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What is the APMACS act?

Traditionally, coffee is mainly grown in developing countries between the tropics. This means that many of the farmers and processors at the very source of the supply chain do not come from wealthy backgrounds and, more often than not, will need support and resources in order to consolidate their trade.

In the Araku Valley in the Andhra Pradesh region of India, some of the key challenges faced by the indigenous peoples who relied on farming for their livelihoods was the fact they were socially, politically and economically isolated. As a result, it was difficult for these more primitive communities to truly capitalise on the natural resources they had at their disposal to operate a thriving coffee industry.

The need for change

Nevertheless, over the years there has been a concerted effort by authorities to establish thriving and – more importantly – self-sustained businesses.

To this end, May 4th 1995 was a very important date. This is because it is when a bill was unanimously passed by the Andhra Pradesh Legislative Assembly, to reform the way that cooperatives in the region operated. It was then notified on June 1st of the same year.

Described as a “landmark in the history of the cooperative movement in India”, the Andhra Pradesh Mutually Aided Cooperative Societies Act, 1995 – also known as the APMACS Act or the 1995 Act – was a revision of the provisions of the 1964 bill.

What exactly is it?

The bill is described by the Cooperative Development Foundation as: “An act to provide for the voluntary formation of cooperative societies as accountable, competitive, self-reliant business enterprises, based on thrift, self-help and mutual aid and owned, managed and controlled by members for their economic and social betterment and for the matters connected therewith or incidental thereto.”

It lists certain principles and bylaws to which individuals and groups wanting to form a cooperative society under the act must conform.

For example, they must first and foremost be voluntary and available to all who wish to make use of its services and accept membership – that’s to say, completely non-discriminatory in terms of race, political orientation, social status or religion.

The institutions which are formed as part of the act are considered to be fully-fledged democratic institutions. That is, decisions are made by individuals who have been chosen by members of the cooperative itself.

That said, the process by which this happens can vary depending on the kind of cooperative it is. For example, members of a primary cooperative will all have equal rights when it comes to voting. However, in anothers there may be certain hierarchical structures when its comes to elections – although these, too, must be carried out in accordance with democratic principles.

In terms of money, individuals of a cooperative registered until the act have a vested financial interest in membership, as one of the central tenets is for the cooperative to boast transparency when it comes to economic results. This means that no one member can take more than his or her fair share.

For those cooperatives registered under the 1964 legislation, there is of course a section in the new bill pertaining to re-registration under the 1995 act. However, this is by no means an automatic switch. Members of those cooperatives registered under the outdated act must all agree to the transition.

As the Cooperative Development Foundation says: “Since the preamble makes it clear that registration under the new act has to be the result of the will of the members of a cooperative – and that registration under the new act comes with accountability and competitive spirit – the new act leaves it to each cooperative under the old act to choose to remain under the old act or to shift to the new one.”

Why was it necessary?

It was deemed necessary because of the increasing amount of state participation in cooperatives which was leading to a sense that they were less and less controlled by their members in a way that a cooperative society should be. Self-reliance, responsibility and accountability on the part of the members was becoming increasingly less of a priority.

As the aforementioned foundation says: “That all the parties wanted such a law for the people of the state speaks volumes for the spirit behind and the contents of this legislation.”

“This law was enacted as a response to the anguish of self-respecting cooperators frustrated by an archaic cooperative law” – an archaic law that was both counterproductive to political, social and economical progression and, perhaps more importantly, the empowerment of people.