Marketing

Advantages of Co-operative Society for Marketing Farm Products in Bangladesh

The advantages that may accrue from the marketing of farm products through the co-operative marketing society may be summarized as follows:

(1) Improved products: The local buyer often pays a flat price regardless of quality, or grades products roughly, thereby overpaying producers of low-quality goods and underpaying the producers of superior products. The formation of farmer’s associations has had an important effect on such practices, since they usually undertake to secure for the individual farmer the market price for the particular grades he has produced. The success of their efforts in this direction and the educational activities they have carried on have been a powerful influence toward inducing individual farmers to grow high-grade products of uniform quality.

(2) Improved grades: Co-operatives have also assisted in the development of Unproved grades, have improved methods of packing and shipping and have encouraged the development of facilities for more effective and more economical means of producing good products. The cooperatives have been able, by emphasizing on careful grading, quality production and careful processing, to encourage farmers to produce the types of products desired by consumers and so to enable the growers to receive better prices.

(3) Higher prices: Co-operatives endeavor to secure higher prices for their .A members by narrowing the spread between the terminal and local prices. This can be done directly by reducing the cost of marketing to terminal market buyers, with the growers profiting in higher prices at the time of sale or through patronage dividends or both. The competition of co-operative associations has often the effect of forcing independent agencies to pay better prices and give better service. Thus the co-operatives perform a service which benefits both members and non-members.

(4) Orderly marketing and stabilization of prices: Efforts to stabilize prices through orderly marketing are important activities of some large co-operatives. In order to attain this objective associations sometimes attempt to influence production so that it will accord more nearly with the demands of the market. Attempts are also made to control the marketing of the crop so that commodities will go to the best markets at the most favorable times. A third activity is the attempt to control the seasonal flow of a pro-duct to all markets, commonly called “orderly marketing.” In the degree to which such efforts are successful will gluts and shortages tend to be eliminated. The price will be stabilized.

(5) Reduction of trade abuses: The cooperative marketing societies may help in reducing or eliminating the abuses that prevail in the trade. The society’s competition becomes instrumental in inducing private dealers to pay more attention to proper grading in buying from farmers. Thus, both members and non-members are benefited from the services rendered by the cooperatives.

(6) Economy in the cost of marketing : When the farmers endeavor to sell their produce through cooperatives they can directly deal in the wholesale market and eliminate the small assemblers who unnecessarily increase the cost of marketing. This facility enables them to economize on the cost of assembling of small lots. Since the cooperative marketing societies can render services at lower cost than private intermediaries, it is possible to avoid the superfluous middlemen.

(7) Advantages of collective bargaining power : The cooperatives generally control a large volume of a limited supply. As a result, they not only can derive better prices for the farmers, but also will be in a position to secure advantages which arise from its collective power.

(8) Cheaper finance : It is difficult for an individual farmer with small means to get finance from government credit agencies. But the financing agencies do not usually hesitate to advance loans to the cooperative organisations. The cooperatives can also obtain credit at a cheaper rate than the individual farmers. The availability of cheaper marketing finance indirectly helps reduce the cost of marketing.

(9) Lower cost production : In an effort to increase the return to the farmers various ways have been developed to decrease the production cost of the farmers. Many cooperatives primarily concerned with marketing have also established departments to buy supplies for their members. Sometimes cooperatives purchase farm supplies for their members. The expectation is that the supplies purchased by the cooperatives will be closely tailored to the needs of the farmers and that the cost will be low because of large- scale buying. The cooperatives also give assistance to the farmers by supplying experts to give advice on various phases of production and by providing for expensive agricultural implements which the farmers could not afford to buy.

(10) Better selling methods : The cooperatives dealing in fruits , vegetables and other non-staple products try to improve the sales promotional methods for their products. They endeavor to increase the total demand for the products they sell through the advertising of brand names and other selling tactics.

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