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Cooperative Marketing in India: Advantages and Progess

20-OCT-2015 15:09

    Cooperative is an important tool of economic development in rural India, when it comes to cooperative marketing in India, it gives an idea of collective efforts to achieve specific objective to carry out marketing strategy for agricultural products. The cooperative marketing arises due to the prevalence of many defects in the private and open marketing system. This concept was first introduced in the European countries. It is defined as form of organization, where in person voluntarily associate together as human beings, on the basis of equality for the promotion if economic interests of themselves.

    Benefits of cooperative marketing in India:

    The advantages that cooperative marketing can confer on the farmer are multifarious, some of which are listed below:

    • Increases bargaining strength of the farmers: If the farmers join hands and form a cooperative society, they will be able to increase their bargaining strength because their produce will now be marketed by single agency.
    • Direct dealings with final buyers: It outcast an intermediaries which eliminates the exploiters and ensures fair prices to both, the producers and the consumers.
    • Provision of credit: The marketing cooperative 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: This reduces the cost and botheration of transporting produce to the market.
    • Storage facilities: The cooperative marketing societies generally have storage facilities. Thus, the farmers can wait for better prices; also there is no danger to their crop from rains, rodents and thefts.
    • Grading and standardization: This task can be done more easily for a cooperative 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 cooperatives 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 market prices: While previously the market prices were determined by the intermediaries and merchants and the helpless farmers were mere spectators forced to accept whatever was offered to them, the cooperative societies have changed the entire complexion of the game.
    • Provision of inputs and consumer goods: The Cooperative marketing societies can easily arrange for bulk purchase of agricultural inputs like seeds, manures, fertilisers, pesticides, etc., and consumer goods at relatively lower prices and can then distribute them to the members.
    • Processing of agricultural produce:  The Cooperative societies can undertake processing activities like crushing oil seeds, ginning and pressing of cotton, etc.

    Progress of Cooperative Marketing in India

    Two types of cooperative marketing structures are found in India. Under the first type, there is a two-tier system with primary societies at the base and the State society at the apex. Under the second type, there is a three- tier system with primary societies at the village level, Central marketing societies at the district level, and the State marketing society at the apex.

    At present, the cooperative marketing structure comprises 2,633 general purpose primary cooperative marketing societies at the Mandi level, covering all the important mandies in the country, 3,290 specialised primary marketing societies for oilseeds, etc., 172 district Central Federations and the National Agricultural Cooperative Marketing Federation of India Ltd., (NAFED) at the national level. NAFED is the apex cooperative marketing organisation dealing in procurement, distribution, export and import of selected agricultural commodities.

    Conclusion: It can be concluded that cooperative marketing is very essential in promoting the Agriculture produce because cooperative marketing reduces the cost of marketing and arranges good price to the participants of cooperative marketing.

    DISCLAIMER: JPL and its affiliates shall have no liability for any views, thoughts and comments expressed on this article.

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