Rethinking local institutional development in India: Theoretical perspectives and analysis of dairy cooperatives

Abstract

The quality of institutions indicates the level of economic development in the country. Institutions are a part of a system that is based on human interactions and that leads to the generation of incentives. These incentives can deal with uncertainties and foster economic, social, political growth, provided the human interactions are moderated well. This paper reflects on the strength of the interventionalist institutions like cooperatives in India and promotes institution building for a better future. The base of the paper focuses on the lessons learnt from dairy cooperatives in Gujarat state and discusses the current situation of the cooperatives and challenges faced by them. The cooperatives in India have been old institutions with a great history of success as also failures. Though there are various types of cooperatives in India, the dairy cooperatives have been able to gain more attention in the international market due to the Operation Floods I, II, and III. India has secured its position as one of the largest milk producers in the world. At present, India produces 20% of the total milk production in the world. This paper is a blend and analysis of theoretical perspectives and ground realities of the dairy cooperative sector in India. The paper follows theoretical perspectives from institutional theory to analyse the present scenario of dairy cooperatives in India. It addresses the gaps in the dairy cooperative development sector with an in‐depth analysis of ground realities and contributes to future policy formulation and interventions.

Comparative Performance of Cooperatives and Producer Companies in Member Producer’s Income Enhancement: A Case Study of the Milk Sector in Indian Punjab

“…After the initiation of the green revolution in India from the mid-1960s onwards, another institutional set-up that transformed the entire rural landscape was the operation flood programme that took place from 1970 to 1996 in three phases with financial support from the World Bank. A peculiar feature of the operation flood programme was development of the dairy sector through the establishment of three-tier producer-driven dairy cooperative societies (DCSs) at village level, milk union at district level and a federation of milk unions at state level across different parts of India, which has helped to increase milk production, augment rural income and provide milk at a reasonable price to the consumers (Birthal et al, 2019; Christie, 2020; Rajendran & Mohanty, 2004). The dairy cooperatives in India have extensive coverage in about 1.94 lakh villages with a membership of 17.22 million milk producers (National Dairy Development Board [NDDB], 2019–2020).…”