Governance and Performance of Producer Organisations in India: A Case Study of NDDB’s Milk Producers’ Companies

Abstract

Many of the explanations of poor or superior performance of the cooperatives lie in their governance and management. In the search for a better legal form of organisation of small producers, the Producer Company (PC) was born as a legal provision in the early 2000s in India. This paper examines the governance issues and the role of governance in their performance with case studies of NDDB’s Milk Producers’ Companies (MPCs) in terms of governance innovations designed by the promoting entity—National Dairy Services (NDS) of National Dairy Development Board (NDDB). The major governance factors in the relatively superior performance of milk PCs included: membership rules, member commitment to patronage of the milk PCs and its linkage with member equity like in the new generation cooperatives elsewhere, role of Board of Directors (BoD) and its composition besides very transparent and democratic functioning of the Board.