The Mulkanoor Cooperative Rural Bank and Marketing Society, Mulkanoor

The Mulkanoor Cooperative Rural Bank and Marketing Society, Mulkanoor

Mandal: Bheemadevarapally, District: Karimnagar (Andhra Pradesh)

A drop that became an ocean...

OUR HISTORY:
India became independent in 1947. Leaders of Independent India believed that progress was possible only if the Indian people participated actively in planning and development of their own lives.

The Panchayatraj system of local self-governance was promoted so that politically, India would develop-into a truly democratic nation accountable to its people.

Along side the Panchayatraj system, people with common needs were encouraged to form cooperatives, so that they could, with mutual support, address their own economic and social problems.

Several cooperatives were formed, many in rural areas, in the 1950s. Midway through the 50s, however, it was noticed that many of these agricultural cooperatives were too small to ever become financially viable.

People were, then, encouraged to form large, more viable co- operatives. In the village of Mulkanoor, too, people began to speak of the possibility of cooperation. While there was much scepticism initially, after a series of meetings amongst potential members, 375 individuals from 14 villages came along within a 10 km radius to form Mulkanoor Cooperative Rural Bank. The founder Shri A.K. Vishwanatha Reddy, then a young man of 30 years, collected a total share capital of Rs. 2300. Many of the older farmers, even while contributing to the share capital told him that while they appreciated his sincerity, they didn't expect to see their money back!

That our cooperative has not just survived, but has moved from strength to strength, is history now.

OUR MISSION:
Poor soils, lack of irrigation facilities, of electricity, of communication facilities, of access to finance except at usurious rates, of access to inputs, of remunerative price for agricultural produce, of information, of self confidence were all part of the Mulkanoor of the early 50s.

Farmers could not invest in farm development even if they wanted to, mainly because finance which was available would have been at such a cost that the fruits of labour or the additional investment would never have been theirs. Laborers migrated to neighboring states in search of work.

Under these circumstances, the Mulkanoor Cooperative Rural Bank set out to:
1. Ensure that members of cooperative became optimal agricultural producers receiving fair financial returns for their production.
2. Ensure that others dependent on agriculture would find enough work within the villages, to leave the area, only by choice and not in distress.

The cooperative method was chosen to achieve these primary objectives because, it was felt that only through mutual cooperation it was possible to turn the villages from a situation of poverty to a state where people could live and work with dignity, where it was possible for all to live by their work and for the poor to consolidate and develop what they had – not to lose it to indifferent nature of a usurping man.

Our Cooperative ensures
1. That membership is voluntary and open to those who need the main services.
2. That management is democratic.
3. That share capital receives no special privileges.
4. That surplus is distributed equitably.
5. That members and others know about cooperative democracy and business.
6. That we actively work with other genuine co-operatives in order to create a favorable environment of growth for all.
7. That it participates in social activates.

Our Services:
We began serving our members very modestly in 1956-57. In our first year, we gave out short term crop loans to the tune of Rs. 32,000 and at harvest time we carefully recovered the loans. From then on, there was no looking back. Today we offer our members a wide variety of services—services which they need, provided in a manner which they define. Our services, today, can broadly be classified as financial services, input supply services, produce marketing services consumer services and Welfare services.

BONUS, DIVIDEND AND OTHER BENEFITS TO MEMBERS 2007-08
The society is paying bonus to members on their agricultural produce procured by it every year in addition to the market value depending upon the profit earned. Four decades back payment of bonus started with Rs.10 and is increasing year after year. During the year 2008- 09 bonus paid is Rs. 100 per quintals on B.P.T Paddy, Non B.P.T. Paddy Rs. 75, Cotton Rs. 200 and paddy seed Rs. 75. Total Bonus paid is Rs. 144.45 Lakhs.

Similarly, dividend 15% and interest on thrif deposits 9% (on par with rate of interest collected on seasonal agricultural loans) is being paid.

A statement showing the benefits given to farmer members is shown in the ANNEXURE-II.

The activities of the society increased year after year. During the tenure of the present president Sri A. Praveen Reddy, turnover of the society increased 17 times, as compared to his assumption in the year 1987.

A Brief statement showing the financial details for the year 2007-08 are shown in ANNEXURE-I

STRUCTURE :
· Registered under A.P. Act 1964 in the year 1956.
· Converted to A.P.M.A.C.S. Act 1995 in the year 1995.
· General Body consists of 6048 Members
· Managing Committee consists of 15
· President
· General Manger & Employees –110

Finances:
Main Sources
· Our Members
· State Bank of Hyderabad
· National Cooperative Development Corporation, New Delhi
· Government of Andhra Pradesh

Financing bank:
· Up to 1965-69 - District Cooperative Central Bank
· From 1969 - State Bank of Hyderabad.

The area of operation of this cooperative is rural and agri based. Out of 6410 members, small and marginal farmers are 5242. Small & marginal farmers constitute 82% of the total membership of the cooperative. This cooperative has encouraged the members to start agribusinesses and arranged technical and scientific advise. The cooperative is having 4 agriculture graduates, 3 qualified mechanics to render necessary service to the members to improve their skill development. Apart from regular guidance to the farmers alongwith the agriculture and technical staff of the cooperative, eminent scientists in agriculture, horticulture, animal husbandry are invited every year and group meetings are conducted in the premises of the cooperative and also field visits arranged. Under the member education programme, the farmers are taken to various exhibitions and meats to enlighten them about new scientific varieties, trends etc.

Dr. V. Kurian, founder Chairman of the National Dairy Development Board has cited the example of our cooperatives as:

If there were 41,000 Mulkanoors in India, it would have been enough to serve all our villages. Since, Mulkanoor Cooperative employs 110 people, 41,000 Mulkanoors would provide full time employment for 45 lakhs rural people. Mulkanoor's members have raised Rs. 115 lakhs of share capital; 41,000 Mulkanoors would have mobilized Rs. 47,150 Crores of rural capital. Mullkanoor's members have saved Rs. 600 Lakh; 41,000 Mulkanoors would have mobilized rural saving deposits of almost Rs. 2,50,000 Crores. Mulkanoor has reserves of Rs. 570 Lakh; 41,000 Mulkanoors would have amassed reserves of Rs. 2,33,000 Crores and create rural capital base of Rs. 5,00,000 Crores.

P.N. Haksar, Vice Chairman, Planning Commission of India, who visited the society in 1973, observed that

“Ye Mulkanoor nahin hai, Ye mulk ka noor Hai”
“This is not Mulkanoor. It is the light of the nation."

A.K. VISHWANATHA REDDY RURAL DEVELOPMENT SOCIETY – MULKANOOR.

The management and members of the society felt that there is much to be done in the field of Rural Development. Therefore, separate independent society was registered and is functioning.

Initially, it started Junior College followed by Degree College. Functioning of these colleges helped small and marginal farmers and weaker section community children to pursue their studies in higher education, Hitherto, such facilities were not available in this rural area.

During the year 2007-08, the strength of the college was 730. Out of it, girl students were 394 (54%). Result of pass in Degree college is 55.43% and intermediate 60.26%.

The watershed programmes have been commenced with the financial assistance of NABARD. At present, two schemes are in pipe line. The aim is to implement watershed programmes in 14 villages of area of operation of the society, wherever feasible.

REASONS FOR SUCCESS:
· No outside interference in functioning of the Cooperative.
· Dedicated, honest and professional management.
· Strict & timely recovery.
· Timely & sufficient lendings, supply of inputs.
· Linking of credit with marketing.
· Lendings to agribusiness activities
· Supply of improved seeds
· Implementation of Welfare Measures including Insurance Services.
· Declaration of dividends to members every year @ 15%.
· Distribution of surplus
· Patronage to social activities
· Constant built in strong internal resources.
· Work and service culture of employees.
· Efficient marketing management.
· Good will and patriotism of members

INSIGHTS :
The main objective among others, of the Primary agriculture cooperative is, to meet the agriculture and allied needs of the farming community, In India 75% of Agriculture families, consist of small & marginal farmers. The cooperatives can play a vital role in encouraging the agriprenuers and provide training and guidance in skill development in the sectors of agriculture, seed production, horticulture, medicinal and aromatic plants, farm mechanism, sheep rearing, dairy development. The cooperative with strong internal resources coupled with external finances can help small in their entrepreneurship and also skill development these. efforts will contribute for development of the nation, if not in a big way but to a considerable extent.

Apart from these direct services, we think our coop. Has contributed very significantly to the provision of work opportunity to all.

Mulknoor believes and practices that a successful cooperative must be good in adherence to cooperative principles – namely democratic governance and accountability to membership and at the same time, it must be equally good in its business – practices and performance.

If you are looking for an inspiring example to emulate: take the road to Mulkanoor.

Annexure- I Statement Showing The Benefits Provided To The Farmer Members During The Year 2007-08
Sl.No. Details Amount Rs.(in lacs)
1.2.3.4.5.6.7.8. Welfare servicesBonus on paddy purchasedBonus on paddy seedBonus on cottonInterest rebate received from state government for promptrepayment of loans by membersMargin Money & subsidy received by members from various development agenciesDevidend paid on share capital of members 15%Interest paid on thrift deposits of member 9% (at par with the interest collected from members on crop loans) 83.8976.2733.4523.6738.8099.0051.6369.93

Status of Society as on 31-03-3008
Sl.No. Details
1.2.3. MembersEmployeesNet Profit (surplus) 6410110130.89 lacs


Financial Services LoansRs. In Lakhs
Short term loan -Loans for various cropsMedium term loan - deepening of wells, installation of pumpsets, laying of pipe line, poultry, dairy, sheep rearing, solar lanterns, cranes, power tillers, LP Gas, sprinklers, trailers, pipe lines, power sprayers, sericulture, individual latrines etc.) personal loan, 18 kinds of loans.Long Term Loans - Tractors, Harvester, Orchards etc.Other Loans - (For Technical education, Chronic diseases, marriage of girls etc.)TotalMembers Funds - Share Capital- Thrift Deposits- Other deposits (FD. S.D & C.A) 1576.75290.97249.021893.424010.18334.23834.11989.39
Inputs Supply Services
- Supply of Fertilizers, Pesticides, Seeds Sprayers, Pumpsets, Accessories, Pipe Lines, Seedlings of Orchards, Poultry, Feed and Medicines, Diesel.- Technical Services to Farmers by our Agricultural Officers, 1320.18
Marketing Services —Value addition to produce- Procurement of Paddy produce from its members- Processing of paddy and selling by products (i.e.) Rice, Broken rice, born etc.- Procurement of Cotton and ginning- Procurement of maize- Production of paddy seed, processing & marketing- Procurement & sale of maize 4105.25
Consumer Services
- Cloth, Cosmetics, Food grains and edible & non edible article.- Fair Price Shops (PDS) 272.03
Welfare Services
- Electrification in Villages- Providing drinking water in villages by bore wells- Family Planning Camps, Eye Camps- Insurance Services through LIC, GIC- Mutual Family Welfare Fund- Funeral Expenses- Janatha Accident Policy- Scholarships to Students- Electric Motors Insurance- Loan Insurance Scheme to the extent of Crop Loan- Statement showing details of welfare activities


Annexure-II Statement showing details of welfare activitiesundertaken during the year 2007-08
S.No. Details No. of members InsurancePremium Claims Received/benefits paid(in lacs)
1.2.3.4. 5. 6.7.8.9. 10. Funeral expenses to the deceased members and their spouses (1500 cash + 50 Kg. of Rice from own funds of the society)Welfare fund scheme (from each member Rs. 500 Minimum and Rs. 1250 maximum, will be collected depending upon land holdings @ Rs. 125 per acre at one time. On expiry of member 20 times of Welfare fund deposits will be paid to the legal heirs of deceased members.Group Insurance Policy (Janashree Beema Yojana policy) covering all the members. Entire premium is born by the SocietyA. Life Insurance linked with crop loan (JBY) under this scheme. On expiry of member, his crop loan to the extent of Rs. 25,000/- will be waived off by seeking reimbursement from insurance companyB. Under this scheme (JBY) the children studying in class 9th to12th (limiting to two children) will be paid scholarships@ Rs. 1200/- per studentA. Master policy for Janatha Accident Policy covering all members. Premium born by society. Coverage of accident Rs. 50,000 and Rs. 25,000B. Claim under Janatha Accident Policy IFFCO @ Kribhco Tokyo insurance (After purchase of fertilizers, if farmer met with accident and expires, risk is covered under this scheme. Coverage Rs. 400 per bag to the maximum extent of Rs. 1 LakhA. Insurance to cows, buffalows, from own fundsB. Claims receivedA. Insurance to electric motors (Premium for 3 years)B. Claims received from insuranceA. Individual life insurance coveredB. Claims receivedi. deceased memberii. maturity of policesA. Micro Insurance Scheme (Jeevan Madhu)B. Claims received under micro insurance (Jeevan Madhur Scheme)A. National Health Insurance SchemeB. Claims received 1331076250106135All members2818653769235175256410815190931 ----23.05----6.43----29.48--0.48--5.77----11.41--5.70-- 2.7612.76--14.1816.36--1.253.72--1.76--0.68--4.5014.60--0.67--1.87
Total -- 61.14 84.02


Liabilities
S. No. Details Amount Rs. (in lacs)
1.2.3.4.5.6.7.8.9. Share capital of membersDeposits of members (thrift)Deposits of non members (F.D, S.D, C.A)Reserve fundOther reservesLoan received from BankCash credit Account with BankPayablesNet Profit 344.23834.11989.39470.212,920.702,219.81356.48383.03130.89

Assets
S. No. Details Amount Rs. (in lacs)
1.2.3.4.5.6.7.8. Shares in other institutionsInvestments in other institutionsLoans due from membersProperties of the societyReceivablesValue of closing stockCash in HandTotalOver due percentage 679.212,822.532,932.751,085.27387.01718.9723.118,648.8511%


Business turnover during 2007–08
S. No. Details Amount Rs. (in lacs)
1.2.3.4.5.6. Loans to membersSale of Agriculture ProduceInput salesSales of consumer activitiesHire chargesTotal turnover 4,010.184,105.251,320.19272.0339.239,746.8

AWARDS

(Late) Sri A.K. Vishwanatha Reddy (President from 1956 to 1985)
Year Details Institution (Award from)
198119871992 Manager of the year – 1981In recognition of services rendered toCDF as Trustee memberFelicitation for the services Rendered to coop. movement Hyderabad Management AssociationCooperative Development Foundation-HyderabadPeddi Reddy Thimma Reddy Farm Foundation, Hyderabad


Sri A. Praveen Reddy (President from 1987)
Year Details Institution (Award from)
2004200420052005200620062007 Citation in recognition of services rendered to agricultureBest Cooperator AwardUttama Sahakara Sangam PuraskaramKribhco Sahakaritha VibhushanAwardModel Co-operativeGood Working CooperativeFelicitated in recognition of services rendered to farmers Honorable Minister for Agriculture, Govt. of Andhra Pradesh Sri Raghu Veera Reddy.On the occation of centenary celebrations of Coop.Movement in IndiaPresented by Dr. Y.S. Rajasekar Reddy, Hon'ble Chief Minister, Govt. of A.P.APS Coop. Union & APS Coop. Urban Banks Federation.Krishak Bharathi Cooperative Ltd., (KRIBHCO) New Delhi.Sahakar Bharati, MumbaiNational Cooperative Union and National Council for Coop. Training, New DelhiInauguration of RYTHU LOKAM, Monthly Magazine, Hyderabad


REASONS FOR SUCCESS of "Mulkanoor Cooprative Rural Bank & Mkt. Society Ltd."· No outside interference in functioning of the Cooperative.· Dedicated, honest and professional management.· Strict & timely recovery.· Timely & sufficient lendings, supply of inputs.· Linking of credit with marketing.· Lendings to agribusiness activities· Supply of improved seeds· Implementation of Welfare Measures including Insurance Services. · Declaration of dividends to members every year @ 15%.· Distribution of surplus· Patronage to social activities· Constant built in strong internal resources.· Work and service culture of employees.· Efficient marketing management.· Good will and patriotism of members


A. Praveen Reddy
President