3.a) The new rural cooperative system for Comilla Thana

In accordance with the structure of the project area having a central town with a strong socioeconomic influence an a larger number of villages and the limited abilities of the peasants, the new cooperative system was organized as a two tier system.
Primary societies have been organized in individual villages. It was expected that it would not be possible to form groups consisting of several villages and that because of factions not even all farmers of one village but only some of them could be organized. These villages societies, with a membership of less than 50, were too small to be business cooperatives but were thought of as aid cooperatives helping the higher tier of the system to perform its functions. These outposts helped in the communication, distribution, collection of savings and extension of agricultural techniques from the central cooperative to the peasants.

Thana Central Cooperative Association

Individual village cooperatives are united in the higher tier, the activities of which are those of a business cooperative. This Cooperative supervises the activities of the village cooperatives, such as saving, utilization of credit and division of profit into investment savings. The constant supervision of resource use, in particular, ensures the high investment rate. Besides, the Central Cooperative Association supplied all such services which can not be organized at the village level, like machines, marketing, processing, etc. An important aspect of the relation between Central Cooperative Association and village societies is the constant training given by the Association which will be discussed below.

Some features of the activities of cooperative societies deserve special mention.

1. Capital formation

Rural development is looked upon as an undertaking which requires much investment. In order to make the capital available, each member is required to save at least 50 paisas (Pak Rs 0.50) a week. This sum is collected at the weekly night meeting and deposited into the account of the Central Association. In making this request, the scheme deviates from the tradition of cooperative development in many countries which usually promises something like cheap credit to the peasants. Here, duties are assigned and the saving which is supposed to develop into habit is rigidly enforced. With this policy, a considerable amount of capital formation has been achieved.

2. Supervised credit

A new credit system has been developed to replace the traditional moneylender. Credit requirements of individual members have to be included in the request of the village society and have to be based an a production plan. As a rule, at least ten per cent should be covered by savings and shares of the particular member. This determines the top limit of the credit to be granted. The credit, usually in kind, is made available at appropriate time and is issued to the societies and not to individuals. The societies remain responsible for proper use and repayment. The central cooperative charges six per cent interest plus five per cent for supervision expenses. The cost of supervision is rather high, but as a result of the strict supervision, the repayment rate is 99 per cent. Repayment is made in cash or to a proportion of about 50 per cent in kind.

3. Maintenance of discipline

In order to establish and maintain a disciplined pattern of work in the village societies, the duties assigned to them, like weekly savings, regular meetings, etc., are controlled and the right of the Central Cooperative Association to dissolve inactive village societies or dismiss inactive members has been made use of.

4. Membership of non farmers

While initially most of the members have been farmers, in recent times more and more non farmers obtained membership. Their benefit is more limited and their main interest lies an the credit side. For instance, landless labour use the credit they can get by savings of ten per cent of the credit amount to pay the rent of a piece of land and become tenants.