Cooperative marketing

• Cooperative Marketing – Meaning
• Cooperative marketing organizations are associations of producers that collectively market their produce to secure advantages from large-scale business, which individual cultivators cannot achieve due to their small marketable surplus.
• In a cooperative marketing society, control rests with the farmers, and each member has one vote, regardless of the number of shares owned. Profits earned by the society are distributed among members based on the quantity of produce marketed.
• They operate similarly to private business organizations but differ in motives and structure.

Functions of Cooperative Marketing Societies

• Market Produce: Market the produce of society members at fair prices.
• Safeguard Members: Protect members from excessive marketing costs and malpractices.
• Credit Facilities: Provide credit facilities against the security of the produce brought for sale.
• Scientific Storage: Arrange for the scientific storage of members’ produce.
• Grading and Market Information: Provide facilities for grading and market information to help members achieve better prices.
• Pooling System: Introduce a pooling system to enhance bargaining power for marketing.
• Government Agent: Act as an agent for the government in food grain procurement and price support policy implementation.
• Export Arrangements: Arrange for the export of members’ produce to obtain better returns.
• Transport Arrangements: Organize transportation of members’ produce from villages to markets collectively, reducing transportation costs.
• Supply Inputs: Arrange for the supply of essential inputs like improved seeds, fertilizers, insecticides, and pesticides to farmers.

Processing Cooperatives:

• These cooperatives focus on processing raw agricultural products into finished or semi-finished goods, such as milk into cheese or wheat into flour.
• By taking control of the processing stage, farmers receive a larger share of the final product’s value, which leads to better profits.
• Processing cooperatives also ensure quality control and standardization, making their products more competitive in the market.

Farming Cooperatives:

• Farming cooperatives involve a group of farmers pooling their resources, including land, labor, machinery, and capital, to work together for improved efficiency and output.
• Members benefit from shared expertise, reduced input costs, and increased bargaining power.
• These cooperatives can be organized for various purposes, such as collective farming operations, joint purchase of inputs, or collaborative marketing.

Cooperative Warehousing:

• This type of cooperative provides storage facilities for agricultural produce, which is essential for reducing post-harvest losses, stabilizing prices, and ensuring food security.
• Cooperative warehouses help farmers store their products safely until prices are favorable, reducing the pressure to sell immediately after harvest when prices are often low.
• Additionally, they may offer facilities like grading, packaging, and sometimes finance through collateralized storage.

Advantages that co-operative marketing

• Increases bargaining strength of the farmers:
• Many of the defects of the present agricultural marketing system arise because often one ignorant and illiterate farmer (as an individual) has to face well-organised mass of clever intermediaries.
• If the farmers join hands and for a co-operative, naturally they will be less prone to exploitation and malpractices.
• Instead of marketing their produce separately, they will market it together through one agency.

• Direct dealing with final buyers: The co-operatives can together skip the intermediaries and enter into direct relations with the final buyers. This practice will eliminate exploiters and ensure fair prices to both the producers and the consumers.

• Provision of credit: The marketing co-operative societies provide credit to the farmers to save them from the necessity of selling their produce immediately after harvesting. This ensures better returns to the farmers.

• Easier and cheaper transport: Bulk transport of agricultural produce by the societies is often easier and cheaper. Sometimes the societies have their own means of transport.

• Storage facilities: The co-operative marketing societies generally have storage facilities. Thus the farmers can wait for better prices.

• Grading and standardization: This task can be done more easily for a co-operative agency than for an individual farmer. For this purpose, they can seek assistance from the government or can even evolve their own grading arrangements.

• Market intelligence: The co-operatives can arrange to obtain data on market prices, demand and supply and other related information from the markets on a regular basis and can plan their activities accordingly.

• Influencing marketing prices: Wherever strong marketing co-operative are operative, they have bargained for and have achieved, better prices for their agricultural produce.

• Provision of inputs and consumer goods: The co-operative marketing societies can easily arrange for bulk purchase of agricultural inputs, like seeds, manures fertilizers etc. and consumer goods at relatively lower price and can then distribute them to the members.

• Processing of agricultural produce: The co-operative societies can undertake processing activities like crushing seeds, ginning ‘and pressing of cotton, etc.