Co -operative marketing

Submitted to: Prof Shakuntala Yadav

Submitted by: Isha Bari

Class: SYBMS

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Div: A

Roll no: 15

Submitted on: 31st Jan, 2011

UNIVERSITY OF MUMBAI

PRAHLADRAI DALMIA LIONS COLLEGE OF COMMERCE AND ECONOMICS

Index

1. Introduction Pg 4

2. Salient features of co operative marketing Pg 5

3. Types of co operative marketing societies Pg 7

4. Need and importance of co operative marketing Pg 8

5. The co operative development

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corporation Pg 10

6. Organization Pg 11

7. Webliography Pg 15

8. Questionare Pg 16

DECLARATION

I, Isha Hemant Bari of SYBMS, Prahladrai Dalmia Lions College Of Commerce And Economics, hereby declare that I have completed the project titled Co Operative Marketing in the academic year, 2010-11. The information

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submitted is true and original to the best of my Knowledge.

CERTIFICATE OF PROJECT COMPLETION

Certified that the project report titled Co Operative and rural marketing has been completed satisfactory in partial fulfillment of BMS course of University of Mumbai for the academic year 2010-11 by Prof. Shakuntala Yadav a student of _________________

Seen by:

Internal Examiner: _________________

Signature: _________________

Date: _________________

External Examiner: _________________3 | P a g e

Signature: _________________

Date: _________________Introduction

Cooperative marketing is based on the principles of cooperation. It is a system by which a group of farmers join together to carry out some or all the processes involved in carrying agricultural produce from the

producer to the consumer. It is a voluntary association formed by its members for mutual benefit and help. Such an association brings divert benefits to its members in terms of fair prices. Cooperative marketing is just an extension and

application of the philosophy of cooperation in the area of agricultural marketing. It is a process of marketing through a cooperative society, formed for the producers, by the producers. It seeks to eliminate the middlemen between the producer and the consumer, thus getting the maximum price for their produce.

Cooperative marketing refers to advertising and promotional programs in which a manufacturer or distributor supports the advertising efforts of a retailer (i.e., grocery store newspaper advertisements) or, as

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in the example of "Intel inside," another party that uses a specific part, a branded ingredient or licensed approach. Such advertising is sometimes referred to as co-op advertising. Typically the manufacturer will help underwrite a portion of, or in some cases, pay for completely, the advertising costs incurred by the retailer.

Cooperative marketing is just an extension and application of the philosophy of cooperation in the area of agricultural marketing. It is a process of marketing through a cooperative society, formed for the producers, by the producers. It seeks to eliminate the middlemen between the producer and the consumer, thus getting the maximum price for their produce.

Salient features of cooperative marketing

Some salient features of a cooperative society are: although like any other business activity a cooperative society may need capital for its operation, yet it is the membership which is paramount, and not the capital investment. Then the Voting right is based on the membership, and not on the sum of shares held. The society will be managed by a board comprising elected members from the general body. And the principle of voluntarism is cardinal to the organisation of the cooperative society. The principal objective of a cooperative marketing society is to gain all the advantages of large-scale trading and volume of business to the individual members, each one of whom

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is a small-scale operator, thanks to the fragmentation of landholdings due to the partition of the family inheritance over several generations. Finally, the keystone of a cooperative society is service, and not profit — which is the basis and rationale for the capitalist enterprise.

The book is structured into three sections. Sections one and three consist of only one chapter each, whereas section two comprises 10 chapters.

The first section, which is prefatory, introduces and elucidates the concept of cooperative marketing in India.

The third section is comparative: in order to obtain a clear understanding about the marketing cooperatives — their potential and promise — and also to draw lessons from the way these societies in other countries function successfully, this section has been devoted to a study of cooperative marketing in Japan, Israel, the U.S., the U.K., Canada and Thailand.

"What has been broadly found in the third section is that in all these countries, farmers' holdings as also their main problems are by and large the same as those of the Indian farmers. But factors such as strong motivation resulting in spontaneous urge to set up marketing cooperatives, and keeping the cooperatives free from extraneous influences with a strong determination to preserve them as a joint undertaking, have made these cooperatives stronger and more successful than most of their counterparts in India.''

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Types of cooperative marketing societies

The cooperative marketing societies may be grouped into the following types on the basis of the commodities held by them.

1. Single commodity cooperative marketing societies: these societies deal in marketing of only one agricultural commodity. Examples sugarcane cooperative marketing society, cotton cooperative society and oilseeds growers cooperative marketing society.

2. Multi commodity cooperative marketing societies: most of the cooperative marketing societies in india are of this type. They deal in marketing of a large number of commodities produced by the members such as foodgrains, cotton, oilseeds.

3. Multi purpose multi commodity cooperative societies: a large number of commodities are marketed by them and they perform such other functions such as providing credit to the members, arranging for the supply of inputs required by them and meeting their requirements of essential domestic consumption goods. Farmers are hereby protected from exploitation of the village money-lender-cum-village merchant.

Need and importance of cooperative marketingIn the context of rural marketing, cooperative marketing is of great importance. Need and importance of cooperative marketing is as follows:

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1. Abolition of middlemen: By eliminating the role of middlemen, cooperatives have been successful in protecting the interest of their members.

2. Collective bargaining : cooperative societies have bargaining power more than that of a single producer.

3. Storage facility: cooperative societies have their own godowns for storing their products. They also provide storage facilities to their members at nominal charges.

4. Standardisation and grading: the goods in the societies are rearranged according to their predetermined standards and grades so that they are sold at the highest possible price.

5. Higher prices of members: cooperative societies ensure highest possible prices for the products as they keep themselves in close touch with the rates in market in market and sell them when the prices are high.

6. Market infrastructure: cooperative marketing societies have a very large and wide infrastructure. There are facilities such as godowns, warehouses, transport, grading etc. These facilities involve large costs, which are beyond their means. For this, they can seek financial assistance from government for the establishment of these facilities.

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7. Supplying inputs and consumer goods: cooperative societies can easily undertake supply of inputs needed by the farmers. These societies can finance purchases by the farmers from the sale price of their produce. Buying of inputs and consumer goods by marketing society at wholesale rates benefit member farmers.

8. Facility of correct weighing:Manipulation of weights and measures and cheating the farmers eliminated.cooperative marketing societies help in offering reasonable price for the products to their members because they arrange for correct weighing of the product of the members.

9. Relief from illegal production:The merchants make many unauthorised and illegal deductions while taking agricultural products from the farmers. These deductions are made in the name of charity, donations etc. Cooperative societies protect their members from such illegal deductions.10. Linking credit, processing and farming:Cooperation in the field of marketing can either expand to cover such aspects of agriculture as credit, processing and farming, or the operation of cooperative marketing societies can be linked with other societies.

  The Co-operative Development Corporation

The National Co-operative Development Corporation has been promoting and financing a wide range of

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economic activities in rural areas through co-operatives. The Co-operation is a unique institution in the country catering to the development of the rural economy and agriculture sector through co-operative. There is no other institution in the country, which is exclusively for meeting the requirement of co-operatives.

NCDC has been playing special attention to weaker sections co-operatives in various part of the country. The promotional and development role of NCDC had lead to continuous diversification and expansion of co-operative programs under its preview.

ORGANISATION:

Under the system of co-operative marketing whole responsibility of marketing is taken up by the farmers themselves, organized on co-operative basis. The area of operation of marketing society is usually fixed with reference to local conditions - area based or commodity based. The commodity-based societies related to grapes, oranges, banana, pomegranate, etc. have wider jurisdiction covering the major areas growing each crop. There are societies at the producer's level and they federate at state or national level to deal with bigger markets including foreign markets for export of their produce.

Membership:

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Membership of a co-operative marketing society is open to individual farmer who produces the crop for which the society is formed. Other co-operative societies in the area can also become institutional members.

Resources:

The sources of fund of the society are as under:

1.      Share capital

2.      Deposits.

3.      Loans from higher financial institutions including NABARD.

4.      Grants or subsides from the Govt. for godowns, etc.

5.      Reserve funds.

The marketing societies require short-term, medium-term and long-term capital

1.      Short-term capital is needed for financial advances to members for production, packing, transport, etc. to meet contingent expenses.

2.      Medium- term capital is required for purchasing motor trucks, etc.

3.      Long-term loan is required for installation of machinery, construction of building for godown, storage, etc.

  Functions:

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1.      To arrange for the sale of members produce to the best possible advantage.

2.      To undertake activities in connection with grading, pooling and procurement of produce of the members.

3.      To provide storage facilitates to their members by renting or owning the godowns and thereby facilitate to grant advances against pledge of produce.

4.      To protect members from all types of malpractices eliminates the middleman in the chain of marketing.

5.      Co-operative marketing society ensures grading, etc. and supply of good quality material to consumers.

6.      It teaches business methods to farmers and serves them as agency for supply market information.

7.      The society is able to stabilize prices over a long period by adjusting the supply with the demand.

8.      Marketing societies are also encouraged to undertake export trade so that they can give better prices to their members.

Weak Co-operative Marketing:Although, many advantages are envisaged in the co-operative marketing the structure has remained relatively weak as compared to credit co-operatives. There are only about 1000 marketing societies as against 20,000 credit societies in Maharashtra. The marketing is more difficult involving many technical

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and commercial aspects. Marketing of perishable is still more different. Arranging quick transport, arranging storage to avoid losses, to keep watch on demand - supply position to ensure good prices to members are all matters need for good marketing. For want of these managerial aspects, desired number of co-operative marketing societies have not come up and those which were started could not succeed. Several marketing surveys/studies at farmer's levels have revealed that among several marketing channels, co-operative channel has offered greater share of consumer's prices to the producers. Whichever, marketing is unorganized, farmer - producers have expressed that marketing co-operative societies should be formed.This was particularly reported in the cases of marketing of perishables.

Few Successes:Inspite of the difficulties encountered in the marketing of perishables like fruits, vegetables, milk, etc. there are few examples of good success.

1.      Maha-grape co-operative federation marketing grapes in Maharashtra.

2.      Co-operatives marketing pomegranate.

3.      Co-operatives marketing banana in Jalgaon district.

4.      Vegetables co-operatives in Thane District.

5.      Milk co-operatives in Maharashtra and Gujarat.

6.   Co-operative cotton marketing societies.

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WEBLIOGRAPHY..

Google.comWikipedia.org

QUESTIONARE

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