Explainer: Why Congress wants to stop an ordinance to amend Kerala Co-operative Societies Act

It’s feared that the amendment to grant voting rights to non-elected members would give more power to the state government and erode the rights of dairy farmers.
Women at Milma milk processing unit in Kerala
Women at Milma milk processing unit in Kerala
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The Kerala Leader of Opposition VD Satheesan recently wrote to Governor Arif Mohammed Khan urging him not to sign the ordinance on the Kerala Co-operative Societies Act (second amendment) 2022, as it has the potential to undermine the democratic functioning of Kerala Co-operative Milk Marketing Federation, popularly known as Milma.

The main concern of the Opposition is that the proposal to amend Section 28 of the principal Act, through the ordinance route, is aimed at providing voting rights to non-elected members in the election of the administrative committees of the regional cooperative milk producers unions. Currently as per the Act, such co-opted members do not have the right to vote in any election of the co-operative society in their capacity and are not eligible to be elected as office bearers of the board.

The three tier-set up of Milma

Milma enjoys a near monopoly in the milk market in the state. There is a vast, well-connected network of dairy farmers, who keep the sector vibrant and have transformed it into a successful model. Formed in 1980, the Kerala Co-operative Milk Marketing Federation (KCMMF) is a three-tiered organisation with 3,366 Anand-model primary milk co-operative societies. In the Anand pattern, producers are directly linked with the consumers, making it beneficial to small-scale farmers.

Milma, as on March 2021, has 9.96 lakh local milk producing farmers as members.There are three regional societies — TRCMPU  for Thiruvananthapuram (southern) region, ERCMPU for Ernakulam region (central) and MRCMPU for Malabar region (northern Kerala). While each co-operative union has its own governing body, dairy farmers are its members. The cooperative societies are a three-tier set up with the primary societies as basic units.

Above the primary societies come the Union and the three state federations. Milma functions as a single-window operating system by collecting milk from the primary societies, which collect the milk from farmers. As per the data on Milma website, the milk procurement in the state has shown an increase from 52,000 litres per day during 1983 to over 13.51 lakh litres per day in 2020-21. The average milk sales per day for the 2020-21 was 13.10 lakh litres. 

The proposed amendment

Hitherto, the voting rights to the regional units are vested with the presidents of the primary co-operative societies. “But sometimes the primary societies in which discrepancies are found will be dissolved and such societies will be placed under the control of administrators or administrative committees. The right to contest the regional societies and to vote is vested only with the president. If the elections to the primary committees, which are dissolved, are pending, they won’t have representatives in the election to regional societies. With the amendment, the person chosen by the administrative committees can take part in the general body meetings of regional committees and would have the right to vote as well,” a government source told TNM. 

The amendment will add a new provision to Section 28 (sub clause 8) of the Cooperative Societies Act, 1969 and would do away with the situation of primary societies not having representation in the regional committees, the source explained. When the ordinance is passed, the nominated members who didn’t have voting rights hitherto will have voting rights. 

“The amendment will be applicable to Anand-model cooperative societies and other societies that work in the same model. A ‘notwithstanding’ clause has also been added to the amendment, which will  give an overriding power to the government to withstand anything contained in the law. While there are certain conditions to be an elected member, nominating a member becomes the prerogative of the government. This will dilute the election process for the societies,” a senior government official said.

The government argument is that the amendment would ensure representation for societies which are under administrator or administrative committee rule. “But the government has the power to dissolve any committee, bring it under administrative rule and thereby nominate members.” the official said. This would give undue advantage to the state government to take control of societies if they wish so.

The opposition by Congress

VD Satheesan in the letter to the Governor alleged that an ordinance was being brought forth to sabotage the Regional Co-Operative Milk Producers managing committee election. According to Satheesan, the nominated members are being given voting rights so that they can wrest control of the society through shortcuts.

With the amendment, the ruling government can easily get a milk society under its control, says Prayar Gopalakrishnan, former chairman of the federation. “With the amendment, the government can nominate members to primary milk marketing societies. But the nomination, with the amendment, is possible only to the primary societies and not to the upper bodies,” says Gopalakrishnan, who was instrumental in the growth of the Milma.

Gopalakrishnan says Milma has attained the stature comparable to international bodies over the years and the amendment would have an adverse impact as the state government would have more control. Now, the farmers are the backbone of the society but could be taken over by politicians if non-elected members are allowed to vote, he said. “Milma’s style of administration has been a model to everyone; distorting it does not suit a farmers' movement,” he added.

The second Pinarayi Vijayan government led by the CPI(M) had recently brought in an ordinance to make certain amendments to the Kerala Lokayukta Act, 1999. The amendment, which stirred a controversy and was cleared by the Governor in February, cut down the powers of the anti-corruption agency to merely an advisory in nature.

It's also to be noted that Kerala is the one state that vehemently opposed the Union government’s formation of the Union Ministry of Cooperation, claiming that would destroy federalism. In an interview to TNM, senior CPI(M) leader and former Finance Minister Thomas Isaac said that the agenda of Union Home Minister Amit Shah is to make political inroads into the state and Kerala will fight it tooth and nail.

Prayar Gopalakrishnan further said: “Doing away with the voting power of societies does not befit democracy. This is an act of taking away the powers of the societies. The amendment is to capture the establishment (the societies) to rein in the societies. This is a farmers’ establishment, even for voting power in the society a farmer needs to have distributed milk in a stipulated time of a year. The amendment will keep these farmers away from having voting rights. This does not suit a cooperative movement.”

The amendment’s impact would however be limited to Milma societies, Gopalakrishnan said. “In Milma societies, as per the by-law, only those who distribute milk can become members of the society or become part of its administration. This is not the case with other Cooperative societies. Hence the amendment will be impacting only Milma societies," he said. 

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