The concept of co-operative farming

Co-Operative Farming

This is a proposal for co-operative farming. In this proposal, five farmer members come together with their pooled lands and distribute risks and rewards of the self-help group.

There will be five farmers in a self-help co-operative group, depending on their monthly income. This is shown in the table:

Serial Number

Farmer Type

Monthly Income

1

Super Farmer

> 50,000 INR

2

Progressive Farmer

> 30,000 INR

3

Middle Farmer

> 20,000 INR

4

Low Income Farmer

> 10,000 INR

5

Super Low Income Farmer

> 5,000 INR

The super-farmer will take the lead of the group in terms of security. If the group fails, the onus is on the super farmer and the progressive farmer. When the group makes profit or any loan is disbursed through this self-help group, then the super farmer takes the lead.

The loan within the self-help group is disbursed within with the consent of the super farmer.

There are phases where the farmer’s self-help group disburses loan in phases. Let us assume that the total amount to be disbursed is 2,00,000 INR. In Phase 1, up to 1,00,000 INR can be disbursed with the consent of the super farmer. IN Phase 2, up to 75, 000 INR can be disbursed. In Phase 3, the last amount of 25, 000 INR can be disbursed.

The trigger for the phases can be as this:

Phase 1- No ground rules for the first disbursement

Phase 2- No profit or loss after the phase 1 disbursement

Phase 3- At least 10% profit in phase 2 disbursement or at least 5% profit in the phase 1 and 2 combined

Profit Sharing Techniques are as follows. Let us say that there is a profit of 20,000 INR. In that case, one-fourth of the money is kept for contingency fund- 5,000 INR. INR 10,000 is distributed among the group in the ratio of 10:10:5:3:2. The rest goes back to the loan issuing credit company.

So, essentially we are mitigating, and yet rewarding the head of the farmers on the profit sharing as well. This is the concept of co-operative farming.

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