Role of Co-operative banks in empowering peasants: An economic analysis

Agriculture is a primary sector of the Indian economy as about 70 percent of the total population depends on it and its dependence continues unabated. The pulls and pressures in the farm factor continue to extent their influence on the overall course of economic activity. Farming one of the most challenging of all economic enterprises, because it is wholly out-door venture exposed perilously to the unpredictable vagaries of weather. The crops are vulnerable to damage to several factors like diseases, birds, stray animals, rats, natural and unnatural calamities such as floods, droughts, cyclones, fires etc. So provision of an effective insurance cover for farm activities is indeed very difficult. The insurance companies which had rich experience is providing the insurance cover and other types of business are not inclined to take up crop insurance business due to higher risk factor prevailing in the farm sector. Cooperative credit structure was the first to realize that increasing rural incomes through enhanced agricultural production and generating employment in non-farm activities as critical to expanding home market for accelerated investment and industrial growth. In view of the support of cooperative credit, it has been possible to register higher rate of income growths. Prices of agricultural produce have been largely responsible to arrest the rate of inflation. Short term cooperative credit structure silently has been working on this philosophy. The institutional rural credit system has been envisaged as an effective channel for creating an environment for socio-economic development in the society. The institutional rural credit delivery system for agriculture comprises of (1) Short Term and Long Term Cooperative Credit Institutions (2) Commercial Banks (3) Regional Rural Banks (4) National Banks for Agriculture and Rural Development (5) Reserve Bank of India. The institutional credit delivery system for urban areas comprises of (1) Commercial Banks (2) Urban Cooperative Banks and (3) Urban Cooperative Credit Societies. This paper makes an attempt to analyse the role of co-operative societies in empowering the agricultural farmers and improving their standard of living.