PRIMARY AGRICULTURAL CREDIT SOCIETIES (PACS)
1. Context
Recently, the union cabinet approved the constitution and empowerment of an Inter-Ministerial Committee (IMC) for the facilitation of the "World's largest Grain Storage Plan in the Cooperative Sector" through the convergence of various schemes of the Ministry of Agriculture and Farmers Welfare, Ministry of Consumer Affairs, Food and Public Distribution and Ministry of Food Processing Industries.
2. Key points
- To ensure time-bound and uniform implementation of the Plan in a professional manner, the Ministry of Cooperation will implement a pilot project in at least 10 selected Districts of different states/UTs in the country.
- The Pilot would provide valuable insights into the various regional requirements of the project, the learnings from which will be suitably incorporated for the country-wide implementation of the Plan.
- All efforts should be made to leverage the strength of the cooperatives and transform them into successful and vibrant business enterprises to realize the vision of "Sahakar-se-Samriddhi".
- To take this vision forward, the Ministry of Cooperation has brought out the "World's Largest Grain Storage Plan in Cooperative Sector".
- The plan entails setting up various types of agri-infrastructure, including warehouses, custom hiring centres, processing units etc. at the levels of PACS, Thus transforming them into multipurpose societies.
- Creation and modernization of infrastructure at the level of PACS will reduce food grain wastage by creating sufficient storage capacity, strengthening the food security of the country and enabling farmers to realise better prices for their crops.
- There are more than 1, 00, 000 PACS in the country with a huge member base of more than 13 crore farmers.
- Given the important role played by PACS at the grass root level in transforming the agricultural and rural landscape of the Indian economy and leveraging their deep reach up to the last mile, this initiative has been undertaken to set up decentralized storage capacity at the level of PACS along with other agri infrastructure, which would not only strengthen the food security of the country but would also enable PACS to transform themselves into vibrant economic entities.
3. About Primary Agricultural Credit Societies
- PACS are village-level cooperative credit societies that serve as 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 or DCCBs that operate at the district level. The DCCBs work with PACS, which deals directly with farmers.
- Since these are cooperative bodies, individual farmers are members of the PACS and office-bearers are elected from within them.
- A village can have multiple PACS and be involved in short-term lending or what is known as crop loans.
- At the start of the cropping cycle, farmers avail credit to finance their requirement of seeds, fertilisers etc.
- Banks extend this credit at 7 per cent interest, of which 3 per cent is subsidised by the Centre and 2 per cent by the state government. Effectively, farmers avail the crop loans at 2 per cent interest only.
4. Implementation
- An Inter-Ministerial Committee (IMC) will be constituted under the Chairmanship of the Minister of Cooperation with the Minister of Agriculture and Farmers Welfare, Minister of Consumer Affairs, Food and Public Distribution, Minister of Food Processing Industries and Secretaries concerned as members to modify guidelines and implementation methodologies of the schemes of the respective Ministries as and when the need arises, within the approved outlays and prescribed goals, for facilitation of the "World's Largest Grain Storage Plan in Cooperative Sector" by the creation of infrastructure such as godowns, etc, for Agriculture and Allied purpose, at selected "viable PACS".
- The Plan would be implemented by utilizing the available outlays provided under the identified schemes of the respective Ministries.
The following schemes have been identified for convergence under the Plan:
4.1. Ministry of Agriculture and Farmers Welfare
- Agriculture Infrastructure Fund (AIF)
- Agricultural Marketing Infrastructure Scheme (AMI)
- The mission for Integrated Development of Horticulture (MIDH)
- Sub Mission on Agricultural Mechanization (SMAM)
4.2. Ministry of Food Processing Industries
- Pradhan Mantri Formalization of Micro Food Processing Enterprises Scheme (PMFME)
- Pradhan Mantri Kisan Sampada Yojana (PMKSY)
4.3. Ministry of Consumer Affairs, Food and Public Distribution
- Allocation of food grains under the National Food Security Act
- Procurement operations at Minimum Support Price
5. Benefits of the Plan
- The plan is multi-pronged and it aims to address not just the shortage of agricultural storage infrastructure in the country by facilitating the establishment of godowns at the level of PACS, but would also enable PACS to undertake various other activities, viz:
- Functioning as Procurement centres for State Agencies or Food Corporation of India (FCI).
- Serving as Fair Price Shops (FPS)
- Setting up custom hiring centres
- Setting up common processing units, including assaying, sorting and grading units for agricultural produce etc.
- Further, the creation of decentralized storage capacity at the local level would reduce food grain wastage and strengthen the food security of the country.
- By providing various options to the farmers, would prevent the distressed sale of crops, thus enabling the farmers to realise better prices for their produce.
- It would hugely reduce the cost incurred in the transportation of food grains to procurement centres and again transporting the stocks back from warehouses to FPS.
- Through a "whole of Government" approach, the Plan would strengthen PACS by enabling them to diversify their business activities, thus enhancing the incomes of the farmer members as well.
6. Time frame and manner of implementation
- National Level Coordination Committee will be formed within one week of the Cabinet approval.
- Implementation guidelines will be issued within 15 days of the Cabinet approval.
- A portal for the linkage of PACS with Govt. of India and State Governments will be rolled out within 45 days of the Cabinet approval.
- Implementation of the proposal will start within 45 days of the Cabinet approval.
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For Prelims: PACS, Inter-Ministerial Committee, Ministry of Agriculture and Farmers Welfare, Ministry of Consumer Affairs, Food and Public Distribution, Ministry of Food Processing Industries, State Cooperative Banks, district central cooperative banks, National Level Coordination Committee, For Mains:
1. What are Primary Agricultural Credit Societies (PACS)? Discuss the various programmes implemented by the Government to strengthen the Primary Agricultural Credit Societies in the country. (250 Words)
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Previous Year Questions
1. Consider the following statements: (UPSC 2020)
1. In terms of short-term credit delivery to the agriculture sector, District Central Cooperative Banks (DCCBs) deliver more credit in comparison to Scheduled Commercial Banks and Regional Rural Banks.
2. One of the most important functions of DCCBs is to provide funds to the Primary Agricultural Credit Societies.
Which of the statements given above is/are correct?
A. 1 only B. 2 only C. Both 1 and 2 D. Neither 1 nor 2
Answer: B
2. With reference to organic farming in India, consider the following statements: (UPSC 2018)
1. 'The National Programme for Organic Production' (NPOP) is operated under the guidelines and directions of the Union Ministry of Rural Development.
2. 'The Agricultural and Processed Food Products Export Development Authority' (APEDA) functions as the secretariat for the implementation of NPOP.
3. Sikkim has become India's first fully organic State.
Which of the statements given above is/are correct?
A. 1 and 2 only B. 2 and 3 only C. 3 only D. 1,2 and 3
Answer: B
3. With what purpose is the Government of India promoting the concept of "Mega Food Parks"? (UPSC 2011)
1. To provide good infrastructure facilities for the food processing industry.
2. To increase the processing of perishable items and reduce wastage.
3. To provide emerging and eco-friendly food processing technologies to entrepreneurs.
Select the correct answer using the codes given below:
A. 1 only B. 1 and 2 only C. 2 and 3 only D. 1, 2 and 3
Answer: B
4. With reference to “Urban Cooperative Banks" in India, consider the following statements: (UPSC 2021)
1. They are supervised and regulated by local boards set up by the State Governments.
2. They can issue equity shares and preference shares.
3. They were brought under the purview of the Banking Regulation Act, 1949 through an Amendment in 1966
Which of the statements given above is/are correct?
A. 1 only B. 2 and 3 only C. 1 and 3 only D. 1. 2 and 3 only
Answer: B
5. With reference to 'Financial Stability and Development Council', consider the following statements: (UPSC 2016)
1. It is an organ of NITI Aayog.
2. It is headed by the Union Finance Minister.
3. It monitors macroprudential supervision of the economy.
Which of the statements given above is/are correct?
A. 1 and 2 only B. 3 only C. 2 and 3 only D. 1, 2 and 3
Answer: C
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Source: PIB
