Agricultural Cooperative Marketing

  • Post last modified:8 August 2021
  • Reading time:6 mins read

Agricultural Cooperative Marketing

An agricultural Co-operative Marketing, is also known as farmers cooperative. A cooperative where farmers pool their resources in certain areas of activity.

Agricultural co-operatives are forms of co-operatives formed by farmers or agriculturalists who have combined their resources together for the production and marketing of their produce and also getting some equipment and items to enhance the effectiveness of their production and marketing of the items with the hope of benefiting members financially and economically.


What is Cooperative Marketing?

Co-operation is a form of organization, wherein persons voluntarily associate together as human beings, on a basis of equality for the promotion of the economic interest of themselves”.


Objectives of Cooperative Marketing

The main aim of co-operative marketing societies is to rationalize the whole marketing system so that it may be beneficial to the producer. Its immediate objective is to strengthen the bargaining capacity of the cultivator so as to secure him better price and remove the intermediaries.

The objects and aims of co-operative marketing society are briefly given below:

  1. 1. Strengthen the bargaining power of the producer.
  2. Safeguard the member a better price for their produce.
  3. Removal of superfluous intermediaries.
  4. To help them during financial crisis by providing loans.
  5. Stimulate the producer to develop quality goods.

Role of Cooperative Marketing

It has been recognized that systems of cooperative organizations are playing a crucial role in improving the systems of agro-product marketing. Cooperative marketing plays a significant role in the areas as mentioned below:

  • Optimum Utilization of Available Resources: An efficient cooperative marketing system can contribute to an increase in the marketable surplus by minimizing losses due to implementation of inefficient procedures, storage and costly transportation.

  • Maximizing the Farm Income: An efficient cooperative marketing system ensures the farmer better price for agro-products and stimulates them to invest their surplus in buying modern factors of production so that productivity may be maximized.

  • Enlarging the Markets: An organized cooperative marketing system helps in the enlargement of the market for the agro-products by penetrating them to remote locations of the country, i.e., the areas away from the production points.

  • Development of Agro-Based Industries: The improved and efficient systems of agricultural marketing contribute in the growth and development of agro-based industries and induce the overall development process of our economy.

  • Employment Generation: A well-integrated co-operative marketing system generates employment to persons engaged in various functions, like packaging, transportation and processing.

These co-operatives can support in efficient and harmonious relation between producer and consumer that will be against the exploitative tendencies of the greedy traders.


Functions of Agricultural Cooperative Marketing

We should remember that farmers formed co-operatives for many purposes, including marketing of produce, purchasing of production and house supplies, and provision of credit. Farm marketing associations are the most important type of agricultural co-operatives. Farm purchasing co-operatives rank second in importance.

The functions of agricultural co-operatives are summarized as follows:

  1. Farm Production: Agricultural co-operatives encourage members to engage in joint cultivation of food and cash crops among others.

  2. Co-Operatives Joint Supply of Farm Machinery: The membership of an agricultural co-operative can afford a farmer the opportunity to use modern farm and agricultural tools and implement which he could not afford on his own.

  3. Produce Marketing: The produce marketing co-operative society helps to stabilize prices of farm produce.

  4. Irrigation: An individual farmer may not be able to practise irrigation due to costs involved. But by joining a co-operative, he and the members may be engaged in irrigation programme to the benefits of the members (farmers).

  5. Land and Soil Conservation: Land and soil conservation can be better achieved through co-operative effort.

  6. Access to Credit Facilities: Government and its agencies easily grant credit facilities to co-operatives rather than an individual, who may lack collateral securities to obtain loans. This is also applicable to commercial banks.

  7. Training and Education: Agricultural co-operatives provide to their members, training and education.

  8. Extension Service: The introduction of new ideas, new methods, new techniques (innovation) is also a function of an agricultural co-operative.

  9. Attraction of Government Support: Agricultural co-operatives attract government support to their activities.

  10. Mobilization of Savings: Agricultural co-operatives encourage the culture of savings among farmers.

Importance of Cooperative Marketing

  1. To Eradicate Malpractices: The malpractices that exist in the marketing system can be eradicated to a large extent through cooperative marketing structure.

  2. Proportionate Share of Price: A large number of intermediaries who take part in various activities like: collection, storage, financing, grading, sale and transportation of agricultural product. Their charges are disproportionate and producers do not get appropriate share of the price paid by the consumers. Efficiently organized co-operative marketing helps in sinking the price-spread between producer and consumers.

  3. Better Return to Farmers: Co-operative marketing is an essential requirement for large-scale expansion of co-operative credit. Cooperative marketing societies are supposed to ensure a better return to the farmer with assisting them during financial crisis by fulfilling loans requirements from co-operative sources.

  4. Performing Various Tasks: The integrated marketing system in a co-operative manner would perform tasks of assembling, grading, processing, storage and transportation, insurance financing and many more.

  5. Maximizing Efficiency and Improving Economic Conditions: Co-operative marketing of agriculture produce is necessary for the attainment of maximum efficiency and for improving the economic conditions of the producers by strengthening their bargaining power.


  6. Educating the Farmers: Co-operative marketing would educate the farmer in increasing the productivity, selecting the market of his product, provide enough volume of product to make efficient grading possible and allow the Indian producer to directly interact with exporters and also with large consumers in India.

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