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Cooperative Marketing, NAFED & FCI

The document provides a comprehensive overview of co-operative marketing, detailing its meaning, objectives, advantages, and historical development in India. It highlights the structure of co-operative marketing societies, their functions, reasons for poor performance, and significant players like Amul and Nafed. The document concludes by emphasizing the role of marketing societies in improving farmers' income and lifestyle through better prices and services.

Education◦
Co-operative Marketing: Dr. Devyanee K. Nemade Assistant Professor Department of Agricultural Economics & Statistics Dr. PDKV, Akola
Content: - Meaning - Definitions of Co-operative Marketing: - Objective of Co-operative Marketing: - Advantages of Co-operative Marketing - Historical Development of Co-Operative Marketing in India - Meaning Co-operative - Cooperative Marketing – Need - Functions of Co-Operative Marketing Societies - Types of Co-Operative Marketing Societies: - Co-operative Marketing Structure - Reasons for Poor performance - AMUL - Conclusion
Meaning Co-operative: * Co-operative – the word „Co-operation‟ is derived from the Latin word “Co-operari”, which means working together.
Co-operative Marketing Meaning * Co-operative marketing consist of two words “Co- operative” or “Co-operation” and “Marketing”. *It is also the marketing „for the farmers‟ and „by the farmers‟ that aim at eliminating the chain of functionaries operating between the farmers and the ultimate consumers and this securing maximum price for the farmer‟s produce.
Definitions of Co-operative Marketing: According to RBI “Co-operative marketing is a co-operative association of cultivators formed primarily for the purpose of helping the members to market their produce more profitably than is possible through private trade.” According to FAO Co-operative Marketing is a system through which a group of farmers join together to carry on some or all the process involved in bringing goods to the consumer.”
Objective of Co-operative Marketing: * To sell the members product directly in the best market and in a state which attracts the best price. * To grade the produce in such a way that the best price is obtained for all qualities to the advantages of the grower. * Give fair weight. * Handle the crop without damage or waste.
Continue…….. * Strengthen the bargaining power. * Help members to produce the best product, which has most demand, this may include processing also. * Educate the members in marketing. * Stand for fair trading practices and stop manipulation of prices.
Co-operative Marketing * Brings in economy in cost of Marketing * Supply quality goods to customer. * Makes available grading and transportation facilities. * Acts as a part of the Government for procurement and implementation of price support policy. * Encourage self-help and thrift. * Link marketing with credit.
Advantages of Co-operative Marketing * Reduce cost and improved services. * Improve marketability-reduce all undefined and undesirable market changes. * Safeguards against rising costs and input prices. * Provides credit. * Storage facilities * Processing of agricultural produce. * Processing of Agricultural produce. * Market Intelligence.
Historical Development of Co-Operative Marketing in India * The history of co-operative marketing in India dates back to 1912, when the Co-operative Marketing Societies Act, 1912 was passed. * The First market society started in India was the Kumbakonam Agricultural Society in 1913, which supplied seeds, manures, implements and arrangement of sale of the products of its members.
Continue……………. * In the year 1915 and 1917 two Marketing Co-operative Societies were formed at Hubli and Gadag respectively. The basic objective was to encourage the cultivation of improved cotton and sell it collectively. * In 1920-21 there were only 31 co-operative societies. The Royal Commission on Agriculture (1928) stressed the need for group marketing instead of individual marketing.
Continue…………… * The Central Banking Enquiry Committee (1931) also underlined the need for organized marketing. The XI Conference of Registrars of Cooperative Societies (1934) emphasized the importance of Cooperative marketing. *In 1945, the Co-operative Planning Committee recommended that at least 25 percent of marketable surplus should be channelized through co-operative societies within the next 10 years by framing one society for the group of 200 villages.
Continue…………… * In 1958, the National Agriculture Co-operative Marketing Federation (NAFED) came into power as the Apex body of Co-operative Marketing. * In 1963, the National Co-operative Development Corporation (NCDC) was established for the promotion of programmes relating to processing, storage, packing and marketing of rural produce through co-operative markets.
Continue………….. * In 1968, the RBI recognized the linking of credit with marketing as a necessary step for the development of agricultural marketing.
Co-operative Marketing – Need 1. Abolition of Middlemen 2. Collective bargaining. 3. Storage facilities – for members. 4. Standardization and grading 5. Higher prices of members. 6. Market infrastructure. 7. Supplying inputs and consumer goods. 8. Facility of correct weighing. 9. Relief from illegal deductions. 10.Linking credit, processing and farming.
Cooperative Marketing – 10 Main Functions of Co-Operative Marketing Societies *Purchase and Sale of Produce : The marketing co-operatives purchase the produces from their member growers and sell it in bulk quantities, which enables them to reduce marketing cost and earn fair returns. * Distribution of Agricultural Inputs : The co-operatives supply the agricultural inputs such as seeds, fertilizers, pesticides, agricultural implements etc., the supply of quality materials at reasonable prices save cost of the member producers. Sometimes these inputs may be also given on credit basis.
Continue…………….. *Providing Storage Facility: To provide storage facilities, the societies may have their own Godown or hired Godown. *Supply of Agricultural Implements: They supply the needed agricultural implements like tractors, tillers, power sprayers etc., on rent basis to the cultivators for the purpose of production.
Continue………………. * Provide Financial Assistance : They make credit facilities to the members against the security of the produce brought for sale. Members get advances up to 75 percent of the market value of the produce deposited. * Processing of Produce : Some societies undertake processing of agricultural produce, which ensures high prices to the producers after processing.
Continue………………. *Providing Transportation Facility: The co-operative societies make arrangements for the transport of the produce of the members from the villages to the market on collective basis, which reduces the transportation costs for its members. * Providing Market Information: They provide latest information about the new techniques of production as well as the market information about the market prices from time to time, which will help the members to get a good price for their produce.
Continue………………. *Stable Price: The societies adjust the supply of commodities according to the market demand. In this way, in long run the prices get stabilized, which helps the farmers from the evil effects of the seasonal price fluctuations. *Participation in Foreign Trade: These co-operative societies participates in the export trade of the country, which helps to get better prices for the growers. Through export trade, the marketing co- operatives provide wide market to the agricultural produce. The share of agricultural exports in India‟s total exports is around 16 percent.
Progress and Types in Co-operative Marketing Societies: Under the active encouragement of the Government and the RBI, cooperative marketing has made great progress in Maharashtra, Andhra Pradesh, Tamil Nadu, Uttar Pradesh and Bihar. There are co-operative societies in Maharashtra specialized in the sale of tobacco, fruit, vegetables etc. The network of co-operative marketing structure now comprises over 6,000 primary marketing societies, of which 3,500 are special commodity marketing societies.
Continue……………… At the district level, there are 160 Central Marketing Societies, covering nearly all the important mandis in the country. At the state level there are 29 general purpose state level co-operative marketing federations and 16 special commodity marketing federations, and at all India level, there are the 1. National Co-operative Development Corporation (NCDC), 2. National Agricultural Cooperative Marketing Federation (NAFED), 3. National Co-operative Tobacco Growers Federation Ltd., 4. National Consumers‟ Co-operative Federation and the Tribal Co-operative Marketing Development Federation of India (TRIFED) – All these are working in the field of agricultural marketing.
Types of Co-Operative Marketing Societies: The co-operative marketing societies may be grouped into two types: * Single Commodity Co-operative Marketing Society * Multi-Commodity Co-operative Marketing Society *Multi-purpose multi-commodity Marketing Society
* Single Commodity Co-operative Marketing Societies : These type of societies deal with only one agricultural commodity. For example: Cotton Co-operative Marketing Society, Oilseed Growers, Co-operative Marketing Society etc., Areca nut co- operative marketing society, etc.
Continue………….. *Multi-Commodity Co-operative Marketing Societies : These societies deal with more number of commodities produced by the members such as oilseeds, cotton, food grains etc. * Multi-purpose, Multi-commodity Co-operative Marketing Societies: These societies market a large number of commodities and perform such other functions as providing credit to members, arranging for the supply of the inputs required by them, and meeting their requirements of essential domestic consumption goods.
Co-operative Marketing Structure •The co-operative marketing societies have both two-tier and three-tier structure. •In the states of Assam, Bihar, Kerala, Madhya Pradesh, Karnataka, Orissa, Rajasthan and West Bengal, there is a two-tier pattern with primary marketing societies at the taluka level and state marketing federation as an apex body at the state level. •In other states, there is three-tier system with district marketing society in the middle. At the national level, NAFED serves as the apex institution.
The pattern of the three-tier structure is as follows: Local Association/ Base level : PACS, Dairy Co- operative Regional Association : District Level, Multi commodity exchange, Primary Marketing Co- operative Society. State Level Association: * State level. * 27 State level marketing federation. * 199 regional co-operative marketing associations * NAFED(National Agricultural Co-operative Marketing Federation of India)
Co-operative Marketing Structure * State Marketing Society * District Central Marketing Societies * Primary Marketing Societies.
Primary Marketing Societies: At the base level there are primary cooperative marketing societies. These societies market the product of the producer members in that area. They may be single commodity or multi-commodity societies depending upon the production of the rural products in the area.
Continue……………. Primary marketing co-operatives are those which are operating in the small and limited area, may be either a taluka or a block. The members are the producers engaged in production of rural produce. These co-operatives will either buying from members or acting as agents for the grower producers to sell, on behalf of them.
Central or District Level Co-operative Societies: After the primary co-operative societies operating at block level, there are cooperative marketing societies covering a larger area or a district. These district level co-operative societies are called federations or marketing unions. These are engaged in the task of buying selling and extending credit facilities to primary cooperative societies. Their main job is to market the produce brought for sale by the primary cooperative marketing societies of the area. These are located in the secondary wholesale markets and generally offer a better price for the produce.
Continue…………….. The primary cooperative marketing societies are members of these unions in addition to the individual producer members. In the two-tier structure, the state societies perform the functions of district level societies by opening branches throughout the district.
3. State Marketing Societies: At the State level there are apex body that is State Co-operative marketing societies which serve the state as a whole. Their members both the primary co- operative societies and the Central Cooperative Union of the State. They are above the level of central co-operative marketing societies which is grown as a provincial society.
Continue…………… The basic function of these is to coordinate the activities of the affiliated societies and conduct such activities as inter-State trade, export-import, procurement, distribution of inputs and essential consumer goods, dissemination of market information and rendering expert advice on the marketing of rural produce. They undertake the task of granting credit that facilitates needy and deserving co-operatives, whether primary or central.
Continue………………. The pyramid structure is neither well-knit nor well developed because all co-operatives are not co- operating with one another. This is the sorry state of affairs, as there prevails „step mother policy‟ in business relations which is acting as the strong impediment for the success of co-operative societies. At present, the co-operative marketing is having 30 state level co-operative societies, 180 District level societies and 2900 primary co-operative societies and 3490 Special Commodities Societies.
Reasons for Poor performance: * Lack of initiative by members, only Govt. initiative. * Competition from credit societies, middlemen, traders, etc. * Lack of Co-ordination. * Lack of audit and supervision * Untrained persons. * Lack of funds.
AMUL: * The largest food brand in India and World‟s Largest Pouched Milk Brand “Amul” is a brand name managed by Gujarat Co- operative Milk Marketing Federation Ltd (GCMMF). * The Gujarat Co-operative Milk Marketing Federation Ltd, Anand is the largest food products marketing organization of India and is the apex organization of the Dairy Co-operatives of Gujarat. * With a turnover of INR billon GCMMF has created an economic network that links. * Millions of consumers in India and abroad. * 2.8 million village milk producers. * A Co-operative system that includes 13,141 Village Diary Co- operative Societies at the Village level.
Conclusion: Marketing Societies play an important role in order to get a better price for the produce, better facilities and services to the farmers. This in turn will lead to higher Income and better lifestyle to the farmers.
National Agricultural Co-operative Marketing Federation of India (NAFED): The National Agricultural Co-operative Marketing Federation of India(NAFED) is an apex organization of Marketing Co-operatives in the country. * Establishment Year: October 1958 * Head Office: New Delhi * Branches: 31 * Procurement, Processing, Distribution, Export Commodities of Agricultural Commodities.
Objective of NAFED: * Co-ordinate and promote the marketing and trading activities. *Purchase, Sales and Supply (Agricultural Goods). * Promote inter-state, intra-state and international trade. *Own and construct Godowns. * To make arrangements for the supply of agricultural inputs like seed, fertilizer, manure agricultural implements etc.
Continue…………….. * To act as an agent of the government for the purchase, sale, storage and distribution of agricultural products and inputs. * Insurance agent. * Consultancy * Manufacture of agricultural machinery, implements, processing and marketing. * Marketing research and marketing Intelligence dissemination. * Training.
Activities of the NAFED: * Price support operations * Internal trade * Foreign trade * Marketing of agricultural Inputs * Promotional activites * Tribal produce marketing activity * Setting of scientific storage system * Processing of fruits and vegetables.
Food Corporation of India(FCI): * Set up under Food Corporation act 1964. * Fulfill price support to farmers, distribution of Food Grains to Consumers and maintaining buffer stock. * Handling food grain trade and its distribution to each section society. * Establishment Year: January, 1965. * Its market operations prevent the speculative traders and provide the remunerative prices for agricultural produces. * Ensures prompt and un-interrupted supply of food grains.
Function of FCI: * Procurement of Food Grains at incentive prices. * Release of stock timely through PDS(Public Distribution system. No rise in consumer price. * To minimize seasonal price fluctuations and interregional price variations in agricultural commodities.(Purchase and Distribution network). * To build up buffer stock of food grains to meet short falls in internal procurement and imports.
Structure of FCI: * Five Major zone. * Each zone office has regional Offices. * Regional offices in every district. *Corporation in all have 5 zonal offices. *19 regional offices, 4 sub rigional offices, * 4 offices of joint managers, 173 district offices and 1000 of operating points for distribution and purchase.
Progress of FCI: Progress of Procurement: * Public procurement agencies * Price Support operations of Cereals * Distress sale * Cereals and pulses distribution in defense services.
Continue……………. Progress of Storage: * Food grains are stored in production and consumption center's * Prevent storage loss( from 10 % to 1 %) * Constructed 28.30 million tonnes storage capacity. Progress in Transportation: * Railways 80 % and 20 % roads. *20 million tonnes transported per annum. Progress in Imports *Speedy dispatch to various destination s to avoid congestion at he ports and to augment supplies to PDS.
Continue……………. Progress in Distribution: * Distribution of procured and imported food grains. Progress in Processing: * 24 modern rice mills * Paddy processing unit Tiruverur in Tamil Nadu * Ujjain(MP): Solvent extraction plant-Gr.Nut. * Faridabad(Hariyana) Maize mill
Cooperative Marketing, NAFED & FCI