The Cooperative Marketing Societies have been established with the object of facilitating the marketing of agricultural produce of its members at a remunerative price besides distributing farm inputs to them advancing pledge loan on agricultural produce and undertaking the processing and adding value to the agricultural produce handled.

The structure of Cooperative Marketing in Tamil Nadu is a two tier structure with the Tamil Nadu Cooperative Marketing Federation (TANFED) at apex level and 110 Primary Cooperative Marketing Societies (CMS) at district/taluk levels. Tamil Nadu Cooperative Marketing Federation was established in 1959 and is currently engaged in sale of fertilizers and other inputs through Cooperative Marketing Societies and Primary Agricultural Cooperative Banks. The federation owns a fertilizer mixing unit at Pamani near Mannargudi in Tiruvarur district. It also operates 38 owned godowns with capacity of 28,640 metric tonnes and two cold storage godowns one at Basin Bridge, Chennai with 1350 metric tonnes capacity and the other at Koyambedu with 2500 metric tonnes capacity. Tamil Nadu Cooperative Marketing Federation also undertakes price support operations on behalf of National Agricultural Cooperative Marketing Federation for Copra and for commodities like chillies as and when ordered by Government. During 2007-08, upto 29.2.2008, Tamil Nadu Cooperative Marketing Federation has distributed chemical fertilizer worth Rs.175.67 crores. This is 23% higher than the distribution of Rs.142.30 crores during 2006-07.

Apart from Tamil Nadu Cooperative Marketing Federation and Cooperative Marketing Societies, there are 3 special types of Cooperative Marketing Societies as detailed below:

The Nilgiris Cooperative Marketing Society

The Nilgiris Cooperative Marketing Society runs a potato auction yard at Mettupalayam and fertilizer mixtures to meet the specific requirement of selected crops in Nilgiris. It also supplies seed material to its members on demand basis and extends credit supplies as and when required.

Thanjavur Cooperative Marketing Federation is fulfilling the needs of Thanjavur, Tiruvarur and Nagapattinam districts through 12 Primary Marketing Societies affiliated to it. These societies act independently from the Tamil Nadu Cooperative Marketing Federation.

This society is engaged in the production and distribution of seeds, distribution of fertilizers, pesticides and agricultural implements to the farmers. It also provides credit to its members on demand.

(i) Marketing of Agricultural Produce

The Cooperative Marketing Societies perform the following two types of functions:-

(a) Providing agency service by making available the facilities like auction yards, drying facilities etc. and facilitate the traders and farmer members to transact their business. The marketing societies collect service charge for this purpose.

(b) Engaging in purchase, process and sale of agricultural produce. The processed products are also sold through consumer cooperative stores.

During 2007-08, cooperative societies have marketed the agricultural produce to the tune of Rs.907.94 crores upto 29-2-2008.

(ii) Linking of credit with Marketing

Cooperative Marketing Societies enroll the borrowers of Primary Agricultural Cooperative Bank as members and assist in the sales of the produce brought to the cooperative marketing society by the borrower member of the Primary Agricultural Cooperative Banks. These efforts helped the Primary Agricultural Cooperative Banks to recover loans besides assisting the farmers for selling their produce at remunerative price. In the year 2007-08, upto 29-2-2008, Rs.153.21 lakhs was recovered in this process.

(iii) Linking of Consumer Cooperative Stores with Marketing

Cooperative Marketing Societies have tie-up with the Cooperative Wholesale Stores. This enables the Cooperative Marketing Societies to procure the farmers’ produce, process it and sell it to the Cooperative Wholesale Stores so that the wholesale stores get a quality product at a reasonable price and the farmers also get a good price. During 2007-08, the Cooperative Marketing Societies marketed produce worth Rs.16.48 crores upto 29-2-2008 to the Cooperative Wholesale Stores.

(iv) Issue of Produce Pledge Loan

During the peak harvesting season, farmers invariably resort to distress sale to meet their urgent need for cash. To protect the interest of such farmers, Cooperative Marketing Societies provide Produce Pledge Loan so that farmers are able to store the produce and dispose at later date to get a better price.During 2007-08 upto 29-2-2008, a sum of Rs.18.32 crores has been disbursed to the farmer members as Produce Pledge Loan.

(v) Processing of and value addition to agricultural produce

Some of the cooperative marketing societies are having processing units to process and add value to the agricultural produce transacted by them. They also provide processing facilities to the farmers at affordable rates. During 2007-08 upto 29.2.2008, cooperative processing units have processed agricultural produce to the tune of 16,500 metric tonnes.

(vi) Procurement of Copra under price support scheme

To protect the interest of the coconut farmers, cooperative marketing societies are implementing Price Support Scheme for copra at the minimum support price fixed by Govt. of India on behalf of National Agricultural Marketing Federation. The support price for the copra has been revised from Rs.36.20 to Rs.36.60 per Kilo gram for the year 2008. During 2007-08 upto 29.2.2008, cooperative marketing societies have procured 5676.66 metric tonnes.

Despite the efforts of the Government, there are several cooperative marketing societies which are not functioning vibrantly. It is a great concern for the Government that these societies are not serving the intended purpose. Many of them are now confined to Public Distribution System operation instead of taking up agricultural marketing. A study by a special team has been conducted on the functioning of the Cooperative Marketing Societies and this Government will consider recommendation of this report and take appropriate action for the revival of these societies.

The global economic changes have boosted the prospects for the commodity trade and it is necessary that the benefits which accrue due to information revolution should ultimately reach the farmers. The Government is well aware of the importance of introducing a better price discovery mechanism and disseminating the price information and trends of the various major markets and to the farmers so that they can take appropriate decision in disposing of their produce and get better price.

As a new venture, this Government will take steps to provide a platform in the selected cooperative marketing premises to disseminate the information on the price trend in various markets and commodity exchanges. Tamil Nadu Cooperative Marketing Federation will also institutionalize the system of providing consulting service on the commodity price trend and link it up with these cooperative markets so that the farming community are guided properly to take appropriate decisions on their production and marketing. This is expected to help the farmers to find out the correct price for their produce, based on the assessment of market fluctuation and price forecast.

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The major objective of the consumer cooperatives is to serve the consumers by supplying quality products at reasonable prices. They play a vital role in containing the prices of commodities by market intervention at the time of crisis.

The consumer cooperatives in Tamil Nadu comprises of three tiers:

i. Tamil Nadu Consumer Cooperative Federation (at the apex level)

ii. Cooperative Wholesale Stores (at the district level) and

iii. Primary Cooperative Stores (at the grass root level)

(i) Tamil Nadu Consumer Cooperative Federation

Tamil Nadu Consumer Cooperative Federation at Chennai is the apex body. It procures paper and other stationery material in bulk and distributes them to the district cooperative wholesale stores, primary cooperative stores and cooperative printing presses. The Federation also purchases crackers during the festival season and distributes them to the cooperative wholesale stores and primary agricultural cooperative banks for sale to the general public. Though on a cumulative loss of Rs. 4.28 crores, the Federation has earned a current profit of Rs.62.00 lakhs in 2007-08 from a turnover of Rs.3.01 crores. In the current year, this organization has ventured into purchase of onions from Nasik through SAFAL (vegetables and fruits) National Exchange (SNX) and is distributing them throughout the state through Public Distribution System outlets. Action is being taken to enroll as a member of SNX so as to source fresh vegetables and fruits from all over the country. The Government will take steps to expand the operations of this Federation further and facilitate it to take up procurement and sale of wide ranging consumer products from upcountry locations during 2008-09.

(ii) Cooperative Wholesale Stores

At present 34 cooperative wholesale stores are functioning in Tamil Nadu. They are engaged in transporting the essential commodities from the Tamil Nadu Civil Supplies Corporation godowns as lead societies and deliver them to the public distribution system outlets run by cooperative societies. The wholesale stores also procure consumer goods in bulk directly from the producing centres, manufacturers and the marketing societies and offer the same to the consumers at reasonable prices.

During the year 2007–08, the cooperative wholesale stores had transacted business to the tune of Rs. 1015.71 crores on both controlled and non controlled commodities. In the year 2008–09, it is expected that the turnover will touch Rs.1100 crores. A high level committee has been constituted by the Government to identify the cause for the sickness of the five huge loss making Stores viz., Triplicane Urban Cooperative Society, Park Town Cooperative Wholesale Stores, Chennai, Madurai Pandian Cooperative Wholesale Stores, Trichy Chinthamani Cooperative Wholesale Stores and Coimbatore Chinthamani Cooperative Wholesale Stores and to suggest ways and means to rehabilitate these wholesale stores and to monitor their proper functioning. The report is expected soon and on the basis of this report action will be taken to rehabilitate these five stores and to set them on a growth path during 2008-09.

(iii) Primary Cooperative Stores

As on date, 3550 primary cooperative stores including students’ cooperative stores at base level are functioning in Tamil Nadu. These primary cooperative stores are engaged in the distribution of quality consumer goods at reasonable prices, besides functioning as outlets for distribution of essential commodities under Public Distribution System.

During the year 2007-08, consumer cooperatives achieved retail sales to the tune of Rs. 318.93 crores.

5

The Tamil Nadu Cooperative Union which was established in 1914 imparts cooperative education and training. The union also takes steps to propagate the ideals of cooperative movement through conduct of exhibition and other methods of publicity.

There are 20 cooperative training institutes in the State. Out of these 11 are independent and 9 are functioning as the units of Tamil Nadu Cooperative Union. All these units conduct Diploma course in cooperation of 36 weeks duration and award diploma to the candidates. During the year 2007-08, 866 students have been trained. In addition, these institutes conduct short term courses on computer operation and jewel appraisal. These institutes also conduct correspondence courses for the employees of the cooperatives who are unable to undergo the direct training.

Two institutes of cooperative management, one at Chennai and another at Madurai are run by the National Council for Cooperative Training, New Delhi. These institutes conduct, higher diploma course in cooperative management. They also run a number of short term courses for the staff and officers of cooperative department and societies including those under the Functional Registrars. In the year 2007-08, these 2 institutes conducted 172 courses till 29.2.2008. They have planned to conduct 195 courses in 2008-09.

Three cooperative industrial training institutes at Bargur in Dharmapuri District, Pattukottai in Thanjavur District and Tiruchuzhi in Virudhunagar District and one cooperative Polytechnic at Lalgudi in Trichy District are run by Tamil Nadu Cooperative Union. These institutes provide technical training to the youths for their self-employment. An average of about 400 students get technical education every year through these industrial training institutes and polytechnic.

In order to encourage the students who are doing research in cooperation, the Tamil Nadu Cooperative Union has created a chair of Rs. 5.00 lakhs each in the Madras University, Madurai Kamarajar University, Bharathiar University and Annamalai University. Out of the interest earned on the investment of this deposit, scholarships are awarded to the research students.

The Tamil Nadu Cooperative Union collects 3% of the net profit of cooperative societies for Cooperative Research and Development Fund and 2% of the net profit for Cooperative Education Fund and maintains these funds. As on 29.2.2008 the amount available in this corpus fund of CRDF and CEF are Rs.65.80 crores and 44.15 crores respectively. Proceeds from such corpus is being utilized for development of cooperative movement, development of societies through infusion of new technology, research in critical areas, conduct of member education programme and training and carrying out publicity and propaganda.

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There are 26 cooperative printing press in our State with a total membership of 12645 with share capital of Rs. 2.09 crores. They fulfill the printing needs of all cooperatives, Government, quasi-Government and general public.

In our State 10 Salt Workers’ Cooperative Production and Sale Societies are functioning at present. Out of these, 5 societies are functioning exclusively for the welfare of Adi Dravida members. These societies are engaged in the production of iodised salt with financial assistance from the Government under TAHDCO scheme.

As of now, 115 Labour Contract Cooperative Societies are functioning in our State with a total membership of 34,431 labourers. These societies are formed to raise the standard of living of SC/ST by providing employment opportunities to the members by securing contract works. The members of these societies are availing the benefits in full as the middle man between the management and the labourers are eliminated. These societies are provided with financial assistance in the form of share capital, working capital and managerial subsidies from the funds obtained from the Government of India.

In our State, six Barber Cooperative Societies and three Washermen Cooperative Societies are functioning with the object of improving the conditions of barbers and washermen who belong to the economically weaker sections.

At present 17 LAMP cooperative societies under Integrated Tribal Development Programme areas and two societies under non-Integrated Tribal Development Programme areas are functioning in the State. These societies provide single window service for production credit, consumption credit, supply of agricultural inputs, marketing of agriculture produce, collection and marketing of minor forest produce and supply of essential commodities under Public Distribution System to the Tribals.

These societies have 81955 tribal members and 9364 non-tribal members. In order to enable the Tribals to undertake agricultural operations, LAMP societies provide short term loans for cultivation and medium term loans for allied activities of agriculture. In order to avail the loan facility, share capital subsidy has been provided to the members of the society. As these loans are provided free of interest, interest subsidy to compensate the interest loss has also been provided. In addition, financial assistance in the form of subsidy for transport, drivers’ pay and maintenance of vehicles have also been provided. An amount of Rs. 90 lakhs each for the year 2006-07 and 2007-08 has been sanctioned by the Government as subsidy to these LAMP societies for the above purposes. Presently most of these LAMP societies are not healthy.

The Government took special efforts during 2007 – 08 to rejuvenate LAMP societies in Kolli Hills area by infusing funds, increasing lending activities and taking up marketing of tapioca directly to the mills, it being the major produce in that area. In the process, besides increasing turnover and profits, higher price for tapioca to the tribal farmers could be ensured on a sustainable basis.

35 Cooperative canteens are also functioning for providing food at economic cost to students, workers and staff of various institutions.

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The Cooperative societies play a major role in the distribution of essential commodities in public distribution system. Cooperatives run 21630 fair price shops which accounts for 93% of the Public Distribution System outlets. These shops are run by 5060 cooperative societies comprising of 86 lead societies, 4540 link societies and 434 self lifting societies. In addition to this the cooperatives are also running 5898 part time fair price shops to serve the families in far-flung and remote areas and 36 mobile fair price shops to serve the people in hilly areas to deliver essential commodities at the door steps of people. At present 266 kerosene bunks are also run by cooperatives in order to streamline the distribution of kerosene.

The Government has been compensating the loss met out by the fair price shops on account of the sale of essential commodities at subsidised prices under public distribution system over and above the present retail margin provided by the Government. During the year 2006-07 and 2007-08 an amount of Rs. 97.05 crores and Rs.106.90 crores respectively have been sanctioned to the cooperatives as subsidy.

There has been increase in the prices of certain daily used commodities such as pulses, edible oil, wheat products etc., In order to protect the poor and middle income families from the spiralling price rise, the Government as a measure of price control has been selling these commodities through the fair price shops at reasonable prices. Besides, more than 20 non-controlled commodities are being sold through the Public Distribution System outlets at reasonable prices. The required products are purchased in bulk through wholesale stores to reduce intermediary margins. During 2007-08 upto 29.2.2008, non controlled goods worth of Rs.842.87 crores have been sold through Public Distribution System outlets.

The supply of essential commodities in correct weighment to the cardholders under public distribution system is accorded top priority by this Government. Accordingly an amount of Rs. 11.50 crores has been sanctioned in 2007 - 08 for the supply of modern electronic weighing machines to all cooperative shops. The supply and installation is in progress. It is expected that by end of May 2008, all the fair price shops run by cooperatives will have electronic weighing machines.

The Government has considered the plea of the employees of fair price shops and issued orders revising the scales of pay of salesmen and packers working in the fair price shops run by the cooperatives as announced while moving the demand on Cooperation in the last Budget Session. Giving effect to this, all the regularized salesmen and packers were brought under regular time scale of pay.

In order to alleviate the sufferings of the small tea growers in the Nilgiris District, the Government has ordered to sell tea processed by INDCOSERVE under public distribution system through fair price shops. The Government have fixed a target of 250 metric tonnes per month and the cooperatives have distributed a total quantity of 2673 metric tonnes of Ooty tea from April, 2007 upto February, 2008 through cooperative fair price shops.

With a view to minimize the health hazard caused by iodine deficiency, the Government has decided to promote the sale of iodised salt produced by the Tamil Nadu Salt Corporation and has ordered to sell the iodised salt through fair price shops in all districts of Tamil Nadu. Iodised salt is being sold at Rs.2.50 per Kg. During 2007-08, upto 29.2.2008, 28562 metric tonnes of Arasu salt were sold.

Government has announced that soap products of Tamil Nadu Khadi and Village Industries Board will be sold through fair price shops run by the cooperative societies. Initially it was proposed to sell 4 varieties of toilet and washing soaps, to start with 11 districts. The scheme has now been extended to all the districts in the State with a view to sell 10 varieties of Khadi products through fair price shops. The value of Khadi products sold through cooperatives during 2007 – 08 upto 29.2.2008 is Rs. 152.59 lakhs.

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The Integrated Cooperative Development Project is implemented for the overall development of the cooperatives in the selected districts of this State. This scheme has an integrated area based approach for cooperative development in rural areas. It aims on the development of functional linkages between cooperatives to promote their overall development to cater to the needs of rural community in an effective manner. Emphasis is laid on the strengthening and turning the primary cooperatives into multi-purpose entities.

The State Government have been receiving financial assistance from National Cooperative Development Corporation in the form of loan and the funds are channalised to the district central cooperative banks concerned which are acting as Project Implementing Agencies.

The Integrated Cooperative Development Project scheme had been implemented in the following 8 districts as shown below:

At present Integrated Cooperative Development Project is being implemented in the following six districts.

(Rs. in lakhs)

The detailed project reports prepared by the consultants in respect of Salem, Erode, Madurai and Pudukottai have been cleared by the State Level Coordination Committee and the National Cooperative Development Corporation. The administrative approval for implementation of the scheme in the above districts is under consideration of the Government. As regards Tirunelveli district, the National Cooperative Development Corporation has given its approval and the detailed project report is under examination.

The Government has selected Dindugul, Karur, Vellore, Sivaganga and Nagapattinam districts for implementation of Integrated Cooperative Development Project in the next stage of assistance. The National Cooperative Development Corporation has given its concurrence for implementation of the scheme in these districts. Draft Project Reports for implementation of the scheme are under preparation by the appointed consultants. The Government have also selected the Nilgiris district for implementation of Integrated Cooperative Development Project and the National Cooperative Development Corporation has given its approval in principle.

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This Government is keen to conduct polls to cooperatives in a fair and democratic way so that they function independently in an effective and efficient manner under the guidance of the elected representatives. Consequent on the cancellation of the elections a spate of petitions were filed in the High Court and the final verdict of the Court in this matter is still awaited. After the receipt of the verdict of High Court and in consultation with the political parties in the Legislature, necessary further action will be taken for the constitution of separate Election Commission and to conduct election to cooperatives in a fair and free manner.