Case Studies In co-operatives

gaurav1987

Par 100 posts (V.I.P)
Hey frnds,
These are a few case studies on co-operatives...the case problems have been defined n questions asked on dat...so try solving this itwould help u to a gr8 deal.....

Case 1 COIR TO CHOIR THE LINK OF TOGETHERNFBS
If you drive past the lush greenery and the waters of Kerala, you arrive at a remote place in Kerala called Allepey. Surrounded by green coconut plantations, this place will be like a feast for your eyes. About a hundred villages work on these plantations, which for them is an everyday ritual.
Legend has it that in the Ramayana, Lord Ram was praising all the trees, but forgot to mention the coconut tree. The coconut tree prayed to the Lord, and the Lord gifted a boon to the coconut tree. He promised that every part of the coconut tree would be useful in some way or the other. True to the legend, we can witness that every part of the coconut tree is of some use to mankind from time immemorial.
The villages in and around Allepey have some of the finest coconuts in the world. All the members of the family participate in the daily chores of processing this fruit. One can witness community development. In every village, a group of villagers come together and organise themselves into a co-operative. A formal registration is done with the Registrar of Co-operatives in Kerala. Their main job is to process the coconut fibre into coir. There are around 300 co-operatives employing around 30,000 people. The process is very simple. A farmer cuts off the coconuts from the tree when they are ripe. The people break open the fruit (shell) and the nut is put into the basket. The nuts (kernels) are further dried and made into 'copra'. The leftover fibre is then dried in the sun and is converted into bits or spun in to long threads. This is called coir The Kerala Government established the Coir Board to help these co-operatives in the marketing of this coir.
These co-operatives in turn supply the raw coir to a number of small-scale industries, specialized in converting the coir into carpets, mats, mattresses etc. A major part of the coir is mixed with sponge and is used in the preparation of mattresses. It is a very lucrative business in Kerala. As a large number of smallscale industries started manufacturing the mattresses, the competition intensified, thereby leading to a price war. The price war created a major drive in cost-cutting. The mattress industry tasted its first competition from the early 90's onwards. The changing lifestyles of the people added fuel to the fire. The customer started demanding more value added products. Hence, all the small-scale companies switched over to synthetic fibre and stopped processing the coir from these co-operatives.
Now the livelihood of the people of the 300 co-operatives is at stake. Almost 28,000 families are surviving on these co-operatives. After a series of meetings with the members, hey decided to meet the Coir Board. Around 15 co-operatives lecided to meet the Director of the board. In spite of five visits, he Director was not available for help. They finally got fed up with the idea of meeting with Director.
Many co-operatives disintegrated, and the people moved to urban areas in search of employment. But for the rest, life seems to be a big bubble about to burst.
QUESTIONS
1. If you were the representative of the Coir Board of India, what recammendatians would you suggest to bring back the last glary of this cammunity based an co-operative movement?
2. Should these co-operatives go for related and unrelated diversification? If so, enumerate the co-operative strategy and apply it to those co-operatives.

3. Do you feel that the co-operatives in this area made a mistake by not foreseeing the changes that are taking place in the market? Do you think that these co-operatives could not adapt to the change? Give your comments.

Case 2 LAMBS TO THE SLAUGHTER
Political analysts call them 'war chests'. Others call them 'engines of Maharashtra's rural growth'. In plain terms, they are just co-operative banks. There are almost 32 district co-operative banks in Maharashtra with total deposits of Rs. 3,500 crores. These banks fuel the growth at the grass roots. This movement is the strongest in western Maharashtra. Sugar co-operatives were the fIrst to come up in this area. Since sugar production and processing was a capital intensive business, no nationalized bank would lend them money, so district co-operative banks came to their rescue and became a vehicle for financing them.
Co-operative banks seldom trade in gilts in a big way. But that changed after Ketan Parekh blew a hole in the finances of Madhavpura Mercantile Co-operative Bank in 2001. The Rs. 157 crore scam prompted the RBI to come out with a rule making it mandatory for all the co-operative banks to invest 25% of their funds in gilts. Dealers would call one another on the phone to keep up with the market movements and strike deals in G-Secs (Government Securities). In addition, big players like SBI and Citibank were ruling the market. Getting a hand on the prevailing market rates was difficult, especially for co-operative banks, which were miles away from the trading hub of Mumbai. This was an opportunity that prompted Sanjay Agarwal of Home Trade to trade in gilts with co-operative banks. Banks like Janata Sahakari Bank, Nagpur District Development Co-operative Bank (NDDCB) fell prey to him and lost crores.

The modus operandi of the co-operative banks goes like this the co-op banks provide the voters, who are high risk borrowers with the funds. Most of these are the Board Members of the bank who have political party affiliations. Hence, scamsters like Harshad Mehta, Ketan Parekh or Sanjay Agarwal can easily bribe these Board Members (it was learnt that Sanjay Agarwal had agreed to part off with 6% commission on the amount borrowed from NDDCB). Furthermore, RBI cannot directly intervene in the functioning of these banks as NABARD (a sister concern of RBI) looks after the functioning of these banks. NABARD in addition, has to co-ordinate with the Registrar of the co-operative societies in each state (with whom the co-op banks have to register themselves). But NABARD and the Registrar of each state are generally not on good terms due to ego tussles.

Will 'life means more' be the adage for the functioning of the co-operative banks or will they perish. . . . . . . . . ?
QUESTIONS
i. identify the problem in the case.
2. Was it a good move for the RBI to implement the 25% investment as mandatory for all the co-operative banks in India? If yes, why? If no, why not?
3. Give a suitable strategy to overcome the problem of political influence on co-operative banks and how can RBI overcome them?

Case 3 FRIENDS' EDUCATION SOCIETY
The Peshwa community had to leave India when the Partition took place between India and Pakistan. However, after the 60's, the community members returned to their motherland, India as they had a lot of ancestral properties here. One such community came to Nagpur to carry out their business activities. Many of their children were denied entry into local schools as the city dubbed them as 'outsiders from Pakistan'. They were also humiliated wherever they went.

In order to overcome this problem a group of six like-minded individuals, and Gandhian followers thought that it would be ideal to start a school for their community as well as for the people of Nagpur. They registered their body with the Registrar of the Nagpur district and named it 'Friends' Education Society'. The body adhered to the strict principles of co-operation and enshrined some tough measures when it came to discipline. They started their first school in the same year of registration and named it 'Mahatma Gandhi Memorial High School'. The following are some rules framed by the society to carry out its activities:
1. Every child irrespective of caste, creed or religion will be admitted into our society's institutions.
2. The selection procedure will be purely based on merit. No special quota shall be given to our community (however, 20% of the seats shall be reserved for our community on the basis of merit)

3. The society will not accept any donations or bribes in the form of building fund, etc. The fee collected will be as per the government rules.
4. The society shall recruit teachers of high repute and calibre, and no community reservations are accepted in this regard.
5. The society shall adhere to strict disciplinary methods and fair means of education system shall prevail.

A lot of hard work, commitment and dedication earned a good name for this society. In 1995, the society celebrated its silver jubilee. As Kantilal, one of the founder trustees was preparing a report for speaking on the occasion, he was surprised to note on how the society grew by leaps and bounds. The society today comprises of 23 schools, 8 colleges and 3 vocational centres in the city of Nagpur. In the silver jubilee celebrations, the trustees unanimously decided that all of them should step down and pass on the mantle to young blood, as all of them crossed the 80 years mark. In the AGM, the entire Board of Directors was dissolved, and the trustees decided to form a new Managing Committee to run the society. Most of the new members (trustees) were all in the age group of 35-40 years. They were all closely connected to each other; and most of them were children of the old trustees.

n 1996, Maharashtra Government with the help of the Nagpur University launched a series of non-aided courses to generate employment to the youth of Nagpur. They launched courses in mass communication, journalism, management, fashion designing etc. The trustees of F.E.S met and they finalised that they would go for these courses. In fact, F.E.S. was the first institution to opt for these graduate programmes. The first mover advantage and past glory of the society found many takers for these new courses.

The trustees believed that as the new courses were non-aided programmes, a lot of money can be made by the institution. One of the trustee members even pointed out, that he would shut down his business to make money through these courses. The society floated a new college with a state-of-the-art infrastructure (to make more money than to offer education) and named it Gandhi Institute for Professional Studies (he is no more Mahatma). A lot of nepotism, bribery and unprofessionalism entered into this institution. In the first six months, the institute earned Rs. 2 crores through fees alone, and in the next five years they made Rs. 50 crores (as of 31st March, 2001).

The students who completed the course were not given any placements. When asked for it, the Director used to say, "Our job is only to provide education and not jobs. Do you think we are a placement consultancy?" The whole student community got frustrated with the way the society functioned on the lines of commercialisation of education. The media reported of the atrocities committed by the society. Finally, one day the older trustees dissolved the Board and re-appointed themselves to run the body.
QUESTIONS
1. Identify the main problem in the case.
2. Was it right on the part of the old trustees to re-appoint themselves as members of the Managing Committee? Substantiate your answer.

Case 4 HAVE YOU DONE THE DUE?
Bhilwara, the desert stretch of Rajasthan state houses many textile units. Famous for its quality products, some companies have even mentioned the name of the place in their advertisements. Some companies have even associated themselves with the name of the place, Bhilwara Suitings.

A drive through the scorching heat, will lead one to the remote village spread in a small area. This is the home for many ancillary units engaged in the supply of dress materials to various textile mills. Mostly organised as co-operatives, these units were engaged in the manufacture of a wide variety of sub-items used in the textile units. One such unit is called Marwari Dyes Co-operative Ltd. (MDCL). A community based co-operative, this unit supplies colour dyes to major industries in Bhilwara. Started in 1978, this unit specializes in the manufacture and supply of the latest colour dyes to the textile industry. A group of 16 like-minded individuals saw the unit moving towards prosperity, as Bhilwara was gradually turning out to be an industrial cluster for textile units. They appointed Kantilal Sajnani as the Chairman and ten members represented the Managing Committee.
Kantilal was a respected man in the village. A staunch Gandhian, he was like an idol in the village. His commitments towards honesty and dedication earned him respect and loyalty. The members of the co-operative enjoyed working under him. The best of human resource practices were employed under him. The co-operative prospered under his leadership, good will and popularity which earned permanent customers for the co-operative. .
Kantilal breathed his last on 25th May, 1998. His son Dhirajlal was studying Textile Engineering at Warwick University, UK. On the sudden demise of his father, he had to return to India. After his father's death ceremony, he wanted to go back to UK to complete his post-graduation. But the Managing Committee decided that he should continue in his father's place as the Chairman of the co-operative.

He was reluctant, but had to succumb to the pressure from his mother. So he took up the post of the Chairman. Initially, he ran the co-operative with the help of the Managing Committee. But after six months, the Managing Committee saw a sea of change in the behaviour of Dhirajlal. He gradually forgot the principles of co-operation. He argued with his fellow members as to why the co-operative dealt only in the supply of dyes. Why couldn't it market readymade apparels for males? He suggested that it would create a lot of revenue for the co-operative. Dhirajlal wanted to be in the good books of the media and wanted his name to be splashed in all the leading business magazines and business news channels. In that process, he forgot the principles on which this co-operative was founded and functioned.
One day, all the Managing Committee members met to discuss the future of the co-operative. Dhirajlal did not attend the meeting. Instead, he organised a birthday party for his friends at the expense of the co-operatives' funds. Gradually, the whole co-operative funds were mismanaged. The auditors came to check the misappropriation of funds on the insistence of one of the members. Dhirajlal bribed the auditors and settled the issue. He also came to know that the complaint was filed by his father's very close friend, AgarwaL

In the board meeting next month, he openly criticized Agarwal and told the other members that they were all in this co-operative, because of the mercy shown by his father when he started the co-operative in 1978. After the meeting, one of the committee members, Rakeshnath, a close confidante of Dhirajlal's father was walking in depression, seeing the setting sun in the late evening, he wondered what is going to happen to Marwari Dyes Co-operative Ltd. "Will it shine back or go into the oblivion like the setting sun?" He left with lingering memories.......
QUESTIONS
1. Identify the problem in the case.
2. What sort of leadership qualities were exhibited by Dhirajlal?
3. Do you believe that leadership is the main driving force to run a co-operative? Substantiate your answer with examples.
4. What future do you foresee for Marwari Dyes Co-operative Ltd.? Can you suggest any remedial measures?


Case 5 SWEET AND SOUR
Uttar Pradesh is the state with the largest number of MP's (Members of Parliament), and also has the largest number of districts. If you want to truly understand Indian politics, then you must travel to Uttar Pradesh. One can witness the excellent marketing the politicians indulge in, to gamer votes. Right from Ram Janmabhoomi to high level comIption, bribery and scandals, UP has got it all.

Hold your breath; for UP is also the home of sugar cane, thus making the state rich and prosperous. Incidentally, UP has the largest stretch of land under sugar cane cultivation. The zamindars hold acres of land. There are also presence of large number of small and marginal farmers engaged in the cultivation of sugar cane. Since 1940, many co-operatives approximately 300 today are actively involved in the sugar cane business.
The co-operatives play an active role in the process. The farmers come together and start a co-operative for their own benefits or maybe sometimes to serve the society. A dig into one of the co-operatives will provide a better insight into the functioning of these bodies.
Shahranpur district is one of the largest districts in UP. A network of 150 villages have inter-connectivity with the district. The villages comprise of Thakurs, an upper caste community who own acres of land, and the local Dalits who are small and marginal farmers. They usually work for the Thakurs or cultivate their own patch of land.

Sugar cane processing is a very tough job (it should be noted that no major companies like Tatas or Birlas are into the sugar industry). Once the sugar cane is cut, it has to be crushed into juice within 24 hours (if not, the sugar cane will loose its juice content.) Many farmers were losing out their revenue because of the difficulties in transportation to distant places. The sugar mill will weigh the sugar cane and pay the farmers according to the juice content of the sugar cane. The juice is then boiled and is decarbonised to remove the brown colour. A mixture of hydrogen peroxide gives it a white colour. The boiled juice is then crystallized into tiny pieces. They are then packed in gunny bags, lined with polythene and are sold in the market. In UP, many co-operatives do the processing job. The Central Government purchases about 60 per cent of the produce from each co-operative for Public Distribution System (PDS). After Maharashtra, Uttar Pradesh is the main producer of sugar in India. Sugar has wide applications in Food and Beverages Industries like Cadbury, Coca-Cola, Britannia, HLL etc.
The co-operatives in UP are organised by farmers themselves. Going back to our earlier example, around 100 co-operatives formed a federation to construct a sugar mill that can process about 100 tonnes of sugar per day. Established in 1980, Shahranpur District Sugar Co-operative Federation elected a Managing Director from all the member co-operatives. All these years, a member from among the Dalits was appointed as the Managing Director to run the federation. Of late, since 1990's, the Thakurs wielded power and used to influence the Chairman of the co-operatives by throwing money. It was reported that there was an incident where a Dalit - Thukaram was beheaded by the Thakurs and then onwards it was the Thakurs who were the Managing Directors. Are the Thakurs doing this for money? Just read on....

The upper caste Thakurs used the post of the Managing Director of these co-operatives, and they later entered into politics using the name and fame achieved from the co-operative. Mr. Tiwari is one such person who shot into fame using the post of M.D. of the Federation and subsequently got elected into Parliament as a Minister of State for sugar industry. The co-operatives were established to provide support to the Dalit community. If the Thakurs use the co-operatives for their benefit, what is the purpose of establishing these bodies.
How long will this continue, only time will tell . . . . ...?
Questions
1. Identify the main problem in the case.
2. Do you favour the role of politics in co-operatives? If no, what
actions can be taken to curb this practice?


Case 6 BOILING OUT
Mr. Selvaraj hails from an orthodox Tamil family. Born and brought up in Ambathur district in Tamil Nadu, Selvaraj did his studies in Chennai. After completing his graduation in Chemical Engineering from lIT Madras in 1998, he gave the CAT exam and got selected for IIM-Ahemadabad. He enrolled for the class of 1999.

Inspired by the success story and ethical business practices of Infosys, Selvaraj was touched by the kindness and simplicity of Narayan Murthy, founder of Infosys, about whom he read in a couple of magazines. He directly went to his professor, Mr. Saxena and told him that he was not interested to work for the MNC's but he wanted to contribute to the society. His professor suggested him to join a co-operative which could fulfill his vision.
After completing his management education at 11M-Ahmadabad, Selvaraj returned to his home town-Ambathur. He made known his ambition to his father. His father with the advice of a family friend, suggested him to take up a job at TNMMF (Tamil Nadu Milk Marketing Federation). TNMMF is the marketing federation for six milk plants which are co-operatives engaged in milk production for Tamil Nadu state. TNMMF follows a pattern of Amul in its marketing activities. TNMMF branded its milk products under the common umbrella brand name 'AAVIN'. .
TNMMF was a federation to the core. It believed in the true principles of co-operation. AA VIN achieved huge success after Selvaraj took over the reigns as General Manager (Marketing). Whole of Tamil Nadu was flooded with milk from AAVIN. Many private companies engaged in the manufacture of milk had to shut down their operations. Selvaraj was very happy with the success of this co-operative. His next dream was to see that the co-operative should be of help in rural areas with some community projects to uplift the poorest people in Ambathur and its surrounding districts. But the Tamil Nadu operations alone could not suffice this endeavour.

He appreciated the work of the members of the Managing Committee at TNMMF. He advised that the Federation should start exporting its products to USA and Gulf countries where there is a greater presence of Tamil people. The Managing Committee was against the idea of this proposal. Selvaraj was very much depressed. He pitied the state of affairs at TNMMF. His conscience used to tell him, "TNMMF is a pack of uneducated fools, who did not welcome any innovations."
Selvaraj met Head Hunters, a leading placement consultancy in Chennai. Head Hunters placed him in a MNC as a Marketing Manager. Selvaraj was getting almost three times more than what he was paid at TNMMF per month as his salary. One day he was casually reading the newspaper, and to his utter surprise he read that TNMMF had shut down its operations due to mounting losses becaus'e of severe competition from private dairy plants which were owned by politicians. Tears trickled down his cheeks......
QUESTIONS
1. Identify the problem in this case.
2. Was it the mistake of AAVIN not to export its products as suggested by Selvaraj?
3. Was the Managing Committee right in its decision to reject the idea of exports mooted by Selvaraj? Yes or No? Why?
4. Was Selvaraj correct in his decision to move out of the co-operative and join a MNC?


Case 7 CO-OPERATE TO OPERATE
The Sudharshan Co-operative Housing Society Ltd. (the society) is located in one of the suburbs of Mumbai-Borivali. The Society's premises houses a total of six buildings, and a total of seventy two flats.
Established over 25 years ago, the society has a fairly respectable group of people. as its members. Many of them were professionals while the remaining few lead rather hectic lives in their day-to-day work.
Mr. Shyamlal Sharma was the Chairman of the Society. He had served the society in different ways. Mr. Sharma had been the Treasurer, the Secretary and is now the Chairman.
The members of the Society were decent people, but they were somewhat indifferent, especially when it came to undertaking specific responsibility of the society. As a matter of fact, hardly anybody was interested in becoming a member of the Managing Committee (MC) of the Society. Even those who were finally persuaded to become MC members, took very little interest in actually running the society efficiently.
This state of affairs of the Society made Mr. Sharma, a publicspirited man somewhat skeptical about his involvement with the Society. While the members of the Society did not prefer to actively shoulder the responsibility of running the Society, they usually emerged as its staunchest critic. Such criticism was seldom

constructive and sometimes had negative effects. Over a period of time the true spirit of co-operation appeared to have been lost. The net result of all this was that nobody was really concerned about how the Society was being run.
Mr. Sharma was tired of doing a thankless job. His patience also appeared to be running out. One fine morning, he abruptly decided to put in his papers and resigned from the Chairmanship of the society.
QUFSTIONS
1. How far would it be correct to argue that the problem faced by the Society is basically a reflection of a much larger problem of disinterested members who constitute the first tier of co-operation?
2. Do you agree with Mr. Sharma's decision?
3. What steps you suggest to indicate the true spirit of co-operation
among the members?

Case 8 SEHORE CO-OPERATIVE
Madhya Pradesh was once perhaps the largest state in India. But today, it has been broken into two parts-MP and Chattisgarh. Bhopal is incidentally the state capital and one of the largest districts in Madhya Pradesh. Today, Bhopal has gone past modernization, with people changing lifestyles and culture. But deep down in the remote areas of the hinterland, are many villages which still follow the same age-old traditions and culture.
Sehore is one such village among the galaxy of villages within the district of Bhopal. The zamindars are economically and socially, the most powerful upper caste people of Sehore. The Bhels are economically and socially, the weakest sections of the society. The Bhels are all landless labourers working on the lands of zamindars and are totally dependent on them for their livelihood. Only 40 per cent of Bhels possess land. Each of them owns around 3 or 4 acres of land. However, given the very low yield from their lands alone, they cannot solely depend on it and so are employed as labourers with the zamindars. The zamindars exploited the Bhels in many ways - paying low wages, making them work for excess hours, keeping them bonded etc.
In the 1980's, Snehalaya, the NGO, started working to free this community from the exploitation of the zamindars. Responding to a BBC documentary on this village, Snehalaya extended their full support, by creating awareness programmes on the Bhels, of how they were being exploited by zamindars. Snehalaya realized that unless the Bhel community became economically independent, they would be oppressed by the upper castes. Snehalaya helped the Bhel community in setting up a co-operative society, so that the entire Bhel community could come together for a common cause to lead a life of independence, rather than dependence.
Sehcre Co-operative was registered on July 15th,1983. Its primary aim was to increase the income of its members through undertaking vegetable cultivation and marketing the produce in Bhopal city. In addition, the Sehore Co-operative aimed at providing a bouquet of services to its members for agricultural operations on their individual farms. The Sehore Co-operatIve had to transport inputs for and outputs from its lands. The individual members also had to plough their farms.
Analyzing these needs, Snehalaya advised the co-operative to purchase a tractor. A Mahindra tractor was purchased by Sehore Co-operative on October 2nd, 1983 for Rs. 2.08 lakhs. This was financed through a loan of Rs. 1.5 lakhs from Vindhya Sahakari Co-operative Bank and the balance amount was funded by Snehalaya. The tractor was to be used by the co-operative and individual farmers. The Managing Committee asked the Supari Bhel, the oldest community among the Bhels to manage the tractor.
Shankar Bhel was appointed as the driver of the tractor. Three members of the committee were from the same community and were related to him. Shankar had the experience of driving a tractor for the past six years, as he was employed by the zamindars.
Shankar's job as assigned by the committee included keeping the tractor in good condition, maintaining a register to record individual usage by farmer members and also to record the number of trips to Apna Mandi. His job was also to maintain a file expenses on fuel. For the first three years, the members of the co-operative had an easy time. Snehalaya helped them with the marketing of vegetables and even built a cold storage for storing the vegetables. A delegation from Hungary visited the
co-operative and wanted a tie-up to export dehydrated. Vegetables, as this co-operative was using only organic fertilizers.
The co-operative was able to pay back all its loans and the sum they owed to the NGO. In fact, their balance sheet showed surplus funds. However, all these actions angered the zamindars. They all came together and they wanted to teach a lesson to the co-operative. They first killed one of the members of the Snehalaya, the NGO. They also gave a warning to the Chairman of the co-operative. But even these did not deter the activities of the co-operative. Day by day, its activities were yielding good results. Zamindars thought that something drastic had to happen to get rid of this co-operative. They finally found an answer in Shankar who had earlier worked with them as a tractor driver. So they caught hold of him and fed him with wine. They lured him by offering huge sums of money and also arranged for a wom3.n, with whom Shankar started having an affair. He used to misuse the tractor to travel with his girlfriend to the nearby town and occasionally show her a movie. For all their expenses, he used to furnish wrong bills like tractor having repairs, putting in of spare parts etc.
The whole vision of the co-operative was damaged as the tractor was not functioning effectively. Shankar went to the extent of taking bribes from farmers to carry their produce to the local mandi. One day, the Managing Committee met and decided that they should remove Shankar from his post. The MC formally removed him from the post and wanted to appoint a new person. But Shankar gave a warning to the whole village that if anyone assumes his post, he would be killed.
Two youngsters who were trained to drive tractors, got frightened and refused to take up the job. With the kharif season on, the members were hiring tractors from neighbouring villages who were charging exorbitant rates on hourly basis. The co-operative tractor was lying idle in the shed and they were losing their business. The Chairman seemed to be a helpless man.
QUFSTIONS
1. Enumerate the various problems faced by this co-operative.
2. What remedial measures would you suggest to revitalize the co-operative?
3. Do you think it was right on the part of Managing Committee to remove Shankar from the driver's post? Substantiate your answer.

Case 9 SURYAVANSHI GRAPES CO-OPERATIVE
Pune is the 'land of grapes'. Many small and marginal farmers possess vineyards in this place. Grapes are grown for two purposes:- (a) they are directly edible as fruits, and (b) they are processed by the breweries to make wine. Pune's climatic conditions and availability of groundwater help better yields of this fruit. The fruit is exported to many countries and is also sent to Bangalore as per the orders placed by the breweries.
However, it is seen that the farmers are being exploited by middlemen who just pay them Rs. 10 per kilo, and sell it in the open market for Rs. 40 per kilo. As the farmers are illiterate and do not know the prevailing rates of the market, middlemen exploit them a lot. The farmers are also unaware of the grading system of the grapes.
Anil, a resident of Pune works for a leading multinational bank based in Mumbai. Once in three months, he visits Pune to relax and be away from the stressed professional life of Mumbai. On one such visit to Pune, he closely observed the grape market in Pune. Right from cultivation, till the fruit reaches the end user, he carried on an extensive research for one week. AniI's childhood friend, Rahul who is now settled in USA works as a software engineer in the Silicon Valley, California. He is one of the main founders of Sycamore Networks, one of the early startups in Silicon Valley. Today, the company has a turnover of $800 million every year. Rahul who communicated almost daily with Anil through e-mails one day mentioned that he wanted to give back something to Pune in return to the place that gave him everything. One day Anil replied to an e-mail from Rahul, and narrated to him how the farmers were being exploited by middlemen. He told him that may be, he could come back to Pune on a holiday for a year and put things in order. Rahul was thrilled with the idea.
On 6th September, 1997, he flew to Pune and started working on his job. While on his flight, on the internet, he saw how co-operatives played an active role in the rural development. He was very much impressed with how people came together for a common cause irrespective of caste, creed or religion. Realizing co-operation as a major force behind rural development, he decided that all small and marginal should be organized into a co-operative. He arranged for a meeting and invited all the members. They agreed to the idea. Together they formed a co-operative and named it Suryavanshi Grapes Co-operative. It consisted of 250 farmers as members. They elected ten persons in the Managing Committee. The co-operative had five people as Board of Directors and a Chairman. They promulgated an ordinance on strict lines of co-operative principles.
The following were the main initiatives proposed by the co-operative:
i. Create a brand name for the grapes produced by the co-operative.
ii. Create an overseas market to export the grapes to atleast 20 countries.
iii. To do grading and standardization for the fruit as per the international standards of quality.

iv. To make facilities for cold storage to preserve the fruit.
v. To hold meetings once a month to monitor the strategy.
Rahul promised to stay back for one year to monitor the work, and pledged that he would leave Pune once the co-operative was formed. Anil took a months' leave and promised his bank that he would foresee the operations of Pune branches of the MNC bank that he was working for. He basically wanted to help his friend in his endeavour.
They first approached Creations- a design studio for graphic arts owned by Ramki. They finally decided on the brand name for international market as 'Golden Grapes'. Their next job was to obtain storage facility and finally to help them with exports of the produce.
They briefed their whole plan to the MC of the co-operative. As an initial investment, all the 250 farmers contributed Rs. 1000 each and Rahul contributed Rs. llakh as non-refundable capital. However, this amount was not enough to fund all their plans. The Committee approved their plans. The next month was a bit grinding for both Rahul and Anil, running after every institution for financing them and also to help them in marketing (exports) their produce. After a series of rounds, they got fed up. Unless the apex institution gives it approval, the co-operative cannot export as the documents have to be cleared by these institutions.
A leading public sector bank manager asked what per centage he would get, if he cleared the loan. Rahul got fed up with the institutions involved in the co-operative development. He angrily relented his emotions in the committee metting. All the farmers

really couldn't understand what Rahu1 was saying. Anil briefed Rahul about the problems of co-operative institutions in our country. He narrated "Most of the apex institutions supporting co-operatives in rural development are owned by the government. So, there is no inner sense of responsibility from the officials towards the co-operative development. Moreover, the Government has just appointed an apex institution for every sector of a co-operative. For example, NDDB for milk, NABARD for credit sector etc. There is no proper co-ordination between the 40 odd institutions. These institutions are only paying lip service to the co-operative movement in the country. I only wonder what the government is really doing. All these institutions are running with bureaucracy, professional egos and no accountability. There is also no performance appraisal done on these bodies." Rahul was shocked to learn about the state of affairs of co-operatives in India. He told Anil, "Do you know that the American economy runs with 60 per cent of co-operatives. I only wonder what is happening to our homeland, where the co-operative movement was started for the first time, and incidentally has the largest number of co-operatives in the world".
Rahul frustrated with the system in India, caught the next flight to the US. The future of Suryavanshi Grapes Co-operative looms large on the faces of 250 members.
QUESTIONS
1. Analyze the case.

Case 10 CARPET BOMBING
Driving on the snow-capped mountains can be real fun, especially when the nerves tune into the chill that runs down the spine and the cold weather hits the heart. All of a sudden, Atul realizes that he is on a road which is 12,000 feet above sea level, and it is getting more cooler than before. Atul and Indranil are busi-ness partners running a big shopping mall in South Delhi's posh locality. Graduated from FMS, Delhi, both of them studied in the same school and institutions right from their childhood.
It is an annual ritual, every summer to beat out the Delhi heat by holidaying in Kashmir. They have been doing so since the past ten years. Their suppliers would make fun of them by saying', "Holidaying in Kashmir, are you joking?" But every year in May, they would make it a point to visit Kashmir. You may call it obsession or maybe fascination, they don't mind it. For they believed that Kashmir is the heaven on earth.
Alighting from the Land Rover, Atul asked Indranil about the programme for the next day. Indranillooked a bit puzzled and answered, "Atul, did you forget that our second day of the holiday is always the (shikara) trip at the Dal Lake'. Atul smiled with excitement and remembered the happier times spent at the lake.
Dal Lake was incidentally one of the major tourist attractions in Kashmir. The boat (shikara) trip is the best experience one can ever have. A look at the snakes crawling on the salt waters of the lake will create a thump in your heart. Also, the country largest floating market will thrill the eyes. Shopkeepers line up with vegetables, fruits and handicrafts on the houseboats. There are even floating five-star restaurants.
But one thing which interests everyone is the houseboats which sell woollen carpets. Kashmir is the 'land of wool'. There are a variety of sheep here. The Kashmiris have organized themselves into co-operatives since the past 30 years, which mostly consists of the Muslim community. Kashmiri carpets were famous right from the days of the Britishers.
There were around 250 co-operatives employing around a million people for weaving carpets. In fact, the whole state of Jammu and Kashmir used to depend on the foreign exchange earnings of the carpets, which were exported to the European and American markets. The co-operatives with the help of the local support used to handle all the operations i.e. from obtaining the wool from the animals, spinning it, adding dyes, and designing it or weaving it into beautiful carpets. ''Those were the good old days", Atul pointed out to Indranil.
In the 80's, Kashmiri carpets found their way into Wal-Mart stores in the US and Harrods in the UK. Atul and Indranil used to shop for these carpets in Kashmir, whenever they were on their holiday. They used to buy carpets in bulk from the offices of these co-operatives directly.
However, in late 80's, things began to change. The battle for Kashmir had entered the lanes and houses of Kashmir. Heavy infiltrations from the neighbouring country of Pakistan started instigating terrorism in the Valley. Everyday, scores of militants seeped into the Valley. Finally, the Indian Government, after seeing many killings of innocent Kashmiris, intervened which resulted in the Kargil War in the late 90's. Even today, a lot of foreign tourists are targeted by the militants and killed. This has resulted in low tourist arrivals since the past six years. Thus, the co-operatives these days do not have much sales as the major buyers for carpets are foreigners. .
Of late, the terrorists' attack on international destinations has badly affected the exports of these carpets. Many co-operatives have shut down and the remaining ones are thriving on the domestic markets. Lately, even Atul and Indranil were not stocking carpets in their merchandise due to fear of terrorist attacks.
Next day morning, Atul and Indranil went to the Dal Lake. They were astonished to see thirty soldiers guarding the lake. They learnt that the famous Char Chinar Garden on the lake has been bombed by terrorists. There were no more shikaras and no more floating markets. Atul and Indranil decided to return back to their hotel. Atul said to Indranil, "Probably, this will be our last visit to Kashmir. . . . . ."
QUFSTIONS
1. Analyze the case.



:SugarwareZ-191:
 

rosemarry2

MP Guru
Hey frnds,
These are a few case studies on co-operatives...the case problems have been defined n questions asked on dat...so try solving this itwould help u to a gr8 deal.....

Case 1 COIR TO CHOIR THE LINK OF TOGETHERNFBS
If you drive past the lush greenery and the waters of Kerala, you arrive at a remote place in Kerala called Allepey. Surrounded by green coconut plantations, this place will be like a feast for your eyes. About a hundred villages work on these plantations, which for them is an everyday ritual.
Legend has it that in the Ramayana, Lord Ram was praising all the trees, but forgot to mention the coconut tree. The coconut tree prayed to the Lord, and the Lord gifted a boon to the coconut tree. He promised that every part of the coconut tree would be useful in some way or the other. True to the legend, we can witness that every part of the coconut tree is of some use to mankind from time immemorial.
The villages in and around Allepey have some of the finest coconuts in the world. All the members of the family participate in the daily chores of processing this fruit. One can witness community development. In every village, a group of villagers come together and organise themselves into a co-operative. A formal registration is done with the Registrar of Co-operatives in Kerala. Their main job is to process the coconut fibre into coir. There are around 300 co-operatives employing around 30,000 people. The process is very simple. A farmer cuts off the coconuts from the tree when they are ripe. The people break open the fruit (shell) and the nut is put into the basket. The nuts (kernels) are further dried and made into 'copra'. The leftover fibre is then dried in the sun and is converted into bits or spun in to long threads. This is called coir The Kerala Government established the Coir Board to help these co-operatives in the marketing of this coir.
These co-operatives in turn supply the raw coir to a number of small-scale industries, specialized in converting the coir into carpets, mats, mattresses etc. A major part of the coir is mixed with sponge and is used in the preparation of mattresses. It is a very lucrative business in Kerala. As a large number of smallscale industries started manufacturing the mattresses, the competition intensified, thereby leading to a price war. The price war created a major drive in cost-cutting. The mattress industry tasted its first competition from the early 90's onwards. The changing lifestyles of the people added fuel to the fire. The customer started demanding more value added products. Hence, all the small-scale companies switched over to synthetic fibre and stopped processing the coir from these co-operatives.
Now the livelihood of the people of the 300 co-operatives is at stake. Almost 28,000 families are surviving on these co-operatives. After a series of meetings with the members, hey decided to meet the Coir Board. Around 15 co-operatives lecided to meet the Director of the board. In spite of five visits, he Director was not available for help. They finally got fed up with the idea of meeting with Director.
Many co-operatives disintegrated, and the people moved to urban areas in search of employment. But for the rest, life seems to be a big bubble about to burst.
QUESTIONS
1. If you were the representative of the Coir Board of India, what recammendatians would you suggest to bring back the last glary of this cammunity based an co-operative movement?
2. Should these co-operatives go for related and unrelated diversification? If so, enumerate the co-operative strategy and apply it to those co-operatives.

3. Do you feel that the co-operatives in this area made a mistake by not foreseeing the changes that are taking place in the market? Do you think that these co-operatives could not adapt to the change? Give your comments.

Case 2 LAMBS TO THE SLAUGHTER
Political analysts call them 'war chests'. Others call them 'engines of Maharashtra's rural growth'. In plain terms, they are just co-operative banks. There are almost 32 district co-operative banks in Maharashtra with total deposits of Rs. 3,500 crores. These banks fuel the growth at the grass roots. This movement is the strongest in western Maharashtra. Sugar co-operatives were the fIrst to come up in this area. Since sugar production and processing was a capital intensive business, no nationalized bank would lend them money, so district co-operative banks came to their rescue and became a vehicle for financing them.
Co-operative banks seldom trade in gilts in a big way. But that changed after Ketan Parekh blew a hole in the finances of Madhavpura Mercantile Co-operative Bank in 2001. The Rs. 157 crore scam prompted the RBI to come out with a rule making it mandatory for all the co-operative banks to invest 25% of their funds in gilts. Dealers would call one another on the phone to keep up with the market movements and strike deals in G-Secs (Government Securities). In addition, big players like SBI and Citibank were ruling the market. Getting a hand on the prevailing market rates was difficult, especially for co-operative banks, which were miles away from the trading hub of Mumbai. This was an opportunity that prompted Sanjay Agarwal of Home Trade to trade in gilts with co-operative banks. Banks like Janata Sahakari Bank, Nagpur District Development Co-operative Bank (NDDCB) fell prey to him and lost crores.

The modus operandi of the co-operative banks goes like this the co-op banks provide the voters, who are high risk borrowers with the funds. Most of these are the Board Members of the bank who have political party affiliations. Hence, scamsters like Harshad Mehta, Ketan Parekh or Sanjay Agarwal can easily bribe these Board Members (it was learnt that Sanjay Agarwal had agreed to part off with 6% commission on the amount borrowed from NDDCB). Furthermore, RBI cannot directly intervene in the functioning of these banks as NABARD (a sister concern of RBI) looks after the functioning of these banks. NABARD in addition, has to co-ordinate with the Registrar of the co-operative societies in each state (with whom the co-op banks have to register themselves). But NABARD and the Registrar of each state are generally not on good terms due to ego tussles.

Will 'life means more' be the adage for the functioning of the co-operative banks or will they perish. . . . . . . . . ?
QUESTIONS
i. identify the problem in the case.
2. Was it a good move for the RBI to implement the 25% investment as mandatory for all the co-operative banks in India? If yes, why? If no, why not?
3. Give a suitable strategy to overcome the problem of political influence on co-operative banks and how can RBI overcome them?

Case 3 FRIENDS' EDUCATION SOCIETY
The Peshwa community had to leave India when the Partition took place between India and Pakistan. However, after the 60's, the community members returned to their motherland, India as they had a lot of ancestral properties here. One such community came to Nagpur to carry out their business activities. Many of their children were denied entry into local schools as the city dubbed them as 'outsiders from Pakistan'. They were also humiliated wherever they went.

In order to overcome this problem a group of six like-minded individuals, and Gandhian followers thought that it would be ideal to start a school for their community as well as for the people of Nagpur. They registered their body with the Registrar of the Nagpur district and named it 'Friends' Education Society'. The body adhered to the strict principles of co-operation and enshrined some tough measures when it came to discipline. They started their first school in the same year of registration and named it 'Mahatma Gandhi Memorial High School'. The following are some rules framed by the society to carry out its activities:
1. Every child irrespective of caste, creed or religion will be admitted into our society's institutions.
2. The selection procedure will be purely based on merit. No special quota shall be given to our community (however, 20% of the seats shall be reserved for our community on the basis of merit)

3. The society will not accept any donations or bribes in the form of building fund, etc. The fee collected will be as per the government rules.
4. The society shall recruit teachers of high repute and calibre, and no community reservations are accepted in this regard.
5. The society shall adhere to strict disciplinary methods and fair means of education system shall prevail.

A lot of hard work, commitment and dedication earned a good name for this society. In 1995, the society celebrated its silver jubilee. As Kantilal, one of the founder trustees was preparing a report for speaking on the occasion, he was surprised to note on how the society grew by leaps and bounds. The society today comprises of 23 schools, 8 colleges and 3 vocational centres in the city of Nagpur. In the silver jubilee celebrations, the trustees unanimously decided that all of them should step down and pass on the mantle to young blood, as all of them crossed the 80 years mark. In the AGM, the entire Board of Directors was dissolved, and the trustees decided to form a new Managing Committee to run the society. Most of the new members (trustees) were all in the age group of 35-40 years. They were all closely connected to each other; and most of them were children of the old trustees.

n 1996, Maharashtra Government with the help of the Nagpur University launched a series of non-aided courses to generate employment to the youth of Nagpur. They launched courses in mass communication, journalism, management, fashion designing etc. The trustees of F.E.S met and they finalised that they would go for these courses. In fact, F.E.S. was the first institution to opt for these graduate programmes. The first mover advantage and past glory of the society found many takers for these new courses.

The trustees believed that as the new courses were non-aided programmes, a lot of money can be made by the institution. One of the trustee members even pointed out, that he would shut down his business to make money through these courses. The society floated a new college with a state-of-the-art infrastructure (to make more money than to offer education) and named it Gandhi Institute for Professional Studies (he is no more Mahatma). A lot of nepotism, bribery and unprofessionalism entered into this institution. In the first six months, the institute earned Rs. 2 crores through fees alone, and in the next five years they made Rs. 50 crores (as of 31st March, 2001).

The students who completed the course were not given any placements. When asked for it, the Director used to say, "Our job is only to provide education and not jobs. Do you think we are a placement consultancy?" The whole student community got frustrated with the way the society functioned on the lines of commercialisation of education. The media reported of the atrocities committed by the society. Finally, one day the older trustees dissolved the Board and re-appointed themselves to run the body.
QUESTIONS
1. Identify the main problem in the case.
2. Was it right on the part of the old trustees to re-appoint themselves as members of the Managing Committee? Substantiate your answer.

Case 4 HAVE YOU DONE THE DUE?
Bhilwara, the desert stretch of Rajasthan state houses many textile units. Famous for its quality products, some companies have even mentioned the name of the place in their advertisements. Some companies have even associated themselves with the name of the place, Bhilwara Suitings.

A drive through the scorching heat, will lead one to the remote village spread in a small area. This is the home for many ancillary units engaged in the supply of dress materials to various textile mills. Mostly organised as co-operatives, these units were engaged in the manufacture of a wide variety of sub-items used in the textile units. One such unit is called Marwari Dyes Co-operative Ltd. (MDCL). A community based co-operative, this unit supplies colour dyes to major industries in Bhilwara. Started in 1978, this unit specializes in the manufacture and supply of the latest colour dyes to the textile industry. A group of 16 like-minded individuals saw the unit moving towards prosperity, as Bhilwara was gradually turning out to be an industrial cluster for textile units. They appointed Kantilal Sajnani as the Chairman and ten members represented the Managing Committee.
Kantilal was a respected man in the village. A staunch Gandhian, he was like an idol in the village. His commitments towards honesty and dedication earned him respect and loyalty. The members of the co-operative enjoyed working under him. The best of human resource practices were employed under him. The co-operative prospered under his leadership, good will and popularity which earned permanent customers for the co-operative. .
Kantilal breathed his last on 25th May, 1998. His son Dhirajlal was studying Textile Engineering at Warwick University, UK. On the sudden demise of his father, he had to return to India. After his father's death ceremony, he wanted to go back to UK to complete his post-graduation. But the Managing Committee decided that he should continue in his father's place as the Chairman of the co-operative.

He was reluctant, but had to succumb to the pressure from his mother. So he took up the post of the Chairman. Initially, he ran the co-operative with the help of the Managing Committee. But after six months, the Managing Committee saw a sea of change in the behaviour of Dhirajlal. He gradually forgot the principles of co-operation. He argued with his fellow members as to why the co-operative dealt only in the supply of dyes. Why couldn't it market readymade apparels for males? He suggested that it would create a lot of revenue for the co-operative. Dhirajlal wanted to be in the good books of the media and wanted his name to be splashed in all the leading business magazines and business news channels. In that process, he forgot the principles on which this co-operative was founded and functioned.
One day, all the Managing Committee members met to discuss the future of the co-operative. Dhirajlal did not attend the meeting. Instead, he organised a birthday party for his friends at the expense of the co-operatives' funds. Gradually, the whole co-operative funds were mismanaged. The auditors came to check the misappropriation of funds on the insistence of one of the members. Dhirajlal bribed the auditors and settled the issue. He also came to know that the complaint was filed by his father's very close friend, AgarwaL

In the board meeting next month, he openly criticized Agarwal and told the other members that they were all in this co-operative, because of the mercy shown by his father when he started the co-operative in 1978. After the meeting, one of the committee members, Rakeshnath, a close confidante of Dhirajlal's father was walking in depression, seeing the setting sun in the late evening, he wondered what is going to happen to Marwari Dyes Co-operative Ltd. "Will it shine back or go into the oblivion like the setting sun?" He left with lingering memories.......
QUESTIONS
1. Identify the problem in the case.
2. What sort of leadership qualities were exhibited by Dhirajlal?
3. Do you believe that leadership is the main driving force to run a co-operative? Substantiate your answer with examples.
4. What future do you foresee for Marwari Dyes Co-operative Ltd.? Can you suggest any remedial measures?


Case 5 SWEET AND SOUR
Uttar Pradesh is the state with the largest number of MP's (Members of Parliament), and also has the largest number of districts. If you want to truly understand Indian politics, then you must travel to Uttar Pradesh. One can witness the excellent marketing the politicians indulge in, to gamer votes. Right from Ram Janmabhoomi to high level comIption, bribery and scandals, UP has got it all.

Hold your breath; for UP is also the home of sugar cane, thus making the state rich and prosperous. Incidentally, UP has the largest stretch of land under sugar cane cultivation. The zamindars hold acres of land. There are also presence of large number of small and marginal farmers engaged in the cultivation of sugar cane. Since 1940, many co-operatives approximately 300 today are actively involved in the sugar cane business.
The co-operatives play an active role in the process. The farmers come together and start a co-operative for their own benefits or maybe sometimes to serve the society. A dig into one of the co-operatives will provide a better insight into the functioning of these bodies.
Shahranpur district is one of the largest districts in UP. A network of 150 villages have inter-connectivity with the district. The villages comprise of Thakurs, an upper caste community who own acres of land, and the local Dalits who are small and marginal farmers. They usually work for the Thakurs or cultivate their own patch of land.

Sugar cane processing is a very tough job (it should be noted that no major companies like Tatas or Birlas are into the sugar industry). Once the sugar cane is cut, it has to be crushed into juice within 24 hours (if not, the sugar cane will loose its juice content.) Many farmers were losing out their revenue because of the difficulties in transportation to distant places. The sugar mill will weigh the sugar cane and pay the farmers according to the juice content of the sugar cane. The juice is then boiled and is decarbonised to remove the brown colour. A mixture of hydrogen peroxide gives it a white colour. The boiled juice is then crystallized into tiny pieces. They are then packed in gunny bags, lined with polythene and are sold in the market. In UP, many co-operatives do the processing job. The Central Government purchases about 60 per cent of the produce from each co-operative for Public Distribution System (PDS). After Maharashtra, Uttar Pradesh is the main producer of sugar in India. Sugar has wide applications in Food and Beverages Industries like Cadbury, Coca-Cola, Britannia, HLL etc.
The co-operatives in UP are organised by farmers themselves. Going back to our earlier example, around 100 co-operatives formed a federation to construct a sugar mill that can process about 100 tonnes of sugar per day. Established in 1980, Shahranpur District Sugar Co-operative Federation elected a Managing Director from all the member co-operatives. All these years, a member from among the Dalits was appointed as the Managing Director to run the federation. Of late, since 1990's, the Thakurs wielded power and used to influence the Chairman of the co-operatives by throwing money. It was reported that there was an incident where a Dalit - Thukaram was beheaded by the Thakurs and then onwards it was the Thakurs who were the Managing Directors. Are the Thakurs doing this for money? Just read on....

The upper caste Thakurs used the post of the Managing Director of these co-operatives, and they later entered into politics using the name and fame achieved from the co-operative. Mr. Tiwari is one such person who shot into fame using the post of M.D. of the Federation and subsequently got elected into Parliament as a Minister of State for sugar industry. The co-operatives were established to provide support to the Dalit community. If the Thakurs use the co-operatives for their benefit, what is the purpose of establishing these bodies.
How long will this continue, only time will tell . . . . ...?
Questions
1. Identify the main problem in the case.
2. Do you favour the role of politics in co-operatives? If no, what
actions can be taken to curb this practice?


Case 6 BOILING OUT
Mr. Selvaraj hails from an orthodox Tamil family. Born and brought up in Ambathur district in Tamil Nadu, Selvaraj did his studies in Chennai. After completing his graduation in Chemical Engineering from lIT Madras in 1998, he gave the CAT exam and got selected for IIM-Ahemadabad. He enrolled for the class of 1999.

Inspired by the success story and ethical business practices of Infosys, Selvaraj was touched by the kindness and simplicity of Narayan Murthy, founder of Infosys, about whom he read in a couple of magazines. He directly went to his professor, Mr. Saxena and told him that he was not interested to work for the MNC's but he wanted to contribute to the society. His professor suggested him to join a co-operative which could fulfill his vision.
After completing his management education at 11M-Ahmadabad, Selvaraj returned to his home town-Ambathur. He made known his ambition to his father. His father with the advice of a family friend, suggested him to take up a job at TNMMF (Tamil Nadu Milk Marketing Federation). TNMMF is the marketing federation for six milk plants which are co-operatives engaged in milk production for Tamil Nadu state. TNMMF follows a pattern of Amul in its marketing activities. TNMMF branded its milk products under the common umbrella brand name 'AAVIN'. .
TNMMF was a federation to the core. It believed in the true principles of co-operation. AA VIN achieved huge success after Selvaraj took over the reigns as General Manager (Marketing). Whole of Tamil Nadu was flooded with milk from AAVIN. Many private companies engaged in the manufacture of milk had to shut down their operations. Selvaraj was very happy with the success of this co-operative. His next dream was to see that the co-operative should be of help in rural areas with some community projects to uplift the poorest people in Ambathur and its surrounding districts. But the Tamil Nadu operations alone could not suffice this endeavour.

He appreciated the work of the members of the Managing Committee at TNMMF. He advised that the Federation should start exporting its products to USA and Gulf countries where there is a greater presence of Tamil people. The Managing Committee was against the idea of this proposal. Selvaraj was very much depressed. He pitied the state of affairs at TNMMF. His conscience used to tell him, "TNMMF is a pack of uneducated fools, who did not welcome any innovations."
Selvaraj met Head Hunters, a leading placement consultancy in Chennai. Head Hunters placed him in a MNC as a Marketing Manager. Selvaraj was getting almost three times more than what he was paid at TNMMF per month as his salary. One day he was casually reading the newspaper, and to his utter surprise he read that TNMMF had shut down its operations due to mounting losses becaus'e of severe competition from private dairy plants which were owned by politicians. Tears trickled down his cheeks......
QUESTIONS
1. Identify the problem in this case.
2. Was it the mistake of AAVIN not to export its products as suggested by Selvaraj?
3. Was the Managing Committee right in its decision to reject the idea of exports mooted by Selvaraj? Yes or No? Why?
4. Was Selvaraj correct in his decision to move out of the co-operative and join a MNC?


Case 7 CO-OPERATE TO OPERATE
The Sudharshan Co-operative Housing Society Ltd. (the society) is located in one of the suburbs of Mumbai-Borivali. The Society's premises houses a total of six buildings, and a total of seventy two flats.
Established over 25 years ago, the society has a fairly respectable group of people. as its members. Many of them were professionals while the remaining few lead rather hectic lives in their day-to-day work.
Mr. Shyamlal Sharma was the Chairman of the Society. He had served the society in different ways. Mr. Sharma had been the Treasurer, the Secretary and is now the Chairman.
The members of the Society were decent people, but they were somewhat indifferent, especially when it came to undertaking specific responsibility of the society. As a matter of fact, hardly anybody was interested in becoming a member of the Managing Committee (MC) of the Society. Even those who were finally persuaded to become MC members, took very little interest in actually running the society efficiently.
This state of affairs of the Society made Mr. Sharma, a publicspirited man somewhat skeptical about his involvement with the Society. While the members of the Society did not prefer to actively shoulder the responsibility of running the Society, they usually emerged as its staunchest critic. Such criticism was seldom

constructive and sometimes had negative effects. Over a period of time the true spirit of co-operation appeared to have been lost. The net result of all this was that nobody was really concerned about how the Society was being run.
Mr. Sharma was tired of doing a thankless job. His patience also appeared to be running out. One fine morning, he abruptly decided to put in his papers and resigned from the Chairmanship of the society.
QUFSTIONS
1. How far would it be correct to argue that the problem faced by the Society is basically a reflection of a much larger problem of disinterested members who constitute the first tier of co-operation?
2. Do you agree with Mr. Sharma's decision?
3. What steps you suggest to indicate the true spirit of co-operation
among the members?

Case 8 SEHORE CO-OPERATIVE
Madhya Pradesh was once perhaps the largest state in India. But today, it has been broken into two parts-MP and Chattisgarh. Bhopal is incidentally the state capital and one of the largest districts in Madhya Pradesh. Today, Bhopal has gone past modernization, with people changing lifestyles and culture. But deep down in the remote areas of the hinterland, are many villages which still follow the same age-old traditions and culture.
Sehore is one such village among the galaxy of villages within the district of Bhopal. The zamindars are economically and socially, the most powerful upper caste people of Sehore. The Bhels are economically and socially, the weakest sections of the society. The Bhels are all landless labourers working on the lands of zamindars and are totally dependent on them for their livelihood. Only 40 per cent of Bhels possess land. Each of them owns around 3 or 4 acres of land. However, given the very low yield from their lands alone, they cannot solely depend on it and so are employed as labourers with the zamindars. The zamindars exploited the Bhels in many ways - paying low wages, making them work for excess hours, keeping them bonded etc.
In the 1980's, Snehalaya, the NGO, started working to free this community from the exploitation of the zamindars. Responding to a BBC documentary on this village, Snehalaya extended their full support, by creating awareness programmes on the Bhels, of how they were being exploited by zamindars. Snehalaya realized that unless the Bhel community became economically independent, they would be oppressed by the upper castes. Snehalaya helped the Bhel community in setting up a co-operative society, so that the entire Bhel community could come together for a common cause to lead a life of independence, rather than dependence.
Sehcre Co-operative was registered on July 15th,1983. Its primary aim was to increase the income of its members through undertaking vegetable cultivation and marketing the produce in Bhopal city. In addition, the Sehore Co-operative aimed at providing a bouquet of services to its members for agricultural operations on their individual farms. The Sehore Co-operatIve had to transport inputs for and outputs from its lands. The individual members also had to plough their farms.
Analyzing these needs, Snehalaya advised the co-operative to purchase a tractor. A Mahindra tractor was purchased by Sehore Co-operative on October 2nd, 1983 for Rs. 2.08 lakhs. This was financed through a loan of Rs. 1.5 lakhs from Vindhya Sahakari Co-operative Bank and the balance amount was funded by Snehalaya. The tractor was to be used by the co-operative and individual farmers. The Managing Committee asked the Supari Bhel, the oldest community among the Bhels to manage the tractor.
Shankar Bhel was appointed as the driver of the tractor. Three members of the committee were from the same community and were related to him. Shankar had the experience of driving a tractor for the past six years, as he was employed by the zamindars.
Shankar's job as assigned by the committee included keeping the tractor in good condition, maintaining a register to record individual usage by farmer members and also to record the number of trips to Apna Mandi. His job was also to maintain a file expenses on fuel. For the first three years, the members of the co-operative had an easy time. Snehalaya helped them with the marketing of vegetables and even built a cold storage for storing the vegetables. A delegation from Hungary visited the
co-operative and wanted a tie-up to export dehydrated. Vegetables, as this co-operative was using only organic fertilizers.
The co-operative was able to pay back all its loans and the sum they owed to the NGO. In fact, their balance sheet showed surplus funds. However, all these actions angered the zamindars. They all came together and they wanted to teach a lesson to the co-operative. They first killed one of the members of the Snehalaya, the NGO. They also gave a warning to the Chairman of the co-operative. But even these did not deter the activities of the co-operative. Day by day, its activities were yielding good results. Zamindars thought that something drastic had to happen to get rid of this co-operative. They finally found an answer in Shankar who had earlier worked with them as a tractor driver. So they caught hold of him and fed him with wine. They lured him by offering huge sums of money and also arranged for a wom3.n, with whom Shankar started having an affair. He used to misuse the tractor to travel with his girlfriend to the nearby town and occasionally show her a movie. For all their expenses, he used to furnish wrong bills like tractor having repairs, putting in of spare parts etc.
The whole vision of the co-operative was damaged as the tractor was not functioning effectively. Shankar went to the extent of taking bribes from farmers to carry their produce to the local mandi. One day, the Managing Committee met and decided that they should remove Shankar from his post. The MC formally removed him from the post and wanted to appoint a new person. But Shankar gave a warning to the whole village that if anyone assumes his post, he would be killed.
Two youngsters who were trained to drive tractors, got frightened and refused to take up the job. With the kharif season on, the members were hiring tractors from neighbouring villages who were charging exorbitant rates on hourly basis. The co-operative tractor was lying idle in the shed and they were losing their business. The Chairman seemed to be a helpless man.
QUFSTIONS
1. Enumerate the various problems faced by this co-operative.
2. What remedial measures would you suggest to revitalize the co-operative?
3. Do you think it was right on the part of Managing Committee to remove Shankar from the driver's post? Substantiate your answer.

Case 9 SURYAVANSHI GRAPES CO-OPERATIVE
Pune is the 'land of grapes'. Many small and marginal farmers possess vineyards in this place. Grapes are grown for two purposes:- (a) they are directly edible as fruits, and (b) they are processed by the breweries to make wine. Pune's climatic conditions and availability of groundwater help better yields of this fruit. The fruit is exported to many countries and is also sent to Bangalore as per the orders placed by the breweries.
However, it is seen that the farmers are being exploited by middlemen who just pay them Rs. 10 per kilo, and sell it in the open market for Rs. 40 per kilo. As the farmers are illiterate and do not know the prevailing rates of the market, middlemen exploit them a lot. The farmers are also unaware of the grading system of the grapes.
Anil, a resident of Pune works for a leading multinational bank based in Mumbai. Once in three months, he visits Pune to relax and be away from the stressed professional life of Mumbai. On one such visit to Pune, he closely observed the grape market in Pune. Right from cultivation, till the fruit reaches the end user, he carried on an extensive research for one week. AniI's childhood friend, Rahul who is now settled in USA works as a software engineer in the Silicon Valley, California. He is one of the main founders of Sycamore Networks, one of the early startups in Silicon Valley. Today, the company has a turnover of $800 million every year. Rahul who communicated almost daily with Anil through e-mails one day mentioned that he wanted to give back something to Pune in return to the place that gave him everything. One day Anil replied to an e-mail from Rahul, and narrated to him how the farmers were being exploited by middlemen. He told him that may be, he could come back to Pune on a holiday for a year and put things in order. Rahul was thrilled with the idea.
On 6th September, 1997, he flew to Pune and started working on his job. While on his flight, on the internet, he saw how co-operatives played an active role in the rural development. He was very much impressed with how people came together for a common cause irrespective of caste, creed or religion. Realizing co-operation as a major force behind rural development, he decided that all small and marginal should be organized into a co-operative. He arranged for a meeting and invited all the members. They agreed to the idea. Together they formed a co-operative and named it Suryavanshi Grapes Co-operative. It consisted of 250 farmers as members. They elected ten persons in the Managing Committee. The co-operative had five people as Board of Directors and a Chairman. They promulgated an ordinance on strict lines of co-operative principles.
The following were the main initiatives proposed by the co-operative:
i. Create a brand name for the grapes produced by the co-operative.
ii. Create an overseas market to export the grapes to atleast 20 countries.
iii. To do grading and standardization for the fruit as per the international standards of quality.

iv. To make facilities for cold storage to preserve the fruit.
v. To hold meetings once a month to monitor the strategy.
Rahul promised to stay back for one year to monitor the work, and pledged that he would leave Pune once the co-operative was formed. Anil took a months' leave and promised his bank that he would foresee the operations of Pune branches of the MNC bank that he was working for. He basically wanted to help his friend in his endeavour.
They first approached Creations- a design studio for graphic arts owned by Ramki. They finally decided on the brand name for international market as 'Golden Grapes'. Their next job was to obtain storage facility and finally to help them with exports of the produce.
They briefed their whole plan to the MC of the co-operative. As an initial investment, all the 250 farmers contributed Rs. 1000 each and Rahul contributed Rs. llakh as non-refundable capital. However, this amount was not enough to fund all their plans. The Committee approved their plans. The next month was a bit grinding for both Rahul and Anil, running after every institution for financing them and also to help them in marketing (exports) their produce. After a series of rounds, they got fed up. Unless the apex institution gives it approval, the co-operative cannot export as the documents have to be cleared by these institutions.
A leading public sector bank manager asked what per centage he would get, if he cleared the loan. Rahul got fed up with the institutions involved in the co-operative development. He angrily relented his emotions in the committee metting. All the farmers

really couldn't understand what Rahu1 was saying. Anil briefed Rahul about the problems of co-operative institutions in our country. He narrated "Most of the apex institutions supporting co-operatives in rural development are owned by the government. So, there is no inner sense of responsibility from the officials towards the co-operative development. Moreover, the Government has just appointed an apex institution for every sector of a co-operative. For example, NDDB for milk, NABARD for credit sector etc. There is no proper co-ordination between the 40 odd institutions. These institutions are only paying lip service to the co-operative movement in the country. I only wonder what the government is really doing. All these institutions are running with bureaucracy, professional egos and no accountability. There is also no performance appraisal done on these bodies." Rahul was shocked to learn about the state of affairs of co-operatives in India. He told Anil, "Do you know that the American economy runs with 60 per cent of co-operatives. I only wonder what is happening to our homeland, where the co-operative movement was started for the first time, and incidentally has the largest number of co-operatives in the world".
Rahul frustrated with the system in India, caught the next flight to the US. The future of Suryavanshi Grapes Co-operative looms large on the faces of 250 members.
QUESTIONS
1. Analyze the case.

Case 10 CARPET BOMBING
Driving on the snow-capped mountains can be real fun, especially when the nerves tune into the chill that runs down the spine and the cold weather hits the heart. All of a sudden, Atul realizes that he is on a road which is 12,000 feet above sea level, and it is getting more cooler than before. Atul and Indranil are busi-ness partners running a big shopping mall in South Delhi's posh locality. Graduated from FMS, Delhi, both of them studied in the same school and institutions right from their childhood.
It is an annual ritual, every summer to beat out the Delhi heat by holidaying in Kashmir. They have been doing so since the past ten years. Their suppliers would make fun of them by saying', "Holidaying in Kashmir, are you joking?" But every year in May, they would make it a point to visit Kashmir. You may call it obsession or maybe fascination, they don't mind it. For they believed that Kashmir is the heaven on earth.
Alighting from the Land Rover, Atul asked Indranil about the programme for the next day. Indranillooked a bit puzzled and answered, "Atul, did you forget that our second day of the holiday is always the (shikara) trip at the Dal Lake'. Atul smiled with excitement and remembered the happier times spent at the lake.
Dal Lake was incidentally one of the major tourist attractions in Kashmir. The boat (shikara) trip is the best experience one can ever have. A look at the snakes crawling on the salt waters of the lake will create a thump in your heart. Also, the country largest floating market will thrill the eyes. Shopkeepers line up with vegetables, fruits and handicrafts on the houseboats. There are even floating five-star restaurants.
But one thing which interests everyone is the houseboats which sell woollen carpets. Kashmir is the 'land of wool'. There are a variety of sheep here. The Kashmiris have organized themselves into co-operatives since the past 30 years, which mostly consists of the Muslim community. Kashmiri carpets were famous right from the days of the Britishers.
There were around 250 co-operatives employing around a million people for weaving carpets. In fact, the whole state of Jammu and Kashmir used to depend on the foreign exchange earnings of the carpets, which were exported to the European and American markets. The co-operatives with the help of the local support used to handle all the operations i.e. from obtaining the wool from the animals, spinning it, adding dyes, and designing it or weaving it into beautiful carpets. ''Those were the good old days", Atul pointed out to Indranil.
In the 80's, Kashmiri carpets found their way into Wal-Mart stores in the US and Harrods in the UK. Atul and Indranil used to shop for these carpets in Kashmir, whenever they were on their holiday. They used to buy carpets in bulk from the offices of these co-operatives directly.
However, in late 80's, things began to change. The battle for Kashmir had entered the lanes and houses of Kashmir. Heavy infiltrations from the neighbouring country of Pakistan started instigating terrorism in the Valley. Everyday, scores of militants seeped into the Valley. Finally, the Indian Government, after seeing many killings of innocent Kashmiris, intervened which resulted in the Kargil War in the late 90's. Even today, a lot of foreign tourists are targeted by the militants and killed. This has resulted in low tourist arrivals since the past six years. Thus, the co-operatives these days do not have much sales as the major buyers for carpets are foreigners. .
Of late, the terrorists' attack on international destinations has badly affected the exports of these carpets. Many co-operatives have shut down and the remaining ones are thriving on the domestic markets. Lately, even Atul and Indranil were not stocking carpets in their merchandise due to fear of terrorist attacks.
Next day morning, Atul and Indranil went to the Dal Lake. They were astonished to see thirty soldiers guarding the lake. They learnt that the famous Char Chinar Garden on the lake has been bombed by terrorists. There were no more shikaras and no more floating markets. Atul and Indranil decided to return back to their hotel. Atul said to Indranil, "Probably, this will be our last visit to Kashmir. . . . . ."
QUFSTIONS
1. Analyze the case.



:SugarwareZ-191:

hey buddy,

Please check attachment for Case Studies Insights for Owners and Employees Business Conversions to Worker Cooperatives.
 

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