The new concept of producer corporations relies on the recommendations of A knowledgeable committee LED by noted economic expert, Y. K. Alagh. The committee was asked (a) to border a legislation that will change incorporation of cooperatives as corporations and conversion of existing cooperatives into corporations and (b) to confirm that the planned legislation accommodated the distinctive components of cooperative business with a regulative framework like that of corporations.
The new kind is termed as
Producer Company', to point that solely bound classes of persons will participate within the possession of such firms. The members have essentially to be primary producers,’ that is, persons engaged in associate activity connected with, or associated with, primary turn out.
What is primary turn out? In terms of the Act it’s a product of farmers arising from agriculture as well as farming, gardening, flower gardening, pisciculture, culture, forestry, forest product, re-vegetation, bee raising and farming plantation products: turn out of persons engaged in loom, handicraft and alternative house industries: by – product of such product; and products arising out of auxiliary industries.