Good Governance Practices and Competitiveness in Cooperatives: An Analytical Study of Kerala Primary Agricultural Credit Societies

Abstract

Cooperatives play an important role in rural development and financing. Primary Agricultural Credit Societies (PACS)the bottom tier of cooperative credit structure, form the largest number of Cooperative institutions in India. Bringing good governance into operating system leads to competitiveness in cooperatives. The performance of PACS depends upon how it is being governed and how the size of PACS acts as an indicator of competitive enhancement. The study examines various business activities of select PACS in India's southern State of Kerala and provides insight into their governance practices and its relationship with competitiveness. The study adopts a descriptive-analytical approach with a blend of primary as well as secondary data. The research study concludes that participation, accountability, and transparency are the effective pillars of cooperative governance in the presence of diversification strategy which further leads to improved competitive performance of Kerala's PACS. The competitive process led by good governance has been demonstrated as a key determinant for the growth and development of cooperatives. Good practices of PACS enhance the reputation and stakeholder value of the cooperatives in the long run. This further improves their productivity and enhances their capability to produce goods and services, which presents as a competitive growth. The study supports that the system of governance should not be rigid and imposed on cooperatives, rather be flexible and adaptive to each evolving situation.

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Constraints of Crop Credit Beneficiaries of Primary Agricultural Co-Operative Credit Societies in Dakshina Kannada District, Karnataka

“…• low-valued shares • invisible reserve fund • Limitless member liabilities • The credit of relatively lengthy terms with facilities for repayment in convenient installments • • Loans for productive purposes • Loan facility only for its members [6].…”

“…This will be useful in the event of yield loss brought on by insufficient or excessive rainfall, damage from pests and diseases, or natural disasters. A farmer can reduce the risk of product loss brought on by seasonal weather variation by renewing the KCC account and paying crop insurance and personal accident insurance payment each year [29].…”

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