The newly-approved National Co-operative Exports Limited (NCEL) will cover agriculture and allied activities as well as handloom and handicrafts items by enrolling a large number of co-operatives under its fold with a target to double its revenue by 2025 from the current level of about ₹2,160 crore among 10 major co-operatives that will be its members.
NCEL will have an authorised share capital of ₹2,000 crore in which the initial paid-up share capital will be ₹500 crore to be contributed equally by Indian Farmers Fertilizer Cooperative (IFFCO), Krishak Bharati Cooperative (KRIBHCO), National Agricultural Cooperative Marketing Federation of India (NAFED), Gujarat Cooperative Milk Marketing Federation (GCMMF) and National Cooperative Development Corporation (NCDC), sources said. The Cabinet last week approved its creation.
Main issues
Initially, the registered office will be in New Delhi and NCEL will start operating from GCMMF’s Delhi office, sources said.
In the co-operative sector, the export turnover of GCMMF which owns the AMUL brand, was highest at ₹1,530 crore whereas its turnover was ₹46,481 crore in 2021-22. In all the other cooperatives, the revenue from export is even lower against turnover, officials pointed out.
“Sufficient finance, export orientation, adequate infrastructure, standardisation, market awareness and certification of products are some of the main issues that need to be addressed for growth of exports by cooperatives,” an official said. Proper institutional support for aggregation of domestic surplus, working capital, logistics, technical know-how and training are required by the cooperatives to raise their share in export basket, the official added.
“Only a few co-operatives are directly involved in exports despite their widespread presence and substantial contribution in the economy,” the official said, adding NCEL could easily help double the export turnover of co-operatives in the next two years.
Operating as biz entity
As there is no financial contribution by the Centre nor its interference in management of NCEL, the society is likely to operate purely as a business entity, similar to what AMUL has demonstrated, the official said. However, some experts said that unless it gets into direct export on its own, the fate of NCEL could be similar to NAFED.
Agri cooperative NAFED was government’s canalising agency for export of onion for a number of years and it used to certify export deals entered by private traders with importers.
Experts have also warned that NCEL should not be made dependent on government-to-government (G2G) business as any geopolitical conflict may have adverse implications. The byelaws, however, allow NCEL to act as an umbrella organisation for working as an Export Business House for goods and services of co-operatives and other related entities including G2G trade with support from Commerce and External Affairs ministries.
As NCEL has been tasked to organise trade fairs, exhibitions and buyer-seller meets, an over enlarging role may be seen as a conflict of interest as there are several commodity Boards already entrusted with the same task, an expert said.
The area of operations marked for NCEL includes agriculture, horticulture, dairy, poultry, livestock, fisheries (including marine), sugar, spices, organic products, fertilizer, handloom, handicraft, textile, tea, coffee, minor forest produce, Ayurvedic and herbal medicines, processed food and leather.