Revitalizing the Cooperative Agriculture Credit Structure: A Case Study of Kheda District

With a view to understand the current status and working of Cooperative credit Structure and to formulate the strategy they need to follow in the coming decade, Kheda district in Gujarat selected for a case study. On the basis of insights developed, the strategy needed to strengthen the cooperative credit structure is discussed in this paper. Selection I gives a brief review of the changes made for strengthening the cooperatives on the basis of the recommendations of various committees. Section II presents a brief performance review of cooperative credit in Kheda district and Section III the alternative strategies available to strengthen cooperative credit movement. The last is the concluding section. After the comprehensive analysis, the paper makes a radical suggestion of delinking agricultural credit from PACS and entrusting it to the DCCB. PACS may be encouraged to diversify to provide technological inputs with support in storage, processing and marketing to their members. The paper however, adds a word of caution. Merely divesting credit from the primary cooperative may not be an end in itself. Simultaneous efforts in professionalising banking at DCCB level and ability to prepare business plan at the primary level are important. Though not directly relevant, it is equally important that the cooperative law of India, mainly conceived and continuously amended keeping cooperative credit movement in view, needs to be thoroughly rehashed.