International Journal of Research and Review www.ijrrjournal.com E-ISSN: 2349-9788; P-ISSN: 2454-2237

Review Paper

Business Operations of Co-Operative Marketing Societies- A Theoretical Perspective

Sini Raj S

Research Scholar in Commerce, Kerala University Library Research Centre, University of Kerala

ABSTRACT

Co-operative marketing society is a practical economic system of transacting business based on all that is best in its members. It was generally considered that the society dealing with the economic needs of its members may not be in a position to give full attention to their social problems. But this society is not such a manner. It gives equal important to socio-economic betterment aspects. This will able to contribute to the economy of the household and improve their social situation within their community.

Key words: Co-operation, Co-operative marketing and Marketing

INTRODUCTION in some States like Assam, Bihar, Madhya Co-operative marketing societies are Pradesh, Karnataka, Orissa, Kerala, established for the purpose of collectively Rajasthan and West Bengal, there is a two marketing the product of the members. They tier pattern of organization, namely primary arrange for the sale of the produce brought marketing societies at the base level and by the members. These societies also enter apex marketing society at the State level. In the market as buyers. The commodities, other States, there is a three tier system thus, purchased are sold again when the consisting of primary marketing societies at prices are higher. Thus the objective of the base level, the central marketing economic development and social welfare societies at the district level and apex can be furthered by canalizing agricultural marketing society at the State level. produce through general co-operative marketing societies. Co-operative marketing BUSINESS OPERATIONS OF CO- societies handle more than one agricultural OPERATIVE MARKETING commodity. SOCIETIES The advantages of handling many Brief accounts of various business commodities are operations performed by co-operative (i)It prevents formation of several agencies marketing societies are given below: within area. A. PRIMARY MARKETING (ii)it increases the volume of business SOCIETIES – AT BASE LEVEL without much addition to overhead cost. The primary co-operative marketing (iii)It facilitates continuous operations societies exist at the base of the co-operative throughout the year; and provides balance to marketing structure. These societies market business. the produce of the farmer members in that The pattern of organization of co-operative area. They may be single commodity or marketing societies is not uniform multi commodity societies, depending upon throughout the country. Excluding NAFED the production of the crops in that area.

International Journal of Research & Review (www.ijrrjournal.com) 130 Vol.5; Issue: 10; October 2018 Sini Raj S. Business Operations of Co-Operative Marketing Societies- A Theoretical Perspective

They are located in the primary wholesale local practices. The societies should market, and their field of operations extends maintain a confidential record of the credit- to the area from which the produce comes worthiness or solvency of buyers. for sale. 5. Pooling 1. Commission Agency System The society can act as a market pool. A co-operative marketing society acts as Pooling is the process of physical mingling selling agent. It is also called commission of the products with a view to sell the business. The society acts as an expert products so mingled as a single unit rather selling agent on behalf of its members on an than as separate lots or units of each agreed commission. It creates no risk of loss member’s account. Pooling implies three and capital needs are also low to carry on steps: (a) physical assembling of products, the agency business. Members can get better (b) combining all expenses of operations prices due to competent selling by society and (c) distributing net sales proceeds officials. However, members have to bear among the members of the pool. Pooling is the risk of loss and society cannot do profitable to the society also it can achieve grading and processing of the produce. economies of handling a large volume of 2. Outright Purchase System goods. The society acts just like the merchandise - 6. Procurement Operations buyer for the purpose of resale. It has to Producers at the nearby places bring their bear the risks as an owner. The society will produce and supply at the Head Office or at naturally need much larger capital. It the branches. Almost entire quantity of purchases the produce from the member, agricultural produce is now being procured pays him the current market price and then from members and non-members. In order tries to sell the assembled produce after to meet the agricultural inputs and other grading, processing, if necessary, at the essential goods requirements of buyers, the highest possible price. This method suits society procured goods from appropriate small farmers having small surplus, so that institutions. they need not to go to local traders to sell 7. Distribution of Agricultural Inputs their produce. The society can create a Co-operative marketing societies have special reserve to meet losses due to price recorded good progress in the distribution of fluctuations. agricultural inputs. The marketing societies 3. Pledge Advance procured agricultural inputs like fertilizers, Co-operative marketing society advances seeds and implements in advance and pledge loans in those cases (i) in order to distribute them to the farmers at reasonable prevent distress sales immediately after prices. harvest, where a cultivator feels that the prevailing market price is not favorable to B. KERALA STATE CO-OPERATIVE him (ii) to secure a fair price for his produce MARKETING FEDERATION and he needs some money for his domestic (MARKETFED) – AT STATE needs urgently. The slow growth of pledge LEVEL business is due to the wide variation in the As the very name suggests, a State rules and regulations governing these Marketing Federation is a state level advances. This business involved no risk to institution working as the federal body of the societies. the central or district co-operative marketing 4. Trade Credit societies in some states or primary co- A co-operative marketing society allows operative marketing societies in rest of the trade credit to the wholesale buyers of states. agricultural produce sold by the society. The 1. Procurement of Agricultural Goods period of such trade credit ranges between 2 Marketing Federation procure agricultural and 15 days depending up on the prevalent and other produce belonging to its affiliated

International Journal of Research & Review (www.ijrrjournal.com) 131 Vol.5; Issue: 10; October 2018 Sini Raj S. Business Operations of Co-Operative Marketing Societies- A Theoretical Perspective

societies and their members to their best operative Societies Act. It was setup with advantage. the object to promote Co-operative 2. Purchase and distribute Agricultural marketing of Agricultural Produce to benefit Inputs the farmers. The objects of the NAFED Marketing Federation purchase and shall be to organize, promote and develop distribute fertilizer, seeds, insecticides, marketing, processing and storage of pesticides and other agricultural farm agricultural, horticultural and forest implements including processing machinery produce, distribution of agricultural and other agricultural and domestic machinery, implements and other inputs, requirements. undertake inter-State, import and export 3. Processing Activities trade Marketing societies undertake processing 1. Outright Business activities and established processing units. In order to ensure remunerative prices to the Combining marketing would processing cultivators for their farm produce, NAFED with surely enable the Marketing Federation has been making commercial purchases of to take advantage of better marketing agricultural commodities such as spices, conditions by either selling it as raw pulses, oil& oil seeds, horticulture, onion, material or as processed products. Society cotton, jute goods, poultry, fertilizer, seeds can secure better income by adding value to ,etc., the members produce by processing them 2. Joint Venture Business according to consumers’ requirements. Business on joint venture basis is a device 4. Undertake Inter-State Trade and through which efforts are made to promote Export Trade inter co-operative relationship. NAFED’s Marketing Federation appoints agents in joint venture is generally of the vertical type various parts of a state or outside the wherein it joins hands with lower units in boundaries of a state, for the purpose of undertaking the business in partnership. inter- state and intra- state trade. Federation 3. Agency Business undertakes export of agricultural Under this form of business operation, commodities like pepper, cardamom, purchases are made on commission basis in turmeric, dry ginger, cocoa and tapioca. the capacity of an agent of a principal which 5. Undertake Grading and may be State Government, Public Sector Standardization Corporation or the consumers’ co- Grading results in a set of separate supplies operatives. of products which may be regarded as 4. Consignment Business homogeneous in terms of classification Through this type of business operation, based on variety, weight and colour of the NAFED attempts to assists its constituents, products. Its aim is to standardize the mainly co-operative marketing societies in products through sorting so as to fetch a the disposal of their stocks on consignment higher price. basis in various terminal markets through its branches located in these markets. C. NATIONAL AGRICULTURAL CO- 5. Export Operations OPERATIVE MARKETING NAFED has been exporting agricultural FEDERATION (NAFED) – AT produce to give benefit of higher prices NATIONAL LEVEL prevailing in the international markets to the The National Agricultural Co-operative farmers. NAFED continued to be one of the Marketing Federation of India Ltd. canalizing agencies for export of onion (NAFED) is the national level organization 6. Supply of Agricultural Inputs of marketing societies in India. It was The Agricultural Inputs Division through its established on 2nd October 1958. NAFED agro Service Centres (ASCS) supplies seeds is registered under the Multi State Co- as its major items along with supplying

International Journal of Research & Review (www.ijrrjournal.com) 132 Vol.5; Issue: 10; October 2018 Sini Raj S. Business Operations of Co-Operative Marketing Societies- A Theoretical Perspective

spares, agricultural implements, plant thus raising their status in the society and protection equipments, batteries, tyres and improve their economic condition. tubes, pesticides, weedicides and bio fertilizes. REFERENCES 7. Processing Activities  Divakar Jha, 1997 “A Perspective on Co- Processing is an essential link in marketing. operative Marketing” Vikas Publishing NAFED established processing units for House Pvt Ltd –New Delhi-110014. processing of agricultural, horticultural,  Dr. BaidyanathMisra, 1997. “Co-operative forest produce and wool. Movement in India” A.P.H. Publishing Corporation.

 GS. Kamat, 1974 “Marketing the Co- CONCLUSION operative Way” HarshadPrakashan, Poona. Co-operative marketing societies  S.A.Sherlekar, 1981. “Modern Marketing have multifarious goals that include helping Principles and Practices” Himalaya the agriculturalists for getting higher returns Publishing House”, Bombay. on farm produce. They have potentials to  Tapas R Dash and K.K.Sen, 1998 “Co- offer numerous employment opportunities operatives and Economic Development” to its agriculturalists they are the back bone Rawat Publications, Jaipur. as well as future hope of the society. All these helps farmers to increase their earning,

How to cite this article: Raj SS. Business operations of co-operative marketing societies- a theoretical perspective. International Journal of Research and Review. 2018; 5(10):130-133.

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International Journal of Research & Review (www.ijrrjournal.com) 133 Vol.5; Issue: 10; October 2018