Limitation on working areas of co-ops proposed

Published On: September 12, 2016 08:36 AM NPT By: Sagar Ghimire | @sagarghi

KATHMANDU, Sept 11: The government has proposed a new measure to limit the working areas of a cooperative within a village development committee (VDC).

According to the Cooperatives Bill 2073, which the government has recently registered at the Parliamentary Secretariat, a cooperative established in a VDC will have to be based in the same VDC. However, a cooperatives registered in a municipality can have up to three wards as its working areas. Cooperatives registered in metropolitan and sub-metropolitan cities will be able to cover one and two wards, respectively, as its working areas if the bill is approved by the parliament.

The new measure comes in the wake of cooperatives mushrooming in certain areas, particularly urban places, while reluctant to go to the rural areas.

According to the proposed provision in the new bill, cooperatives, which are already registered with more than allowed working areas, have to scale back their working areas within three years of the new law coming into effect. If the cooperatives failed to scale down their operation, the Department of Cooperatives or District Cooperatives Office can fix working areas for cooperatives.

Cooperatives, however, can gradually extend their operation areas. The proposed arrangement in the bill allows a cooperative to increase its operation to entire district after three years of operation.

In a bid to encourage agro and production-based cooperatives, the government has, however, proposed to allow cooperative business on agriculture and forest products, processing, storage and marketing, electricity production, transmission and distribution, health and education to operate in more than one district after getting permission from the cooperatives registrar.

However, the new bill proposes that there cannot be more than one saving and credit cooperative in each ward of municipality, metropolitan and sub-metropolitan cities, and one in a VDC. If more than one saving and credit cooperatives are already into operation, they will have to go for a merger by completing necessary procedure within three years.

“Since cooperatives are meant to serve members in their community, it’s not necessary for them to cover a lot of geographical or working area,” Shankar Prasad Adhikari, secretary at the Ministry of Cooperatives and Poverty Alleviation, told Republica.