to take initiatives in shaping their destiny.

5 Dairy Co-operatives They serve more than 10 million farmers in over 80,000 villages. They serve more than 10 million farmers in over 80,000 villages. The structure of dairy co-operatives consists of primary milk producer societies at the primary level and milk supply unions at the district level. The structure of dairy co-operatives consists of primary milk producer societies at the primary level and milk supply unions at the district level. The primary milk societies are federated into unions, while state federations are functioning in some states. The primary milk societies are federated into unions, while state federations are functioning in some states. At the national level, there is a National Co- operative Dairy Federation. At the national level, there is a National Co- operative Dairy Federation.

6 Dairy Co-operatives The progress of co- operatives in dairy sector is not uniform throughout the country. The progress of co- operatives in dairy sector is not uniform throughout the country. In some regions and states, this sector has shown promising progress, whereas in others it is not so. In some regions and states, this sector has shown promising progress, whereas in others it is not so.

7 Dairy Co-operatives This variation in growth may be attributed to several economic and non-economic factors including role of leadership. This variation in growth may be attributed to several economic and non- economic factors including role of leadership.

8 The progress and performance of dairy co- operatives in recent years have also been examined. Role of leadership in promoting the dairy co- operative movement in various states. Factors affecting leadership have been examined.

9 Data Secondary data have also been obtained from various issues of the publications of NABARD and CSO, New Delhi. The data on different variables have been obtained from a Report entitled, “Some Aspects of Farming”, (2005) published by NSSO, Govt. of India.

10 Methodology to examine the role of leadership in the growth and promotion of dairy co-operative societies, an effort has been made to develop an appropriate leadership index. In evolving this index, it is hypothesized that leadership is positively influenced by the level and extent of education, the level of general awareness of people and their affiliation with registered and other organizations. Keeping this in view, it was assumed that states with better educational level of farmers will show better leadership. Similarly, in states with larger proportion of farmers having knowledge of minimum support prices as well as world trade organization will show better leadership traits.

11 Methodology State-wise information was also obtained on the association of farmers with registered organizations and self-help groups. Proportion of farmers in a state with membership of co-operatives was also taken into consideration. An equal weight was assigned to all these variables and an index was worked out.

12 Methodology The leadership index has been developed by estimating the relationship between milk procurement per society and literacy rate as well as per capita agricultural income in the state.

13 Methodology It has been assumed that higher the literacy rate and per-capita income, the better is the leadership available in the state, to the co-operative sector. The equations using least square technique have been estimated.

14 Methodology This leadership index was analysed and the impact of various variables were obtained using the following regression model: L 1 = a+bX 1 +b 2 X 2 +b 3 X 3 +b 4 X 4 +b 5 X 5 +b 6 X 6 +e

15 Methodology Where, L 1 = Leadership Index ( no.) X 1 = Proportion of male farmer’s literacy X 2 = Proportion of household knowing minimum support prices X 3 = Proportion of farmers knowing WTO X 4 = Proportion of farmers belonging to registered organizations X 5 = Proportion of farmers belonging to self help groups X 6 = Proportion of farmers who are members of co- operatives a and b are constant and coefficients respectively,e is error term

16 Methodology Impact on Leadership For estimating the impact of different variables on Leadership the following equations have been estimated: L 1 = a+b 6 X 6 + e L 1 = a+b 4 X 4 +b 5 X 5 +b 6 X 6 + e L 1 = a+ b 1 X 1 + b 2 X 2 + b 3 X 3 + b 4 X 4 +b 5 X 5 +b 6 X 6 + e

17 Methodology Role of Leadership in Dairy Co-operatives: In order to study the role of leadership on the development of dairy co-operatives, the regression equations have been estimated using the following model: Y = a+b 1 X 1 +b 2 X 2 +b 3 X 3 +b 4 X 4 +b 5 X 5 +b 6 X 6 +X 7 +u Where, Y is dependent variable defined as follows; Number of members per DCS (No.) Volume of milk procured per DCS (Kg.) Volume of milk marketed per DCS (Kg.)

18 Methodology And the dependent variables are as: X 1 = Leadership Index X 2 = Proportion of literate milk farmers X 3 = Proportion of farmers having knowledge of MSP X 4 = Proportion of farmers having knowledge of WTO X 5 = Proportion of farmers belonging to registered organizations X 6 = Proportion of farmers belonging to self help groups X 7 = Proportion of farmers who are members of co-operatives a and b are constant and coefficients respectively,e is error term

19 Methodology The following equations have been estimated using Y as dependent variable: Number of members per DCS (No.) Y = a+b 1 X 1 +u Y = a+ b 1 +X 1 +b 2 X 2 +b 3 X 3 +b 4 X 4 +u Volume of milk procured per DCS (Kg.) Y = a+ b 1 +X 1 +b 2 X 2 +b 3 X 3 +b 4 X 4 +u Milk Marketed per DCS (kg.) Y = a+ b 1 +X 1 +u Y = a+ b 1 +X 1 +b 2 X 2 +b 3 X 3 +b 4 X 4 +b 5 X 5 +b 6 X 6 +b 7 X 7 +u

20 Table 1 : Status of Dairy Co-operatives in India different states of India( ) S.No. Name of State DCSOrganised(No.)FarmerMembers(‘000) Rural Milk Procurement(000kg./Day)MilkMarketing (000 L/day) 1. Andhra Pradesh Assam Bihar Goa Gujarat Haryana Himachal Pradesh Karnataka Kerala Madhya Pradesh Maharashtra Nagaland Orissa Pondicherry Punjab Rajasthan Sikkim Tamil Nadu Tripura Uttar-Pradesh West-Bengal Total

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23 Results  Available evidence indicates that the number of dairy co-operative societies was maximum in Uttar- Prades(18104).  This was second highest in Gujarat.  The states in the eastern part of the country had relatively smaller number of such societies.

24 Results  The states of Karnataka, Tamil Nadu, Maharashtra, Punjab and Rajasthan showed good growth of societies.  In terms of membership of these societies, the state of Gujarat ranked first.  This was followed by Tamil Nadu, Karnataka and Mahrashtra.  The membership was very less in all states located in eastern India.

25 Results  As for the procurement of milk was concerned, about one-third of total milk procured by these co- operatives comes from Gujarat.  It was followed by Maharashtra, Karnataka and Tamil Nadu.

26 Results L 1 = ** X 6 R 2 = L 1 = X X ** X 6 R 2 = R 2 = L 1 = ** X ** X ** X X X ** X X X ** X ** X 6 R2 = 0.993

27 Results Number of Members per DCS as dependent variable: Y = ** X 1 R 2 = R 2 = Y = * X 1 + (-) X 2 +(-) X 3 (-) X 2 +(-) X X X 4 R 2 =.559 R 2 =.559

28 Results Milk Procured per Society: Y = X 1 R 2 = R 2 = Y = (-) X 1 Y = (-) X X X X X X X X X X X X X 7 R 2 = R 2 = 0.733

29 Results Milk Procured per Society: Y = X 1 R 2 = Y = (-) X X X X X X X 7 Y = (-) X X X X X X X 7 R 2 = R 2 = 0.733

30 Results  It is evident from the results of regression analysis that when the variables pertaining to male farmer’s literacy, household knowing minimum support prices and WTO, farmers belonging to registered organizations and self-help groups and proportion of farmers who are members of co-operatives are included in the analysis, as independent variables, the leadership index,which is the dependent variable, has R 2 of  The co-efficients of education level, farmers knowing WTO and proportion of number of co-operatives are statistically highly significant.

31Results  In another set of analysis, 77 percent variation in the leadership index was explained by proportion of farmers belonging to registered organizations and self-help groups, as well as farmers who are members of co-operatives in the state.  The co-efficient associated with the last variable is statistically highly significant.

32Results  In another set of analysis, 77 percent variation in the leadership index was explained by proportion of farmers belonging to registered organizations and self-help groups, as well as farmers who are members of co-operatives in the state.  The co-efficient associated with the last variable is statistically highly significant.

33 Results  When regression of leadership index on proportion of members of co- operatives was studied, the R 2 was 0.65 and co-efficient was statistically significant.  Leadership plays a big role in better organization and management of co- operative societies in general and dairy co-operatives in particular.

34 Results Milk Marketed Milk Marketed Y = * X 1 Y = * X 1 R 2 = R 2 = Y = * +(-) X 1 + Y = * +(-) X 1 + (-) X 2 +(-)89.180X 3 (-) X 2 +(-)89.180X X X X X X X X X 7 R 2 = R 2 = 0.791

35 Results  A perusal of regression equations for number of members per Dairy Co- operative Society (DCS) in the states indicates that the variable of leadership explains 38 percent of variation in it.  Independent variable of leadership index, literacy, knowledge of MSP and WTO explained about 56 percent variation in number of members in state. number of members in state.

36 Results  Milk Procured per dairy co-operative society was studied using similar variables.  Leadership variable could explain more than 14 percent of variation in it,  while all seven variables taken together, could explain more than 73 percent of variation in milk procured per society.

37 Results  It is also evident from the analysis that, amount of milk marketed in the state is positively affected by the independent variables  The leadership index variable could explain more than one fourth of variation in the milk marketed  This shows that the leadership is an important contributory factor in the development of dairy cooperatives.

38 Conclusions  It has been observed from the analysis that dairy co-operatives have done well in Western and Northern part of the country.  The study further indicated that literacy rate and better general awareness as well as association of people with registered organizations in the state affected the leadership index in a positive manner.

39 Conclusions  In turn the leadership trait could help in better spread and development of dairy co-operative activities in the states  In future, with the improvement in general awareness of people and better socio- economic conditions, there is a strong possibility of more efficient and better managed dairy co-operatives in rural India.

40 References:  Central Statistical Organization ‘Statistical Abstracts of India’, (various issues) Deptt. Of Statistics, Ministry of Planning, New Delhi.  Kaul, Sushila (2004) ‘Problems and Prospects of Women Co-operatives in Indian Dairy Sector’ Paper presented at 3rd Asia Pacific Research conference of ICA at Chiangmai, Thailand, Nov.30,  Kaul, Sushila (2005) ‘Economic Analysis of Regional Variation in Dairy Co-operatives of India’ accepted for presentation in International Co-operative Research conference,held at Cork,Ireland,Aug.10-14,2005.  Mamoria, C.B.(1982) ‘Agricultural Co-operative Structure in India’, Kitab Mahal.  NSSO(2005) ‘Some Aspects of Farming’, Govt. of India, New Delhi.

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