IOSR Journal Of Humanities And Social Science (IOSR-JHSS) Volume 13, Issue 2 (Jul. - Aug. 2013), PP 14-25 e-ISSN: 2279-0837, p-ISSN: 2279-0845. www.Iosrjournals.Org www.iosrjournals.org 14 | Page Cooperatives, Agriculture and Rural Development: Role, Issues and Policy Implications 1 Dr. Rabi N. Patra, 2 Mahendra P. Agasty 1 Reader in Economics Government Science College, Chatrapur, Ganjam-752010 2 Asst. Prof. of Economics, Silicon institute of Technology, Bhubaneswar-751024 Abstract: Cooperatives, credit cooperatives in particular, are an integral part of the Indian rural economy. They are having far reaching direct and indirect impacts on agricultural growth and rural development. In the changing scenario characterized by globalisation, structural adjustment programmes, transition from a centrally planned to a market oriented economy, processes of democratisation and decentralisation, agricultural industrialisation and rural out-migration, cooperative are facing new challenge. But they must succeed and have to be resilient to weather the transition. They need to reevaluate and reinvent themselves, adapt to the changing paradigm and reestablish their relevance as effective rural institutions. This paper reviews the evolution of cooperative movement, examines its role and problems, and highlights its potential to adjust to the new perspectives in the context of Odisha, India. It concludes with some policy suggestions reposing great hope on the cooperative sector. Key words: Cooperative credit, agriculture, rural development. I. Introduction India is essentially rural India. According to Census-2011, 68.84 per cent of total population of the country lives in the county side. They are virtually the cultivator, agricultural laborer, rural artisan, petty retail businessmen and small services provider. Agriculture, rural crafts, cottage industries, small business and services are the mainstay of the rural economy. Performance of the national and sub-national economies draws heavily on rural development and hence on the pace of growth of these activities and on the economic well- being of people engaged in them. Provision of credit; input supply; technology dissemination; value addition through diversification favoring high value agriculture, agro-processing and warehousing facilities; and creation of marketing network and infrastructure play a pivotal role in economic transformation in the villages and rural development. The need for institutional arrangements in these core areas is necessitated by the limitations of self-provisioning and heart-breaking exploitation of non-institutional agencies. Credit is the most vital input for economic activities in the rural areas and cooperative credit institutions are the main purveyors, other agencies being commercial banks and regional rural banks (RRBs). In spite of remarkable GDP growth and substantial diversification in production structure at the macro level in the recent years, the situation in the villages remains largely unchanged. The share of agriculture in GDP has drastically declined from about 50 percent in the 1950s to about 14 per cent during 2012-13 while that in employment reduced at a slow pace from about 75 per cent to 55 per cent during the said period. This means that changes in the production structure moved far ahead of those in the implement structure of the workforce. The ratio of worker productivity in agriculture to non-agriculture is registering a decline despite widespread application of improved farm technology in agriculture. Besides, workers are disinclined to work in agriculture and are migrating to small towns either as daily commuters or as seasonal and/or long period migrants to work in physically less demanding activities. The villages are giving a sad look devoid of prime age population while the urban areas are experiencing over congestion and vertical construction. In this backdrop an attempt has been made in the paper to focus on the evolution and role of cooperatives in rural development, and assess their problems and future prospects as agents of change, transformation and prosperity. The study covers the host of economic activities in the rural areas with concentration on agriculture, and the variety of rural cooperatives with specific reference to those dispensing agricultural credit. It is based on both secondary data obtained from various published sources and primary data collected from 100 agricultural households sampled out of 220 households of four villages of Iswarpur gram panchayat under Nilgiri block of Balasore district in Odisha, India. A five stage simple random sampling procedure has been adopted to select the sample households with the district, the block, the gram Panchayat, the villages and the households representing the five stages respectively. The primary data relate to the kharif season of the agricultural year 2012-13. Data have been collected by means of a well structured pre tested schedule canvassed in person among the respondents of sample households. Very simple statistical tools have been used to analyse data and interpret the results.