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Plan to Set up 2 lakh PACS, Dairy, and F

  Mar 18, 2023

Plan to Set up 2 lakh PACS, Dairy, and Fisheries Cooperatives

Q. Why is this in News?

A. The Centre approved a plan for setting up 2 lakh Primary Agricultural Credit Societies (PACS), dairy, and fisheries cooperatives in the country in the next five years to strengthen the cooperative movement.

  • Earlier, the Union Budget 2023 announced Rs 2,516 crore for computerisation of 63,000 PACS over the next five years, with the aim of bringing greater transparency and accountability.

Q. What are the Key Points of the Plan?


  • Aim: The plan, mooted by the Ministry of Cooperation, is aimed at “strengthening cooperative movement in the country and deepening its reach up to the grassroots”.
  • Convergence of Various Schemes: Plan is to establish viable PACS, dairy and fishery cooperatives in villages, and strengthen the existing ones through convergence of various schemes of the Ministry of Fisheries, Animal Husbandry & Dairying by leveraging the ‘whole-of-government’ approach.
  • Action Plan: Action plan for implementation of the project shall be prepared by NABARD, National Dairy Development Board (NDDB) and National Fishery Development Board (NFDB).
  • Components:
    • Department of Animal Husbandry and Dairying:
      • National Programme for Dairy Development (NPDD)
      • Dairy Processing & Infrastructure Development Fund (DIDF)
    • Department of Fisheries:
      • Pradhan Mantri Matsya Sampada Yojana (PMMSY),
      • Fisheries and Aquaculture Infrastructure Development (FIDF)
  • High Level Inter-Ministerial Committee (IMC): It is to be established under Ministry of Cooperation for smooth implementation of the plan.

Q. What is the Significance of the Plan?


  • There are still 1.6 lakh panchayats without PACS and nearly 2 lakh panchayats without any dairy cooperative society.
  • PACS account for 41% (3.01 crore farmers) of the Kisan Credit Card (KCC) loans given by all entities in the country.
    • NABARD’s annual report of 2021-22 shows that 59.6 per cent of the total loans were extended to the small and marginal farmers.
  • These societies also provide warehousing services to farmers in order to preserve and store their food grains.

Q. What is PACS?


  • PACS are the ground-level cooperative credit institutions that provide short-term, and medium-term agricultural loans to the farmers for the various agricultural and farming activities.
  • These are the last link in a three-tier cooperative credit structure headed by the State Cooperative Banks (SCB) at the state level. Credit from the SCBs is transferred to the District Central Cooperative Banks (DCCBs), which work with PACS.
  • The PACS functioning at the base of the co-operative banking system constitute the major retail outlets of short term and medium-term credit to the rural sector.

Q. What is the Way Forward?


  • Along with improved coverage, reorganisation and increased resource-mobilization capacity of PACS is necessary to increase their ability to attract more deposits and loans from higher financing agencies.
  • PACS should receive coherent policy support over long period and be highlighted in the Government of India's vision for Atmanirbhar Bharat and Vocal for Local initiatives to realize their potential as building blocks for a self-sufficient village economy.