National Commission on Labour (1967)||
29.68 With the encouragement received in the successive plans, the cooperative movement has spread in the last eighteen years. It now covers fields such as credit, marketing, processing of rural products, consumer sales, housing, farming construction and banking. Several of these areas of activity are of interest to the working class in its capacity as consumer of goods and services To the extent the co-operative movement keeps a check on the distribution and pricing of goods and helps the egalitarian urges in the society, it certainly has a relevance to the task entrusted to us, though in impact could be indirect. In recent years, some forms of cooperative organisation have emerged which employ labour, in small or large numbers but mainly small. Particularly in the sector which processes agricultural commodities, cooperative running of industry has acquired sufficient importance.
29.69 The Industrial Policy Resolution (1956) stated: "Many of the activities relating to small scale production will be greatly helped by industrial cooperatives. Such cooperatives should be helped in every way". Suitable recommendations in pursuance of this policy were made in the Second Plan for encouraging industrial cooperatives.1 The Third Plan, while reviewing the progress of developments during the Second Plan in this sphere, recognised that though cooperative processing was a recent development, comparatively greater progress had been achieved in sugar, cotton ginning and pressing units than in the processing of other agricultural products. With regard to the former, it reviewed the achievements and noted with satisfaction the setting up of the National Federation of Cooperative Sugar Factories with the object of improving the operational efficiency of existing units and promoting new units.2 At the same time, the Plan emphasised the need for a parallel development on the side of labour in the cooperative sector by stating that in the organisation of large cooperative undertakings for processing and other purposes, attention should also be given to the position of workers and employees. They should have the opportunity to participate in the management of co-operative enterprises in which they serve.
29.70 According to a recent estimate3 nearly 56,000 cooperatives have been organised in the industrial held with nearly 4 million members and a working capital of over Rs. 268 crores. These include cooperatives formed by craftsmen, artisans, workers and small industrialists that either undertake production or offer services to their members. Also included are societies organised by cultivators, milkmen and Other primary producers for processing activity. The cooperative processing units, which employ a sizeable labour force, are relatively less in number.†
1 Second Five Year Plan p. 299 and pp. 435-438
2 Third Five Year Plan p. 208-209. The Fourth five Year Plan (1969-74) draft has referred to the progress during the sixties in the development of processing cooperatives ad has emphasised a more systematic development p, 163.
3 Small Scale Industries in India, Development Commissioner, Small Scale Industries, Govt. of India, pp 46-50 (1968)
There were 928 such units as on 30th June, 1967.1 Information on the number of workers employed by all these cooperative processing units is not available, but in 1964, employment in units employing 50 or more workers with power and 100 or more workers without power alone was about 45,600 workers distributed over 280 units. These included 40 cooperative sugar mills employing about 18,300 workers.
29.71 Cooperative processing is thus an expanding sector of the national economy and so are other related sectors of rural cooperatives. Some indicators of their development and prospects could be seen from the following table.
TABLE 29.2: Physical ProgrammesóLevels Achieved and Anticipated
|Sl. No.||Programme||Unit||†††††††††† Levels achieved ††††††††||Levels anticipated
|1||Agricultural produce marketed by cooperatives||Rs. crores (current prices)||175||360||475||900|
|2||Cooperative Agricultural processing units||Numbers||1004||1500||1600||2000|
|3||Fertilisers to be retailed by cooperatives||Rs. crores||28.2||80.1||260||650|
|4||Storage .......||Mill. tonnes||2.3||2.4||2.6||4.6|
It is this proposed expansion and its implications for labour which we propose to consider in what follows.
29.72 Labour employed in the cooperative sector naturally has the same aspirations as other labour has; indeed it should have even higher expectations because of the in-built social values the cooperative movement stands for. To quote: "Along with a growing public sector and a private sector which function with responsibility to the community as a whole, the influence of cooperation extends far beyond the particular activities organised on cooperative lines and gives to the social structure and the national economy, balance, direction and a sense of values."2 The basic principles of any cooperative endeavour should be absence of exploitation, a reasonable profit-motive and self-help. In practice, however, it was brought to our notice by workers' organisations that through the cooperative processing units, the primary producers of raw material had come to own the manufacturing establishments. These producers have eliminated middlemen; the cream of benefits which the middlemen used to get has now become the privilege of the producers themselves. At the processing stage the cooperative has to engage workers as any other unit similarly occupied. Since these workers have no organised strength and the professed objectives of the cooperatives are not followed by the organisers when it comes to their dealing with workers, difficulties have arisen. These were highlighted in a memorandum we received from a trade union leader in Maharashtra who has considerable experience in organising workers in the sugar industry. In substance the memorandum stated that producer cooperatives have helped their members far out of proportion to the investments made. Membership of a cooperative has meant an economic and political benefit, and all this at the expense of workers and the society. Since the memorandum was based only on one industry in one State, we considered it necessary to convene a meeting of a representative group of organisers of industrial cooperatives. The response to this invitation was unfortunately poor. Most of the discussion centred round a specific area, Maharashtra, and a specific industry. To understand the other view we discussed the connected issues with representatives of industrial cooperatives also.
29.73 As would be expected, cooperative processing units will fall into two sections, the larger units coming under the purview of the Factories Act and other labour legislation, and the smaller ones, the labour in which will fall in the same category as other labour dealt with
1 Review of Cooperative Agricultural Marketing, Processing, Supplies and Storage in India, National Cooperative Development Corporation, Cooperative Year 1966-67, page 69
2 Third Plan, p. 200.
in this chapter. For labour in the larger units, the recommendations made by us under different heads throughout our Report will apply with equal force. Merely because the employer happens to be a cooperative unit, it should not seek exemption from the operation of labour laws nor would it be expedient for the Government to grant such exemption. In fact, the organisers of sugar cooperatives mentioned to us that they were paying to workers the wage rates which had been fixed by the sugar wage board. This is as it should be. It is possible that smaller units in the cooperative sector could be distinguished from other small units, since in the former case entrepreneurship is widely distributed. But this by itself should not be a criterion for separate treatment. Beyond this, we do not wish to dilate on the problems of labour in the cooperative sector. We, however, recommend that there should be a comprehensive study of the working and living conditions of labour in the cooperative sector in order to understand their position vis-a-vis labour in corresponding units where the nature of entrepreneurship is different. This study would provide guidance for future action.
29.74 A related problem in the producers' cooperatives is with regard to workers engaged by individual members of the cooperative for agricultural operations which help the members to feed raw material into the industrial activity undertaken by the cooperative on their behalf. It is possible that there may be no uniformity in the treatment of such labour by the members of a producer cooperative. Here again, a variation could be as between a small farmer and a comparatively substantial farmer; and we have reason to expect that most of the members will be small farmers in terms of labour each one has to employ. In any case what we have said about agricultural labour in the last chapter will apply equally to agricultural workers engaged by members of the cooperatives.
29.75 There is another issue posed before us about labour in cooperative processing unitsó should it or should it not be allowed membership of the cooperative. The workers' representatives have urged that the workers should have the right to become members and shareholders of the enterprise. The cooperative entrepreneurs contest the claim. The consideration involved in this issue is the same as that relating to allowing workers of a unit owned by a joint stock company to have shares in the company. All we can suggest is that workers should not necessarily be barred from holding a share. The argument about the difficulties in maintenance of discipline in case a worker becomes a shareholder advanced by the cooperatives does not appeal to us. It could be said that a worker who has shown initiative in acquiring an interest in the cooperative may work better to improve the return on his investment. But giving worker a share in the cooperative by itself cannot be a complete answer to the problems of labour in the cooperative sector. Even when some of them are given shares, there will still remain several others who will continue to be mere workers and need protection of the type workers in other establishments are entitled to.