INTRODUCTION
The success
of milk co-operatives organised under Operation Flood in India has
inspired the National Dairy Development Board (NDDB) to experiment
with the Anand Pattern milk co-operatives in production and market-ing
of various other commodities. In 1985, the NDDB prepared a pilot project
to meet rural needs of forage and fuelwood through co-operatives of
tree growers. The project was launched in 1986 and the Spearhead Teams
operating under the project started organising the Tree Growers' Co-operatives
(TGCs) at the village level. A national level federation of these
co-operatives was promoted in 1988 as the Rashtriya Vriksha Mitra
Sahyog Limited, The Federation was renamed as the National Tree Growers'
Co-operative Federation Limited (NTGCF) in 1992. By the end of the
year 1994-95, the NTGCF had under its umbrella a total of 307 village
level TGCs in six States, namely, Gujarat, Rajasthan, Orissa, Andhra
Pradesh, Karnataka and Uttar Pradesh. These TGCs had planted trees
on about 4,502 hectares of revenue wastelands by the end of 1994-95.
The village
level TGCs motivate people to grow suitable trees and grasses for
meeting their needs of fuelwood, fodder and small timber, in particular,
and to improve the ecological-environmental status, in general. Accordingly,
the most important activities for these TGCs have been:
1) to lease-in village wastelands from the government
and grow trees and grasses on them under the co-operative ownership,
2)
to adopt suitable soil and water conservation measures on the leased-in
wasteland to improve its quality,
3)
to provide incentives for growing nurseries and planting trees and
grasses on private lands,
4)
to provide proper marketing facilities for disposal of the surplus
produce of the leased-in wasteland as well as tree produce of the
private lands,
5) to facilitate installation of bio-gas plants,
construction of smokeless chulhas and use of solar and pressure cookers
for energy conservation,
and
6)
to organise awareness - and skill - building programmes.
All these activities use a variety of resources and produce a variety
of outputs or impacts. The conventional financial accounts presently
prepared by these co-operatives are not meant to capture the achievement
of their above-mentioned objectives. These accounts are therefore
not sufficient for assessing their performance and guiding them in
making appropriate decisions in line with the above objectives. There
is a need for these co-operatives to evolve an additional suitable
accounting system that takes into account all physical, financial,
economic, environmental and social implications of their activities.
The present study has therefore been conducted with the following
objectives:
1. To propose a methodological framework
for preparing a set of accounts for tree growers' co-operatives that
incorporate all social,
economic and environmental impacts of their activities.
2.
To apply the proposed framework to develop such accounts for some
tree growers' co-operatives operating in different situations.
The following four village level TGCs were selected for applying the
framework.
(1)
Samal TGC, taluka Thasra, district Kheda, Gujarat,
(2)
Tada Talav TGC, taluka Khambhat. district Kheda, Gujarat
(3)
Dob TGC, tehsil Lalsot. district Dausa, Rajasthan, and
(4)
Bhatiyani TGC. district Ajmer, Rajasthan.
METHODOLOGY
The study
has proposed two sets of accounts - flow accounts and stock accounts.
The flow accounts would be based on various types of annual flows
of benefits and costs, They would include the collection of fuelwood,
timber, fodder, seeds, fruits, vegetables and other forest produce,
use of various inputs like labour, fertiliser and water, changes in
soil and air quality, employment generation, growth in standing biomass
and so on during the accounting year. The stock accounts would indicate
the status of various stocks like standing wood biomass, soil, water,
air and various cumulative benefits and costs at a point of time.
The flow accounts would include individual flow accounts as well as
an aggregate flow account. Similarly, the stock accounts would include
individual stock accounts as well as a balance sheet indicating overall
assets and liabilities. Both sets of accounts are proposed to have
the following three sections:
1)
physical;
2)
financial; and
3)
economic and social.
The physical section would give an idea of numbers and quantities
associated with each entry in the accounts. These entries would facilitate
valuation, on one hand, and be the sole indicator, on the other, in
case of difficulty in valuation. This information is also important
in the sense that while the monetary values may sometimes present
a distorted picture due to inflation or market imperfections, the
physical values are not affected by such factors.
The financial section would indicate the actual monetary implications
associated with each entry from the viewpoint of the organisation;
i.e., the TGC. It will include even the transfer payments. This section
will have almost one-to-one correspondence with the present financial
accounts of a TGC except for some corrections that are needed in its
present financial accounts. The financial performance of a TGC can
be judged from this section.
The economic and social section would combine all economic, social
and environmental implications of the activities pursued by a TGC.
The economic accounting will take into account all inputs, outputs
and impacts associated with the activities of a TGC irrespective of
who gets affected. This will also take into account the environmental
impact which can be valued. The social considerations would include
income redistribution and merit and demerit goods.
Though it is important to know the aggregate benefits and costs from
the viewpoint of the whole society to assess the social desirability
of a TGC, it is equally important to assess the benefits and costs
from the angle of the owners to know whether it is in their interest
to continue the organisation. It is therefore suggested to further
divide the 'economic and social' section into two sub-sections: (1)
Internal, and (2) External. The 'Internal' sub-section would include
the economic value of all those costs and benefits that are caused
either to the TGC or to its members. That is, such costs and benefits
are internal to the organisation and its owners. The difference between
this head and the financial head would show what additional benefits
or costs are caused to the members in addition to what is caused to
them as the owners of the organisation. This head therefore shows
the total costs and benefits that are caused to the members either
through the organisation or separately.
The intention of the 'external' sub-section is to indicate the economic
value of all those costs and benefits that occur to the outside society.
Whenever it is not possible to divide certain costs or benefits between
the members and the outsiders, it is proposed to include the impact
under 'external'.
RESULTS AND CONCLUSION
A set
of four accounts has been finally prepared for each of the four selected
TGCs. These are : (1) Flow Account, (2) Tree Biomass Account, (3)
Environmental Account, and (4) Balance Sheet. The environmental account
incorporates the accumulated changes in soil quality and amounts of
carbon sequestration. The changes in soil quality have been assessed
by the changes in the contents of major nutrients (nitrogen, phosphorous
and potash), pH and electrical conductivity.
The use of the proposed accounting system for the four TGCs presents
a picture of these co-operatives which is very different from what
is presented by their financial accounts. The financial accounts of
Sarnal TGC show a net income of merely Rs. 760 during 1994-95 and
the financial net worth at the end of 1994-95 only as Rs. 7,089. The
proposed accounting system indicates an economic and social income
of Rs. 4.15 lakh to the co-operative and its members, and of Rs. 59
thousand to the outside society during 1994-95. The economic and social
net worth of the co-operative is indicated to be about Rs. 6 lakh
at the end of 1994-95. The Sarnal TGC has thus done much better than
what is indicated by its financial accounts.
On the other hand, the proposed system shows that the actual performance
of the other three co-operatives is much worse than what is indicated
by their financial accounts.
It is
expected that the use of the proposed accounting system will provide
timely information to make appropriate internal decisions to improve
the performance of the organisation. It would help NTGCF in effecting
timely interventions, if required. At the same time, it would help
in presenting a correct picture of the TGCs to the outsiders, particularly
to the policy makers.
The accuracy of the proposed accounting system would, however, very
much depend on the correctness of financial accounts, precision in
measuring tree biomass and changes in soil quality, reliability of
estimates of freely collected minor forest produce and so on. It would
be necessary to follow appropriate sampling procedures and record
their details for proper interpretation of the samples. Proper training
and incentives would need to be provided to the persons responsible
for maintaining such system of accounts.
For
further information, contact:
Prof.
Rakesh Saxena
Institute of Rural Management,
Anand-388 001
Prof. Rajesh Agarwal
Indian Institute of Management, Vastrapur Ahmedabad - 380 015
