Primary Agriculture Credit Societies in crisis

THIRUVANANTHAPURAM  Primary Agriculture Credit Societies in the state are facing a severe crisis following the government’s  indifferent attitude in facilitating payment of dues being written off under the Ashwas scheme and overburdening the societies by forcing them to meet the audit cost. The fluctuating interest structure  prevailing in the market had also had its impact on the primary societies. Various primary cooperative credit societies are complaining of a trend of thrusting the  extra burden of the Ashwas scheme on the societies. Out of the over 1600 societies , about 1100 societies are running at a loss even when the deposit base of cooperative sector had grown to over `68,000 crore. As per the Ashwas scheme of 2010, the societies had to write off the interest if it exceeds the principal amount. The government has a commitment to  offset the losses incurred on this account by the societies.  But, of late, it has become a ritual on the part of the government to keep aloof, says  A M Rize, president of the Venjarammoodu Cooperative Society. “The exploitation of the weak societies are going on without any respite. The governments can announce any scheme and offer largesse. However, in this case it has shifted the burden of finding the resources on societies,’’he said. He pointed out that while the fixed deposits attracts 11 percent interest, it is literally impossible to find means to pay the interest when the penal interest is written off. Against his backdrop, most of the societies are reluctant to provide agriculture loans to farmers leading to farmer suicides as in Wayanad.Further, as per the Cooperative Act of 1969, societies have to bear the burden of  audit cost besides having to pay the audit fee and affiliation fee. It has been pointed out that an audit officer engaged in auditing at an A Grade society will be drawing a monthly salary of `25,000 to `35,000. Besides, he may be given all the benefits due from the government. The entire amount is paid in advance. Rize said his society had paid `1,68,000  as cost for six months. He said that instead of burdening the poor and loss- making societies, the government should  pay the salary and other benefits of its employees. Cooperative Department officials point out that many of the primary societies are functioning in violation of the Cooperative  Act and rules. It had been noticed that some of the societies even deny the legitimate benefits of the depositors and  shareholders. To curb such activities, it would have been better to conduct team audit in place of engaging a single auditor for a whole year. They point out that if team audit was  held, a good amount could be saved in audit cost. They also pointed out that there was no mechanism for internal audit in such societies.