Co-operative marketing means the association of agricultural producers for marketing their products and the co-operation of final consumers in purchasing goods and servims for their own use. A consumer’s co-operative is a voluntary association of ultimate consumers, organised to fulfill some of their needs for goods and services. Co-operative Marketing associations are composed of groups of farmers organised for the purpose of marketing the commodities they produce.
Farmers have often felt that they did not receive the full value of their products when they were sold to local buyers whose manias were too large, because either of their inefficiencies or avarice. This led to the organisation of co-operative associations. Agricultural co-operation may also be defined as joint action among a number of farmers for the purpose of selling their production and providing other services like stimulation of demand condition, storing, pooling and standardizing the produce.
Objectives of Co-operative Marketing
The main object of co-operative marketing society is to secure for their members as much as possible for the products they sell. More specific objectives designed to bring about this result include the following :
(b) Better marketing service.
(a) Lower marketing cost.
c) Improvement in the quality of the products.
(d) Influencing supply and demand in the market.
(e) More accurate grading and classification.
(f) Extension of production credit.
(g) Purchase of farm supplies.
(h) Finally, education in both production and marketing methods which will lead to more specific farm operation.
The efforts to reduce marketing costs originally concentrated on elimination of the middlemen and capturing his profits for the organization’s members. Improving operating efficiency became a companion objective. It was discovered that in order to reduce the marketing costs and margins, efficiencies had to be developed in which the co-operative could do the job more economically than other agencies.
A co-operative can also serve to improve the marketing system. It might be organised to pursue one or a combination of the economic objectives, viz., (a) provide services at a lower cost, (b) offer an alternative market outlet to offset monopoly in the local market, (c) provide new or improved marketing services and (d) channel technical information, new practices and new inputs to producers and better co-ordinate production and marketing.
The environment for formation of co-operatives is more favourable if marketing margins are high due to collusive behaviour within the private trade or if there is great inefficiency in the private trade for other reasons.