Cooperative marketing role A Presentation by Mr Allah Dad Khan

2. ROLE OF COOPERATIVE MARKETING IN
AGRICULTURAL PRODUCE
A
LECTURE BY
MR.ALLAH DAD KHAN

3. ROLE OF COOPERATIVE MARKETING IN
AGRICULTURAL PRODUCE
 Agriculture is basically different from manufacture . The problems
faced by by it in the sale of surplus goods is quite complex and
complicated. The farmers who have surplus goods have to sell
these generally in un-regulated markets. They, therefore, do not
get fair and reasonable price for their produce due to number of
reasons. For example the goods produced by the farmers are
generally perishable and cannot be stored for a longer period of
time. There is less grading of agricultural produce. No market
news service is easily available to the farmers. There is a long
chain of middlemen who take away about 1/8th of the hard
earned income of the farmers. The transport and storage facilities
are not only inadequate but also expensive. In order to help the
farmers for getting a fair return of their surplus produce,
establishment of cooperative sale societies are considered the
best solution to help the agriculturists at the village end.

4. WHAT IS COOPERATIVE SALE SOCIETIES OR
COOPERATIVE MARKETING?
 Cooperative sale societies are formed on a
cooperative basis. These societies arrange to
sell the produce of the the member farmers and
charge only a normal commission. Cooperative
sale societies or cooperative marketing thus is a
voluntary association of farm producers for the
joint sale of their surplus products. It is the
system by which a group of farmers voluntarily
pool their resources and join together to carry
on some or all of the processes in marketing of
the agricultural produce.

5. OBJECTIVES OF CO-OPERATIVE MARKETING:
 The main objective of establishing a co-operative
marketing is to encourage the intelligent and orderly
marketing of agricultural produce, to eliminate
speculation and waste, to make distribution of
agricultural products between producer and
consumer as direct as can be efficiently done and to
stabilize the marketing of agricultural productions.''
The co-operative marketing is an alternative to
private dealers with the main objective of securing a
large share of profits for the producer. A co-
operative marketing is thus to store, transport,
process the farm goods in the form, at the time
and at the place that consumers desire.

6. PATTERN OF CO-OPERATIVE MARKETING IN
PAKISTAN.
 At present the nucleus of co-operative marketing in
Pakistan consists of commission shops which have been
set up in the grain markets, called ''Ghala Mandies.''
These commission shops receive agricultural produce
from the member and non member farmers and sell it in
the local market against a commission of three percent.
These co-operative shops do not undertake collection of
agricultural produce at the farm. They also do not provide
the transportation and processing facilities to the member
farmers. The performance of the commission shops is
very much like that of a private agent. It will, therefore, be
not wrong to say that the idea of co-operative marketing
has not yet developed in Pakistan

7. PROBLEM OF CO-OPERATIVE MARKETING IN
PAKISTAN:
 A co-operative marketing society is basically
a trading firm. It is faced with multiple
problems in Pakistan. These problems are
divided into three sections. (1) Economic
problems (2) Technological problems (3)
Sociological problems.

8. (1) ECONOMIC PROBLEMS:
 (a) Scale. The co-operative marketing
society due to low volume of business
operates on a small scale. In the active
business period, due to seasonal agricultural
production, the surplus produce is short. The
society is not a viable economic unit. In order
to reduce the fixed cost per unit of turnover, it
has to be turned into a multipurpose society.

9.  (b) Finance. The cooperative marketing society badly
lacks finance. In order to increase the business
volume of the society, the members are to be paid
advance money before the sale proceed of the
agricultural product. The society does not possess
adequate marketing finance. It is therefore not in a
position to increase the volume of business.
 (c) Management. The small turnover in commission
shops does not allow for the employment of a
qualified business trained manages. The ineffective
management is one of the major problems faced by
the society.

10. 2) TECHNOLOGICAL PROBLEMS:
 (a) Business character: The trading
activities of a marketing society are carried
on in a traditional manner. The management,
due to fear of loss, does not take risks. They
only follow the trading practices of the
commission shops run by private dealers in
agricultural produce.

11. TECHNOLOGICAL PROBLEMS:
 (b) Decision making. The working of the society is
affected due to inability to arrive at a quick timely
decision. As the decision making of the society is
done by the management committee, it takes time to
call the meeting and then take decisions. The
decisions of the society are mostly person oriented
instead of being business oriented.
 (c) Lack of storage and transport facilities. The
marketing societies do not usually have adequate
storage and transport facilities. The facilities are
indispensable for the efficient operation of the shops.

12. TECHNOLOGICAL PROBLEMS:
 (d) No outright purchase. The commission
shops are not practicing any outright
purchase. They do not make payments to the
farmers on receipt of the produce. The
farmers, therefore, hesitate to deliver the
produce to these shops

13. (3) SOCIOLOGICAL PROBLEM:
 The management of the co-operative marketing society is usually
not co-operative minded. The executive members of the society
join for political leadership. The static leadership is also a factor
for inefficient working of the society.
 Solution to the Problem. The problems of co-operative marketing
are heterogeneous. As such there cannot be a single solution to
the problem. The marketing society, if is to be a viable economic
unit, must switch over to multipurpose society. It should take up
the work of processing the farm goods, in the form the consumers
desire. The processed goods should be standardization of
agricultural produce. Adequate consumers. There should be
standardization of agricultural produce. Adequate arrangements
shall have to be made for the transportation of goods. Storage
facilities shall have to be provided in the rural areas. The control
of the cooperative marketing should be in the hands of genuine
farmers who sell their produce through it.