Today's Business Standard carries an article stating that the Central Govt. will provide a guarantee worth Rs 1200 crore to NAFED. NAFED is an agri-produce marketing co-operative. One gets to hear about NAFED when prices of commodities rise.The govt usually depends on NAFED to procure high-price commodities and sell them through govt.channels at reasonable prices.The fact that NAFED is used largely for keeping prices in check gives one the impression that it has urban consumer interests in mind rather than interests of its members i.e. farmers. In fact the bias towards urban consumers vis-a-vis producers has a long history which an IRMA alumnus Avinash Kishore highlights in one of his blog posting.
NAFED also acts as the canalising agency for agri-products in India.
Inspite of this, it has performed very badly.And hence the 1200 crore package. What is shocking is that there is a plan for the Agriculture Ministry to own 51% of the co-operative till this guarantee is present.
The reason that AMUL has succeeded is because Dr.Kurien kept ministers and bureaucrats at arm's length. He never allowed them to interfere in the functioning of co-operatives.And today, Amul is Asia's biggest food brand!
How can a co-operative be owned by the government? It is silly and disgraceful.So much for a farmer's co-operative, as the launch page of its website states!