Cooperation: United we stand

Cooperative Marketing
Cooperation
Collaboration &
Integration are desired
For efficient and cost effective operations
 We focus, in cooperation, on:
Horizontal Integration at Farmers level for marketing
An inexpensive and underused marketing tool
“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”
 Types of Cooperative Societies
1. Consumers’ Co-operative Societies
2. Producers’ Co-operatives
(i) For Industrial Production
(ii) For Agricultural Production
(iii) For Miscellaneous Services
3. Marketing Co-operatives
4. Housing Co-operatives
5. Co-operative Credit Societies
(i) Agricultural credit co-operatives
(ii) Non-agricultural credit co-operative
6. Co-operative Farming Societies
7. Processing Co-operative Societies
8. Labour and Construction Co-operatives
 Inherent advantages by Cooperatives
• Getting better deal from intermediaries/ users
(for larger volumes)
• Tackling poverty, food security and
unemployment (esp. in rural areas)
• Delivering goods & services to far-off areas
• managing risk for members
• keeping markets efficient (as unit cost is less)
• Economies of Scale
• Organized and professional marketing possible
• Eliminates malpractices in marketing
 Cooperative Marketing & Economic Development
• Increases marketable surplus by controlling losses
• Increases income for farmers by reducing the
middlemen
• Widens the market by taking the products to
remote areas
• Helps in the growth of agro-based industries
• Assists the farmers in planning their production
• Helps the farmers in the adoption of new
technologies
• Provides employment opportunities
• Adds value to the product
 Benefits of Cooperative Marketing in India
• Increases bargaining strength of the farmers
• Direct dealings with final buyers possible
• Provision of credit at easier terms
• Easier and cheaper transport (for larger quantity)
• Storage facilities can be developed/ hired
• Grading and standardization
• Market intelligence (broadcasting of market
prices)
• Standardization of weight and measures
• Influencing market prices (Stabilizes the prices)
 Other Functions of Cooperatives
• A machinery pool (for use on the farm)
• Linking of Farmers’ Credit with Marketing
• Linking of Consumer Cooperative Stores with
Marketing Cooperatives
• Issue of Produce Pledge Loan
• Processing of and value addition in agr. produce
• Purchase of vital inputs
• Facilitating Procurement at MSP
• Establishment of Marketing Information Centres
• Offering other services to members
 Cooperative Marketing Structure
A 2-tier or 3-tier system
1) Primary Cooperative Marketing Societies
2) Central/District Marketing Societies
3) State Marketing Federations (MARKFEDS)
National Agricultural Cooperative Marketing
Federation (NAFED)
(NAFED is the apex cooperative marketing
organisation dealing in procurement, distribution,
export and import of the selected commodities)
 Methods of Operation

1) Outright Purchase and sale

2) Agency Method

3) Pooling Method

Each one of them is having its own merits and

demerits
Common complaints in its working

1. Disloyalty of Members

2. Lack of Scientific Management

3. Shortage of Finance

4. Rivalry from Private Traders

5. Defective Business Techniques

 Problem of Cooperative Marketing
• Economic Problems
• Finance 
• Management
• Technological Problems
• Business character
• Decision Making
• Lack of storage and transport facilities
• No Outright Purchase
• Sociological Problem
Suggestions for Strengthening the Cooperatives
(i) The officials of co-operative marketing societies should possess
business experience and qualifications. They should be given proper
training to deal efficiently with the business of the society. The
efficiency should be rewarded, wherever possible.
(ii) There should be proper co-ordination between credit and
marketing co-operative societies to facilitate the recovery of loans
advanced by credit societies, and sufficient finance should be
provided to marketing societies.
(iii) The area of operations of the societies should be large enough to
provide them sufficient business and viability. Most of the societies at
present are not viable because of the small volume of business.
(iv) The societies should acquire the transport facility to bring the
produce from villages to the mandi timely at a lower cost.
(v) The public procurement and public distribution programmes
should be implemented through co-operatives to increase their
business turnover.
 Suggestions for Strengthening the Cooperatives
(vi) Co-operative marketing societies should develop
sufficient storage facilities in the mandi or in the villages.
(vii) Co-operative marketing societies should diversify their
activities. They should sell the produce and inputs, and
engage in the construction of storage facilities.
(viii) Marketing societies, like the private traders, should
provide accommodation and the drinking water facility for
their members when the latter come to the mandi.
(ix) The societies should give adequate representation to the
small and marginal producers in their organisational set-up.
(x) The co-operative feeling among members should be
inculcated by proper education by organising seminars and
by the distribution of literature.
 Examples of successful co-operatives in India
• Operation Flood & Dairy Cooperatives
• Indian Farmers Fertiliser Cooperative Ltd.
(IFFCO)
• Krishak Bharti Fertiliser cooperative Ltd.
(KRIBHCO)
• Anand Milk Union Limited (AMUL)
• The Indian Farm Forestry Development Co-
operative (IFFDC)
• Primary Farm Forestry Co-operative Societies
(PFFCS)