Co

-operativ
e
marketin
g
Submitted to: Prof Shakuntala Yadav

Submitted by: Isha Bari

Class: SYBMS
1|Page
 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

2|Page
 5. The co operative development 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
3|Page
information 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: _________________

4|Page
Date: _________________

External Examiner: _________________

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.

5|Page
 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 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
6|Page
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 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.

7|Page
"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.''

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.

8|Page
 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

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

9|Page
 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.
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

10 | P a g e
 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
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

11 | P a g e
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:
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:

12 | P a g e
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:
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

13 | P a g e
 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
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.

14 | P a g e
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.

15 | P a g e
 WEBLIOGRAPHY..

Google.com
Wikipedia.org

QUESTIONARE

16 | P a g e