RURAL DEVELOPMENT THROUGH CO-OPERATIVES

RURAL DEVELOPMENT THROUGH CO-OPERATIVES


Dr. S. Surapa Raju*


The Integrated Marine Fisheries Project is one among the many projects
for the socio-economic development of the fishermen community. Under this
project, the Andhra Pradesh Fishermen co-operative Federation (AFCOF)
distributed Beach Landing Crafts on subsidy basis to the members of the
fishermen co-operative societies. With the help of these crafts the
beneficiaries have improved their annual incomes from Rs. 13,850 to Rs.
25,509. 75 percent of the total sample households have benefited from the
scheme by crossed their previous income levels and remaining 25 percent of
them have to cross their income levels. If the AFCOF supplies adequate nets
and the cooperative society take the responsibility of marketing activity,
then this scheme will be a boon to the fishermen community.


INTRODUCTION


Andhra Pradesh occupies an important place in the fisheries map of
India. The state has 974 km of coastline, 33,227 sq km of continental
shelf; 4 lakh hectares of fresh water bodies and 1.50 lakh hectares of
brackish water area. The state occupies the 5th rank in marine fish
production in India. Fisheries sector is potential income generating sector
with 14.05 lakh persons employed in different activities. There are nine
coastal districts covering 508 villages in the state. No doubt this sector
earns Rs. 2400 crores annually by exporting marine products to various
countries, but the living conditions of the fishermen are poor. It implies
that fisheries sector is flourishing but not the living conditions of the
fishermen households. The fishermen are economically, sociologically,
educationally backward people in Andhra Pradesh. Due to their poor economic
conditions they are unable to purchase the costly productive assets like
craft and gear on their own. So they invariably approach either
institutional finance agencies or non-institutional finance agencies to get
credit. Due to rigid procedures and formalities (collateral securities,
sureties, etc) the fishermen unable to get the financial help from
Institutional finance agencies and are approaching the non-institutional
agencies (traders, merchants and money lenders) for credit. The merchants
exploit the fishermen households by extending credit facilities on the
condition that they have to surrender their entire quality catch to them
until clear off their loan. To avoid this type of exploitation by the
merchants, the government has formulated many programmes for the socio-
economic development of the fishermen households in the state from the
first five-year plan onwards.
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* Assistant prof., Council for Social Development, Near NIRD ,
Rajendranagar, Hyderabad-500 030
The Integrated Marine Fisheries Project (IMFP) is one among the many
Projects. This has been implementing in phased manner in the state since
1987 onwards and its main objective is to provide productive assets to the
fishermen households by extending financial assistance through National Co-
operative Development Corporation (NCDC) and recover these loan amounts
through co-operative societies by procuring their catches. In
implementation of schemes and recovery of loans the Andhra Pradesh
Fishermen co-operative Federation (AFCOF) plays an important role, which
was established under the AP Co-operative Act in the year 1987 with
registration no11/IU/870. The main objectives of the AFCOF are: (i) to
under take procurement and distribution of fishery requisites; (ii) to
establish cold storage plants and net making plants; (iii) to undertake
procurement of fish; (iv) to set up fish stalls; and (v) to
establish branches at suitable places to facilitate the business. The AFCOF
has been implemented NCDC assisted projects for supplying fishery inputs to
the Marine fishermen co-operative societies (MFCS) under various IMFP
Phases since 1987 onwards, which are given below in detail (See Table 1).



Table 1 : Phases of IMFP and allocated amounts in Andhra Pradesh



"IMFP "Year "Project "No. of Marine "Total Number "Name of the "
"Phases " "Cost (Rs "Fisheries "of districts "Districts "
" " "in lakhs) "Cooperative "covered " "
" " " "Societies " " "
"I Phase "1987-1991"215.24 "12 "2 "Nellore "
" " " " " "Prakasham "
"II Phase"1991-2001"2195.65 "97 "6 "Guntur "
" " " " " "Krishna "
" " " " " "West Godavari "
" " " " " "Visakhapatnam "
" " " " " "Vizianagaram "
" " " " " "Srikakulam "
"III "2001-2004"2786.21* "51 "9 "Srikakulam "
"Phase " " " " "Vizianagaram "
" " " " " "Visakhapatnam "
" " " " " "East Godavari "
" " " " " "West Godavari "
" " " " " "Krishna "
" " " " " "Guntur "
" " " " " "Prakasham "
" " " " " "Nellore "
"IV Phase"2005 - "2097.15 "- "9 "Srikakulam "
" " " " " "Vizianagaram "
" " " " " "Visakhapatnam "
" " " " " "East Godavari "
" " " " " "West Godavari "
" " " " " "Krishna "
" " " " " "Guntur "
" " " " " "Prakasham "
" " " " " "Nellore "


*out of this amount 606.8 lakh have been assisted.

Table 2 : Distribution of Inputs supplied and its Value, Cumulative
Demand and Collection (AFCOF) As on 31-12-2004

"Particulars (AVERAGE) "Average demand, collection and balance per "
" "head (Rs.) "
" "Phase-I "Phase-II "Phase-III"Total "
"Value of input "6,192 "19,473 "30,333 "19,335 "
"Demand as on 31-12-2004 "10,732 "20,760 "9,844 "17,616 "
"Collection as on "2,822 "4,210 "747 "3,464 "
"31-12-2004 " " " " "
"Balance as on 31-12-2004 "7,910 "16,550 "9,097 "14,152 "
"% of collection over "26 "20 "8 "20 "
"demand " " " " "


Source: General manager, AFCOF Hyderabad


The average value of input is increased from 6,192 in Phase-I to Rs.
30,333 in Phase-III. But in case of percentage of collection over demand is
decreasing from Phase-I to Phase-III. (Table-2).

Table 3 : Statement Showing the District wise data of the assistance
given under NCDC assisted IMFDP (D.C.B as on 31-12-2004) (Rs. In Lakhs)

"Name "Pha"No "No. "No. of "Value "Cumulativ"Cumulativ"Cumulative"
"of the "se "of "Of "benefi "of "e "e "Balance "
"district "typ"Soci"inputs "ciaries"inputs "Demand "Collectio" "
" "e "- "supplie" " " "n " "
" " "etie"d " " " " " "
" " "s " " " " " " "
"Srikakulam "II "11 "236 "964 "172.80 "212.27 "31.88 "180.38 "
" " " " " " " " " "
"Visakhapatnam"II "34 "1391 "4123 "726.03 "613.92 "143.39 "470.53 "
" "III"12 "167 "459 "181.33 "67.43 "2.38 "65.05 "
"Total " "46 "1558 "4582 "907.36 "681.36 "145.77 "535.58 "
"East Godavari"II "12 "300 "659 "175.05 "48.05 "6.68 "41.37 "
"Guntur "II "11 "344 "1234 "285.97 "294.91 "61.01 "233.90 "
" "III"4 "36 "180 "71.77 "21.34 "0.15 "21.19 "
"Total " "15 "380 "1414 "357.74 "316.26 "61.16 "255.09 "
"Prakasam "I "7 "639 "1011 "64.28 "111.98 "28.88 "83.10 "
" "III"4 "37 "153 "53.41 "13.05 "1.78 "11.27 "
"Total " "11 "676 "1194 "117.69 "125.03 "30.66 "94.37 "
"Nellore "I "5 "626 "926 "56.80 "99.13 "26.63 "72.50 "
" "III"6 "65 "241 "83.45 "20.65 "3.67 "16.98 "
"Total " "11 "691 "1167 "140.25 "119.78 "30.30 "89.48 "
"Grand Total " "160 "5858 "14030 "2712.66 "2471.60 "486.00 "1985.60 "


Source: General manager, AFCOF Hyderabad
In overall three phases, the highest number of inputs supplied in
East Godavari and less number of inputs supplied in Vizianagaram district
by the AFCOF. Altogether in nine coastal districts 5858 units worth of Rs.
2712.66 lakhs were supplied by the AFCOF.

BEACH LANDING CRAFT SCHEME

The Beach Landing Craft (BLC) Scheme (locally called as Fibre Nava
scheme) is one among the many schemes being implemented through AFCOF.
The Breach Landing Craft, made of Fibre was introduced during the year 1991-
92 in Krishna district of Andhra Pradesh. The main aim of introducing the
BLC scheme is to improve the living standards of the fishing households of
the fishermen by increasing their fish catches. The BLC reduces the stress
and strain of the traditional fishermen and increases the speed of the
operations of boats by fitting the motors. The horsepower capacity of the
motors is ranging from 10 HP to 16.6 HP. It enables them to go to far off
places for fishing into the sea, which could not be reached manually. Also
fishing in seasons of rough weather made more frequent and comparatively
safe.

AFCOF implements this BLC Scheme through its branches stationed at
District Headquarters. The district manager of AFCOF acts as a liaison
officer between AFCOF and the fishermen co-operative Society at village
level. The Apex agency at state level selects the cooperative societies
for the implementation of the scheme on the basis of its sound financial
position, performance, etc. After getting the particulars regarding
selection of societies, number of boats sanctioned to each society, etc.
from the Apex Agency, the district manager intimates to the selected
cooperative societies at village level. At village level, President or
Secretary of the fishermen cooperative society arranges a meeting among its
members and selects the fishermen for this scheme. This cooperative
society takes the responsibility for the repayment of the loan amount to
the AFCOF on behalf of its members. After getting the recommended names of
the persons from the cooperative society, the district manager will hand
over the boats to them after getting documentation, security bond, etc.
from the society as well as from the beneficiary.


In this background an attempt is made to study the impact of Beach
Landing Craft scheme of IMFP on beneficiary households. For this study
Gilakaladindi Landing Centre of Krishna district in Andhra Pradesh is
selected. It is located near Machilipatnam town, which is the district head
quarter of Krishna district of Andhra Pradesh. 122 beneficiary households
who obtained beach landing crafts from the various co-operative societies
of Giripuram, Combellapeta, Laxmipuram, Chinna gollapalem etc and are
operating their crafts from the Gilakaladindi landing centre were selected
for this study. It is a part of the sample selected and collected data for
the Ph.D thesis.


Objectives of the study

The main objective of this study is to know the impact of Beach
Landing Craft scheme on beneficiary households who obtained through
fishermen co-operatives. The following specific objectives framed for this
study are:


To study the average unit cost of the scheme, installment
amount and source of finance for additional amount

To analyze the main characteristics of the craft and its
Economics

To know the impact of schemes on catch and incomes of the
beneficiaries

To find out the socio-economic conditions of the beneficiaries




Selection of the Beneficiary, Average Unit Cost and Instalment Amount

The cooperative society after getting the sanctioned letters from the
AFCOF arranges a meeting among its members for selection of beneficiaries.
Usually there will be a lot of competition among the members as most of
them are interested to acquire the BLC. Then the society auctions the
sanctioned boats among boat seekers. Some times the auctions ranges from
Rs. 5,000 to Rs. 25,000. The bidder has to pay the auctioned amount within
one month to the society. It is observed that due to this selection
procedure, other than the real and needy traditional fishermen are getting
these boats. Economically sound persons like traders and influential
persons are getting these boats. Very few traditional poor fishermen
participate in the auction and paying the money to the society by taking
the money from the money lender – cum – merchant on the condition that they
have to supply all their catches to the merchants.

The average unit cost of the Beach Landing Craft in the selected
villages and amount to be paid by the beneficiary as instalment amount for
120 months is worked out and shown in the Table-4.


Table 4: Scheme particulars of BLC


"Particulars of the BLC Scheme " Average amount (Rs.)"
"Value of the craft "85,393 " "
"Engine "37,394 " "
"Nets "30,581 "1,53,368 "
"Average total unit cost of the scheme " "1,53,368 "
"Subsidy (25%) on unit cost " "38,842 "
"Amount payable to the AFCOF by each " "1,14,526 "
"beneficiary " " "
"AFCOF offers 25% of the total cost as margin" "38,842 "
"money " " "
"Total " "76,684 "
"For each monthly instalment " " "
"Monthly interest (Interest on 76,684 @ 12.75" "815 "
"per year) " " "
"Beneficiary has to pay to AFCOF. (Margin " "324 "
"Money) per month " " "
"Principal amount per month " "639 "
"Instalment amount per month " "1,778 "

The average unit cost of the beach landing craft is worked out to be
Rs. 1,53,368. Out of this amount Rs. 38,842 is to be
given as subsidy. Rs. 1778 per month has to be paid by the beneficiary to
the AFCOF as instalment for 120 months. But in addition to this scheme
amount, the beneficiaries used to go for additional loans to other
financial agencies to meet the requirements such as purchase of additional
nets and other expenditure.

Source of Finance:

It is observed from Table 5 that the average total investment on unit
was around Rs.2,04,330. Out of this amount, nearly 75 per cent was extended
by the AFCOF. Out of the total investment the sample households were
spending 42 per cent on crafts, 28 per cent on nets, 18.3 per cent on
engine and 11 per cent on other expenditure. The total cost of the craft
and engine was given by the AFCOF but in the case of nets the society
supplied 53 per cent to the total cost of the nets. For the remaining
amount the sample households go to the moneylenders, friends and relatives
for purchase of additional nets. When comparing to private moneylenders,
friends and relatives charge very less rate of interest and on request they
may allow more time for repayment. But in the case of money lender – cum –
fish trader the case may be different. (Table-5).

Table 5 : Distribution of average expenditure incurred by sample
households for fixed capital by source of finance

"S.No."Source of "Craft "Engine "Nets "Others* "Total "
" "finance " " " " " "
"1. "AFCOF "85393 "37394 "30581 "-- "153368 "
" "through "(55.9) "(24.4) "(19.9) " "(100.0) "
" "Cooperative"(100.0) " "(52.8) " "(75.0)** "
" "Society " " " " " "
"2. "Money "-- "-- "20840 "18600 "39440 "
" "lender - " " "(52.8) "(47.2) "(100.0) "
" "cum - fish " " "(36.0) "(78.8) "(19.3) "
" "trader " " " " " "
"3. "Friends and"-- "-- "6522 "-- "6522 (100.0)"
" "Relatives " " "(100.0) " "(3.2) "
" " " " "(11.2) " " "
"4. "Own "-- "-- "-- "5000 "5000 (100.0)"
" "investment " " " "(100.0) "(2.5) "
" " " " " "(21.2) " "
" "Total "85393 "37394 "57943 "23600 "204330 "
" " "(41.8) "(18.3) "(28.4) "(11.5) "(100.0) "
" " "(100.0) "(100.0) "(100.0) "(100.0) "(100.0) "


*Others include auction charges and transportation **Subsidy amount, i.e.
38,342 included in the total financed by the AFCOF.

Moneylender – cum – fish merchants

It is observed that moneylender – cum – fish trader plays an
important role in advancing the loans to the fishermen for their initial
capital investment. Mainly two reasons forced the fishermen to approach
for loans for initial capital investment from money lender – cum –
merchants: (1) to pay the auction amount to the cooperative society in a
stipulated period, (2) to purchase the additional nets due to inadequate
supply of nets by the AFCOF. It may be due to inadequate supply of nets
by AFCOF, which are not catering the needs of the fishermen for fishing in
all seasons. They supplied only 2 to 3 kinds of nets, which are not
adequate for fishing in different varieties in different seasons. To get
more catch by acquiring more nets, there is no other alternative for them
but to approach the lender–cum–trader. The lender – cum – trader provides
loans to these fishermen without charging any interest; moreover no
securities in the form of property are asked and all financial transactions
are handled on verbal basis, without paper work; but on the condition that
they have to sell all their catches to the trader. The price was pre-
determined by the fish trader, which is always less than the prevailing
market price. Due to this, the fishermen are getting less income.

MAIN CHARACTERISTICS AND ECONOMICS

One of the ways to know the ability of fishing craft is by assessing
its characteristics. Nearly 14 characteristics of the craft were identified
and averages were worked out. On an average the length of the craft was
24.47 feet and its average age was 5 years old. The average horsepower of
the engine was worked out to be 8.00 and it covers 17 K.M. distance in
fishing operations. The value of the gear they possessed was worked out to
be Rs. 48,581 and six to seven workers were engaged in each craft for its
fishing operations. This small scale fishing craft can be landed at any
place in the seashore. With the help of the small-scale craft, the
fishermen used to catch fish at mid water by using their passive fish gear.
Altogether the beneficiary has invested Rs. 2,04,330 to acquire craft
(Table-6).






Table –6: Characteristics of the Small-Scale Fishing Crafts
"Characteristics of the "Unit "Averages "
"Craft " " "
"Length of the Craft "Feet "24.47 "
"Age of the Craft "Years "5.00 "
"HP "HP "8.00 "
"No. of trips "Days "197.00 "
"Distance "Kms. "17.00 "
"Gear Value "Rs. "48,581 "
"No. of Workers "Persons "6-7 "
"No. of Fishing Hours "Hours "6 – 7 hours "
"Investment "Rs. "2,04,330 "
"Each Trip "Days "1 – 2 "
"Craft landing "- "Landing at any "
" " "place "
"Fishing gear "- "Passive "
"Fishing "- "At mid-water "
"Engine "- "Engine for "
" " "propulsion "


Source: Field Survey


It is well known fact that capital is essential to run any type of
activity and fishing sector is not exemption from this. On an average Rs.
2,04,330 has invested by the fisherman to acquire the craft.



Table7: Distribution of Component-wise Investment


"Particulars "Average (value in Rs.) "
"Hull "85,393 (41.8) "
"Engine "37,394 (18.3) "
"Fish Gear "57,943 (28.4) "
"Others (transportation)"23,600 (11.5) "
"Total "2,04,330 (100.0) "


Source: Field Survey

Among the various components in total investment, the fishing
households have invested more percentage (70%) on hull and fish gear. The
cost incurred on hull is the highest (42%) among the components. After
acquire the craft, fishermen have to get the fishing instruments (more
varieties of gears) to catch more varieties of fishes in various seasons
(Raju: 2002), so that they have invested (28%) to total investment on
gears. (Table-7).

Table 8: Component-wise Fixed Cost

"Particulars "Amount in Rs. "
"Depreciation on Hull, Engine & " 8,865 (27.1 ) "
"Gear " "
"Insurance "2,524 (7.7 ) "
"Installment @1778 per month X 12"21,336 (65.1 ) "
"months " "
"Others " 44 ( 0.1 ) "
"Total "32,769 (100.0) "

Whether the beneficiary has to spend some amount on fixed costs like
insurance, interest on loans, depreciation etc. The depreciation was
calculated on the basis of strait line method (present value of the craft
divided by its life expectancy) and insurance and interest on loans are
worked out on the basis of actual amount spent. (Table-8). The beneficiary
has to spend nearly 65 per cent of the total fixed cost is on instalment.



Table 9 : Component-wise Variable Cost


"Particulars of Variable Cost "Amount in Rs. "
"Oil "37,644 (43.6) "
"Grease "213 (0.3) "
"Ice / Salt "4,379 (5.1) "
"Repairs and maintenance "7,608 (8.8) "
"Beta, food for crew "4,603 (5.3) "
"Warfage "197 (0.2) "
"Wages / share of the worker "31,637 ( 36.7) "
"Total " 86,281 "
" "(100.0) "


Source: Field Survey
The beneficiary has to spend some amounts everyday to operate his
craft, which are very much essential, and with out these costs he could not
go for fishing into the sea. These costs include oil, grease, ice/salt
repairs and maintenance, beta, food for crew, Warfages, wages/share of the
workers etc. The small-scale craft owners spend the highest amount on oil
(37%) to their total variable costs. Expenditure on oil depends upon the
distance covered in the sea, number of hours of fishing, experience of the
driver and crew, age of the engine, repairs and maintenance of the craft,
age of the craft etc. The craft owner spent (37%) to their total cost on
wages/share of the workers (Table-9).


Table 10: Different varieties of fish catches grouped under major
categories
"Names of various fish varieties "Grouped under "
" "major categories "
"Nalla chanduva,Tella chanduva "Pomfret "
"Konemu, vanjanamu etc. "Seer fish "
"Bokki sorrah, pala sorrah kukka "Shark fish "
"sorrah, " "
"Talla karralu, polasa katumenu etc. "Hilsa fish "
"Teku chapa, mullu Tevu katla mullu "Rays fish "
"teku etc. " "
"Pala chapa, pala borta etc. "Milk fish "
"Nethaka, Thokapariga etc "Anchovies "
"Cat fish lezard, sea peches "Missce. "




Table11 : Variety wise Catch Particulars of Beneficiary Households

"Sl."Fish Varieties "Quantity "Value "Per kg value of "
"No " "(in Kgs.) "(in Rs.) "fish (in Rs.) "
"1 "Pomfret "1117(12.2) "37,509 "33.58 "
"2 "Seer "888 (9.7) "24,926 " 28.07 "
"3 "Shark "1025(11.2) "22,181 " 21.64 "
"4 "Hilsa "723 (7.9) "20,613 " 28.51 "
"5 "Rays "2133(23.3) "10,452 " 4.90 "
"6 "Milk Fish "787 (8.6) "10,160 " 12.91 "
"7 "Anchovies "576 (6.3) "8,208 " 14.25 "
"8 "Others "1904 (20.8) "10,510 "5.52 "
"Total "9153 (100.0) "1,44,559 "15.79 "


Source: Field Survey
Variety wise fish catch


The beneficiaries obtained eight varieties of fish namely Pomfret,
seer, shark, Hilsa, Rays, Milkfish, Anchovies and other miscellaneous
varieties (Table-10). Among these varieties, the fishermen netted more
quality of Rays (23%) and 21% other varieties of fishes. In value terms,
more money was obtained to pomfret fishes and the least amount was obtained
to anchovies. With regard to per kg value of fish, Rs. 33.58 and Rs. 28.51
were obtained to pomfret and Hilsa fishes respectively. On an average 9153
kgs of fish captured in a year by the beneficiary and its value was Rs.
1,44,559. On the whole the beneficiary gets Rs. 15.79 per kg of fish catch
(Table- 11).

Fig-1



Sample households caught the highest percentage of quantity and
value of fish during the months of July and October and the least is
observed during the March- June period (Table-12).





Table: 12 Period wise Catch Particulars of ample Households

"Period "Quantity (in "Value (in Rs.) "
" "Kgs.) " "
"November-February "3176 (34.7) "44,090(30.5) "
"March-June "1474 (16.1) "17,925(12.4) "
"July- October "4503(49.2) "82,544(57.1) "
"Total "9153(100.0) "1,44,559(100.0) "


Source: Field Survey


Income from the scheme


Income derived from the schemes given under the Integrated Marine
Fisheries Project through the AFCOF, is used as the yardstick to know
whether the sample households get benefit or not. But the real incremental
income can be derived from the scheme only when we compare the before and
after annual incomes of the beneficiaries.


Table 13 : Distribution of sample households according to average annual
income before and after the scheme

" "After "
"Before scheme " "
" "