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State of Co-operatives in Mizorm

 

A report by Mr. Bhima Subrahmanyam, Managing Director, the  National Federation of State Co-operative Banks Limited and Mr. Balu Iyer, Regional Director, International Co-operative Alliance Aisa and Pacific.

                                                                                                   

1.      Prelude:

 

The following is a report by Bhima Subrahmanyam and Balu Iyer on their three-day visit to Aizwal from May 03 to 05, 2017. During a National Seminar organized by the National Federation of State Co-operative Banks Limited (NAFSCOB) in Mumbai, on “Roadmap to Enhance the Share of Cooperatives in Agricultural Credit,” it was decided that a visit would be undertaken to understand the state of co-operatives in one of the North Eastern states. Mizoram was chosen, in particular the Mizoram Cooperative Apex Bank Ltd (MCAB), one of the active members of NAFSCOB.  This was the first visit for Balu Iyer and the second for Bhima Subrahmanyam. Mr. Bhima was excited to visit Mizoram after about 26 years of his first visit (05-04-1991). The visit owes much to the attention put in by Pi.T.Lalmuanpuii, the dynamic Chairperson of the MCAB, who arranged courtesy calls/organized meetings with Pu Lalsawta, Minister of Finance, Planning and Law, Pu Lalmalsawma, Chief Secretary, and Pu Sang Dingliana, Secretary; meetings with the co-operative department and heads of co-operative sectoral federations and visits to a few co-operatives. Pi. Lalnuntluangi Hrahsel, Assistant Registrar of Cooperative Societies and Incharge Chief Executive of the Mizoram State Co-operative Union accompanied us on all ten visits and provided useful perspective on co-operatives in the State. She is very resourceful.

 

2.      History of Co-operatives in Mizoram

 

The state of Mizoram derives its name from Mi (people), Zo (lofty place, such as a hill) and Ram (land), and implies "land of the hill people." Situated in the northeast of India, it is the southernmost landlocked state sharing borders with four of the Eight sister states – Assam Manipur, Sikkim and Tripura. Mizoram also shares a 722-kilometer border with the neighboring countries of Bangladesh and Myanmar[1] (at 4:00 in the morning it was bright as daylight; while Mizoram is on India time zone, the time in Bangladesh was 4:32 and in Myanmar 5:21). For someone coming from Delhi and Mumbai it was a very pleasant surprise to see drivers on the narrow mountainous roads, stick patiently in their line and not even one of them honk their horn (our driver Kennedy was one such diligent driver who despite the traffic (yes, Mizoram is also not spared of these) ensured we were on time to all ten meetings/visits at different levels.Pi Lalmuanpuii attended seven out 10 meetings.

 

Cooperation as an activity or as a way of life is not a new thing among the Mizos. They have a closely knitted society and awell-established community from time immemorial. It is not surprising Mizoram has a fascinating history of co-operatives which have gone through periods of highs and lows.  Co-operatives in the state were formed to address the evolving needs of the people and the attention given to them varied has with the interest (or lack of) of the governments in power.

 

The history of modern co-operative societies in Mizoram[2]can be traced toJean Christom McCall, the wife of the Wartime Superintendent of the Lushai Hills, A.G. McCall. She started the Young Lushai Women’s Organization and the Lushai Weavers co-operatives in 1942. Though the cooperatives organized by Mrs. Jean Christom McCall had no legal existence or registration under any Cooperative Act, it nevertheless sowed the seeds of the cooperative movement in Mizoram

 

The list of co-operatives formed goes as follows: Aijal Central Trading Co-operative Society Limited (1949), Zanlawn Weaving Co-operative Society Limited (1954), First Assam Rifle Thrift Co-operative Society Limited (1955), Aijal Industrial Co-operative Society Ltd. (1959), Champhai Credit Co-operative Union and Chaltlang Credit Co-operative Union (1960), Aijal Cattle Farmer’s Co-operative Society Limited (1960), Bilkhawthlir Fishery Co-operative Society Limited (1961), Vairengte Protected and Progressive Village Service Co-operatives and Kolasib Protected and Progressive Village Service Co-operatives Service Cooperative Society Limited (1967), Zarkawt Knitting Co-operative Society Limited (1970), Mizoram Secretariat Canteen Co-operative Limited (1974), Mizoram Apex Marketing Co-operative Society Limited (1974), Zoram Handicraft Co-operative Society Limited (1974), the Aizawl Returnee Multipurpose Co-operative Society Limited (1977), and the Tuirial Jail Camp Multipurpose Co-operative Society Limited (1977, within the prison complex). To promote awareness and cooperative education among the members as well as to the common people, the Mizoram State Cooperative Union Limited (MSCU) was formed on May 20, 1975 to take the charge of imparting cooperativeeducation, awareness and training to members of cooperatives.

 

The co-operative movement which started when Mizoram was a district of under the state of Assam suffered serious setback due to outbreak of insurgency which lasted for 20 years. Co-operatives were paralysed and most of them ceased to function because of the failure ofadministrative machineries in the region. Most agricultural credit cooperatives failed to pay back their loans and the Assam Cooperative Apex Bank, Aizwal branch was burned down with all itsrecords and important documents which resulted in the closure of this office forsome time. Things started to improve when Mizoram attained the status of Union Territory in the year 1972 and subsequently full-fledged statehood in 1986. The cooperative movement in Mizoram has completed 68 years its existence and now covers 353 villages (out of 830) and 43,920 households. There are 1,463 registered co-operative societies and 10 state level cooperative societies.

 

 

3.      State of Co-operatives:A case of Mizoram Cooperative Apex Bank ltd:

 

While the current state of co-operatives is subdued and lacking support, the opportunities are immense for those with strong leadership, a sense of purpose, and capitalizing on the opportunities,one such, is the MCAB. Under the leadership of its chairperson Pi T. Lalmuanpuii, the bank has seen an increase in its deposits, appreciation of net profits, improvement in CRAR ratio and stabilization in its NPAs. Speaking to us at their newest modern branch, right next to the State Secretariat, Ms.Lalmuanpuii told us, “the bank is making efforts to modernize, make effective use of technology and focus on members. All our bank branches   are covered under Core Banking Solution (CBS), we offer online banking services, and would like to get into mobile banking. However certain RBI stipulations are preventing us from moving forward in adopting complete mobile banking which includes transaction Facility”.It is worthwhile to peruse a brief profile of MCAB

 

3.1  Mizoram Cooperative Apex Bank Ltd.:

 

MCAB has been carrying out Banking business since  31st July, 1982 and at present has a total of 14 bank branches including Head Office and Assets Recovery Management (ATM) branch.MCAB  as on March 2016 (provisional) has a total share capital of Rs.187 lakhs, reserve funds Rs.2355 lakhs and mobilized a total deposits to the tune of Rs.59202 lakhs. The outstanding of bank’s loans and advances was to the tune of Rs.11,033 lakhs and total amount of investment was Rs.13,995 lakhs. During 2015-16, the MCAB   earned net profit of Rs.625 lakhs. As on March 2017, the bank has achieved Capital to Risk (Weighted) Assets Ratio (CRAR) of 9.19% .The  Non-Performing Asset (NPA) level is on decreasing trend and it indicates that the NPA management is appreciable.

 

All bank branches have been brought under CBS. MCAB also offer online banking services viz., NEFT/RTGS to customers. Bank has issued RuPay Kisan Credit Cards (KCCs) to 73 members and RuPay Debit Cards to 11,400 members. The bank provides Mobile Banking facility to its customers with view facility only and looking forward for permission to offer online transaction facility. MCAB   installed 6 ATMs with sub-membership through HDFC Bank under National Financial Switch (NFS). The bank is also participating in Direct Benefit Transfer (DBT) and extended Gas subsidy of Rs.2.21 croresto 7243 beneficiaries. MCAB   opened accounts under GoI social security schemes viz., Pradhan Mantri Jan Dhan Yojana (PMJDY), Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and Pradhan Mantri Suraksha Bima Yojana (PMSBY).The bank  disbursed Rs.126.45 lakh loans to 255 beneficiaries under Micro Units Development and Refinance Agency (MUDRA) . The bank received financial assistance under Financial Inclusion (FIF) from NABARD for installation of Mini Computer Lab, Micro ATM, Mobile Van, Financial Literacy Centre and RuPay Debit Card.

 

MCAB  complied with   mandatory and necessary statutory/regulatory requirements viz., Know Your Customer (KYC), Anti Money Laundering (AML), and also formulated  Risk Management Policy and Information Security Policy based on the model policy guidelines suggested by NAFSCOB. Further, bank has also complied the membership requirement  of Credit Information Companies (CICs), and also set up a mechanism by  for redressal/grievances.  

 

The Government of Mizoram signed Memorandum of Understanding (MoU) with GoI and NABARD on 27th June 2008 under implementation of Revival Package for ST Cooperative Credit Institutions, as per recommendations of  Task Force under chairmanship of Prof. Vaidyanathan,. Under Revival Package, the Govt of Mizoram took all steps including amendment to State Cooperative Societies Act, Amendment to Bye-laws of MCAB and appointment of Chief Executive Officer as per Fit and Proper Criteria,release of their share of recapitalization as per MOU, etc,.Govt of India is yet to  release their  share of Rs. 2244.13 lakhs  under the package. Therefore,the implementation of Revival package was incomplete in Mizoram as in few other states including states in North eastern region.

 

As on March 2015, total numbers of Primary Agricultural Credit Societies (PACS) in Mizoram state were 136, out of which 15 and 5 were viable and potentially viable respectively.

 

4.      Interaction with Heads of Cooperative Sectoral Federations:

 

At the meeting organized with the heads of sectoral Federations, we got an opportunity to meet with representatives from the Handloom and Handicrafts, piggery, fishery, banking and marketing federations. The opportunity for co-operatives seemed immense, just to take two examples, pig rearing and fishery.  Pig rearing is an integral part of the people of Mizoram and an activity where almost all households are involved. Due to high demand of pork, it can play a distinctive role in poverty alleviation. PIGFED, the Cooperative Federation of Pig Producers in Mizoram (registered in 1989) caters to the welfare and needs of its members in terms of capacity building, technical inputs (scientific pig rearing), and marketing of piggery farm produce including supply of quality feed for pigs. It has 179 primary pig producer cooperative societies and runs 4 retail outlets of pig feeds and other animal feeds. According to Dr. Lalmunhlima Rath the Managing Director of  PIGFED, “The outlets are managed by local youth thereby addressing unemployment problems. We are planning to engineer improved breed by establishing Base Pig Breeding Farm; go in for artificial insemination; and increase the number ofsales outlet. We hope to increase outreach, improve quality, provide employment and improve livelihoods. We need government support to expand our outreach and increase our scale of operations.”Dr. O.P. Singh, Managing Director of ZOFISFED, the fisheries co-operatives echoed similar sentiments about improving the backward and forward linkages. “Fisheries is a money catching profession! the federation is working towards an integrated approach where the focus in on improving production, ensuring hygiene, generating employment, and adding value.”

 

The Mizoram Milk Producers Cooperative Union Limited (MULCO) registered as a co-operative society in 1984 follows the AMUL pattern of dairy cooperative - societies at the village level federated under a milk union at the district level and a federation of member unions at the state level. MULCO supplies milk in and around Aizwal and works to establish direct linkage between milk producers and consumers. We visited the dairy plant in Thuampui and got to savor the lassi and rosogulla being produced. MULCO’s share of milk and milk products is around 20% with private trades accounting for 25% and the rest divided between two heavy weights AMUL and Nestle. According to Dr. Lalremliana, the Managing Director, “given the state’s topography, the milk collection centers are not easily accessible plus the prices of commodities such as cattle feed and oil cake are comparatively higher in Mizoram than other states. We have around 800 members (of whom 40% are women) and we plan to increase number of members, expand the Union, and continue to improve the number and range of products.”

 

The Handloom and Handicraft sector is one of the vibrant sectors of Mizoram. The bamboo and cane items are most sought after as is the traditional colorful skirt wrap, Paun, worn by Mizo women. We visited the Zuangtui Weaving Co-operative Society and had discussions with an enterprising executive Ms. Zohmangaihi. The Paun’s were a specialty of the society and it was amazing to see stacks of intricately designed and colorful pauns all over the store. “I design the Paun’s based on what I see are the customer needs, we sell across the world where the Mizo community resides.” On the day we visited, there was a training session organized for the weavers on skill up gradation. While the twenty-member co-operative seems to be doing fine, the same could not be said about the workers. The looms they were working on were semi-automatic and helped reduce the drudgery; however, the living quarters left much to be desired. While the workers got regular employment, the co-operative difference was not obvious.

 

The 2016 New Development Economic Policy of Mizoram is aimed towards zero poverty, more jobs, inclusive growth, shared prosperity, and cohesive and inclusive society. The State has identified four areas as key growth drivers: a) Agricultural & Allied Sector: Rice, Vegetables, Fruits, Floriculture, Animal Husbandry, Diary, Fishery; b) Industry-Manufacturing Sector: Forest Based Industries (bamboo), Handloom, Handicrafts, Agro Based Food Processing; c) Infrastructure Development: Roads, Energy, Water Supply, ICT, Sanitation & Sewerage; d) Services Sector: Tourism & Hospitality, Sports & Recreation, Education, Health Care, ICT, Transport Services. In regard to agriculture the state is looking at a two-pronged approach: (i) improving market orientation of smallholders at production level, and (ii) facilitation of market access and participation of smalland marginal farmers in output markets. There are many identified growth areas in which co-operatives are currently engaged and have the potential to contribute.

 

5.      What Matters :

 

Hon Minister Pu Lalsawta in an early morning meeting with us said, “for the new economic policy to work, we need to get our farmers organized and I see a role for co-operatives in this. We would like to promote PACS that organize the farmers and address all their needs. We could outsource certain functions to entrepreneurs who are agile and quick to respond. However, co-operatives in the state need to show they are up to the challenge. We have seen money go in and nothing afterwards”. While appreciating the efforts being made by MCAB under the leadership of  Pi.Lalmuanpuii to strengthen MCAB, he observed that all segments of cooperatives have greater potential to address their spelt out objectives. The sincerity of purpose and commitment are need of the hour and heads of sectoral cooperative Federations should demonstrate such capabilities to ensure support of all kinds from Government of Mizoram.

 

Chief Secretary Pu Lalmalsawma was very attentive to the needs of the State Cooperative Union, the Apex Cooperative Bank and other sectoral cooperatives. He committed to know more of the crucial issues and to address their concerns. Pu.Sang Dingliana,Secretary (Cooperation)  calls for appropriate strategies to develop positive attitudinal changes among all sections of people connected with cooperatives including government to address the crucial issues of cooperatives and related cooperation.He is of the view that there is a scope for further strengthening of PACS including reviving most of them and thereby ensure a significant role to cooperatives towards  agriculture & Rural development.

 

6.      Some of the steps to be taken could include:

 

  • Government of India need to honour the MOU entered with Government of Mizoram  and release their share of recapitalization support to cooperatives at the gross root level,as a part of the revival package envisaged by the Task Force under the Chairmanship of Prof.A Vaidyanathan.
  • Reserve Bank of India may seriously consider to accord Scheduled status not only to MCAB but to all licenced cooperative Banks in North eastern region and include them under Second Schedule to RBI Act ,1934.
  • State Government support the State Co-operative Union to improve its dilapidated office and provide resources for outreach.
  • The Office of the Registrar and co-operative federations work together to see how co-operatives can play a meaningful role in the key growth drivers identified in the New Economic Development Policy. A paper has been prepared by the Cooperation Department, Government of Mizoram along these lines.
  • The National Co-operative Union of India to provide more opportunities to train and equip staff in the Union and State Co-operative Federations
  • A regional dialogue to bring together stakeholders - the North-East Council, the National Co-operative Union of India,the National Cooperative Development Corporation, National Federation of State Cooperative Banks (NAFSCOB),and other National level Federations – to commit their support to the development of co-operatives in the North-Eastern states
  • Move forward the proposal to set up and/ or strengthen the existing cooperative management/Training institutes in the North-Eastern Region states.
  • Hon. Radha Mohan Singh, Minister of Agriculture and Farmers Welfare, Government of India in a 2015 speech at the National Conference on Strengthening of Cooperative Education and Training had mentioned that the Government is keen to strengthen cooperative education and training in these states and all efforts will be made to provide sufficient funds and other resources in this regard[3].

 

 

7.      Post visit:

 

Following our visit, Chairperson, MCAB,  the Registrar of Cooperative Societies and the Chief Executive of the State Cooperative Union met the Finance Minister in his office and talked through issues like office building and activities in the anvil. They are also planning to meet the Chief Minister with the active help of both Chief Secretary & Secretary(coop) to seek support to Cooperatives.  These is a good begining; however, a more sustained effort is need to galvanize the cooperative movement to mirror its early days when co-operatives addressed real and emerging needs of people.  Our brief but quick and uninterrupted visits to cooperatives in Aizwal, on behalf of ICA-AP and NAFSCOB, created a very positive impact and paved way for

all concerned to rethink on actively supporting cooperatives.

 

 

 

[1]https://en.wikipedia.org/wiki/Mizoram

[2] A detailed account of the co-operative movement can be found in the thesis of Dr.Lallawmawma, John C, Cooperative societies in Mizoram Problems and Prospects, Mizoram Universityhttp://hdl.handle.net/10603/120503

 

[3]http://pib.nic.in/newsite/PrintRelease.aspx?relid=114809

 

IMPORTANT CONTACTS DURING OUR VISIT TO AIZWAL,MIZORAM

 

Government officials:

  • Pu Lalsawta, Minister of Finance, Planning and Law
  • Pu Lalmalsawma, IAS,  Chief Secretary
  • Pu Sang Dingliana, IAS, Secretary (Co-operation)

 

Department of Cooperation:

 

  • Pu Sang Dingliana,IAS- Secretary / Registrar of Cooperative Societies
  • Pu Lalhmachhuana- Joint Secretary
  • Pu Lalrinpuia-Deputy Secretary
  • Pi Lalthanthuami-Superintendent


Office of the Registrar of Cooperative Society:

 

  • Pi Lalfakzuali-Additional  Registrar of Cooperative Society
  • Pu Lalrinsang-Joint Registrar of Cooperative Society
  • Pi Lalnuntluang HRAHSEL-Asst Registrar of Coop Societies
  • Pu Lalchhandama- ARCS AE
  • Pi M Liansangpuii-SICS A West
  • Pu Lalmalsamwa-Inspector

 

Mizoram Cooperative Apex Bank:

 

  •  T. Lalmuanpuii-Chairperson
  • Lalzuahliana (Zuaha)-Chief Executive Officer
  • R. Zirrokunga-Dy General Manager Admn
  • V.L. Ruala-Dy General Manager, Loans and Advances
  • R Vanlalmuana-Asst Gen Manager Adm
  • C Lalramzauva-Ass Gen Mgr Inspection
  • Vincent Sailo-Asst Gen Magr IT
  • Lalthatluanga Hmar-Ass Gen Mgr Loans and Adv
  • B Thangchuanga-Ass Gen Mgr Banking Ops
  • Vanlalhriata-Manager,
  • Liansangpuia-Branch Manager,New Secretariat Branch

 

Meeting at MULCO:

  • Vanlalchhunga- Chairperson
  • Dr. Lalremliana-Managing Director
  • R. Laldaungliana
  • Dr. SalroltuangaSailo
  • F. Zosangliana

 

Heads of sectoral Federations:

  • Lalzuahliana-Chief Executive Officer-MACB
  • Lalmuanpuii-Chairperson-MACB
  • Vanlalchhunga-Chairperson-MULCO
  • Dr. Lalremliana-Managing Director-MULCO
  • F. Zosanga-Chairperson-RICEFED/ MIZOFED
  • Lianthangpuia-President-MSCU
  • Dr. Zohmangaiaha-Chairperson-MAHCO
  • Dr. O.P. Singh-Managing Director-ZOFISFED
  • Dr. LalmunhlimaRath-Managing Director-PIGFED
  • C. Lalchhiunga-Chairperson-MAHFED
  • Lalmalsamwa-Inspector-RCS
  • Lalthangfala-Inspector-RCS

 

State Cooperative Union

Pi Lalnuntluang HRAHSEL, Chief Executive

 

Zuangtui Weaving Cooperative Society, Chhinga Veng

1. W. Chhuanawma, Chairman

2. Pi. Zohmangaihi, Executive