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3.    HISTORICAL DEVELOPMENT IN SELECTED COUNTRIES

Japan

3.1     Japan had organized many cooperatives in the later part of the 19th century and was in 1900 the first country to introduce a cooperative law in Asia (Sagyo Kumiai Law), based on German Cooperative Law. In 1943 this law was amalgamated with the farm organizations law, known as Ngio Kai or Farm Association Law, which involved compulsory membership for all Japanese farmer. This law however had no cooperative contents, and was replaced by the Agricultural Cooperative Law in 1947. Since then separate laws have been enacted for different types of cooperatives.

India

3.2     In India, the beginning of cooperatives is linked to the Nidhi's in the Province of Madras, in the second half of 19th century. These were quite similar to Raiffesen credit cooperatives. Other types of cooperatives, like consumer cooperatives, were also organized on the basis of the Rochdale model, in the last decades of the century. Seeing these trends and considering the problems of rural agricultural economy, the First Cooperative Law of India was enacted by the British in 1904, covering the undivided India (including Bangladesh, Pakistan, and Burma). The law covered only credit cooperatives and was repealed by a new law to cover various types of cooperatives in 1912. The 1912 cooperative law focused on provisional issues and provinces were given powers to enact their own cooperative laws. Henceforth, all provinces/states introduced own cooperative laws. To cover the cooperatives that have members in more than one State, the Multi-unit Cooperative Societies Act was introduced by the Government of India in 1942. This Act was an enabling Act and was replaced by a comprehensive enactment i.e. Multi State Cooperative Societies Act 1984 and is presently operative.

Bangladesh

3.3     Cooperatives in Bangladesh, as a part of India until 1947, were regulated by the Bengal Cooperative Societies Act of 1940, which was replaced by the cooperative society ordinance in 1984.

Myanmar

3.4     The Indian Cooperative Act of 1904 and later the Act of 1919 applied to cooperatives in Myanmar. The first agricultural credit society was registered in January 1905. Myanmar experienced an economic depression from 1929 onwards and many cooperatives had to be liquidated under a new Cooperative Act of 1927. This Act remained valid for around 30 years, but it was replaced by the Act of 1956. When the Revolutionary Council came into power in 1962 it replaced the 1956 Act by a cooperative law of 1970 in which cooperatives were formed on territorial basis, lost their voluntary character, and became part of the socialist economy. The law was repealed in 1992, restoring cooperative autonomy in Myanmar.

Pakistan

3.5     After partition of India and establishment of Pakistan in 1947, Pakistan continued to retain the Bombay/ Sindh Cooperative Societies Acts of 1925. The Act is presently in operation, with certain amendments. In addition, a Cooperative Farming Act of 1976 was enacted for farming cooperatives along with a Multi Unit Cooperative Societies Act of 1942, for cooperative covering more than one province.

Indonesia

3.6     The initiation of the Indonesian cooperative movement can be traced back to the formation of first cooperative bank “Hulp en Spaarbank” of savings and assistance in the year 1895, the first consumer cooperative by Budi Utomo in 1909, and an organization by Javanese Medical School in Jakarta. Later, since 1913 Sarekat Islam, a political organization based on cooperative ideas, played an active role in promoting cooperatives and is reported to have created hundred of consumer cooperatives. The cooperatives became legal entities with the introduction by the Dutch Government on April 7, 1915 of Regulations concerning Cooperatives, based on the Netherlands Cooperative Law of 1876. This law was replaced by the National Government, first in 1967, and then again in 1992, regulating all types of cooperatives.

Malaysia

3.7     Earlier attempts to promote cooperatives in Federal Malay States, including Singapore, did not receive much response from the British Officialdom or the planting community, even though studies were made on the relevance of Indian and Burmese cooperatives in regard to Malaysian cooperative development. The Federal legislative council passed the first Cooperative Societies Act in 1922, based on the Indian Cooperative Societies Act of 1912. The Cooperative Act of 1922 was replaced by the Cooperative Societies Ordinance of 1948, regulating all types of cooperatives. The Ordinance has since been amended many times, last in 1993.

However, since the introduction of the Farmers Organization Authority Act 1973 (Act 109), the Director General has been made Registrar and has under the Act assumed legal authority over all agro-based cooperative societies along with farmers associations.

Nepal

3.8     In Nepal, the first cooperative department was established in 1956, with the task to promote cooperatives, followed by first Cooperative Law in 1959. A new law replaced this Law in 1986, and again in 1992. The latter is currently operative.

Philippines

3.9     The cooperative movement in the Philippines was sponsored by the civic and regional groups. The first Corporation law was introduced in April 1906 followed by the Rural Credit Cooperatives Associations Act in 1915. The establishment of cooperatives picked up particularly during the American occupation. Cooperatives were registered under the cooperative law no. 1459, enacted on April 1, 1906, Agricultural Credit Associations Act No. 2508, 5th February 1915 and cooperative marketing law no. 3425 on 9th December 1927, repealed in April 1973. Said laws continued to be valid along with sectorial regulations till all of them were integrated in the “Cooperative code of Philippines” in 1989.

Sri Lanka

3.10   The first cooperative law in Sri Lanka was enacted in 1911. This law was only for credit cooperatives, similar to Indian Cooperative Law of 1904. Only in 1921 were the law amended to cover other types of cooperatives. With the experience gained from about two decades of cooperative activity, in many fields, the Cooperative Societies Ordinance (Chapter 124) of 1936 was promulgated 'to consolidate and amend the law relating to the constitution and Control Of Cooperative Societies. "This law remained the principal law, with over eight amendments, until the promulgation of the cooperative societies law no.5 of 1972, which remains the principal law at present, however subject to four subsequent amendments. Recently a committee was appointed to draft a new law under the chairmanship of Mr. .B. Rajaguru, former Regional Director of the ICA, ROAP. The draft law has been widely discussed at district, provincial and national levels, and the final draft has been submitted by the legal draftsman and is awaiting approval by the Parliament.

Fiji

3.11  The first cooperative initiatives in Fiji can be traced back to the establishment of the Coconut Planters Union in 1919, and the Rewa Dairy Cooperative in 1923. However, the first cooperative ordinance was issued only in 1947, and was replaced in October 1996.

South Korea

3.12   In Korea, there had been various cooperatives in the early 20th century. During the Japanese occupation, financial association and farmers association were organized by the government initiative and played predominant role instead of voluntary cooperative organizations. These associations were formed to supply government loans or increase agricultural production. After the World War 2nd, the formation of modern agricultural cooperatives started from 1957 when the Agricultural Cooperative Law was approved by the National Assembly. In 1961 the new Agricultural Cooperative Law was enacted and former agricultural cooperatives and agriculture bank were merged into multipurpose agricultural cooperatives and is operative presently. Similar cooperative laws have been enacted for livestock cooperatives, fishery cooperatives, credit cooperatives etc. The Laws have been amended many times in last two decades and many restrictive provisions particularly relating to election have been deleting by democratic provisions.

Thailand

3.13   The first cooperative law in Thailand called The Amended Association Act 1914, was amended in 1916 and was introduced to register farmers cooperative in order to help rice growers, similar to the cooperative development in India/Burma. This act remained in place until 1928, then the Cooperative Societies Act of 1928 was replaced (the Amended Association Act 1914 was repealed). The latter Act was amended many times and finally replaced by a new law, the Cooperative Societies Act 1968 (the Cooperative Societies Act 1928 was repealed) which has also been amended many times, and a new draft Act is presently in the process of consideration by the Parliament.

China

3.14   After the People's Republic of China was founded, Agricultural cooperatives changed from elementary agricultural producers' cooperatives, advanced agricultural producers' cooperatives to People's commune and formed the system combining cooperatives and governments, which hurt the enthusiasm of farmers for production, hindered rural production. In 1979, rural reform was carried out in China, People's commune system was abolished, the dual management system within the framework of the household responsibility system was adopted. On above basis, all kinds of rural cooperatives developed gradually. In some areas, farmers organize farmers' special cooperatives, such as raising pig cooperatives, raising chicken cooperatives, plant cooperatives and so on. These cooperatives carry out activities according to the principle of mutual benefit, voluntaries, organized by farmers, managed by farmers, benefited by farmers. Some rural cooperatives formulate their own regulations. Regulations are approved by concerned authorities, and the cooperatives have therefore practically become state agencies. Ministry of Agriculture is in charge of the work and develops cooperatives in the way of guidance and direction. In order to promote cooperatives, a study on cooperative legislation is being carried out at present.


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