Home General Role of Cooperative Marketing in Agricultural Produce

Role of Cooperative Marketing in Agricultural Produce

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The problems faced in the sale of surplus goods are quite complex and complicated. The farmers who have surplus goods have to sell them generally in un-regulated markets.

They do not get fair and reasonable price for their produce due to numbers of reasons. For examples, the goods produced by the farmers are generally perishable and cannot be stored for a longer period of time.

There is less grading of agricultural produce. No market news service is easily available to the farmers. There is a long chain of middle-men who take away about 1/8th of the cost; transport and storage facilities are not only inadequate but also expensive.

In order to help the farmers for getting a fair return of their surplus produce, establishment of cooperative sale societies are considered to be the best solution so as to help the agriculturists at the village end.

What is Cooperative Sale Societies or Cooperative Marketing?

Cooperative sale societies are formed on a cooperative basis. These societies arrange to sell the produce of the member farmers and charge only a normal commission. Cooperative sale societies or cooperative marketing thus is a voluntary association of farm producers for the joint sale of their surplus products.

It is the system by which a group of farmers voluntarily pool their resources and join together to carry on some or all of the process in marketing of the agricultural produce.

Objectives of Cooperative Marketing:

The main objective of establishing a co-operative marketing is to encourage the intelligent and orderly marketing of agricultural produce, to eliminate speculation and waste, to make distribution of agricultural products between producer and consumer as direct as can be efficiently done and  to stabilize the marketing of agricultural productions.

The co-operative marketing is an alternative to private dealers with the main objective of securing a large share of profits for the producer. A co-operative marketing is thus to store, transport, process the farm goods in the form, at the time and at the place that consumers desire.

Pattern of Cooperative Marketing:

At present the nucleus of co-operative marketing consists of commission shops which have been set up in the grain markets, called “Ghala Mandies.” These commission shops receive agricultural produce from the member and non member farmers and sell it in the local market against a commission of three percent.

These co-operative shops do not undertake collection of agricultural produce at the farm. They also do not provide the transportation and processing facilities to the member farmers. The performance of the commission shops is very much like that of a private agent.

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Problem of Cooperative Marketing:

A co-operative marketing society is basically a trading firm. It is faced with multiple problems. These problems are divided into following three sections:

Economic Problems:

Scale: The co-operative marketing society due to low volume of business operates on a small scale. In the active business period, due to seasonal agricultural production, the surplus produce is short. The society is not a viable economic unit. In order to reduce the fixed cost per unit of turnover, it has to be turned into a multipurpose society.

Finance: The co-operative marketing society badly lacks finance. In order to increase the business volume of the society, the members are to be paid advance money before the sale proceeds of the agricultural product. The society does not possess adequate marketing finance. It is therefore not in a position to increase the volume of business.

Management: The small turnover in commission shops does not allow for the employment of a qualified business trained for the employment of a qualified business trained manages. The ineffective management is one of the major problems faced by the society.

Technological Problems:

Business character:  The trading activities of a marketing society are carried on a tradition manner. The management, due to fear of loss does not take risks. They only follow the trading practices of the commission shops run by private dealers in agriculture produce.

Decision Making:  The working of the society is affected due to inability to arrive at a quick timely decision. As the decision making of the society is done by the management committee, it takes time to call the meeting and then take decisions.  The decisions of the society are mostly person oriented instead of being business oriented.

Lack of storage and transport facilities: The marketing societies do not usually have adequate storage and transport facilities. The facilities are indispensable for the efficient operation of the shops.

No Outright Purchase: The commission shops are not practicing any outright purchase. They do not practicing any outright purchase. They do not make payments to the farmers on receipt of the produce. The farmers, therefore, hesitate to deliver the produce to these shops.

Sociological Problem: The management of the co-operative marketing society is usually not co-operative minded. The executive members of the society join for political leadership. The static leadership is also a factor for inefficient working of the society.

Solution to the Problem: The problems of co-operative marketing are heterogeneous. As such there cannot be single solution to the problem. The marketing society, it is to be a viable economic unit, must switch over to multipurpose society.  It should take up the work of processing the farm goods, in the form the consumers desire.

The processed goods should be standardization of agriculture produce. Adequate arrangements shall have to be made for the transportation of goods. Storage facilities shall have to be provided in the rural areas. The control of the co-operative marketing should be in the hands of genuine farmers who sell their produce through it.

 

Contributed By:

Vinod Kumar Verma, Research Scholar, Agricultural Economics, SKN COA, JOBNER JAIPUR RAJASTHAN

S.S. Jheeba, Assoc. Prof. Agricultural Economics, SKN COA, JOBNER JAIPUR RAJASTHAN

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