The Expansive Reach of India’s Co-operative Movement

India’s cooperative movement is not just a chapter in an economics textbook – it is the backbone of the livelihoods of hundreds of millions of people. From a small farmer in rural Gujarat securing fertilizer at a fair price to a dairy producer in Anand receiving payment directly without a middleman, cooperatives have quietly shaped India’s economy for over a century. Today, India accounts for nearly 27% of all cooperatives in the world, making it home to the single largest cooperative movement on the planet.

The sheer scale of India’s cooperative network 🔗

The numbers are staggering. India has over 6.21 lakh functional cooperative societies with a combined membership exceeding 29 crore people – that is nearly one in every five Indians connected to a cooperative in some form. For context, the Ministry of Cooperation’s National Cooperative Database tracks around 8.5 lakh cooperatives across all sectors, capturing the full breadth of registered societies at both state and national levels.

These cooperatives span an enormous range of sectors: agricultural credit, dairy, sugar, fertilizers, fisheries, housing, handlooms, handicrafts, consumer goods, and banking. With 98% coverage in rural India, cooperatives are deeply embedded in the rural economy, ensuring sustainable livelihoods for farmers, women, youth, and marginalized communities. Of the 300 largest cooperatives in the world by turnover, 15 are from India, with IFFCO ranked first and Amul second among Indian entities.

State-wise spread 🔗

The geographic distribution of cooperatives reflects India’s diversity. Maharashtra leads the country with the highest number of cooperative societies, driven by its strong tradition in agriculture, dairy, and rural banking. Gujarat follows with over 76,000 functional cooperatives, buoyed by success stories like Amul. Karnataka ranks third with nearly 39,000 societies. Interestingly, Kerala, with just over 7,000 functional societies, has a membership of nearly 2.94 crore individuals – a testament to the depth of cooperative penetration in the state, where credit unions, consumer cooperatives, and housing societies have become a way of life.

Agricultural credit cooperatives: the oldest pillar 🔗

The cooperative movement in India was born from the agrarian crisis of the late 19th century. The Cooperative Credit Societies Act, 1904 was enacted to channel institutional credit to farmers who were otherwise at the mercy of exploitative moneylenders. This gave rise to Primary Agricultural Credit Societies (PACS) – the foundational units of the rural credit cooperative structure.

PACS operate at the village level, providing short-term credit for crop production, seeds, and inputs. Above them sit District Central Cooperative Banks (DCCBs), and at the apex are State Cooperative Banks. This three-tier structure remains the primary formal credit delivery system for millions of small and marginal farmers across rural India. The legal architecture supporting this network is rooted in state laws – cooperative societies are a state subject under Entry 32 of the State List of the Seventh Schedule of the Constitution, meaning each state governs its own cooperatives through its respective Cooperative Societies Act.

Fertilizer cooperatives: IFFCO and KRIBHCO 🔗

Among the most consequential cooperative institutions India has built are its fertilizer giants – IFFCO (Indian Farmers Fertiliser Cooperative Limited) and KRIBHCO (Krishak Bharati Cooperative Limited).

IFFCO was registered on November 3, 1967, starting with just 57 member cooperatives. Today, it has grown into one of the world’s largest fertilizer cooperatives, with around 35,000 member cooperatives and a reach extending to over 50 million Indian farmers. It holds approximately 19% market share in urea and around 31% in complex fertilizers. What makes IFFCO’s model distinctive is its democratic ownership – farmers, through their cooperative societies, are the actual shareholders. Profits flow back to the community rather than to external investors. IFFCO has also diversified well beyond fertilizers, venturing into rural insurance (IFFCO Tokio), nano fertilizer research, and rural telecommunications, making it a comprehensive rural services organization.

KRIBHCO, established in 1980, complements IFFCO’s role with a focus on specific regional agricultural needs. It operates fertilizer plants, provides crop protection chemicals, supports soil health management through testing laboratories, and delivers agricultural advisory services. Together, IFFCO and KRIBHCO are described as the twin pillars of India’s cooperative fertilizer ecosystem, playing a critical role in maintaining the balance between fertilizer demand and supply across states. Their importance was underscored most recently during Kharif 2025, when both organizations worked at near full production capacity to ensure urea availability, helping India secure a total of 230.53 lakh metric tonnes against a projected demand of 185.39 lakh metric tonnes.

Dairy cooperatives: the white revolution 🔗

No story of India’s cooperative spread is complete without the dairy sector – and no dairy story is complete without Amul.

Amul was born in 1946 as the Kaira District Cooperative Milk Producers’ Union Limited in Anand, Gujarat. Before Operation Flood, India’s dairy sector was largely unorganized, dominated by middlemen, and suffered from low productivity due to poor infrastructure. Milk producers were trapped in a cycle where intermediaries dictated prices and farmers had no market access. Amul broke this cycle by organizing farmers into village-level dairy cooperative societies and linking them directly to urban consumers, eliminating the middleman entirely.

The architect of this transformation was Dr. Verghese Kurien, who set up the Kaira District Cooperative Milk Producers’ Union in 1950 and later, in 1965, became the founding head of the National Dairy Development Board (NDDB). When Prime Minister Lal Bahadur Shastri visited Anand and saw the cooperative model in action, he tasked Kurien with replicating it nationwide – and Operation Flood was born.

Operation Flood and the Anand Pattern 🔗

Launched in 1970, Operation Flood created a National Milk Grid linking milk producers across India with consumers in over 700 towns and cities, reducing seasonal and regional price variations. At the foundation of this system were village milk producers’ cooperatives operating on what became known as the Anand Pattern – a three-tier structure comprising village-level Dairy Cooperative Societies (DCS), district-level milk unions for processing, and state-level marketing federations.

The programme was implemented in three phases between 1970 and 1996. By the end of Phase II in 1985, a self-sustaining system of 43,000 village cooperatives covering 4.25 million milk producers had become a reality. Phase III added 30,000 more dairy cooperatives. The results were transformative: India transformed from a milk-deficient nation into the world’s largest milk producer, surpassing the United States in 1998. Milk production, which stood at just 21.2 million metric tonnes before Operation Flood, climbed to 53.9 million metric tonnes by 1990-91.

Today, Amul is managed by the Gujarat Cooperative Milk Marketing Federation (GCMMF), jointly owned by more than 3.6 million milk producers in Gujarat. It processes over 3.5 crore litres of milk daily and exports products to over 50 countries. The cooperative model has also been replicated at the state level – Tamil Nadu has Aavin, Kerala has Milma, and Karnataka has Nandini – each serving as the dairy lifeline of their respective states.

Social impact beyond milk 🔗

Dairy cooperatives have been powerful instruments of social equity. Since milk production does not require much land but benefits from family labour which the rural poor have in abundance, the landless and marginal farmers could participate meaningfully in the White Revolution. Women, who are the primary caretakers of milch animals in most rural households, were integrated into the cooperative governance structure. The number of women members in dairy cooperatives grew from 0.62 million in 1986-87 to 2.47 million by 2001-02 – a social transformation that accompanied the economic one.

Sugar, housing, and other cooperative sectors 🔗

The cooperative footprint in India extends well beyond agriculture and dairy. Most sugar production in India takes place at mills owned by local cooperative societies, with members including all farmers – small and large – supplying sugarcane. Maharashtra, in particular, has a deep connection between sugar cooperatives and rural economic life, though this has also produced political entanglements that have sometimes compromised efficiency.

Housing cooperatives serve urban and semi-urban members across three broad categories – tenure cooperatives (collective ownership and management), finance cooperatives (providing loans for construction or repair), and building cooperatives (constructing housing for members). Consumer cooperatives, handloom cooperatives, and fisheries cooperatives round out the picture of a movement that has woven itself into nearly every productive sector of Indian society.

The Ministry of Cooperation and recent policy push 🔗

Reflecting the strategic importance of the cooperative sector, the Government of India established a dedicated Ministry of Cooperation in July 2021, with the vision of Sahkar se Samriddhi – prosperity through cooperation. Before this, cooperative policy was handled by the Ministry of Agriculture. The new ministry signals a renewed political commitment to strengthening cooperatives at the grassroots, easing the regulatory burden on multi-state cooperatives, and bridging technological gaps in cooperative governance.

The National Cooperative Database being developed by the ministry aims to provide single-point access to authentic data on all 8.5 lakh cooperatives, enabling better planning, policy-making, and identification of geographical gaps in cooperative coverage. Simultaneously, Primary Agricultural Credit Societies (PACS) are being converted into Pradhan Mantri Kisan Samriddhi Kendras (PMKSKs), transforming them into one-stop shops for farm inputs, credit, and advisory services.

India’s cooperatives in a global context 🔗

India accounts for nearly 27% of all cooperatives globally and has over 20% of its population participating in the cooperative movement, compared to a global average of just 12%. Among the 300 largest cooperatives in the world by turnover, IFFCO is ranked 72nd, Amul 90th, and KRIBHCO 236th. India ranks second in the Asia-Pacific region and sixth globally in terms of the number of large cooperatives – a position that reflects both the scale and the maturity of the movement.

What makes this global standing remarkable is that it was built not through corporate capital or state monopoly, but through the collective action of farmers, dairy producers, and rural communities – most of them small-scale, many of them belonging to historically marginalized groups. The cooperative model proved that democratic economic organization can deliver efficiency, equity, and scale simultaneously, and India’s experience has inspired cooperative development programmes in countries ranging from Pakistan to Sri Lanka to several African nations.

What do you think? India’s cooperative movement has achieved remarkable scale, yet challenges like political interference in governance and competition from private players continue to test its resilience – do you think the democratic ownership model of cooperatives is strong enough to withstand commercial pressures in the long run? And given that states like Kerala demonstrate high membership with fewer societies while others have more societies but lower penetration, what does this tell us about what truly makes a cooperative movement effective?

References

1. https://www.nabard.org/annual-report/cooperatives-tackling-challenges-building-opportunities.html
2. https://www.indiancooperative.com/from-states/india-has-6-21-lakh-co-ops-and-29cr-members-co-op-database/
3. https://www.cooperation.gov.in/index.php/national-cooperative-database
4. https://coops4dev.coop/en/4devasia/india
5. https://www.nabard.org/pdf/2024/cooperatives-tackling-challenges-building-opportunities.pdf
6. https://en.wikipedia.org/wiki/Indian_Farmers_Fertiliser_Cooperative
7. https://www.indiancooperative.com/from-states/co-ops-anchor-indias-fertilizer-security-in-kharif-25-iffco-kribhco-lead/
8. https://amul.com/m/a-note-on-the-achievements-of-the-dairy-cooperatives
9. https://en.wikipedia.org/wiki/Verghese_Kurien
10. https://www.nddb.coop/about/genesis/flood
11. https://en.wikipedia.org/wiki/Operation_Flood
12. https://www.drishtiias.com/daily-news-analysis/amul-a-pillar-of-india-s-dairy-sector
13. https://en.wikipedia.org/wiki/Cooperative_movement_in_India